“We identify them early. We move them around various jobs and to various businesses,” Bajaj said in an interview at his South Mumbai residence overlooking the Coastal Road. “They move from business to human resources and to operations. So, by the time they come into their 40s, they have a very good experience across multiple areas.”
Bajaj’s idea is to make better leaders out of them. Interestingly, the financial services group also moves people in its middle management tiers between group companies. That is to ensure they get exposure to more than one type of business, creating leadership for the future, said Bajaj.
Bajaj said the group’s 100,000-plus employees come to work not to earn daily pay, but because they enjoy being there.
“I have never stopped anybody who wanted to leave the company because I’ve always believed that those who are there should be there because they want to be there,” he said, adding that given the plethora of opportunities one cannot hold people back forcibly and that is not something he wants to do.
Also read | Can Bajaj Finserv still dominate the credit game?
“What we can do is to create that excitement and empowerment and ownership where the leaders who work with us run those businesses as their own. Now, may be we cannot take that ownership all the way down to the 100,000th employee, but at least we can for senior management and senior leadership.” He said that of the top 100 leaders, other than through natural retirement, not even five would have quit in the last 15 years or so.
On succession at the promoter level, Bajaj said that his children are still finishing their education and it depends what their interests are.
According to him, all of Bajaj Finserv’s operating companies are run by professional chief executives and teams. The promoters’ role is to guide them, empower them, and build businesses for the long term. “If somebody from the family wants to come in, they have to have the capability to rise through the ranks,” said Bajaj.
In 2007, Bajaj Auto was split into three companies, one for the auto business, one for financial services, and the third as the investment and holding company. While Rajiv Bajaj was put in charge of the auto business, Sanjiv got the financial services space. Bajaj Auto chairman Rahul Bajaj had said at that time that the move was prompted by a desire to unlock shareholder value and not divide the group between his sons.
Read this | Rate cut at upcoming MPC meet not a certainty, says CEO of Bajaj Finserv AMC
“I represent the Bajaj family in actively managing financial services but the Bajaj family itself has many more members.”
Bajaj Finserv’s subsidiary non-bank financier Bajaj Finance recently elevated long-time managing director Rajeev Jain to the role of vice-chairman, while promoting internal candidate Anup Kumar Saha as the next MD. Jain, who had joined Bajaj Finance as the chief executive officer in 2007, went on to become the managing director in 2015. Before joining Bajaj, he worked with GE, American Express and the American International Group (AIG).
“Given the fact that Rajeev has been in that role for over 17 years, we saw the opportunity for an orderly transition. Anup has been with us now for over seven years and for the last few years, he has been running most of the businesses,” said Bajaj, adding that Jain still continues to provide mentorship, to work with Bajaj and Saha on strategy.
Jain was also appointed on the board of Bajaj Finserv as an additional director. Bajaj said Jain will provide some mentoring and assistance there to some of the businesses as well. “We are building out for the next 10 years what we need to do in as much of an orderly way that we can.”
Also read | Crowd is right on trends, but wrong on ends: Nimesh Chandan of Bajaj Finserv AMC
The idea to have Jain’s continuing presence in the company has assuaged analysts. “This finally ends the overhang of its management change,” analysts at Kotak Institutional Equities said in a note to clients on 20 March.
The note said that there have been concerns about the possible exit of Rajeev from Bajaj Finance after the end of his tenure in March 2025, which may have posed risks associated with managing transition. Jain, the note said, has steered the business exceptionally well, after joining the board in 2007; it would be challenging for someone new to fit into his big shoes. To be sure, Jain told analysts in January that he planned to remain involved in shaping the strategy of the non-bank financier in his future role.
Meanwhile, the Bajaj Group will buy out Allianz SE’s stakes in their two insurance joint ventures for a total of ₹24,180 crore, marking the end of its 24-year partnership with the world’s largest insurer. In a late-night statement on 17 March, Sanjiv Bajaj-led Bajaj Finserv said the company and other promoter firms will acquire the stakes of the German insurer in Bajaj Allianz General Insurance Co. and Bajaj Allianz Life Insurance Co. for ₹13,780 crore and ₹10,400 crore respectively.
Most of the Allianz stake will be purchased by other promoter entities. Post-acquisition, Bajaj Finserv’s stake will be 75.01% in both companies. While Bajaj Finserv will acquire about 1.01%, Bajaj Holdings and Investment would acquire about 19.95% and Jamnalal Sons about 5.04% in each of the two insurance companies.
And read | How Bajaj Finserv plans to sell mutual funds to its 100 million clients
“For Allianz, one of the main priorities was that India is an important market, and that is why they want to build their plans for India as early as possible. This meant that we needed an agreement which could have been executed once we got regulatory approvals, as fast as possible,” said Bajaj.
Bajaj said that since Bajaj Finserv is a CIC (core investment company), neither was it sitting on large surplus funds, nor is it allowed to borrow. “Hence, in the group, two of our group companies stepped up, Bajaj Holdings and Investment Ltd and Jamnalal Sons Pvt. Ltd which do sit on surplus cash and investments, and they will come in to ensure that the transaction moves with speed and with a high level of certainty,” said Bajaj.
https://www.livemint.com/companies/succession-at-bajaj-finserv-starts-by-spotting-young-leaders-says-sanjiv-bajaj-rajiv-bajaj-american-express-11742724100003.html
