Godrej Consumer Products Rises on Divestment News

20 Feb 2024 , 11:25 AM

Godrej Consumer Products witnessed a surge in its share price on the morning of February 20 following the announcement of its divestment in Godrej East Africa Holdings, Mauritius, for $3.5 million. At 9:55 am, the company’s shares were trading at ₹1,237.45, marking a 0.61% increase from the previous closing price.

The divestment move is part of Godrej Consumer Products’ strategy to restructure its operations in East Africa, focusing on regions with higher growth potential and profitability. Upon completion of the deal, Godrej East Africa Holdings and its subsidiaries will cease to be subsidiaries of the company.

The restructuring in East Africa operations aims to enhance profitability, particularly in the GAUM cluster (Godrej Africa, USA, Middle East). As part of this strategy, GCPL has announced the divestment of its Tanzania operations, transitioning to a franchisee model. This move is expected to result in a negative revenue impact of approximately ₹70 Crore for Q4FY24.

With the realignment of its operations in Uganda, Angola, and Tanzania, Godrej Consumer Products is set to reorganize its Kenya business. The company plans to shift its Kenya business to a franchisee model, aiming to generate approximately ₹50 Crore in annual profit from the transition.