The Telegraph
Since 1st March, 1999
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Rahul Bajaj tightens grip on Bajaj Auto

Mumbai, Sept. 12: With the two Bajaj factions still at loggerheads and no compromise in sight, the Rahul Bajaj faction’s recent exercise in increasing its stake in the company through secondary market purchases has raised eyebrows among corporate circles.

The company recently informed the Bombay Stock Exchange that Bajaj Auto chairman Rahul Bajaj had acquired 36,000 shares, while cousins Madhur and Shekhar had acquired 10,000 and 18,954 shares.

Immediately after the first announcement, the company again informed the BSE that Bajaj had acquired another lot of 7,000 shares while his cousin Shekhar Bajaj had acquired 4,000 shares. Following the pattern set by the seniors it was reported that Rajiv Bajaj has also acquired 16,000 shares, while Madhur Bajaj acquired 8,000 shares of BAL.

The big question was whether one faction was selling and the other faction stepping in to buy the BAL stock. However, sources in the know say that the Shishir Bajaj faction has not sold a single share in the market yet. The recent downward spiral in the share price of BAL had nothing to do with them, they added.

Speaking to The Telegraph, Rahul Bajaj said: “We have been buying shares of Bajaj Auto for a long time. It is a good dividend paying company and we regard it as a good investment. There is nothing more to it,” he added.

The company recently issued a dividend and probably the family could have used the dividend proceeds to buy more BAL stock, brokers said.

“We keep doing it and we have informed the stock exchange in accordance with the listing rules,” Bajaj explained.

Recent reports of a bridge loan being arranged to buy out Shishir Bajaj’s stake thus seem premature, sources opine. Of late, mutual funds have been switching loyalties and opting for four-wheeler auto stocks like Telco, Ashok Leyland and Eicher Motors.

The two-wheeler stocks have dipped after the recent bull run, with Bajaj Auto also falling in line with other stocks. “This could be the only reason for the recent depreciation in two-wheeler stocks,” analysts say.

They said the discounts being offered by two-wheeler companies may put their margins under pressure. However, Bajaj Auto and Hero Honda have been reiterating that their operating margins will be maintained as per the projections.

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