Tata Digital will become the sole entity of all online shopping ventures under the Tata Group, according to a report by Economic Times. It already houses BigBasket, Tata Neu and Croma.
The consolidation will now be complete after Tata decided to transfer the holding of Tata UniStore, which owns and operates the e-commerce platform Tata Cliq, to Tata Digital.
Tata Unistore was previously held jointly by Tata Industries and Trent, with the former having a 96.78 per cent stake. As per latest regulatory filings, Tata Group values UniStore at Rs 750 crore and Tata Digital will offer preference shares to Tata Industries and Trent as consideration for the acquisition.
Last week, the group infused Rs 750 crore to Tata Digital and increased its authorised share capital by Rs 1,000 crore to Rs 21,000 crore. As per the group's filings with the Registrar of Companies, the increment was made keeping in mind repayment of debt, business plans and investments to be made.
Earlier, the group had infused Rs 3,462 crore to Tata Digital in the month of September. The consolidation and capital infusion are reflective of Tata's aggressive expansion into the e-commerce business.
“There are very few Tata businesses where funding has been deployed at such a war footing and it shows where the group's priorities lie,” ET quoted Mohit Yadav, founder of business intelligence firm AltInfo, as saying.
In the domestic e-commerce market, Tata faces competition from Reliance Industries, Amazon, Walmart-owned Flipkart and Myntra. Presently, the various players are enaged in a pricing war, in a bid to capture maximum market share.
By offering big discounts across various categories, the e-commerce players have also been burning a lot of cash.
In FY22, Tata UniStore witnessed its net loss more than double to Rs 750 crore, despite a 137 per cent hike in its revenue. According to the company's filings, revenue for FY22 stood at Rs 844 crore.