Tata Digital Gets A War Chest Of INR 5,882 Cr For Super App Push
- ByStartupStory | April 9, 2022
Tata Sons have invested INR 5,882 crore in Tata Digital, just days after selling 2.48 crore shares to Tata Consultancy Services (TCS) for INR 4,500 each, generating INR 11,163 crore in cash. According to its most recent regulatory filing, Tata Sons purchased 588.2 Cr shares at a rate of INR 10 on a rights basis, a decision that was approved by Tata Digital’s board on March 30th.
The announcement comes only days after Tata Digital debuted Tata Neu, its much-anticipated super app, during this year’s IPL season. The fact that Tata is also the title sponsor of the IPL 2022 has given the app a lot of traction, with over 1 million downloads on the Google Play Store already. However, the app has a 3.9 rating on Google Play and a 3.3 rating on Apple App Store.
The current commitment brings Tata Sons’ total investment in Tata Digital to INR 11,872 crore in 2021-22. According to previous estimates, Tata Sons may make an interim investment of up to $500 million (INR 3,795.87 crore) for the final stretch of Tata Neu’s debut and to keep up with the capital burn that comes with running a mega app. The actual investment is 35.46 percent more than what was previously disclosed. According to RoC filings, Tata Digital raised INR 400 crore from Tata Sons in FY21 and INR 100 crore in FY20.
The launch of Tata Neu has been in the headlines since last year. After Reliance initiated a similar consolidation with its Jio Platform business, Tata Digital combined several digital organizations under the Tata umbrella into a super app offering.
Tata Digital had bought many companies, including Grameen eStore, Urja, AccessBell, 1mg, BigBasket, and CureFit, and had taken a share in the super app, bringing founder Mukesh Bansal on board to lead the development. Croma was just added to Tata Digital, which already includes the eCommerce platform Tata Cliq. Tata Neu will be better equipped to compete with Amazon and Flipkart, as well as newcomer Reliance Jio, thanks to the recent funding (which is competing with its own super app push).
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