JBM Auto Emerges as Top Bidder for Majority Stake in SML Isuzu
According to recent reports, JBM Auto, a prominent manufacturer of auto components and equipment, is currently positioned as the frontrunner to acquire a controlling stake in SML Isuzu, an automaker.
SML Isuzu’s Japanese promoters have expressed their intention to divest their ownership in the company and are engaged in advanced discussions with JBM Auto regarding the sale of their stake.
Sumitomo Corporation, holding a 43% stake in India-based SML, aims to withdraw its operations in India, and negotiations with JBM Auto have reached an advanced stage. However, there is no mention of any other potential bidders for the stake in the report.
Reuters, in its report, mentioned that JBM is considering various options for acquiring the shareholding, including a combination of cash and a share swap deal.
JBM has initiated a thorough due diligence process, and it is expected that the deal will value SML at a premium compared to its current share price.
This potential acquisition is anticipated to provide JBM Auto with an entry into new markets associated with commercial vehicles, particularly the school bus segment. Furthermore, JBM Auto will benefit from the extensive dealer network of SML Isuzu.
During Q4FY23, JBM recorded a net profit of ₹28.4 crore, indicating a 66% decline compared to ₹85.3 crore during the same quarter the previous year. Additionally, the company’s revenue decreased by 5.7% to ₹1,010 crore, as opposed to ₹1,072 crore in the fourth quarter of the previous fiscal year.
The EBITDA for Q4FY23 experienced a decline of 11.5%, amounting to ₹108 crore, in contrast to ₹122 crore during the corresponding period of the previous year. The EBITDA margin stood at 10.7%, contracting from 11.3% in Q4FY22.
Despite these figures, there is positive news for investors as the board of directors of JBM Auto has recommended a final dividend of 65% per equity share for FY23, totaling ₹1.30.
About JBM Auto:
JBM Group is a renowned global conglomerate that stands as one of the leading manufacturers of crucial automotive systems, electric vehicles, and buses worldwide. With a steadfast commitment to progress, JBM Group aims to enhance our customers’ businesses by providing exceptional products, services, and cutting-edge solutions.
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