SML Isuzu Shares Hit Lower Circuit As Mahindra's Buyout Bid Fails To Cheer Investors

Meanwhile, M&M stock gained 2% as investors cheered its plans to strengthen its commercial vehicle portfolio.

SML Isuzu stock plunged over 10% in Monday's session, hitting a lower circuit after Mahindra & Mahindra (M&M) announced plans to acquire a majority stake in the company. In contrast, M&M's stock gained about 2%.

Over the weekend, M&M said it would acquire a 58.96% stake in SML Isuzu for ₹555 crore by purchasing 43.96% from Sumitomo Corporation and 15% from Isuzu Motors at ₹650 per share.

In line with SEBI regulations, M&M will also launch a mandatory open offer to acquire up to 26% of SML's shares at ₹1,554.6 per share. 

Notably, the open offer price is at a steep 13% discount to SML's Friday closing price of ₹1,789, dampening investor sentiment and triggering a sell-off.

SML Isuzu is a notable player in the intermediate and light commercial vehicle (ILCV) space, particularly in buses, where it commands a 16% market share.

M&M aims to bolster its commercial vehicle (CV) portfolio through this acquisition.

Currently, M&M holds a 3% market share in this category, which it plans to double immediately after the acquisition.

Over the long term, the company targets a 10%–12% market share by FY31 and over 20% by FY36.

On Stocktwits, retail sentiment for SML Isuzu remains 'bearish.'

For the year, however, SML Isuzu stock has gained 14%. 

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