Bajaj Auto has an insatiable appetite for KTM, and the Indian company has slowly been gobbling up KTM stock, and now is just under a 40% shareholder in the Austrian motorcycle company. With Cross Industries AG holding 51% of the company in its control, the Austrians have made it clear that they will not give up majority control of KTM, especially to the Indian automotive company. However, analysts are predicting Bajaj could take its partnership with KTM to its limit, purchasing up to 49% of the company’s stock.
“Bajaj Auto has increased its stake in Austria’s KTM Power Sports AG to 39.26 percent and will consider taking it up to 49 percent,” wrote sector analysts Jinesh Gandhi and Mansi Varma from Motilal Oswal Securities Ltd. Writing in a July 18th analysts report, Gandhi and Varma are basing their reports on comments made by Bajaj Auto’s CFO Kevin D’sa, who talk at an investor conference held on the same day.
KTM’s relationship with Bajaj has brought the company the very successful KTM 125 Duke, which is being produce in India by Bajaj for the European market. With several models expected to spawn from that paterfamilias, KTM is getting a strong small-displacement range of motorcycles from Bajaj, as well as an entryway into India and its surrounding markets. In return, Bajaj has a path to the European market.
It’s hard to tell who needs whom more in this relationship, but should Bajaj move to a 49% minority shareholder, it could make for some interesting discussion about the Indian market and the state of European manufacturers, and the industry as a whole.
Source: Dealer News; Photo: Romero S. / KTM Images
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