Tata Digital’s acquisitions and investment limit set at Rs 12,000 crore – The Economic Times

Clipped from: https://economictimes.indiatimes.com/industry/services/retail/tata-digitals-acquisitions-and-investment-limit-set-at-rs-12000-crore/articleshow/81681172.cms

Synopsis–Tata Digital is waiting for the Competition Commission of India’s approval for its deal to acquire a 64.3% stake in e-grocer BigBasket. The deal is pegged at about $1.2 billion (₹8,720 crore). The group is also reportedly in talks to acquire 1MG, an online pharmacy startup.

The Tata Group has set ₹12,000 crore as the limit to make acquisitions and investment through its newly set up ecommerce entity, Tata Digital, which is behind the salt-to-software conglomerate’s most ambitious ecommerce venture through the proposed SuperApp.

Tata Digital has received most of the capital that the group put in its ecommerce businesses this fiscal year. The group holding company, Tata Sons, infused ₹400 crore into Tata Digital — half of that this month. It made just a ₹30 crore fresh investment in Tata UniStore that owns Tata Cliq marketplace.

Tata UniStore used to get the largest share of the capital infusion till last fiscal year from the group in ecommerce.

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As per latest regulatory filings with the Registrar of Companies (RoC), the Tata Digital board held an extra ordinary general meeting on January 20 to approve a proposal to increase the limit to ₹12,000 crore for acquiring any company, giving loans or guarantee or providing any security, or for debt securities, bank deposits and government securities.

“Considering the company’s business plans and the investments likely to be made from time to time, it would be necessary to enhance the enabling limit…,”it said, but did not provide the earlier cap.

An email sent to Tata Sons seeking comment remained unanswered till Wednesday press time.

Mohit Yadav, founder of business intelligence firm AltInfo, which analysed RoC filings, said Tata Digital’s current balance sheet might not support high investment right now, but it was clear that there was a strong intent to put substantial capital into the company in near future.

Tata Digital is waiting for the Competition Commission of India’s approval for its deal to acquire a 64.3% stake in e-grocer BigBasket. The deal is pegged at about $1.2 billion (₹8,720 crore). The group is also reportedly in talks to acquire 1MG, an online pharmacy startup.

The SuperApp will integrate these acquisitions apart from existing ecommerce ventures of the group, such as Tata Cliq, e-grocer StarQuik, and those of other entities.

Yadav said the RoC filings showed that the Tatas had already invested ₹600 crore in Tata Digital in less than two years and, considering the company’s authorised capital is ₹1,000 crore, it was likely to invest at least ₹400 crore more into the business.

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