[BoneCollector]

Sajjan Jindal owned company plans to pick up 45-48% stake in MG Motors.

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Sajjan Jindal, chairman and managing director of JSW group of companies, is reportedly set to own between 45 and 48 percent of carmaker MG Motor India, which is a wholly owned arm of the Shanghai-headquartered SAIC Motor, according to the Economic Times. His majority acquisition would make the company into an Indian entity, with the dealers and Indian employees owning around 5-8 percent. The parent company, SAIC, will hold on to the remaining percentage, the ET report cited multiple sources in the know.

This acquisition plan will ensure that at least 51% of the company will be in Indian control, while the Chinese will become a minority partner with a maximum holding of 49%.

[Aditya]

Sajjan Jindal owned company plans to pick up 45-48% stake in MG Motor India - Post moved to a new thread.

[GoBabyGo]

Hello Moderators & fellow BHPians - Could you please share your thoughts on why MG Motor India is doing this, what benefits MG Motor India will have by doing this and also what, we as an end users, will get from this exercise.

Will it be very similar to Suzuki-Maruti joint venture and also do we have similar joint ventures successfully running (other than erstwhile Hero-Honda two wheelers).

Do you see any such arrangements BYD has to do to stay in India.

My specific query is for Chinese brand, not for European, Korean or American etc. brands

[Sebring]

I read, being a Chinese Company, the going is rough for MG in India so they want a strong local partner 'who can manage affairs'. Could be a rumour, not sure

[shankar.balan]

This was also purported to be fake news.

[kadanaJ]

Let me share some news articles to shed further light on why MG is divesting their stake in India.

Business Today: Chinese-owned MG Motor India to sell majority stake; invest Rs 5,000 crore by 2028

MG Motor India, the local subsidiary of the Chinese-owned passenger vehicle major, has come up with an ambitious plan to transform its business by 2028 amid Indian government’s onslaught on investments from the neighbouring country. After securing one per cent share of India’s passenger four-wheeler market in 2023, the company is now planning to bring in local owners in its bid to ‘Indianise’ the business.

The foreign owners of the company are now planing to divest its majority stake to Indian partners within 2-4 years. For the same, it has already started scouting for buyers among Indian investors, including institutions, its local business partners and HNIs. “We will finalise the new investors-cum-owners of MG Motor India, who together would own more than 50 per cent of the company within FY24," Rajeev Chaba, CEO Emeritus, MG Motor India told the media today. The aim is to ‘Indianise’ the company that will, in turn, help it raise funds for the next phase of expansion through expansion in its production capacity.

TOI: 54 Chinese Investments Proposals Pending: Nirmila Sitharam

"54 FDI proposals received during the past year and current year with investor/ beneficial owner from China/Hong Kong are pending for decision with government as on March 21, 2023," Sitharaman informed Parliament on Monday.

The Indian government is not considering easing restrictions put in place a few years ago on foreign investments from countries that share land border with India, Sitharaman said.

In 2020, India sought to limit investments from China as political tensions heightened between the two countries with its soldiers clashing at the disputed Himalayan region.

The restrictions called for beneficial owners of a country sharing a land border with India to seek its government's approval for investments.
The step was taken to prevent hostile takeovers of Indian companies when the country was severely impacted by the Covid-19 pandemic.

Government Press release from 2020

A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited. However, an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route.

MG is allegedly in talks with RIL, Hero, Premji Invest and JSW for the sale of stake. Hope the above articles help clarify why they are going through this exercise.

[neerajku]

This looks like another Spice jet in the making. Crony capitalism at its best. What do they do know about Automobiles and even plain and simple Tech. If to happens it will not be good news. They may not transfer tech when they are not in control. India may be a big market but they have their own big one at home and why bother beyond a point about a hostile and unsafe market and unsympathetic authorities. They will ensure transition, gradually sell off or just limit to tech support on payment basis.

[WorkingGuru]

This will discourage any new car makers from entering India and embolden the poor industry practices amongst the current ones.

EoD Indian consumers will continue to get the most watered down & worst spec cars compared to the offerings of the same brand anywhere else in the world. We will continue to be treated poorly in terms of servicing and OTC parts availability too.

[GTO]

No political discussions please, but this is forced by the government. Similar to their muscling around with all the Chinese smartphone manufacturers. MG India has been desperate for money and its Chinese parent has no shortage of funds. But the government simply won't allow any further Chinese funding.

MG has been raising debt, but there's a limit to that.

We will see many more Indians in the MG India decision making team now.

Originally Posted by GoBabyGo

Do you see any such arrangements BYD has to do to stay in India.

