Bajaj Auto shares have rallied over 2%, hitting an intraday high of ₹8,039.65, as the market took note of the company’s investment in Pierer Bajaj AG (PBAG), the parent company of Austrian motorcycle company KTM. Overall, the launch reflects Bajaj Auto’s desire to strengthen its position in the premium motorcycle market.
Strategic Investment Details
Bajaj Auto International Holdings BV (BAIH BV), the 100% owned arm of Bajaj Auto, has become an investor in PBAG through a convertible bond of 50 million euros (about ₹461.6 crore). The 500 bonds subscribed by Bajaj Auto International Holdings BV (BAIH BV), each with a nominal value of 1,00,000 Euros, clearly demonstrate BAIH BV’s financial support to KTM’s phased resumption of motorcycle production. BAIH BV now holds a 49.9% stake in PBAG, which acts as the operating company for 74.94% shareholder Pierer Mobility AG (PMAG). These new convertible bonds will have an option of conversion into PBAG shares from June 1, 2025 to February 29, 2028, thus aligning Bajaj Auto’s strategic interests even more with the KTM Group. Strengthen KTM’s production This investment helps revive production at KTM AG and maintain its market presence. Bajaj Auto MD and CEO Rajiv Bajaj holds a position on PBAG’s supervisory board, thus indicating that the plant’s influence extends to KTM Group’s business decisions.
Market reaction and stock performance
The Sensex was flat and Bajaj Auto shares were trading at ₹8,029.35 at 10:06 am on Thursday, up 1.97% from the previous close, due to positive news from the company. This data is new highs as investors have regained their faith in Bajaj Auto’s strategic vision and drive for growth through substantial partnerships
While the deal is a related-party transaction, it is done on an arm’s length basis and approved by Bajaj Auto’s audit committee, thereby adhering to standards of corporate governance and transparency.
Long-term strategy
This is in line with Bajaj Auto’s long-term strategy to integrate and collaborate with KTM and increase its presence in the premium motorcycle segment. The deal gives Bajaj Auto a large financial and strategic stake in PBAG, allowing it to participate in KTM’s future development and technology. This not only improves KTM’s manufacturing capabilities but also makes Bajaj Auto a global player in motorcycle manufacturing.
