The Tatas project to invest Rs 3,500 crore on their eCommerce venture Tata Cliq and have increased the authorised share capital of the firm from Rs 1,500 crore to Rs 5,000 crore for this.
In its recent regulatory filing to the Registrar of Companies, Tata Unistore Ltd, which owns Tata Cliq, said the board of directors has recommended an increase in the authorised share capital of the company through the issue of equity shares, considering the funding requirements to enable it to run its firms effectively.
The paid-up share capital of Tata Unistore is Rs 1,203.12 crore as per the fillings. The company has also increased its borrowing limit to Rs 490 crore. The development is a clear indication that Tatas will be opening up their chest in the coming years and intends to be in the eCommerce business for the long haul, said Mohit Yadav, founder of Corporate Intelligence Firm Altinfo that has sourced and analysed Tata Unistore’s financials.
This fiscal, till now, Tata Unistore has raised only Rs 30 crore from its parent last April against Rs 311 crore in financial year 20. As per the last fillings, the company’s revenue increased 144% to Rs 266.03 crore in 2019-20. While its net loss surged by 270.64 crores.
Yadav said Tata’s bet is looking promising with the top line growing at a marginal increase in expenses.
“If Unistore is able to maintain this growth, it can soon become Ebitda profitable”, he added.