THE BAJAJS are business royalty. The group founder, late Jamnalal Bajaj, was both an astute businessman and a social reformer. He was so close to Mahatma Gandhi that he was often called the fifth son. Apart from trading, Bajaj set up a sugar-making company in 1931, which would later become Bajaj Hindusthan. The automobile company came later, just before Independence, in 1945. Though the third generation of the family, nominally headed by Rahul Bajaj, also had interests in steel, sugar, electricals and others, it was known for Bajaj Auto, the maker of the ubiquitous Bajaj scooters (modelled on the old Vespa scooters of Italy), which had a waiting period of decades during the bad old days of controlled economy.
After the economic reforms of 1991, when the animal spirits of the Indian economy were unleashed, it seemed for some time that the family had lost its mojo. While it was trying to make a mark in motorcycles, scooter sales were falling, and other manufacturers like the erstwhile Hero Honda (now separated into two companies – Hero MotoCorp, run by the Munjals, and Honda Motorcycle and Scooter India, run by the Japanese) and Venu Srinivasan’s TVS Group were rapidly gaining market share.
Eventually, Rajiv Bajaj, Rahul’s elder son, decided to exit scooters, focus on high-performance motorcycles instead of the mass market, and turned Bajaj Auto into one of the country’s most profitable and cashrich automakers. But there was still a feeling that despite the reputation of the group, its huge cash pile, and easy access to credit, it had not done enough to take advantage of the opportunities economic liberalisation had thrown up. It had not forayed into any of the sunrise sectors – telecom, roads, airports, power, etc. Even in sectors where it had interests – such as steel – it had been conservative and not expanded when its peers were doubling and tripling capacity in short time spans. It had, in fact, not done much beyond protecting existing businesses.
But then, Rahul Bajaj decided to spin-off the auto financing business of Bajaj Auto – a relatively small in-house operation – and give it to younger son Sanjiv Bajaj to handle. Ace banker Nanoo Pamnani, the brother-in-law of Rahul Bajaj’s wife, was roped in to help the new business.
The finance business has taken off like a rocket. Bajaj Finance is among the hottest NBFCs in the country, making enormous profits, while keeping risks under check. The financial services holding company, Bajaj Finserv, also houses the two profitable insurance joint ventures. The market capitalisation of the Bajaj Group reflects the confidence of investors – who have now propelled the group higher than many other business families that were bigger till a few years ago.
The entire Bajaj clan spoke to Senior Editor Nevin John for our cover story this issue – sharing their plans for the future. There seems a new energy in the family today as they try to make up for the time lost.