MG Motors made quite an entrance to the ever-demanding Indian market; the brand has captivated the hearts of Indian consumers with its stylish designs, advanced features, and commitment to sustainability.
They started operations in India in 2019 and offer SUVs such as the Astor, Hector, and Gloster. The company also offers electric vehicles such as the ZS EV and Comet EV as part of its lineup in India.
Amidst recent reports surrounding the JSW Group’s acquisition of a substantial stake in MG Motor India, fresh acquisition developments have surfaced over the internet, further fueling the excitement surrounding the company.
As per the latest updates, automobile giants Mahindra and Mahindra and the Hinduja Group – the parent company of Ashok Leyland- have joined the race to acquire a major share of MG Motor India’s equity.
To solidify its position in the Indian automotive market, MG has made around 45-48 per cent of its stake available for sale to Indian individuals or groups, and approximately 5-6 per cent of its shares will be given to the Indian employees and dealer principals.
These proposals will limit the ownership of its current Chinese owner, SAIC Group, to just 49 per cent. Thus making it a minority stakeholder. SAIC is one of the market leaders in the Chinese automobile industry and holds the record for being the largest carmaker in China.
Since the initial border dispute between India and China, the investments from China in MG have been severely impacted by several sanctions imposed by the Indian government on Chinese companies.
MG Motors could no longer acquire funds consistently from its parent company, the SAIC Group. As a result, the company’s expansion initiatives, including establishing a new production facility in Halol, Gujarat, have faced setbacks and delays.
It is expected that, with the inclusion of new Indian stakeholders, MG Motors could lose its Chinese image as the majority of stakes will be held by Indian entities on the board. This inclusion will enable the company to attract enough investments from Indian companies.
However, the transfer of stake cannot be done as a sudden or immediate process; instead, the dilution in equity will happen gradually over a period of 3-4 years as part of the ongoing transition.
As MG Motors embarks on the path toward going public, the future holds immense possibilities for the brand in the Indian market. MG has a strong lineup of vehicles admired by many and has advanced tech, which might be why Mahindra and Hinduja groups are in the hunt for shares.
Going public will provide the company with additional capital and unlock new opportunities for expansion and collaborations, especially with Mahindra and Ashok Leyland. Let’s wait and see how this will turn out and what it can bring.
