Rahul Bajaj
Chairman, Bajaj Auto
Age: 75
Rank in the Rich List: 20
Net Worth: $3 billion
Key Learning: Every top business school today teaches family business. The basic principles that come to my mind are love, truth and non-violence. You follow those, then there will be no problems. If you don’t, then that gives rise to ego, selfishness, greed and pride.
Advice to other business families: Be reasonable. Believe in give-and-take and don’t be greedy.
Rahul Bajaj is unabashedly confident—after all, he has been there and done that. At his office in Akurdi, on the outskirts of Pune, he casually chooses where he wants to sit on the couch. During the interview, he turns a question around to check if you really mean it. He poses for a photograph. He raises his voice while making a point. He laments that interviews for which he has budgeted one hour almost always take two. And, in his own inimitable style of brashness mixed with worldly wisdom, Bajaj, 75, talks about his idea of wealth creation and lifestyle, the spat with brother Shishir, differences with son Rajiv and the aversion to debt.
Consider the facts. Bajaj has been a constant feature on the Forbes India Rich List. This year, he is ranked 20th and his total wealth is estimated at $3.1 billion. It has dropped marginally from $3.4 billion last year (as has his rank from 19) but, in the last four years, Bajaj has almost doubled his wealth. Today, the Bajaj Group is among the largest corporate houses in the country. The Group’s total revenues stand at $7.3 billion, with a market capitalisation of about $14.6 billion. It has 40 companies across businesses such as two- and three-wheelers, insurance and steel; and it employs more than 33,000 people. Now, you can’t really argue with this kind of success. Or that level of confidence.
Q. What is your idea of wealth creation?
I am no saint… People often ask this question: Why do you run a business? Generally, they say it is to make money. That is not fully correct. It is alright in a limited sense. What is right is this, and I am just repeating what was said by Peter Drucker, the smartest management guru in the world, many years ago: The purpose of business is to satisfy the needs of the customer. If you make motorcycles and nobody buys them, you will go bankrupt like companies which are not customer centric.
Take care of the customer. If you cheat him, give him bad quality, charge him more than you should, he will not buy and you are in trouble. This is not a charity mindset. It is an enlightened, ‘good businessman’ mindset.
In 1971, the MRTP commission report stated that ‘Rahul Bajaj did not take advantage of the ten-year delivery period of the Bajaj scooter [excess demand over supply], even though the premium [people were willing to pay] on the vehicle was much more than the profit. And his is the lowest priced scooter in the market.’ But this enabled Bajaj Auto to become one of the most profitable and fastest-growing companies in the 1980s. That is the philosophy of creating wealth. I am proud of what I have achieved. And whether I made one dollar or a billion, the question is how I did it. I am not a Gandhi. Subject to that, I am proud of how I made my money. I am not saying I have never made a mistake. But I have not consciously cheated anyone or done anything corrupt.
Q. You have done well for yourself. Has it affected your lifestyle choices?
First the yes: I have a large office and a large home. I have big cars and, for some time, we have had an aircraft for our business needs, comfort and convenience. Clearly, all of this shows to an average man that you are a rich guy. Now, the no: When I came back in August, 1964, after completing my MBA from the Harvard Business School, I came to Akurdi. My wife and I travelled economy class. I was a Bombay boy; I did my schooling in Cathedral there. I went to St Stephen’s College in Delhi; I studied law at the Government Law College in Mumbai and then did my MBA in Boston. Akurdi was a jungle at the time. There was no school, college, hospital… nothing.
Name one industrialist who did that, anyone from cities like Calcutta, Bombay, Delhi and Chennai. Did they go to a small place and stay there for over 40 years? People might visit their plant once or twice a month. If you are training at a plant, you will maybe stay there for a year or so. I came here in January, 1965, and I am still here. I didn’t even shift to Pune. What kind of a lifestyle will you have in a factory colony which works three shifts? Parties that start at 9 or 10 pm and, like in Delhi or Mumbai, go on till 2 am? You can’t do anything like that. And that’s been the lifestyle for the first 25 years; even now—though, during the last few years, I started travelling more.
Q. A lot is made of the disagreements between you and Rajiv. What is a typical Rahul and Rajiv Bajaj discussion like?
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(This story appears in the 28 November, 2013 issue of Forbes India. To visit our Archives, click here.)
Shri Bajaj Sahab has been a pillar of strength , philosopher and guide for Babaj group of companies , source of inspiration to business and industry here and commands lot of respect from consumers and citizens at large in our country and abroad . Our country needs guidance from him during many years ahead .
on Nov 16, 2013Scooters now account for almost more than 35% of the Indian Two wheeler industry and Bajaj Auto doesn\'t make any. In hindsight Mr.Rahul Bajaj was right in insisting on making scooters. Sooner or later Bajaj Auto will have to re enter the scooter segment and that will be a herculean challenge.
on Nov 16, 2013Mr Rahul Bajaj is a great and towering personality . He is a source of inspiration to hundreds not only in business and industry but to thousands of common people in the country . My own good wishes to him for a long life -full with good \' health \' and \' wealth \' . J K
on Nov 16, 2013My due respect to Mr. Rahul Bajaj for sharing his thoughts/opinions candidly to the media. Rajiv Bajaj has taken Bajaj Auto to a new sphere altogether, at par with MNC giants in the 2-wheeler space. The decision to concentrate on motorcycles \"only\" is a smart one, but most 2-wheeler firms are gaining popularity in the scooter space to the extent that HMSI Activa has overtaken sales of the Hero Splendor. This may be a right time for Bajaj to resurect a modern version of the Chetak. Cheers
on Nov 13, 2013