Tata Motors Share Price Cracks 4% Today: Here’s Why It Happened and What Investors Should Do Now

Tata Motors' shares came under pressure on Wednesday morning, sliding more than 4% in early trade, as reports surfaced of the automaker being in advanced talks to buy out the truck business of Italy’s Iveco Group for around $4.5 billion.

The stock, which had closed at Rs 692.35 on Tuesday, slipped to an intraday low of ₹665.25 on the BSE. At last count, it was trading at ₹668.90.

According to a Bloomberg report citing people familiar with the matter, Tata Motors is poised to acquire Iveco's commercial vehicle (CV) operations, including its trucks, powertrain units, buses, and other specialty vehicles. The deal, if confirmed, would mark a significant expansion of Tata’s CV footprint in Europe and other global markets.

Tata Motors has, however, not issued an official comment on the matter so far.

The report also mentioned that the Iveco Group, part of Italy’s Agnelli family-backed CNH Industrial spin-off, is planning to sell its defense division to Leonardo SpA, a state-backed Italian aerospace and defense giant. Both transactions could be announced later today, in line with Iveco’s scheduled earnings release.

Why this deal is important?

As per industry analysts, the potential acquisition is seen as a pivotal move for Tata Motors, positioning the company to strengthen its foothold in the European market and scale up its CV production capabilities. The transaction is also expected to bring in advanced design and engineering expertise, allowing Tata Motors to better cater to the evolving demands of European clients, according to a report by Bloomberg.

If finalized, this would be among the most significant overseas deals by the Tata Group — second only to its landmark acquisition of Corus. For Tata Motors specifically, it would be the most ambitious buyout since it purchased Jaguar Land Rover for $2.3 billion back in 2008.

Stock market performance

On the stock market front, Tata Motors has shown mixed performance. Over the past month, the share price has dipped by around 2%, though it has managed a 4% gain over the last three months. 

Since the beginning of the year, the stock has retreated by 10%, and over a 12-month period, it’s down by 42%. Despite the recent volatility, long-term investors have seen significant gains — the stock has surged by 50% over three years and delivered an impressive 550% return over the last five years.

Also REad: Tata Motors in Talks to Acquire European Truckmaker Iveco | Republic World

Emkay maintains 'Buy' rating on Tata Motors

'Meanwhile, Emkay Global remains positive on Tata Motors, keeping a ‘BUY’ rating, but lowers its target price to Rs 750, down about 6%. The change follows a cut in earnings estimates for the next two years, mainly because of softer demand and lower profit margin guidance at Jaguar Land Rover (JLR). 

While JLR now expects a smaller profit margin and flat free cash flow next year due to continued investments and uncertain global trade conditions, it has also become stronger in terms of business and balance sheet over the last five years. Despite near-term challenges, Emkay believes Tata Motors is well-placed to weather current headwinds and continue its growth journey over the long term. 

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