Tata Digital May Offer ESOPs; Aim To Raise $5 Bn Amid Super App Race
- ByStartupStory | October 7, 2021
Tata Digital, Tata Sons’ digital business, will raise $5 billion from commercial paper as the company seeks funding to expand into e-commerce.
Tata Digital creates a platform for the Tata group’s consumer business, acquires 64% of the online grocer’s Big Basket, while developing its e-commerce business.
An email sent to Pratik Pal, CEO of Tata Digital, regarding the company’s fundraising efforts, yielded no response.
India Ratings and Research has assessed Tata Digital’s commercial paper route to raise Rs 5,000 crore as `A1+.
“Given the importance of TDL (Tata Digital) in the overall digital ambitions of the Tata Group, IndRa expects that TDL will not only launch the platform in a timely manner, but also integrate most of the flagship brands of the Tata Group. In addition, the need for up-front funding could be higher for platform development and financing operational costs,” said a note from India Ratings and Research.
“IndRa expects TSL (Tata Sons) to inject sufficient equity capital initially or in time to maintain TDs strategic importance to TSL,” the memo said.
TDL’s stand-alone financial statements are not material as there have been no material transactions to date, the note said. Rs 5.3 crore in FY20. Shares issued and subscribed were Rs 6,000 million on March 31, 2021. The EBITDA loss in FY21 was Rs 306.1 crore compared to Rs 57.1 crore in year 20.
The Indian Competition Commission (ICC) approved Tata’s majority stake in Digital in BigBasket in April. With this approval, Tata Digital will leave for investors Alibaba, which owns approximately 29% of the company’s capital, as well as investors Actis LLP (16.3%) and IFC (4.1%). Tata has finalized its plan to acquire this stake for approximately 9,300 crore rupees (approximately $1.2 billion).
Tata Digital has also made an early investment in the 1mg online healthcare platform. According to reports, Tata Digital has contributed Rs 100 crore in 1mg through Mandatory Convertible Bonds (CCDs).
Follow Startup Story
Related Posts
