$2 billion plan for Tata Sons and Super App Tata New

The TataNeu, which is still in the testing phase, is expected to launch nationally early next year. It is designed as a single-point digital gateway to the Tata Group’s diverse consumer offerings including health, food and grocery, financial services, fashion and lifestyle, electronics, over-the-top services, education and bill payments.

“Work (to install Super App) is in full swing. Of the total investment required, Tata Sons may invest around $2 billion in the platform from group firms or (issue) debentures,” said one of the two people above, on condition of anonymity, the decision was taken at Tata Sons. Board meeting of 12 October of Sons.

According to the people mentioned above, the holding company of the Tata group plans to sell a stake in the Super App venture to outside investors to raise money, similar to Jio Platforms’ mega funding last year.

“After this round, an additional $5 billion will be raised from long-term investors such as global pension funds, sovereign funds and insurance companies,” the person cited above said. In a similar move, Tata Motors recently raised $1 billion for itself. Electric vehicle unit from TPG Rise Climate Fund.

“For now, the capital to be invested by Tata Sons will be done through a mix of equity and mezzanine debt,” said the second person.

In FY2011, Tata Sons reported a 142% jump in standalone profit ₹6,512 crore, with a revenue of ₹19,598 crores. net debt was ₹27,615 crore on standalone basis, same as approx. ₹₹27,753.18 crore in the last financial year. The adjusted net debt of the entire group was ₹2.6 trillion compared to ₹2.38 trillion in the last financial year.

Several large global investors have sought details from Tata Sons on Tata Digital’s operational structure (under which TataNew will operate) and ways to integrate existing retail operations such as Trent Limited and Titan Company Limited. Tata Sons has already invested. ₹15,000 crore in business including acquisitions.

“It’s a capital-intensive business, and it takes years to break through,” the first person said.

Analysts expect fierce rivalry for Tata’s Super App from Reliance Jio, Amazon, Paytm and Walmart-Flipkart. As per the person mentioned above, Tata Digital already has over 400 million users in its digital vertical.

“The launch plan was delayed partly due to the government’s proposed consumer protection norms and e-commerce norms, on which Tata Digital, as well as every existing e-commerce player, has sought clarity, especially from distribution partnerships and logistics. with respect to the relevant policies. Tie-up,” said the other person.

Most of the large e-commerce players rely on external funding for growth. Jio Platforms, owned by Reliance Industries Ltd, promoted by Asia’s richest man Mukesh Ambani, raised $15.2 billion last year from a consortium of investors including Google, Facebook, Microsoft and the Abu Dhabi Investment Authority.

After raising the money, Jio’s retail reach has grown, leading to increased digital business revenue for the group. Through the connectivity of Reliance Jio Infocomm, RIL has expanded its network and established hyperlocal commerce with small merchants across the country. This is somewhat similar to Tata’s SuperApp ambitions.

To ensure this, Tata has started integrating many of its services under one platform and enhanced its ability to offer a full range of products and services to the customers. Working on SuperApp, Tata acquires 64.3% stake in online grocer BigBasket ₹9,500 crores. It also acquired digital pharmacy 1mg and signed a deal to invest up to $75 million in CureFit Healthcare.

Tata Sons has recently agreed to buy 43.35% stake in telecom gear maker Tejas Networks Ltd. ₹1,884 crores. Currently, Amazon and Flipkart are the leaders in the retail e-commerce space.