- According to a report highlighted by Businessline, KK Modi Family Trust has reached out to a number of investment bankers – JP Morgan, Credit Suisse to sell their stakes.
Godfrey Phillips India (GPI), the seller of Marlboro cigarettes and largest tobacco manufacturers seem like they are having a rough time in India. KK Modi Family trust has put the largest tobacco manufacturer on the block and has persuaded them to reach out to global investors to sell their stakes in the company.
KK Modi & Family have approached a number of investors, Goldman Sachs, Morgan Stanley, Credit Suisse, JP Morgan to name a few.
“There is a proposal that the KK Modi Family Trust may consider the disposal of its trust fund. It has been proposed to discuss with you a possible mandate for assistance in the sale process of assets of the KK Modi Family Trust,” said a letter was written to Morgan Stanley by Titus Advisors on December 27, 2019. (Source)
In January, shares of GPI rose ₹1480 but went as low as ₹675 in August 2019. The current market cap of Godfrey Phillips is approx. ₹7,000 crores.
KK Modi group has transferred all its shareholdings into the trust to make sure that none of the beneficiaries own any share in the company. Bina Modi, Charu Modi, and Sameer Modi were key beneficiaries who have expressed their interest not be associated with the largest tobacco manufacturer anymore.
After the head of the family passed away last year, Modi family members have been occupied in disputes over the division of assets and property. Which one of the major reasons why the family wants to end the relationship with Godfrey Phillips.
Our largest tobacco manufacturer might have difficult times but this is not a permanent dark time for the company. For investors this year, tobacco looks like a bigger sin as compared to alcohol and they have been avoiding this lane.
Though Marlboro sales in the country will not stop all we have to see next is, who invests in the company and who buys stakes of the Modi family.
We hope that the company finds a new investor real soon. Revenue coming from tobacco companies in the form of taxes is huge and beneficial to the nation as a whole and if anyone tobacco manufacturer stops selling, imagine the loss tax collection would have. And the news is about the largest tobacco manufacturer. Just imagine.