According to reports, Tata digital is pursuing additional funds from the holding company, Tata Sons, to support the growth plans of its determined digital retail initiative as negotiations with global firms which have slowed-down due to geo-political issues. The wholly owned subsidiary of Tata Sons is understood to have sought working capital funds in recent weeks.

The group is expected to make an interim investment of around $500 million as Tata Digital needs to expand aggressively to take on entrenched incumbents like Amazon Inc, Wal-Mart, besides Reliance Group’s Jio platforms. This fund infusion of $ 500 million would be done in multiple tranches, as per reports.

Besides, investors appear to be reluctant to commit funds until clarity emerges on the consumer response to the official launch of the Super App called Tata Neuto- which is now expected to be in April 2022.

Tata Digital has estimated a valuation of $ 18 billion and more for the digital entity, which includes Big Basket, online pharma store 1 mg, Croma and Tata Cliq. Investors are however keen to assess the scale of revenues or gross merchandise value that Tata Digital can offer within a year if operations.

Some of the sovereign and pension funds were looking to participate in the funding round as co-investors and not as lead investors. So, Tata’s wanted to finalize the anchor investor part first to get larger capital access from financial investors, according to the reports.

Reports suggest that, 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. Investors have asked for more details on the operational structure of Tata Digital and its integration plans with existing retail operations of the group such as Trent and Titan.