Mahindra & Mahindra’s (M&M) share price surged nearly 3% after the company announced its acquisition of a 59% stake in SML Isuzu for ₹555 crore. This strategic move is set to enhance M&M’s presence in the commercial vehicle sector, particularly in the >3.5T segment.
Mahindra & Mahindra (M&M), a leading Indian multinational in the automotive and commercial vehicle sectors, saw its share price surge by 2.82%, reaching ₹2,945 per equity share on the National Stock Exchange (NSE) following its announcement of acquiring a 58.96% stake in SML Isuzu for ₹555 crore. The stock rose as much as 3% earlier in the day, marking it as one of the top five gainers in the Nifty 50 index.
The acquisition involves purchasing 43.96% of shares from Sumitomo Corporation and 15% from Isuzu Motors, both existing shareholders of SML Isuzu. The deal is subject to regulatory approvals, including clearance from the Competition Commission of India (CCI), and is expected to be completed by 2025.
Strengthening M&M’s Commercial Vehicle Market Position
The strategic acquisition allows M&M to enhance its footprint in the >3.5-tonne commercial vehicle (CV) segment, where it currently holds a modest 3% market share. This move aligns with M&M’s goal to bolster its presence in the segment, which is key to its long-term growth. Post-acquisition, M&M intends to increase its market share in the >3.5T segment to 6% initially, with ambitious targets of 10-12% by FY31 and over 20% by FY36.
About SML Isuzu
SML Isuzu, initially known as Swaraj Vehicles, was renamed to Swaraj Mazda and later to its current name in 2011. The company specializes in manufacturing light and medium commercial vehicles and holds a market share of 16%. It is a joint venture between Sumitomo Corporation and Isuzu Motors, known for its high-quality vehicles and strong presence in India’s CV market.
Positive Outlook for M&M’s Stock
M&M’s stock has been performing well, rising nearly 5% in the last five trading days and providing a return of around 9% over the past month. In the last six months, M&M’s stock has grown by over 4%, and it has seen an impressive 40% increase in the last year, boosting investors’ wealth. The acquisition of SML Isuzu is expected to strengthen the company’s position in the competitive commercial vehicle market.
