Godrej Properties: Divergent Dividend Decision

Abstract

The case study explores the unprecedented dividend decision made by the board of Godrej Properties, one of the leading Indian real estate companies. The decision was unusual from a regular dividend paying company at a time when the confidence of home buyers was very weak, unsold inventory in the industry was at its peak, and the real estate industry was facing numerous structural changes. Amid these challenges, a decision by the board of Godrej Properties to eliminate the dividend and to invest in high-return projects, with an expected return on equity of 20%, left equity analysts perplexed. Students will be asked to evaluate the unprecedented decision made by the board of Godrej Properties and suggest a future course of action.

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