Pune, Aug 2: The maharashtra government should exit from Maharashtra Scooters Ltd by off-loading its stake to the public. Maharashtra Scooters,CMD Rahul Bajaj said that the state government was hanging on to its stake while the value of the stock has been continuously eroding.Bajaj, who has total control over the management of Maharashtra Scooters indicated that the future did not look good especially with the scooter market being hit by falling sales and drop in margins. Bajaj was speaking to the press following Bajaj Auto annual general meeting (AGM).The Maharashtra state government has a 27 per cent stake in the Satara-based Maharashtra Scooters. Despite several overtures, the state government has not shown any inclination to exit from the company. Officials at Western Maharashtra Development Corporation (WMDC), the agency through which the state government's holding has been routed in the company, were not available for comment.
As far as the state government is concerned, despite its dipping sales and profits, Maharashtra Scooters is still among its few profitable ventures. The government is not willing to forego short-term returns for long-term erosion of its investments. The future, however, looks bleak for this Satara-based venture. The company shifted to five-day week operations in June. It has recently introduced a voluntary retirement scheme (VRS) for its employees for down-sizing manpower.
Maharashtra Scooters registered a fall in scooter sales during the first-quarter of the current financial year. Sales fell to 32,751 scooters as against 38,178 scooters sold during the corresponding period of the previous year. Sales and other income during the quarter dropped to Rs 73.53 crore as compared to Rs 83.92 crore from the same period last year. The sale of scooters in the current year is expected to be lower at around 130,000 compared to 146,673 last year, a company release said.
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