Tata Sons, the holding company of the Tata group, is looking at options to raise funds from global private equity firms and strategic investors by selling small stakes from a few firms. The company wants to do this so that it can expand new business like e-commerce and clean energy.
Tata group looking to raise Rs 5,000 crore
The Tata group is initially looking to raise at least ₹5,000 crore through potential stake sale in group companies, including Tata Consumer Products Ltd., Tata Power and Tata Realty & Infrastructure. The sources said on condition of anonymity, “Tata Group is looking to raise capital either through preferential allotment in individual Tata companies or through fresh issuance through sale of promoter stake in the next six months. ”
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What is the purpose of Tata
Sources said the proposed fund-raising will be aimed specifically at investing in the TataNeu super-app venture, the group’s ambitious Tata digital project. In a regulatory filing last week, Tata Consumer Products said its board will meet on Tuesday to consider raising funds by issuing preference shares equal to 1.5% of its paid-up equity capital to overseas buyers. Sources also said that Tata Group has approached Goldman Sachs and JP Morgan as potential investors. According to sources, the fund raising process will be completed in several phases. However, a Tata Sons spokesperson declined to comment on the matter.
Funds will also be used to reduce debt
A part of the planned fund raising can be used to reduce the debt of the Tata group. The fund can be used to meet the working capital requirements of the new venture of Tata Sons. This includes airline company Air India, renewable energy business and Tata’s super-app.
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Full focus on TataNeu
Tata is looking to further strengthen its e-commerce business, which includes TataNeu. It has already been given a soft-launch for Tata Group employees and plans are being made to officially launch it for the masses during the ongoing Indian Premier League.
Sources said the raising of equity capital from investors will help strengthen the TataNew initiative and also help it become financially stronger and challenge its rivals in the digital space. Let us tell you that TataNeu of Tata Group can give tough competition to Jio Platforms, the digital property business of e-commerce firm Amazon, Walmart-Flipkart and Mukesh Ambani’s company RIL.