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Kin may back Rahul Bajaj in split

BS Corporate Bureau

Senior members of the Bajaj family rushed to Mumbai today for what is expected to be a closed door meeting among the kin, as the possibility of a split in the family-controlled businesses came to light.

It is learnt that Shishir Bajaj, the younger brother of Bajaj Auto chief Rahul Bajaj, has sought to steer Bajaj Hindusthan, Bajaj Sevashram and Deccan Ayurvedashram - the companies that he manages - away from the family umbrella in return for his shareholding in other Bajaj group companies.

Though the meeting is not expected to be a decisive one, it is understood that the remaining members of the family have decided to rally around Rahul Bajaj, the eldest of the cousins. The senior Bajaj is also expected to be the mediator in future family discussions.

Shishir Bajaj is understood to be out of town, and is not expected to participate in the meeting.

Sources close the Bajaj family, however, played down the Friday meeting and said: "It is not uncommon for brothers to meet for dinner. They need not have a specific agenda for the meeting."

It is learnt that Shishir Bajaj would not offload any of his holding in group companies in the open market, but would offer his stake in the different companies to other family members.

"Any transfer of shares will be done internally. Of course, it will not be sold to public," sources close to the family said.

The nagging issue in the split could be the huge difference in market capitalisation between Bajaj Auto, the group flagship, and sugar maker Bajaj Hindusthan, the listed company that Shishir Bajaj controls.

While the two-wheeler major has a market cap of over Rs 50 billion, the other's is less than Rs 600 million.

If the family members agree to go in for simple swap of their holdings, Rahul Bajaj and the rest will have to shell out a considerable amount to buy out Shishir Bajaj.

At the ruling market price, his stake in Bajaj Auto would be over Rs 2.50 billion, while he would have to pay almost one-tenth of that amount to buy out his cousins from Bajaj Hindusthan. The Bajaj brothers - Rahul, Shishir and their cousins Shekhar, Madhur and Neeraj - have almost equal stakes in all group companies.

But each member is responsible for a particular company.

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