In a notice to the Bombay Stock Exchange on Thursday, Bajaj Auto, the country's second-largest two-wheeler maker, said its board meeting on May 17, which would consider its results and dividend, would also take up the issue of the long-speculated demerger of the financial and automotive businesses.
Sources said Bajaj Auto would transfer over Rs 6,000 crore out of its surplus capital of Rs 8,000 crore to the new financial services entity to be used as its share capital.
Bajaj Auto will also transfer equity investment in various joint ventures, such as the life and general insurance companies (Bajaj Auto has 76 per cent equity in it while Allianz has the rest) and Bajaj Auto Finance (in which the promoters have a 42 per cent equity stake), to the new company.
Industry experts said chairman Rahul Bajaj's two sons -- Rajiv, Bajaj Auto's managing director, and Sanjiv, its executive-director -- would be on the boards of both the companies.