M&M Targets to Grow Market Share, Cut Costs

Punjab-based vehicle maker to remain separate listed firm

- SWARAJ BAGGONKAR

The SML Isuzu acquisition is strategically aimed at growing market share in the truck and bus segments, while also achieving greater cost efficiencies in the tractor segment, said Mahindra & Mahindra (M&M) on Monday.

The board of M&M on Saturday approved a proposal to acquire a 59% stake in SML Isuzu for a total outlay of ₹555 crore. SML Isuzu, based in Punjab and India's seventh-largest commercial vehicle manufacturer, saw its stock fall 10% on the BSE, hitting the lower circuit limit. In contrast, M&M shares rose by 2.29%, closing ₹80.4 higher at ₹2,942.6 per share.

SML Isuzu has a strong presence in the intermediate and light commercial bus segment, an area where M&M has been a smaller player. SML's market share in the light bus segment is close to 16%. Along with M&M's own portfolio, the share jumps to 21% after the acquisition.