Tata Digital Explores $1 Billion Stake Sale: Plans Formal Process with Global PE Funds

2 Jan 2024 , 02:23 PM

Tata Sons is initiating the formal process of selling a minority stake in Tata Digital Pvt. Ltd (TDPL) to raise approximately $1 billion from global private equity funds.

The discussions are currently at an informal level with bulge-bracket private equity funds, with plans to commence a formal process soon. A proposal for the stake sale will be presented to the board after completing the valuation exercise and finalizing a tentative list of investors.

TDPL, a Tata Sons subsidiary, was established in 2019 to develop the Tata Neu super app, a consolidated e-commerce platform hosting various Tata businesses.

The deal, if successful, is expected to be finalized before March this year. TDPL encompasses the Tata Neu digital platform, consumer brands like Croma, loyalty programs of various brands, and digital payment services like Big Basket, IHCL, Starbucks, Vistara, and Tata Cliq.

The fundraising aims to retire part of the company’s debt and inject equity into growth-stage businesses requiring capital infusion.

The interest of investors lies in loyalty programs and businesses like Croma, known for high customer retention and return rates.

If successful, this will be the third instance in recent years where a Tata group company brings in a private equity investor, following Tata Motors and Tata Technologies.

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