Tata Sons Puts New Investments On Hold Until E-Commerce, Electronics Businesses Find Their Ground: Report

Tata Sons, the holding company of the Tata Group, has decided to halt new investments until its e-commerce and electronics businesses stabilise.

What Happened: The conglomerate is prioritising the consolidation of its existing businesses over injecting fresh capital, as per an Economic Times report. This decision is a result of the company’s e-commerce and electronics sectors still being in the process of shaping up.

The decision is viewed as a strategic one, aimed at ensuring the stability and growth of Tata Sons’ current ventures before venturing into new ones. The company is expected to resume its investment activities once the aforementioned sectors have established a solid foundation.

The conglomerate has so far invested ₹19,000 crore in Tata Digital, the holding company of the group’s e-commerce businesses which includes Tata Unistore (which runs Tata Cliq), BigBasket, Tata 1MG Healthcare Solutions, Tata Neu and Infiniti Retail which owns over 500 Croma stores.

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In FY23, the combined losses of Tata Digital, Croma, Tata Cliq and BigBasket reached ₹4,700 crore compared to ₹3,130 crore in FY22. According to the Registrar of Companies (RoC) data, Tata invested equity capital of ₹3,462 crore in FY23 and ₹11,782 crore in FY22 in Tata Digital. It invested ₹12,000 crore into the e-commerce business which is the highest in a single year till now.

On Tuesday, Tata Play reported its losses increased to ₹354 crore in FY24 compared to the loss of ₹105 crore in the previous year.

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