CARVERSAL

As the Government has set up some new stricter norms for some International brands or to be specific, Chinese brands, which simply state that - If any Automotive firm wants to set up any concrete plans like establishing a manufacturing hub in India, etc, they will have to make a partnership with an Indian firm by selling 48% of their company's Indian part. This most probably done due to the series of Border Clashes between India and China in 2020, which really raised a concern of security.

Sajjan Jindal, the head of JSW Group, owns a privately held business that plans to invest in MG Motor India, a Shanghai-based SAIC Motor affiliate. 

According to the current consensus, Jindal will reportedly control 45–48% of MG Motor India, with dealers and Indian staff presumably owning the remaining 5-8%. According to many people acquainted with the ongoing discussions, SAIC will hold the final share. The planned proposal, which the Indian government is said to have authorized, intends to ensure that Indian businesses own at least 51% of the stock, with the Chinese side becoming a minority partner holding a maximum of 49%.

According to a senior government official, “It will become an Indian entity, instead of a Chinese one, with an eventual India listing in the next few years.". As part of this transition, the top management and board of the company will have a larger share of Indians.

According to the article, ET had previously reported on June 13 that Chinese cell phone makers had also been asked to include Indian senior management and equity partners in their Indian businesses.

Meeting With SIAC

Sajjan Jindal and his son Parth recently traveled to China to speak with SAIC executives about the relationship. The lengthy discussions have gained speed as both sides have understood the deal's framework. According to the sources above, the valuation of MG Motor India is anticipated to be about $1.2-1.5 billion (9,800-12,300 crore), much less than the initial valuation assumption of $8-10 billion.

Legal arrangements have been started with the intention of creating a formal and enforceable agreement, and they are expected to be finished within the next three to four months. The goal is to develop a new brand identity that incorporates the corporate identities of both interested parties. SAIC was willing to commit an amount comparable to the approximately 5,000 crores it had already put in India. Nevertheless, the idea has been postponed since 2020 because of tense ties between the two nations brought on by border tensions. Due to this, MG Motor's activities in India have been supported by external commercial borrowings from its parent firm.

Along with the Astor, Hector, and Gloster, MG Motor provides a variety of models, including the electric Comet and ZS cars even though the MG brand is owned by a Chinese firm, MG Motor launched in 2019 with the intention of highlighting its British history by using actor Benedict Cumberbatch as a brand ambassador.

Despite favorable feedback for its models, MG Motor India has not raised its sales or established its capacity to meet the demand over the previous two years. A threshold of 50,000 units or thereabouts has been established in annual sales, with 48,866 units sold in FY23, a 21% rise from FY22. According to SAIC, with a growth rate of 51% in sales volume, India was the area with the strongest increase in May.