Bajaj Ventures' sell-off by September ‘12

Consumer electronics major Bajaj Electricals along with another Bajaj group company Baroda Industries are in the process of divesting their stakes in Bajaj Ventures Ltd. Both Bajaj Electricals and Baroda Industries hold 50% each in Bajaj Ventures. 

According to industry sources, the existing owners are currently in a fairly advanced stage of negotiations with the potential buyer and are expecting to conclude the transaction in the coming months.

Confirming the development, Shekhar Bajaj, chairman and managing director, Bajaj Electricals Ltd, said, “The deal will see both the entities divest their stakes in favour of the buyer. Discussions are currently on and a sell-off is likely by the end of second quarter this fiscal.”

While the value of investment on Bajaj Electricals’ books, according to industry sources, is around Rs 15 crore the company management is looking at a significantly higher multiple in terms of realisation from the stake sale. Shekhar Bajaj however did not share any information about the valuation expectations from this sale.

Bajaj Ventures was originally christened Black & Decker Bajaj Pvt Ltd, (Black & Decker Bajaj), which was a 50:50 joint venture (JV) with Black & Decker Corporation, United States. The company was instituted in 1993-94 to manufacture and market power tools, household appliances, and related accessories.

After seven years of operations i.e. in fiscal 1999-2000, Black & Decker chose to exit the JV and sold its 50% stake to one of Bajaj group companies (Baroda industries Ltd) post which the company was rechristened Bajaj Ventures Ltd.

While the Black & Decker brand association with Bajaj Electricals continued despite the JV being called off, the former is now looking to enter the market on its own. And since Bajaj Electricals does not consider power tools as its core business, the company management has decided to generate cash by disposing off the Bajaj Ventures business.