Bajaj Auto to invest ₹1,364 crore in financial trouble-hit KTM

Bajaj Auto is planning to infuse a large chunk of funds into KTM, which has been struggling financially for the last couple of months. The homegrown two-wheeler giant that currently holds a 49.9 per cent stake in Pierer Bajaj AG, which holds 75 per cent share of Pierer Mobility AG, the parent company of KTM, has plans to invest ₹1,364 crore. The investment in the financial trouble-hit KTM will be in the form of equity capital, preference capital or loan.

Despite being the fastest-growing European motorcycle brand once, KTM has been facing financial issues since November 2024 and is currently in search of emergency funds to keep its operations running. Owing to this financial problem, KTM announced emergency restructuring on November 29 last year. “KTM AG is in the process of implementing restructuring measures due to high financing needs. The management of KTM AG assumes that it will not be possible to secure the necessary interim financing in a timely manner," Pierer Mobility Group said in a statement in November.

The auto company has been in discussions with various lenders. However, nothing has been materialised so far. But with Bajaj Auto now jumping in with such a large tranche of investment, the Austrian performance motorcycle manufacturer is expected to get a breather and focus on getting itself out of the trouble.

It is not clear yet if Bajaj Auto will become the majority stakeholder of KTM after making this investment. However, it will be interesting to see how both the auto manufacturers work together.

Bajaj Auto and KTM partnership

Bajaj Auto's partnership with KTM dates back to 2007 when the Indian two-wheeler brand picked up a 14.5 per cent stake in KTM Power Sports AG and subsequently launched the brand in India. Bajaj Auto International Holdings BV (BAIHBV) gradually increased its stake to 48 per cent. In 2021, the shareholding was simplified when BAIHBV swapped 46.5 per cent of its holding to gain a 49.9% stake in the KTM group’s parent company. Currently, Bajaj Auto manufactures small-displacement KTM and Husqvarna motorcycles at its Chakan plant.

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