The chairman of JSW Group, Sajjan Jindal is apparently buying up a big stake in MG Motor India. This move will increase the company’s Indian equity.
MG Motor India is a subsidiary of Shanghai-based SAIC Motor. It is known for offering stylish SUVs and affordable EVs. The company has many popular models in the Indian market like MG Hector. Now, JSW Group Chairman Sajjan Jindal is reportedly buying a large stake in the privately-owned company. However, companies under the JSW Group will not be part of the new venture. The new deal comes after the Indian government requested that the Chinese companies should increase Indian equity and get Indian executives in their Indian operations.
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JSW Group to Buy Upto 35% Stake in MG Motor India
As per reports, Mr. Jindal is all set to get 32-35% ownership in MG Motor India as part of the new deal. About 5-8% will be held by dealers and Indian employees. With this move, the Indian equity in MG Motor India will be at least 40%. Meanwhile, the Chinese owners will continue to enjoy a majority share, holding 51% of the company. Additionally, there will be more Indian citizens in the senior management of the company. The Indian government seems to have approved this plan. The goal of the deal is to make MG Motor India an Indian entity with an India listing in the coming years.
The new deal is being negotiated for a while now. Sajjan Jindal, along with his son Parth, even visited China to meet with the SAIC leadership and crack the deal structure. As per the latest reports, legal agreements have been initiated now to create a formal agreement. However, it might take three to four months to be officially finalized. While MG Motor India was initially estimated to have a valuation of $8-10 Billion, the new sources hint that the valuation during the new deal is around $1 billion.
Over Rs 5,000 Crore Investment by MG Motor in Indian Market
Over the last few years, SAIC showed a keen interest in the Indian market and planned several investments to grow its brand. So far, the company has invested around Rs 5,000 crore in the India operations. However, the company had to step back due to the strain in the India-China relationships in 2020. The new brand identity of MG Motor India will reflect the corporate identities of both partners. MG Motor India was initially launched in 2019. Since then, the company has always highlighted the British heritage of the MG brand. It even used popular actor Benedict Cumberbatch as a brand ambassador. However, it is owned by a Chinese company, and hence the new deal.
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Currently, MG Motor has an impressive lineup of cars. This includes MG Astor, MG Hector, and MG Gloster. It also offers electric cars like the MG Comet EV and ZS EV. However, the popularity of the brand does not match its sales numbers. It sold 48,866 units sold in the fiscal year 2023 (a 21% increase from FY22). For SAIC, India was the fastest-growing region in May this year. The Chinese company reported a growth rate of 51% in sales numbers. Still, MG Motor India has not increased its volumes over the past two years. This might change after the new deal.
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