Twins Become Billionaires Riding India's Scooter Draft

The twin great grandsons of Mahatma Gandhi’s "fifth son" have become billionaires riding the draft of their uncle’s motorcycle business.

Anurang Jain’s net worth hit $1.1 billion, according to the Bloomberg Billionaires Index, after auto parts maker Endurance Technologies Ltd. soared 74 percent since its October initial public offering. His brother, Tarang, has a $1.1 billion fortune based on the valuation of closely held Varroc Group, which also makes components for motorcycles and cars.

Both companies have long counted their uncle’s Bajaj Auto Ltd. as their biggest customer.

“I will be the first one to shout at them if I find any problem,” Rahul Bajaj, 78, said in a May 11 phone interview. “Bajaj Auto has always insisted on better quality and lower cost. Indeed, both had worked on cost and quality, otherwise they would not have grown.”

Ashram Childhood

Bajaj, who recalls sitting in Gandhi’s lap and digging wells for the independence leader at his ashram, realized as a teenager that what propelled his family most wasn’t the spirit of non-violent political protest but a quest for success.

“People say, while you are a child, you think of being a policeman or a pilot,” Bajaj said in an interview with Harvard Business School in 2014. “I never thought of anything else: business, business, business.”

Since then, Bajaj transformed himself into the king of the Indian scooter industry and amassed a personal fortune valued at $4.2 billion, ranking him No. 433 on the Bloomberg index of the world’s 500 richest people.

Samir Shrimankar, a spokesman for the Bajaj Group, confirmed Rahul’s net worth, while Anurang’s was verified by Sunil Lalai, an Endurance spokesman. Varroc representatives didn’t respond to requests for comment.

Family Alliance

Publicly traded Bajaj Auto, started by Rahul’s father and run by his son since 2005, is the group’s flagship business and India’s largest exporter of motorcycles and three-wheelers. The company is part of Bajaj Group, controlled by the billionaire and three cousins -- Madhur, Niraj and Shekhar -- through Bajaj Holdings & Investment.

Varroc, based in the western city of Aurangabad, is India’s No. 1 motorcycle parts supplier and had revenue of $1.5 billion in fiscal 2017, according to its website. Publicly traded Endurance had revenue of 55.7 billion rupees ($831 million) in the year ended March 31, most derived from its aluminum casting business.

The families trace their lineage to Jamnalal Bajaj, a freedom fighter Gandhi considered to be his fifth son. Jamnalal, who created Bajaj Group in 1926, persuaded Gandhi to establish an ashram in his home state of Maharashtra in 1932 and his family lived there until the Hindu leader’s assassination in 1948.

Bajaj’s family moved to Mumbai around the time of India’s independence in 1947, after years spent in and out of British jails. Rahul’s father took control of the family business in 1942, creating the precursor to Bajaj Auto three years later and expanding the enterprise to include cement, electrical appliances and scooters.

High Gear

It was the scooter business that kicked the family fortune into high gear. Built up by Bajaj during the 1970s and ’80s against the headwinds of a centrally controlled economy, the company became India’s top scooter brand while expanding to places like Colombia, Sri Lanka and Nigeria.

The two-wheelers became a prized commodity, especially in northern India, where "you couldn’t get married in a middle-class family unless the girl’s family was ready to give a Bajaj scooter" as dowry, Rahul Bajaj told Harvard. Families would order one when a child was born or buy them on the black market.

Naresh Chandra Jain, Rahul’s brother-in-law and father of the twin billionaires, had been running Kaycee Industries Ltd. to supply Bajaj Auto with electrical switches, leaving in 1985 to join his sons at Anurang Engineering, which produced aluminum die-castings used in Bajaj scooters and is now part of Endurance.

Both Endurance and Varroc have worked to reduce their dependence on Bajaj by adding new customers and products through acquisitions. Varroc’s revenue almost doubled with the 2012 purchase of lighting business Visteon for $92 million, while Endurance now has seven factories in Europe and 18 in India. 

Through it all, the family has managed to successfully navigate the difficult line between nepotism and operational success, according to Shriram Subramanian, managing director of corporate governance advisory firm InGovern.

“What matters are results,” Rahul recalled telling his eldest son after he hatched a plan to improve margins by abandoning the scooter business. “The day I find in totality you are not good for the company, I will talk to you. The fact that you are a Bajaj will not save you.”