Bajaj Auto's may transfer investments to AMC - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Bajaj Auto's may transfer investments to AMC

Nov 27, 1999

Bajaj Auto plans to hive off its investment portfolio to a wholly-owned subsidiary in a bid to improve valuations. This was revealed by a leading financial daily. Bajaj Auto is India's largest manufacturer of two/three-wheelers with a presence in all three segments of the two-wheeler market - scooters (64% market share in September 1999), motorcycles (26% market share) and mopeds (6% market share).

Bajaj Auto's is mulling a transfer of investments (Rs 15 bn book value) to an wholly-owned subsidiary in an attempt to improve its return on capital employed (ROCE). As close to 50% of the company's balance sheet size is locked up in investments, it pulls down the composite ROCE of the company. At current level of operations, the company's ROCE stands at 20%. However, ROCE of its manufacturing operations hovers at close to 28%, while the ROCE from investments is close to 14%.

Hiving off its investments will the unlock value of its manufacturing operations, which have been pulled down by lower returns from investments. Analysts are of the opinion that such a move will reflect in a 50% appreciation of the company's stock price

Equitymaster requests your view! Post a comment on " Bajaj Auto's may transfer investments to AMC". Click here!


More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

4 Stocks to Make Your Portfolio Immune to the Second Covid Wave (Profit Hunter)

Apr 6, 2021

Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.

A Stock with 700% Return Potential Comes with Additional Payoffs (Profit Hunter)

Apr 15, 2021

Narayana Murthy was one of the first unicorn founders to get the backing of this entity...

Why Did the Market Crash on Monday? (Fast Profits Daily)

Apr 13, 2021

In this video, I'll you what I think is the real reason behind yesterday's market crash.

A Unique Sector for Short-Term Profits (Fast Profits Daily)

Apr 12, 2021

This ignored sector could deliver big short-term profits.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Apr 16, 2021 (Close)


  • Track your investment in BAJAJ HOLDINGS & INVESTMENT with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks