Share price of automaker Mahindra & Mahindra Ltd. was at a two-month extreme in early commerce on Monday, after the company launched its acquisition of SML Isuzu Ltd. in a deal valued at Rs 555 crore.
Brokerages keep largely bullish on this progress, with Citi and Investec sustaining their ‘buy’ title on the company, whereas Morgan Stanley issued an ‘overweight’ rating.
The Scorpio maker will select up a 43.96% stake held by promoter Sumitomo Corp. and 15% from Isuzu Motors Ltd.—a public shareholder of SML Isuzu, primarily based on an commerce submitting on Saturday. Individually, M&M will make an open present to buy 26% stake at Rs 650 per share.
The acquisition is an attempt to shore up presence throughout the over 3.5-tonne CV section the place M&M has 3% market share. The deal, M&M said, would double its market share to 6% immediately, with an function to develop it to 10-12% by 2030-31 and higher than 20% by 2035-36.
Mahindra Group sees the acquisition of SML Isuzu as a “important milestone” in its imaginative and prescient of delivering 5 events improvement of their rising firms, Chief Govt Officer Anish Shah said in an announcement. “This acquisition is aligned with our capital allocation approach for investing in extreme potential improvement areas, which have a strong correct to win and have demonstrated operational excellence.”
