ET Family Business Awards: How India Inc's next generation is balancing legacy with innovation

India's family-owned businesses are entering a new phase, with the next generation focusing on growth while balancing legacy with innovation, long-term thinking with measured risk, and family values with professional management, panellists at the ET Family Business Awards said.

Moderated by ET's Arijit Barman, the panel on 'Family Business: Retaining Entrepreneurial Edge and Institutionalising Culture', brought together Anchit Nayar, executive director & CEO, Nykaa; Apurva Parekh, executive vice-chairman, Pidilite Industries; Nyrika Holkar, executive director, Godrej Enterprises Group; Vishal Kampani, vice-chairman & managing director, JM Financial; and Abhijit Joshi, founder & managing partner, Veritas Legal, for a discussion ranging from succession planning and capital allocation to deep-tech investments, family constitutions and brand building.

Panellists said contrary to the perception that legacy businesses are becoming more conservative, established business families are, in fact, taking bigger bets than before but in a more disciplined and structured way. "We're in a new India," said Apurva Parekh of Pidilite Industries, pointing to faster economic growth, much better access to capital and a plethora of global opportunities. Strong businesses with healthy balance sheets, professional management, and aligned families, he said, have both the "ability and willingness to take greater risks."


Vishal Kampani of JM Financial said the rise of family offices has fundamentally changed how Indian business families deploy capital.

Public shareholders expect listed companies to stay focused on their core businesses, making family offices the natural vehicle for backing startups, frontier technologies and new sectors, he added. "That's simply good capital allocation," Kampani said.

"While listed companies should continue investing in businesses adjacent to their core operations, moonshot bets are better housed in family investment vehicles. India is only at the beginning of a cycle that could see family offices become one of the country's biggest sources of patient capital for deep technology over the next two decades," he said.

Godrej Enterprises Group executive director Nyrika Holkar challenged the notion that legacy businesses don't focus on taking bold bets or invest much in innovation. The issue, she said, is not risk aversion but "calibrated risk-taking".

The Godrej scion said that instead of chasing venture-style returns, companies like Godrej focus on strengthening manufacturing capabilities, engineering depth and strategic partnerships that create durable competitive advantages.

"For example, aerospace has been an investment theme for the group for four decades, while partnerships with startups allow both sides to combine innovation with industrial-scale manufacturing," she said. Innovation, she added, is measured not merely by research spending but by how effectively it builds new capabilities, addresses customer needs, and creates future business models.

The discussion also veered towards innovation and how it was measured in legacy groups. While many investors track revenue from new products as a measure of future readiness, Parekh said that such indicators capture only part of the picture.

"Companies must also evaluate businesses being incubated today that may not contribute to earnings for several years. At Pidilite, the company continuously nurtures two or three pioneering businesses whose financial contribution will only become visible over time. Looking only at today's numbers risks overlooking tomorrow's growth engines," he said.

Nykaa CEO Anchit Nayar put forth views on how a younger, family-run company was navigating one of India's fastest-changing sectors. Technology disruption, he said, demands constant reinvention.

The Nykaa leader said that one big advantage for the company was its young workforce, whose understanding of emerging consumer behaviour often shapes the company's strategic direction. Many of the company's ideas originate from Gen Z and millennial employees, while the founding family regularly debates broader strategic shifts, monitors competitors, and tracks new business models, he said. "The company's rapid response to the rise of quick commerce reflected that philosophy. You don't necessarily have to be first. But if you see something working and recognise it as a competitive threat, it's important to respond quickly," said Nayar.

If innovation dominated one half of the discussion, succession and governance shaped the other.

For Abhijit Joshi, founder partner of Veritas Legal, the biggest challenge for the next generation was not legacy itself but learning to navigate a vastly different business environment. Every generation, he said, absorbs lessons from those that came before it. But the challenges confronting today's leaders are fundamentally different and far more complex than those faced by their predecessors.

"The ability and willingness to handle complexity is successively reducing across generations," he said, arguing that young successors should first assess whether they are prepared for those responsibilities before attempting transformational decisions. "Legacy is rarely the problem. The real test lies in adapting to new markets, new value creation metrics, and a rapidly changing external environment," said Joshi.

That adaptability also explains why many business families are moving away from old ways of doing business.

Holkar said the Godrej family consciously decided against documenting an exhaustive investment framework because doing so could constrain future generations. Instead, the emphasis remains on shared values rather than inflexible rules.

Parekh echoed that view, saying capital allocation decisions are guided by decades of collective experience, with important proposals debated within the family before being tested by an active and independent board.

Kampani believes that approach is evolving as businesses become larger and ownership structures more complex. "You have to balance heritage with hustle," he said. "You can't get lost in heritage, and you also can't survive on hustle alone."

Joshi agreed, describing family constitutions as guiding principles that must evolve over time. Like businesses themselves, he said, they cannot remain static and must adapt to changing realities.

Private equity, another issue that once divided family businesses, is also being viewed increasingly as an enabler of growth rather than a threat to family control. Kampani argued that promoters should see private equity first as a source of growth capital and, equally importantly, as a source of operating discipline and global expertise.

Pidilite's Parekh, however, cautioned that there is no universal template. Businesses capable of funding growth through internal accruals can list directly, while others may benefit from strategic investors before going public. "Both approaches can be equally valid," he said.

The discussion also spotlighted why some of India's most enduring consumer brands continue to emerge from family-owned companies. Holkar attributed that advantage to "patient capital" rather than passive capital. "Investments made decades ago in aerospace and nuclear engineering are only now beginning to generate returns, illustrating why family businesses often think in generations rather than quarters. Equally important is ensuring that values survive leadership transitions and remain embedded within professional management," she said.