Tata Motors shares fall 4%. Here's why investors are worried about $4.5 billion Iveco gamble
shares crashed 4% to Rs 665.45 on BSE Wednesday as news of the automaker's audacious $4.5 billion bid for Italy's truck-maker Iveco spread through Dalal Street. The mega-deal, set to become the Tata Group's second-largest acquisition after Corus, has investors running for cover amid fears the cash-strapped company is biting off more than it can chew.
The boards of Tata Motors and Turin-based Iveco are meeting on Wednesday to approve the transaction that would make it the automobile major's largest-ever acquisition, dwarfing even the $2.3 billion
Jaguar Land Rover
purchase in 2008.
Explore courses from Top Institutes in
Please select course:
Select a Course Category
Artificial Intelligence
others
Others
Data Science
Data Science
Project Management
Operations Management
CXO
Leadership
Design Thinking
Data Analytics
PGDM
Product Management
Digital Marketing
Degree
Finance
Healthcare
Public Policy
Technology
Management
MCA
Cybersecurity
healthcare
MBA
Skills you'll gain:
Duration:
7 Months
S P Jain Institute of Management and Research
CERT-SPJIMR Exec Cert Prog in AI for Biz India
Starts on
undefined
Get Details
"Tata Motors is facing the perfect storm with Jaguar going electric, tariffs hurting premium markets, and huge investments (GBP 3.8 bn for FY26) lined up to update its models to make them ready for EURO VI norms. Another investment of $4.5 billion at this stage would mean borrowings would increase, as cash flow is not sufficient to finance the deal," warned Dr Nitin Balwani, Associate Dean and Professor at NMIMS School of Business Management.
The market is sceptical of huge investments as it fears that the company is spreading itself too thin and it would take time to absorb the acquisition and make it work, he told ET Markets.
Also Read |
Tata Motors set to acquire Italian truck maker Iveco for $4.5 billion in its biggest deal to date
UBS maintained its bearish stance, keeping a 'Sell' rating with a target price of Rs 690. The global brokerage noted that Tata Motors may have to spend over €1.5 billion, including the mandatory open offer that would be triggered under regulations.
Under the proposed M&A deal structure, Tata Motors would acquire 27.1% from Exor, the Agnelli family's investment company, before launching a tender offer to buy out smaller shareholder groups. Exor controls 43.1% of voting rights in the truck maker.
The Tata Group is confident of securing 100% of listed Iveco, excluding the defence business, which is being demerged and will not be part of the transaction, ET reported earlier.
JPMorgan's analysis shows Iveco's industrial business derives 70% of revenue from trucks, with buses and powertrain contributing 15% each. The Group commanded a 13.3% market share in 2024 in the Light Commercial Vehicles segment, along with an 8% to 9% share in the Medium and Heavy Commercial Vehicles segment.
The $4.5 billion (€3.9 billion) deal represents a massive bet for Tata Motors, which is already grappling with the challenges of electrifying Jaguar Land Rover while managing substantial capital requirements. The acquisition comes at a time when the company faces mounting pressure from trade tariffs affecting premium markets and the need for massive investments to meet stringent emission norms.
Tata Motors stock has been under sustained pressure and has fallen 42% in the last one year.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
a minute ago
- Economic Times
Siemens Energy shares in focus after Q3 profit soars 80% YoY; company lines up Rs 280 crore expansion
Shares of Siemens Energy India are set to be in focus on Tuesday after the company posted an 80% year-on-year jump in net profit for the June quarter, its first earnings report since listing in June, and announced a Rs 280 crore investment to expand manufacturing capacity amid surging order inflows. ADVERTISEMENT The company reported a net profit of Rs 263 crore for the third quarter of FY26, compared to Rs 146 crore in the same period last year. Revenue from operations rose 20% YoY to Rs 1,785 crore. The sharp rise in profit after tax was attributed to a significant increase in new orders, which surged 94% to Rs 3,290 crore. Robust demand was recorded across both domestic and export markets, the company said in an exchange filing. Revenue growth was supported by a strong and healthy order backlog. The Q3 profit margin stood at 17.6%—in line with the normalised margins seen in the first half of the fiscal—and up from 13.3% in the year-ago quarter. The margin excludes favourable one-time impacts and stamp duty or other transfer charges. The earnings were announced after market hours on Monday. Siemens Energy India shares closed at Rs 3,235.50 on the NSE, up 2.10% from Friday. The company also announced plans to invest Rs 280 crore in a phased manner to expand its manufacturing capacity for high-voltage switchgear products at its Aurangabad facility. Siemens Energy said the expansion will help meet growing demand for power transmission equipment in both Indian and global markets. ADVERTISEMENT "We continue to add capacity in our Power Transmission business to serve the increasing demand for high-voltage switchgear products—not just in India but globally," said Managing Director and CEO Guilherme Mendonca. "With this investment, we are proud to demonstrate our continued commitment to supporting India's energy transition and the Government of India's Make in India and Aatmanirbhar Bharat vision." This was Siemens Energy India's first quarterly result since its listing on June 19. The company is promoted by Netherlands-based Siemens International Holding B.V. ADVERTISEMENT Commenting on the earnings, Mendonca said: "New orders grew by an exceptional 94% on the back of a strong domestic market and rising exports. A healthy order backlog and continuous operational excellence helped the company deliver robust results for the quarter and for the nine months of the fiscal year."Siemens Energy India provides solutions across the energy value chain, including power generation, transmission, and storage, through a portfolio spanning gas and steam turbines, hybrid power plants powered by hydrogen, power generators, and transformers. ADVERTISEMENT Also read | NSE reaches Rs 40 crore settlement with Sebi over data disclosure case (Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Economic Times
a minute ago
- Economic Times
Marico shares in focus after 9% YoY growth in Q1 PAT. Should you buy?
