Mahindra & Mahindra (M&M) is reportedly in discussions to acquire the entire stake of Japan’s Sumitomo Corp in commercial vehicle manufacturer SML Isuzu, according to CNBC-Awaaz on March 24, citing sources.
The potential acquisition is expected to support M&M’s expansion into the trucks and buses segment. As per the report, M&M is considering a valuation of ₹1,400-1,500 per share for SML Isuzu.
At 1:05 PM on March 24, SML Isuzu’s stock was trading 5% higher at ₹1,732 per share, with a market capitalization of ₹2,500 crore. The stock’s 52-week high stands at ₹2,405, while its 52-week low is ₹1,028.
CNBC-Awaaz also stated that M&M’s board is likely to convene this week to assess the proposal. However, M&M has declined to comment on the matter, calling it speculation.
As of December 2024, exchange data shows that Sumitomo Corporation held a 43.96% stake in SML Isuzu. Meanwhile, Japan’s Isuzu, which produces SUVs and pickup trucks through a separate entity, owns a 15% stake in the company.
SML Isuzu’s net profit dropped by 80.22% to ₹0.53 crore in the December 2024 quarter, compared to ₹2.68 crore in the same quarter of the previous year. Additionally, its sales declined by 14.07% to ₹331.80 crore from ₹386.13 crore in the year-ago period.
At 1:10 PM on March 24, M&M’s shares on the BSE were trading 1.5% lower at ₹2,759 per share.
In June 2023, CNBC-TV18 had reported that JBM Auto was one of the leading contenders to acquire SML Isuzu, as Sumitomo Corporation was planning to exit its India operations, according to sources at the time.
At 1:16 PM on March 24, JBM Auto’s shares were up by 14%, trading at ₹646 per share.
