The Tata Group plans to invest Rs 3,500 crore in Tata Cliq, an e-commerce venture by the conglomerate. Tata UniStore, which owns Tata Cliq, reported that the board recommended an increase in authorized share capital to Rs 5,000 crore from Rs 1,500 crore. This information was reported by The Economic Times during a regulatory filling.
The report added that this raise in authorized share capital will be executed through the issue of equity shares. According to the filling, the paid-up share capital of Tata UniStore is Rs 1,203.12 crore. Tata Cliq has also raised its borrowing limit to Rs 490 crore.
Vikas Purohit, CEO of Tata UniStore has not responded to any queries.
This investment comes from the potential growth of the e-commerce venture. Mohit Yadav, founder of Corporate intelligence firm Altinfo said that this development is a clear indication that the Tatas will be opening up a war chest in the future and intent to be in the e-commerce business for the long haul.
In the company’s director’s report, Tata UniStore said that their company continues to scale on a year-on-year basis and has attributed this financial performance to the current stage of investment in the growth of the business.
A quote from the director’s report says, “With aggressive growth targets for future years, the company plans to further strengthen its position as a leading omnichannel multi-brand e-retail player in India.”
Tata UniStore has added more than 20 new brands on its platform and this growth trajectory continues this fiscal year with additions including Reebok, Adidas, Nike, American Eagle and GAP.
Along with this, Tata UniStore has been able to start shipping from warehouses with select electronic brands. It has added around 2 million customers to its platform. According to reports, more than 50% of its business came from repeat customers in FY20.
It is to be noted that this move by the Tata Group is done amid reports of the conglomerate working on a “super-app.” The reports also add that Tata Digital, which handles the group’s e-commerce ventures, in talks to acquire a majority stake in BigBasket.
