Shares of Kirloskar Brothers Ltd closed lower on Tuesday after the company disclosed a Supreme Court order directing arbitration in a long-running family dispute, with investors appearing cautious about the legal uncertainty ahead.
The stock ended at ₹1,899 on the NSE, down ₹23.40 or 1.22 per cent from Monday’s close of ₹1,922.40, touching an intraday low of ₹1,886. Traded volume was thin at 0.28 lakh shares, with traded value of ₹5.38 crore. The company’s total market capitalisation stood at approximately ₹15,088 crore at close.
The sell-off followed the company’s Regulation 30 disclosure to stock exchanges on Monday evening, revealing an August 11 Supreme Court order in the matter of Kirloskar Brothers Ltd versus Atul Chandrakant Kirloskar and others. The court disposed of three Special Leave Petitions filed in 2021, directing constitution of a three-member arbitral tribunal to adjudicate disputes arising from a Deed of Family Settlement dated September 11, 2009. The DFS had originally divided management and control of various Kirloskar Group entities among different family branches.
The Supreme Court appointed Justice Nitin Madhukar Jamdar, former Chief Justice of the Kerala High Court, as arbitrator for Kirloskar Brothers, and Justice K.R. Shriram, former Chief Justice of the Madras and Rajasthan High Courts, on behalf of the contesting respondents. The two nominee arbitrators are to jointly appoint a presiding arbitrator within four weeks, with Pune as the seat of arbitration.
The court left open all questions of arbitrability, including whether non-signatories to the DFS are bound by its arbitration clause, to be decided by the tribunal as a preliminary issue.
The company stated the financial impact of the proceedings cannot be presently ascertained. Despite Tuesday’s dip, the stock remains up nearly 18 per cent year-to-date and has delivered over 400 per cent returns in five years.
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