With the acquisition of SML Isuzu, Indian automaker Mahindra & Mahindra (M&M) is trying to get into the electric bus section whereas focusing on a market share of 20 per cent by FY36 in the industrial car section of larger than 3.5 tonnes.
Over the weekend, M&M introduced buying a 58.96 per cent stake in SML Isuzu for ₹555 crore.
“We now have lower than 3 per cent market share in larger than 3.5 tonnes industrial autos in FY25. We had determined that the section is a enterprise that we will flip round,” mentioned Anish Shah, Managing Director, M&Ma.
M&M will purchase the complete stake of 43.96 per cent from Sumitomo Company, promoter of SML, and individually additionally purchase a 15 per cent stake held by Isuzu Motors, public shareholders of SML, for an mixture consideration of ₹555 crore. The corporate will even launch an open supply for the acquisition of as much as 26 per cent from public shareholders of SML, as per the SEBI Takeover Laws.
“There will probably be community synergy to considerably unlock alternatives by combining strengths. We don’t play in the electric bus section however SML Isuzu is already in the superior phases of introducing the identical. We’ll scale to allow tailwinds throughout the community, suppliers and financiers,” mentioned Rajesh Jejurikar, Govt Director and CEO (auto and farm sector), M&M.
Funding ramp-up
Whereas analysts consider that the acquisition will assist in increasing M&M’s Intermediate Mild Industrial Automobiles (ILCV), the corporate should ramp up funding.
“M&M has a powerful presence in the SCV goods-carrier section. The corporate can use SML Isuzu’s ILCV passenger-carrier platform to broaden into the ILCV items section as effectively. Buses have been a fast-growing section in latest years and thru SML Isuzu, Mahindra will get entry to this market. Nevertheless, we predict M&M should make investments in SML Isuzu’s merchandise as they appear to have been underinvested in latest years,” acknowledged BNP Paribas.
Printed on April 28, 2025
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