Economy

Godfrey Phillips’ Share Price Declines Amid Sale of Retail Business

On September 4, Godfrey Phillips India Ltd. saw its share price drop by over two percent in the morning session, following reports that the cigarette manufacturer has finalized the sale of its retail business, 24Seven. As per CNBC-TV18, the company has signed a term sheet with the start-up New Shop to complete the transaction by the end of September. The process of transferring 24Seven’s shops and assets to New Shop is already underway.

By 10:20 am, Godfrey Phillips’ stock was trading at Rs 6,470.15 on the National Stock Exchange (NSE), marking a decline of 2.5 percent from the previous session’s close.

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Court Approval and Internal Disputes

In July of this year, the Delhi High Court granted Godfrey Phillips permission to proceed with the sale of its retail arm, 24Seven. The decision to divest the retail business was met with resistance from Executive Director Samir Modi, who has been engaged in an ongoing inheritance dispute with Bina Modi, the Managing Director of Godfrey Phillips.

Company Background and Diversification

Founded in 1936, Godfrey Phillips has established itself primarily as a cigarette manufacturer, with well-known brands such as Four Square, Red & White, and Cavanders. The company also holds an exclusive sourcing and supply agreement with Philip Morris International for the Marlboro brand in India.

In an effort to diversify its business and reduce its dependence on the tobacco sector, Godfrey Phillips ventured into the retail market in 2010. The retail business, branded as 24Seven, aimed to tap into the burgeoning consumption market. At its peak, 24Seven operated over 150 stores across Delhi NCR, Punjab, and Telangana, generating a gross sales revenue of Rs 484 crore.

Share Performance and Market Comparison

Over the past 12 months, Godfrey Phillips’ shares have surged by more than 200 percent, significantly boosting investor wealth. In contrast, the Nifty 50 index has experienced a gain of around 30 percent during the same period.

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Srishti Mukherjee

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