Mumbai, Jan. 3: Shares of Bajaj Auto today leapt on hopes that the company will soon announce the much-awaited demerger of its financial operations into a separate company.

On the BSE, the share rose by Rs 103.90, or 3.79 per cent, to close at Rs 2,842.65. Brokers said there were two major reasons behind this gain.

The company had recently announced robust sales figures for the month of December and activity was high on the counter on hopes that the demerger proposal could soon be taken to the board.

Analysts feel the hiving off of Bajaj Auto’s finance activities would unlock shareholder value.

“As in the case of Reliance Industries, it is felt that here too any demerger will lead to enhanced shareholder value,” a broker said.

Rahul Bajaj had first talked about this demerger plan around four years ago. The Bajaj Auto chief had said he had plans to form two companies — one would concentrate on manufacturing and the other, a separate investment company, would improve the price-earnings ratio.

The broad plan was to have a holding company which would house the auto finance business, the insurance business, and part of the company’s huge treasury operations. While Bajaj Auto’s investment portfolio is over Rs 7,000 crore (as of June last year), the demerged company will hold shares of not only Bajaj Auto, but also other subsidiaries like Bajaj Allianz Life Insurance Company and Bajaj Allianz General Insurance Company.

The proposal did not make much headway due to various issues, including the possibility of a high stamp duty. Further, the family settlement issue is yet to be sorted out.