Bajaj Electricals may raise capital for new ventures
Shekhar Bajaj’s son, is going to take complete responsibility of Rs 500 crore company’s export import and new businesses arm, Bajaj International, reports Suprotip Ghosh.business Updated: Aug 07, 2007 00:51 IST
After the Bajaj Group, it is now the turn of Bajaj Electricals to realign its businesses. Shekhar Bajaj, Chairman and Managing Director of Bajaj Electricals, is redefining responsibilities in the two most important arms of the company.
According to the plan, Anant Bajaj, Shekhar Bajaj’s son, is going to take complete responsibility of Rs 500 crore company’s export import and new businesses arm, Bajaj International.
On the other hand, R Ramakrishnan, additional director of Bajaj Electricals, is being promoted to executive director of the company. This would effectively define his role inside the boundaries of the company’s electricals and electrical appliances business.
The company has also proposed to enhance his salary from the present 1.5 lakh per month to a scale of 1.5 to 3 lakh per month in view of his new responsibilities, according to the company’s annual report.
“With this realignment, Mr Ramakrishnan would be responsible solely for Bajaj Electricals, as separate from Bajaj International,” Shekhar Bajaj told Hindustan Times. Earlier, Ramakrishnan and Anant Bajaj had more or less equal say in both arms of the company.
The plan would also give Anant Bajaj more scope of setting up new businesses for the Bajaj Group company. Bajaj Electricals has redeemed all its preference shares into equity shares, which would in effect consolidate its share capital of Rs 20 crore.
This would in turn enable the company to raise debt or equity if needed for the company, Shekhar Bajaj said. The new debt may be used by Bajaj International to fuel its plans to expand into electrical transmission and distribution business. This is important as the company is planning to set up a plant in the east Asia for manufacturing products for India and abroad.
“We are planning to set up a plant in the middle east, to supply hexagonal electricity poles and other distribution infrastructure materials for Indian and foreign markets,” Anant Bajaj told Hindustan Times.
Under the existing structure in Bajaj Electricals, which sells air conditioners, house appliances and lighting equipment, no longer manufactures most of its products. Instead, it is outsourced to manufacturers in China. It also exports its finished products to markets abroad.
All this activity is routed through Bajaj Intenational. According to the company’s annual report, Bajaj Electrical’s payments to Bajaj International has moved up from Rs 5.871 crore last year to Rs 44.024 crore this year.
Under the new structure, this new cash flow is effectively going to be controlled by Anant Bajaj.