Tata Sons is in the mood to take on the e-commerce business, and compete with industry giants such as Amazon and Flipkart. As per a report, the business conglomerate has invested an amount of Rs 5,882 crore to its flagship e-commerce firm Tata Digital. This is the highest ever fund allocation Tata Sons has made in a single tranche into its e-commerce business in any single fiscal year, the report says.
The overall investment in Tata Digital has now amounted to Rs 11,872 crore in 2021-22 with the additional funding, helping it to build sufficient strength to take on e-commerce rivals like Amazon and Flipkart in India, the report by Economic Times said citing regulatory filings. As per the publication, it has been mentioned in the filings to the Registrar of Companies (RoC) that the board of Tata Digital gave nod to “the allotment of 5.88 billion fully paid-up equity shares of Rs 10 each on a rights basis” to Tata Sons, the holding entity of Tata Digital, on March 30 this year. The allotment resulted in an investment of a total amount of Rs 5,882 crore. This allotment was made on the day Tata Neu, the company’s all-purpose app, went live to compete with existing players like Flipkart, Amazon and others in the foray.
“Tata Digital, which is also the holding entity for the group’s electronics retail chain Croma, had received Rs 5,990 crore from Tata Sons in the nine months till December of 2021-22 in multiple tranches,” the report said citing the regulatory filings.
“On March 23, the filings showed, Tata Digital increased its authorised share capital to Rs 15,000 crore from Rs 11,000 crore to set the stage for the current round of capital infusion. Tata Digital said in the filings that its authorised share capital had been increased to repay part of its existing debt, meet business activities and other corporate requirements,” the report further said.
The increase in authorised capitals proves that the Tatas are in the war to win and there is a possibility of more such investments in the foreseeable future, say experts. According to the RoC filings, Tata Digital had raised Rs 400 crore in FY21 and Rs 100 crore in FY20 from Tata Sons, the report said. On the other hand, Tata Cliq platform owner Tata UniStore Ltd raised Rs 102 crore in FY22, Rs 30 crore in FY21, Rs 311 crore in FY20, Rs 292 crore in FY19 and Rs 224 crore in FY18, as per the filings.
The Tata Group has recently gone public with its intention to make it big in the e-commerce with the launch of its super app Tata Neu. The application provides users access to a number of platforms like Air Asia, BigBasket, Croma, IHCL, Qmin, Starbucks, Tata 1Mg, Tata CLiQ, Tata Play, and Westside and other platforms owned by the company.