For Chandrasekaran, who was reappointed as the chairman of Tata Sons for another five years in February, Tata Digital has been his brain child since he took charge as Tata Sons chairman.
He has been closely involved in its growth plans from the beginning as the Mumbai-based conglomerate eyes to make a dent in the Indian ecommerce universe.
Chandrasekaran’s formal appointment is of significance considering its future plans of raising funds from external investors. At present, Tata’s digital strategy is being spearheaded by Pratik Pal, CEO along with Mukesh Bansal, founder of Cultfit-who previously founded fashion ecommerce startup Myntra. "Chandrasekaran helming the entity is also a kind of additional reassurance for external investors about the kind of attention and focus that the digital initiative will get in the Tata system" said an official close to the development.
Tata Sons confirmed the appointment.
People involved in building Tata Neu have echoed Chandrasekaran’s involvement in the project.
In fact, in his first interaction after the Tatas acquired BigBasket, cofounder and CEO Hari Menon had told ET that it was Chandrasekaran who first called him in July 2020 and proposed to discuss a majority investment in the egrocery firm.
“Not just Mukesh and Pratik, but he has been involved with new-age founders and other key executives at Tata Digital while building out the Tata Neu up. This is also a big opportunity for him to showcase how he is taking an traditional Indian conglomerate into the fast growing internet economy in India,” a person who has worked with the Tata Sons chairman said.
ET had reported on February 17 saying Tata Sons had written to the Ministry of Corporate Affairs seeking approval to appoint Chandrasekaran in few more group firms as their board chairperson.
Tata Digital has recently sought additional funds from the holding company, Tata Sons, to support its growth plans of ambitious digital retail initiative as negotiations with global firms are taking longer to materialise because of geopolitical issues and a broader slowdown in big-ticket funding deals.
The group is expected to make an “interim investment” of an estimated $500 million as working capital requirements. Tatas have been in talks with global investors, including some sovereign and pension money managers, to fund its digital foray.
Tata Digital has estimated a valuation of over $18 billion for the digital entity, which includes Big Basket, online pharma store 1mg, Croma and Tata Cliq. Investors are however keen to assess the scale of revenue or gross merchandise value that Tata Digital can offer within the first year.
A bunch of long-term investors including Canada Pension Plan Investment Board, Singapore’s Temasek Holdings, SoftBank Group, Abu Dhabi Investment Authority and two European money managers were among those approached for a potential deal.
Post Tata Neu’s launch last week, it would be critical to see how general consumers adopt to the ecommerce offering of the salt-to-steel conglomerate. The app was being tested with access limited to Tata group employees, for the past several months.
In a statement, Tata Digital, which houses Tata Neu, said the super app “seamlessly blends product commerce, service commerce and financial services into a consumer-first, future-ready, integrated experience”.
Tata Neu has been launched during the Indian Premier League (IPL) and Tatas are the title sponsor of the tournament. Tata-owned brands including BigBasket, 1mg, Croma, AirAsia, IHCL, Qmin, Starbucks, Tata Cliq, Tata Play, and Westside will be available on the super app initially. Vistara, AirIndia, Titan, Tanishq, and Tata Motors will be added soon, said Chandrasekaran.