Mahindra & Mahindra Limited (M&M) has successfully completed a significant strategic move in the commercial vehicle sector by acquiring a controlling stake in SML Isuzu Limited. The company announced that it has finalized the acquisition of a 58.96% equity stake in SML Isuzu for ₹555.00 crore, marking a major expansion in its commercial vehicle portfolio.

Key Highlights of the Acquisition

• M&M acquired a 43.96% stake from Sumitomo Corporation and a 15% stake from Isuzu Motors Limited.
• The acquisition was completed at ₹650.00 per share.
• SML Isuzu has now become a listed subsidiary of Mahindra & Mahindra.
• M&M will launch a mandatory open offer for up to 26% additional stake from public shareholders at ₹1,554.60 per share.

Strategic Implications

This acquisition significantly strengthens Mahindra's position in the commercial vehicle market, particularly in the trucks and buses segment. Currently, M&M holds a 3% market share in the >3.5T CV segment, compared to its dominant 52% share in the light commercial vehicle segment.

SML Isuzu's Performance

SML Isuzu brings valuable assets to the Mahindra group:

• Reported operating revenue of ₹2,196.00 crore in FY24
• EBITDA of ₹179.00 crore in FY24
• Market-leading position in the ILCV Buses segment with approximately 16% market share

Mahindra's Growth Targets

With this acquisition, Mahindra has set ambitious growth targets for its commercial vehicle business:

• Increase market share in the >3.5T CV segment to 6% initially
• Target 10-12% market share by FY31
• Aim for over 20% market share by FY36

Industry Impact

This strategic move is expected to reshape the competitive landscape in the Indian commercial vehicle market. By combining Mahindra's strong presence in the light commercial vehicle segment with SML Isuzu's expertise in buses and trucks, the merged entity is poised to offer a more comprehensive range of commercial vehicles to customers.

Regulatory Compliance

As part of the regulatory requirements, Mahindra & Mahindra will undertake necessary actions in compliance with its obligations under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 in relation to the Open Offer.

The acquisition of SML Isuzu represents a significant step in Mahindra & Mahindra's strategy to expand its footprint in the commercial vehicle sector. As the integration process unfolds, industry observers will be keenly watching how this move impacts the competitive dynamics of the Indian automotive market.

Mahindra & Mahindra , a leading Indian automotive and farm equipment manufacturer, recently held its 79th Annual General Meeting (AGM) and released its July sales figures, showcasing significant corporate developments and robust market performance.

Key AGM Outcomes

At the AGM, Mahindra & Mahindra shareholders approved several important resolutions:

• Re-appointment of Independent Directors: Ms. Nisaba Godrej and Mr. Muthiah Murugappan were re-appointed as Independent Directors for second terms of five consecutive years each.

• Director Re-appointments: Mr. Rajesh Jejurikar and Mr. Anand G. Mahindra were re-appointed as directors liable to retire by rotation.

• Remuneration Revision: Shareholders approved a revision in the remuneration terms for Mr. Anand G. Mahindra, the Non-Executive Chairman of the company.

• Appointment of Secretarial Auditor: M/s. Parikh & Associates, a peer-reviewed firm of practicing Company Secretaries, was appointed as the Secretarial Auditor for a five-year term.

July Sales Performance

Mahindra & Mahindra reported strong sales figures for July:

Auto Sales

Tractor Sales

Nalinikanth Gollagunta, CEO of Mahindra's Automotive Division, attributed the SUV growth to recent product launches, including the XUV 3XO 'REVX' Series and the commencement of deliveries for new variants of the BE 6 and XUV 9E models.

Veejay Nakra, President of the Farm Equipment Business, noted that the tractor sales performance was driven by sustained land preparation activities and supported by robust cash flows in rural markets following the Rabi crop harvest. The normal progression of the monsoon across most regions also contributed to good demand during the onset of the Kharif sowing season.

Conclusion

The strong domestic and export performance across both automotive and farm equipment divisions underscores Mahindra & Mahindra's resilient business model and its ability to capitalize on market opportunities. As the company continues to innovate and expand its product portfolio, these positive results and shareholder approvals position Mahindra & Mahindra for continued growth in the Indian automotive and agricultural sectors.