MG Motor plans to raise funds by selling stake to local partners, investors

MG Motor

MG Motor India on Wednesday said it plans to offer a majority stake to local partners and investors over the next 2-4 years as it looks to raise around Rs 5,000 crore capital to fund next round of its growth in the country.

MG Motor, a British brand currently owned by China's largest automaker SAIC Motor Corp, aims to utilise the capital to set up a new plant and introduce new models in the Indian market.

The automaker has been looking to raise capital for sometime now to fund its expansion plans.

As per industry sources, the automaker has been awaiting government approval for around two years now to raise funds from its parent.

With little success so far, it has now started looking for other options to raise the required capital.

In an interaction with PTI, MG Motor India CEO Emeritus Rajeev Chaba said the automaker is going to dilute the equity over the next few years to raise the capital.

"The funds will be required primarily for the second plant in Halol which will have a production capacity of 1.8 lakh units per annum and also to come up with 4-5 products, primarily EVs from this new plant," he noted.

Some part of the capital may also be used for creating charging infrastructure in the country, Chaba said.

The company is talking to multiple entities, including big conglomerates, financial institutions, high net worth individuals, including some of the existing big dealer partners, he said.

"So when we say Indians will have majority, it will constitute one or two partners, financial institutions, high net worth individuals, dealers and employees," Chaba noted.

He noted that the situation merits monetisation of the business and raise funds for the enhancing the production capacity beyond 2025.

"We have been using the ECB route from the parent company and managing our business but now because there is an opportunity for monetising and we are trying to take advantage of that. Hopefully we will be able to raise the funds and localise the new technologies and components in the country," Chaba said.

When asked if the company could also look at coming up with an IPO going ahead, he said: "It is the last stage of dilution and that may happen based on various conditions..in 2028 we do not rule out IPO as an option so that more locals could become owners of this company." MG Motor India currently rolls out products from its manufacturing plant in Halol, Gujarat, which it had acquired from General Motors.

The Halol plant can produce up to 1.2 lakh units per year.

The company's second plant would also come up at Halol, taking its installed capacity to 3 lakh units per annum.

MG Motor said its aims to launch 4-5 new cars in the country, with focus on EVs.

The company expects its EV portfolio to contribute up to 65-75 per cent of total sales in India, it noted.

The automaker said it is also exploring setting up of cell manufacturing and hydrogen fuel-cell technology through joint ventures or third-party manufacturing.

With expansion plans in place, the automaker aims to have a total workforce of 20,000 by 2028.

"As we pave the way for our next phase of sustainable growth, we have outlined a clear roadmap and vision for 2028. Our growth strategy is centred around strengthening localisation, aligning more closely with the government's 'Make in India' initiative while innovatively augmenting our promise consistently, and diligently meeting the evolving needs of the market," Chaba said.

Further, he said that the automaker is committed towards making a positive impact on society.

Chaba also highlighted the company's focus on promoting gender diversity.

MG Motor India sells models like Hector, Astor, Gloster and ZS EV in the market. It recently introduced a small EV, Comet, in the domestic market.