Tata Sons to Invest $400 Million in Tata Digital to Revive Its Struggling E-Commerce Business

Tata Sons is set to inject $400 million into Tata Digital, its e-commerce venture, amid rising challenges in India’s competitive digital retail market, as per a Moneycontrol report. The capital will be sourced from TCS dividends without diluting any equity in the IT major, signalling the group's commitment to turn around the digital vertical.

$400 Million Infusion to Revive Tata Digital's Position

The $100 billion Tata Group is leaning on the strong dividend stream from Tata Consultancy Services (TCS), which yielded over ₹32,700 crore in FY25, to bolster its digital arm. This $400 million capital injection is intended to stabilise Tata Digital, which includes BigBasket, Tata 1mg, and Tata Cliq—platforms that have yet to gain significant traction compared to rivals Flipkart, Amazon, and Reliance Retail.

Continued Losses Despite Prior $2 Billion Investment

Since its 2021 launch, Tata Digital has absorbed $2 billion from the Tata Group. However, it continues to underperform amid fierce competition in the quick commerce and e-pharma segments. Platforms like Blinkit and Zepto have outpaced BigBasket, particularly in urban markets, due to faster delivery models and broader reach.

Read More: TCS Faces Employee Backlash as New 35-Day Bench Policy Creates Anxiety!

Leadership Challenges Reflect Deeper Issues

Frequent top-level changes have also impacted growth. Founding CEO Pratik Pal resigned in February 2024, followed by a brief stint as CEO and MD Naveen Tahilyani, who exited in May 2025. This volatility has made external funding difficult, prompting reliance on internal reserves to fuel operations and strategy shifts.

Focus on Internal Strength Over Stake Sale

This funding will occur without any stake dilution in TCS, where Tata Sons holds a 71.77% stake. Earlier in 2024, the company had sold ₹9,300 crore worth of TCS shares for balance sheet restructuring, but opted now to preserve its position in the IT leader while supporting newer ventures.

Conclusion

Tata Sons' $400 million investment highlights its resolve to sustain and grow Tata Digital despite fierce market pressure and past underperformance. As the group pivots away from external fundraising, this internal support may be crucial to its digital transformation ambitions.

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