SML Mahindra hits 20% upper circuit after board approves ₹525 crore acquisition of M&M truck, bus business

SML Mahindra Ltd. shares hit the 20% upper circuit on Wednesday after the company's board approved the acquisition of Mahindra & Mahindra's (M&M) Truck and Bus Division (MTBD) in a ₹525 crore cash deal, a move aimed at creating a unified commercial vehicle business within the Mahindra Group.

The stock surged to ₹4,566 apiece on the NSE after the announcement. The proposed acquisition, to be executed through a slump sale under a Business Transfer Agreement, remains subject to shareholder approval and other customary conditions. The transaction is expected to be completed on or before January 31, 2027.

Strategic consolidation

The business being acquired posted revenue of ₹2,989 crore and sold 14,832 vehicles during FY26. It includes Mahindra's truck and bus operations along with employees, intellectual property, licences, contracts and other assets and liabilities.

According to the company, the transaction is intended to consolidate Mahindra Group's truck and bus businesses under a single listed entity, creating a comprehensive commercial vehicle portfolio spanning light, intermediate and heavy commercial vehicles as well as buses.

"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," Mahindra Group CEO and managing director Anish Shah said.

Growth roadmap

The investor presentation outlined an ambition to build a ₹12,500 crore commercial vehicle business by FY31 and 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.

Rajesh Jejurikar, executive director and CEO, auto and farm sector at M&M, said the combination would allow the group to "drive meaningful synergies across operations, technology and customer-facing domains while preserving the unique heritage and market positioning of both brands."

Vinod Sahay, executive chairman of SML Mahindra, described the acquisition as "a transformative step" that would create a stronger commercial vehicle platform with greater scale, broader market coverage and a more comprehensive product portfolio.

"The combination leverages the complementary strengths of both organizations and is expected to unlock significant commercial and operational synergies. We believe this transaction will enhance our competitiveness, improve operational effectiveness and create sustainable long-term value for our customers, employees, partners and shareholders," Sahay said.