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Bajaj Auto is hiking its stake in KTM from 25% to 30% to hold tight KTM

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Although the two-wheeler industry in India is going through an economical crisis, Bajaj Auto is not holding back its plans of global ambitions. The company is tightening its grip on KTM Power Sports, Europe’s second-largest power sports bike manufacturer. Bajaj is hiking its stake in KTM from 25% to 30% to make the most of “low valuations”.

Bajaj Auto managing director Rajiv Bajaj told ET that the stake hike in KTM will be completed in 6-8 weeks. “We have reached an agreement to increase stake in KTM. At this juncture, it won’t be appropriate for me to talk about the valuations,” added Mr Bajaj.

It is learnt that Bajaj Auto, along with the KTM promoters, will infuse fresh capital into Austria-based KTM, which is also grappling with a difficult market. After the preferential allotment of new shares, the KTM promoters will remain the largest shareholder with around 46% in the European company, followed by Bajaj Auto which will pump in around Rs 100 cr for the latest round of stake hike.

It’s happening at a time when the duo is working to roll out the high-powered KTM bikes in India. The KTM bikes, Duke and RR, based on two platforms, 125cc-180cc and 250cc-400cc, will be assembled at Bajaj Auto’s Chakan facility.

Till date, Bajaj Auto has invested around Rs 800 cr for its shareholding in KTM. “The prototypes are ready and we will be launching the KTM bikes in India by next year,” said Mr Bajaj. Besides, KTM also wants to co-develop entry level bikes in association with Bajaj for the European market. Bajaj Auto, which has witnessed a sharp decline in sales over the past few months, is now banking on new products to regain market share.

The company, which saw its two-wheeler sales fall by as much as 34% last month, is looking to roll out a plethora of new models, including the high-end bikes from KTM and Kawasaki.

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source: economic times

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