Bajaj Auto has an insatiable appetite for KTM, and the Indian company has slowly been gobbling up KTM stock, and now is just under a 40% shareholder in the Austrian motorcycle company. With Cross Industries AG holding 51% of the company in its control, the Austrians have made it clear that they will not give up majority control of KTM, especially to the Indian automotive company. However, analysts are predicting Bajaj could take its partnership with KTM to its limit, purchasing up to 49% of the company’s stock.

Bajaj’s appetite for KTM stock seems to be never-ending, though slow in digestion, as the Indian company has acquired another 1.21% of the Austrian motorcycle maker. Gobbling up shares from other minority holders on the open market, Bajaj now has a 39.3% interest in KTM, while majority shareholder CROSS continues with its 50.1% stake.

CROSS has made it clear it intends is to remain the majority shareholder, and has no plans of selling-out its position to the Indian company (or has it?). So, no corporate takeovers just yet, but a continuation of an interesting move by Bajaj in investing with KTM.

Our friends at IndianCarsBikes.in have spied the KTM 200 Duke again out testing again near Bajaj’s factory in Pune, India. This time riding down the street, we get to see how the 200cc variant of the KTM 125 Duke will sit with an adult on the frame, and the bike looks fairly comfy for a full-sized person (although we have no idea how tall the rider actually is of course). The second spy shot of the KTM 200 Duke in a just a week, Bajaj is either getting sloppy (unlikely), or the debut of this machine could be edging closer and closer to reality.

Is this the KTM 200 Duke? The folks at OverDrive.in were fortunate enough to encounter in Pune what looks like a pre-production KTM Duke destined for the Indian market. Taking the photo above, OverDrive wasn’t certain if this was the KTM 125 Duke that the Austrian company launched at Intermot this year, or if it was a larger displacement version that’s been rumored to be coming from the minds of Bajaj & KTM.

Luckily the guys at IndianCarsBikes.in were able to get Rajiv Bajaj on the line and ask him about the photo, and the son of the Bajaj empire confirmed that what we see here is the 200cc KTM 200 Duke that will be an India-only model. Reportedly a deal hatched between KTM and Bajaj, the Indian market will get a slightly larger version of the new Duke, which will be liquid-cooled, have DOHC, and be positioned on the premium side of the market equation.

We know it’s a cryptic headline, but there’s a big HUGE move happening today in India as far as motorcycles are concerned, and we couldn’t help being overly dramatic. Holding a 26% stake in Hero Honda, Honda announced that it will be selling its position in Indian joint-venture, the world’s largest two-wheel manufacturer, to the Hero Group’s founders, the Munjal family, and various investment funds.

Honda in turn will be pumping its resources into its own fully-owned subsidiary in India called Honda Motorcycles and Scooters India (HMSI). Buying its stock back at a discounted rate, the Honda will be selling the stock to Hero Honda for $1.2 billion, presumably in exchange for a larger percentage of the company’s early revenue (Honda currently takes home 2.5% of Hero Honda’s yearly revenue).

Bajaj must be celebrating a late Thanksgiving (we might be talking about the wrong Indians here) as the Pune-based automotive group has gobbled up some more shares of Austrian company’s stock. Strengthening the two companies’ strategic partnership, Bajaj has modestly increased its 35.67% interest in KTM, becoming a 38.08% shareholder. Also coming out of the orange brand is news that Stefan Pierer will continue on as CEO of the company through 2015, and Friedrich Roithner, formerly of DGF Cross Industries, will take on the role of Financial Director in the new year.

Finally officially debuted at Intermot, KTM took the wraps off its 2011 KTM 125 Duke, a single-cylinder street bike geared towards young riders. While KTM has always included off-road machines in its line-up that are aimed at getting younger riders to ride orange, the company until now has left a gapping hole in its on-road offering for the same demographic. With Bajaj taking a 35% stake in KTM, the Indian company has not only given the Austrian company the capital it needed to expand its line, but is also rumored to be the major driving force behind the 2011 KTM 125 Duke.

According to Indian publication Bike Advice, Bajaj is looking to cultivate its relationships with KTM & Kawasaki further, hoping to create a three-way alliance that would build off the strengths of each company. Since 1986 Bajaj has had technical ties to Japanese manufacturer Kawasaki, with Bajaj paying royalties to Kawasaki for basing its creations off Kawasaki designs. Bajaj and Kawasaki also share distribution channels, with Bajaj motorcycles being sold at Kawasaki dealerships, and vice versa.

In 2007 the Indian manufacturer bought a 17% stake in KTM (Bajaj has since increased its stake in the Austrian company to 35% in 2008, with further investment plans rumored), which allowed Bajaj access to Europe and KTM access to India. Bajaj has also gained some of KTM’s knowledge on two-stroke motors, while KTM has seen the small-bike specialist help them with its soon-to-be released KTM 125 Duke project.

With all these relationships being fostered, and obvious synergies existing, Bajaj wants to take its relationship with each company to the next level (in America we call that Third Base), and change the level of collaboration so it goes three-ways. The affect would be a merger, without the merger.

As we reported last week, there were rumors circulating that Bajaj was poised to take a controlling interest in KTM, which could see the Indian manufacturer owning up to 90% of the Austrian company. After the circulation of these rumors KTM released a statement (posted after the jump) that touched on some of the issues brought about by the weekend’s news coverage, namely the future ownership structure of the company.

Some publications have taken this release as a denial of the acquisition rumors (which the release at no point actually says), but like many press releases what is said is often less important that what isn’t said. Sensational headlines aside, KTM’s response only suggests that CROSS Industries AG will remain the majority shareholder in KTM, and in no way denied rumors that Bajaj would be increasing its stake in the Austrian company. While CROSS and KTM’s current leadership seem set to remain intact at KTM (what was actually stated in the release), our sources continue to point to Bajaj increasing its stake in KTM, while the company’s glaring omission to address that part of the industry rumors seems to confirm that initial suspicion.

With KTM’s shareholder general assembly only two weeks away, we won’t have long to wait to see how the over $40 million of additional stock gets spread out over current and potential investors. Press release after the jump, for you to make the call yourselves on what was said.

Rumors are indicating that KTM has invited Indian manufacturer Bajaj to increase its stake in the Austrian company from the current 30% to up to 90%. While neither party has confirmed the news, it is reported that Bajaj has accepted KTM’s offer, and will immediately purchase an additional 21% of the company’s stock, making it a 51% majority shareholder. Bajaj will then increase its ownership to 90% at a later undecided time.