Bajaj Auto, a leading player in the Indian automotive industry, announced on Thursday an additional investment of ₹45.75 crore in the electric bike-sharing platform Yulu Bikes.
Following this fresh investment, Bajaj Auto’s shareholding in Yulu Bikes now stands at 18.8% of the paid-up equity share capital, according to a regulatory filing by the company.
On Friday, February 23, Yulu disclosed that it had successfully raised a total of $19.25 million (Rs 160 crore) in equity funding. This funding comes from its existing investors, Bajaj Auto and Magna.
In a press release, Yulu highlighted its remarkable growth over the past year, experiencing nearly a fivefold increase in revenue. The additional capital infusion is expected to fuel Yulu’s growth trajectory, reinforcing its market leadership.
The funds will support the expansion of the electric bike-sharing platform in terms of vehicles, operational locations, and advancements in product and technology to meet the growing demand from users.
Notably, in 2019, Bajaj Auto had previously announced an investment of $8 million (approximately ₹66 crore) in Yulu, aiming to boost electric vehicle adoption in India.
Talking about the stock performance, the shares of Bajaj Auto have shown positive returns in multiple time frames, the stock has gained 18.62% in the past one month and over 80% in the last six months.
The year-to-date returns of Bajaj Auto stand at 25.61 and a robust returns of 120% in the last one year.
What do analyst say on the deal:
“Bajaj Auto’s investment in Yulu secures a first-mover advantage in India’s growing electric two-wheeler market, especially in shared mobility. This positions them strongly against competitors entering the EV space, ensuring a significant edge. Bajaj Auto can partner with Yulu to innovate and test EV technologies, like battery swapping and charging infrastructure,” said Amit Goel, Co-Founder and Chief Global Strategist at Pace 360
Commenting on the same Atul Parakh, CEO of Bigul said, Bajaj Auto’s 18.8% stake in Yulu Bikes provides strategic exposure to electric two-wheelers, enabling it to diversify into new mobility solutions. This allows Bajaj to leverage Yulu’s expertise while benefiting Yulu through its manufacturing and distribution strengths.
“The partnership can aid new product development and cross-selling opportunities. Exports will continue driving growth across key markets. Margin pressure from input costs persists, but cost optimisation efforts should aid profitability. Overall, the outlook seems good for Bajaj Auto,” added Parakh.
On the future outlook Goel added that, the future outlook for Bajaj Auto is influenced by the highly competitive Indian automotive market, with challenges posed by both domestic and international competitors. However, the current economic slowdown in India may impact Bajaj Auto’s sales in the short term.