Mahindra & Mahindra Ltd (M&M) has announced that it will acquire a 58.96% stake in SML Isuzu Ltd (SML) for ₹555 crore at ₹650 per share, as part of a strategic move to significantly strengthen its presence in the >3.5 tonne commercial vehicles (CV) segment. The agreement includes the launch of a mandatory open offer in accordance with SEBI Takeover Regulations.
This acquisition marks a pivotal expansion for Mahindra, which currently holds a 3% market share in the >3.5T segment compared to its dominant 52% share in the <3.5T light commercial vehicles (LCV) space. With this move, Mahindra expects to double its CV market share to 6% immediately, targeting an ambitious growth to 10–12% by FY31 and 20%+ by FY36.
SML Isuzu: A Strong Strategic Fit
Incorporated in 1983, SML Isuzu is a listed company known for its robust brand value and pan-India presence in the Trucks and Buses segment. The company holds a leading position in the ILCV buses segment, with approximately 16% market share.
In FY24, SML reported:
Operating revenue of ₹2,196 crore
EBITDA of ₹179 crore
SML’s operational strengths, frugal manufacturing practices, and engineering capabilities offer strong synergies with Mahindra’s Trucks and Buses Division, which has been leveraging technology, innovation, and efficient sourcing from its broader auto business.
“SML brings a strong legacy, a loyal customer base, and a credible product portfolio that complements Mahindra’s existing offerings,” said Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, Mahindra & Mahindra Ltd.
Transaction Structure and Strategic Outlook
Under the transaction:
M&M will acquire 43.96% stake from Sumitomo Corporation, the current promoter.
An additional 15% stake will be acquired from Isuzu Motors Ltd, a public shareholder.
An open offer will be launched for up to 26% of the remaining public shareholding.
The acquisition remains subject to Competition Commission of India (CCI) approval and is expected to be completed within 2025.
“The acquisition of SML Isuzu marks a significant milestone in the Mahindra Group’s vision of delivering 5x growth in emerging businesses,” said Dr. Anish Shah, Group CEO and Managing Director of Mahindra Group.
Kotak Investment Banking is acting as the financial advisor and manager to the open offer, while Khaitan & Co has served as the legal advisor to Mahindra.
Mahindra’s strategic integration of SML Isuzu is positioned to consolidate platforms, unify supply and distribution networks, enhance plant utilization, and unlock operating leverage, setting the stage for sustained profitable growth in the competitive Trucks and Buses segment.