BYD is still small in India. It also depends a lot on the company's relationships & lobbying power in Delhi. But for now, if you are a Chinese company, don't expect any support from the Indian government. In fact, Chinese companies are outright harassed.

Originally Posted by WorkingGuru

This will discourage any new car makers from entering India and embolden the poor industry practices amongst the current ones.

Chinese ones, yes. Outside of China, every player that could have tried their hand in India has already done so. Some successfully, some not.

[prajwalmr62]

Originally Posted by neerajku

This looks like another Spice jet in the making. Crony capitalism at its best. What do they do know about Automobiles and even plain and simple Tech. If to happens it will not be good news. They may not transfer tech when they are not in control. India may be a big market but they have their own big one at home and why bother beyond a point about a hostile and unsafe market and unsympathetic authorities. They will ensure transition, gradually sell off or just limit to tech support on payment basis.

Well, that is all hypothesis. It is too early to say whether this deal is doomed. They might be choosing a non-automobile company to partner with, because they don't want meddling in their decision makings. They will still own 40-49% I believe, so not something easy to let go from investment perspective. Because this does not look like Joint Venture(JV) where there's also knowledge transfer, but just stakes being sold to reduce fire.

If they are able to pull it off, or go extra mile and IPO in Indian stock market, it would be an interesting case study.

That being said, it is possible they loose interest at some point, and leave the market unannounced.

[GoBabyGo]

Originally Posted by GTO

No political discussions please, but this is forced by the government. Similar to their muscling around with all the Chinese smartphone manufacturers. MG India has been desperate for money and its Chinese parent has no shortage of funds. But the government simply won't allow any further Chinese funding.

MG has been raising debt, but there's a limit to that.

We will see many more Indians in the MG India decision making team now.



BYD is still small in India. It also depends a lot on the company's relationships & lobbying power in Delhi. But for now, if you are a Chinese company, don't expect any support from the Indian government. In fact, Chinese companies are outright harassed.



Chinese ones, yes. Outside of China, every player that could have tried their hand in India has already done so. Some successfully, some not.

Thanks GTO - I agree "No Political Discussion here please". However, would like to understand from Management point of view, even if Indian company own some 51% stake (slightly more than majority stake for example), do you think Chinese Management will not dictate their terms in R&D, Design, Marketing, Product Planning, Positioning, Service & Spare parts Supply & Costing. Is it possible to have Indian collaboration for funding but Chinese management for decision making with no role of Indian management in decision making. I think European & American companies are doing this since decades. Even in smartphone industry, Chinese are taking all the decisions and Indian management is just a face.

[Shreyans_Jain]

Originally Posted by GoBabyGo

Thanks GTO - I agree "No Political Discussion here please". However, would like to understand from Management point of view, even if Indian company own some 51% stake (slightly more than majority stake for example), do you think Chinese Management will not dictate their terms in R&D, Design, Marketing, Product Planning, Positioning, Service & Spare parts Supply & Costing.

What’s the problem with that? At the end of the day, a company will succeed if only its products provide good value and if it is able to support them over time. They have to do this against established competition from Indian, Japanese and Korean players. As long as they are getting their product proposition spot on (like they did with Hector) no one has any reason to complain.

[Deepak George]

Quick update from CNBC-TV18. It's now not only JSW in the race to acquire majority share in MG motors but also Mahindra and Mahindra, Hinduja group, Hero group, Premji Invest among others.

Mods - Please change the title if it makes sense.

[amtak]

Originally Posted by Deepak George

Quick update from CNBC-TV18. It's now not only JSW in the race to acquire majority share in MG motors but also Mahindra and Mahindra, Hinduja group, Hero group, Premji Invest among others.

Mods - Please change the title if it makes sense.

It'll be good if M&M can proceed ahead with this. They will have easy access to SAIC's models that will compliment Mahindra's SUV DNA.

[AtheK]

Originally Posted by Deepak George

Quick update from CNBC-TV18. It's now not only JSW in the race to acquire majority share in MG motors but also Mahindra and Mahindra, Hinduja group, Hero group, Premji Invest among others.

Mods - Please change the title if it makes sense.

The interest that MG is generating is backed by some very good cars they have launched. Hector still continues to be most VFM car, though now it has inched closer to XUV700 terittory, but still remains cheaper. I have seen 6 new hector in my basement compared to two from previous gen. They have a solid Customer care setup and have been able to stay relevant in a tough market.

Good to see M&M step up, would maybe love to see Hector interior with the XUV700 engine in future.

For me one of the perfect cars that can be would probably be the below

Harrier Exterior + Hector Interior and electricals and XUV 700 rocket petrol engine, what a car that would be.