Tata Digital to get $400 million boost from Tata Sons' TCS dividend

Tata Sons will invest $400 million in Tata Digital, using dividend income from TCS. The funding aims to support the struggling digital arm, which includes BigBasket, Tata 1mg, and Tata Cliq

Tata Sons, the parent company of the $100-billion Tata group, is planning to invest $400 million into Tata Digital, the group’s digital commerce division, according to a Moneycontrol report quoting sources.

 

This capital is expected to come from the dividends Tata Sons earned from Tata Consultancy Services (TCS), according to the report. Tata Digital comprises consumer-facing platforms like BigBasket, Tata 1mg, and Tata Cliq.

 

The report also mentioned that Tata Sons is not considering selling more of its stake in TCS to fund this initiative. In 2024, the company sold TCS shares worth over ₹9,300 crore to strengthen its finances.

 

 

During FY25, Tata Sons received more than ₹32,700 crore in dividends from TCS, where it holds a 71.77 per cent stake. Tata Sons and Tata Digital did not respond to emails seeking comment by the time of publication.

Struggles of Tata Digital

The funding plan comes at a time when Tata Digital is struggling to gain a strong foothold in India’s highly competitive e-commerce sector. This has made it hard to attract funds from external sources.

 

Launched in 2021 with high expectations, Tata Digital aimed to build a “super app” named Tata Neu. This platform was designed to combine services like grocery delivery (BigBasket), healthcare (Tata 1mg), and lifestyle shopping (Tata Cliq), among others. The idea was to take on major players such as Amazon, Flipkart (owned by Walmart), and Reliance Retail.

 

Despite these efforts, Tata Neu has not grown as quickly as the group had hoped. Over the last three years, Tata Sons has already invested $2 billion into Tata Digital. However, its services are trailing behind competitors.

 

Quick commerce players like Blinkit and Zepto have edged past BigBasket, thanks to faster delivery services and better reach in urban areas.

Leadership changes at top

Frequent leadership changes have added to Tata Digital’s challenges. Pratik Pal, the founding CEO who launched Tata Neu, stepped down in February 2024 after facing difficulties in turning the platform into an integrated consumer app.

 

His successor, Naveen Tahilyani, who took over as CEO and Managing Director in February 2024, left the role in May 2025 — just 15 months later — to take up a global position at Prudential Plc.

 

As rival companies continue to secure large investments from public and private markets, the latest funding from Tata Sons will be vital for Tata Digital as it seeks to revive and strengthen its position in the market.