MG Explores Stake Sale in Indian Operations with RIL and Hero Group.

In a significant development in the Indian automotive industry, MG Motor, a British car brand owned by Chinese auto giant SAIC, is reportedly in advanced negotiations with multiple potential buyers for a stake sale in its Indian operations. The move comes as MG Motor aims to secure regulatory ease in India and overcomes challenges in obtaining approvals for fresh investments from its Chinese parent company, which are restricted due to ongoing tensions between India and China.

The Quest for Local Partners
To navigate these obstacles and embark on its next phase of growth, MG Motor is actively seeking local partners with strong financial capabilities and a trusted reputation. Several prominent Indian companies have emerged as potential suitors, including Reliance Industries, Hero Group, Premji Invest, and JSW Group, according to reliable sources. The involvement of these local partners would not only provide the necessary capital but also bring a wealth of expertise and established networks to facilitate MG Motor’s expansion plans.

Accelerating Growth and Investments
MG Motor is currently in discussions with these potential partners, with the aim of finalizing a deal by the end of the year. The urgency to secure funds is driven by the company’s immediate requirements for kick-starting the next phase of expansion. In particular, MG Motor is seeking investments of approximately Rs 5,000 crore to establish a state-of-the-art manufacturing facility in Gujarat and introduce a new lineup of vehicles, primarily focusing on electric models.

Seeking Credible Partners and Attractive Valuations
As negotiations progress, MG Motor is prioritizing finding a credible partner while also ensuring attractive valuations for its Indian operations. The company recognizes the importance of choosing the right collaborator who can not only provide the necessary financial backing but also align with MG Motor’s vision and long-term growth strategy. By partnering with trusted Indian companies, MG Motor aims to leverage their expertise and local market knowledge to establish a strong presence in India’s rapidly evolving automotive landscape.

MG Motor’s Vision and Investment Plan
While specifics of the ongoing discussions remain confidential, MG Motor India CEO Rajeev Chaba has affirmed the company’s commitment to an aggressive investment plan. As part of a five-year business roadmap, MG Motor plans to invest Rs 5,000 crore by 2028, significantly increase production capacity from 1.2 lakh units annually to 3 lakh units, introduce four to five new vehicle models, and explore advanced technologies such as battery assembly units, cell manufacturing, and hydrogen fuel-cell technologies through joint ventures and third-party manufacturing.

In addition to expanding its product portfolio and production capabilities, MG Motor also aims to enhance localization efforts, which will contribute to the growth of domestic suppliers and the overall Indian manufacturing ecosystem. These initiatives are expected to create employment opportunities, both directly and indirectly, with an estimated increase of around 20,000 jobs by 2028.

MG Motor’s pursuit of a stake sale in its Indian operations signifies a strategic shift aimed at overcoming regulatory hurdles and ensuring sustained growth in the Indian market. By collaborating with reputed Indian companies, MG Motor aims to secure the necessary capital, expertise, and local market insights to expand its presence and product offerings in India. The ongoing negotiations with potential partners, including Reliance Industries, Hero Group, Premji Invest, and JSW Group, highlight the keen interest in MG Motor’s future prospects and reflect the company’s commitment to long-term success in the Indian automotive sector.

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