In a transfer set to reshape India’s business car panorama, Mahindra & Mahindra Ltd (M&M) introduced that it’ll purchase a 58.96% stake in SML Isuzu Ltd (SML) for Rs 555 crore. The deal, struck at Rs 650 per share, additionally features a obligatory open provide underneath SEBI’s takeover rules.
The acquisition marks a daring push by Mahindra to bolster its presence within the >3.5-tonne business car phase, the place it at the moment holds only a 3% market share. By absorbing SML’s enterprise, Mahindra expects to right away double its stake to six%, with ambitions to succeed in 10-12% by FY31 and 20% or extra by FY36.
Based in 1983, SML Isuzu instructions a robust place in India’s truck and bus market, notably within the intermediate mild business autos (ILCV) bus phase, the place it holds a 16% share. In FY24, SML reported working income of Rs 2,196 crore and EBITDA of Rs 179 crore, underpinned by worthwhile operations, frugal manufacturing, and strong engineering capabilities.
“The acquisition of SML Isuzu marks a big milestone in Mahindra Group’s imaginative and prescient of delivering 5x development in our rising companies,” stated Anish Shah, Group CEO & MD of the Mahindra Group. “This acquisition is aligned with our capital allocation technique for investing in excessive potential development areas which have a robust proper to win and have demonstrated operational excellence.”
Underneath the deal, Mahindra will purchase the 43.96% stake held by Sumitomo Company and a separate 15% stake from Isuzu Motors Ltd. The transfer is anticipated to unlock substantial synergies throughout value constructions, model leverage, manufacturing efficiencies, and product portfolios.
“SML brings a robust legacy, a loyal buyer base, and a reputable product portfolio that enhances Mahindra’s current choices within the vehicles and buses phase,” stated Rajesh Jejurikar, Government Director and CEO, Auto and Farm Sector, Mahindra & Mahindra Ltd. “Collectively, we’re well-positioned to scale quickly and drive worthwhile development.”
The transaction, pending approval from the Competitors Fee of India, is anticipated to shut inside 2025. Kotak Funding Banking is advising Mahindra on the monetary features, whereas Khaitan & Co serves as its authorized advisor.
