
Lodha versus Lodha: How a family agreement brought the Lodha brothers to battle

Summary
- If Mangal Prabhat Lodha's elaborate family settlement plan was designed to prevent conflict in the second generation, it was a grand failure.
Mumbai and Bengaluru: When Mangal Prabhat Lodha embarked upon the division of the real estate empire he founded in 1986, the underlying goal was simple: Avoid acrimony in the second generation, which has plagued Indian business families since forever.
Over two years beginning 2015, an arbitrator appointed by the Lodha family crafted multiple family settlement agreements and arbitration awards. Finally, by the end of 2017, family members agreed that the elder brother, Abhishek (45), would take over the reins of the flagship Lodha Developers, while Abhinandan (43), the younger one, would transfer his ownership to his mother, with the assurance that all business would eventually be divided between the two. Abhinandan was also given two businesses, Lodha Ventures and Lodha FinServ, apart from about ₹500 crore.
If the aim was to prevent conflict, the plan was a failure. Less than eight years after what appeared to be succession planning, the two brothers have locked horns.
Macrotech Developers—the listed holding company of the Lodha Group under Abhishek—moved the Bombay High Court on Monday (20 January) seeking to restrict The House of Abhinandan Lodha, started by Abhinandan, from using the Lodha name. On Tuesday, the court asked Macrotech Developers to file the case, again, according to lawyers representing the two factions.
But the battle over the brand is just the tip of the iceberg; the fault lines run much deeper. Ironically, these can be traced back to the 2017 settlement that was designed precisely to avoid such bickering.
The Genesis
In a synopsis of the dispute shared on Tuesday, Macrotech Developers argued that a significant increase in debt, between 2008 and 2014, caused stress in the family. Around 2014-15, governance issues were identified in the company’s finance department, which was led by Abhinandan Lodha, Macrotech Developers stated.
The turmoil soon led to the family settlement agreement, under which both brothers agreed to take some assets and debt, according to Macrotech Developers. However, the company alleges that at a later stage, Abhinandan insisted on not taking any customers, projects or debt and asked for cash as part of the settlement.
“As a result, Abhishek and his parents were left with ₹20,000 crore of debt, and Abhinandan separated to start a new business with a payout of ~ ₹1,000 crores," read a note dated 21 January, shared by Concept Public Relations, the agency hired by Macrotech. “Between 2015 and 2020, Mr Abhishek Lodha and the family went through a ‘near-death experience’ due to this baggage of huge debt," the note added.
The other narrative
“We have just come across an annexure of a press release sent by Concept Public Relations...they have stated that Mr Abhinandan Lodha was given ₹1,000 crore," said a spokesperson for Abhinandan Lodha. “This is a lie," added the spokesperson, “which is contradicting their own case in court filed last week, where they have attached the family settlement agreement of 2017, which clarifies that under all the awards and settlement documents, Mr Abhinandan Lodha has received ₹429 crore and some apartments, all amounting to ₹500 crore."
When contacted, Abhinandan Lodha said that the lawsuit came as a “surprise" to him.
“My elder and only brother Abhishek Lodha asked me to separate from the family business and start something new," he said. “Consequently, between 2015 and 2017, multiple family settlement agreements and arbitration awards were passed by a sole arbitrator appointed by the family, despite me being out of Macrotech Developers Ltd. During this process, I was asked to transfer my shareholding in Macrotech Developers Ltd to my mother with the clear understanding between the four of us, and the assurance from each family member, that I was entitled to my share in the family business and that all business assets would eventually be divided equally between my brother Abhishek and I," Abhinandan said in response to a Mint questionnaire.
He added he received just ₹500 crore across all awards and settlement documents, “as I was told that Macrotech Developers Ltd is not in a position to pay more then."
Abhinandan claims that he repeatedly helped the family’s crown jewel, Macrotech Developers, during its debt crisis in 2018-19.
“Macrotech Developers Ltd has borrowed multiple times from my companyLodhaFinServfrom2017 to 2020.In aggregate, the loans amounted to over ₹900 crores while the peak outstanding at any given time was ₹175 crore," said Abhinandan.
He added that the elder brother and the company approached him in 2019 when Macrotech Developers was squeezed by spiralling premiums on its London-listed bonds and thinning credit lines.Abhinandan claims that his companies gave corporate guarantees of ₹250 crore, and he gave personal guarantees of over ₹2,000 crore. “I even mortgaged my flat and raised funds to support Macrotech Developers Ltd.Thisis all a matter of record," he said. “All of this was done as a responsible member of the family and in the interest of the family."
Since then, Macrotech Developers has managed to turn the corner. In April, the company received a rating upgrade from Crisil Ratings and ICRA. The two agencies rated the company’s long-term debt AA—compared to A+ earlier.
