Tata Sons sought approval for a ₹7,000 crore infusion into Tata Digital’s consumer businesses.
Noel Tata questioned the funding size and aggressive growth assumptions behind the plan.
Tata Digital’s businesses may report nearly ₹9,000 crore in cumulative losses over three years.
Tata Sons management sought approval for an equity infusion of about ₹7,000 crore into the group's digital consumer businesses at its board meeting on May 26, according to a Moneycontrol report.
The proposed funding is intended for consumer-focused digital businesses housed under Tata Digital, including BigBasket, Tata Cliq and other digital ventures, the report said.
1 May 2026
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According to the report, Tata Trusts Chairman Noel Tata raised questions about both the size of the proposed investment and the assumptions underlying the business plan presented to the board.
The proposal included projections showing that the digital businesses are expected to continue reporting losses over the next three financial years as the group invests in customer acquisition, scale and market expansion. The cumulative losses could amount to about ₹9,000 crore during this period, the report said.
The report attributed to people present during the discussions who said the business plan assumed annual revenue growth of around 45% over the next three years. Noel Tata is understood to have questioned whether these assumptions were realistic, given that growth rates across parts of the portfolio are currently lower.
He also reportedly sought clarity on whether the projections adequately accounted for risks arising from intense competition in digital commerce.
Concerns were reportedly raised during the meeting over whether additional capital deployment could be justified based on aggressive growth forecasts when some businesses continue to face challenges related to scale, profitability and cash-flow management.
Focus on Capital Allocation
According to the report, Noel Tata argued that the group should prioritise capital allocation among newer businesses it has entered in recent years.
He viewed Air India and the semiconductor business as projects of national importance and questioned the strategic relevance of retaining certain digital commerce businesses.
One source cited by the publication quoted him as asking, "Air India and semiconductors are projects of national importance. Do we really need to own Tata Cliq?"
Tata Cliq, launched in 2016, is owned by Tata UniStore Limited and operates as an online marketplace for apparel, footwear, beauty and lifestyle products.
Tata Digital was established to consolidate the group's digital businesses across commerce, grocery, fintech, loyalty programmes and consumer engagement. Through acquisitions and investments, the company has built a portfolio that includes BigBasket, Tata Cliq, Tata 1mg, Croma and the Tata Neu platform.
Profitability Remains Under Focus
Tata Digital has been among the Tata Group's most capital-intensive investments in recent years. Although the company reduced losses in FY25, several businesses within the portfolio continue to require significant capital.
The report said BigBasket, Tata Cliq and Tata Neu operate in highly competitive markets alongside players such as Amazon, Flipkart, Reliance Retail, Zepto, Blinkit and Swiggy Instamart.
The publication further reported that BigBasket's market share has declined to about 7% from nearly 40% in 2021.
Earlier, at a board meeting on February 24, Noel Tata had raised concerns about losses at Air India and BigBasket and called for corrective measures, according to the report.
Air India reported a loss of ₹10,859 crore in FY25 and remained the largest loss-making unlisted company within the Tata Group portfolio.
Governance Discussions Intensify
The May 26 board meeting included presentations by executives from Air India, Tata Electronics and Tata Digital, who outlined investment requirements and expected timelines for profitability.
The performance of unlisted businesses, including Air India and Tata Digital, has become an increasing focus within the Tata Trusts ecosystem, particularly regarding future funding requirements and capital allocation, as per Moneycontrol.
The publication also noted that the discussions come amid broader governance deliberations within Tata Trusts over the future structure of Tata Sons. Previously, Moneycontrol reported that Noel Tata had conveyed concerns to the Reserve Bank of India and other government stakeholders regarding the potential public listing of Tata Sons.
According to the report, Tata Trusts believes Tata Sons has historically operated as a source of long-term capital for strategic businesses and that a public listing could alter that approach by increasing pressure to meet short-term shareholder expectations.
