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Business Standard
28-04-2025
- Automotive
- Business Standard
Why this smallcap auto stock fell 10% in trade on Apr 28? Check details
M&M's board has approved acquiring Sumitomo Corporation's 44 per cent stake in the company at a price of ₹650 per share along with Isuzu Motors 15 per cent stake at the same price of ₹650 per share. Mumbai SML Isuzu share price today: Share price of SML Isuzu locked in lower circuit of 10 per cent at ₹1,590.05 on the BSE in Monday's intra-day trade after Mahindra & Mahindra (M&M) informed that its board has approved acquiring Sumitomo Corporation's 44 per cent stake in the company at a price of ₹650 per share along with Isuzu Motors' 15 per cent stake at the same price of ₹650 per share. M&M's acquisition price is at a 63 per cent discount to the company's Friday closing price of ₹1,766.70 on the BSE. Till 10:33 am, a combined 93,000 equity shares had changed hands and there were pending sell orders for 110,000 shares on the NSE and BSE. Past price performance of SML Isuzu Mahindra to acquire 58.96 per cent stake in SML Isuzu for ₹555 crore M&M on Saturday, April 26, 2025, announced that it has entered into an agreement to acquire 58.96 per cent stake in SML Isuzu at ₹ 650 per share, which is an outlay of ₹555 crore. In addition, M&M will make an open offer in accordance with SEBI Takeover Regulations. The proposed acquisition is a step towards establishing a strong presence in the >3.5T commercial vehicle (CV) segment, where M&M has a 3 per cent market share today, as compared to a 52 per cent market share in the <3.5T LCV segment. M&M's Trucks and Buses Division has made meaningful progress over the past few years. This acquisition would double the market share to 6 per cent, with a plan to increase this to 10 – 12 per cent by FY31 and 20 per cent plus by FY36. As part of the transaction, M&M would acquire the entire stake of 43.96 per cent held by Sumitomo Corporation, promoter of SML Isuzu, and separately also acquire 15 per cent stake held by Isuzu Motors Ltd, public shareholder of SML Isuzu, for an aggregate consideration of ₹555 crore. M&M would also launch a mandatory open offer for the acquisition of up to 26 per cent stake from eligible public shareholders of SML Isuzu in accordance with the SEBI Takeover Regulations. The proposed acquisition is subject to completion of customary closing conditions including receipt of CCI Approval, and is expected to be completed by December 31, 2025. The open offer will be completed in accordance with the takeover regulations. M&M's objects and impact of acquisition of SML Isuzu M&M said the acquisition will enable the company to strengthen its presence in the trucks and buses segment by unlocking operational synergies, enhancing product development capabilities, and expanding market reach. It supports the company's long-term growth vision in the commercial vehicle industry. Brokerage view – ICICI Securities The total acquisition price of SML Isuzu for M&M worked out at ~₹ 1,750 crore (Enterprise Value) which is at a very lucrative valuations from M&M's standpoint, i.e., ~0.8x P/S, ~8x EV/EBITDA and ~12x P/E on TTM basis. Acquiring SML Isuzu could prove to be a strategic fit for M&M given its absence in the buses segment. M&M sees this acquisition as a step towards establishing a strong presence in the >3.5T CV segment, where it has a 3 per cent market share today. The brokerage firm has a positive view on M&M. Share price of M&M today Shares of M&M have rallied 3 per cent to ₹2,940.25 on the BSE in intra-day trade. The stock had hit a 52-week high of ₹3,276.30 on February 10, 2025. About SML Isuzu SML Isuzu, an auto original equipment manufacturer (OEM) operating in the commercial vehicles (CV) space, is primarily in the business of manufacturing and sale of light commercial vehicles (LCVs) and medium commercial vehicles (MCVs) in the automobile industry and has a product portfolio comprising buses, trucks, and specific application vehicles.
