Leading company in the Indian auto sector Bajaj Auto said on Thursday that it had invested an extra ₹45.75 crore in Yulu Bikes, an app for renting out electric bikes. According to a regulatory filing the business made, Bajaj Auto's stake in Yulu Bikes now represents 18.8% of the paid-up equity share capital as a result of this new investment.
Yulu announced on Friday, February 23, that it has successfully received $19.25 million (around Rs 160 crore) in equity capital. Bajaj Auto and Magna, two of its current investors, are the source of this money.
Yulu said in a press statement that company income has increased by about five times in the last year, marking a spectacular period of development. It is anticipated that the new funding would accelerate Yulu's expansion and solidify its position as the industry leader.
In order to fulfill the increasing demand from customers, the money will be used to support the platform's development in terms of cars, operational areas, and product and technological advances.
Notably, Bajaj Auto had earlier said in 2019 that it will spend $8 million (about ₹66 crore) in Yulu with the goal of increasing the use of electric vehicles in India.
In terms of stock performance, Bajaj Auto shares have increased in value over a number of time periods. Over the last six months, the stock has increased by almost 80% and by 18.62% over the previous month.
Bajaj Auto's returns for the year thus far are 25.61, with a strong 120% return in the previous year.
According to analysts, the acquisition gives Bajaj Auto a first-mover advantage in India's expanding electric two-wheeler sector, particularly in shared mobility, thanks to its investment in Yulu. This gives them a considerable advantage over rivals that are joining the EV market. According to Amit Goel, co-founder and chief global strategist of Pace 360, Bajaj Auto and Yulu may collaborate to develop and test
EV technologies including battery swapping and charging infrastructure.
Making a remark on the same Bajaj Auto's 18.8% ownership in Yulu Bikes gives it strategic exposure to electric two-wheelers and allows it to expand into new mobility options, according to Bigul CEO Atul Parakh. As a result, Bajaj can take advantage of Yulu's experience, while Yulu gains from Bajaj's capabilities in production and distribution.
The collaboration can help with cross-selling opportunities and the creation of new products. Key markets will continue to increase as a result of exports. Although input cost pressure on margins continues, cost optimization initiatives should boost profitability. Overall, Bajaj Auto's future is bright," Parakh continued.
Regarding the company's future prospects, Goel continued, "Bajaj Auto faces challenges from both domestic and foreign competitors in the fiercely competitive Indian automotive market." However, Bajaj Auto's sales might be impacted in the near future by the present economic downturn in India.
