Bajaj Auto , a leading Indian two-wheeler manufacturer, has successfully resolved a global magnet supply issue that was impacting its operations. In a significant development for the company and its customers, Bajaj Auto has announced the resumption of deliveries for its electric scooter, the Chetak, ahead of the initially planned schedule.

Ambitious Delivery Targets

Bajaj Auto's Managing Director has set ambitious delivery targets for August, aiming to deliver more than 15,000 Chetak e-scooters and 7,000 electric three-wheelers during the month. This aggressive push demonstrates the company's commitment to expanding its presence in the electric vehicle market.

Supply Chain Resilience

The resolution of the magnet supply issue demonstrates Bajaj Auto's agility in managing supply chain disruptions. Magnets are crucial components in electric vehicle motors, and global supply constraints have been a challenge for many EV manufacturers.

Timely Restart Before Festive Season

By restarting deliveries earlier than anticipated and setting high delivery targets, Bajaj Auto has positioned itself favorably for the upcoming festive season in India. The festive period typically sees a surge in vehicle sales, and the increased availability of the Chetak electric scooter could potentially boost the company's sales figures.

Implications for Chetak Electric Scooter

The Chetak, Bajaj Auto's foray into the electric two-wheeler market, has garnered significant interest since its launch. The resumption of deliveries and the ambitious target of over 15,000 units in August is likely to be welcomed by customers who have been waiting for their vehicles. This development could also help Bajaj Auto strengthen its position in the growing electric vehicle segment in India.

MD's Stance on Proposed GST Cut

Bajaj Auto Managing Director Rajiv Bajaj has welcomed the government's proposal to reduce GST on two-wheelers from 28% to 18% for models under 350 CC, describing it as a 'fabulous and fantastic' step. However, he advocated for extending the benefit to all segments, noting that over 97-98% of two-wheelers sold in India are under 350 CC.

Bajaj highlighted that India's proposed 18% rate remains significantly higher than global norms, where tax rates range between 8-14% with a median of 12%. He warned that limiting the reduction to vehicles under 350 CC could create market distortions and potentially force manufacturers to unnecessarily realign product portfolios.

The MD also noted that the two-wheeler industry has struggled to recover to pre-COVID levels due to inflation outpacing income growth. Regarding demand impact, Bajaj indicated that the slowdown has already started as consumers defer purchases awaiting lower prices, but expects demand to bounce back strongly during the festive season if new rates take effect from October 1.

Conclusion

The swift action taken by Bajaj Auto to overcome the magnet supply issue and expedite Chetak deliveries, coupled with its ambitious delivery targets, underscores the company's commitment to its electric vehicle strategy and customer satisfaction. As the festive season approaches, this timely resolution and aggressive push, along with the potential GST reduction, could provide Bajaj Auto with a significant competitive edge in the two-wheeler market, particularly in the electric segment.

Bajaj Auto 's wholly-owned subsidiary, Bajaj Auto Credit Limited, has made its first foray into the commercial paper market, issuing Rs. 500 crores worth of commercial paper. This strategic move marks a significant step for the subsidiary in diversifying its funding sources and potentially lowering its borrowing costs.

Issue Details

The commercial paper, which received a Crisil A1+ credit rating—indicating the highest degree of safety regarding timely payment of financial obligations—was issued on August 18, 2025. The instrument carries a competitive discount rate of 6.25% and is set for redemption on November 17, 2025, representing a 91-day tenure.

Listing and Regulatory Compliance

In compliance with regulatory requirements, the commercial paper was listed on the National Stock Exchange of India (NSE) on August 19, 2025. Bajaj Auto, the parent company, promptly informed both the BSE and NSE about this development, adhering to the Master Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper dated May 22, 2024.

Market Implications

This debut issuance by Bajaj Auto Credit Limited could signal the company's intent to establish a presence in the short-term debt market. The high credit rating and competitive discount rate suggest strong investor confidence in the Bajaj Auto group's financial health and could pave the way for future issuances.

Corporate Structure

It's worth noting that Bajaj Auto Credit Limited is a wholly-owned subsidiary of Bajaj Auto, a leading player in the Indian automotive sector. This structure allows the parent company to potentially leverage its subsidiary for various financial activities while maintaining full control.

The successful placement of this commercial paper issue may provide Bajaj Auto Credit Limited with increased financial flexibility, potentially supporting its growth initiatives or working capital needs. As this marks the subsidiary's first venture into commercial paper issuance, market observers will likely monitor its impact on the company's overall financial strategy going forward.

For investors and market analysts, this development offers insights into Bajaj Auto's group-level financial management strategies and could be indicative of future trends in its approach to short-term financing.