Read by: 100 Industry Professionals
Read by 
There could very well be a formidable front opening in the Indian auto market. Steel magnate Sajjan Jindal is stitching up a new company by first buying a sizeable stake into MG Motor India (a unit of Chinese giant SAIC), and then acquiring Ford’s factory in Chennai through the new entity. And while all this happens, he is also in active talks with Chinese auto company Leapmotor to license their technology for making electric vehicles.
The move has been in the works for around a year, and a deal between an entity of Sajjan Jindal entity (for this foray) and MG Motor “looks imminent”, say sources. TOI had first reported about the talks between Jindal and MG Motor India/SAIC in its editions dated April 25 this year, and the conversations are now headed for completion, with the parties agreeing to go ahead with a deal.
Jindal is seen as a “best fit” partner by MG Motor as the latter faces intense pressure in getting access to funds for expanding its India business. MG had also initiated conversations with Reliance Industries, Hero group, and Premji Invest, though Jindal has now emerged as the frontrunner.
The increased scrutiny on Chinese companies post the India-China border tensions has meant that MG is unable to get investments from its parent, while also facing difficulties in raising funds through other routes.
For Jindal, a partnership with MG and SAIC will mean immediate access to a plethora of technologies as well as vehicle platforms, which would be a major advantage as he looks to challenge well-established Indian and global automotive players operating in the market. “Jindal has been enthusiastic about the plans with MG and SAIC, especially as he gets a firm grip on the operations post a deal. In fact, the Indian company’s nominee may be appointed the MD of the new entity,” the sources said.
The sources said Jindal may initially get over 30% stake in the company with MG Motor continuing to hold majority along with local financial institutions and employees. However, with a planned IPO at a later stage, the share of the Chinese company will come down, while the Jindal entity will take a controlling stake.
A spokesperson of MG Motor India said this to a questionnaire on the matter, “As stated previously, we are evaluating all options to grow our presence in the country and create a win-win situation for all stakeholders while keeping customers’ interests at the core. This would encompass bringing world-class technology, enhancing localisation, and retaining pole position in customer satisfaction for both sales and aftersales.
We decline to comment on the query as it is speculative”. JSW group refused comment. Ford Motors, which had sold its Sanand plant in Gujarat to Tata Motors, said, “We continue to explore alternatives for the Chennai plant and have nothing further to add.”
