MG Motors India may sell its majority stake, Reliance may invest in EV market
China-based carmaker SAIC which owns the brand MG Motors is keen to sell a majority of its stake of its India car business. The company is in talks to close the deal by the end of this year.
MG Motors is a sister company of SAIC Motor and has its manufacturing plant in Halol Gujarat. The company is planning to liquefy its stake to an Indian company.
Several companies with major Chinese stake are facing obstructions with the Government of India regarding various factors. The obstructions may be like approvals for fresh investments, sourcing of spare parts from China, duties and taxes, etc.
MG Motor has also sought government approval in terms of raising funds from its parent company for added investments into its Indian operations. It has been for two years now that this sanction has been put forth but to no success. Hence the company has now decided to raise capital via other means, particularly through Indian entities.
The company said that for the second round of growth in India, it plans to raise capital of around Rs 5,000 crores over the next 2-4 years. For this it will offer a majority stake to local partners and investors. Till date the possible investors are like Reliance Industries, Hero Group, Premji Invest, and JSW Group.
However, the focus of the expansion plan lies in expanding MG India’s EV portfolio by 2028. The company has announced that it will launch four to five new all-electric models in the next five years and wants to achieve 65 to 75 percent of revenue from its EV portfolio in the future.
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