Business Standard
28-04-2025
- Automotive
- Business Standard
M&M edges higher after signing deal to acquire nearly 59% stake in SML Isuzu
Mahindra & Mahindra (M&M) added 1.54% to Rs 2906.30 after the company said that it has entered into an agreement with the SML Isuzu and its promoters to acquire 58.96% stake in SML Isuzu for Rs 554.65 crore. Mahindra & Mahindra has entered into an agreement with the Sumitomo Corporation, Japan, and SML Isuzu for acquiring 6,362,306 equity shares, representing 43.96% of the equity share capital of SML Isuzu. The share would be acquired at a price of Rs 650 apiece and the aggregate consideration for the same would be Rs 413.55 crore. M&M has also inked an agreement with Isuzu Motors, Japan, for acquiring 2,170,747 equity shares (representing 15% stake in SML Isuzu) for a total consideration of Rs 141.10 crore. In addition and in line with the SEBI Takeover Regulations, M&M has launched an obligatory open offer to acquire up to 26% of SML Isuzu from eligible public shareholders. The shares would be acquired at a price of Rs 1,554.60 per share, which is at a discount of 12.01% to the scrips previous close of Rs 1,766.70. As a result, shares of SML Isuzu were currently locked in 10% lower circuit at Rs 1,590.05 on the BSE. M&M stated that the proposed acquisition is a step towards establishing a strong presence in the '>3.5T CV segment, where M&M has a 3% market share today, as compared to a 52% market share in the '<3.5T CV segment. M&Ms Trucks and Buses Division has made meaningful progress over the past few years. "This acquisition will double the market share to 6%, with a plan to increase this to 10 - 12% by FY31 and 20%+ by FY36, the company stated. Incorporated in 1983, SML Isuzu is a listed company with well-recognized brands, a strong vintage and pan-India presence in the Trucks and Buses segment. SML has a market leading position in the ILCV Buses segment, with around 16% market share. The company reported operating revenue of Rs 2,196 crore and EBITDA of Rs 179 crore in FY24. It has profitable operations, frugal manufacturing, and strong engineering capabilities. M&M said that SML offers significant potential to unlock value through synergies in cost, network, brand, manufacturing, talent, and product complementarities. The companys Trucks and Buses business has developed strengths by tapping into technology, design & innovation, and sourcing from our auto business. Together, this would be a powerful combination. Dr. Anish Shah, Group CEO & MD of the Mahindra Group, said: "The acquisition of SML Isuzu marks a significant milestone in Mahindra Group's vision of delivering 5x growth in our emerging businesses. 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." The Mahindra Group enjoys a leadership position in farm equipment, utility vehicles, information technology, and financial services in India. It is the world's largest tractor company by volume. It has a strong presence in renewable energy, agriculture, logistics, hospitality, and real estate. The company reported a 19.06% jump in standalone net profit to Rs 2,964.31 crore in Q3 FY25 as compared with Rs 2,489.73 crore in Q3 FY24. Revenue from operations jumped 20.31% YoY to Rs 30,963.76 crore in Q3 FY25.
Mint
28-04-2025
- Automotive
- Mint
SM Isuzu share price hits 10% lower circuit as M&M to acquire 58.96% stake in company
Stock Market Today: Shares of SML Isuzu faced intense selling pressure in the morning trade on Monday, April 28, after Mahindra & Mahindra (M&M) announced signing an agreement to acquire a 58.96% stake in the company for ₹ 555 crore. While M&M will be acquiring 43.96% stakes from Sumitomo Corp's promoter and 15% stake from its public shareholder, Isuzu Motors, it will also launch an open offer in accordance with the SEBI Takeover Regulations. The price fixed for the open offer of SML Isuzu by M&M is at ₹ 1,554 per share, a 13% discount to Friday's closing price. M&M over the weekend announced that it has entered into an agreement to acquire a 58.96% stake in SML Isuzu at ₹ 650 per share, which is an outlay of ₹ 555 crore. For a total consideration of ₹ 555 crore, the Mumbai-based automaker will be acquiring the full 43.96% stake held by SML's promoter, Sumitomo Corporation, as well as a separate 15% stake held by SML's public shareholder, Isuzu Motors Ltd. In addition and in line with the SEBI Takeover Regulations, M&M would also issue an obligatory open offer to acquire up to 26% of SML from eligible public shareholders. With a current market share of 3% in the >3.5T CV category and 52% in the <3.5T LCV segment, as per the company, the proposed acquisition is a step towards building a strong presence in that market. Over the past few years, M&M's Trucks and Buses Division has achieved significant progress. The market share will double to 6% as a result of this acquisition as per the company, with plans to raise it to 10% to 12% by FY31 and 20%+ by FY36, the company said. SML Isuzu share price opened at ₹ 1701.95, nearly 4% below its previous closing price of ₹ 1766.70. Soon, the small-cap stock faced more intense selling pressure, tumbling as much as 10% to hit the lower circuit limit of ₹ 1,590.05 apiece. Meanwhile, M&M share price gained following the announcement. The BSE Sensex stock rose nearly 2% today and was trading at ₹ 2898.70, up 1.3% around 10.25 am.
