M&M bought 58.96% stake in this auto company for 555 crore, Rs 1,789 is currently share price – Cross Talk India

Mahindra & Mahindra (M&M) Has announced the purchase of 58.96 percent stake in SML Isuzu (SML). Let us tell you that SML Isuzu was included in 1983 as Swaraj Vehicles Limited and it was promoted by Punjab Tractors Limited with technical collaboration with Majda Motor Corporation, Japan and Sumitomo Corporation, Japan. In 2004, the technical cooperation agreement with Majda ended and it sold its entire stake to Sumitomo Corporation and at the same time, it signed a technical support agreement with Isuzu Motors. Now Mahindra has bought a stake in this company. Mahindra’s move aims to expand the presence of M&M in a commercial vehicle (CV) segment of more than 3.5 tonnes, where the company currently holds only 3 percent market share.

Acquisition at the rate of Rs 650 per share

This acquisition will be done at the rate of Rs 650 per share. Subsequently, M&M will launch a mandatory open offer under SEBI’s acquisition rules to get an additional 26 percent stake from public shareholders. M&M holds a 52 percent stake in the light commercial vehicle (LCV) market weighing less than 3.5 tonnes. With this transaction, M&M hopes that it will double its market share in a segment weighing more than 3.5 tonnes and sets a target of more than 20 percent by FY11 and 20 percent by FY 36. M&M will gain 43.96 percent stake from Sumitomo Corporation and 15 percent stake from Isuzu Motors, both SML’s current shareholders. The deal is subject to regulatory approval including the Competition Commission of India, and is expected to be completed within 2025.

1,789 rupees is currently share price

The price of SML Isuzu is currently Rs 1,789 in the market. This is Friday’s closed price. If we look at the company’s shares, investors have received a bumper return of 14.90% in the last one month. At the same time, this stock has given a bumper return of 358.66% to investors in a period of 5 years.

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