What next for Shapoorji Pallonji Group investors after Mistry's death?

The sudden death of Cyrus Mistry, the Shapoorji Pallonji Group’s scion, has given the Group a double blow. 

Mistry’s father, Pallonji Mistry, had died on June 28. And now Cyrus Mistry’s untimely demise has brought the focus back on the 157-year-old multi-billion dollar group.

Investors are worried about the Group’s succession plan, as they remain unsure if either of Mistry’s two sons – Firoz and Zahan – is ready to take charge. 

DEVEN CHOKSEY, MANAGING DIRECTOR, KR CHOKSEY INVESTMENT MANAGERS says SP Group companies are professionally run. Investors need to track the next mentor. Cyrus Mistry is survived by two sons; unsure if they’re ready to take charge. Succession plan is slightly unclear. 

On the bourses, shares of Shapoorji Pallonji Group companies traded mixed on Monday.

Eureka Forbes shares, where Shapoorji Pallonji And Company Private Limited held nearly 9% stake at the end of the June quarter, fell 1% on the BSE as against 0.75% gain in the benchmark Sensex index.

Those of Sterling and Wilson Renewable Energy, and Forbes and Company, meanwhile, tumbled 0.61% and 5%.

Shapoorji Pallonji And Company Private Limited held 25% stake in Sterling and Wilson RE at the end of June, 2022, while Cyrus Pallonji Mistry and Pallon Shapoor Mistry held 0.38% stake each in their individual capacities.

As regards Forbes and Company, Shapoorji Pallonji and Company Private Limited held 72.56% stake at the end of June, 2022.

That said, analysts say Mistry was only acting as a promoter in these listed companies, and hence they don’t anticipate serious implications of his death on the companies’ future trajectory from a long-term perspective.

AMBAREESH BALIGA, INDEPENDENT MARKET ANALYST says Mistry’s death will definitely have an impact. Mistry steered the Group out of the debt trap. Historically, such large Groups have second and third lines of command in place. Dust will settle after an initial knee-jerk reaction.

From investment standpoint, analysts say investors should stay put, and avoid any impulsive decision. However, they caution that market participants should avoid buying the dips amid uncertainty.

On Tuesday, markets will react to the outcome of the OPEC+ meeting, and eye other global triggers.