Mahindra & Mahindra is set to acquire SML Isuzu Ltd. in a deal valued at Rs 555 crore to bolster its presence in the large commercial-vehicle segment.
The Scorpio maker will pick up a 43.96% stake held by promoter Sumitomo Corp. and 15% from Isuzu Motors Ltd.—a public shareholder of SML Isuzu, according to an exchange filing Saturday. Separately, M&M will make an open offer to buy 26% stake at Rs 650 per share.
The acquisition is an attempt to shore up presence in the over 3.5-tonne CV segment where M&M has 3% market share. The deal, M&M says, would double its market share to 6% immediately with an aim to grow it to 10-12% by 2030-31 and more than 20% by 2035-36.
Kotak Investment Banking is the financial adviser to the Mahindra-SML Isuzu deal. Khaitan & Co. are handling the legal machinations.
“SML Isuzu is an established player that gives Mahindra a wider set of customers,” Puneet Gupta, director – S&P Global Mobility for India & Asean, told NDTV Profit when asked to comment on the deal. “On the other hand, M&M can add value to SML by adding new technologies to their product portfolio and give customers a superior experience.”
Mahindra Group sees the acquisition of SML Isuzu as a “significant milestone” in its vision of delivering five times growth in their emerging businesses, Chief Executive Officer Anish Shah said in a statement. “This acquisition is aligned with our capital allocation strategy for investing in high potential growth areas which have a strong right to win and have demonstrated operational excellence.”
SML Isuzu was first incorporated in 1983 as Swaraj Vehicles Ltd. to make light commercial vehicles, as part of a government initiative to promote fuel-efficient transport. By 1984, the company was renamed to Swaraj Mazda Ltd. after Japan’s Mazda Motor Corp. and Sumitomo Corp. came on board as investors, along with Punjab Tractor Ltd.
The company commenced commercial production in 1986 but was declared “sick” due to the rupee devaluation of 1991 that forced India to undergo liberalisation. The company survived, wiped out all the losses by 1998, and more than doubled its profit in 2003.
Over the years, Sumitomo Corp. increased its shareholding in SML Isuzu—buying out Punjab Tractors (15% stake) and Mazda (15% stake) in 2005—to acquire a majority of 53.5% in 2009. Swaraj Mazda was renamed as SML Isuzu in 2011.
Today, the company is known for its profitable operations, frugal manufacturing and strong engineering capabilities. It has 16% market share in the large commercial-vehicle segment. In the fiscal ended March 31, 2025, SML Isuzu sales rose 3.1% year-on-year to 14,221 units, according to an exchange filing on April 1.
“SML brings a strong legacy, a loyal customer base, and a credible product portfolio that complements Mahindra’s existing offerings in the trucks and buses segment,” Rajesh Jejurikar, CEO of Mahindra Group’s auto and farm division, said in the statement. “This acquisition is a pivotal step toward our ambition to become a full-range, formidable player in commercial vehicles. Together, we are well-positioned to scale rapidly and drive profitable growth.”
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