Business Upturn
28-04-2025
- Automotive
- Business Upturn
Why are SML Isuzu shares falling to 10% lower circuit despite Mahindra's acquisition? Know More
Shares of SML Isuzu Ltd slumped 10% to ₹1,596.10 in Monday's early trade after Mahindra & Mahindra Ltd (M&M) announced the acquisition of a 58.96% stake in the commercial vehicle company. The sharp sell-off comes amid investor concerns over the deep discount at which Mahindra is acquiring the stake and the lack of fresh capital infusion for SML Isuzu. Mahindra will purchase the stake for ₹555 crore, buying 43.96% from Sumitomo Corporation and 15% from Isuzu Motors at a price of ₹650 per share — a steep 63% discount compared to SML Isuzu's previous close of ₹1,773.40. Advertisement Adding to the sentiment pressure, Mahindra will also launch a mandatory open offer for up to 26% of public shareholding at ₹1,554.60 per share, in line with SEBI Takeover Regulations. Despite the open offer being priced higher, the valuation at ₹650 per share for the controlling stake has created a perception of reduced intrinsic value, weighing heavily on SML's market price. Moreover, analysts noted that the deal provides no fresh capital to SML Isuzu. Investors were likely expecting a capital infusion to support future growth, but the current structure involves only a transfer of ownership. Strategic rationale behind the move: Mahindra is aiming to strengthen its commercial vehicle (CV) presence, especially in the >3.5 tonne segment where it currently holds just a 3% market share. With the acquisition, Mahindra expects to double its market share to 6% immediately, and targets reaching 10–12% by FY31 and over 20% by FY36. While brokerages like Citi and Morgan Stanley have maintained positive views on Mahindra post this deal, citing potential synergies in supply chain, manufacturing, and products, the steep discount at which the stake was bought has rattled sentiment around SML Isuzu's standalone valuation. Brokerage highlights: Citi has maintained a Buy rating on Mahindra with a target price of ₹3,680 , saying the acquisition offers avenues for growth in the CV segment. Morgan Stanley reiterated its Overweight rating on Mahindra, highlighting that the cash consideration is unlikely to dent M&M's balance sheet and the valuation is still reasonable compared to peers. Despite the broader strategic positives for Mahindra, investors in SML Isuzu have reacted negatively to the immediate 63% discount valuation and the absence of capital support, driving the stock sharply lower. Disclaimer: The information provided is for informational purposes only and should not be construed as investment advice. Readers are advised to consult a financial advisor before making any investment decisions. Business Upturn and the author are not liable for any losses arising from the use of this information.
Mint
28-04-2025
- Automotive
- Mint
M&M share price in focus on agreement to acquire 58.96% stake in SML ISUZU for ₹555 crore
M&M share Stock Market Today: M&M share price remains in focus on Monday as it announced signing an agreement to acquire 58.96% stake in SML ISUZU for ₹ 555 Crore to strengthen its presence in commercial vehicles segment. While Mahindra & Mahindra will be acquiring 43.96% stakes from Sumitomo Corp's promoter, it will also launch an open offer in accordance with SEBI Takeover Regulations Mahindra & Mahindra Ltd (M&M) over the weekend announced that it has entered into an agreement to acquire 58.96% stake in SML Isuzu Ltd. at ₹ 650 per share, which is an outlay of ₹ 555 crore. For a total consideration of ₹ 555 crore, the Mumbai-based automaker will be acquiring the full 43.96 percent stake held by SML's promoter Sumitomo Corporation as well as a separate 15% stake held by SML's public shareholder Isuzu Motors Ltd. In addition and in line with the SEBI Takeover Regulations, M&M would also issue an obligatory open offer to acquire up to 26% of SML from eligible public shareholders. M&M plans to strengthen its Commercial vehicles segment With a current market share of 3% in the >3.5T CV category and 52% in the <3.5T LCV segment, as per the company, the proposed acquisition is a step towards building a strong presence in that market. Over the past few years, M&M's Trucks and Buses Division has achieved significant progress. The market share will double to 6% as a result of this acquisition as per the company, with plans to raise it to 10% to 12% by FY31 and 20%+ by FY36. M&M share price had closed at 2862.20 levels on the BSE on Friday, down 1.22% on a day the stock markets saw significant selling prssure. On the NSE the M&M share price had closed at ₹ 2864.20, on Friday. The agreement for acquisition of majority stake in SML Isuzu was announced by M&M on Saturday and hence M&M share price will remain in focus on Monday Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions. First Published: 28 Apr 2025, 09:15 AM IST
