Bajaj Auto shares in focus as Rs 5,427 crore loan aids KTM bailout ahead of key deadline
Shares of
Bajaj Auto
are set to be in focus on Monday, after its Netherlands-based investment arm raised Rs 5,426.5 crore through
unsecured loans
to support the restructuring of
KTM AG
, the bankrupt
Austrian motorcycle maker
in which it holds a 49.9% stake.
Bajaj Auto International Holdings BV
, a wholly owned subsidiary of Bajaj Auto, has signed loan agreements worth €566 million with JPMorgan Chase, DBS Bank, and Citigroup Global Markets Asia. According to an exchange filing on Friday, the loans are unsecured and have a one-year term. The funds will be used to support the investment vehicle's activities, ahead of a critical May 23 deadline by which KTM must pay creditors €548 million to avoid liquidation.
The funding marks the latest step in a series of interventions by
Bajaj Auto
to keep KTM afloat. The Austrian bikemaker filed for bankruptcy on November 29, 2024, after amassing billions of euros in debt, driven by its acquisition of MV Agusta and heavy investments in its MotoGP operations. A collapse in two-wheeler demand in Europe around the same time exacerbated the company's troubles.
Bajaj steps up support
On February 21, 2025, Bajaj Auto had infused €150 million into its investment arm, of which €50 million was extended as a loan to KTM AG to restart operations. Subsequently, KTM's creditors approved a restructuring plan on February 25, which mandated a cash contribution of €548 million by May 23.
KTM resumed production at its Mattighofen plant on March 17. This was followed by two more infusions of €50 million each from Bajaj Auto International Holdings on March 31 and April 3, issued in the form of convertible bonds. On May 15, Bajaj Auto invested an additional €125 million into its investment arm, with €50 million immediately directed into KTM.
In total, Bajaj Auto has committed €200 million to KTM since the bankruptcy filing.
Ownership structure & outlook
KTM is held through a layered structure. Pierer Bajaj AG, a joint venture between Stefan Pierer and Bajaj Auto International Holdings, owns 74.9% of Pierer Mobility AG, the Vienna-listed entity that is KTM AG's immediate parent. Bajaj Auto Managing Director Rajiv Bajaj sits on the board of Pierer Bajaj AG.
KTM AG itself controls brands such as KTM, Husqvarna, and GasGas, along with the MotoGP racing team.
It remains unclear whether Bajaj Auto will seek a majority stake in KTM or bring in an outside investor to acquire Stefan Pierer's 50.1% stake in their joint venture. Clarity is expected when Bajaj Auto reports its fourth-quarter earnings on May 29.
Share price and technicals
On Friday, shares of Bajaj Auto rose 1.91% to Rs 8,487.15 on the BSE. The stock has gained 10.4% in the last week but is down 3.8% over the past year and 11% in the past six months.
Technical indicators are mixed. The stock is trading above six of its eight key simple moving averages but remains below its 150-day and 200-day SMAs. The 14-day Relative Strength Index stands at 64.7, suggesting it is approaching overbought territory.
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Nifty likely to advance towards 25,200-25,800: Analysts
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