SML Mahindra soars after approving Rs 525-crore Mahindra Truck & Bus deal

SML Mahindra hit the 20% upper circuit at Rs 5,478.60 after its board approved the acquisition of Mahindra & Mahindra's Truck and Bus Division (MTBD) on a slump sale basis for Rs 525 crore, subject to working capital adjustments.

The acquisition will be executed through a Business Transfer Agreement (BTA) and is subject to shareholders' approval. Mahindra & Mahindra (M&M), which holds a 58.97% stake in SML Mahindra, is the company's promoter, making the transaction a related-party deal. The company said the acquisition is being undertaken on an arm's length basis.

The acquisition covers MTBD's employees, assets, intellectual property, licences, permits, contracts and liabilities as a going concern.

MTBD offers a comprehensive portfolio of light, intermediate and heavy commercial trucks and buses for cargo and passenger transportation, with a focus on fuel-efficient, technologically advanced and reliable mobility solutions. The business sold 14,832 vehicles and generated Rs 2,989 crore in turnover during FY26. The BTA is expected to be signed on or before 7 August 2026, while the transaction is targeted to close by the end of FY27, subject to the fulfilment of conditions precedent.

The company said the transaction will consolidate the Mahindra Group's truck and bus operations under a single platform, creating a unified commercial vehicle business spanning light, intermediate and heavy commercial vehicles. Mahindra-branded trucks and buses will continue to be manufactured by M&M under a contract manufacturing arrangement to ensure business continuity.

According to the investor presentation, the combined business aims to become a top-three player in India's intermediate and light commercial vehicle (ILCV) trucks and buses segment while strengthening its presence in heavy commercial vehicles. It is targeting the creation of a Rs 12,500-crore business by FY31, supported by a broader product portfolio, higher market share and greater operating scale.

The integration is expected to unlock synergies across product development, sourcing, manufacturing, sales and service networks, while strengthening research and development, improving cost efficiencies, leveraging dealer networks and expanding the commercial vehicle portfolio. SML Mahindra said the combined platform would enhance competitiveness, improve operational efficiencies and create long-term value for customers and shareholders.

SML Mahindra has a pan-India presence in the 'Truck & Bus' segment. The company has a market leading position in the ?ILCV [Intermediate and Light Commercial Vehicles] Buses segment.

On a standalone basis, SML Mahindra's net profit declined 4.99% to Rs 63.62 crore while net sales rose 13.20% to Rs 957.54 crore in Q1 June 2026 over Q1 June 2025.

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