TataNeu could be worth $15 billion as it is in position to clock $20 billion in sales by the end of this decade.- JM Financial has based this prediction on the gross merchandise value (GMV) of key categories on the superapp.
- The company’s GMV currently stands roughly around ₹16,000 crore ($2 billion).
This could be a natural transition for the steel-to-tech-to-auto conglomerate which also has various consumer interest businesses including retail stores like Westside, Croma, FMCG brands from tea to salt, and also owns the grocery delivery app, BigBasket.
“We believe there is a lot of value in the Tata ecosystem that Tata Digital can help unlock. Based on the gross merchandise value of key categories on
In fact, the report compares it to the e-commerce pivot of US retail giant, Walmart — and can successfully leverage online and offline shopping experience — something even Amazon and Jio are trying to achieve. But, it comes with its own risks.
“While Tata is ticking all the right boxes in their digital shift, the mere enormity of this transition makes this an audacious endeavour. Drawing lessons from Walmart’s pivot to e-commerce, we believe Tata will need sustained investments in this space to succeed,” the report noted.
JM Financial has also not accorded any value to Tata Pay, its own UPI service and other categories in the TataNeu bubble such as food and travel. It expects the company’s valuation to evolve with addition of new products and services.
Tata Digital is yet to add existing brands like Vistara, Air India, Tanishq, Titan and others to the
“One thing is certain though. If executed well, there is a lot of value within the Tata group which Tata Digital can help unlock,” the report noted.
If all works fine, JM Financial believes that TataNeu’s GMV could increase to ₹1.54 lakh crore (approximately $20 billion, at current conversion rate) by the end of this decade. The company based this prediction on the gross merchandise value (GMV) of key categories on the superapp.
Its GMV — total value of merchandise sold over a given period of time — currently stands roughly around ₹16,000 crore ($2 billion).
Note: ‘E’ in FY2022E stands for estimates.
JM Financial highlighted that it is difficult to accurately ascribe value to TataNeu due to lack of granular data around the number of users and GMV as it is early days of the app's launch. However, it emphasized that the valuation of the company should be akin to valuing an e-commerce company.
TataNeu, which rolled out a little over eight months ago, was only open for 800,000 Tata Group employees and their friends and family till its formal launch in April. The superapp began with a cumulative consumer base of 120 million users and 2,500 offline stores, along with an 80 million app footprint across its digital assets.
JM Financial believes that TataNeu is well placed to take market share away from its existing competitors like Flipkart, Amazon, Reliance Retail/JioMart.
“Tata’s leadership in the fast-growing e-grocery segment (through Big Basket) and compelling omnichannel offerings in two of the largest ecommerce categories – lifestyle and consumer electronics – position it well to take market share away from the incumbents,” JM Financial said.
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