MG Motor India is reportedly planning to raise the Rs. 5,000 crore to set up a second manufacturing plant in India, as the company gears up to launch new models, including a mass-market electric vehicle.
View PhotosMG plans to raise the Rs. 5,000 crore via external commercial borrowings (ECBs) or private equity route
MG Motor India is reportedly planning to raise fresh funds of up to ₹ 5,000 crore through external commercial borrowings (ECBs) or private equity route. According to a report on Time of India, the funds will go towards setting up a new manufacturing plant in India, as the company gears up to launch new models, including a mass-market electric crossover SUV. We have reached out to MG Motor India for get more clarity on the matter, however, at the time of publishing this story, our email sent to the company remained unanswered.
MG is opting for the ECB route or private equity because the company is struggling with the lack of approvals for its Foreign Direct Investment (FDI) plans because of PN3
Speaking with TOI, Rajeev Chaba, President and Managing Director, MG Motor India said, “We are finalising plans to raise funds of up to ₹ 5000 crore and we are in advanced discussions to opt for the ECB route or get private equity. We should be completing this exercise this year itself.” Chaba further added, “We understand that this route will not require us to seek permission from the government under the Press Note 3 (PN3) Rules.”
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The British carmaker, which is owned by China’s SAIC Motor, is opting for the ECB route or private equity because the company is struggling with the lack of approvals for its Foreign Direct Investment (FDI) plans because of PN3, which mandates getting prior clearance from the Indian government. This is applicable when the investment is coming from a country that shares a land border with India, a move that was initiated by the government after the escalation of border disputes with China. Chaba said constraints around fresh investments as well as semiconductor shortages have limited its growth.
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MG Motor India plans to launch an electric crossover in ₹ 10-15 Lakh range by early 2023
The new production facility will help further MG’s plans to launch a mass-market electric vehicle. The company has already announced that the new EV will be a crossover SUV that will be priced in the range of ₹ 10 lakh to ₹ 15 lakh, which makes it a direct rival to the Tata Nexon, which is currently the best-selling electric four-wheeler in India. The second plant will also help the company ramp up production of existing models like the MG Hector, Astor, Gloster and the ZS EV.
Reports claims that MG Motor India is also looking into getting cars contract-manufactured through another automobile OEM in India, however, those talks are still in a preliminary stage.
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Source: ET Auto
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