MG Motor India plans stake sale to fuel expansion

MG Motor India, a subsidiary of China's SAIC Motor, is looking at diluting its majority stake in the company to Indian entities to fund its expansion plans in the country over the next five years.

It plans to invest ₹5,000 crore, which will be utilised, among others, to establish a second manufacturing facility in Gujarat. The new unit will more than double the company's installed capacity to 300,000 units from 120,000 units.

MG Motor India CEO emeritus Rajeev Chaba said the intention is to "Indianise operation" by diluting majority stake to financial institutions, partners and high net-worth individuals in the country. "We intend to Indianise shareholding, the company's board, management, supply chain in the next two-four years," he told ET.

The first step of the process is likely to be finalised in this financial year, he said.

Chaba said while talks are on with multiple potential partners, identification of a possible partner is only likely to happen later this year.

His comments come amid media reports of MG Motor India being engaged in talks with Sajjan Jindal-led JSW for stake sales.

JSW Holdings had clarified in a notice to the National Stock Exchange dated April 25 that no such proposal had been placed for discussion before its board or any of its committees.