KOLKATA: The Tata Group has infused more than INR 1,150 Cr equity into the group’s consumer businesses across retail, ecommerce and white goods in the first quarter of this fiscal year, as per latest regulatory disclosures.
These funding has been made in four entities: Tata UniStore (which owns Tata Cliq), Infiniti Retail (which runs the Croma chain of electronic stores), Voltbek Home Appliances (which is into durables) and Trent (lifestyle chain Westside and Star hypermarket)
As per disclosures with the Registrar of Companies (RoC), sourced from business intelligence platform Veratech Intelligence, these equity investments have been done by Tata Sons, Tata Industries, Tata Investment Corporation and Voltas which are the parent entities for these companies. Tata’s media relation agency said the Tata Group spokesperson would not comment for this story.
“Consumer businesses will face damp demand for at least a couple of quarters or maybe more and may need to tide over cash flow gaps thro-ugh fund infusions from their investors,” said Devangshu Dutta, the chief executive at consultancy firm Third Eyesight. “It can be either through equity or debt.”
Tata Industries invested INR 92.7 Cr in two tranches for shares allotted on a rights basis in Tata UniStore, which analysts said would be to beef up the eCommerce business, Tata Cliq.
As much as INR 950 crore in this round of funding has gone to the retail business, Trent, which allotted equity, shares on a preferential basis to Tata Sons. The company would raise additional funds up to INR 600 crore this fiscal year by the issue of equity shares or other securities through qualified institutional placement or rights issue or any other mode, it said in the RoC filing. Trent will be utilizing the funding for the expansion of its store network.
Tata Industries invested INR 92.7 Cr in two tranches for shares allotted on a rights basis in Tata UniStore, which analysts said would be to beef up the eCommerce business, Tata Cliq. Last fiscal year, Tatas invested INR 292 Cr in this entity. Infiniti Retail issued equity shares to Tata Sons pursuant to the conversion of compulsory convertible debentures raising INR 50 Cr.
In the consumer electronics entity, Voltbek, INR 70 Cr of equity infusion has been done by the Tata Group and INR 70 Cr by its JV partner, Turkey’s Koc Group. Tatas had invested INR 118 Cr in the share capital of Voltbek in 2018-19, taking its total investment in the company through FY19 to INR 197 Cr. Voltbek launched its operations last September, selling refrigerators, washing machines and is also setting up a new plant for localized products.