Mumbai: Tata Sons infused capital into Tata Digital at a lower valuation in April, for the first time marking down its value, at a time when its cash burn and weak consumer acceptance have attracted scrutiny from the trusts controlling the Tata Group.
Tata Sons infused just under ₹3,000 crore in Tata Digital at a valuation of $10.3 billion, which is 5.5% lower than the valuation at which the company last received capital in February 2025. Back then, Tata Sons had infused just under ₹4,000 crore in the privately owned company.
The markdown comes at a time when Tata Trusts chair Noel Tata has sought a clear roadmap from Tata Sons chair N. Chandrasekaran on the group’s new businesses, including Tata Digital and Air India, which are .
Tata Sons owns 99% of Tata Digital, while Ratan Tata Endowment Foundation (RTEF) owns 1%. They invested ₹2,970 crore and ₹30 crore, respectively, in Tata Digital, valuing its shares at ₹47.75 each, according to a disclosure filed with the ministry of corporate affairs last week.
Markdown
In February 2025, the duo had invested ₹4,000 crore at ₹52.1 a share, according to separate filings reviewed by Mint. RTEF is a not-for-profit entity set up in 2022 by the late Ratan Tata, the former chairperson of Tata Trusts and Tata Sons.
At these valuations, Tata Digital’s per-share value declined by 8.35%. The pre-money valuation, before the ₹3,000 crore infusion, fell by 4.7%, while the post-money valuation declined by 5.5%, from ₹1,03,688 crore in February last year to ₹98,031 crore. The difference between pre- and post-money valuations is due to the increase in shares between the two investment periods in February last year and in April, as well as a smaller investment than in the last period.
The latest cash infusion came just a few weeks before top executives of the new ventures—Air India CEO Campbell Wilson, Tata Electronics CEO Randhir Thakur, Agratas CEO Thomas Flack and Tata Digital CEO Sajith Sivanandan—briefed the Tata Sons board in May about the performance of their businesses. A three-year roadmap detailing performance and capital requirements for the businesses was shared with the six-member Tata Sons board, including Noel.
An email sent to Tata Digital seeking comment went unanswered.
The Everything App
Tata Digital was founded in 2019 with the lofty ambition of building a one-stop app offering everything from shopping to cab-hailing. It was the first of the new business bets made by Chandrasekaran after his appointment as Tata Sons chair in February 2017.
Including the latest infusion, the Tata Group has invested ₹26,306 crore in Tata Digital till date. The company also had about ₹9,000 crore in bank borrowings by FY25 end, with accumulated losses of ₹16,958 crore. It is expected to file FY26 earnings with the ministry of corporate affairs by August.
Put simply, Tata’s effort to build an everything-app has resulted in nearly ₹17,000 crore in losses, after investments of over ₹26,000 crore over seven years.
Despite the heavy cash burn, Tata Neu, the everything-app developed by Tata Digital, has until now.
The markdown in Tata Digital’s valuation should not be read as a collapse in confidence, but it does indicate a reset in expectations, according to Saptarshi Purkayastha, professor (Strategic Management), Indian Institute of Management Calcutta.
“The lower valuation suggests that Tata Sons may now be applying a more disciplined lens to capital allocation,” he said. “In my opinion, for Tata Digital’s leadership, the reported markdown may represent an important moment of reassessment. The mandate is unlikely to be only about building a large super-app ecosystem; it will increasingly be about demonstrating the economics of that ecosystem.”
Future funding
Future funding for Tata Digital could become more closely linked to operating milestones such as customer retention, cross-selling, technology integration, operating leverage and a clearer timeline for narrowing losses, Purkayastha said. He argued that Tata Digital has strong consumer-facing businesses and platforms in BigBasket, Croma, Tata 1mg, Tata CLiQ and the Tata Neu ecosystem.
“These businesses give Tata Digital access to significant consumer touchpoints, but the bigger question is how effectively these can be converted into profitable and repeat customer engagement,” he said.
Tata Neu has faced several challenges. Firstly, Tata Digital’s attempt to integrate BigBasket, 1mg, Air India and Tata CliQ, among other services, into a unified super-app did not resonate with consumers, according to one Tata executive, who spoke on the condition of anonymity. Additionally, frequent CEO changes led to shifts in strategy. Tata Digital has had three leaders in its seven-year history: Pratik Pal, followed by Naveen Tahilyani and the current CEO Sivanandan, who took charge in September last year.
Tata, which has paid over ₹7,000 crore to acquire startups like BigBasket, 1mg and Curefit has struggled to merge them.
BigBasket was among the leaders in grocery delivery when Tata in May 2021. However, it fell behind as Blinkit, Instamart and Zepto pushed ahead with quick commerce. As BigBasket rewired its operation, it lost money in a crowded space.
Digital ambition
“The larger problem with Tata Digital for me is that after seven years in the business, one will still struggle to define what problem they are trying to solve,” said Satish Meena, founder of Datum Intelligence, a Gurugram-based market research and consumer analytics firm.
“To start with, a super-app ambition was flawed because Tata lacked a high-frequency product that consumers would buy. Today, none of its businesses, including BigBasket and 1mg, are among the top 3 in their respective categories. In the consumer internet, unless you are a leader and cannot scale, you will continue to lose money,” Meena said.
One sign of the scepticism on the Tata’s digital ambition is the absence of an external investor. In contrast, Reliance Industries Ltd raised about ₹75,000 crore for its retail business from sovereign wealth funds, including the Abu Dhabi Investment Authority, and Singapore’s GIC, as well as private equity giants such as Silver Lake Partners and KKR in 2020.
This continued underperformance prompted Noel Tata, who built Trent Ltd before taking over as the Chair of Tata Trusts in October 2024, to question the roadmap for Tata Digital at the Tata Sons’ board meeting on 24 February. This prompted the six-member board of Tata Sons to defer a decision on granting a third term, which is to start in February next year. Tata Sons is expected to discuss Chandrasekaran’s term at its board meeting on 12 June, although the agenda for the meeting has not yet been shared with board members.