Mahindra’s Mega Truck Play: SML Isuzu Acquisition Shifts Gears in Heavy Vehicle Race

Mahindra & Mahindra (M&M) has announced a landmark move to acquire a 58.96% stake in SML Isuzu Ltd for ₹555 crore, marking a strategic leap into India’s high-growth truck and bus market above 3.5 tonnes. The deal, which involves buying out stakes from Sumitomo Corporation and Isuzu Motors, will be followed by a mandatory open offer for up to 26% from public shareholders, in line with SEBI regulations.

 

This acquisition is set to double Mahindra’s market share in the segment from 3% to 6%, with an ambitious target of reaching 10-12% by FY31 and over 20% by FY36. SML Isuzu, a recognized leader in the intermediate and light commercial vehicle (ILCV) bus segment with a 16% share, brings a strong pan-India presence, robust financials, and proven manufacturing and engineering capabilities to the table.

 

The move will not only bolster Mahindra’s presence in the >3.5 tonne truck and bus category but also accelerate its entry into the electric and CNG bus markets, leveraging SML Isuzu’s expertise and product range. Mahindra aims to unlock value through cost, network, and product synergies, while both companies will initially continue to operate independently.

 

Mahindra Group CEO Anish Shah called the acquisition a “milestone” in the group’s vision for fivefold growth in emerging businesses, underscoring a focused capital allocation strategy and a strong “right to win” in this sector.

 

Sources: Mahindra Press Release, Economic Times, Reuters, CNBC-TV18