India, home to some of the richest business families in the world, is reportedly on the cusp of a historic wealth transfer, with second and third generations poised to inherit an estimated $1.5 trillion in assets — roughly one-third of the country's GDP.

Yet, with fewer than half of Indian business families having formal succession structures in place, a wave of high-stakes boardroom battles is spilling into the courts.

Over the past decade, judicial forums have witnessed several family-led corporate disputes. Inheritance issues plaguing Indian corporate families — like the Rs 30,000 crore legal battle between deceased businessman Sunjay Kapur’s heirs — indicate the challenges Indian businesses face in the absence of structured transition plans. ​​

PwC’s 12th Global Family Business Survey says succession planning has emerged as one of the most acute challenges, with 36% of Indian family businesses lacking clear handover directions as compared to 28% globally. PwC’s 2026 report also found that 52% of businesses cited “senior-generation resistance to next-generation readiness” as compared to the global average of 29%.

In May, the Supreme Court urged deceased businessman Sanjay Kapur’s heirs to settle their inheritance dispute amicably. “We come with empty hands, we go with empty hands. We come with nothing but our soul,” Justice JB Pardiwala said, exhorting all parties to come to an understanding through mediation led by former Chief Justice of India DY Chandrachud.

The Kapur drama is not a new story. Before the Rani Kapur-Priya Kapur (Kapur’s mother and widow, respectively) saga dominated the headlines, judicial forums had witnessed several families fighting over assets in courts. It also serves as the ultimate warning that even the most professionalised companies with formal handovers in place are not immune to risks.

These primarily include challenging the validity of wills, questioning trusts and their managers, shares, a seat on the board, rights as a daughter, and money, among other issues.

A lack of formal succession planning is increasingly driving India’s prominent, family-run corporations into public legal disputes over inheritance.

The resulting boardroom friction can affect the company's market capitalisation, inflating borrowing costs, and for listed companies, their shareholders.

One Size Doesn't Fit All

Succession planning in India is still a novel idea. It is governed by various Indian laws, including the Indian Trusts Act, 1882, Income Tax Act, 1961, Indian Registration Act, 1908, and the Transfer of Property Act, 1882.

While statutory bodies like the Securities and Exchange Board of India (SEBI) or the Ministry of Corporate Affairs (MCA) have mandated succession disclosure frameworks for listed companies, rules for private companies are largely written by courts on a case-by-case basis.

Advocate Samarth Luthra said this could be attributed to the changing nature of family wealth, which is no longer limited to the house, parcel of land, the factory or the shop. “It may involve shareholding, voting rights, promoter control, trust, real estate, intellectual property, board positions and even lender or investor confidence,” he said.

Experts stress that succession planning cannot be codified through simple regulatory nudges because it inherently involves "formalising relationships."

Ketan Dalal, Managing Partner of Katalyst Advisors, explained that succession planning is unique and not one size fits all; quite the contrary. For example, deciding who becomes the trustee — essentially the legal owner of a trust — can be a massive hurdle depending on whether a family is harmonious or combative.

Dalal said while it may be impossible for regulators to mandate succession planning for private companies, pressure from institutional investors, including whether to invest in a family-led business or not, can be a significant trigger to implement the same, he added.

However, the pandemic proved to be a universal catalyst. Advocate Tanmay Patnaik, Partner and Head of the Private Client Practice at Trilegal, said that COVID-19 exposed the lack of contingency plans across the spectrum.

"Certain large and medium-sized businesses, which had ignored implementing governance protocols, found themselves rudderless," Patnaik said.

Jagmeet Sethi, Managing Director of Luman Industries, soon after taking over from his father, the founder of the company, prioritised transforming his family business into a professionally managed enterprise with clearly defined systems, processes, and governance structures.

Sethi said family businesses thrive across generations when they are run with professionalism, transparency, and clear accountability. The scope for disputes also reduces significantly,” he added.

Sethi said he has already put his succession plan in place and communicated the same with his family. “I have also drafted my will, and discussed these matters openly with my family. My two sons, who represent the third generation in the business, know what to expect, and that clarity helps build trust and avoid misunderstandings in the future,” Sethi told The Core.

Kewal Jain of Kewal Kiran Clothing Limited (KKCL), the promoter of the famed Killer Jeans and other associated brands, is the patriarch of a Mumbai-based joint family venture that also includes his three younger brothers and a chunk of the second generation. However, all siblings and cousins have their work outlined before them based on their experience and expertise to avoid friction.

“Litigation happens when there’s a difference in opinions. Where three to four people get together, there will be differing views and sometimes ego too. When there is compromise, there is no issue. As elders, we should go with an open mind and should not claim they are more than the others. That is the only way to protect the legacy and take it forward, Jain said.

How Markets React

Markets have reacted dynamically to this shift. Families are steadily moving away from the traditional Hindu Undivided Family (HUF) structure, which legal experts increasingly view as an ineffective vehicle for modern corporate governance and a “relic of the past”.

Instead, families are adopting trust structures to consolidate shareholding before accessing public markets. Advocate Tanmay Patnaik noted that in the last financial year alone, he advised on six pre-IPO trust structures.

The financial stakes are clear: the stock market “delivers its verdict swiftly and brutally” when succession planning falters.

Patnaik cited the historical Tata-Mistry fallout, where now-deceased businessman Cyrus Mistry’s public disclosure of potential write-down risks caused key listed Tata companies to drop between 2% and 7% in a matter of days. "This destruction of market capitalisation happens rapidly because investors immediately price in the uncertainty of a conglomerate’s future direction," Patnaik explained.

Uncertainty also elevates credit risk for lenders. Banks and bond investors lend against future cash flows, which rely entirely on stable management execution. "When leadership is in flux, revenue targets slip and capital expenditure decisions stall," Patnaik said.

