JSW MG Motors sets in motion up to $350 million fund raise from PE investors – ETCFO-OxBig News Network

JSW MG Motor India is looking to raise $300-350 million (₹2500-₹2980 crore) from institutional investors like climate focussed privte equity funds and sovereign wealth organisations, to fund expansion of its existing model line-up and augment capacity, according to people aware of the discussions. This will be the first round of external equity fund raising by India’s second largest electric passenger carmaker, since the Sajjan Jindal-led JSW forged a $1.5 billion joint venture with SAIC-owned MG Motor India in March 2024.

The fundraise plans come against the backdrop of a financial turnaround in its financial health in FY24 and the success of the Windsor EV, a crossover utility vehicle. In less than a year of its launch, the Windsor has replaced the Tata Nexon EV as the largest selling model in the country crossing the 20,000 units cumulative sales milestone in six months. JSW MG Motor India anticipates EVs to constitute up to 65per cent of its total sales by the end of 2025 up from 50per cent last calendar year, PTI reported earlier this month. However, the company is still loss making with cumulative losses touching ₹3,000 crores over the past five years.

The company is working with its advisor to kick start the process in the coming weeks. This will also be the 2nd instance of an Indian EV maker to tap financial investors after the Tata Group raised $1 billion for their EV arm from TPG Rise and Mubadala in 2021.

Mails sent to JSW Group and MG Motors India remained unanswered till press time on Tuesday.

Despite heightened competition from other mainstream carmakers including Mahindra & Mahindra, Hyundai Motor India, Maruti Suzuki India, Kia Motor India and others, JSW MG plans to introduce close to five new models in the EV and internal combustion engine (ICE) segments in the current calendar year in the mass and premium end of the market, said people aware of the company’s plans.

On the back of improved sales volumes and cost controls on raw materials, the company’s FY24 topline was ₹7900 crore, up 4.64per cent in Y-0-Y, as average selling price saw an uptick. Its profit margins saw a significant 20.73per cent bump up that resulted in a gross profit of ₹2.91 crore – a first for the company. Net losses shrunk to to ₹586 crore for the FY24 fiscal, down from ₹826 crore in the previous year, as per regulatory documents filed by the company. The most significant number that highlights the turnaround is the operating profit of ₹29,292 per vehicle, from the loss of ₹65,926 per vehicle in FY23. Industry observers say, some of the leading carmakers in India operate at 10-13per cent on the operating profit level.The company has already announced plans to invest ₹5,000 crore to enhance its product portfolio. These include the Bingo – an electric hatchback, Starlight e-sedan, Majestor, a seven seater SUV, among others. It will also launch the MG Cyberster on June 25. It would be the brand’s first convertible electric sports car in India, as the company is doubling down on its EV focus. Over 85 per cent of sales in March 2025 were from electric vehicles (EVs), including the Comet, ZS EV and Windsor models.

The capex also includes a second manufacturing plant in Gujarat, aiming to increase production capacity three folds from the current over 1 lakh units per year. “The capital raise will set a valuation benchmark and more importantly, act as growth equity as the company is looking at new vehicles, every three to six months starting September 2024,” said an official privy to management’s plan, on condition of anonymity as the talks are in private domain.

The company has three principal shareholders – SAIC Group of China with a 49per cent stake in the company, JSW Ventures with a 35per cent stake and Everstone Capital owning another 8per cent of the company. Employees and distributors own another 8per cent of the company. Together the Indian shareholders have a highre economic interests than the Chinese. This was part of the 2023 agreement that helped the cash strapped Chinese auto giant indigenise the business in India.

According to news reports the Everstone 8per cent stake was valued at approximately ₹1,000-₹1,200 crore. The company has been planning an IPO in the next 2-3 years. Earlier the partners had outlined investment plans of $5bn by 2030 and cut costs by increasing local sourcing, including of batteries from a plant to be built in India’s eastern Odisha state by JSW.

JSW MG’s market share during the year rose to 28.02per cent from 12.77%. The gain primarily came at the cost of market leader, Tata Motors which saw its share fall to 53.52per cent from 70.52per cent in the same period. Last September, it introduced the “Battery-as-a-Service” (BaaS) plan – allowing consumers to rent batteries — to stimulate EV adoption further. This reduces the upfront cost of EV ownership. The BaaS plan charges 3.5 rupees/ km with a minimum monthly usage fee, addressing affordability concerns associated with electric vehicles.

India’s nascent EV market is slowing signs of cooling off and penetration of EVs in the overall passenger vehicle market has remained almost unchanged. Electric car sales in India advanced 11per cent to 1,07,645 units in 2024-25 over 2023-24. However, their share in the broader car market has inched only marginally to 2.6per cent from 2.3per cent in the same period, according to Federation of Automobile Dealers Associations.

JSW is also planning to set up a separate car plant to roll out models under its own brand name, though it has not given much details about its investment plans. In a post on X in October, Aurangabad Industrial City, an industrial park in Maharashtra, welcomed JSW for what it said would be a $3.2billion investment set to make EVs and commercial vehicles and create 5,200 jobs.

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