Rahul Bajaj Biography

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Rahul Bajaj factsheet

Rahul Bajaj
NameRahul Bajaj
Born on10th June, 1938
Place of BirthBengal Presidency, British India
EducationSt Stephen's College, Delhi and Harvard University, USA
Works forBajaj Group
PositionChairman
Valued atRs. 9200 Crores (2003)
Married toPriya
ChildrenRajiv, Sanjiv
Rahul Bajaj was born on 10th June 1938 at Bengal. Residency, British India. He is an Indian businessman, industrialist, politician, Forbes billionaire and a member of the Indian Parliament. In 2010, Forbes had estimated his net worth to be US $ 1.1 Billion making him one of India’s Top 50 richest persons. He is the Chairman of Bajaj Auto, a leading Indian Automobile Manufacturer.

Family

Rahul Bajaj is a son of Rajasthani Businessman Jamnalal Bajaj who started Bajaj Auto in 1945. He has one brother, Shishir Bajaj, with whom there was a recent business settlement ending the family dispute. He has 3 cousins, Shekhar, Madhur and Niraj together with whom he controls the Bajaj Group of companies. He is married to Ruparani and has two sons Rajiv & Sanjiv who are involved in the management of his companies and a daughter, Sunaina Kejriwal who is married to Manish Kejriwal who heads Temasek India.

Growing up

Rahul Bajaj went to The Cathedral and John Connon School. He graduated from St. Stephen's College in Delhi in 1958 with an honors degree in economics. He underwent on-the-job training for 4 years at two of the group companies. During that time, he also earned a law degree in Bombay. He is also an alumnus of the prestigious Harvard Business School in USA.

The Beginning

Given his family background- at the tender age of 12, he started dreaming of becoming a businessman. His grandfather had bought a steel mill and a sugar mill, and in 1945 his father founded Bajaj Auto, now the crown jewel in the Bajaj Group.

In the 1970s, India was a socialist state barred by rules and regulations. As a result, there was no entrepreneurship and nothing could be done without government approval. At this difficult time Bajaj became the CEO of Bajaj Auto Ltd. (BAL) in 1968 at the age of 30 making him one of the youngest CEOs of that time.

In this environment, the company was limited to produce just 20,000 units a year. Supply and demand didn't match. Hence, after placing their order, customers had to wait for roughly ten years to receive it.

To lower costs while improving the price and quality of the products, he increased production to avail “Economies of Scale”. He ignored a government regulation and increased volume by more than the permitted 25 percent of his licensed capacity.

His grandfather had been known as the "fifth son" of Mahatma Gandhi and his parents and grandparents had spent time in British prisons for the sake of Indian independence. Hence, he didn't fear of going to jail for the (illegal) excess production.

Also, the fact that he was producing a commodity that most Indians needed gave him the strength to take the risk. He established factories at Akurdi and Waluj and worked hard to expand BAL- now the world's fourth-largest maker of motorized scooters, three-wheel vehicles, and motorcycles - India's most common forms of transportation.

Achievements

Since Rahul Bajaj took over the charge of Bajaj Group in 1965, under his leadership Bajaj Auto has grown to new heights year after year. The turnover of Bajaj Auto has risen from a mere Rs.72 million to Rs.46.16 billion. He created one of India's best companies in the difficult days of the license-permit raj.

Apart from his achievements as the CEO of BAL, his individual achievements are:
  • He is the only top executive to have served two terms as president of the Confederation of Indian Industry (CII), which represents over 5,000 companies from India's private and public sectors.

  • He is a member of International Advisory Committee and his expertise in these matters are tapped by the New York Stock Exchange.

  • For his contribution to Indian industry, he was awarded the nation's third-highest civilian honor, the Padma Bhushan, in 2002.

  • He was nominated to the Rajya Sabha from Maharashtra in June 2006 with cross party support from the NCP, BJP and the Shiv Sena.

  • He was said to be the 20th richest man of India according to the Forbes India poll on top 40 richest persons in India.

  • The Government of India appointed Mr. Bajaj as the Chairman of the Development Council for Automobiles and Allied Industries, 1975-77.

  • In 1975, Mr. Bajaj received the “Man of the Year” Award from the National Institution of Quality Assurance.

  • Mr. Bajaj was selected as Business India's Businessman of the Year 1985.

  • In 1988, Mr. Bajaj was felicitated for his achievements in a public function by the Pune Municipal Corporation.

