Mahindra Sells Truck And Bus Division To SML Mahindra

03 Aug 2026 CW Team

The Rs 525 crore consideration is subject to working capital adjustments and the business transfer agreement is expected to be signed on or before August seven. The company stated the transaction is likely to be closed by January 31, 2027, subject to regulatory approvals and fulfilment of conditions precedent. M&M will continue to manufacture trucks and buses under a contract manufacturing arrangement after the transfer to ensure continuity of supply.

Mahindra Group financial management noted that the merged truck and bus division will initially weigh on SML Mahindra financials but that synergies in operations and ongoing integration work are expected to materialise over time, reducing the drag. The restructuring follows M&M's acquisition of a 58.97 per cent stake in SML Isuzu, now SML Mahindra, and an open offer completed last year. The company said the simplified structure should enhance competitiveness in a consolidating commercial vehicle market.

SML Mahindra has a capacity of 24,000 chassis per annum and 12,000 bus units per annum while M&M's Chakan plant can handle 35,000 to 40,000 trucks and buses per annum and is currently about half utilised. The truck and bus division reported income of Rs 2,989 crore in FY26, about 2.02 per cent of M&M's income from operations, equivalent to Rs 29.89 billion (bn), and was carried on the books at approximately Rs 481 crore, equivalent to Rs 4.81 billion (bn), at March 31, 2026. The combined network places the business fourth in the domestic commercial vehicle segment and plans include adding 20 to 25 dealerships and 50 to 60 service stations in the coming 18 months.

Mahindra & Mahindra has approved the sale of its truck and bus division to its listed subsidiary SML Mahindra for Rs 525 crore, equivalent to Rs 5.25 billion (bn), as part of an internal restructuring to create a unified commercial vehicle business. The transaction will be executed on a slump sale basis, transferring assets, personnel, licences and liabilities to SML Mahindra. The group said the move is intended to broaden the product portfolio and improve operational efficiencies. The Rs 525 crore consideration is subject to working capital adjustments and the business transfer agreement is expected to be signed on or before August seven. The company stated the transaction is likely to be closed by January 31, 2027, subject to regulatory approvals and fulfilment of conditions precedent. M&M will continue to manufacture trucks and buses under a contract manufacturing arrangement after the transfer to ensure continuity of supply. Mahindra Group financial management noted that the merged truck and bus division will initially weigh on SML Mahindra financials but that synergies in operations and ongoing integration work are expected to materialise over time, reducing the drag. The restructuring follows M&M's acquisition of a 58.97 per cent stake in SML Isuzu, now SML Mahindra, and an open offer completed last year. The company said the simplified structure should enhance competitiveness in a consolidating commercial vehicle market. SML Mahindra has a capacity of 24,000 chassis per annum and 12,000 bus units per annum while M&M's Chakan plant can handle 35,000 to 40,000 trucks and buses per annum and is currently about half utilised. The truck and bus division reported income of Rs 2,989 crore in FY26, about 2.02 per cent of M&M's income from operations, equivalent to Rs 29.89 billion (bn), and was carried on the books at approximately Rs 481 crore, equivalent to Rs 4.81 billion (bn), at March 31, 2026. The combined network places the business fourth in the domestic commercial vehicle segment and plans include adding 20 to 25 dealerships and 50 to 60 service stations in the coming 18 months.

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