Chairman and founder of Lodha Group, Mangal Prabhat Lodha, has put a succession plan in place to avoid any confrontation between his two sons in future.In this regard, Lodha is dividing the empire into two clear businesses - real estate and financial services.
While the real estate will be helmed by elder son Abhishek, younger one Abhinandan will head the financial services, which will be engaged in housing finance, asset reconstruction and wholesale lending.
Though the companies will function independently, they both will use the Lodha brand. A holding company will control both these companies.
One of the people familiar with the news told Economic Times that the company's employees were informed about the impending changes in a town-hall meeting held by Lodha and Abhishek last week.
A formal announcement to all stakeholders is likely to be made this week.
A well-placed source told ET that Lodha turns 60 later this year and he was keen to put a succession plan in place.
"Many proposals were discussed in the past four months. Mr Lodha was very keen not to divide the real estate business but use group resources to nurture the financial services business, much like what Rahul Bajaj did for his two sons Rajiv and Sanjiv," a source familiar with the reorganisation told the financial daily.
Reportedly, Lodha will have 80% stake in the holding company while the balance 20% will be owned by Abhishek, Abhinandan and some family members.
All three companies will have Lodha and both his sons on their boards.
ET stated Abhishek is the group's managing director while Abhinandan is designated deputy managing director. The group's real estate business, Lodha Developers, clocked revenue of Rs 8,000 crore in 2014-15.
Meanwhile, nearly 30 employees of Lodha Developers will be shifted to the new financial services company and hiring for this unit will start later.
Abhishek, 36, and Abhinandan, 33, joined the family business in 2003. While the elder son looks after construction as well as functions such as legal, marketing, corporate planning and strategy, Abhinandan is responsible for sales, taxation and finance.
Lodha Group, founded in 1980, is currently developing an estimated 43 million sq ft of real estate projects, mostly in the Mumbai metropolitan region and there are 28 ongoing projects across London, Mumbai, Pune and Hyderabad.
(Image: Indiatimes)