Bajaj Auto To Infuse ₹1,199.92 Crore In its Netherland Subsidiary, Is To Save KTM?

Bajaj Auto disclosed to the BSE and NSE yesterday that its Investment Committee has approved an additional capital infusion of €125 million (around ₹1,199.92 crore) into its Netherlands-based subsidiary, Bajaj Auto International Holdings BV (BAIH BV). This is the very same brand via which Bajaj Auto owns shares in KTM, and this investment comes at a very critical juncture as KTM scours for capital to clear off all its debts. 

While Bajaj Auto has not specified as to where this extra fund will go into, it did mention that it will be used by BAIH BV to explore and support new investment opportunities. Moreover, Bajaj Auto has classified this investment as a related party transaction that will be conducted on an arm’s length basis. Earlier when Bajaj loaned KTM AG ₹455.55 crore to Pierer-Bajaj AG to commence production, it did so with the help of its Netherlands-based company. 

Rajiv Bajaj has also stated earlier that KTM has set a deadline of May 23 by which it has assured the Indian brand that it will come up with a sustainable solution to this financial crisis for the long run. While Bajaj’s bossman has already clarified how KTM’s forms a large part of its business in revenue terms, and how profitable it has been for them so we wouldn’t be surprised if we see tomorrow that this capital has gone to KTM AG. KTM’s future and survival will be revealed next week and it will be interesting to see whether or not Bajaj Auto takes majority possession of the brand or not.