M&M in Negotiations to Purchase SML Isuzu's Whole Promoter Stake

A media outlet reported on March 24 that Mahindra & Mahindra (M&M) is in negotiations to acquire the entire value of Sumitomo Corp's stake in SML Isuzu, a manufacturer of heavy vehicles in Japan. The agreement will probably aid M&M's entry into the truck and bus market. M&M is considering valuing SML Isuzu at INR 1,400–1,500 per share. The M&M board will probably get together this week to discuss the suggestion. M&M informed the media that it would prefer not to address the rumours. According to exchange records, promoter Sumitomo Corporation owned 43.96% of SML Isuzu as of December 2024. 15% of SML Isuzu is owned by Japan's Isuzu, which produces SUVs and pickup trucks through a different company.

Financial Dynamics of SML Isuzu

SML Isuzu's net profit decreased 80.22% to INR 0.53 crore in the December 2024 quarter from INR 2.68 crore in the December 2023 quarter. Compared to the previous quarter, which ended in December 2023, when sales were INR 386.13 crore, sales in the quarter ending in December 2024 fell 14.07% to INR 331.80 crore. According to a June 2023 article by a prominent media group, SML Isuzu's Japanese promoters were seeking to abandon their activities in India, and JBM Auto was one of the leading candidates to acquire the company.

Revamping the Board of SML Isuzu

In the meantime, SML Isuzu notified the stock exchanges that the company's board of directors, in its meeting on March 21, 2025, accepted the resignation of managing director and CEO Junya Yamanishi, with effect from April 16, 2025. The Ministry of Corporate Affairs (MCA) of the Government of India must issue a Director Identification Number (DIN) before the board can ratify Yasushi Nishikawa's appointment as an additional director, which will take effect on April 17, 2025. According to the corporation, the Board has also authorised his nomination as managing director and CEO, effective April 17, 2025, for a five-year term, contingent upon the shareholders' and central government's consent, if necessary. SML Isuzu predicts that infrastructural development, changing industry dynamics, and macroeconomic expansion will fuel the need for trucks.

There will likely be a large demand for commercial vehicles as a result of the government's emphasis on infrastructure development, the Bharatmala project, the Smart Cities Mission, and designated freight corridors. It is anticipated that rising investments in the nation's transit system would fuel an increase in the demand for buses overall in the upcoming years. The federal government and state governments are eager to improve the transportation infrastructure. According to the corporation, it is considering a favourable chance in special application vehicles, including water tankers, refrigerated vans, dog vans, and specialised rubbish collection trucks. At the moment, Bangladesh, Nepal, and Bhutan, the company's neighbours, account for the majority of its export volumes.