Tata is said to explore options for struggling Jaguar Land Rover

However Tata Motors say there is no truth to these rumors and they would not like to comment further on any market speculation.

The Jaguar Land Rover Automotive Plc XE SV Project 8 vehicle is displayed during a reveal event in Los Angeles, California. Photographer: Patrick T. Fallon/Bloomberg

Mumbai/London/Milan/Southfield: Tata Group, India’s biggest conglomerate, is exploring strategic options for its Jaguar Land Rover Automotive Plc unit including a potential stake sale in the struggling luxury carmaker, people familiar with the matter said.

Tata is considering alternatives ranging from a minority stake sale to finding a venture partner that would jointly develop vehicles and lower costs, said the people, who asked not to be identified because the discussions are private. The company is holding early-stage talks with potential advisers, and the deliberations may not lead to any transaction, they said.

The company would be reluctant to give up control of what was once its crown jewel, and it may prefer to seek fresh equity from investors such as a strategic partner or sovereign wealth fund, some of the people said. The Indian conglomerate’s Mumbai-listed automotive arm, Tata Motors Ltd., currently owns 100 percent of Jaguar Land Rover.

“There is no truth to the rumors that Tata Motors is looking to divest its stake in JLR, and we would not like to comment further on any market speculation,” Tata Group said in an emailed statement. A spokeswoman for Jaguar Land Rover declined to comment on Tata’s intentions for the business.

Tata Motors’ shares surged as much as 3.7 percent and were trading at 182 rupees, up 2.7 percent at 2:35 p.m. in Mumbai.

Jaguar Land Rover has hit several roadblocks in the past few months, prompting Tata Motors to write down the value of the business by 3.1 billion pounds ($4.1 billion). Sales in China have slumped, and Jaguar Land Rover said in January it will cut 10 percent of its workers amid flagging demand and uncertainty around Brexit.

“The U.K. stays the most important market for JLR and that market has a lot of problems due to Brexit,” Deepesh Rathore, London-based director at Emerging Markets Automotive Advisors. “With so many headwinds, JLR needs massive investments to prepare and ride the next upturn of the market.”

Jaguar Land Rover said last month it was seeking alternative funding sources as conditions were not right to borrow from the bond market. The maker of the Jaguar XE sedan and Land Rover Discovery sport utility vehicle needs to raise $1 billion in 14 months to replace maturing bonds and is also burning cash on an investment program for electric cars.

Tata Motors bought the brands from Ford Motor Co. more than a decade ago for $2.3 billion in its biggest-ever acquisition. The company has considered listing a stake in Jaguar Land Rover in previous years, people familiar with the matter have said. Moody’s Investors Service, S&P Global Ratings and Fitch Ratings all have a negative credit outlook on Tata Motors for risks related to the U.K. business.

Land Rover still ranks as the most valuable of the marquee brands owned by Tata Group, which also controls Tetley tea and New York’s luxury Pierre hotel. The automotive marque was worth an estimated $6.2 billion last year, according to Interbrand.