Quick Overview:
- Mahindra to acquire a 58.96% stake in SML Isuzu for INR 555 crore
- Move aims to double Mahindra’s market share in the >3.5T truck and bus segment
- Acquisition strengthens Mahindra’s ambition to become a full-range commercial vehicle player
Mahindra & Mahindra has fired a major shot in the commercial vehicle space. The company announced it will acquire a 58.96% stake in SML Isuzu Ltd. for a tidy INR 555 crore. With shares valued at INR 650 apiece, this deal signals Mahindra’s big ambition—to grab a firmer foothold in the heavier >3.5-tonne CV (Commercial Vehicle) segment where it currently holds just 3% market share.
With the acquisition, Mahindra’s share will double to around 6%, and the long-term plan? A bold 10-12% by FY31 and over 20% by FY36. Big dreams, but if history is any proof, Mahindra knows how to make big bets work.
SML Isuzu, for those not fully clued in, is no small fry. Established back in 1983, the brand carries serious weight in India’s truck and bus ecosystem, especially in the intermediate light commercial vehicle (ILCV) bus segment with a strong 16% market share. In FY24, SML posted revenues of INR 2,196 crore and an EBITDA of INR 179 crore—solid numbers for a company operating in the hard-knock world of commercial vehicles.
The move also includes an open offer to public shareholders, as per SEBI regulations. Interestingly, Mahindra is buying out both Sumitomo Corporation’s 43.96% stake and Isuzu’s 15% slice. It’s a clean sweep to gain control—and a clever play to plug the gap between Mahindra’s light commercial vehicles and the big boys of the trucking world.
Mahindra’s top bosses seem upbeat too. Dr. Anish Shah, Group CEO & MD, called it a “significant milestone” towards Mahindra’s 5X growth plan in emerging businesses. Meanwhile, Rajesh Jejurikar, Executive Director and CEO (Auto and Farm Sector), highlighted how SML’s brand loyalty, product lineup, and national network will add real muscle to Mahindra’s ambitions.
Of course, this deal needs the nod from the Competition Commission of India and is expected to wrap up later this year. When it does, expect Mahindra’s Trucks and Buses Division to look a lot sharper in a market that’s fiercely competitive with players like Tata Motors, Ashok Leyland, and Eicher Motors already jostling for space.
Final Thoughts
Mahindra buying SML Isuzu feels like a calculated power move, not a flashy impulse buy. It’s like assembling your Avengers lineup when you know the final boss fight (read: market share) is getting tougher. Trucks, buses, and a chunk of India’s roadways—Mahindra clearly wants them all. Watch this space, because the CV wars just got a lot more interesting.