Tata Group is gearing up to raise $1.3 billion to support its BigBasket and Tata 1mg digital ventures. The group has appointed global investment banks Citi and Moelis to manage the fundraising process.
Investment Details
Out of the $1.3 billion, $1 billion is slated for BigBasket, the online grocery delivery platform, while $300 million will be directed towards Tata 1mg, the digital healthcare platform. Both companies are part of the Tata Digital ecosystem.
The Strategic Push
The investment is intended to strengthen the group’s competitive advantage in the online healthcare and quick commerce businesses. Tata Sons earlier this year voiced concerns that BigBasket was trailing behind its competitors such as Blinkit and Zepto. Tata Sons Chairman N Chandrasekaran stressed that these businesses needed to show profitability since the group’s capital assistance cannot go on forever.
Performance Insights
BigBasket has seen steady growth despite the challenges. Its revenue from operations grew by 6.27% in FY24, reaching Rs 10,061.9 crore, while losses shrunk by over 20%. The company targets total sales of Rs 12,400 crore ($1.5 billion) in FY25. On the other hand, Tata 1mg recorded a 20% revenue increase to Rs 1,968 crore in FY24, with losses reducing by 75% to Rs 313 crore.
Future Plans
BigBasket plans to expand its dark store network to 700 locations, including tier II–IV towns, while integrating offerings across Tata brands like Croma, Zudio, 1mg, and Carat Lane. Tata 1mg aims to enhance its express delivery network and strengthen its physical presence.
Investor Interest and Future Outlook
Potential investors are Canadian pension funds and Asian sovereign funds such as Temasek. While there are some investors thinking of exiting, an IPO for BigBasket is not in the pipeline at present.
With the continuing strategic investments, the Tata Group aims to strengthen its presence in India’s rapidly changing digital commerce space.
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