Tatas set to invest another Rs 3,500 crore in Tata Cliq as FY20 revenue more than doubles

The Tata Group is set to infuse another Rs 3,500 crore equity capital in its ecommerce venture Tata UniStore, which owns Tata Cliq as the ecommerce platform sees strong growth.

Acording to a report in the Economic Times, 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 the board of directors has recommended increase in authorised share capital of the company through issue of equity shares, considering the funding requirements to enable it to run its business effectively.

At present, the paid-up share capital of Tata UniStore is Rs 1,203.12 crore as per the filings, the publication mentioned. The company has also increased its borrowing limit to Rs 490 crore.

Mohit Yadav, founder of corporate intelligence firm Altinfo told the 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 ecommerce business for the long haul.

So far this fiscal, Tata UniStore has raised only Rs 30 crore from its parent, in last April, against Rs 311 crore in FY20, Rs 292 crore in FY19, and Rs 224 crore in FY18.

The business daily citing latest filings of the company, mentioned that its’ revenue increased 144% to Rs 266 crore in 2019-20 while its net loss surged 9.7% to Rs 270.64 crore.

Yadav said Tatas’ bet is looking promising with the topline growing at a marginal increase in expenses. “If UniStore is able to maintain this growth, it can soon become Ebitda profitable,” Yadav added.

In its director’s report, Tata UniStore said the company continues to scale on a year-on-year basis and attributed the financial performance to the current stage of investment in the growth of the business.

“With aggressive growth targets for future years, the company plans to further strengthen its position as a leading omnichannel multi-brand e-retail player in India,” the publication quoted its director’s report as saying.

In the previous financial year Tata Cliq added more than 20 new brands on its platform and this momentum continues this fiscal as well with additions such as Reebok, Adidas, Nike, GAP and American Eagle.

Tata UniStore said it has also been able to start shipping from warehouse with select electronic brands and has added around two million new customers to the platform. It said more than 50% of its business came from repeat customers in FY20.

Worth mentioning here is that Tata Group also has plans to roll out a SuperApp for all its ecommerce platforms including its proposed acquisition of online grocer BigBasket.