The new scooter features a halogen headlamp along with LED pilot lamps, 12-inch tubeless tyres, telescopic suspension with air springs and remote flip key. It will be available in orange rush, bolt white, monarch black and regal red.

According to Vinod Sahay, COO, Mahindra Two Wheelers, the company had a good response to its Mahindra Gusto 110 range, which was launched last year. "We are now excited about extending the Gusto brand and portfolio to include new consumer segments," he said.

The Gusto 125 is expected to take on the Honda Activa 125 and Suzuki Access. The Honda Activa dominates the Indian scooter market.