"Lenders respond to an unknown or disputed successor by tightening covenants, reducing credit limits, or demanding higher risk premiums."

Effective succession planning, when done well, delivers the opposite of everything described above — it creates management continuity, investor confidence, and compounding long-term value. Mukesh Ambani’s calculated move to expedite succession at Reliance Industries by appointing his children—Isha, Akash, and Anant—to directorships in the group's unlisted arms serves as a prime market example of institutionalising continuity.

As Indian promoter-driven businesses navigate third-generation transitions, formalised succession planning is increasingly separating resilient enterprises from those waiting for a boardroom crisis to act.

The Appealing Option

Succession planning is no longer the exclusive domain of the moneyed elite. Experts further observed that COVID and corporate family disputes in courts proved to be two key triggers that spurred the business families to formalise their structure to protect their legacy and ensure a smooth transition to the next generation.

“COVID did not limit itself to the top 100 business families in India. It affected everyone across the spectrum. A number of business families lost senior members and key decision makers. There was no contingency plan in place. This left a sudden decision-making void, and left certain large and medium-sized businesses rudderless,” Patnaik said.

“In the past few years, we have also seen some ugly public spats over estates amongst Indian corporate families. Business families have sensitised themselves to this, recognising that succession issues and estate planning are not something one can drag their feet on,” Patnaik added.

Advocate Tanmay Sharma–who founded WALLT, specialising in end-of-life financial planning–argued that succession planning is also the need of the hour because the systemic lack of financial communication with the family is also an issue.

In India, more than Rs 2.4 lakh crore assets in the form of pension accounts, stocks, insurances, mutual funds and other investments remain unclaimed. “During COVID, people passed away without settling their affairs, and the next of kin were left without the knowledge of what and where the assets were,” Tanmay said.

“In India, many heads of households may write a will, but then they hide it from their families for various reasons. In such cases, information is paramount. What is the point of succession planning if the heirs are not aware of it?” Tanmay said.

When Boardroom Fights Enter The Courtroom

Since roughly 90% of Indian companies are promoter-driven or family-run, succession friction frequently escalates into “oppression and mismanagement” cases under the Companies

Act, tying up family feuds in judicial forums for years.

Courts are increasingly asked to resolve what begin as family disagreements, but go on to become business-continuity problems, advocate Samarth Luthra said.

Latest data shows that the Supreme Court has a backlog of 92,726 cases, of which 71,980 are civil in nature, while High Courts have 64,23,715 pending cases, of which, 44,90,771 are civil cases. NCLT data suggests that as of March 2025, there were 14,961 pending cases of which 6,885 cases were under the Companies Act, 6,988 were IBC cases and the remaining were Mergers and acquisition cases. These numbers do not include other miscellaneous petitions related to the main cases.

The Birla-Lodha dispute, one of India's most high-profile and long-running corporate inheritance battles, stems from a contested 1999 registered will where Priyamvada Birla bequeathed her entire Rs 5,000-crore MP Birla Group empire to her chartered accountant and trusted advisor, Rajendra Singh (RS) Lodha, as opposed to her family.

In the Murugappa Group case, Valli Arunachalam, the eldest daughter, demanded a seat on the board of Ambadi Investments (the group's holding company) or a fair buyout of her family's 8.15 per cent stake following the 2017 death of her father MV Murugappan (the former chairman of the Rs 74,000 crore Murugappa Group). The case eventually settled out of court, and the terms remain private.

The Finolex case, the Kirloskar case and the Bharat Forge cases have siblings and cousins pitted against each other for controlling shares.

The Aristo Pharma case is also unique in the sense that the courts have to decide on the validity of a will by a patriarch who had been diagnosed with dementia years later.

"Succession failure is not merely a human resources problem—it is a profound business risk that cascades across governance, capital markets, and creditor confidence," Patnaik explained. When a leadership vacuum occurs suddenly, strategic priorities stall, leaving companies exposed on multiple fronts.

To Court Or Not To Court

A fundamental legal question remains on whether courts should entertain corporate family disputes.

In this context, it is important to point out that in 2016, the Supreme Court ruled that disputes arising from Trust Deeds and the Indian Trusts Act cannot go into arbitration. Family disputes can only be mediated.

This ruling proved to be a major disruptor because many families include arbitration clauses in such deeds, hoping to keep succession disputes private and out of civil courts.

Advocate Aman Sharma said matters of succession and wealth transfer are civil in nature and entirely detached from questions of personal “morality”. “The courts will look at the dispute using civil law and not rule on issues in a summary manner like how it would decide writ petitions, public interest litigations, or fundamental rights issues,” Sharma said.

Recently, the Supreme Court in May 2026, relied on precedent to reiterate that a valid will trumps all and a will is not considered invalid simply because a man chose to favour his sister and bequeath his assets to her over his wife and children. “The whole idea behind the execution of a will is to interfere with the normal line of succession,” the court said.

When family feuds disrupt operations and damage public market capitalisation, do courts have an obligation to step in and protect minority shareholders? Legal experts say a board owes a fiduciary duty to its stakeholders, while the judiciary will simply focus on the law.

“A person investing in the market does so at his own risk and courts are not obligated to consider investor-interest,” Patnaik said.

Sharma said the method of wealth transfer usually leads to litigation. “There will always be a disgruntled person. So the question is not how to reduce litigation, but how to ensure that the litigation is minimal and contained,” he added.

He said the TVS family settlement is the gold standard for succession planning, while the Hero Group succession plans are also noteworthy.

As many family-led businesses navigate billion-dollar transitions, formal succession planning is now separating resilient enterprises from those exposed to sudden operational paralysis.

For India's promoter-driven corporate landscape, adopting structured governance frameworks has become a matter of necessity to keep up investor confidence and long-term valuation.