Lessons From Sanjay Kapur's Legacy Feud

Indian Business Families Can No Longer Ignore Succession Planning

By Ritika Jain

What? 

In May, the Supreme Court urged deceased businessman Sanjay Kapur’s heirs to settle their inheritance dispute amicably. “We come with empty hands, we go with empty hands. We come with nothing but our soul,” Justice JB Pardiwala said, exhorting all parties to come to an understanding through mediation led by former Chief Justice of India DY Chandrachud.

India, home to some of the richest business families in the world, is reportedly on the cusp of a historic wealth transfer, with second and third generations poised to inherit an estimated $1.5 trillion in assets — roughly one-third of the country's GDP. 

Yet, with fewer than half of Indian business families having formal succession structures in place, a wave of high-stakes boardroom battles is spilling into the courts. 

Over the past decade, judicial forums have witnessed several family-led corporate disputes. Inheritance issues are plaguing Indian corporate families, like the Rs 30,000 crore legal battle between deceased businessman Kapur’s heirs.  ​​

The Kapur drama is not a new story. 

Why? 

The cases pending in judicial forums include challenging the validity of wills, questioning trusts and their managers, shares, a seat on the board, rights as a daughter, and money, among other issues. 

The resulting boardroom friction can affect the company's market capitalisation, inflating borrowing costs, and for listed companies, their shareholders. 

Succession planning in India is still a novel idea. It is governed by various Indian laws, including the Indian Trusts Act, 1882, Income Tax Act, 1961, Indian Registration Act, 1908, and the Transfer of Property Act, 1882.

While statutory bodies like the Securities and Exchange Board of India (SEBI) or the Ministry of Corporate Affairs (MCA) have mandated succession disclosure frameworks for listed companies, rules for private companies are largely written by courts on a case-by-case basis. 

Advocate Samarth Luthra said this could be attributed to the changing nature of family wealth, which is no longer limited to the house, parcel of land, the factory or the shop. “It may involve shareholding, voting rights, promoter control, trust, real estate, intellectual property, board positions and even lender or investor confidence,” he said.  

Experts stress that succession planning cannot be codified through simple regulatory nudges because it inherently involves "formalising relationships." 

Why It Matters 

Since roughly 90% of Indian companies are promoter-driven or family-run, succession friction frequently escalates into “oppression and mismanagement” cases under the Companies Act, tying up family feuds in judicial forums for years.

Courts are increasingly asked to resolve what begin as family disagreements, but go on to become business-continuity problems, advocate Samarth Luthra said.

The Birla-Lodha dispute, one of India's most high-profile and long-running corporate inheritance battles, stems from a contested 1999 registered will where Priyamvada Birla bequeathed her entire Rs 5,000-crore MP Birla Group empire to her chartered accountant and trusted advisor, Rajendra Singh (RS) Lodha, as opposed to her family. 

In the Murugappa Group case, Valli Arunachalam, the eldest daughter, demanded a seat on the board of Ambadi Investments (the group's holding company) or a fair buyout of her family's 8.15 per cent stake following the 2017 death of her father MV Murugappan (the former chairman of the Rs 74,000 crore Murugappa Group). The case eventually settled out of court, and the terms remain private. 

The Finolex case, the Kirloskar case and the Bharat Forge cases have siblings and cousins pitted against each other for controlling shares. 

"Succession failure is not merely a human resources problem—it is a profound business risk that cascades across governance, capital markets, and creditor confidence," said advocate Tanmay Patnaik. When a leadership vacuum occurs suddenly, strategic priorities stall, leaving companies exposed on multiple fronts. 

The financial stakes are clear. The stock market “delivers its verdict swiftly and brutally” when succession planning falters. 

Patnaik cited the historical Tata-Mistry fallout, where now-deceased businessman Cyrus Mistry’s public disclosure of potential write-down risks caused key listed Tata companies to drop between 2% and 7% in a matter of days.

 "This destruction of market capitalisation happens rapidly because investors immediately price in the uncertainty of a conglomerate’s future direction," Patnaik explained.

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Rs 725 crore

That’s how much investors pulled out of gold exchange-traded funds (ETFs) in May, a record outflow, reversing net inflows of Rs 3,040 crore in April, according to data from the Association of Mutual Funds in India (AMFI).

The outflows snapped a 13-month streak of positive inflows into the category.

The reversal came after the government raised the import duty on gold and silver to 15% from 6% in mid-May, pushing domestic gold prices to record highs.

Around the same time, Prime Minister Narendra Modi urged Indians to avoid buying gold for a year, arguing that lower imports would help protect the country’s foreign exchange reserves.

