Bajaj Electricals Board of Directors has authorized management to assess and recommend options to consider hosting the power transmission and distribution business as a stand-alone entity.
In addition to manufacturing and selling home appliances, fans, and consumer lighting products, Bajaj Electricals also has a vertical Engineering and Construction Procurement (EPC) business that houses lighting projects. . The segment also includes very high voltage (EHV) transmission line projects, EHV substations, monopolies for transmission and distribution, electrification projects, masts and public lighting, sports lighting, industrial and commercial lighting, specialized turnkey lighting projects and other solutions. .
The company explores the split, the subsidiary and the strategic partnership with the aim of unleashing the growth and the creation of value.
“Need for a targeted approach”
“Given the varied nature and potential opportunities of each segment and the need for a focused approach to unlock these opportunities, the board of directors has decided that the company should undertake a comprehensive review of the existing business structure. Bajaj Electricals said in a dossier. with scholarships.
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Shekhar Bajaj, Chairman and CEO of Bajaj Electricals, said, “Over the past two years, the power transmission and distribution verticals have refined their operational focus, ensuring project closure, increasing cash flow, reducing receivables and paying off most of the debt, while simultaneously focusing on health and safety and ESG in general. We believe that the time has now come to go further and review our structures to allow unconstrained commercial growth for each business segment. “
The company intends to appoint various advisers or consultants to assist the board of directors in evaluating the options.
Tailor-made capital structure
Thanks to this initiative, Bajaj Electricals intends to have a tailor-made capital structure and capital allocation policies based on a specific dynamic to the company, a well-defined company positioning coupled with a release of value for all stakeholders, distinct investment profiles to attract deeper and broader investor bases, accelerate sustainability initiatives and accelerate ESG practices, and attract the right talent and provide better growth opportunities for talent existing ones, in accordance with a more precise strategic orientation on each business segment under separate entities.
The EPC activity was the source of the decrease in the total turnover of the company in fiscal year 21. While the income of the consumer products activity increased by 7.10%, revenues from the EPC business fell 32.9% in the same year. The EPC business was responsible for generating 28 percent of the company’s revenue for fiscal year 21.