China’s SAIC Motor to dilute stake in MG Motor India: Reliance, Hero Group in negotiations to buy equity - Times of India

China’s SAIC Motor which holds majority stake in MG Motor India, is planning to dilute its stake in the company over the next two to four years. The Chinese automotive giant will step back and allow Indian entities to take over the majority and is reportedly in the advanced stages of negotiations with several investors such as Reliance, Hero Group, Premji Invest and JSW Group for equity sale. Citing sources, a TOI report states that MG Motor is looking to close the deal by the end of 2023 and the dilution and takeover will take place in a phased manner.

With continuing tensions on the Indo-China border, it has been often reported that companies with Chinese links have been facing hurdles in getting approvals for fresh investments. According to the TOI report, sources have confirmed that MG Motor India has been waiting for government approval to raise funds from parent SAIC, for around two years now. With little success in sight, the automaker is now looking at domestic entities to raise capital for its expansion strategy.

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On May 10, MG Motor India announced that it will be raising capital and making investments worth Rs 5,000 crore in the country. The automaker will develop a new manufacturing plant in Gujarat and expand its annual production capacity to three lakh units in the next five years. 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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China’s SAIC Motor to dilute stake in MG Motor India: Reliance, Hero Group in negotiations to buy equity - Times of India
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