Sajjan Jindal may acquire 48% stake in MG Motor India, govt onboard

Industrialist Sajjan Jindal is planning to buy a stake in MG Motor India, according to a report in The Economic Times (ET). MG Motor India is a wholly owned subsidiary of Chinese carmaker SAIC Motor. Jindal group's listed companies, JSW Steel and JSW Energy, will not have any exposure to the venture, the report said.

However, when asked about the deal, a JSW spokesperson said that the group has no comments to offer on market speculation, ET reported. So far, there are no comments from MG Motor India either.

According to the report, Jindal is likely to acquire a 45-48 per cent stake in MG Motor India. This would include a 5-8 per cent stake held by dealers and employees. SAIC will continue to hold the rest of the stakes in the company, the report said, quoting multiple sources.

Jindal and his son Parth were in China to meet the SAIC officials to discuss the specifics of the alliance, the ET report said. The discussions are ongoing for several months and are reaching positive outcomes as both parties appear happy with the terms.  

The government of India is also aware of the deal and is happy with the developments. When concluded, the deal will leave at least 51 per cent stake of the company in Indian hands, ET reported.

Thereafter, MG Motor India will "become an Indian entity, instead of a Chinese one, with an eventual India listing in the next few years," the report said, quoting a senior government official.

This is not the first time that the news of Sajjan Jindal planning to acquire a stake in MG Motor India has surfaced. On April 26, the group denied any such plans, as reported in Business Standard. 

"With regard to the query on 'JSW in talks to pick up stakes in MG, BYD India', we confirm that no such proposal as referred to in the news article has been placed for discussion of the Board or any of its Committees," the company had said in a press release.

In a similar trend, Chinese smartphone manufacturers were also asked by the government of India to introduce Indian ownership in terms of equity partnerships in their companies. Additionally, the government had asked these companies to appoint Indian officials in key roles, such as chief executive officer and chief financial officer, among others.

MG Motor India is valued at $1.2-1.5 billion (Rs 9,800-12,300 crore), which is much less than what SAIC originally asked ($8-10 billion) for, the report quoted people cited above.

MG sells its recently launched Comet EV and ZS electric vehicles in India. It also has Astor, Hector, and Gloster in its product lineup.