The automaker called the Reuters report to be ‘unfounded and said that there is ‘no truth in the matter’.
“As there has been some un-necessary speculation raised by the Reuter’s article, the Company on its own considers it necessary to clarify to the stock exchanges that the article is unfounded and there is no truth in the matter,” M&M informed the exchanges on Friday.
Mahindra’s shares closed 2.5 per cent higher at Rs 2,748.45 apiece on the BSE Sensex, which spiked 819 points or 1.04 per cent.
The report, which cited sources, claimed that majority stake in the proposed manufacturing venture will be owned by Mahindra and that the company has sought a green light from the Modi-led government for the Chinese investment.
Further, the plant is proposed to be set up in Gujarat, as per the report. As per the report, the proposal includes building an export-oriented, integrated manufacture hub for assembled cars – known as completely built-up units – as well as engines and car batteries.Also Read: Mahindra Group companies run into ‘brand’ tax
Since 2020, Indian companies have required government approval for Chinese investments, following geo-political tensions between the two neighbours.
Currently, India is mulling over easing restrictions on Chinese investments in non-sensitive sectors such as solar panels and battery manufacturing, areas where it lacks expertise.
Historically, Chinese investments in India have faced significant delays or cancellations due to heightened scrutiny. This includes proposals from companies like BYD Co Ltd, Great Wall Motor, and SAIC’s MG Motor. A particular proposal worth $1 billion from BYD last year has been on hold due to security concerns.
Union Finance Minister Nirmala Sitharaman recently expressed support for this potential change. She backed the views of her Chief Economic Adviser V Anantha Nageswaran that New Delhi could promote foreign direct investment from China to boost India’s exports.
(With Reuters inputs)