Mahindra To Acquire 58.96% Stake In SML Isuzu

Mahindra will soon buy nearly a 59 per cent stake in SML Isuzu for around ₹555 crore, in a bid to improve its market share. With this, Mahindra hopes to increase its market share in the medium and heavy commercial vehicle segment (>3.5 ton), where it currently hold a 3 per cent market share. 

To acquire the stake in SML Isuzu, Mahindra will purchase the 58.96 per cent stake at ₹650 per share. But Mahindra will also have to make an open offer in accordance to the SEBI Takeover Regulations. As a part of the transaction, 43.96 per cent stake will be acquired from Sumitomo Corporation, the primary promoter of SML Isuzu, 15 per cent stake from Isuzu Motors and will also make the aforementioned open offer for 26 per cent from eligible public shareholders. 

Currently, Mahindra has a 3 per cent market share in the more medium and heavy commercial vehicle (MHCV) segment, compared to 52 per cent market share in the light commercial vehicle (LC) segment (<3.5 ton). Mahindra is aiming to double its market in the MHCV segment with the acquisition, with a plan to increase it to 10 - 12 per cent by the financial year 2030-31 and more than 20 per cent by the financial year 2035-36. 

Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, 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.”