Rahul Bajaj: The Scooter King
Rahul Bajaj's life is the story of India – from Gandhi to Modi, scooters to motorcycles, auto to finance.
Rahul Bajaj lived through the best of times and the worst of times. His family's political history was a source of much prominence and some turbulence. The Bajaj brand a household name, but also witness to fierce business rivalries and one particularly ugly family split. Yet, in the over eight decades Rahul lived and led one of India's most prominent business groups one thing remained unchanged – his candour.
Whether it was directed at his children or at the government of the day.
In 2009, when son Rajiv Bajaj shut down the family's legacy scooter business, Rahul publicly expressed dismay. "They feel that I am sentimental," he told this reporter. "That I was a scooter king. They don't have the attachment, I am not blaming them for that. I don't fully agree with the policy," he said while also acknowledging that he was no longer running the company and hence would defer to his son's decision.
That same directness made an appearance three years ago when at a televised business event Bajaj stood up to prominent ministers of the Narendra Modi government for creating an environment of fear. "We don't have the confidence that you'll appreciate criticism," he said on behalf of a business community that maintained its silence even when government acolytes trolled the veteran leader in response.
Bajaj would have remained unfazed by that, may be even amused that the reaction proved him right.
He was very candid in his views, Baba Kalyani said describing his friend of over 50 years. He was a man of principle and he stood by it, the chairman and managing director of Bharat Forge Ltd. said over the phone on the day of Bajaj's demise.
It was a trait inherited from Kamalnayan Bajaj.
"He never accepted ideas uncritically," Rahul Bajaj wrote about his father in a 2015 book released to mark his parent's centenary year. "He even argued with Gandhiji. That is why he earned the sobriquet of being a 'Gandhian rebel'."
Rahul Bajaj spiritedly carried on the legacy.
He was "bold and fearless," said Uday Kotak, chief executive officer of Kotak Mahindra Bank Ltd. on social media. "A rare businessman who spoke truth to power."
Bajaj, Birla, Ambani...
Rahul Bajaj (1938 - 2022) took charge of the family business in a post independent India that was marked by Nehruvian socialism, stifling license raj and the paranoia-filled Emergency years of Indira Gandhi before the more liberal governments of Rajiv Gandhi and his successors. In that, he shared the challenges of his peers such as Dhirubhai Ambani and Aditya Birla.
But the three had very distinct approaches to building businesses of scale.
Ambani (1932 - 2002), was a first generation entrepreneur with an insatiable risk appetite and penchant for political maneuvering. He started with textiles and, through backward integration, built a petrochemical and petroleum refining giant in Reliance Industries.
The more reticent and private in nature but detail-oriented Birla (1943 - 1995) came from a similarly privileged business family as Bajaj and chose to build a diversified, commodity-led multinational empire.
Straight-shooting, loquacious Bajaj inherited a family business that spanned trading to consumer products to steel to lamps, travel, sugar and auto. With a brother and three cousins in the fray, he focused on the flagship Bajaj Auto.
"If Bajaj Auto cannot be a world player in its field, I do not deserve the right to diversify. You should diversify from a position of strength, not from a position of weakness," he is quoted as saying in Gita Piramal's book - Business Maharajas.
Bajaj, Socialism, Protectionism...
At the time of his taking charge (1965), the company had a collaboration with Piaggio to assemble and sell the Vespa in India. Though the partnership ended a decade later, when Indira Gandhi's government refused permission for an extension, it laid the foundation for Bajaj's own brands Chetak and Super. They went on to become bestsellers, with 10 year-long waiting lists. Mostly as Gandhi's government controlled capacity expansion, especially since Bajaj Auto was a near-monopoly.
"My blood used to boil. The country needed two-wheelers. There was a ten-year delivery period for Bajaj scooters. And l was not allowed to expand. What kind of socialism is that?" Rahul Bajaj says in Piramal's book.
Ironically, Rahul Bajaj came to be associated with another kind of 'ism' in the 1990s – protectionism. He was the most visible face of the Bombay Club, a group of Indian businessmen claiming to lobby for a level playing field with foreign business, but who came to be viewed as anti-foreign competition.
I have always been an advocate of liberalisation and a free market, Bajaj said in his defence in a 2014 interview to Srikant Datar, professor at Harvard Business School. "In fact, that is the Gandhian philosophy. My family stood for that. In fact, nobody thought of and nobody remembered that Gandhi didn’t want a big government. He wanted in fact Panchayati Raj [local government]."
