China’s SAIC Motor to dilute its stake in MG Motor India; Reliance, Hero in race to acquire

China’s SAIC Motor, which holds the majority stake in MG Motor in India, is planning to dilute some of its stake from the company over the next two to four years. The Chinese entity is planning to step back and will allow the Indian multinationals to acquire the stake. It has been reported that they are already in an advanced stage of negotiation with Indian MNCs such as Reliance, Hero Group, Premji Invest and JSW Group for the equity sale.

As per a report by TOI, the sources have informed that MG Motor is looking forward to close the deal by the end of 2023 and the dilution and takeover will take place in phased manner.

Due to the continuing tensions on the Indo-China border, it has often been reported that the Chinese entities have been facing more than regular hurdles in getting approvals for their fresh investments in India. Sources has revealed that MG Motors have been waiting on approval from the Indian government for past two years, to raise funds from their parent company SAIC Motor.

With little success, the automaker is now looking at domestic companies to raise capital for its expansion strategy.