Speculation about Bajaj Auto de-merger

News reports from India have surfaced since January this year of a de-merger at Bajaj Auto, splitting the company into finance and automobile divisions.

Despite denials from the company's head Rahul Bajaj, the plans for the de-merger has most likely come about due to increased tensions between his two sons, Sanjiv and Rajiv, the reports said.

Bajaj Auto, which specialises in the manufacture and sale of motorcycles and three wheelers, has emerged as one of the most successful companies in India. A proposal for the de-merger is expected to be put before the Bajaj Auto Board of Directors in the next few months, according one of the reports in the Times of India. If the merger does materialize in the coming year, Sanjiv Bajaj would handle the finance entity while Rajiv Bajaj would control the automobile entity, the report.

David Peiris Motor Co. Limited, the local agents for Bajaj, declined to comment on any of the reports.