M&M to transfer trucks and bus biz to subsidiary SML Mahindra for Rs 525 cr

Mumbai, Jul 29 (PTI) Auto major Mahindra and Mahindra on Wednesday announced a restructuring exercise under which it will transfer its trucks and bus division to subsidiary company SML Mahindra for Rs 525 crore consideration.

The transfer will help SML, a listed entity where M&M has nearly 59 per cent ownership, grow much faster, an exchange filing said, adding that the deal will also help exploit synergies between the two businesses and improve profitability.

The aim is to be India’s fourth-largest commercial vehicle maker, with a revenue of Rs 12,500 crore by FY31, they said.

Combined revenues of SML Mahindra and the truck and bus division stand at under Rs 6,000 crore, as per public disclosures.

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, and renamed it as SML Mahindra. The group’s truck and bus division is more stronger on the heavy commercial vehicles front.

A business transfer agreement (BTA) for the ‘slump sale’ will be signed by August 7 and the deal is aimed to be consummated by January 2027, as per the notification on exchanges.

Mahindra and Mahindra shares dropped by 1.51 per cent to close at Rs 3,223.15 per share on BSE. SML Mahindra soared 20 per cent to settle at its upper circuit limit of Rs 4,565.50 apiece on the BSE. PTI AA MR