Mumbai: Bajaj Auto Ltd, the country’s second-biggest two-wheeler maker, informed the Bombay Stock Exchange on 10 May that its board of directors would meet on 17 May to consider a proposal for demerger, besides taking up the audited financial results and dividend for 2006-07.
Bajaj Auto chairman Rahul Bajaj had in the past said the company intended to unlock shareholders value by splitting the manufacturing and financial assets into two separate entities.
At present, the company has cash reserves of around Rs8,000 crore and a market capitalisation of about Rs25,950 crore. The shares of the company closed at Rs2,609, up 1.74% on BSE on 10 May.
The auto and finance entities are expected to be headed by Rahul Bajaj’s sons Rajiv and Sanjiv respectively.
Rahul Bajaj had earlier said the proposed demerger would not have any bearing on the company’s joint ventures with German financial firm Allianz.
Bajaj Auto has joint ventures with Allianz — Bajaj Allianz Life Insurance and Bajaj Allianz General Insurance — in which it is the majority partner.
The demerger process is expected to take long as after the board approval, it would have to get regulatory and High Court clearances.