The Tata Group is planning to invest another Rs 3,500 crore equity capital in its e-commerce venture Tata Cliq as the platform sees strong growth. Tata Cliq is owned by Tata UniStore.
Tatas have increased the authorised share capital of the company from Rs 1,500 crore to Rs 5,000 crore. In its latest regulatory filing to the Registrar of Companies, Tata UniStore said that the board of directors has recommended an increase in authorised share capital of the company through the issue of equity shares, considering the funding requirements to enable it to run its business effectively.
Currently, the paid-up share capital of Tata UniStore is Rs 1,203.12 crore, according to the filings. The firm has also increased its borrowing limit to Rs 490 crore.
Mohit Yadav, Founder of corporate intelligence firm Altinfo, told the leading publication that the development is a clear indication that Tatas will be opening up their war chest in the future and intend to be in the e-commerce business for the long haul.
According to the latest filings, the company’s revenue increased 144% to Rs 266.03 crore in 2019-20 while its net loss surged by 9.7% to Rs 270.64 crore.
Yadav added, “Tatas’ bet is looking promising with the top line growing at a marginal increase in expenses. If UniStore is able to maintain this growth, it can soon become Ebitda profitable.”