Mahindra To Acquire Majority Stake In SML Isuzu For Rs 555 Crore To Expand Commercial Vehicle Business

Mahindra & Mahindra Ltd (M&M) has signed an agreement to acquire a 58.96% stake in SML Isuzu Ltd. (SML) for an investment of Rs 555 crore at a price of Rs 650 per share. Following this agreement, M&M will also launch a mandatory open offer under SEBI Takeover Regulations to acquire up to 26% additional stake from public shareholders. Kotak Investment Banking is advising M&M on the deal and managing the open offer process, while Khaitan & Co is acting as legal advisor.

Currently, M&M holds a 3% market share in the segment of commercial vehicles above 3.5 tonnes. Through this acquisition, M&M aims to double its share to 6% and has set a goal to reach 10–12% by FY31 and over 20% by FY36. In the light commercial vehicle segment below 3.5 tonnes, M&M already holds a 52% share.

Dr. Anish Shah, Group CEO & MD of the Mahindra Group, said, “The acquisition of SML Isuzu marks a significant milestone in Mahindra Group's vision of delivering 5x growth in our emerging businesses. 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.”

Founded in 1983, SML Isuzu operates across India with a strong presence in the trucks and buses segment. It has a market share of about 16% in the intermediate and light commercial vehicle (ILCV) bus segment. In the financial year 2023-24, SML reported operating revenue of Rs 2,196 crore and EBITDA of Rs 179 crore.

Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, Mahindra & Mahindra Ltd., said, “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. This acquisition is a pivotal step toward our ambition to become a full-range, formidable player in commercial vehicles by enhancing market coverage, unlocking operating leverage through platform consolidation, a unified supplier and network base, and better plant utilization. Together, we are well-positioned to scale rapidly and drive profitable growth.”

As part of the agreement, M&M will acquire the 43.96% stake held by Sumitomo Corporation and a 15% stake held by Isuzu Motors Ltd. Completion of the transaction is subject to approvals, including clearance from the Competition Commission of India.