Tata Sons is reportedly set to inject around USD 1 billion (Rs8,300 crore) into Tata Digital over the next few years.
What Happened: This move comes as Tata Group‘s parent company halts external fundraising for its e-commerce venture, Tata Neu, awaiting a review of its digital strategy with the recent appointment of a new CEO, Economic Times reported, citing sources.
The decision to seek external investors for Tata Digital will be reconsidered after the new CEO is in place to focus on execution and scaling, one source revealed, the sources said.
Earlier this week, Naveen Tahilyani, former managing director of Tata AIA Life Insurance, was appointed as the CEO and managing director of Tata Digital, replacing Pratik Pal.
Tata Sons has already invested over USD 2 billion (Rs16,600 crore) in Neu and has board approvals for further capital infusion over five years.
Growth Rush: Chairman N Chandrasekaran had reportedly been impatient about the super app’s growth and sought a seasoned executive with a consumer background to drive Neu’s expansion. With Tahilyani’s expertise, the company aims to enhance operational efficiency, and agility and scale up its business.
Neu has initiated the integration of Air India on its platform, with a focus on expanding its fintech vertical in the future.
While Neu is refining its operational strategies, it will prioritise profitability and address customer grievances regarding app glitches, user experience and payment issues.
Analysts value Tata Digital at around USD 15 billion (Rs 1.25 lakh crore) based on Neu’s gross merchandise value in key categories.
Despite facing challenges in garnering consumer loyalty, Neu has onboarded various Tata Group companies and launched loyalty programs and financial services, including the Tata Neu HDFC card.
(The article is published under a mutual content partnership arrangement between The Free Press Journal and Benzinga)
