Mahindra to Transfer Truck & Bus Division to SML in Rs 525 Crore Slump Sale

Mahindra & Mahindra Ltd (M&M) has approved the sale, transfer and disposal of its Truck and Bus Division (MTBD Business Undertaking) to SML Mahindra Limited (SML) in a slump sale valued at Rs 525 crore, subject to working capital adjustments, as the group moves to consolidate its commercial vehicle operations under a single listed entity.

The transaction was approved by M&M’s Board of Directors on July 29, 2026. The consideration of Rs 525 crore is based on a valuation report obtained from GT Valuation Advisors Private Limited. A Business Transfer Agreement is proposed to be executed on or before August 7, 2026, with the slump sale expected to be consummated on or before January 31, 2027, or such later date as may be mutually agreed, subject to fulfilment of conditions precedent and requisite approvals. The transaction is expected to close during FY2027.

For the financial year ended March 31, 2026, the MTBD Business Undertaking generated total income of Rs 2,989 crore, accounting for approximately 2.02 per cent of M&M’s total income from operations for the year. As the division forms an integral part of the company’s overall business operations, its net worth is not maintained or reported separately. As per the audited financial statements for FY2026, M&M’s investment in MTBD stood at approximately Rs 481 crore, representing around 0.65 per cent of the company’s total net worth as of March 31, 2026.

SML, a listed subsidiary of M&M, is not part of the promoter or promoter group of the company. The transaction is classified as a related party transaction under SEBI regulations and is being undertaken on an arm’s length basis. The sale is outside the scope of the company’s Scheme of Arrangement, and Regulation 37A of the SEBI Listing Regulations does not apply, as MTBD does not qualify as an ‘undertaking’ under Section 180(1)(a) of the Companies Act, 2013. As the transaction involves only the slump sale of the division, M&M’s shareholding pattern will remain unchanged.

The Board of SML has also approved the acquisition of MTBD from M&M. The move follows M&M’s acquisition of a 58.97 per cent stake in SML Mahindra Limited, formerly SML Isuzu Limited, from Sumitomo Corporation and Isuzu Motors Limited on August 1, 2025, along with a subsequent mandatory open offer.

The combination is positioned as a strategic step to create a unified Truck & Bus business within the Mahindra Group, spanning light, intermediate and heavy commercial vehicles, as well as buses in the above 3.5-tonne commercial vehicle segment. The group said the simplified operating structure is expected to enable greater scale, operating synergies, sharper market focus and improved competitiveness.

Dr Anish Shah, Group CEO & MD, Mahindra Group, said, '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.’

Mr Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, Mahindra & Mahindra Ltd, said, 'This partnership is about unlocking the best of both organisations. By combining strengths of SML and Mahindra Truck & Bus, we can drive meaningful synergies across operations, technology and customer-facing domains while preserving the unique heritage and market positioning of both brands. Together, the two brands will be better placed to expand customer reach, enhance offerings and create greater value for all stakeholders.’

Mr Vinod Sahay, Executive Chairman of SML, said, 'This acquisition is a transformative step in the evolution of SML Mahindra. By bringing together SML and Mahindra Truck & Business under one unified commercial vehicle platform, we are creating a stronger business 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.’

About the Company: Mahindra & Mahindra Limited is a diversified group spanning automotive, farm equipment, financial services, industrial businesses and consumer services. In FY2025-26, it reported consolidated external revenue of Rs 1,98,638.55 crore, with Automotive contributing about 55.0 per cent and Farm Equipment about 18.3 per cent. The group operates multiple manufacturing facilities across India and maintains a presence in overseas markets including Australia, Europe, the UAE and Jordan.

Mahindra & Mahindra Ltd was Rs 3,222.6 at July 29, 2026, 2:32 PM, down 1.52 per cent versus previous close Rs 3,272.4. Returns: 1.99 per cent (1y), 13.36 per cent (2y), 122.98 per cent (3y); 1-year outperformed BSE 500's 0.07 per cent. 52-week high/low Rs 3,801.80/Rs 2,951.20. FII holdings declined to 34.89 per cent from 36.23 per cent; DII holdings rose to 32.63 per cent from 31.5 per cent.

Disclaimer: The article is for informational purposes only and not investment advice.