Mumbai: Bajaj Auto International Holdings BV, a subsidiary of Bajaj Auto Ltd, has bought a 14.5 per cent stake in Austria''s KTM Power Sports AG for over Rs300 crore.

The two companies will co-operate on the development of 4-stroke 125 cc and 250 cc engines, as well as new vehicle platforms, Bajaj said in a statement.

KTM, which makes bigger 1190 cc, 990 cc and 690 cc platforms in Austria, will now have entry-level models, which will be made in India by Bajaj, it said.

"Thus the KTM Group is able to develop a natural hedging potential for its USD-exposure in the future," it said.

Bajaj will also distribute KTM bikes in India and in Southeast Asia.