China’s SAIC Motor dilutes stake in MG Motor India: Reliance, Hero Group in talks to buy shares

The Chinese SAIC Motor which holds the majority MG Motor Italy, plans to dilute its stake in the company over the next two to four years. The Chinese auto giant will step back and allow Indian entities to take over majority ownership and is reportedly in late stage talks with several investors such as Reliance, Hero Group, Premji Invest and JSW Group over the sale of shares. Citing sources, a TOI report said MG Motor is looking to close the deal by the end of 2023 and the dilution and acquisition will be phased.


With the continuing tensions on the Indochina border, it has often been reported that companies with Chinese connections have faced obstacles in obtaining approvals for new investments. According to the TOI report, sources confirmed that MG Motor India has been waiting for government approval for about two years to raise funds from parent company SAIC. With little success in sight, the automaker is now seeking domestic entities to raise capital for its expansion strategy.

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On May 10, MG Motor India announced that it will raise capital and make investments worth Rs 5,000 crore in the country. The automaker is to develop a new manufacturing plant in Gujarat and expand its annual production capacity to three lakh units over the next five years. However, the goal of the expansion plan lies in expanding MG India’s electric vehicle portfolio by 2028. The company has announced that it will launch four to five new all-electric models over the next five years and aims to get 65 to 75 percent of revenue from its EV portfolio in the future.



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