Bajaj Auto board gives nod to infuse ₹1,364 crore in Netherlands-based arm, stock down 14% in six months

Bajaj Auto Ltd announced on Friday, February 21, that its board approved an investment of up to Euro 150 million ( ₹1,364 crore) in its wholly-owned arm, Bajaj Auto International Holdings BV, Netherlands, to fund the needs of the Netherlands-based subsidiary towards further investment opportunities.

At its meeting today, the Pune-based two-wheeler major's board of directors approved an investment of up to Euro 150 million in Bajaj Auto International Holdings BV, Netherlands (BAIH BV). The board said the investment could be in one or more tranches, either in the form of equity capital, preference capital, or a loan—convertible or otherwise, as determined in due course.

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Bajaj Auto invests in Netherland-based subsidiary

The capital infusion will be made in one or more tranches depending on the fund requirements up to March 31, 2026. BAIH BV is a wholly-owned subsidiary of the company and is engaged in the business of investment.

“The additional capital infusion by the company is to fund the needs of BAIH BV towards investment opportunities,” said Bajaj Auto in a regulatory filing to the stock exchanges, adding that necessary approval for the investment in BAIH BV, a foreign subsidiary, has been obtained from the Reserve Bank of India (RBI).

Although the company did not elaborate on the "investment opportunities," the development comes when Bajaj Auto is linked to the possibility of increasing its stake in the financially stressed KTM AG to bail out the Austrian bikemaker undergoing a judicial restructuring. Bajaj Auto, through BAIH BV, holds a 49.9 per cent stake in its associate, Pierer Bajaj AG (PBAG), in Austria. Pierer Industrie AG holds the remaining controlling stake in PBAG.

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PBAG holds a nearly 75 per cent stake in its subsidiary, Pierer Mobility AG (PMAG), the holding company of KTM AG. Apart from being a part equity owner, Bajaj Auto is also a strategic partner for KTM as it develops and manufactures products (under 400cc) for India and exports to overseas markets.

The business in India is managed by Bajaj Auto, whereas export geographies are managed mainly through KTM AG and partly by Bajaj Auto. Last year, KTM stated the judicial restructuring of its holding firm, Pierer Mobility AG, had no impact on business related to products co-developed with Bajaj Auto for the domestic market and select export markets. However, it impacted the Pierer Mobility AG/KTM AG business, run out of Austria, including exports from Austria, India, and China to its key markets in the US and Europe.

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Bajaj Auto share price trend

On Friday, shares of Bajaj Auto opened at ₹8,550 and declined over one per cent to hit an intraday low of ₹8,445.80 before settling 1.44 per cent lower at ₹8,504.55 apiece on the BSE. The Bajaj-Group company commands a market cap of ₹2,37,496.03 crore. In the past six months, Bajaj Auto has declined 14 per cent and is down nearly three per cent year-to-date (YTD).