The Pune-based Bajaj family which owns and manages the eponymous Bajaj Group of companies is riding high these days. In January, the Delhi-based Business Today certified it the country’s fourth biggest business group in terms of market capitalisation (Rs.3.77 lakh crore). Moreover on January 23, the House of Bajaj was voted the country’s #1 family business house by the Economic Times.
The principal protagonist behind the rise and rise of the House of Bajaj into a major force in Indian industry is the machiavellian Rahul Bajaj, chairman of the Bajaj Group of Companies, operating in the automotive two-wheeler, consumer electricals, financial services and steel, among other industries. As soon as he returned from Harvard University in the mid-1960s, he elbowed out H.K. Firodia who built Bajaj Auto’s scooters manufacturing plant and his family which was a major shareholder in Bajaj Auto (BA), the group’s flagship company. Utilising the close connection of his father Kamalnayan with then dominant Congress party, Rahul ensured that BA enjoyed a total monopoly of the automotive two-wheelers market to the extent that a registered purchaser had to wait for 14 years to take delivery of his vehicle. Moreover, not content with having pushed the Firodias out of BA, he did his darndest to hijack their company Bajaj Tempo. But Mercedes Benz (Germany) which owned 50 percent of the equity refused his blandishments, and the Firodias retained control of BT (since renamed Force Motors).
However despite Rahul’s best efforts, the Bajaj monopoly of the two-wheelers industry ended in the mid-1980s when the Ludhiana-based Hero Cycles teamed up with the Honda Motor Company, Japan, to quickly emerge as the country’s premier manufacturer of scooters and motor-cycles. This transformed Bajaj into a bitter opponent of liberalisation and deregulation of the economy. Meanwhile Dipak Poddar the MIT-educated professional who built up Bajaj Financial Services, a hire-purchase firm, was shouldered out and replaced by son Sanjeev Bajaj, as have the Shah brothers out of Mukand Steel.
As editor of Business India and Businessworld, your correspondent was the country’s first journo to write up Rahul Bajaj as ‘King of the Road’ enabling the Bajaj clan to multiply the market capitalisation of BA. Yet when EducationWorld was struggling, Rahul point blank refused to lend a helping hand by way of advertising or even utter a few words of support. Yes, the Bajaj clan has transformed into a successful business dynasty. But it represents the ugly face of Indian capitalism.