SML Mahindra shares surged to an intraday high of ₹5,479.20 on Thursday, hitting the upper circuit for the second consecutive day following the company's restructuring deal with Mahindra & Mahindra. The stock opened in positive 10.03% and extended further to hit upper circuit at 11:14 am, demonstrating continued investor enthusiasm for the strategic consolidation. The latest surge reflects strong market confidence as the transaction has now been completed on or before January 31, 2027, as per the latest regulatory filing. The stock has risen 547820.00% in the last 12 months and 37.81% year-to-date, significantly outperforming the NSE Nifty 50 Index which fell 0.04% on the same day. The total traded volume stood at 0.09 times its 30-day average with the relative strength index at 70.57, indicating strong buying interest.
In a regulatory filing on Wednesday, Mahindra & Mahindra revealed that it will transfer its Truck and Bus Division (MTBD) to its listed subsidiary SML Mahindra Limited for ₹525 crore, completing the slump sale acquisition. The acquisition will be executed through a Business Transfer Agreement (BTA) and is subject to shareholders' approval. As per CNBC TV18, M&M expects to sign the agreement on or before August 7, 2026, while completion is targeted by January 31, 2027, subject to regulatory approvals and other customary conditions. The transaction, executed on a slump sale basis, will consolidate the group's commercial vehicle operations under a single entity. The acquisition price of ₹525 crore for a division generating ₹2,989 crore in turnover implies an enterprise value multiple of approximately 1.76x revenue, reflecting the strategic premium placed on unifying the group's commercial vehicle assets.
The restructuring creates a single commercial vehicle business spanning light, intermediate and heavy trucks, as well as buses in the above-3.5-tonne segment. According to the latest investor presentation, the Truck and Bus Division generated total income of ₹2,989 crore in fiscal year 2026, representing about 2.02% of Mahindra & Mahindra's total income from operations. The division was valued based on a report prepared by GT Valuation Advisors Private Limited, with the transaction immediately scaling SML Mahindra's operations with an additional ₹2,989 crore in revenue. The division sold 14,832 commercial vehicles during the 2025-26 fiscal year, as per latest reports. The combined entity aims to create a business worth ₹12,500 crore by FY31, with the company currently holding a 6% market share in FY26 and targeting to increase this to 10-12% by FY31 and over 20% by FY36. The integrated business is expected to become a top-three player in India's intermediate and light commercial vehicle (ILCV) trucks and buses segment, with the aim to be India's fourth-largest commercial vehicle maker, with a revenue of ₹12,500 crore by FY31. According to JM Financial, the combined business will rank fourth in the domestic truck and bus market, with the transaction expected to be EPS accretive for SML Mahindra over time.
SML Mahindra currently operates with capacity of 24,000 chassis per annum and 12,000 bus units per annum, while at Chakan near Pune, M&M has capacity of 35,000-40,000 units for trucks and buses and is currently utilizing around 50% of it. The combined strength of dealers of both companies stands at 200 and 650 touch points. The plan is to add 20-25 dealerships in 18 months and 50-60 more service stations in the same period, as per an SML official. The acquisition will combine SML Mahindra's strong position in intermediate and light commercial vehicle (ILCV) buses with Mahindra Truck and Bus' presence across light, intermediate and heavy commercial vehicles. The transaction will include all employees, manufacturing assets, intellectual property, licenses, permits, contracts, insurance policies, rights, and financial liabilities related to the business. The Truck and Bus Division will be acquired as a going concern through a slump sale, with manufacturing of Mahindra-branded trucks and buses to continue under contract manufacturing arrangements to ensure supply continuity. The integration plan focuses on several key areas to drive value, including product portfolio expansion through platform sharing and rebadging, strengthening R&D for wider product ranges and alternate fuels, and implementing value engineering for design, cost, and process optimization.
Group CEO and Managing Director Anish Shah emphasized that bringing the truck and bus operations under one focused entity would simplify the group's commercial vehicle business and support its long-term growth ambitions. Speaking after the company's June-quarter results, Shah described the July 29 decision to merge the Truck and Bus Division with SML Mahindra as part of a broader strategy to build focused listed businesses instead of exiting non-core operations. "Three or four years ago, many would have asked why we didn't simply sell the truck business. The team did a great job getting the business to perform. Today we have the opportunity to combine it with SML at what we believe is a fair value and create a much bigger platform," Shah stated. Executive Director and CEO (Auto and Farm Sector) Rajesh Jejurikar stated that the integration is expected to combine Mahindra's engineering, manufacturing and sourcing strengths with SML Mahindra's presence in trucks and buses, creating the scale needed to compete more effectively with Tata Motors and Ashok Leyland. The Mahindra group last year acquired a majority stake in what was then known as SML Isuzu, which has a stronger presence in the intermediate and light commercial vehicle segment, while the group's truck and bus division is stronger on the heavy commercial vehicles front. Shah also reaffirmed that the proposed IPO of Last Mile Mobility, Mahindra's electric three-wheeler business, remains on track for the second half of calendar 2027, with the company signalling a capital-allocation strategy centred on creating focused listed businesses while retaining strategic control.
