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The planned takeover of the financiallytroubled KTM will pave the way for Bajaj Auto to sell its own bikes in the developed markets by tapping into the global distribution network of the Austrianbike maker.

KTM has sales operations in the developed markets such as the UK, Europe, Japan, Australia and the US. Bajaj, which is the largest exporter of twowheelers from India, exports to Africa, Middle East, South America and Asia.

KTM sells bikes with engines ranging between 1251,400cc. Bikes up to 400cc are made in India by Bajaj while the remaining used to be made in Austria by KTM.

Strategic Benefits and Market Access

The acquisition also provides Bajaj strategic access to KTM’s advanced R&D, engineering and innovation capabilities, particularly in highperformance and offroad motorcycles, thereby strengthening its technological backbone across segments.

With the consolidated ownership, Bajaj Auto said it stands to gain flexibility to shape future monetisation strategies of the KTM brand, assets and its markets without the complexities on the ownership front.

Through a postal ballot, the Punebased Bajaj Auto is seeking shareholder approval through an ordinary resolution for restructuring support for KTM and its subsidiaries. Bajaj intends to own nearly 75% of KTM from 37.4% presently, subject to regulatory approvals.

The operational synergies across R&D, manufacturing and sourcing can enhance competitiveness and profitability for KTM while also serving as a key pillar of the turnaround strategy and form the core rationale for the investment, Bajaj stated.

“Moreover, it expands the company’s access to developed markets where KTM already has an established presence and distribution network, enabling potential entry of Bajajbranded or codeveloped premium motorcycles in some of these highvalue regions,” Bajaj added.

Production Expansion

The Pune plant of Bajaj Auto will see addition of bigger bikes to its production lines, going up to 1000cc. While this could potentially double the export volumes of KTM bikes from India, the competitive cost structures arising from development and manufacturing here will have a resultant positive impact on stepped up profits for Bajaj Auto.

Bajaj Auto is initiating a revamp of the governance framework, including reconstituting the board of KTM, besides putting in place a program aimed at restoring momentum and competitive growth. It is exploring potential partnerships and collaborations to build sustainable competitive advantage and longterm value creation.

Bajaj Auto has lined up a total of €800 million (Rs 7,760 crore), including €700 million in FY26. With the discharge of all the previous debt, the KTM balance sheet stands debt free on the date of proposed acquisition, Bajaj clarified.

KTM has been a profitable financial investment for Bajaj Auto, with the net amount invested between 2007 and 2013 being around Rs 1,200 crore, against which the carrying value investment as on FY24 Rs 4,820 crore. Had KTM gone into liquidation, this carrying value would be required to be written off.