Sajjan Jindal-led JSW Group plans to bring a financial partner in the new automobile venture with SAIC Motor Corporation.

Last week, JSW Group announced plans to acquire a 35 per cent stake in the joint venture with China’s state-owned SAIC Motor Corporation. SAIC Motor will transfer its ownership in MG Motor India to the new company.

Though the financial details were not revealed, sources said the deal has valued MG Motor India at Rs 8,000 crore, and JSW Group will invest Rs 2,800 crore for its 35 per cent stake.

The plan to bring a financial investor is similar to JSW’s strategy in the steel business. In 2018, when JSW Steel bid for Monnet Ispat and Energy for Rs 2,875 crore, it formed a consortium with Aion Investment. It acquired the asset jointly and merged it with itself in 2022.

JSW Group plans to bring financial investors into the new joint venture spread over one or two rounds.

JSW Group’s spokesperson did not respond to the query sent by businessline.

Vaibhav Shah, Fund Manager, Torus Oro PMS, said the joint venture company plans to localise the company by bringing down the shareholding of Chinese promoters, which will help it raise funds smoothly to fuel growth.

“Over a period of time, we believe there would be some financial investors who would come over to provide the necessary capital in the fast growing auto segment,” he said.

With the strong demand, SAIC Motor was looking to make fresh investments, but like many other Chinese-owned businesses in India, it was prohibited from bringing in fresh investments. Incidentally, MG India is also under investigation for tax evasion and under-invoicing, which the Chinese car maker denied.

MG Motor sells SUVs under the Hector, Gloster, and Astor brands and the ZS EV and Comet EV models of electric vehicles. It has just over one per cent market share in the country and has sold two lakh cars in India.

The joint venture company plans to increase local sourcing, improve charging infrastructure, expand production capacity and introduce new models focussing on green mobility.

JSW Steel, a group company, is one of the largest suppliers of high-strength steel and advanced high-end steel products for its automotive segments in India.

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