New Delhi, Feb 8 (PTI) Bajaj Electricals Ltd would demerge its power transmission and distribution (T&D) business into a separate company in a move to create a sector-focused firm and streamline the management structure.

The board of Shekhar Bajaj-led company on Tuesday approved the scheme of arrangement between Bajaj Electricals (the demerged company) and Bajel Projects Ltd (the resulting company) subject to the approval of shareholders, said a regulatory filing.

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As per the scheme, 1 equity share of face value of Rs 2 each fully paid-up of Bajel Projects will be issued for every 1 equity share of face value Rs 2 each fully paid-up held by equity shareholders of Bajaj Electricals, it added.

"The equity shares of the resulting company shall be listed on BSE and NSE, post the effectiveness of the scheme. The shareholders of the company will be issued equity shares in the resulting company in the same proportion as their holding in the company," it said.

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The segregation will enable both the companies to move forward independently, with greater focus and specialisation, building on their respective capabilities and their strong brand presence, said Bajaj Electricals in the regulatory filing.

After the demerger, Bajaj Electricals will have two business segments - Consumer Product segment and Engineering Procurement and Construction segment.

Its Consumer Product segment business includes appliances, fans and consumer lighting products.

"The nature of risk, competition, challenges, opportunities and business methods for the Power Transmission and Power Distribution Business is separate and distinct from the Remaining Business carried out by the demerged company," said Bajaj Electricals.

Further, the way power T&D business is required to be handled and managed is not similar to that of the remaining business, it added.

The demerged undertaking turnover was at Rs 730 crore as of March 31, 2021 and contributed 15.97 per cent of its total turnover.

For 2020-21, Bajaj Electricals revenue was at Rs 4,573.06 crore.

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