Maharashtra Scooters may come into Bajaj Auto's fold

By Mahesh Vijapurkar

MUMBAI, OCT. 24. Bajaj Auto is all set to anex Maharashtra Scooters. The latter, jointly owned by Bajaj Auto and the Maharashtra Government, has moved into the red for the first time after an unbroken spell of profits. The market capitalisation of the company has now dipped to Rs. 30 crores from Rs. 350 crores four years ago, sources told The Hindu.

Four years ago a proposal was made to divest the Government holding of 27 per cent in Maharashtra Scooters, held through the Western Maharashtra Development Corporation, but no decision was taken by successive governments in the State.

Bajaj Auto is willing to pick up the entire Government stake in Maharashtra Scooters if no other buyers are available.

Maharashtra Scooters has a capacity to produce 1.50 lakh units. Bajaj Auto uses the Maharashtra Scooters' facilities for some of its job work. The 700-odd employees of this unit are more than willing to allow the disinvestment without protest; they are actually keen to protect their future.

Despite being a minority partner, holding 24 per cent stake, Bajaj Auto runs the unit of Maharashtra Scooters. Sources said the bottomline is not healthy now due to poor situation in the two-wheeler industry.

Bajaj Auto joined hands with Maharashtra Scooters when the concept of joint ventures for two wheelers was pushed by the Centre and Mr. T. A. Pai was Industry Minister then.

Similar joint ventures which were set up then elsewhere such as AP Scooters and UP Scooters, have disappeared from the scene.

In a meeting, Mr. Vilasrao Deshmukh, Chief Minister, was reportedly told by Mr. Raghul Bajaj that had the Government not dragged its feet for so long and got out at the time when the market capitalisation was ten times of what it is now, the funds could have gone back into promoting other development work.

Now it may have to settle for less. In fact, sources said, ``much less'' but Mr. Bajaj, keen to retain the reputation of his company, is willing to keep the unit in his fold if he can pick up the stake. Now, the decision on disinvesting in this project can be taken by a committee headed by Mr. Sharad Upasani, former chief secretary.

Send this article to Friends by E-Mail

Section  : Business
Previous : Orbit-e to piggyback on energy trading
Next     : Venture capital - withering and dying