Bajaj To Purchase KTM? Potential Takeover Announcement On February 25

KTM has been struggling financially for quite some time. However, help has come from one of its major stakeholders, Bajaj Auto. The Pune-based two-wheeler and three-wheeler major recently announced in a regulatory filing that it will pump ₹1,364 crore into its Netherland subsidiary, Bajaj Auto International Holdings BV. The latter owns a 49 per cent stake in the Austrian company, and this investment will be in the form of equity/ capital/ preference capital or loan. 

KTM was hit financially pretty badly in 2024, months after it acquired a controlling stake over MV Agusta. The situation became so bad that it not only forced the Austrian major to divest its stake in the Italian brand, but it also had to go into self-administration mode. Furthermore, between January 2023 and October 2024, KTM made several miscalculations in production strategy. It kept manufacturing at high volume despite low demand, which left the company with a huge stockpile of 2,65,000 unsold bikes in its inventory. This created an overflow, leading to a staggering liquidity requirement of €440 million (equivalent to ₹38,941 crores). Later on, KTM cited that it cut its inventory by 40,000 units, which was the reason why the KTM big bikes were introduced in India last year. 

As part of the self-administration mode, last month, KTM’s CEO Stefan Pierer also stepped down from his position. In his place, Gottfried Neumeister was appointed as the new CEO of KTM, while Pierer took up the role of Co-CEO. The Austrian brand also had to reduce its workforce by 1,800 employees and reduce production as well. 

As for the future now, with some fresh investments being pumped into the brand, KTM will now look to strengthen its position and streamline its production line. The brand's current portfolio of bikes underwent significant upgrades, and the new 390 Adventure range is a testament to that. We have ridden the new adventure motorcycle and shall share our take on the same day as the announcement.