Lux Industries Ltd (LIL) is heading for a three-way demerger that will divide the business across separate entities aligned with different branches of the promoter family, in a move that signals a formal restructuring of ownership and control.

Under the scheme of arrangement, which will require regulatory nods, including from the National Company Law Tribunal, brands under hosiery major Lux Industries and manufacturing assets will be split among brothers Ashok Todi, Pradip Todi and their nephews Navin and Rahul Todi.

While Pradip Todi and his family will continue with Lux Industries Ltd, the two new demerged entities are being created following a family settlement agreement and restructuring of LIL.

The new entities, which will eventually get listed on bourses after the demerger becomes effective by the end of 2026, will be managed by Ashok Todi and his family and Navin and Rahul Todi, sons of the late Kishan Todi, the eldest brother of Pradip and Ashok.

The Todi family has a 74.19 per cent stake in Lux Industries, which is nearly equally split among three strands of the family. Post demerger, promoters of each company will continue to maintain the promoter holding at that level.

To untangle crossholding, a complex chain of corporate restructuring involving the gift of shares will be carried out, resulting in each family having full ownership and management control of their respective entities.

Minority shareholders will get 1 share each of two new entities for every share they hold in Lux Industries Ltd on the appointed date of demerger.

Commenting on the development, Ashok Todi, chairman of Lux Industries, said the restructuring will ensure a sharper strategic focus for each vertical, improving accountability, operational efficiency and capital allocation and ultimately enhancing market valuation.

“In the proposed reorganisation, both Lux and the resulting new entities will continue to benefit in the long run to unlock shareholder value,” he said in a statement.

All three companies will bear the Lux name and have the right to use the Lux brand going forward. The export market has been split in a manner that Ashok Todi will have rights in the African and Southeast Asian markets and Pradip Todi will have rights to West Asia.

Pradip Todi added, “Our priority remains to ensure that the reorganisation serves the long‑term interest of the company and its stakeholders, while preserving the strength of our brands and operations.”

Lux posted a revenue of ₹2,578 crore in FY25, and it is expected to cross ₹3,000 crore topline this year.

Saket Todi, son of Ashok Todi, said the family has been running the business in three separate verticals for the last eight quarters. “We have been able to grow faster than the industry in this period due to sharper focus,” he added.