Modi to acquire majority stake in GPI

Modi to acquire majority stake in GPI
KK Modi is fighting for majority stake in India's second largest cigarette company, Godfrey Phillips India, an Indian arm of American tobacco major Phillip Morris. Initially Phillip Morris was holding 36 per cent stakes in GPI but after the diversion plan, Modi ended up acquiring additional 11 per cent taking the overall ownership in the company to 47 per cent.

As per the agreement between Modis and Phillip Morris, former can increase their stakes in the company to 51 per cent to get majority control. The additional 4 per cent stake sell will bring down the ownership of Phillip Morris in GPI to 21 per cent.

KK Modi is planning to wait for suitable time for taking up additional stakes in the company from the American parent company citing current share market situation very volatile. The company is planning aggressively to enter the non-tobacco based sector along with non-cigarette sector including Beedis, Pan Masala and chewing tobacco business.

The company is planning to invest close to Rs. 2000 crore for the expansion in coming years with focus on non- cigarette business. Company is targeting 30 per cent growth rate in coming years riding on success of other businesses. Godfrey Phillips is the second largest player in the Indian cigarette industry with an annual turnover of over Rs 2600 crore. Incorporated in 1936, Godfrey Phillips has two major stakeholders, the K.K. Modi Group and Philip Morris.

After the public issue in 1975, offer for sale to Indian public in 1979 and a rights issue in 1981 the shareholding of Philip Morris Finance Corporation in Godfrey Phillips India Ltd. came down to the present level of 25%.

Read more about: godfrey philips, bse, industry, tobacco
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