SML Isuzu shares hit 10% lower circuit; Mahindra & Mahindra surges 3%; here is why

M&M, on the other hand, surged as much as 2.82% to ₹2,945 on the NSE.

Besides, the automaker will make an open offer to acquire a 26% stake in SML Isuzu per SEBI Takeover Regulations, Mahindra & Mahindra (M&M) said in a statement.

On Monday, the companies shared an update that M&M would acquire the 26% stake at a price of ₹1,554.60 per equity share. This is a 12% discount to Friday's closing price of ₹1,773.40 apiece on the NSE.

The filing added, "With respect to the captioned subject, an open offer is being made for the acquisition of up to 3,762,628 fully paid-up equity shares of a face value of INR 10 (Indian Rupees Ten only) each ("Equity Shares") representing 26.00% of the voting share capital of the target company from the eligible shareholders of the target company at a price of INR 1,554.60 per equity share by Mahindra & Mahindra Limited (the "Acquirer")."

"The acquisition of SML Isuzu marks a significant milestone in Mahindra Group's vision of delivering 5x growth in our emerging businesses," Mahindra Group CEO & MD Anish Shah said.

This acquisition is aligned with the company's capital allocation strategy for investing in high-potential growth areas, which have a strong right to win and have demonstrated operational excellence, Shah added.

M&M Executive Director and CEO, Auto and Farm Sector, Rajesh Jejurikar, said SML brings a strong legacy, a loyal customer base, and a credible product portfolio that complements Mahindra's existing offerings in the trucks and buses segment.

"This acquisition is a pivotal step toward our ambition to become a full-range, formidable player in commercial vehicles by enhancing market coverage, unlocking operating leverage through platform consolidation, creating a unified supplier and network base, and improving plant utilisation," the CEO added.