In a significant move within the Indian automotive sector, Mahindra & Mahindra (M&M) is reportedly in discussions to acquire the entire 44% stake held by Japan's Sumitomo Corporation in SML Isuzu, a prominent manufacturer of trucks and buses. This development, initially reported by CNBC Awaaz, indicates M&M's intent to strengthen its footprint in the commercial vehicle market.

According to sources, M&M is contemplating an offer ranging between ₹1,400 to ₹1,500 per share for Sumitomo's stake, valuing SML Isuzu at approximately ₹2,026 crore (equivalent to $236 million). Following the emergence of these reports, SML Isuzu's shares experienced a 5.4% uptick, reaching ₹1,741.20 on the Mumbai stock exchange.

M&M, renowned for its production of trucks and SUVs, views this potential acquisition as a strategic endeavor to diversify and solidify its presence in the heavy vehicle segment. The company's board is anticipated to convene this week to deliberate on the proposed deal. When approached for comments, an M&M spokesperson stated, "We do not comment on market speculation."

Established in 1983, SML Isuzu Limited has carved a niche in manufacturing light commercial vehicles, including trucks, buses, ambulances, and specialized vehicles. The company's ownership structure comprises a 44% stake by Sumitomo Corporation and a 15% stake by Isuzu Motors.

In the calendar year 2024, SML Isuzu reported sales of 11,617 trucks and buses, positioning it as the eighth-largest commercial vehicle manufacturer in India. The potential acquisition by M&M could reshape the competitive landscape of the Indian commercial vehicle industry, offering synergies in product development, distribution networks, and market penetration.

As the situation develops, stakeholders and industry observers await further announcements regarding this potential consolidation in the automotive sector.