Catch Up Quick: Gold ETFs had enjoyed strong inflows over the past year as investors sought a safe-haven asset amid geopolitical tensions and volatile financial markets. Expectations of further gains in gold prices also boosted demand.

The Turning Point: Analysts attribute the reversal to profit booking after gold prices climbed to record highs. At the same time, several asset management companies halted fresh inflows into some gold funds, limiting new investments into the category.

Even so, the reversal does not necessarily signal a broader shift away from gold. Industry data show that gold ETFs have still attracted substantial net inflows so far this year, reflecting continued long-term investor interest in the asset class.

Meta Meets Jamnagar

Reliance Industries shares rose about 2% on Wednesday after the company announced a partnership with Meta to develop an AI-enabled data centre in Jamnagar, Gujarat. The 168-megawatt facility, which Reliance plans to deliver within two years, will become Meta's first built-to-suit data centre in India and will support the tech giant's global AI computing needs. Reliance will design, build and operate the facility, while also providing renewable power, network connectivity and other managed services.

Catch Up Quick: The announcement underscores India's ambition to become a global AI infrastructure hub as demand for computing power surges. Several top tech companies have announced billions of dollars in investments in data centres across the country to support cloud services and artificial intelligence. The government has also introduced an over 20-year tax break to attract global AI infrastructure investment.

Flashpoint: But the boom comes with trade-offs. Data centres consume vast amounts of electricity and water while generating significant heat, raising concerns over energy demand, local resource use and emissions.

Modi-Trump Trade Showdown

India has pushed back against US allegations of surplus manufacturing capacity in textiles and steel, with Additional Trade Secretary Amitabh Kumar arguing that output must be measured against the country's population, domestic demand and development needs, Reuters reported.

Context: Washington has cited structural excess capacity across Indian industries, from solar modules and petrochemicals to steel and textiles, alongside a $42 billion goods trade surplus, as grounds for a separate Section 301 tariff investigation. The US has also proposed an additional 12.5% tariff over forced labour concerns, though India has said these are not final.

Setup: Trade analysts say the US measures are pressure tactics to pry open Indian markets for American agriculture, energy and defence products. The tensions are expected to feature prominently when Prime Minister Narendra Modi holds likely bilateral talks with President Trump on the sidelines of the G7 summit from June 15 to 17, where trade, H-1B visas and energy cooperation are set to top the agenda, according to a Reuters report.

Hydrocarbons Fuel Energy Pact

Hydrocarbons could play a pivotal role in helping India and the United States (US) achieve their shared goal of expanding bilateral trade to $500 billion by 2030, according to a report released jointly by the US-India Business Council (USIBC) and Grant Thornton Bharat.

The report argues the India-US energy relationship is shifting from a buyer-seller model into a broader strategic partnership spanning trade, investment, technology and energy security.

Overview: The findings highlight significant opportunities across LNG, crude oil, LPG, ethane and propane, while recommending US investment in India's upstream exploration, city gas distribution and petrochemical sectors, alongside Indian investment in the US LNG export facilities and shale resources.

The Lead: Among key recommendations is an India-US AI-Powered Energy Task Force to drive technology adoption across the hydrocarbon sector, alongside deeper cooperation on Strategic Petroleum Reserves to strengthen supply chain resilience for both economies.

El Niño Threat

El Niño has returned to the equatorial Pacific for the first time since 2023, and this one could be different. Scientists warn it may be shaping up into a Super El Niño, one of the strongest on record, according to a report by Bloomberg.

Impact: Rice, pulses, sugarcane and oilseeds are among the crops most vulnerable, and lower agricultural output would inevitably push up food prices and fuel inflation. The heat is already hitting factory floors as well.

Extreme temperatures are disrupting India's garment industry, with factories supplying Uniqlo, Marks & Spencer and Tesco reporting productivity losses of up to 10%, per a NYU Stern report.

Projections: A weak monsoon can soften farm incomes, rural wage growth and discretionary spending on FMCG products, two-wheelers, tractors and entry-level housing. Studies indicate that a combined El Niño plus drought scenario may shave 20–65 basis points off overall GDP growth. I

ndia's $39 billion apparel export industry, employing 45 million people, faces compounding pressure. The McKinsey Global Institute warns rising heat could put 2.5–4.5% of India's GDP, roughly $150–$250 billion, at risk by 2030 through lost labour productivity alone.

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Markets Hold Steady Despite Fresh Flare Up in West Asia

On Episode 898 of The Core Report, financial journalist Govindraj Ethiraj talks to Prabhakar Kudva, Co-Founder and Director at Samvitti Capital. We also feature an excerpt from our Special Edition interview with Vishal Mehta, India Leader for Energy Practice at Boston Consulting Group.

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