Mahindra & Mahindra Ltd and JSW Group are reportedly in talks to buy a stake in Skoda Auto Volkswagen India Pvt Ltd.

Skoda Auto has been in discussions with the two conglomerates for some time and if a deal materialises, one of the two Indian groups could pick up a 15-20 per cent stake in Skoda Auto Volkswagen India, according to the Moneycontrol website.

The deal could also give them an option to increase their stake over time.

This is not for the first time that such reports have come up — earlier this year, there was a buzz that the JSW group was in talks with Volkswagen AG to strengthen the Indian conglomerate’s foray into electric vehicles. Sources, however, said the talks have not gained much traction.

Skoda Auto Volkswagen India’s valuation is not known. In 2022-23, the company retported a profit of ₹309 crore.

The deal may happen at valuations similar to sectoral trends, about 20-24 times the one-year forward price-to-earnings, the website said.

Recently, Klaus Zellmer, global CEO of Skoda Auto, said the group is in talks with a manufacturing partner in India, which would allow them access to local expertise in
engineering, sales and procurement.

A spokesperson of Skoda Auto Volkswagen India Pvt Ltd said they do not comment on market speculation.

However, to fully explore the country’s growth potential, it is always considering new business opportunities, the spokesperson said.

The company is evaluating various options to ensure the best possible solution to implement its strategy in the highly dynamic Indian market, the spokesperson added.

The JSW group in January signed an agreement with the government of Odisha to set up an integrated EV and EV battery making unit in the state.

The facility will come up at Cuttack and Paradeep — comprising a 50GWH EV battery plant, EVs, lithium refinery, copper smelter and related component manufacturing units. The $23 billion JSW group is engaged in the core sector in areas such as steel, energy, cement, infrastructure and paints.

The group has a joint venture with China’s SAIC Motor. In December, the Sajjan-Jindal led group said it would hold 35 per cent in MG Motor India.