SML Mahindra Limited (SML) is acquiring Mahindra Truck and Bus Division (MTBD) from Mahindra & Mahindra (M&M) for Rs 525 crore to create a unified Truck & Bus business with presence spanning across light, intermediate and heavy commercial vehicles, as well as buses in the >3.5T CV segment.
The transaction is expected to be completed during FY2027. Following the announcement, SML Mahindra shares hit the 20% upper circuit, trading at Rs 4,566 apiece on the NSE.
Anish Shah, Group CEO & MD, Mahindra Group, said that the transaction simplifies Mahindra Group's commercial vehicle business structure by consolidating truck and bus operations under SML Mahindra, creating a single focused entity dedicated to growth and leadership in the commercial vehicle sector.
“This is an important step towards our aspiration of building a leading position in the Truck & Bus segment and creating long-term value for all stakeholders,” added Shah.
SML Mahindra, which has ambitions to be among top 3 in India’s intermediate and light commercial vehicle (ILCV) Trucks & Buses market with a focused play in heavy commercial vehicle, currently has an annual production capacity of 24,000 chassis and 12,000 buses, while M&M's Chakan facility has the capacity to manufacture 35,000-40,000 trucks and buses annually, with current utilisation at about 50%.
As per the investor presentation, SML outlined an ambition to build a Rs 12,500 crore commercial vehicle business by FY32.
The MTBD business undertaking generated a total income of Rs 2,989 crore in FY26, representing approximately 2.02% of M&M’s total income from operations for the said year.
The Business Transfer Agreement (BTA) is expected to be executed on or before 7th August 2026 and the slump sale of the MTBD business undertaking is proposed to be consummated on or before 31st January 2027.
“The consideration receivable pursuant to the slump sale is Rs 525 crore, subject to working capital adjustment as set out in the BTA. The consideration amount receivable for the slump sale of MTBD Business Undertaking has been derived based on the valuation report obtained by the Company from GT Valuation Advisors Private Limited,” said a regulatory filing by M&M on Wednesday.
M&M's had acquired a 58.97% stake in SML Mahindra Limited (formerly SML Isuzu Limited) from Sumitomo Corporation and Isuzu Motors Limited on August 1, 2025.
Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, Mahindra & Mahindra, said, “This partnership is about unlocking the best of both organisations. By combining the strengths of SML and Mahindra Truck & Bus, we can drive meaningful synergies across operations, technology and customer-facing domains while preserving the unique heritage and market positioning of both brands.”