After the company's Q1 results, here is what various brokerage firms said: Live Events Motilal Oswal: Buy| Target price: Rs 825 Avendus: Buy| Target price: Rs 832 (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Shares of Marico Ltd. are likely to be in focus on Tuesday, after the consumer goods major reported a 9% year-on-year (YoY) rise in consolidated net profit for the June 2025 quarter. The company posted a profit of Rs 504 crore, up from Rs 464 crore in the same period last year, driven by strong international performance and price-led growth in its domestic from operations jumped 23% YoY to Rs 3,259 crore, compared to Rs 2,643 crore in Q1FY25, marking a strong topline expansion despite margin on the operating front, EBITDA rose 5% YoY to Rs 655 crore, while the EBITDA margin declined to 20.1% from 23.7% due to elevated input costs, particularly in raw Monday, Marico shares closed 1.8% higher at Rs 723.15 on the Oswal has maintained a 'Buy' rating on Marico with a target price of Rs company's growth scorecard remains intact, although there is a slight delay in margin recovery. Rising input costs may impact near-term margins, but the outlook for the second half of FY26 remains positive. Revenue outperformance continues, supported by a 9% volume growth. Marico aims to achieve double-digit PAT CAGR over the next two years and is projected to deliver 11% PAT CAGR between FY25 and FY28. However, FY26 EPS estimates have been cut due to recent copra inflation, while FY27 and FY28 EPS estimates are has maintained a 'Buy' rating on Marico, raising the target price to Rs 832 from Rs firm has revised its revenue estimates upward by around 5% for FY26 and FY27. The outlook factors in near-term tailwinds from pricing actions, recovery in the VAHO segment, and sustained traction in the non-oils portfolio. Despite the expanding revenue base, high raw material prices are expected to keep margins under pressure through FY26. EBITDA growth in FY26 is expected to lag the topline, but a sharp margin rebound of around 20% is projected by FY27.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
a minute ago
- Time of India
Siemens Energy shares in focus after Q3 profit soars 80% YoY; company lines up Rs 280 crore expansion
Siemens Energy India posted an 80% YoY rise in Q3 FY26 net profit to Rs 263 crore, driven by a 94% surge in new orders. Revenue grew 20% to Rs 1,785 crore. The company also announced a Rs 280 crore investment to expand its Aurangabad facility for high-voltage switchgear, marking its first earnings report since listing in June. Tired of too many ads? Remove Ads Aurangabad Expansion to Meet Global Demand Tired of too many ads? Remove Ads First Results Post-Listing Shares of Siemens Energy India are set to be in focus on Tuesday after the company posted an 80% year-on-year jump in net profit for the June quarter, its first earnings report since listing in June, and announced a Rs 280 crore investment to expand manufacturing capacity amid surging order company reported a net profit of Rs 263 crore for the third quarter of FY26, compared to Rs 146 crore in the same period last year. Revenue from operations rose 20% YoY to Rs 1,785 crore. The sharp rise in profit after tax was attributed to a significant increase in new orders, which surged 94% to Rs 3,290 demand was recorded across both domestic and export markets, the company said in an exchange filing. Revenue growth was supported by a strong and healthy order backlog. The Q3 profit margin stood at 17.6%—in line with the normalised margins seen in the first half of the fiscal—and up from 13.3% in the year-ago quarter. The margin excludes favourable one-time impacts and stamp duty or other transfer earnings were announced after market hours on Monday. Siemens Energy India shares closed at Rs 3,235.50 on the NSE, up 2.10% from company also announced plans to invest Rs 280 crore in a phased manner to expand its manufacturing capacity for high-voltage switchgear products at its Aurangabad facility. Siemens Energy said the expansion will help meet growing demand for power transmission equipment in both Indian and global markets."We continue to add capacity in our Power Transmission business to serve the increasing demand for high-voltage switchgear products—not just in India but globally," said Managing Director and CEO Guilherme Mendonca. "With this investment, we are proud to demonstrate our continued commitment to supporting India's energy transition and the Government of India's Make in India and Aatmanirbhar Bharat vision."This was Siemens Energy India's first quarterly result since its listing on June 19. The company is promoted by Netherlands-based Siemens International Holding on the earnings, Mendonca said: "New orders grew by an exceptional 94% on the back of a strong domestic market and rising exports. A healthy order backlog and continuous operational excellence helped the company deliver robust results for the quarter and for the nine months of the fiscal year."Siemens Energy India provides solutions across the energy value chain, including power generation, transmission, and storage, through a portfolio spanning gas and steam turbines, hybrid power plants powered by hydrogen, power generators, and transformers.
