JSW Group In Talks To Acquire 15-20 Per Cent Stake In MG Motor: Report
JSW Group, led by Sajjan Jindal, which is mainly into steel, cement, and paints sectors, has been looking to enter the automotive space for the past three years as part of its diversification strategy
JSW Group could buy stake in MG Motor India, owned by China’s largest car company, Shanghai Automotive, according to a report by Businessline. The report stated that the two firms are in talks which could lead to JSW Group acquiring 15 to 20 per cent stake in MG Motor for anywhere between Rs 2,000 crore and Rs 3,000 crore.
Sajjan Jindal-led Indian conglomerate, which is mainly into steel, cement, and paints sectors, has been looking to enter the automotive space for the past three years as part of its diversification strategy. MG Motor India, on the other hand, is finding it difficult to raise money from China due to the restrictions imposed by the government.
Citing sources privy to the development told Businessline that the deal could value MG Motors at $1.5 billion although the Chinese firm is understood to have pegged the valuation at $2-2.2 billion.
MG Motor India had announced that it had invested about Rs 800 crore to produce its electric car Comet locally at its plant in Halol, Gujarat. With the Comet due to be rolled out soon, it will be the second electric vehicle by the British carmaker after the ZS EV, which was launched in India in 2020.
Earlier, JSW Group had announced plans to make an entry into the high-end electric vehicle space and was looking up to buy technology so this will be a good opportunity for getting a foothold in the automobile space, the source told the publication.
JSW Group had almost finalised the deal to acquire GM India’s Talegaon plant in 2019 but dropped the plan due to economic headwinds unleashed by the pandemic.
JSW Group flagship JSW Steel plant at Salem in Tamil Nadu manufactures one million tonne per annum of high-value steel to automobile companies including the EV makers.
Ashwin Patil, senior research analyst at LKP Securities, said JSW Group entry into EV space through MG Motor will enable them to secure a pie out of the expanding EV space as issue around EV infrastructure is fast easing with new launches from Maruti Suzuki, Tata Motors, and M&M are fetching solid demand.
The Group is not averse to getting in partnership for getting high-end technology. JSW Steel had partnered with Japan’s JFE Steel Corporation to establish a grain-oriented electrical steel sheet manufacturing and sales joint venture company in India.
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