After several days of reports regarding Sajjan Jindal from the JSW Group acquiring a significant stake in MG Motor India, new reports have surfaced, adding more excitement to the developments surrounding the company. The latest updates suggest that Mahindra and Mahindra, as well as the Hinduja Group (owner of Ashok Leyland), are also vying to acquire a substantial portion of MG Motor India’s equity.
According to the reports, MG Motor India has made 45-48 percent of its stake available for sale to Indian individuals or groups, as part of its strategy to strengthen its presence in the Indian car market. While Sajjan Jindal from the JSW Group was believed to have confirmed his status as a new shareholder through one of his private companies, the emerging reports indicate that Mahindra and Mahindra, as well as the Hinduja Group, are also interested in acquiring a significant share.
Around 5-6 percent of the shares will be allocated to Indian employees and dealer principals of MG Motor India. As a result of these proposals, the SAIC Group, the current China-based owner of MG Motor India, will become a minority stakeholder, holding 49 percent of the company’s equity.
Since the border tensions between India and China arose in 2020, foreign investments in MG Motor India from China have been affected by various sanctions imposed by the Indian government on Chinese companies. These sanctions have prevented MG Motor India from consistently raising funds from its parent company, SAIC Group. Consequently, the company’s expansion plans, including the establishment of a new production capacity in Halol, Gujarat, have been hampered.
With the inclusion of new Indian stakeholders, MG Motor India will reduce its Chinese identity as the majority of stakes will be held by Indian entities on the board. This will enable the company to attract investments from Indian companies and revitalize its association with SAIC. However, this transfer of stake is not an immediate process, as the dilution in equity will occur gradually over the next 3-4 years.
MG Motor India commenced its operations in the country in 2019 and currently offers SUVs such as the Astor, Hector, Hector Plus, and Gloster. It also includes all-electric vehicles like the ZS EV and Comet EV in its Indian portfolio, with plans to strengthen its EV lineup over the next five years. The company is also working on expanding its operations in India by establishing an additional manufacturing facility to meet the growing demand in the market.