China’s SAIC Motor will be taking a step back as it plans to dilute its stake in MG Motor India in the next few years, reported Times of India. China’s automotive giant holds a majority stake in the Indian carmaker.
According to ToI, SAIC will allow Indian companies to take over the majority of the stake. Citing reports, TOI added that the former is in the advanced stages of talks with investors from different Indian companies, which include Reliance, Hero Group, Premji Invest, and JSW Group for equity sale.
The report also added that MG Motor India is aiming to close the deal by the end of 2023, and the dilution is expected to happen in a phased manner.
Amid ongoing tensions between India and China over the border issue, it has often come to light that China-backed entities face hurdles while getting approvals related to fresh investments. Another TOI report suggested that MG Motor India is still waiting for the government’s approval in order to raise funds from the parent company SAIC, for nearly two years. However, MG Motor is now planning to resort to domestic companies to raise funds in order to fulfill its expansion strategy.
On May 10, the automaker announced that it will be raising funds and will make investments worth Rs 5,000 crore.
It will also develop a new plant in Gujarat for manufacturing, while also expanding its annual production capacity to 300,000 units in the period of the next five years.
The Indian carmaker also aims to launch four to five all-new electric cars in the next five years. MG Motor also aims to achieve 65 to 75 per cent of revenue from its EV portfolio in the future.
