This will be the first major diversification for the Jamnalal Bajaj-founded, 98-year-old business house since the death of former patriarch Rahul Bajaj in February 2022.
The healthcare business, plans for which are in the initial stages, will be housed in a newly formed company. Nirav Bajaj, head of corporate strategy at Mukand, is overseeing the project and likely to helm the new company, said one of the persons cited.
The investment plans for the new venture are yet to be firmed up. Instead of ploughing in a large sum in one shot, the group is likely to invest in phases based on milestones that the business achieves, said one of the persons. The new venture has set up an office in Mumbai’s Lower Parel, the person added.
The group’s main units include Bajaj Holdings and Investments (group investment company), Bajaj Auto (2 & 3-wheelers), Bajaj Finserv (financial services, insurance), Mukand Industries (specialty steel, industrials), Bajaj Electricals (consumer appliances) and Hercules Hoist (material handling).
Family Council
The family controls these companies through direct ownership, private trusts and unlisted entities. The equity structure of the yet-to-be-named company is not clear.In a departure from the past, the group has done away with the chairman’s position. It now operates through consensus via a family council. This includes Rahul Bajaj’s cousins Shekhar, Madhur and Niraj, and his sons Rajiv and Sanjiv. Others in the family attend the council meetings as observers. Formed around three years back, it meets every month and half or so, for a day.
Niraj Bajaj, chairman and managing director, Mukand, and chairman, Bajaj Auto, declined to comment on ET’s queries about the new business venture.
“There couldn’t have been a better sector for them to get into,” said Kavil Ramachandran, professor of entrepreneurship and family business at the Indian School of Business. “Besides being a growth business, it aligns with the group’s values of service orientation and trusteeship.”
The group is known for quality, a critical factor in healthcare, and the Bajaj brand reflects the organisation’s values, he said.
The Bajaj Group was drawn to the sector because of the high growth potential in the metros and the increasing corporatisation of healthcare. Hospital chains account for 10-23% beds in Delhi, Hyderabad, Bengaluru, Kolkata, Chennai and Mumbai, compared with 21-52% at public hospitals and 10-62% at standalone facilities, according to a research report by JM Financial released last month.
“Flush with cash, the group had been exploring entry into a new sector for over two years,” said one of the persons cited above. “A year ago, it engaged one of the top three global consulting firms, assigning them with the task of shortlisting a few sectors for a possible entry.”
Healthcare was one of the suggestions. The Bajaj family council approved of the idea.
The Bajaj Group, with a market capitalisation of ₹10.75 lakh crore, has the rare distinction of being India’s only large business family that has stuck together for several generations. A family settlement agreement was put in place in 2017-18 to ensure a smooth transition for the fifth-generation family members.
