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Vellayan Subbiah To Exit Cholamandalam Investment Finance Under Murugappa Family Pact
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Vellayan Subbiah, a scion of the Murugappa family, has reached a settlement with other promoter branches to realign ownership
Cholamandalam Investment Finance
Vellayan Subbiah, a scion of the Murugappa family, has reached a settlement with other promoter branches to realign ownership across key group companies, according to a report by Moneycontrol.com, citing people familiar with the matter. The agreement is expected to see Subbiah give up stake exposure linked to Cholamandalam Investment and Finance Company while consolidating his position in Tube Investments of India and CG Power and Industrial Solutions.
The arrangement, finalised after more than two years of negotiations, forms part of a broader plan by the Murugappa Group to separate ownership of the century-old conglomerate among three promoter factions while ensuring business continuity. Under the settlement, Subbiah is expected to relinquish exposure to Cholamandalam Investment — the group’s flagship lending arm — and instead retain and strengthen his alignment with Tube Investments and CG Power, including taking over or retaining stakes tied to those companies within the extended promoter structure, the report said. Emails sent to Subbiah and the Murugappa Group did not receive a response until publication.
The realignment follows prolonged internal discussions over the division of the diversified business empire, which reported revenue of more than $9 billion in FY23, after five generations of joint ownership through the family holding company Ambadi Investments.
Negotiations had earlier faced hurdles due to significant valuation divergences across group companies. As previously reported by The Economic Times on August 19, 2024, the turnaround of businesses overseen by Subbiah — particularly CG Power, Tube Investments and Cholamandalam Finance — had emerged as a sticking point in share-swap discussions among family factions.
The revival of CG Power proved especially pivotal. Since Tube Investments acquired control in 2020, CG Power has deleveraged, restored profitability and benefited from investor interest in domestic manufacturing, railways, power equipment and electronics supply chains. Its stock has surged since the takeover, making it one of the group’s most valuable listed assets. Tube Investments has also diversified beyond its legacy engineering base into green mobility, contract manufacturing and specialised industrial segments, strengthening its market position.
Cholamandalam Investment, meanwhile, has grown into one of India’s most valuable non-bank lenders, with a market capitalisation exceeding Rs 1 lakh crore. The uneven appreciation in these businesses complicated efforts to carve out three equal promoter blocs, with one faction seeking revisions to earlier share-swap assumptions and another resisting reopening agreed terms, people cited by Moneycontrol.com said.
Promoter ownership across Murugappa companies is largely routed through holding vehicles rather than direct individual shareholdings, but the concentration of value highlights why these firms were central to negotiations. The promoter group’s roughly 51–52 percent stake in Cholamandalam Investment is estimated to be worth about Rs 55,000–60,000 crore at current market levels. In Tube Investments, promoter ownership of around 45–46 percent translates into holdings valued at approximately Rs 20,000–22,000 crore. Through Tube Investments’ controlling position in CG Power, the promoter group effectively holds about 58–59 percent of that company, valued at roughly Rs 45,000–50,000 crore.
Beyond these, the family controls about 56–57 percent in Coromandel International, worth around Rs 18,000–20,000 crore; 42–43 percent in Carborundum Universal, valued near Rs 9,000–10,000 crore; and 44–45 percent in EID Parry, worth roughly Rs 3,500–4,000 crore. Tube Investments also indirectly controls about 70 percent of Shanti Gears, valued at approximately Rs 2,500–3,000 crore.
The final arrangement appears to align ownership more closely with operational leadership. Subbiah, a fourth-generation member of the family, is widely credited within the group for steering the revival of CG Power and expanding Tube Investments into new manufacturing and mobility segments, making these businesses natural anchors for his promoter bloc under the new structure.
The Murugappa Group, which comprises nearly 30 companies across fertilisers, engineering, financial services, abrasives, sugar and mobility solutions, operates under a long-standing governance charter that separates ownership from management, the Moneycontrol.com report noted.
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February 26, 2026, 10:51 IST
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