JSW Group President Sajjan Jindal is set to acquire a significant stake in MG Motor India, the automobile company owned by Shanghai-based SAIC Motor’s subsidiary. According to sources, Jindal can acquire a 45-48% stake in the company, while dealers and Indian employees could have a 5-8% stake. The remaining stake will be held by SAIC Motor. The deal does not include JSW Group’s listed companies, JSW Steel and JSW Energy.
Top management to have a significant share in the deal
A senior government official said that in the next few years, an Indian unit could replace the Chinese unit with the listing in India. The deal is expected to include a significant share for Indian management and board members. Chinese mobile phone manufacturers have also been asked to include Indian equity partners and senior management in their Indian operations.
Company valuation estimated to be around INR 12,300 crore
Jindal and his son Parth recently visited China to discuss the deal with SAIC leadership. After months of negotiations, both parties have agreed on the deal structure. MG Motor India is estimated to be valued at around $1.2-1.5 billion (approximately INR 9,800-12,300 crore). According to sources, the deal’s estimated value of $8-10 billion is comparatively low.
Legal agreement for the deal underway
The deal’s formalities have been completed, and the legal agreement is now underway. It is expected to be completed in the next 3-4 months. Both companies intend to create a new brand identity with this deal. SAIC has already invested around INR 5,000 crore in India and is willing to invest the same amount again. However, the proposal has been delayed due to the ongoing border tensions. Meanwhile, MG Motor has relied on external commercial borrowing from its parent company to keep its operations going in India.
MG Motor’s growth rate is increasing every year
MG Motor India is selling luxury cars such as the Hector, Gloster, and ZS, as well as electric models like the Comet and ZS EV. The demand for its cars is continuously increasing in the Indian market, albeit slowly. The company’s annual sales are around 50,000 units, with 48,866 units sold in the financial year 2023. This represents a 21% growth rate from the financial year 2022. The company’s cheapest electric car, the Comet EV, is also available in India, with an initial price of INR 7.98 lakh.
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