Bajaj Auto to Invest ₹1,364 Crore in Netherlands-Based Subsidiary for Global Expansion
In a significant move to strengthen its global presence, Bajaj Auto has announced an investment of up to €150 million (approximately ₹1,364 crore) in its Netherlands-based wholly-owned subsidiary, Bajaj Auto International Holdings BV (BAIH BV). The decision, approved during the company’s board meeting on Friday, underscores Bajaj Auto’s commitment to expanding its international footprint and exploring new growth opportunities.
Investment Structure and Timeline
The capital infusion will be deployed in various forms, including equity capital, preference capital, or loans (convertible or non-convertible), depending on the subsidiary’s requirements. The investment will be executed in one or more tranches and is expected to be completed by March 31, 2026. Bajaj Auto has already secured all necessary regulatory approvals, including those from the Reserve Bank of India (RBI).
BAIH BV’s Role in Bajaj Auto’s Growth Strategy
BAIH BV, a 100% subsidiary of Bajaj Auto, primarily focuses on investment activities. With this fresh infusion of funds, the subsidiary aims to capitalize on emerging investment opportunities, furthering Bajaj Auto’s long-term expansion goals. While specific investment targets were not disclosed, the move aligns with Bajaj Auto’s ongoing strategy to increase its stake in the financially challenged Austrian motorcycle manufacturer, KTM AG.
Bajaj Auto’s Stake in KTM AG
Currently, Bajaj Auto holds a 49.9% stake in Pierer Bajaj AG (PBAG), an associate company based in Austria, through BAIH BV. PBAG, in turn, owns a controlling 75% stake in Pierer Mobility AG (PMAG), the parent company of KTM AG. Bajaj Auto has been instrumental in KTM’s product development, particularly in the under-400cc motorcycle segment, and manages the Indian market while KTM oversees exports to Europe and the U.S.
The investment comes amid KTM AG’s judicial restructuring, which primarily impacts its Austrian operations and export business. However, Bajaj Auto has assured stakeholders that the restructuring will not significantly affect co-developed motorcycles for the Indian and select export markets, ensuring business continuity.
Stock Performance and Market Reaction
On February 21, 2025, Bajaj Auto’s share price closed 1.44% lower at ₹8,504.55 on the BSE. The stock has seen a 52-week high of ₹12,772.15 and a low of ₹7,892. As per BSE data, the total traded volume for the day stood at 3,774 shares, with a turnover of ₹3.22 crore.
At the current price, Bajaj Auto shares are trading at a price-to-earnings (P/E) ratio of 29.55x, based on its trailing 12-month earnings per share (EPS) of ₹287.84, and a price-to-book (P/B) ratio of 8.69.
Future Prospects
This strategic investment highlights Bajaj Auto’s focus on strengthening its global presence and leveraging international partnerships. By bolstering BAIH BV’s capabilities, the company aims to unlock new growth avenues and solidify its position as a key player in the global automotive industry.
*Disclaimer: This article has been written exclusively for educational purposes. The information provided is based on publicly available data and should not be construed as financial or investment advice.