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Mahindra & Mahindra has entered into an agreement with the Sumitomo Corporation, Japan, and SML Isuzu for acquiring 6,362,306 equity shares, representing 43.96% of the equity share capital of SML Isuzu. The share would be acquired at a price of Rs 650 apiece and the aggregate consideration for the same would be Rs 413.55 crore.
M&M has also inked an agreement with Isuzu Motors, Japan, for acquiring 2,170,747 equity shares (representing 15% stake in SML Isuzu) for a total consideration of Rs 141.10 crore.
In addition and in line with the SEBI Takeover Regulations, M&M has launched an obligatory open offer to acquire up to 26% of SML Isuzu from eligible public shareholders. The shares would be acquired at a price of Rs 1,554.60 per share, which is at a discount of 12.01% to the scrip’s previous close of Rs 1,766.70. As a result, shares of SML Isuzu were currently locked in 10% lower circuit at Rs 1,590.05 on the BSE.
M&M stated that the proposed acquisition is a step towards establishing a strong presence in the '>3.5T’ CV segment, where M&M has a 3% market share today, as compared to a 52% market share in the '<3.5T’ CV segment. M&M’s Trucks and Buses Division has made meaningful progress over the past few years.
'This acquisition will double the market share to 6%, with a plan to increase this to 10 - 12% by FY31 and 20%+ by FY36,” the company stated.
Incorporated in 1983, SML Isuzu is a listed company with well-recognized brands, a strong vintage and pan-India presence in the Trucks and Buses segment. SML has a market leading position in the ILCV Buses segment, with around 16% market share. The company reported operating revenue of Rs 2,196 crore and EBITDA of Rs 179 crore in FY24. It has profitable operations, frugal manufacturing, and strong engineering capabilities.
M&M said that SML offers significant potential to unlock value through synergies in cost, network, brand, manufacturing, talent, and product complementarities. The company’s Trucks and Buses business has developed strengths by tapping into technology, design & innovation, and sourcing from our auto business. Together, this would be a powerful combination.
Dr. Anish Shah, Group CEO & MD of the Mahindra Group, said: 'The acquisition of SML Isuzu marks a significant milestone in Mahindra Group's vision of delivering 5x growth in our emerging businesses. This acquisition is aligned with our capital allocation strategy for investing in high potential growth areas which have a strong right to win and have demonstrated operational excellence.'
The Mahindra Group enjoys a leadership position in farm equipment, utility vehicles, information technology, and financial services in India. It is the world's largest tractor company by volume. It has a strong presence in renewable energy, agriculture, logistics, hospitality, and real estate.
The company reported a 19.06% jump in standalone net profit to Rs 2,964.31 crore in Q3 FY25 as compared with Rs 2,489.73 crore in Q3 FY24. Revenue from operations jumped 20.31% YoY to Rs 30,963.76 crore in Q3 FY25.
Hindalco Industries announced the successful delivery of 10,000 aluminium battery enclosures for automotive major Mahindra's state-of-the-art e SUVS – BE 6 and XEV 9e, marking a significant development in India's clean mobility journey. The company also unveiled its state-of-the-art dedicated EV component manufacturing facility in Chakan, Pune—India's premier automotive manufacturing hub. This marks a significant milestone in India's clean mobility journey, with the two companies joining forces to accelerate the electrification of India's automotive industry.
The facility, built with a capital investment of Rs 500 crore and spread across 5 acres within an industrial park, represents Hindalco's foray into EV component manufacturing and is designed to cater to the growing demand for lightweight, crash-resistant battery solutions. The facility is designed to meet the rising demand for lightweight, crash-resistant battery enclosures in the country, reinforcing the company's commitment to innovation and sustainable mobility. It currently has the capacity to produce 80,000 enclosures annually, with plans to scale up to 160,000 units. As of today, over 3,000 Mahindra EVs using these aluminium battery packs are already on Indian roads.
Mahindra & Mahindra Ltd is up for a third straight session in a row. The stock is quoting at Rs 2804.2, up 1.45% on the day as on 12:49 IST on the NSE. The benchmark NIFTY is up around 0.22% on the day, quoting at 24178.45. The Sensex is at 79611.79, up 0.26%. Mahindra & Mahindra Ltd has risen around 1.06% in last one month.
Meanwhile, Nifty Auto index of which Mahindra & Mahindra Ltd is a constituent, has risen around 0.33% in last one month and is currently quoting at 21826, up 0.19% on the day. The volume in the stock stood at 18.3 lakh shares today, compared to the daily average of 36.03 lakh shares in last one month.
The benchmark April futures contract for the stock is quoting at Rs 2795, up 1.3% on the day. Mahindra & Mahindra Ltd is up 35.95% in last one year as compared to a 8.09% gain in NIFTY and a 0.22% gain in the Nifty Auto index.
The PE of the stock is 30.11 based on TTM earnings ending December 24.