This strategic move has been in progress for approximately a year, and sources suggest that a deal between a Sajjan Jindal entity and MG Motor is nearing finalization, ToI reported on October 27. Talks between Jindal and MG Motor India/SAIC were first reported in April of this year, and negotiations are progressing toward a conclusive agreement.
MG Motor views Sajjan Jindal as an ideal partner, especially in light of the challenges it faces in obtaining funds for expanding its operations in India. MG Motor had explored discussions with other entities such as Reliance Industries, the Hero group, and Premji Invest, but Jindal has emerged as the leading contender.
Due to increased scrutiny on Chinese companies following tensions at the India-China border, MG Motor has encountered obstacles in securing investments from its parent company and faces challenges in fundraising through other channels.
For Sajjan Jindal, a partnership with MG and SAIC would provide immediate access to a range of technologies and vehicle platforms, positioning him favorably to compete with established players in the Indian and global automotive market. It is speculated that Jindal may initially acquire over 30% stake in the new entity, with MG Motor retaining the majority along with local financial institutions and employees. However, as part of a planned IPO at a later stage, the Chinese company’s share is expected to decrease, allowing the Jindal entity to assume a controlling stake.
While a spokesperson for MG Motor India declined to comment on the specific details, they mentioned that the company is exploring options to expand its presence in India. The JSW group, associated with Sajjan Jindal, also refrained from making comments. Ford Motors, the current owner of the Chennai plant, stated that they are exploring alternatives for the facility.