Mahindra & Mahindra (M&M) and other investors will invest Rs 875 crore in Classic Legends, the producer of Jawa and Yezdi motorcycles, over the next two-three years.

This is the single-largest investment earmarked for the bikemaker, which is among the focus units for M&M, as efforts are on to turn around the two-wheeler business and make it profitable.

A securities subscription agreement and another amended and restated shareholders’ agreementbetween M&M, the existing shareholders, and the new investors of Classic Legends was executed on Wednesday.

Compulsorily convertible preference shares and equity shares of Classic Legends will be issued to the investors, a statement by M&M on the stock exchanges stated.

M&M will continue to hold 60% of the paid-up capital of Classic Legends.

“Classic Legends will use the proposed investment to build a strong business that leverages the strengths of M&M and its partners,” the statement added.

In September, Classic Legends had announced a plan involving an investment of Rs1,000 crore in marketing, distribution and new product development over the next three years. About half of this is said to be earmarked for British motorcycle brand BSA, which is looking to introduce its first fully electric motorcycle in the UK.

While Classic Legends does not declare sales volume data, according to the Federation of Automobile Dealers Associations (Fada), it had a market share of 0.14% in the Indian two-wheeler market in November. It sold 3,166 units of Jawa and Yezdi bikes during the month, down 15% compared with the same month last year.

The Classic Legends range directly competes with the range offered by Royal Enfield, the niche segment market leader and the biggest player in the 350cc+ category. Royal Enfield volumes jumped 18% during November, as per Fada data.