Will India’s Homegrown Auto Giant Take Over KTM? It’s Netherlands Investment Sparks Speculation!
With this fresh investment round, speculation is rife about whether Bajaj Auto will increase its stake in KTM’s parent company, potentially becoming the majority stakeholder. However, no official statement regarding Bajaj’s plans to take over KTM has been made.
Bajaj Auto has taken a significant step towards strengthening its partnership with KTM by approving an investment of up to Euro 150 million (Rs 1,360 crore) in its wholly-owned subsidiary, Bajaj Auto International Holdings BV (BAIH BV), Netherlands. This investment aims to support BAIH BV’s funding needs for various investment opportunities.
The financial infusion, which will be made in one or more tranches until March 31, 2026, could take the form of equity capital, preference capital, or loans, either convertible or otherwise. Bajaj Auto has secured necessary approvals from the Reserve Bank of India (RBI) to facilitate this investment in its foreign subsidiary.
BAIH BV, which holds a 49.9 per cent stake in Pierer Bajaj AG (PBAG), has already allocated a loan of Euro 50 million to PBAG. This move is seen as an effort to aid the financial restructuring of PIERER Mobility AG (PMAG), the parent company of KTM AG. PBAG currently holds a 74.94 per cent stake in PMAG, making this investment crucial in stabilizing the Austrian motorcycle brand’s operations.
KTM has been facing financial difficulties, prompting it to enter a court-supervised restructuring process to avert bankruptcy. Amidst this turmoil, Bajaj Auto’s capital infusion is being viewed as a potential lifeline for the struggling motorcycle manufacturer.
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Bajaj Auto has long been a crucial partner for KTM, manufacturing several of its Small-Capacity motorcycles, including the 200 Duke, 250 Duke, 390 Duke, and the Adventure series. With this fresh round of investment, speculation is rife about whether Bajaj Auto will increase its stake in KTM’s parent company, potentially becoming the majority stakeholder. However, no official statement has been made regarding Bajaj’s plans to take over KTM.
Bajaj Auto reported a 3.27 per cent rise in standalone net profit to Rs 2,108.73 crore in Q3 FY25, with a 5.72 per cent increase in revenue from operations, reaching Rs 12,806.85 crore compared to Q3 FY24. Despite this positive growth, shares of Bajaj Auto were trading 0.31 per cent lower at Rs 8,427.85 on the BSE at 12:30 pm.
As a leading player in the automotive industry, Bajaj Auto continues to expand its global footprint in motorcycle manufacturing, commercial vehicles, and electric two-wheelers. The recent investment in KTM could be a game-changer, strengthening Bajaj’s influence in the premium motorcycle segment.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice.