With this move, Tata Industries looks to bring together its scalable ecommerce platforms under one roof, people privy to the matter said
The decision has been taken as part of the bigger group consolidation strategy led by investment holding entity Tata Sons
An executive, who is versed in the development, said that capital allocation efficiency and scalability are prime focus (for Tata Industries)
Indian conglomerate Tata Industries is going to move some of its startup ventures including Tata CLIQ Palette, Tata Cliq, Tata Cliq Luxury and Tata Health, among others, away from Tata Digital to its super app Tata Neu in the next two weeks.
With this move, Tata Industries looks to bring together its scalable ecommerce platforms under one roof, people privy to the matter told The Economic Times.
The decision has been taken amid an extensive group consolidation strategy led by investment holding entity Tata Sons. Tata Sons has been amalgamating similar entities housed under various companies of Tata Group to form synergies, trim costs and focus on scalability as well as a competitive advantage.
An executive, who is versed in the development, said that capital allocation efficiency and scalability are the prime focus (for Tata Industries).
“Smaller businesses need to scale up to be profitable and those that can are being housed in entities that can do so. Tata Cliq and Tata Health are all businesses that will scale under Tata Neu and the kind of capital allocation they need to scale up,” the executive added.
The executive further informed that Tata Health will be amalgamated into Tata 1mg, which is a medical ecommerce business of Tata Digital.
Tata Industries, which is an investment holding entity, has promoted as well as incubated novel business organisations across diverse sectors such as control systems, IT, aerospace and defence, finance, automobile components, and telecom. KRS Jamwal, who is an executive director of Tata Industries, is responsible for incubating new sub-companies and investing in them as well as startups.
Some of the entities that are working under the Tata Industries are Tata Cliq, Tata Health, Inzpera Life Sciences, Tata IQ, Tata Class Edge and Studi, among others. In the last few months, some of the startup ventures working under its wing have been moved to other verticals that offer synergies.
A joint venture of Tata Industries and retail venture Trent, Tata UniStore is currently operating Tata Cliq. Tata Cliq moved out of the consumer electronics space whilst its consumer electronics, smartphones and appliances segment were merged with Tata’s consumer electronics retail venture Croma.
Sources stated that in November last year, Tata Consumer Products bought food venture Tata SmartFoodz from parent company Tata Industries. Meanwhile, Tata Advanced Materials came under the wing of Tata Aerospace. Employees working in the cited startups were moved into various group organisations as per their skill set and experience.
Further, Tata Sons has moved and added several brands under Tata Neu since its inception. The super app offers access to various brands including BigBasket, 1mg, Tata CLiQ and Croma, among others.
The latest development has come days after Tata Digital grew its authorised stake capital to INR 20,000 Cr from INR 15,000 Cr as it is planning to raise fresh capital from investment holding entity Tata Sons. Meanwhile, its board has reportedly given the approval to raise INR 3,462 Cr in two tranches from Tata Sons. With this, its issued share capital would increase to INR 15,934 Cr.
Besides, medical ecommerce startup Tata 1mg has recently entered the coveted unicorn club after securing nearly $40 Mn in a fundraising round led by Tata Digital. KWE Beteiligungen AG, HBM Healthcare Investments, among others, also participated in the round.
Post the fundraising, Tata 1mg’s valuation has reached $1.09 Bn.
