Noel Tata Questions ₹7,000 Crore Tata Digital Funding Plan

Tata Sons asked its board on May 26 to clear roughly ₹7,000 crore (about $820 million) in fresh equity for Tata Digital, the conglomerate’s consumer internet arm. Tata Trusts chairman Noel Tata pushed back, questioning both the size of the request and the growth math behind it, according to people familiar with the discussions cited by Moneycontrol.

The challenge arrives after nearly a decade in which the digital unit became one of the group’s hungriest consumers of capital, with little steady profit to show for it.

The ₹7,000 Crore Ask That Split the Boardroom

Management presented the funding request at a special board meeting, alongside a business plan for the platforms grouped under Tata Digital, including BigBasket, Tata Cliq and the Tata Neu super-app. The infusion would keep the unit’s expansion running while it chases scale in grocery, online retail and consumer payments.

Noel Tata is understood to have questioned whether the plan leaned on assumptions that were too optimistic, and whether the projected losses fully captured the risk of a brutally competitive market. His concern, people present said, was as much about priorities as about the number itself.

One exchange, reported by Moneycontrol, captured the mood. A person present at the discussions recalled the chairman framing it this way:

Air India and semiconductors are projects of national importance. Do we really need to own Tata Cliq?

The reference was to the apparel and lifestyle marketplace launched in 2016 under Tata UniStore Limited. It set the ₹7,000 crore request next to the group’s other capital calls, from aviation to chip making, and asked which of those businesses the house actually needs to keep.

The Growth Math Drawing Scrutiny

At the center of the doubt is one figure. The plan assumed annual revenue growth of around 45 percent over the next three years, even though current growth across much of the digital portfolio runs well below that.

The same projections showed the businesses staying in the red. Tata Digital and its sister platforms were expected to post combined losses of as much as ₹9,000 crore over three financial years as the group keeps spending on customer acquisition and share.

Put together, the request asks the board to fund three more years of losses on the promise of growth few rivals are currently delivering. That is the gap Noel Tata is said to have pressed on.

• 45 percent assumed annual revenue growth over three years
• ₹9,000 crore in projected losses across the same window
• ₹24,000 crore reportedly poured into the digital arm to date

BigBasket’s Slide From Grocery Front-Runner

No business illustrates the pressure better than BigBasket. Once the clear leader in online grocery, its share has fallen to roughly 7 percent, down from a peak near 40 percent in 2021, as quick-commerce rivals rewired how Indians buy daily essentials.

The financial strain shows. In FY25 (the financial year ended March 2025), the grocery business widened its net loss past ₹2,000 crore even as revenue slipped, while marketing and delivery costs climbed. It now fights for ground against a crowded field of better-funded operators:

• Blinkit, the quick-commerce leader now part of Zomato’s listed parent
• Zepto and Swiggy Instamart, the fast-delivery challengers burning cash for share
• Amazon, Flipkart and Reliance, the broad e-commerce incumbents with deep balance sheets

Where the Digital Capital Went

Tata Digital was built to pull the group’s consumer ambitions under one roof, spanning commerce, grocery, healthcare, electronics and a loyalty layer. Through acquisitions and fresh investment, it assembled a portfolio that reads like a map of Indian consumer spending.

The lineup runs from grocery to pharmacy to electronics retail, with Tata 1mg in medicines, Croma in gadgets, the apparel marketplace, and Tata Neu, the super-app meant to tie them together with a single login and rewards currency. The consumer brands grouped under Tata Digital sit under chief executive Sajith Sivanandan.

The cost of building all this has been steep. Tata Sons has reportedly committed more than ₹24,000 crore to the unit through buyouts and expansion, even as profitability stayed out of reach.

There was a bright spot in the latest accounts. Tata Digital trimmed its losses by about 31 percent in FY25, helped by tighter spending at several units.

That improvement sits at the heart of the board’s dilemma: does it justify another large infusion, or argue for spending less and demanding a quicker path to profit?

Air India Leads a Growing Loss Ledger

The digital question does not sit alone. It lands inside a wider debate over how much red ink the group’s unlisted ventures are running, and how patient their owner should be. As of FY25, Tata Sons held stakes in 30 companies, split between 14 listed and 16 unlisted entities.

Every one of the listed companies turned a profit. The biggest single weight among the unlisted businesses was Air India, which Tata Sons took back into the fold when the takeover completed in January 2022. The carrier reported a loss of ₹10,859 crore in FY25, even after Tata Sons and Singapore Airlines injected fresh capital during the year.

Across all the unlisted ventures, combined losses reached about ₹25,568 crore in FY25, up more than 58 percent on the year, according to the unlisted-venture losses detailed in Tata Sons’ FY25 annual report. The scale of those bets is also laid out in the group’s ₹29,000 crore venture-loss roadmap for the fiscal year, which projects far steeper near-term spending than earlier internal estimates.

What June 8 and June 12 Decide

A verdict on the funding is not expected on its own. Trustees of Tata Trusts, the charitable bodies that control Tata Sons, are due to meet on June 8, and the Tata Sons board reconvenes on June 12, when capital allocation, governance and the future of chairman N Chandrasekaran are all set to come up.

At the May 26 session, chief executives of three of the group’s costliest new bets, Air India’s Campbell Wilson, Tata Electronics’ Randhir Thakur and Tata Digital’s leadership, laid out the case for continued investment and their timelines to profit. People present described the tone as cordial, with no formal decisions taken, though the differences over how fast to keep funding long-gestation businesses were plain.

Those same tensions feed into the June 8 Tata Trusts review of underperforming divisions. Tata Sons and Tata Trusts did not respond to requests for comment.

If the trustees back the plan, the digital arm gets three more years to prove a 45 percent growth case that rivals are not currently matching. If they hold the line, Tata Sons starts rationing capital among its newest bets, and the question of which consumer businesses the group still needs to own moves from the boardroom to the balance sheet.