Mahindra to Acquire 58.96% Stake in SML Isuzu for INR 555 Crore to Strengthen Trucks and Buses Market Position
Mahindra & Mahindra Ltd. (“M&M”), one of India’s leading automotive giants, announced today that it has signed a definitive agreement to acquire a controlling stake of 58.96% in SML Isuzu Ltd. (“SML”). The acquisition will be made at a price of INR 650 per share, resulting in a total investment outlay of INR 555 crore. In addition to this strategic acquisition, M&M will also initiate a mandatory open offer to acquire up to 26% of SML’s public shareholding, in accordance with the Securities and Exchange Board of India (SEBI) Takeover Regulations.
This move marks a significant step for M&M as it looks to solidify and expand its presence in India’s commercial vehicle (CV) sector, particularly in the segment of trucks and buses above 3.5 tonnes (T). Currently, Mahindra commands a modest 3% market share in the >3.5T CV category, in sharp contrast to its dominant 52% market share in the <3.5T Light Commercial Vehicle (LCV) space. Through this acquisition, M&M expects to double its market share in the heavier CV segment to approximately 6% immediately. More ambitiously, the company has outlined targets to further increase this share to between 10% and 12% by the end of FY31, and to more than 20% by FY36.
Founded in 1983, SML Isuzu is a well-established and respected name in India’s commercial vehicle industry. The company boasts strong brand equity, a vintage presence, and a robust pan-India distribution and service network. SML has been a market leader particularly in the Intermediate Light Commercial Vehicle (ILCV) buses segment, holding approximately 16% market share. In FY24, SML reported operating revenue of INR 2,196 crore, alongside an EBITDA of INR 179 crore, reflecting a healthy and profitable operation.
SML Isuzu’s strengths lie in its frugal manufacturing practices, strong engineering capabilities, and a well-regarded brand portfolio. M&M sees significant opportunity to unlock value through synergistic benefits across multiple dimensions — including cost optimization, network integration, brand strength, manufacturing efficiencies, talent pooling, and complementary product offerings. Mahindra’s Trucks and Buses division has made noteworthy progress in recent years by leveraging technology, product design, innovation, and strategic sourcing from its broader automotive businesses. By combining forces, Mahindra and SML are poised to create a powerful new force in India’s CV market.
As part of the transaction structure, Mahindra will acquire the entire 43.96% stake currently held by Sumitomo Corporation, a promoter group entity of SML. In addition, M&M will separately acquire a 15% stake from Isuzu Motors Ltd., a public shareholder of SML. The total cash consideration for both transactions amounts to INR 555 crore. Subsequently, in line with SEBI’s regulatory requirements, M&M will launch a mandatory open offer to acquire up to 26% from eligible public shareholders.
Commenting on the announcement, Dr. Anish Shah, Group CEO and Managing Director of the Mahindra Group, emphasized the strategic significance of the deal. He stated,
“The acquisition of SML Isuzu marks a significant milestone in Mahindra Group’s vision of delivering 5x growth in our emerging businesses. This acquisition aligns perfectly with our disciplined capital allocation strategy, which prioritizes investments in high-potential growth areas where we have a strong right to win and a proven track record of operational excellence.”
Rajesh Jejurikar, Executive Director and CEO of the Auto and Farm Sectors at Mahindra & Mahindra Ltd., also highlighted the complementary strengths the two companies bring to the table. He noted,
“SML brings a strong legacy, a loyal customer base, and a credible product portfolio that perfectly complements Mahindra’s existing offerings in the trucks and buses segment. This acquisition is a pivotal step toward our ambition to become a full-range, formidable player in commercial vehicles by enhancing market coverage, unlocking operating leverage through platform consolidation, a unified supplier and network base, and better plant utilization. Together, we are well-positioned to scale rapidly and drive profitable growth.”
The acquisition, including the open offer process, is subject to regulatory approvals, including the clearance from the Competition Commission of India (CCI). M&M expects the entire transaction to conclude within calendar year 2025, following the regulatory review and completion of other formalities mandated by SEBI Takeover Regulations.
To ensure a smooth and well-structured transaction, M&M has engaged Kotak Investment Banking as its financial advisor and as the manager to the open offer. Legal advice for the transaction is being provided by Khaitan & Co.
Strategic Rationale and Future Synergies
This acquisition comes at a crucial time when India’s commercial vehicle market is witnessing rapid changes driven by regulatory shifts, the transition to cleaner technologies, and evolving customer needs. With the addition of SML’s complementary product line-up, M&M will significantly expand its offerings in the medium and heavy CV categories, especially in the bus segment, which is expected to experience strong growth due to government investments in public transportation and infrastructure.
Moreover, SML’s established dealership and service network across India is expected to strengthen Mahindra’s distribution footprint, enabling deeper market penetration, better customer reach, and improved after-sales service. Operational synergies in manufacturing and procurement are expected to improve margins and drive efficiencies across both businesses.
SML’s technical collaboration with Isuzu Motors over the years has resulted in the development of reliable and efficient commercial vehicles, which Mahindra plans to further capitalize on. M&M is also expected to leverage its expertise in electric mobility to explore potential electrification of select SML products in the coming years, aligning with India’s transition towards cleaner transportation solutions.
Mahindra’s acquisition of SML Isuzu represents a bold, strategic move to reshape its commercial vehicle portfolio and fortify its market position in the coming decade. With clearly defined growth targets, complementary capabilities, and a unified vision for the future, Mahindra is well poised to accelerate its journey towards becoming a dominant, full-spectrum player in India’s commercial vehicles industry.
The industry will be watching closely as Mahindra integrates SML’s operations and drives forward with its ambitious goals for market expansion, product innovation, and profitable growth.
