Tata Digital revenue up 3x in FY22; TCS, BSNL close in on $2B deal for 4G

Tata Digital’s consolidated revenue increased three-fold to almost Rs 16,000 crore in FY22 on the back of several acquisitions including BigBasket, which alone contributed Rs 7,238 crore to its top line. On Thursday we reported that the Tata Group is set to hive off Tata Cliq, Tata Cliq Luxury, Tata Cliq Palette and Tata Health to Tata Digital in the next two weeks.

Also in this letter:
■ TCS poised to seal likely $2-billion deal for BSNL 4G
■ Cashfree gets RBI nod for payment aggregator licence
■ Good Glamm to take four beauty brands to int’l offline retail
Tata Digital revenue up three-fold to about Rs 16k crore after acquisitions

Tata Digital, which invests in and operates the Tata Group’s ecommerce vertical, reported a three-fold jump in consolidated revenue to Rs 15,979 crore in financial year 2021-22 (FY22) from Rs 5,315 crore in FY21, according to the latest regulatory filings sourced from Tofler.

Acquisitions drive growth: The spike in revenue mainly came from the company’s acquisition of a majority stake in e-pharmacy startup 1mg, and Supermarket Grocery Supplies Pvt Ltd, the parent company of e-grocer BigBasket.

Yes, but: Losses at the new commerce venture widened more than five times to Rs 3,051 crore in FY22 due to the new acquisitions.


BigBasket leads the way: The major contributor to the increased revenue was BigBasket’s parent company, which added Rs 7,238 crore to the total revenue.

Tata Digital acquired BigBasket in May 2021.

If it had taken place at the beginning of the year, the revenue contribution would have been Rs 8,502 crore, according to the filings.


Tata Digital's consolidated revenue also includes businesses such as Croma, Tata Fintech, Tata Technologies and previous BigBasket acquisitions like DailyNinja and Savis Retail.

More buys? Revenue will likely multiply further this year as Tata Digital may expand its portfolio of companies to include more scalable tech businesses.

One-stop shop: We reported on September 29 that Tata Industries was set to hive off some of its significant startup businesses such as Tata Cliq, Tata Cliq Luxury, Tata Cliq Palette and Tata Health to Tata Digital in the next two weeks as part of a move to consolidate scalable ecommerce entities under one roof.
TCS poised to seal likely $2-billion deal for BSNL 4G

Tata Consultancy Services (TCS) and Bharat Sanchar Nigam Ltd (BSNL) are in the final stages of closing an estimated $2-billion deal (Rs 16,000 crore) to launch the state-run telco’s 4G network, people in the know told us.

First local player: The two companies have bridged differences over pricing and other commercial terms, they said, paving the way for the Tata group-led consortium to emerge as India’s first indigenous telecom network solutions provider in a market dominated by global majors.

“There was a lot of procedural delay on pricing, but it is now expected to be finalised within a few days,” said one person cited above, adding that the Centre is keen to see a closure “as it has been pending for some time.”

The public-private combine is expected to roll out BSNL’s 4G services across 100,000 towers or sites, the person added.

Tejas Networks, a unit of Tata Sons, which is the parent company of TCS, is expected to locally manufacture the network equipment for BSNL.

The state-run telco serves some 111 million wireless subscribers.

Market access: A successful rollout of BSNL’s 4G network could put India in a coveted club of countries — such as the US, Sweden, Finland, South Korea and China — that have developed telecom network technology. The market is dominated by the likes of Sweden’s Ericsson, Finland’s Nokia and China’s Huawei and South Korea’s Samsung.

Cashfree gets RBI nod for payment aggregator licence

Cashfree Payments has received in-principle approval from the Reserve Bank of India (RBI) to operate as a payment aggregator, two people aware of the discussion told us.

Chosen few: With this, Cashfree joins the likes of Razorpay, Stripe, Pine Labs, MSwipe and Innoviti, which have all received the RBI’s nod for a payment aggregator licence. At least 185 fintech firms — including big names like Cred, Razorpay, and PhonePe — had applied for the licence, we reported previously.

The payment aggregator framework, formally introduced in March 2020, says only firms approved by the RBI can acquire and offer payment services to merchants.

Over the past several months, RBI has been holding presentations with payment gateway providers and other fintech firms that have applied for the licence. However, it has been strict in its evaluation of these applications, sources told us.

Scrutiny: Over the past months, some online gateways and payment firms seeking a payment aggregator licence have come under intense scrutiny for issues related to know-your-customer (KYC) guidelines and past dealings with cryptocurrency exchanges and gaming apps.

Good Glamm to take four beauty brands to international offline retail
Darpan Sanghvi
The Good Glamm Group will take four of its acquired beauty brands — Sirona, The Moms Co, St Botanica and Organic Harvest — to international markets, starting with retailing in large stores such as Carrefour, Lulu Mall and BabyShop in Dubai, Qatar and Saudi Arabia, Good Glamm founder Darpan Sanghvi said.

Feminine hygiene brand Sirona and The Moms Co, which makes natural beauty products, will start being retailed in Carrefour and Lulu Mall next month, followed by St Botanica and Organic Harvest.

Online vs offline: The move is in line with Good Glamm’s ambition to compete with traditional fast moving consumer goods companies, which themselves have been taking their D2C brands to physical retail in recent months.

Yes, but: In India, the majority of retail push for these brands will continue to be online.

IPO plans: The Good Glamm Group, which owns the MyGlamm franchise of beauty and personal care products, expects to turn profitable by the next fiscal and launch its initial public offer by mid-2024, Sanghvi said.

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US, Europe downturn and WFH hit office space leasing in India

A slowdown in the US and Europe, which is delaying expansion by multinationals, and a slow return to office in the technology sector are threatening to affect office space leasing in India, according to experts at global property consultancy firms.

Driving the news: More than a dozen requests for leasing office space have been withdrawn in the past six weeks, they said. Many of the companies are also resizing their operations, which means they may cut down on office space requirements as well.

Amazon, which has taken half a million sq ft from DLF in Gurgaon, has decided to not exercise its option to lease another 100,000 sq ft for now, said one of the people we spoke to.

“Paytm, which had taken 550,000 sq ft in Noida, is looking for another tenant to fill the space since its own employees are still working from home,” he said. “Many other companies are also doing the same as return to office has been slow.”

Techies shun offices: According to property consultants, up to 45% of the employees have returned to offices since the pandemic. While this has been 80% in the BFSI sector, in IT, which employs millions and occupies large office space in India, only 30-35% have returned on a regular basis.
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New US Bill seeks to give H-1B visa holders a faster path to citizenship

A new bill introduced in the US Senate, which intends to offer citizenship to certain categories of people, would benefit Indian tech workers in the US if passed.

Details: Under the Renewing Immigration Provisions of the Immigration Act, introduced in the Senate on Wednesday, an immigrant who has lived in the US continuously for a period of seven years could qualify for a green card.

The bill was introduced by Senator Alex Padilla and co-sponsored by Senators Elizabeth Warren, Ben Ray Lujan and Dick Durbin. A companion bill was introduced in the House of Representatives by Congresswoman Zoe Lofgren, who is also Chair of the House Subcommittee on Immigration.

Decades-long wait times: The legislation would provide a pathway to a green card for up to eight million people, including H-1B visa holders, children of long term visa holders, dreamers and others. If approved, the bill could benefit Indians the most as they currently face wait times running into decades for permanent residency on account of country quotas.
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