Tata Motors Ltd Chairman N Chandrasekaran on Monday said the proposed acquisition of Iveco Group is expected to be completed by the second quarter of FY27, subject to regulatory approvals and customary closing conditions.
Responding to shareholder queries, Chandrasekaran said: “We hope it will get completed in the second quarter of the current year.. There are significant synergies.” He said the combined revenues of Tata Motors Ltd and Iveco Group currently stand at around $25 billion and are expected to grow to $35-40 billion over the next five years.
The transaction will be funded through a mix of debt and internal cash, with the debt expected to be serviced and repaid through Iveco Group’s future cash flows. “We’re not looking for, at this point in time, any equity raise,” he added.
Chandrasekaran said the acquisition will expand Tata Motors’ product portfolio and international footprint while creating opportunities to share technologies, undertake joint R&D and strengthen distribution across global markets.
Turning to cybersecurity, Chandrasekaran said Tata Motors will continue investing heavily in artificial intelligence-led cyber defences as attacks become more frequent across industries.
“Cybersecurity has already impacted group companies. This is an area we continue to invest heavily in across the group because this threat is only going to increase,” he said, adding that the company was already using AI as part of its cybersecurity efforts.
The remarks come days after Bajaj Auto disclosed a ransomware attack on its systems and months after Jaguar Land Rover, another Tata Group company, suffered a cyberattack that disrupted production, highlighting the growing cyber risks confronting automakers.
Future technologies remain investment priority
Chandrasekaran said Tata Motors will continue to spend 2-4 per cent of annual revenue on capital expenditure, with around 55 per cent of that investment earmarked for future technologies. Spending will remain at the lower end when upgrading existing vehicle platforms and move higher during major product and technology programmes.
He said the company’s investment programme, including the Iveco acquisition, will be funded through internal accruals over the next three to four years, with no plans to raise fresh equity.
Three risks shape strategy
Asked about the biggest challenges facing the company, Chandrasekaran identified geopolitical uncertainty, supply-chain disruptions and commodity price volatility as the three key risks. He said Tata Motors will respond by increasing localisation to reduce supply-chain disruptions, improving value engineering and cost management to offset raw material inflation and continuing to strengthen cybersecurity.
Capital discipline and shareholder returns
On shareholder returns, Chandrasekaran said the company expects to maintain a dividend payout of around 44 per cent of post-tax profit, with scope to increase payouts as the current investment cycle moderates. The Board has recommended a final dividend of ₹4 per share for FY26.
He also urged investors not to compare Tata Motors with Tata Motors Passenger Vehicles following the demerger, saying the two companies have different strategies, market opportunities and risk profiles. “The strategy, the market opportunity and the risks are different. That is precisely why the businesses were separated,” he said.
Chandrasekaran said the company’s industry-leading 72.3 per cent return on capital employed (ROCE) will moderate after the integration of Iveco because of the larger capital base, although it will remain “very healthy”. He also ruled out any plans to list subsidiaries separately, saying such a move would not be efficient.
Highlighting the company’s FY26 performance, he said revenue rose to a record ₹83,855 crore, vehicle sales exceeded 435,000 units, EBITDA margins improved to 12.3 per cent, return on capital employed reached 72.3 per cent and heavy commercial vehicles achieved a decade-high 55 per cent market share.