JSW is taking a 35% stake in MG Motor India. IFI is taking an 8% stake, dealers are taking a 3% stake and 5% is being kept for the employees.
20 Mar 2024 | 21126 Views | By Ketan Thakkar and Prerna Lidhoo
Indians hold a majority stake in the newly formed JSW M G Motor India - a joint venture between JSW Group and China's largest car maker Shanghai Automotive Industry Corporation's British Brand MG Motor India. The Chairman of the joint entity will be from the JSW Group.
Announcing the ...
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Indians hold a majority stake in the newly formed JSW M G Motor India - a joint venture between JSW Group and China's largest car maker Shanghai Automotive Industry Corporation's British Brand MG Motor India. The Chairman of the joint entity will be from the JSW Group.
Announcing the operationalisation of the joint venture - Parth Jindal, a member of the steering committee of JSW MG Motor India told media persons at an event in Mumbai, "JSW is taking a 35 percent stake in MG Motor India. Apart from JSW, the Indian Financial Institution (IFI) is taking an 8 percent stake in the joint venture. The dealers are buying 3 percent in the joint venture, and 5 percent is being kept for the employees. So, 51% of the company will be owned by Indians and the total investment that is being made is above 5,000 crore into this century."
In May 2023, MG Motor had shared that it plans to "Indianise" the company - with a majority stake will be owned by an Indian promoter over 4-5 years. This has become a reality on the first day of this venture. The announcement had come in the wake of M G Motor not getting FDI approvals from the Government of India amid - geo-political tension with China.
It is an all encompassing deal that includes the existing products of MG Motor India and also the products that are in the pipeline.
The JSW MG Motor JV will be investing Rs 5000 crore in the first phase of kicking off the venture.
Explaining the contours of the joint venture, Rajiv Chaba, CEO Emeritus of MG Motor India said, "We wanted to set an example and incentivise our dealers, marketing partners and employees. This is a one-of-a-kind of structure in the automotive industry - where dealers and employees are the (part) owners of our company. Mr Jindal wanted this to happen in the automotive industry as he does in many of its other businesses. The deal was structured in a way that it is a win-win for all stakeholders of the company."
Chaba declined to share the valuation of the deal but added that all the stakeholders are investing about Rs 5000 crore in this first phase, which takes care of capacity expansion to 3 lakh units and the introduction of a few cars.
"But when you talk of Sajjan Jindal's vision for the next 10 years, the investment is going to be much more than that as the JSW will be investing in cells and batteries," added Chaba.
Sajjan Jindal, chairman of JSW Group said, "It is not important what percentage of holding JSW has, what is important is that we bring the best available technology cars to India and then manufacture and design them in India and give it to Indian customers at the best price."
JSW Group and SAIC Motor had announced the partnership in November 2023, the venture is now getting operationalised with the Indian Group setting itself a target of selling 1 million new energy vehicles by 2030.