Mahindra & Mahindra in Talks to Acquire SML Isuzu’s Promoter Stake

Team Finance Saathi

24/Mar/2025

What's Covered Under the Article:

Mahindra & Mahindra is in talks to buy the entire 43.96% promoter stake in SML Isuzu from Sumitomo Corporation.
M&M board to evaluate the acquisition at a price range of ₹1,400-₹1,500 per share, a discount of 11%-17%.
Shares of JBM Auto surged 12% amid speculation, while SML Isuzu and M&M shares reacted to the news.

Mahindra & Mahindra Ltd., a leading commercial and passenger vehicle manufacturer, is reportedly in discussions to acquire the entire promoter stake in SML Isuzu Ltd. from Sumitomo Corporation. This potential acquisition could strengthen Mahindra’s presence in the trucks and buses segment, allowing it to expand its commercial vehicle portfolio further.

M&M’s Valuation for SML Isuzu Stake Purchase

According to sources, Mahindra & Mahindra is considering a valuation of ₹1,400 to ₹1,500 per share for SML Isuzu. This price range represents a discount of 11% to 17% from the current market price of SML Isuzu shares. The M&M board is expected to meet this week to assess the proposal and finalize the acquisition strategy.

Market Reactions and Industry Implications

Following the news, the share prices of the involved companies witnessed fluctuations:

SML Isuzu stock recovered from the day's low and was last trading 1% higher at ₹1,665.6.
M&M shares are currently trading 1.8% lower at ₹2,753.
JBM Auto stock surged 12% to ₹630, reflecting market speculation regarding its interest in acquiring SML Isuzu.

Background: Sumitomo Corporation’s Exit Plan

At the end of the December quarter, Sumitomo Corporation, the Japanese promoter of SML Isuzu, held a 43.96% stake in the company. Reports suggest that Sumitomo Corporation has been looking to exit its India operations, prompting multiple companies to consider acquiring SML Isuzu. Back in June 2023, CNBC-TV18 reported that JBM Auto was among the top contenders for this acquisition.

M&M’s Expansion in the Commercial Vehicle Sector

Mahindra & Mahindra has been steadily expanding its footprint in the commercial vehicle market. If the acquisition goes through, M&M could enhance its production and distribution capabilities in the trucks and buses sector, competing with industry leaders like Tata Motors and Ashok Leyland.

Official Responses

While the speculation continues, M&M responded to CNBC Awaaz’s query stating that it does not wish to comment on market speculation. Meanwhile, SML Isuzu has not yet responded to media inquiries.

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