tata sounds: Tatas replenishes e-commerce war chest with Rs 5,882 crore

Kolkata: Tata Sons has infused Rs 5,882 crore into its flagship e-commerce entity Tata Digital, regulatory filings have shown, the highest fund allocation ever in a single tranche and the most Tatas have invested in e-commerce during a single exercise.

Tata Digital, which owns newly launched e-commerce super app Tata Neu, has been making acquisitions in the consumer internet space over the past year, snapping up hot startups such as online grocery store BigBasket and the online pharmacy 1mg.

The latest funding brings the total investment in Tata Digital to Rs 11,872 crore in 2021-22, helping it reach a war chest to take on established e-commerce rivals Amazon and Walmart-owned Flipkart in the country.

On March 30, the board of Tata Digital approved the allotment of 5.88 billion fully paid shares of Rs 10 each on a rights basis, totaling Rs 5,882 crore, to Tata Sons, the Tata Digital holding entity, filed with the Registrar. of Companies (RoC) showed. The RoC filings were made on Thursday when Tata Neu went live, indicating the group is gearing up to take on established players like Amazon, Flipkart and newcomer, but well-funded RIL stable JioMart.

Tata Digital, which is also the holding entity of Croma Group’s electronics retail chain, had received Rs 5,990 crore from Tata Sons in the nine months to December 2021-22 in installments, according to the documents.

Tata Digital and Tata Sons did not respond to ET’s emails by press time on Friday.

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On March 23, according to filings, Tata Digital increased its authorized share capital to Rs 15,000 crore from Rs 11,000 crore to set the stage for the current round of capital injection.

Tata Digital said in filings that its authorized share capital was increased to repay some of its existing debt, meet business operations and other corporate requirements.

“The massive injection by Tatas of Rs 5,882 crore in a single tranche represents almost half of the capital infused into the business since its inception,” said Mohit Yadav, founder of business intelligence firm AltInfo. “This acts as a signal to other deep-pocketed players that Tatas is waging this e-commerce war to win, and the costs involved will not be a barrier to pursuing this goal.”

The increase in authorized share capital shows that more such injections are possible in the foreseeable future, Yadav added.

According to RoC filings, Tata Digital had raised Rs 400 crore in FY21 and Rs 100 crore in FY20 from Tata Sons.

Tata UniStore Ltd, which owns the Tata Cliq e-commerce platform, 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, according to deposits.

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