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Tata Motors slips 4%, top loser on Sensex, Nifty today; here's why
Shares of Tata Motors slipped 4 per cent to ₹665.45 on the BSE in Wednesday's intra-day trade amid heavy volumes on reports that the company was set to acquire Italian truck manufacturer Iveco from its primary stakeholder, the Agnelli family.
The stock price of Tata Group Company had hit a 52-week low of ₹542.55 on April 7, 2025. It has corrected 44 per cent from its all-time high level of ₹1,179.05 touched on July 30, 2024.
Tata Motors to acquire Iveco for $4.5 billion
Tata Motors is set to acquire Italian truck manufacturer Iveco from its primary stakeholder, the Agnelli family, in a transaction valued at $4.5 billion, according to a report by The Economic Times. This would mark Tata Group's second-largest acquisition, following its purchase of Corus, and the largest deal to date for the automotive division. Tata Motors had acquired Jaguar Land Rover (JLR) for $2.3 billion in 2008.
As per media sources, Tata Motors is in talks to acquire controlling stake in a commercial vehicle (CV) manufacturer based out of Italy i.e. Iveco. Iveco is a significant player in the CV domain with a product profile very similar to Tata Motors. It is present across the drivetrain technology namely diesel, CNG, electric etc. as well as has offerings across LCVs to M&HCVs including buses. It had a market share of 13.3 per cent in the LCV space (3.5-7.5T) in Europe while its market share in the M&HCV space (>7.5T) is pegged at 7.1 per cent.
ICICI Securities view on Tata Motors
Iveco did sales of 14.9 billion Euros in CY24 with 73 per cent coming from CV domain (~11 billion Euros) and the rest 6 per cent from Defence and 21 per cent from engines. It clocked earnings before interest tax (EBIT) margin of 5.7 per cent. It is a listed company with market capitalization of 5.1 billion Euros and trades at a valuation of ~12x PE on TTM basis and ~0.3x P/S. ICICI Securities in a note said it don't see any strategic fit for Tata Motors from this potential acquisition and might strain its balance sheet which has recently turned net debt free (automotive).
The growth outlook at Iveco business is also not encouraging in nature. The only driver for stake purchase could be inexpensive valuations, which comes with difficulties in terms of operating in high-cost foreign soil. Tata Motors is yet to comment on this and we shall closely monitor developments in this case, the brokerage firm said.
Tata Motors Q1 results on August 8, 2025
Tata Motors has informed the exchanges that the meeting of the board of directors of the company was scheduled for August 8, 2025, inter alia, to consider and approve the audited financial results for the first quarter ended June 30, 2025 (Q1FY26).
Demerger: A strategic leap
To empower each business to pursue its distinct vision, the demerger of Tata Motors into two listed entities - Commercial Vehicles and Passenger Vehicles (including EV and JLR) - is progressing as planned, the company said in its FY25 annual report.
Enabling corporate actions to streamline the capital structure of the Company and enhance its operational focus gathered pace during the year with the successful delisting of its DVRs and the merger of Tata Motors Finance with Tata Capital Ltd. The company's shareholders approved the demerger which is expected to be effective during the second half of 2025, with shareholders receiving equivalent shares in both entities, Tata Motors said.
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