Mumbai, Dec. 18: Bombay High Court has approved the demerger of Bajaj Auto.
The demerger will create two new entities apart from a company that will focus only on the auto business.
After the demerger, there will be three separate entities a company for auto business, an entity that will hold Bajaj Autos investments in financial services called Bajaj Finserv and the consumer finance company, Bajaj Auto Finance.
Bajaj Finserv Ltd will include investments in the two insurance companies Bajaj Allianz Life Insurance Company Ltd and Bajaj Allianz General Insurance Company Ltd.
Bajaj Auto officials declined to comment on the issue stating that the company was yet to receive the final order from the court.
The court approval did not have much impact on the Baja Auto scrip and it ended marginally higher at Rs 2,795.80 on the Bombay Stock Exchange today.
Unconfirmed reports say the record date for the demerger will be nearly two months from the order date and that the new entity will be listed by the end of this fiscal.
The details of the order are expected in a day or two.
In August this year, shareholders of Bajaj Auto cleared the companys demerger plan.
According to the scheme, all Bajaj Auto shareholders will become shareholders in each of the new companies and will be issued shares in the two new companies in the ratio of 1:1.
Initially, the existing Bajaj Auto will be renamed Bajaj Holdings and Investment Ltd (BHIL). Subsequently, shareholders will be allotted one share of the new Bajaj Auto, which will represent only the auto business and one share of Bajaj Finserv.
Rajeev Bajaj will continue to be managing director and CEO, while brother Sanjiv Bajaj will continue as executive director. He will have the additional charge of financial and international operations and Bajaj Finserv.