Tata Digital is set to partially exit its investment in Cult.fit by selling nearly 46% of its shareholding through the company's upcoming initial public offering (IPO). According to the Cult.fit's Draft Red Herring Prospectus (DRHP), this will be Tata Digital's first partial exit from a new-age company investment made under the Tata Group's digital commerce strategy.
According to the DRHP, Tata Digital currently holds around 34.4 million shares in Cult.fit. As part of the IPO's Offer for Sale (OFS), the company plans to sell approximately 15.9 million shares, representing about 46% of its total holding.
Tata Digital had invested ₹360 crore in Cult.fit in August 2021 by purchasing 11.9 million compulsorily convertible preference shares (CCPS) at ₹304 per share.
Following the conversion of these preference shares into equity and a subsequent 2:1 bonus issue, Tata Digital's effective acquisition cost works out to approximately ₹105.35 per share, according to the DRHP.
The DRHP also disclosed that Tata Digital did not fully subscribe to all the preference shares allotted during the 2021 investment.
The company paid only ₹0.10 per share on 6.38 million Series E2 CCPS and did not pay the remaining ₹283.90 per share. As a result, the Cult.fit board forfeited these shares on March 29, 2022, with the board formally taking note of the forfeiture on April 18, 2022.
In FY26, Cult.fit reported revenue of ₹1,720.6 crore, up 41.6% from ₹1,215.5 crore in FY25. The company also reduced its net loss to ₹251.9 crore, compared with ₹480.8 crore in the previous fiscal year. Meanwhile, adjusted EBITDA improved to ₹144.8 crore, with the adjusted EBITDA margin rising to 8.41% from -2.76% in FY25.
The company has doubled its revenue over the past two financial years while significantly reducing its losses compared to earlier periods.
According to a LiveMint report, apart from Cult.fit, Tata Digital has also invested in several new-age businesses, including BigBasket and 1mg.
The proposed Offer for Sale (OFS) in the Cult.fit IPO will mark Tata Digital's first partial monetisation of its investments in the new-age startup ecosystem.
Tata Digital plans to sell nearly 46% of its stake in Cult.fit through the company's upcoming IPO, marking its first partial exit from a new-age investment. The proposed OFS comes after Tata Digital's initial investment in 2021 and reflects another key development ahead of Cult.fit's planned public listing.
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Published on: Jul 9, 2026, 11:31 AM IST
Rakesh Deshmukh
Rakesh Deshmukh is a financial content specialist with around 3 years of experience writing impactful content across equities, mutual funds, IPOs, and personal finance. At Angel One, he decodes real-time market trends and breaking news, helping investors and traders stay updated. He also helps investors make informed decisions by simplifying market fundamentals and technical analysis. He holds a bachelor’s degree in commerce.
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