Tata-Group auto major plans ₹2,000 crore fund raise via NCD issue on THIS date, stock down 12% YTD; Buy or sell? | Stock Market News

Tata Motors Ltd announced that its board will meet on Wednesday, March 19, to consider a fund raising proposal up to ₹2,000 crore. The leading manufacturer of domestic and commercial vehicles said the fund raising will be done through the issuance of rated, listed, unsecured, redeemable, Non-Convertible Debentures on a private placement basis.

Tata Motors’ board had approved the fund raising plans in March and may last year. The funds raised are expected to be utilized for general corporate purposes, including but not limited to, research and development, capacity expansion, and working capital requirements. The meeting on March 19 is expected to provide further details on the terms and conditions of the NCD issuance, including the coupon rate and the maturity period.

Tata Motors hosted an analysts meet recently where it announced that with respect to its British luxury arm Jaguar Land Rover (JLR), there are early signs of demand improvement in markets like EU and UK (US continues to remain strong) 

According to domestic brokerage JM Financials, the auto major is confident of achieving its FY25 guidance of >=8.5 per cent EBIT margin and turn net-cash in the near-term. 

While near-term growth for domestic commercial vehicle (CV) and passenger vehicle (PV) is expected to be muted, the brokerage expects the underlying demand environment to improve from FY26 for domestic CV, led by revival in government capex and domestic PV – led by new launches, enhanced marketing. 

The domestic brokerage has maintained a ‘buy’ rating on the stock and the same target price (TP) of ₹860, eyeing a potential upside of 32.7 per cent. “We maintain BUY with unchanged with Mar’26 SoTP of ₹860 (standalone / JLR valued at 12x /2.3x EV/EBIDTA). Recovery in underlying demand remains a key monitorable,” said JM Financials.

However, domestic brokerage Elara Securities cut it’s target price on the stock to ₹872 while maintaining its ‘buy’ rating. 

While Q4FY25 EBIT margin for JLR may be strong at ~10%, the brokerage awaita FY26 EBIT margin guidance. For India business, Sierra ICE launch during the festival season may arrest the market share dip from H2FY26. The brokerage is cautious on India CV cycle. Valuations are comfortable. 

“We reiterate Buy, but cut TP to ₹872 from ₹909, as we pare EV/EBTIDA for CV and PV segments to 10x/ 13x (from 11x/ 14x), respectively, on muted outlook,” said Elara Securities on Tata Motors.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.