The billionaire industrialist and chairman of JSW Group, Sajjan Jindal, may acquire up to 48% stake in MG Motor India, a wholly-owned arm of Shanghai-headquartered SAIC Motor, reported The Economic Times. The report, quoting people familiar with the development, said the group’s listed companies – JSW Steel and JSW Energy – would not be exposed to the deal. Instead, Jindal would buy into MG Motor India through his private company.
The acquisition will make MG Motor an Indian entity, with Indian dealers and employees owning 5-8% each. In total, the company will be 51 percent in Indian control, sources added. The deal will also help MG Motor bring the latest technology into its products, which have received positive consumer feedback.
MG Motor entered the Indian market in September 2017 by acquiring GM India’s Halol plant and currently manufactures five SUVs – Astor, Gloster, Hector 5-seater, Hector Plus, and ZS EV. It has been relying on external commercial borrowings to support operations in the country.
MG Motor is looking to boost local sourcing and manufacturing as part of its localization plan. Besides, it plans to offer majority stakes in its Indian business to local partners over the next 2-4 years. It also explores cell manufacturing and clean hydrogen-cell technology through its own or third-party facilities.
It has been difficult for MG Motor India to secure new foreign direct investment from its Chinese parent. It is seeking to raise Rs 5,000 crore over the next two to three years but has been unable to do so due to political tension between the countries.
Last year, the government asked MG Motor India to increase local ownership in its Indian business. It was also asked to involve Indian officials in its senior management. Several Chinese smartphone manufacturers have recently been asked to do the same and introduce Indian employees to their companies.
Billionaire Sajjan Jindal is considered one of India’s most influential industrialists. He has a net worth of $22 billion and is among the top 10 richest Indians, according to Forbes India. His family has been in the steel, cement, and power industries for decades, and he was instrumental in establishing JSW Group in the early 1990s.
Sajjan Jindal is a member of the National Executive Council of the Indian Congress, the party’s top decision-making body. He is also the chairman of the OP Jindal Foundation and is on the board of several publicly-listed companies in India.
The 62-year-old is also the founder and chairman of Sajjan Jindal Group, a business conglomerate with over 150 companies across India and overseas. He is the son of the late Haryana politician and Congress leader Om Prakash Jindal. The group is among the largest in the country, with a turnover of over $22 billion. The group also includes Jindal Steel and Power Limited (JSPL), one of the world’s largest steel producers.
