Company officials refused to divulge details about the project. The senior Bajaj is reportedly out of the country and could not be contacted for his comments.

Experts say that Bajaj Auto will logically kick off with a focus on motor vehicles insurance and health insurance. This is the second major diversification being considered by the company after its e-commerce foray. It had, more than three years ago, considered a car venture as it would have been the most logical way to grow on the lines of its international counterparts. At that time, it was talking to global giants like Chrylser (now DaimlerChrysler), Ford Motor Corporation and Mitsubishi Motors of Japan.

The company has begun discussions on the insurance foray with key international players who are as keen on getting a foothold in India. Bajaj Auto plans to initially apply for a licence on its own and subsequently induct a foreign partner. With the 26 per cent cap on foreign investment in the insurance sector, Bajaj Auto is likely to hold a 74 per cent stake in the proposed insurance venture.

The company has been witnessing a downtrend in scooter sales with the market shrinking considerably. Diversification was seen as a prudent move for Bajaj Auto. Entering the four-wheeler market would have been the next logical step but with the car market no longer attractive, insurance was considered to be the most synergistic with its existing business apart from the booming e-commerce. The expected boom in the opening insurance market in India is beckoning the auto major.

The `Bajaj' brand equity still going strong in the market is waiting to be leveraged. Apart from the goodwill, the company could also cash in on its strong network across the country for distributing the insurance products. With Bajaj Auto Finance Limited, the company has also gained considerable experience in the mobilisation and marketing of financial products. Raising and managing funds would not pose any problem for the company which has been flush with funds for a long time thanks to the monopolistic domination in the scooter market.