Kolkata: The Tatas plan to invest Rs 3,500 crore on their ecommerce venture Tata Cliq and have increased the authorised share capital of the company from Rs 1,500 crore to Rs 5,000 crore for this. In its latest regulatory filing to the Registrar of Companies, Tata UniStore Ltd, which owns Tata Cliq, said the board of directors has recommended increase in authorised share capital of the company through issue of equity shares, considering the funding requirements to enable it to run its business effectively.
The paid-up share capital of Tata UniStore is Rs 1,203.12 crore as per the filings. 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 war chest in the future 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 FY20, Rs 292 crore in FY19, and Rs 224 crore in FY18. As per the latest filings, the company’s revenue increased 144% to Rs 266.03 crore in 2019-20 while its net loss surged by 9.7% to Rs 270.64 crore. 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 said. Anemail sent to Tata UniStore CEO Vikas Purohit and its media relation agency remained unanswered as of press time Wednesday.