Key Resolutions for Shareholder Approval

The Company is seeking approval from its members via remote e-voting (postal ballot) for the following Special Business items as Ordinary Resolutions:

Item No. 1: Acquisition of M&M's Truck and Bus Division

  • Purpose: To approve a Material Related Party Transaction for the acquisition of the Truck and Bus Division (MTBD Business Undertaking) of Mahindra & Mahindra Limited (M&M).
  • Transaction Structure: Acquisition on a slump sale basis (as a going concern without values assigned to individual assets/liabilities) as per Section 2(103) read with Section 77 of the Income-tax Act, 2025.
  • Counterparty: Mahindra & Mahindra Limited (M&M), the promoter and holding company (58.97% stake) of SML Mahindra.
  • Consideration: ₹525 crores (Rupees Five Hundred Twenty Five Crores Only), payable as per the Business Transfer Agreement (BTA), subject to working capital adjustments.
  • Valuation & Fairness: The consideration is based on an independent valuer's report from BDO Valuation Advisory LLP and a fairness opinion from Ernst & Young Merchant Banking Services LLP, both dated 27th July 2026.
  • Assets Included: The undertaking includes employees, assets, intellectual property, licenses, permits, insurance policies, contracts, rights, and liabilities. Common trademarks/patents will be licensed from M&M. The manufacturing workforce and engine plant will remain with M&M.
  • Post-Acquisition Manufacturing: M&M will continue to manufacture products for the acquired division on a contract manufacturing basis for SML.
  • Approvals: Recommended by the Audit Committee and approved by the Board of Directors on 29th July 2026.

Item No. 2: Omnibus Approval for Material Related Party Transactions

  • Purpose: To approve material related party contracts/transactions/arrangements with M&M, carried out in the ordinary course of business on an arm's length basis.
  • Scope: Covers all RPTs except the specific acquisition in Item No. 1.
  • Limit Sought: An aggregate value not exceeding ₹4660 crores (Rupees Four Thousand Six Hundred Sixty Crores Only) for one year from approval or until the next AGM.
  • Modification: This resolution seeks to modify and supersede the previous aggregate limit of ₹719.51 crores approved at the AGM held on 21st July 2026.
  • Breakdown of RPTs (as per Annexure I): The ₹4660 crore limit includes the ₹525 crore acquisition and encompasses:
  • Purchase of goods/materials (components, parts, etc.): ₹3100 crores
  • Sale of goods: ₹295 crores
  • Borrowings (Inter-Corporate Deposits): ₹330 crores
  • Rendering of services (shared services, IT, etc.): ₹170 crores
  • Availing of services (manufacturing, R&D, etc.): ₹150 crores
  • Purchase of assets: ₹40 crores
  • Sale of assets: ₹25 crores
  • Approvals: Recommended by the Audit Committee and approved by the Board of Directors on 29th July 2026.

Voting Details & Process

  • Voting Mode: Remote e-voting only (no physical ballot forms dispatched).
  • Voting Agency: National Securities Depository Limited (NSDL).
  • Voting Period: Commences at 9:00 AM IST on Saturday, 8th August 2026 and ends at 5:00 PM IST on Sunday, 6th September 2026.
  • Cut-off Date: 31st July 2026 (members holding shares as of this date are eligible to vote).
  • Abstention by Related Parties: In compliance with Regulation 23 of LODR, M&M (holding 58.97%) and all other related parties shall not vote. The resolutions will be decided solely by public (minority) shareholders on a "majority of minority" basis.
  • Result Declaration: The results, along with the Scrutinizer's report, will be announced within two working days after the voting ends (by 8th September 2026) and communicated to the stock exchanges.
  • Scrutinizer: Mr. Kanwaljit Singh Thanewal, Practising Company Secretary, has been appointed.

Strategic Rationale (as per Explanatory Statement)

The acquisition is presented as a strategic move to create a unified truck and bus platform following M&M's acquisition of a 58.97% stake in SML in August 2025. The stated benefits include:

  • Achieving cost efficiencies and economies of scale.
  • Realizing operational synergies through aligned products and processes.
  • Strengthening industry positioning with a larger asset base, expanded product portfolio, and higher market share (aiming for 10-12% by FY31).
  • Leveraging M&M's infrastructure and expertise.
  • Improving organizational capability.
  • Maximizing investor value with a clear flagship entity for truck and bus operations.

The MTBD division sold 14,832 vehicles in FY26, similar to SML's 16,632 units, implying the acquisition would nearly double SML's scale.

Document Availability

The full Postal Ballot Notice with the Explanatory Statement and Annexures is available on the company's website (https://smlmahindra.com), the websites of BSE (www.bseindia.com) and NSE (www.nseindia.com), and the e-voting website (www.evoting.nsdl.com).

Financial Impact

  • The acquisition consideration is a confirmed outflow of ₹525 crores, subject to working capital adjustments.
  • The capital structure impact is not detailed regarding funding sources for the acquisition.
  • The omnibus RPT approval for ₹4660 crores defines the maximum potential value of transactions with M&M over the next year.