Bajaj Electrical shares surge nearly 11% minutes after market open as company mulls rejig in corporate structure

The shares of Bajaj Electricals jumped almost 11 per cent to touch the day’s high level of Rs 1159.95 per share on the BSE intraday trade on Friday, as the company’s board approved a review of its corporate structure, including a move to hive off its power transmission and distribution verticals. 

The stock in the last one year has surged over 93 per cent as compared to over 28 per cent rise in the S&P BSE Sensex during the same period. The stock at around 09:44 am is trading almost 9 per cent higher to Rs 1140.5 per share as against 0.3 per cent fall in the S&P BSE Sensex. 

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The company in a filing to exchanges on Thursday said it would explore a full range of options and alternatives, including demerger, subsidiarisation and strategic partnerships. 

Bajaj Electricals is into consumer product segments like appliances, fan, and consumer lighting products; and Engineering Procurement and Construction segment (EPC) that includes power transmission and power distribution and illumination projects --  

The step has been taken up considering the varied nature and potential opportunities of each of the business segments and the need for a focused approach to unlock these opportunities, Bajaj Electricals Ltd (BEL) said in a statement. 

The board at its meeting held on Thursday authorised the management to "evaluate and recommend such options and alternatives, and subject to such detailed evaluation, consider housing the Power Transmission and Power Distribution business verticals as a standalone/independent legal entity", it added. 

The objective for the exercise, as outlined by its board, includes streamlining the business structure to enhance market positions, deliver long-term growth, tailored capital structure and allocation policies based on business-specific dynamics, the company said. 

The company also intends to appoint various advisors or consultants to assist the board in evaluating the options and complete the process to consider the way forward as soon as "practically" possible.