@Shivansh_Bansal :- Nice write-up.
Supplemental to ur above understanding will be Moerus grp’s latest letter which I shared on other thread : -
This contains a very insightful discussion on investing in holding companies by Amit Wadhwaney. Please check out.
Whr things get interesting in Bajaj’s case is that thr are essentially 3 holding cos. structure : -
- Bajaj Finserv
- Bajaj Holdings & Investments
- Maharashtra Scooters
All 3 trade at discount to thr Fair value and with majority control the fair value realisation lies in thr hands. Wat is needed to be analysed is in which case thr are triggers for narrowing up the discount to Fair value and how sooner or later - e.g - Bajaj Finserv is a spawner for finance businesses so I dont think that structure is going to collapse in near term.
I primarily chose Maharashtra Scooters (and that was more than a yr ago) because : -
(a) The discount here was widest and it still is
(b) The majority shareholding came under Bajaj’s mgmt after settlement with WMDC. So, either the Bajaj mgmt collapses this structure or continues - It will surely be better managed
(c) With Maharashtra Scooters, one gets exposure to Bajaj Auto. Now this is completely personal choice as in if u want to avoid exposure to Auto sector than one can go for Bajaj Finserv. Also if one wants more diversified exposure to equities than one shd go for Bajaj Holdings
Thoughts??
Disclosure : - Invested