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

Tata Motors Ltd announced that its board will meet on Wednesday, March 19, to consider a fundraising proposal of up to ₹2,000 crore. India's leading manufacturer of domestic and commercial vehicles said the latest fundraising will be done through the issuance of rated, listed, unsecured, redeemable, non-convertible debentures (NCD) on a private placement basis.

Tata Motors' board approved the fundraising 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, 2025, is expected to provide further details on the terms and conditions of the NCD issuance, including the coupon rate and the maturity period.

Also Read: Tata Motors share price rises over 3% following CFO’s reassuring remarks

“…We hereby wish to inform you that a meeting of the duly constituted Committee of the Board of Directors of the company is scheduled to be held on Wednesday, March 19, 2025, inter alia, to consider and approve the issuance of rated, listed, unsecured, redeemable, non-convertible debentures on a private placement basis aggregating upto ₹2,000 crore,” said Tata Motors in a regulatory filing to the stock exchanges on Friday.

Tata Motors Share Price Trend: Should you buy or sell?

On Thursday, shares of Tata Motors opened at ₹673.30 and declined 3.5 per cent to hit an intraday low of ₹649.55, before settling 1.95 per cent lower at ₹655.40 apiece on the BSE. The stock has shed 34 per cent in six months and 12.62 per cent year-to-date (YTD). The stock is down 48 per cent from its record highs. 

Tata Motors recently hosted an analyst meeting, announcing that with respect to its British luxury arm Jaguar Land Rover (JLR), there are some early signs of demand improvement in markets like the EU and the UK. The US continues to remain a strong market for Tata Motors. According to domestic brokerage JM Financials, the auto major is confident of achieving FY25 guidance of >=8.5 per cent EBIT margin and turning net cash soon. 

Also Read: Tata Capital to file IPO papers to raise over ₹17,000 crore after NCLT nod on merger with Tata Motors Fin: Report

While the near-term growth for domestic commercial vehicles (CV) and passenger vehicles (PV) is expected to be muted, the brokerage expects the underlying demand environment to improve from FY26 for domestic CV, led by a revival in government capex and domestic PV, led by new launches and 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 March 2026 TP of ₹860 (standalone / JLR valued at 12x /2.3x EV/EBIDTA). The recovery in underlying demand remains a key monitorable,” said JM Financials on Tata Motors stock.

However, domestic brokerage Elara Securities cut its target price on the stock to ₹872 while maintaining its ‘buy’ rating.  While JLR's Q4FY25 EBIT margin may be strong at ~10 per cent, the brokerage awaits FY26 EBIT margin guidance. For the India business, Sierra ICE's launch during the festival season may arrest the market share dip from H2FY26. 

Also Read: Tata Communications appoints N Ganapathy Subramaniam as Chairman of board

The brokerage is cautious about the India CV cycle. Tata Motors's valuations are comfortable.  “We reiterate Buy, but cut TP to ₹872 from ₹909, as we pare EV/EBITDA for CV and PV segments to 10x/ 13x (from 11x/ 14x), respectively, on muted outlook,” said Elara Securities on Tata Motors stock.

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.