Bajaj Auto plans to raise stake in Bajaj Auto Finance to 64%
03 April 2003Mumbai: Bajaj Auto is planning to increase its stake in Bajaj Auto Finance (BAFL) from the current 46.15 per cent to 64 per cent by acquiring an additional 18 per cent equity in the latter. The parent company has to buy 29,16,900 shares of BAFL in order to acquire 64 per cent in the company.
Sources close to the development say the planned acquisition will be by internal transfer among the promoters. The acquisition price per share will be Rs 48.05 per share and the proposed acquisition will be over before the end of this month. Currently, private corporate bodies have a 14.15-per cent stake in BAFL while the Indian public holds around 39.36-per cent stake.
BAFL is in the business of hire-purchase financing of two- and three-wheelers of Bajaj Auto, leasing equipment and vehicles and bill discounting. A major chunk of the revenue of BAFL comes from the hire-purchase finance business. The company also finances consumer durable products such as computers, air-conditioners and refrigerators.
For the year ending March 2002, the disbursements under the higher purchase finance scheme went up by 13.2 per cent to Rs 580 crore over the corresponding previous period. The interest spread also improved during the same period.