Tata funds pause is no 'debt-errent' at 1mg, BigBasket
1mg has secured board approval for a major offline expansion to be financed through debt, while the group’s egrocer, BigBasket, will go for an equity and debt mix of $80-100 million, multiple people aware of the plans said.
The two biggest assets at Tata Digital will increase reliance on debt capital to fuel expansion this financial year after parent Tata Sons’ nudge, they said. This is a significant change in stance for the salt-to-software conglomerate that has deployed over $2 billion over the past two years into superapp Neu and the businesses on it.
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Offering CollegeCourseWebsiteIndian School of BusinessISB Product ManagementVisitMIT xPROMIT Technology Leadership and InnovationVisitIndian School of BusinessProfessional Certificate in Product ManagementVisit“Since both 1mg and BigBasket have significant investment plans this year, the best instrument for capex is debt without diluting equity,” said one person cited above.
ET reported in its Wednesday edition that the Tatas want the group’s digital arm to stabilise operations on Neu before it allocates further funds.
An email sent to Tata Digital didn’t elicit any response on the matter.
The company last infused capital in the online grocer and epharmacy late in 2022. While BigBasket received $200 million, 1mg turned unicorn with $41 million.
The capital required by BigBasket is much higher than what will be needed by its Gurgaon-based group peer.
“There will be a price war in quick commerce,” said a
