Tata Motors allays investors' worries on $4.4 bn Iveco deal

Firm says achieving growth in commercial vehicle biz not easy, so needs such acquisitions

- Ayaan Kartik

Tata Motors Ltd assuaged investor concerns over its acquisition of Italian truck and bus maker Iveco for $4.4 billion, reasoning that it would help generate more returns for shareholders when it starts trading as a standalone entity later this year.

Less than 12 hours after Tata Motors announced its largest acquisition ever, its management fielded questions from analysts and investors over the rationale for the acquisition.

"It is a meaningful, large acquisition... There is an understanding between the two companies to build a business of scale and size," chief financial officer P.B. Balaji said during the call on Thursday. Achieving high growth in the commercial vehicle business isn't easy and India's largest commercial vehicle maker needs such acquisitions to deliver growth to shareholders, the management added.