MG Motor in talks with potential buyers for majority stake in Indian car business, aims to raise Rs 5,000 Crore: Report
MG Motor is currently engaged in discussions with several potential buyers for the majority stake in its Indian car business, according to a report by Times of India. The company is said to be in “advanced negotiations” with interested parties such as Reliance Industries, Hero Group, Premji Invest, and JSW Group. The discussions revolve around […]
MG Motor is currently engaged in discussions with several potential buyers for the majority stake in its Indian car business, according to a report by Times of India.
The company is said to be in “advanced negotiations” with interested parties such as Reliance Industries, Hero Group, Premji Invest, and JSW Group. The discussions revolve around the sale of equity and signify MG Motor’s intention to divest its majority shareholding in the Indian car business.
According to Rajeev Chaba, CEO Emeritus of MG Motors, the company is engaged in discussions with multiple partners and is considering selling a stake in MG Motor India by the end of 2023.
The aim of this stake sale is to raise Rs 5,000 crore, which will be utilized to facilitate the expansion of MG’s second plant in Halol, Gujarat, from its current production capacity of 1.8 lakh units to 3 lakh units.
Chaba also mentioned that as part of MG’s 3.0 plan, up to 75 percent of the vehicles produced will be electric vehicles (EVs).
Furthermore, MG Motor has expressed its intention to pursue an Initial Public Offering (IPO) by 2028, following the completion of diluting its majority stake.
The company has revealed its plan to bring on board a new partner within this year. In the stake dilution process, MG Motor will approach various entities including private equity investors, original equipment manufacturers (OEMs), high-net-worth individuals (HNIs), dealers, and employees of the company.
Since the onset of the COVID-19 pandemic and the border conflict between India and China in June 2020, Chinese investments in India have faced increased scrutiny.
In response, the Indian government revised its Foreign Direct Investment (FDI) policy that year to prevent opportunistic takeovers by countries sharing a land border with India.
Previously, investments from these nations could be made through the automatic route, but now they require government approval. This policy adjustment was implemented with the objective of restricting Chinese investments in India.
In response to concerns over Chinese ownership and to assure the government and customers of its long-term commitment to India, MG Motor India has outlined its plans to “Indianize” the brand. This includes efforts to overcome scrutiny by the government, as well as the banning of numerous gaming and loan apps with Chinese origins in India.