The 41st AGM of Maharashtra Scooters Ltd (MSL) held at the Bajaj Auto premises today had none of the fireworks that may have been expected on account of a growing clamour to liquidate the company and unlock share value.

Instead, it turned out to be quite a docile affair with Sanjiv Bajaj, one of the directors on the Board, advising shareholders to desist from killing the golden goose.

Earlier, shareholders had pointed out that Maharashtra Scooters, in which state government entity WMDC and Bajaj Holdings hold 27 and 24 per cent shares respectively, had done no manufacturing of any consequence since it stopped assembling Bajaj Auto scooters over a decade ago.

The matter of BHIL (now owner of the pre-merger Bajaj Auto’s share) acquiring WMDC’s shareholding and gaining 51 per cent majority shareholding is pending in the Supreme Court. WMDC had filed the special leave petition challenging the share acquisition price after the Bombay High Court had passed an order in favour of BHIL. The next hearing is due on August 5.

“The mandate for which the public gave money to MSL has been defeated. So shareholders should be given an exit option,” one of the shareholders argued. Another pointed out that the market value of the MSL share was a mere Rs 1,500-odd, a fraction of the net asset value of over Rs 4,000, hence minority shareholders were discounted by nearly 70 per cent of what was due to them. 

Responding to this, Sanjiv Bajaj said, “Don’t kill the goose that lays the golden eggs," and added that thanks to MSL investing in  (Rahul Bajaj) Group companies, the NAV had zoomed. According to him, Rs 1 lakh invested in share capital had yielded Rs 2 crore in dividend and had grown to nearly Rs 15 crore through share appreciation as per the current price.  

Speaking on why the MSL board had not opted to continue manufacturing of scooters, Bajaj said MSL had no manufacturing capability and began assembling Bajaj Auto scooters (which no longer makes scooters) by investing Rs 31 crore.

"If MSL had to buy designs for two models and set up a capacity of 50,000 units, it would have required Rs 1,000 crore,” Bajaj said. “All that we had then was Rs 250 crore, and had we borrowed and spent the money, since the market is competitive, there would have been no discussion today on (high) NAV,” he quipped.

Without Bajaj Auto, it has done the right thing to stop scooters he said, adding that it did not mean it could not happen tomorrow. “The decision will be taken after the court case,” Bajaj said.

For the quarter ended June 30, MSL has posted a profit of Rs 136 lakh against Rs 196 lakh in the same period of 2015 and an operational loss of Rs 20.3 crore (Rs 11.4 crore last year).

Income from operations stood at Rs 88 lakh versus Rs 231 lakh in the same quarter of 2015, but thanks to treasury income to the tune of Rs 339 lakh, the company has posted a net profit of Rs 136 lakh versus Rs 196 lakh last year.

The board has declared a final dividend of Rs 30 per share.

On the BSE, the company’s stock shed Rs 21.45 per share and closed at Rs 1,442.10 apiece, 1.47 per cent lower when the benchmark index closed with a gain of 1.05 per cent.