Demerger decision likely after May only: Rahul Bajaj

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One stock which has held out today in a slipping market is Bajaj Auto, it is up Rs 90 today. This journey started a couple of days back as some speculation hit the market that they are now moving really fast on the demerger plan.

 

CNBC-TV18 learns that the demerger proposal will be put to Board in May. Ex-city banker Nanoo Pamnani is likely to advise a four-member internal team, which will be led by the younger brother Sanjiv Bajaj.

 

Sources say the process was expedited in the last two months and that a broad framework has been worked out. Sources further add that one holding company and two SPVs would be formed in the demerging process.

 

But Chairman of Bajaj Auto , Rahul Bajaj stays tight-lipped on the issue, saying that any information on the same may be price sensitive.

 

But he firmly denies the news report saying that the Bajaj brothers are in a fight. "We are a very close-knit family," he says.

 

Excerpts from CNBC-TV18's exclusive interview with Rahul Bajaj, Chairman, Bajaj Auto:

 

Q: Is it indeed true that you have stepped on the pedal on the demerger front?

A: People keep telling me that this may be considered price sensitive information. As soon as the matter goes to the Board, we have a meeting in March, but that is too early. So we may have a meeting in May or July AGM time.

 

So when the Board meeting comes up, we will make it public. But this is a three-four year old matter and I have talked about it years ago saying its very important, FIIs want it. But with the news getting leaked, the market price of Bajaj Auto has gone up and is over Rs 3,000 today and this will unlock value for the shareholders. It will strengthen the company and to that extent, if there is some talk about that the company, we will think about it.

 

The only thing is that the ET news is completely wrong and a gossip that the Bajaj brothers are fighting. So that would mean the Bajaj brothers have been fighting for four years; this is a four-year-old story so where is the question of brothers fighting.

 

None of the three of us are clones of each other and we are proud of that. Each has a distinct entity, we are own people although we disagree on many issues, but our objective is to take this company forward and high is clear and it has been seen in the results of the last few years. We are a very close-knit family.

 

Q: One thing which has added fuel to the fire is the fact that some names have been mentioned that Nanoo Pamnani is apparently drawing out the blue print and Sanjiv Bajaj is heading this initiative for the demerger and both of them have had several meetings to chalk out the plan before it comes to the board. Has there been any such informal discussion at all?

A: Sorry, I cannot give any information, as Sebi may consider this as price sensitive information.

Sanjiv is not only in the board of the company, but he is also a Full Time Director and Nanoo Pamannai, who is extremely confident and experienced in financial matters, is also on the Board of the company. If they are not going to talk to each other and others about any such proposals, then it is very difficult to find out whether they will go and talk to an ET journalist.

 

Q: Can you confirm if this issue will be taken up by the Board? As part of the Board, are you leaning towards any sort of timeline by which you want the entire process to be wrapped up?

A: I have no idea at all and the Board will decide that. I am dying to answer your question in detail, but as Chairman of the company, I have to maintain and keep in mind what Sebi says because there is no secret to this.

 

But yes, we are looking at it and this issue will be taken up to the Board this calendar year. But anything more accurate than that, I don't know because there are lot of implications.

 

I will have to wait for the Budget, as to what it will do to capital gain tax. We will then have to study the capital gain tax implications, stamp duty implications, etc.