Ba­jaj 4.0

Business Today - - FROM THE EDITOR - pros­en­[email protected]­to­day.com @Pro­saicView

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.

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