MG Motor India is reportedly planning to raise Rs. 5,000 crore to set up a second manufacturing plant in India, as the company gears up to launch new models including electric vehicles on a large scale.
see photosMG is planning to raise Rs. 5,000 crore through external commercial borrowing (ECB) or private equity route
MG Motor India is reportedly planning to raise fresh funds of up to ₹5,000 crore through external commercial borrowing (ECB) or the private equity route. According to a report in Time of India, the fund will go towards setting up a new manufacturing plant in India, as the company gears up to launch new models including the massive electric crossover SUV. We have reached out to MG Motor India to 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 ECB route or private equity as the company is grappling with lack of approval for its Foreign Direct Investment (FDI) schemes due to PN3.
Speaking with TOI, Rajeev Chaba, Chairman and Managing Director, MG Motor India “We are finalizing plans to raise funds up to ₹5000 crore and we are in advanced discussions to choose the ECB route or to get private equity. We should complete the exercise this year itself,” it said. Chaba added, “We understand that this route will not require us to obtain 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 as the company grapples with a lack of approval for its foreign direct investment (FDI) schemes due to PN3, which need prior approval. Obtaining is mandatory. Indian government. This applies when the investment is coming from a country that shares a land border with India, a move that was initiated by the government after a border dispute with China escalated. Chaba said a lack of new investment as well as semiconductors limited its growth.
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MG Motor India plans to launch an electric crossover in the ₹10-15 lakh range by early 2023
The new production facility will help take forward MG’s plans to launch electric vehicles on a large scale. The company has already announced that the new EV will be a crossover SUV with a price range of ₹10 lakh to ₹15 lakh, making it a direct rival to the Tata Nexon, which is currently the best-selling electric four . -Wheeler in India. The second plant will help the company in production of existing models like MG Hector, Astor, Gloster and ZS EV.
Reports claim that MG Motor India is also looking at contract-manufacturing cars in India through another automobile OEM, however, those talks are still in the initial stages.
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Source: ET Auto
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