SML Mahindra to acquire Mahindra Truck and Bus Division for Rs 525 crore

SML Mahindra Limited will acquire the Mahindra Truck and Bus Division (MTBD) from parent Mahindra & Mahindra for Rs 525 crore, the two companies informed stock exchanges on 29 July, in a move that consolidates the group's commercial vehicle operations under one listed entity.

The boards of both companies approved the transaction on a slump-sale basis under a Business Transfer Agreement, expected to be executed on or before 7 August. The deal, structured as a going-concern transfer of MTBD's employees, assets, licences and contracts, will bring together SML's presence in the intermediate and light commercial vehicle segment with M&M's broader truck and bus portfolio spanning light, intermediate and heavy vehicles above 3.5 tonnes.

MTBD sold 14,832 vehicles and posted a turnover of Rs 2,989 crore in the financial year ended March 2026, according to disclosures filed with the BSE and NSE. That represented roughly 2 per cent of M&M's total income from operations for the year. Manufacturing of Mahindra-branded trucks and buses will continue under M&M through a contract manufacturing arrangement, the companies said, to ensure supply continuity during the transition.

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The transaction follows M&M's acquisition of a 58.97 per cent stake in SML Mahindra, formerly SML Isuzu, from Sumitomo Corporation and Isuzu Motors in August 2025. That deal, followed by a mandatory open offer, gave M&M control of SML and set the stage for folding its own truck and bus business into the subsidiary. Since MTBD is being transferred from a promoter entity, the transaction qualifies as a related-party deal, though both companies said it has been carried out on an arm's length basis, with valuations independently assessed by BDO Valuation Advisory and GT Valuation Advisors.

The restructuring comes as India's commercial vehicle market has consolidated around a handful of large manufacturers, with scale and product breadth increasingly determining competitiveness against Tata Motors and Ashok Leyland, which together dominate the segment. By combining SML's ILCV strength with M&M's wider truck range, the merged business aims to compete more effectively across weight categories rather than compete internally with two separate Mahindra Group brands.

"The transaction simplifies Mahindra Group's commercial vehicle business structure by consolidating truck and bus operations under SML Mahindra, creating a single focused entity dedicated to growth and leadership in the commercial vehicle sector," said Dr Anish Shah, Group CEO and Managing Director, Mahindra Group.

Rajesh Jejurikar, Executive Director and CEO of the Auto and Farm Sector at M&M, said the move was aimed at "combining strengths of SML and Mahindra Truck & Bus" while preserving the market positioning of both brands.

The deal requires SML shareholders' approval and is subject to satisfactory completion of conditions under the agreement, with the companies targeting consummation by 31 January 2027, coinciding with the current financial year.