The bike is likely to be priced above Rs 50,000 and could have an engine capacity in excess of 150 cc.
It is also planning to relaunch Enticer, the favoured high-end executive segment model of the company, with modifications and higher engine capacity.
The chief general manager (sales & marketing) of Yamaha Motor India (P) Ltd, K R Sridhar, said that the research and development team of Yamaha is now working round the clock to develop the deluxe model that would mark the entry of the Japanese two-wheeler major in the fastest growing segment.
According to him, the field study was now going on for the deluxe bike.
"It will take another 7-8 months to launch the deluxe bike," he said.
Sridhar was in Kolkata for the launch of Gladiator, the 125 cc bike in the executive segment. Yamaha has replaced Frazer with the new model in the segment.
Commenting on Enticer, Sridhar said that the bike was at present underpowered with 125 cc engine and so had been phased out.
Now, the company was thinking of reintroducing the model with a more powerful engine.
According to Sridhar, Yamaha India was planning to invest around Rs 300 crore over next two years for expanding capacity.
The company currently had a manufacturing capacity of five lakh bikes at its facility in Surajpur near Noida.
"We have to increase capacity because five lakh is too small in a market of six million yearly," he added.
Yamaha currently had a 5.5 per cent marketshare with an annual sales of 2.60 lakh bike. It hoped to sell 3.6 lakh units this year.