Bajaj Auto, the second major shareholder in the Austria based motorcycle manufacturer, KTM Power Sports, has expanded its current stake in the company from around 41 percent to over 47 percent through an open market purchase where a major shareholder sold his stake in KTM to the Indian motorized-vehicle manufacturer.
The revelation was withheld due to the transaction being effected by Bajaj Auto International Holdings (BAIHBV), as the detailed disclosure was prohibited due to the confidentiality surrounding the issue. The company had initiated the purchase of shares in KTM in the year 2007 to the tune of 14.5 percent, which has gradually risen with no future intention of Bajaj Auto to hold a majority stake in the firm.
The Managing Director of Bajaj Auto, Mr. Rajiv Bajaj said in statement, "We will be buying more shares to up our stake from 40%. However, we do not want to be the majority stakeholder as to convey the perception of exclusivity and premiumness."
Auto analysts are in the opinion that such a move will highly motivate investors and also will uplift the goodwill of KTM at the global platform.
The companies are working in tandem utilizing their diverse networks and manufacturing capacities to come up with new platforms and engines along with attaining greater cost and quality economy. Strategies are being streamlined to establish their vital manufacturing hub in India.
Out of 81,000 bikes sold by KTM in the year 2011, Bajaj Auto contributed an impressive 11,000 bikes supply and will be raising the supply to over 50 percent of KTM bikes production. Bajaj Auto and KTM have jointly tapped the Indonesian, Brazilian and Malaysian markets in an expansion move and the former has also contracted with Cross Industries for domestic production of KTM 125cc motorcycles intended for sale in Europe.
