Even as he spars with brother Shishir over implementing a settlement relating to the carving up of various companies in the extended Bajaj group, Bajaj Auto chairman Rahul Bajaj is engaged in another carving-up exercise, which concerns his sons Rajiv and Sanjiv.
Rahul said his 25% holding in Bajaj Sevashram, a holding company of the family, will be split between his sons. He refused to give more details, saying: “They will get a share according to my will, and I am not going to share that.”
Meanwhile, he has been working on a plan to complete the demerger of Bajaj Auto’s financial services businesses from the company by July. The demerger will also involve transferring Rs6,000 crore of the Rs8,000 crore cash and cash equivalents on Bajaj Auto’s books to the new company. This will give Sanjiv, the younger son, control of the financial services business. The automotive business will be controlled by elder son Rajiv. JM Financial, promoted by veteran investment banker Nimesh Kampani, has finalised the demerger plan.
“We are determined to complete the Bajaj Auto demerger by July,” said Rahul, adding that this wasn’t linked to the “family settlement” in any way. “The blueprint is ready. We are just waiting for the annual general meeting of Bajaj Auto,” said an investment banker close to the development. Ex-Citibanker Nanoo Pamnani, a member of the Bajaj Auto board, is working with the brothers to ensure a smooth demerger.
Interestingly, Bajaj Sevashram holds 100% of Jamnalal Sons and 78% of Bachhraj & Co, both companies that hold stakes in other group firms such as Bajaj Auto, Bajaj Hindusthan and Mukand Limited. It is Bachhraj’s 24.5% stake in Bajaj Hindusthan, currently managed by Shishir Bajaj’s son Kushagra, that is at the core of the dispute between Rajul and Shishir.
This stake was to be transferred to Shishir and his family as part of a family settlement that sought to untangle cross-holdings and divide a few companies in the group between Rahul and Shishir. The delay has led to both sides trading allegations.
The proposal to demerge the financial services business was first aired three years ago. At the time, Bajaj Auto had cash and cash equivalents of around Rs 3,000 crore on its books.