Street View: Analysts unconvinced by Tata Motors' 'risky' Iveco deal

Iveco NV

01/08/2025 08:44

** Tata Motors TAMO.NS plans to raise about 1 billion euros  ($1.14 billion) of equity to repay part of the loan funding its $4.5 billion offer to buy Iveco's IVG.MI  trucks and bus business

** Shares down 2.2% at 651.50 rupees, among biggest drags on 15-member Nifty Auto .NIFTYAUTO index

'RISKY DETOUR'

** Jefferies ("underperform," PT: 600 rupees) says it is not convinced by TAMO's acquisition of IVG, calling it "a risky detour"

** Adds, European acquisitions have historically posed challenges for several Indian companies

** Emkay Global ("Buy," PT: 750 rupees) says it is concerned over a combined TAMO-IVG's exposure to low-growth region Europe

** Iveco "is not cheap" with a ~9x trailing consol P/E, valued closely to larger peer Daimler's ~11X P/E - Emkay

** Nomura ("Neutral," PT: 799 rupees) says it is concerned the deal increases risk perception tied to TAMO's stock at a time when investors are averse to volatility

** HDFC Securities ("Reduce," PT: 694 rupees) says deal comes at a tough time for TAMO, whose JLR and domestic business sales are stalling

($1 = 0.8753 euros)

 (Reporting by Nandan Mandayam in Bengaluru)

 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))