New Delhi: The Bajaj empire is heading towards a split. Two-wheeler giant Bajaj Auto has let the word out that a demerger plan is afoot in the company to carve the group into two separate entities, auto and finance, to be headed by group chief Rahul Bajaj's two sons Rajiv and Sanjiv respectively.
The details of the demerger plans are not available as yet. There have been reports of differences between Rajiv and Sanjiv, even though neither Rahul Bajaj nor the two brothers are talking on those lines as yet.
"I am proud of my sons. They have done a wonderful job for the company. They are individuals in their own rights and if you call it differences, then so be it," news agency PTI quoted Rahul Bajaj as saying.
According to the sources, Bajaj Auto Board is likely to consider, either in its March or May meeting, a proposal to demerge the automobile and financial and investments businesses to utilise cash surplus and cash equivalent (in the form of investments such as bonds and in other companies).
This could be carved out either as a separate entity or merge into Bajaj Auto Finance, they said. While the March meeting is one of the six mandatory meets held every year, the May meeting takes into consideration the annual accounts.
Sources, however, said the cash surplus of the company has now grown to about Rs 8,000 crore from about Rs 3,000 crore about three years back when plans were first mooted to hive off the financial services and investments to utilise the surplus.
As per the plans, Rajiv, who is currently the Managing Director of Bajaj Auto and credited with turning around the company, would continue to look after the core automobile business, the sources said.
On the other hand, the financial services company is expected to be headed by Sanjiv, a management graduate from Harvard.
Bajaj Auto scrips have been gaining in the bourses on speculations of the demerger. In the last three trading sessions, the company's share prices have gained about Rs 183.
(With PTI inputs)
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