SML Mahindra to Acquire Mahindra Truck & Bus Business for Rs 525 Crore, Creating Unified Commercial Vehicle Platform

Key Highlights

• SML Mahindra will acquire Mahindra's Truck & Bus Division for Rs 525 crore.

• The deal will create a unified truck and bus business under SML Mahindra.

• MTBD reported FY26 revenue of Rs 2,989 crore before the acquisition.

• Transaction is expected to close by January 31, 2027, after approvals.

• Mahindra will continue manufacturing trucks and buses under a contract arrangement.

Mahindra Group has announced a major restructuring of its commercial vehicle business. Mahindra & Mahindra (M&M) will transfer its Mahindra Truck and Bus Division (MTBD) to its listed subsidiary SML Mahindra Limited in a Rs 525 crore deal. The move is aimed at bringing all of the group's truck and bus operations under one company, creating a stronger and more focused commercial vehicle business.

The transaction was approved by the Board of Directors of both companies and will be carried out through a slump sale under a Business Transfer Agreement (BTA).

Rs 525 Crore Deal to Be Completed by FY27

According to the company, the Business Transfer Agreement is expected to be signed on or before August 7, 2026, while the transaction is likely to be completed by January 31, 2027, subject to regulatory approvals and other customary conditions.

A slump sale means an entire business undertaking is transferred as a going concern for a lump-sum amount instead of selling individual assets and liabilities separately.

The total consideration for the transaction is Rs 525 crore, which will be subject to working capital adjustments as specified in the agreement.

What Will Be Transferred?

As part of the acquisition, SML Mahindra will take over the complete Mahindra Truck and Bus Division, including:

• Employees

• Manufacturing assets

• Intellectual property

• Licences and permits

• Insurance policies

• Customer and supplier contracts

• Rights and liabilities

• Other business-related assets

Since the transfer is being made as a going concern, dealers, customers, supply chains and existing product lines will continue without disruption.

Background of the Restructuring

The latest move follows Mahindra & Mahindra's acquisition of a 58.97% controlling stake in SML Isuzu Limited from Sumitomo Corporation and Isuzu Motors Limited on August 1, 2025. After the acquisition, the company was renamed SML Mahindra Limited.

With the truck and bus division now moving to SML Mahindra, the Mahindra Group will operate its entire truck and bus business through a single commercial vehicle platform.

Stronger Presence Across Commercial Vehicle Segments

After the acquisition, SML Mahindra will offer products across multiple commercial vehicle categories, including:

• Light Commercial Vehicles (LCVs)

• Intermediate Commercial Vehicles (ICVs)

• Heavy Commercial Vehicles (HCVs)

• Buses above the 3.5-tonne segment

The unified platform is expected to improve product coverage, strengthen market presence and provide customers with a broader commercial vehicle portfolio.

Financial Details of the Truck and Bus Division

Mahindra Truck and Bus Division generated Rs 2,989 crore in revenue during FY26, contributing around 2.02% of Mahindra & Mahindra's total income from operations.

The company stated that the division's net worth is not maintained separately. However, the investment in the business stood at approximately Rs 481 crore as of March 31, 2026, representing around 0.65% of Mahindra & Mahindra's total net worth.

Manufacturing to Continue Without Disruption

Even after the transfer, the manufacturing of Mahindra-branded trucks and buses will continue to be carried out by Mahindra & Mahindra under a contract manufacturing arrangement.

This arrangement is intended to ensure uninterrupted production, supply continuity and smooth business operations during and after the transition.

Mahindra Expects Better Scale and Efficiency

Mahindra said consolidating its truck and bus businesses into one company will help achieve:

• Greater operational scale

• Wider market reach

• Stronger product portfolio

• Better operational efficiency

• Improved technology integration

• Enhanced commercial and distribution capabilities

• Long-term value creation for customers, employees and shareholders

The company believes combining the strengths of Mahindra Truck & Bus and SML Mahindra will improve competitiveness and accelerate growth in the commercial vehicle market.

Leadership Comments

Dr. Anish Shah, Group CEO and Managing Director, Mahindra Group, said the transaction simplifies the Mahindra Group's commercial vehicle business by bringing truck and bus operations under a single focused entity. He added that the move is an important step toward building a leadership position in the truck and bus segment while creating long-term value for all stakeholders.

Rajesh Jejurikar, Executive Director and CEO, Auto and Farm Sector, Mahindra & Mahindra, said the combination will unlock the strengths of both organisations across operations, technology and customer-facing functions while preserving the individual identity and market positioning of both brands. He said the partnership will help expand customer reach, improve offerings and generate greater value for stakeholders.

Vinod Sahay, Executive Chairman of SML Mahindra, described the acquisition as a transformative milestone for the company. He said bringing SML and Mahindra Truck & Bus together under one commercial vehicle platform will create a larger business with broader market coverage, stronger product offerings and significant operational synergies, leading to sustainable long-term growth.

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CMV360 Says

The acquisition of Mahindra's Truck and Bus Division by SML Mahindra marks a significant restructuring within the Mahindra Group's commercial vehicle business. By combining both businesses under one listed company, the group aims to build a stronger presence across light, intermediate and heavy commercial vehicles as well as buses. With continued manufacturing support from Mahindra & Mahindra and uninterrupted operations for customers and dealers, the consolidation is expected to improve efficiency, expand market reach and strengthen the group's long-term position in India's commercial vehicle industry.