Instant mix: Gits gets 3rd generation on board

MUMBAI: Promoters of the privately held Gits Food Products (Gits), a household name popular for its instant gulab jamun mixes, have transferred a substantial part of their shareholding to the third generation in a phased manner. Family members of the third generation — Sahil Gilani , Aasiya Tejani and Samana Tejani — now occupy prominent positions on the board of the company which was established by co-founders H Z Gilani and A K Tejani in 1963.

The move is expected to empower the third generation to play an active role in the running of the business, even as the first two generations — chairman A K Tejani and the two joint managing directors, Raju Gilani & M A Tejani — remain the driving force at Gits, which is equally owned by the Gilani and Tejani families.

A K Tejani (85) has transferred a substantial chunk of his shareholding to his son, M A Tejani (64), who holds 25 per cent, and grand daughters, Samana , Aasiya and Sheba, who hold 7per cent each. A K Tejani’s stake has thus come down in a phased manner to 4per cent from 50per cent that he originally held when he set up Gits.

Raju Gilani (57), son of late co-promoter H Z Gilani, on the other hand, has transferred 25per cent of his shareholding to his son Sahil, while retaining an equal quantum with himself. The two families are also related through a marriage of one of H Z Gilani’s daughters to M A Tejani, making the third generation members cousins.

"The joint MDs have proposed to pass on their shareholdings to their children in the future. However, it is not decided how exactly their respective 25per cent shareholdings will be divided," said Sahil Gilani (29), director (sales & marketing ), who joined the business in 2007 after he completed his MBA from IE Business School (Institutio Empressa, Madrid, Spain).

"The second generation divided some of their shares at their own discretion. It was done a few years ago by my father (R H Gilani) and later by the chairman (A K Tejani)," said Gilani.

Kavil Ramachandran, the Thomas Schmdiheiny chair professor of family business and wealth management, Indian School of Business, said, "Increasingly, families tend to pass over some shares to their younger generation members involved in the business. Often there is a pattern of phasing this. This is a good thing to build a feeling of ownership and greater involvement in all key matters."

Gits, whose turnover is understood to be a couple of hundred crore rupees, has been an attraction for PE investors as well. "We are not interested in shedding any equity ," said Gilani.

Rivals Gits and MTR are said to be equally strong at a national level in convenience foods which is at an inflection point of growth. This could have hastened the process of emboldening the third generation of Gilanis and Tejanis as stakeholders.