With the acquisition of SML Isuzu, Indian automaker Mahindra & Mahindra (M&M) is looking to get into the electric bus segment while targeting a market share of 20 per cent by FY36 in the commercial vehicle segment of greater than 3.5 tonnes.
Over the weekend, M&M announced acquiring a 58.96 per cent stake in SML Isuzu for ₹555 crore.
“We have less than 3 per cent market share in greater than 3.5 tonnes commercial vehicles in FY25. We had decided that the segment is a business that we can turn around,” said Anish Shah, Managing Director, M&Ma.
M&M will acquire the entire stake of 43.96 per cent from Sumitomo Corporation, promoter of SML, and separately also acquire a 15 per cent stake held by Isuzu Motors, public shareholders of SML, for an aggregate consideration of ₹555 crore. The company will also launch an open offer for the acquisition of up to 26 per cent from public shareholders of SML, as per the SEBI Takeover Regulations.
“There will be network synergy to significantly unlock opportunities by combining strengths. We do not play in the electric bus segment but SML Isuzu is already in the advanced stages of introducing the same. We will scale to enable tailwinds across the network, suppliers and financiers,” said Rajesh Jejurikar, Executive Director and CEO (auto and farm sector), M&M.
Investment ramp-up
While analysts believe that the acquisition will help in expanding M&M’s Intermediate Light Commercial Vehicles (ILCV), the company will have to ramp up investment.
“M&M has a strong presence in the SCV goods-carrier segment. The company can use SML Isuzu’s ILCV passenger-carrier platform to expand into the ILCV goods segment as well. Buses have been a fast-growing segment in recent years and through SML Isuzu, Mahindra will get access to this market. However, we think M&M will have to invest in SML Isuzu’s products as they seem to have been underinvested in recent years,” stated BNP Paribas.
Published on April 28, 2025
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