The rally follows M&M’s board approval to transfer its Mahindra Truck & Bus Division (MTBD) to SML Mahindra for ₹525 crore, a move aimed at bringing the group’s truck and bus operations under a single listed entity.
The transaction will be executed through a Business Transfer Agreement (BTA) on a slump sale basis.
M&M expects to sign the agreement on or before August 7, 2026, while completion is targeted by January 31, 2027, subject to regulatory approvals and other customary conditions.
Following the transfer, the combined entity will house Mahindra’s light, intermediate and heavy truck portfolio, along with buses above the 3.5-tonne segment, creating a unified commercial vehicle platform.
The proposed slump sale covers the transfer of MTBD’s employees, assets, intellectual property, licences, permits, contracts, insurance policies, rights and liabilities. The consideration of ₹525 crore will be adjusted for working capital in accordance with the agreement.
Even after the restructuring, Mahindra-branded trucks and buses will continue to be manufactured by M&M under a contract manufacturing arrangement, ensuring uninterrupted production and supply.
The consolidation builds on M&M’s acquisition of a controlling stake in SML Isuzu from Sumitomo Corporation and Isuzu Motors in August 2025. The company was subsequently renamed SML Mahindra.
For FY26, Mahindra’s Truck & Bus Division reported revenue of ₹2,989 crore, accounting for nearly 2% of M&M’s consolidated operating income. The division had an investment value of around ₹481 crore as of March 31, 2026.On the manufacturing front, SML Mahindra has annual capacity to produce 24,000 chassis and 12,000 buses, while M&M’s Chakan facility near Pune can manufacture 35,000-40,000 trucks and buses a year and is currently operating at around 50% utilisation.
According to M&M, combining the businesses is expected to create scale benefits, expand the product portfolio, strengthen market presence and improve operational efficiencies.
Group CEO and Managing Director Anish Shah said bringing the truck and bus operations under one focused entity would simplify the group’s commercial vehicle business and support its long-term growth ambitions.
Executive Director and CEO (Auto and Farm Sector) Rajesh Jejurikar said the integration is expected to generate synergies across technology, operations and customer engagement while retaining the distinct identities of both brands.
Executive Chairman Vinod Sahay described the transaction as a transformational step that would strengthen competitiveness, improve efficiency and create long-term value for customers and shareholders.
