According to sources on Thursday, the Chinese auto giant SAIC-owned MG Motor may be trying to sell its majority position in the Indian auto industry and is in “advanced negotiations” for an equity sale with a number of interested parties, including Reliance Industries, Hero Group, Premji Invest, and JSW Group.
One of the insiders informed TOI that “hectic discussions are on with the Indian companies and MG Motor is looking to close a deal by the end of this year,” adding that talks are at a “advanced stage” since MG needs the money “almost immediately” to start the next phase of expansion. Negotiations are ongoing, and MG management is making an attempt to find a reliable partner while maintaining competitive valuations.
Questions about the discussions with Reliance, Hero Group, Premji Invest, and JSW were described as “speculative” by MG Motor India.
The growing tensions along the India-China border have made it difficult for businesses with ties to China to obtain licences for new investments. Industry sources claim that the company has been waiting for about two years for regulatory authorisation to raise money from its parent. It has been attempting to raise the necessary funds, but so far with little success.
Also read, India renews call for chipmakers as Anil Agarwal’s efforts drag.
MG Motor looking for localizing operations with help of Reliance:
Rajeev Chaba, emeritus CEO of MG Motor India, stated that the goal is to “Indianize operation” by giving the majority interest to local financial institutions, partners, and high-net-worth individuals. In the next two to four years, he said, “We intend to Indianize shareholding, the company’s board, management, and supply chain.”
In order to acquire about Rs 5,000 crore in cash to fuel the next phase of its growth in the nation, MG Motor India announced on Wednesday that it intends to offer a majority ownership to local partners and investors over the course of the next two to four years.
MG Motor India currently distributes its products from the manufacturing facility it purchased from General Motors in Halol, Gujarat. Up to 1.2 lakh units can be produced annually at the Halol factory.
The company’s installed capacity would increase to 3 lakh units annually with the construction of a second plant at Halol. According to the corporation, its EV portfolio will account for 65–75% of all sales in India.
According to the automaker, building up cell manufacturing and hydrogen fuel-cell technologies through partnerships or third-party manufacture is also something they are looking into.
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