  • Mr. Bajaj was Chairman of Indian Airlines between 1986-89.

  • Mr. Bajaj received the Bombay Management Association Award for The Most Distinguished Services in the Field of Management – 1990.

  • Mr. Bajaj was appointed by His Royal Highness, The Prince of Wales as a Member of the Prince of Wales International Business Leaders Forum in February 1992.

  • FIE Foundation awarded Mr. Bajaj the Rashtrabhushan Award in 1996. Lokmanya Tilak Smarak Trust awarded Mr. Bajaj the Tilak Award in 2000.

  • He was also conferred the Alumni Achievement Award by the Harvard Business School in September 2005.
  • He was a recipient of many more national as well as international honors.

Bajaj Group - Company Profile

Bajaj Group is among the top 10 Business houses in India. The Group manufactures and markets a range of products and services in India and abroad including 2 and 3-wheelers, home appliances, lamps, wind energy, special alloy and stainless steel, castings, cranes, forgings. Its businesses also cover the following sectors: infrastructure development, material handling equipment, travel, general and life insurance and investment & financial services. Market capitalization of the group at present is over US $ 8 billion.

Bajaj Auto

  • The US$ 1.32 Billion worth Bajaj Auto is the main flagship company of the Bajaj Group which employs over 20,000 people with a turnover of over US $ 3.20 billion.

  • Today, with revenues of $1.5 billion and a market capitalization of $3 billion, the company sells nearly 2 million vehicles per year in India and other developing countries in Africa, Latin America, and Southeast Asia.

  • Constant changes in employee management and training led to reduced costs and improved quality. For example; it took 22,000 workers to produce 1 million vehicles in 2000, but only half of that number to make 1.8 million vehicles four years later.

  • In addition, Bajaj Auto has consistently invested in R&D which made the company capable to develop products desired by the customer at a low cost. This has been an important source of confidence for the future.

Awards

For its performance, Bajaj Auto has received various awards including:
  • The 1977 Export Award from the Federation of Indian Chambers of Commerce and Industry (FICCI).
  • The 1985 Economic Times & Harvard Business School Association Award for Corporate Performance.
  • CII Award for Quality and Reliability in 1984 & 1988 and for Technology and Innovation in 1985
  • For 1994-95 Bajaj Auto received the Engineering Export Promotion Council’s award for the highest exports of consumer durables nationally and the highest exports of engineering goods in the Western Region.
  • Bajaj Auto received Dalal Street Journal's Corporate Excellence Award for 1990 & 1995 (Rank I).

Obstacles and Survival

  • The initiation of Liberalization in India by the then PM Rajiv Gandhi posed great challenges for Bajaj Auto. It brought the threat of cheap imports and FDI from top companies like Hero Honda. Rahul Bajaj became famous as the head of the “Bombay Club”, which opposed this liberalization.

    The scooter sales dipped drastically, as people were more interested in motorcycles and the rival Hero Honda was an expert in it.

  • In 2001, the Indian Economy faced a recession and the stock market collapsed. This hit the company hard and it was predicted that Bajaj Auto was soon going to shut down.

However, Bajaj Auto re-invented itself :
  • It established a world-class factory in Chakan.
  • It invested aggressively in R&D.
  • It came up with Bajaj Pulsar Motorcycle which is currently a market leader in its segment.
  • Through a technological collaboration with Kawasaki, BAL improved the variety and quality of its motorcycles. It also altered its supply-chain management and outsourced almost every component used on the assembly line and relying on just-in-time deliveries.
Hence, BAL came out of difficult times even more stronger.

Social Responsibilities

Throughout Bajaj's career spanning forty years at BAL, the company's commitment to corporate social responsibility has remained constant.

Bajaj Auto has set up many “Philanthropic Trusts and Foundations” which support community and rural development in the areas where its workers live, through funding efforts in primary school education, agriculture, and health care.

In the last 5 years Bajaj has been delegating many of his responsibilities to a team of younger executives. In last April, he was succeeded as managing director and CEO by his older son, Rajiv.

Bajaj acknowledges there's still much he wants to do, particularly as India is on the verge of becoming a World Economic Power. According to him some lingering problems in India including an inadequate infrastructure, inflexible labor policies, and too much bureaucratic red tape need to be addressed.

But he believes in the long run, India will succeed, since the entrepreneurial spirit and capability of the Indian people will overcome all these issues.

Last Updated on 12/23/2011