Mfs Pare Bajaj Group Exposure After Spat
The result of the spat in the Bajaj family has seen mutual funds including Unit Trust of India (UTI) paring down their exposure to Bajaj group companies.
Out of the 27 companies in the Bajaj fold there are six major listed companies - Bajaj Auto, Maharashtra Scooters, Bajaj Auto Finance, Mukand Ltd, Bajaj Hindustan and Bajaj Electricals. As on June 30, 2002, mutual funds and the UTI had exposures in Bajaj Auto (4.16 per cent), Bajaj Auto Finance(0.01 per cent) , Maharashtra Scooters (2.17 per cent), Bajaj Electricals (0.98 per cent) , Bajaj Hindusthan (10.42 per cent), Mukand Ltd (7.02 per cent).
However latest figures show that funds hold exposures only in Bajaj Auto (3.5 per cent), Maharashtra Scooters and Mukand - in the last two UTI is the sole holder with stakes of 2 per cent and 6.58 per cent, respectively.
Recently, UTI sold slightly more than 9 per cent in Bajaj Hindustan and records show that right now mutual fund holding in this company is nil - leading one to the conclusion that the Trust has sold off its entire stake in the company in the last two months.
In Maharashtra scooters, UTI has brought down its stake from 2.15 per cent it held as of June 30, 2002. In Mukand its earlier stake was 7.01 per cent.
Analysts tracking the scrip said that funds have been very nervous regarding the fate of the group companies of late - while the individual companies' performance is still the same the apprehension is over any change in management control which the market feels might adversely affect the companies in the medium term.
Funds want to book profits while the price is still fair enough - there is uncertainty over how the stake sale (if at all) from one promoter group to the other will be effected - through market purchases or an off-market deal.
"The funds are just being a bit cautious and do not want to be caught in a situation where they might see their investment eroding," said market watchers.
The problems in the group started when Shishir, younger brother of Rahul Bajaj, wanted to take control of the three group companies -Bajaj Hindusthan, Bajaj Sevashram and Deccan Ayurvedashram, which he currently manages. As a trade-off he is willing to offload his equity stake in other group companies.
The group holding structure is such that each of the families with in the Bajaj group - brothers Rahul Bajaj and Shishir Bajaj and cousins Shekhar Bajaj, Madhur Bajaj and Niraj Bajaj have almost equal stakes in the 25-odd group companies.