 "SML Isuzu")
Isuzu Motors, Japan, the promoters of BSE-listed commercial vehicle maker SML Isuzu, is planning to sell its 44 per cent stake in the company as part of their broader strategy to exit low profit-making businesses.
The company, earlier known as Swaraj Mazda, reported sales of Rs 1,822 crore and returned to profitability in the fiscal 2023 at Rs 19.8 crore. The Japanese firm is talking to several potential investors including JBM Auto to sell its stake, a media report said on Friday.
Emails to Isuzu did not elicit any response. JBM Auto did not reply to email queries.
Bankers said the company's total market capitalisation was Rs 1,670 crore as on Friday and hence Isuzu stake is claimed at around Rs 734 crore.
"Taking into account the company's low market share in the Indian automobile market, the Japanese company will not get any premium on its stake. The transaction is likely to be signed at the current market price," said a banker, asking not to be named.
The Indian commercial vehicle's segment demand remained muted on a yoy basis in the month of May as customers are refraining from buying commercial vehicles.
According to an estimate by Kotak analysts, the CV segment volumes declined by mid to high-single digit yoy due to muted demand trends, given pre-buy of vehicles ahead of the transition to BSVI Phase II in March 2023.
Tata Motors' commercial vehicle volumes declined 12 per cent mainly due to a 38 per cent YoY dip in the light commercial vehicle segment and 19 per cent decline in the SCV cargo & pickup segment, partly offset by 11 per cent increase in the M&HCV segment and 7 per cent improvement in the passenger carrier segment. Another leading CV maker Ashok Leyland reported 1 per cent volume decline led by 9 per cent YoY decline in LCVs, offset by 4 per cent YoY improvement in the M&HCV segment volumes in May 2023.
