In a move set to reshape India’s commercial vehicle landscape, Mahindra & Mahindra Ltd (M&M) announced that it will acquire a 58.96% stake in SML Isuzu Ltd (SML) for Rs 555 crore. The deal, struck at Rs 650 per share, also includes a mandatory open offer under SEBI’s takeover regulations.
The acquisition marks a bold push by Mahindra to bolster its presence in the >3.5-tonne commercial vehicle segment, where it currently holds just a 3% market share. By absorbing SML’s business, Mahindra expects to immediately double its stake to 6%, with ambitions to reach 10-12% by FY31 and 20% or more by FY36.
Founded in 1983, SML Isuzu commands a strong position in India’s truck and bus market, particularly in the intermediate light commercial vehicles (ILCV) bus segment, where it holds a 16% share. In FY24, SML reported operating revenue of Rs 2,196 crore and EBITDA of Rs 179 crore, underpinned by profitable operations, frugal manufacturing, and solid engineering capabilities.
“The acquisition of SML Isuzu marks a significant milestone in Mahindra Group’s vision of delivering 5x growth in our emerging businesses,” said Anish Shah, Group CEO & MD of the Mahindra Group. “This acquisition is aligned with our capital allocation strategy for investing in high potential growth areas which have a strong right to win and have demonstrated operational excellence.”
Under the deal, Mahindra will acquire the 43.96% stake held by Sumitomo Corporation and a separate 15% stake from Isuzu Motors Ltd. The move is expected to unlock substantial synergies across cost structures, brand leverage, manufacturing efficiencies, and product portfolios.
“SML brings a strong legacy, a loyal customer base, and a credible product portfolio that complements Mahindra’s existing offerings in the trucks and buses segment,” said Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, Mahindra & Mahindra Ltd. “Together, we are well-positioned to scale rapidly and drive profitable growth.”
The transaction, pending approval from the Competition Commission of India, is expected to close within 2025. Kotak Investment Banking is advising Mahindra on the financial aspects, while Khaitan & Co serves as its legal advisor.
