Bajaj Auto Limited has informed the Exchange regarding a press release dated May 21, 2025, titled "BAJAJ AUTO MAKES DECISIVE MOVE TO TAKE CHARGE OF REBUILDING KTM".
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On the reaction day the stock moved 1.5 pts more than Nifty 100 and 0.6 pts more than its 2/3 Wheelers peers, over the same two closes: a difference in percentage points, not a measure of what the filing did.
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Bajaj Auto, through its Dutch subsidiary BAIHBV, will take a controlling stake in Pierer Bajaj AG (PBAG) and therefore in KTM AG, Europe's leading premium motorcycle maker behind brands like KTM, Husqvarna and GASGAS. BAIHBV currently holds 49.9% in PBAG (effective ~37.5% in KTM), and the change of control is subject to Austrian regulatory approvals. To prevent KTM from sliding into insolvency, Bajaj is arranging a total debt package of €800 million (about Rs. 7,760 crore), of which €200 million was already infused earlier and a fresh €600 million is being deployed now: a €450 million secured term loan to KTM AG and a €150 million subscription to convertible bonds issued by PBAG. The funds will be paid into the Austrian court's escrow account to settle 30% cash quota to KTM's creditors as part of the restructuring plan approved in February 2025, with a binding court order expected by mid-June 2025. Bajaj will also seek shareholder approval via postal ballot since these are related-party transactions (Rajiv Bajaj sits on PBAG/PMAG/KTM boards).
This is a transformational, value-accretive move for Bajaj Auto as it shifts from a minority investor to the majority owner of a globally renowned premium motorcycle business, but it also carries significant capital deployment and execution risk tied to Austrian regulatory approvals and KTM's turnaround. The market is likely to view the strategic intent positively, though the ~Rs. 7,760 crore outlay will be watched closely for funding mix and impact on leverage.