Bajaj was also among the first to take the India economic story abroad. He began attending the World Economic Forum's annual meeting in Davos in 1979, and was the first Indian on its International Business Council. He was also the first Indian on the advisory council to the New York Stock Exchange.
He saw the development of India coming and therefore he was able to develop his business in that direction, Baba Kalyani reminisced.
Bajaj, Rajiv, Sanjiv...
In the intervening decades, Bajaj Auto fought the Firodias for the tempo business, built manufacturing scale in two and three-wheelers and built a household brand – Hamara Bajaj. It took the battle to international markets with exports and advertisements in Time magazine. But, in the late 1980s, it lost a vital entry into the truck business when the Hinduja Group won the bid for Ashok Leyland, and in the early '90s it missed the foreign partnership bus for the car business.
Rahul claimed that was intentional. Piramal's book quotes him as saying "Until and unless the project is right and we have the right product, we won't get into cars. What's the point in several manufacturers making 20,000 cars each? You've got to make at least 1,00,000 cars, preferably 2,00,000, in order to overtake Maruti. If I can't do that, I don't want to be in cars."
Bajaj Auto was the country's top two-wheeler company till the turn of the century brought the toughest challenge yet. India shifted rapidly from being a scooter market to motorcycle country. Japan's Honda had picked Munjal and Firodia as Indian partners over Bajaj, and Hero Honda's 'Fill It, Shut It, Forget It' campaign helped seal its leadership. It took a major overhaul by son Rajiv, at that time de facto chief executive, to put Bajaj back in the reckoning.
Later Rahul smiled away what was an existential moment. He told Harvard's Datar – "I used to tease my elder son. I said, 'You are a great manager. You are doing well on costs and quality. All I know is, I was number one, you are number two!'"
In 2005, he formally handed over charge to his two sons – auto to eldest son Rajiv, financial services to Sanjiv. The latter, Bajaj FinServ, is now a business with twice the market cap of legacy auto. The gap with Hero Honda has been crossed. And the Chetak is back in an electric avataar.
Bajaj, Congress, Modi...
The Bajaj family's political ties date back to its support of India's freedom movement. Mahatma Gandhi considered Jamnalal Bajaj his fifth child, Rahul would often recount to others with pride, including to this reporter. Jawaharlal Nehru named Rahul, a gesture which made "lndira Gandhi hopping mad as she had wanted it for her own son," his wife Rupa Bajaj recalled in Piramal's book.
Rahul's father Kamalnayan Bajaj even contested the first general elections in 1951-52 on a Congress ticket. But the relationship frayed when he opposed Indira Gandhi for prime ministership in the 1960s and sided with Morarji Desai at the time Gandhi split the party in 1969.
In 1976, under Indira's government the tax department conducted a three-day raid "where 1,100 income tax sleuth simultaneously swooped on 114 Bajaj establishments" Piramal's book notes.
Later, under Rajiv Gandhi's government, Bajaj was among many businesses and leaders investigated in a nation-wide campaign by finance minister VP Singh.
Curiously, soon after, Rajiv appointed Rahul chairman of Indian Airlines, underscoring a tempestuous connection between the two families.
Bajaj was also close to Maharashtra politician Sharad Pawar and was elected with Pawar's support as an independent member of the Rajya Sabha in 2006.
He remained his candid self when appraising the corruption and policy errors of the Congress-led UPA government in its second term.
Narendra Modi hasn't been spared either.
Bajaj, Bajaj, Bajaj, Bajaj.........Bajaj
The main Bajaj manufacturing facilities are in Pune, Maharashtra. Raised in Mumbai, a graduate of the Government Law College and an alumnus of Harvard Business School, Rahul Bajaj and wife moved to the village-like Akurdi in 1965 and raised their three children in a house in the factory complex they built.
It is here that a labour dispute resulted in violence and deaths in 1979. It is here that Rahul, brother Shishir, and cousins Shekhar, Niraj and Madhur split the group companies in 2009, after an ugly, decade-long battle in which the cousins sided with Rahul, and Shishir and son went their own way. It is here that Bajaj lived till the end.
"Actions speak louder than words. I did not and do not believe in absentee landlordism," he had told Piramal.
Menaka Doshi is Managing Editor at BloombergQuint.