Shares of SML Isuzu are expected to see a strong reaction when markets open on Monday, following the announcement that Mahindra & Mahindra (M&M) will acquire a controlling stake in the company, strengthening its footprint in the trucks and buses segment.
Mahindra today announced that it has entered into definitive agreements to acquire a 58.96% stake in SML Isuzu for a total outlay of ₹555 crore. The acquisition includes purchasing 43.96% equity from Sumitomo Corporation and 15% equity from Isuzu Motors Limited, both at a price of ₹650 per share.
In line with SEBI’s takeover regulations, M&M will also launch a mandatory open offer to acquire up to 26% of SML’s public shareholding at a much higher price of ₹1,554.60 per share, indicating a significant premium to the current market price. This premium offer is likely to spark buying interest in SML Isuzu stock in the near term.
Post-transaction, Mahindra will gain full management control of SML Isuzu, making it a listed subsidiary of the group.
The acquisition is strategically important for Mahindra’s ambitions to scale its commercial vehicle business. While M&M already commands a dominant 52% market share in the sub-3.5 tonne LCV category, it has a relatively minor presence — just about 3% — in the heavier >3.5T commercial vehicles segment. The SML acquisition is expected to immediately double Mahindra’s market share in this space to 6%, with aggressive targets of reaching 10–12% by FY31 and over 20% by FY36.
Founded in 1983, SML Isuzu is a well-established player in the intermediate commercial vehicle (ILCV) and bus segments, holding around 16% market share in its segment. In FY24, the company posted revenue of ₹2,196 crore and an EBITDA of ₹179 crore. SML also operates a manufacturing plant in Punjab and exports to markets like Bangladesh, Nepal, Bhutan, Ghana, and Dubai.
Calling the deal a “significant milestone,” Anish Shah, Group MD and CEO of M&M, said the acquisition is aligned with the Mahindra Group’s broader goal of achieving 5x growth across emerging businesses.
With a sharp premium embedded in the open offer price and Mahindra’s strong backing, market sentiment around SML Isuzu is expected to turn sharply positive, positioning it among the key stocks to watch in Monday’s trading session.
Disclaimer: This news article is for informational purposes only and does not constitute investment advice. Investors are advised to consult their financial advisor before making any investment decisions.