The company’s gross debt narrowed to ₹7,680 crore on 31 March2024, from ₹9,050 crore a year prior. The gross debt to cash flow from operations ratio was 1.30 times as of FY24 end compared to 1.80 a year prior. Crisil Ratings expects gross debt, excluding lease rental discounting debt, to be maintained at around 1.0 times the cash flow from operations over the medium term, according to a report dated 31 March 2024.
While Macrotech’s debt woes have eased since then, Abhinandan claims his elder brother is yet to honour his end of the bargain.
"(I was to get my) rightful share in the future post the IPO of the real estate business. Unfortunately, after my exit, the commitments and payments that were to be made to me have not been honoured despite various promises being made until recently," said Abhinandan. He declined to share his “rightful share" in Macrotech Developers, in which his elder brother and promoters own 72%.
Abhinandan claims that there is a more fundamental rift between the two brothers. “We feel the genesis of the dispute is the success of our new generation plotted land business under our company The House of Abhinandan Lodha, which Macrotech Developers is unable to digest," he said. “I re-started my real estate journey in 2021 and created House of Abhinandan Lodha from scratch. It appears now that…they want to throttle the growth of HoABL, which is indeed a matter of great sadness."
Macrotech Developers did not respond to these allegations.
Kavil Ramachandran, professor of family business and entrepreneurship at the Indian School of Business, says that family settlements must explicitly state all the terms agreed upon and leave nothing to mutual understanding for them to be legally enforceable. “Looks like there were unwritten terms here…that were to be honoured based on mutual trust. In this case, it doesn’t seem like trust between the parties exists. They have drifted apart a lot," he said, adding that the dispute is unlikely to be settled without court mediation now.
The latest dispute
This brings us to the latest flashpoint between the two brothers–the Bombay High Court case.
On Monday evening, Macrotech Developers asked the Bombay High Court to intervene and stop the House of Abhinandan Lodha from using the Lodha name. Macrotech argued that prospective buyers were confused about whether the two companies were identical.
“It is evident from the actions of (defendants) that they are attempting to misappropriate the goodwill and reputation garnered by the (plaintiffs) with the sole intention to illegally earn quick money," the complaint alleged.
The alleged infringement of Lodha’s name had caused Macrotech Developers over ₹5,000 crore in provisional loss, the company claimed in its petition, a copy of which Mint has seen. It now wants the court to stop the House of Abhinandan Lodha from using the Lodha name.
Abhinandan claims there is no non-compete agreement, as of today, between the two brothers in real estate. “We are very clear that we are into plotted development and no high-rise buildings and largely operate in locations where Macrotech is not present and this was by choice," he said.
“Lodha Ventures and Lodha FinServ were given to me as part of the settlement process, and the understanding was that the name ‘Lodha’ was not to be used on a standalone basis in real estate," said Abhinandan. Hence, the name was being used in conjunction with other terms, such as Lodha Ventures, The House of Abhinandan Lodha, and Lodha FinServ.
What’s in a name?
While The House of Abhinandan Lodha’s operations are modest compared to Macrotech Developers’, experts said using the name Lodha, even as part of a more prominent brand name, is likely to have helped the company gain credibility among customers.
“Brand is one of the biggest drivers of sale in the real estate sector as it is the largest investment that most individuals make in their lifetime," said Pankaj Kapoor, managing director of Liases Foras, a real estate data and analytics firm. Consumers prefer established brands because they can be assured that the project will be delivered on time and that the construction will be of good quality. Hence, established brands like Lodha also command a premium over others, he said.
“The Lodha brand adds a lot of credibility, just like other big-name developers like Godrej or Hiranandani. That could be one of the reasons why the Lodha brothers are fighting over the brand," Kapoor said.
The Lodha family isn’t the first to see a split in business as a new generation takes over. Earlier, others like the Hiranandani Group and the Raheja Group have also split businesses, with each faction retaining brand usage rights. The latest conglomerate to see such a split was the Godrej Group, where the two factions have demarcated the usage of the brand in the real estate sector.
Stock impact
Eventually, Macrotech's minority shareholders took the biggest hit after the dispute became public.
Since Monday, Macrotech Developers’ shares have tanked nearly 11%, resulting in an erosion of ₹12,700 crore in value. The company ended with a market cap of ₹1.07 trillion on Wednesday. During these two days, the benchmark BSE 30 index was down 1%.
Investors tend to be particularly mindful when disputes involve intangible assets like brands, as it is difficult to estimate the value of damages and, thus, the risk involved, said Nirav Karkera, head of research at Fisdom, a wealth management platform. When a company is involved in a dispute like this, it also raises concerns around brand reputation, goodwill, and impact on management—especially in a promoter-run business, he added. “So to err on the side of caution, investors try to wait out the event."