Catalysis of the reaction: 2-methyl-3-oxopropanoate + CoA + NAD+ = propanoyl-CoA + CO2 + NADH + H+. Can also use malonate (3-oxopropanoate) as a substrate. The reaction occurs in two steps with the decarboxylation process preceding CoA-binding. Bicarbonate rather than CO2 is released as a final product.
methylmalonate-semialdehyde dehydrogenase (acylating) activity