According to sources, Chinese auto giant SAIC-owned MG Motor may be looking to sell its majority stake in the Indian car business and is in "advanced negotiations" for an equity sale with a slew of suitors including Reliance Industries, Hero Group, Premji Invest, and JSW Group.
"Hectic discussions are underway with Indian companies, and MG Motor is hoping to close a deal by the end of this year," one of the sources told TOI, adding that talks are at a "advanced stage," particularly because MG needs funds "almost immediately" to begin the next phase of expansion. "Negotiations are underway, and MG management is working hard to find a credible partner while maintaining attractive valuations."
Questions about talks with Reliance, Hero Group, Premji Invest, and JSW were labelled as "speculative" by MG Motor India.
Companies with ties to China have faced difficulties in obtaining approvals for new investments as tensions on the India-China border have risen. According to industry sources, the automaker has been waiting for government approval to raise funds from its parent for about two years. With little success thus far, it has begun to look for other ways to raise the necessary capital.
Rajeev Chaba, emeritus CEO of MG Motor India, stated that the intention is to "Indianize operation" by diluting majority stake to financial institutions, partners, and high net-worth individuals in the country. "In the next two to four years, we intend to Indianize shareholding, the company's board, management, and supply chain," he said.
MG Motor India announced on Wednesday that it intends to offer a majority stake to local partners and investors over the next 2-4 years in order to raise around Rs 5,000 crore in capital to fund the next stage of its growth in the country.
MG Motor India currently manufactures products at its Halol, Gujarat, manufacturing plant, which it purchased from General Motors.
The Halol plant has a capacity of 1.2 lakh units per year.
The company's second plant would also be built in Halol, bringing its total installed capacity to 3 lakh units per year.
MG Motor has stated that it plans to launch 4-5 new cars in the country, with a focus on EVs.
According to the company, its EV portfolio is expected to contribute up to 65-75 percent of total sales in India.
The automaker also stated that it is looking into establishing cell manufacturing and hydrogen fuel-cell technology through joint ventures or third-party manufacturing.
With expansion plans in place, the automaker hopes to employ 20,000 people by 2028.