On June 10, one of India’s biggest conglomerates–the Tata Group, through its 100% subsidiary, Tata Digital officially announce that it was acquiring a majority stake in ePharma company 1MG. This deal has been in the works for some time, but also in line with the series of investments the salt-to-software group has made in the recent past.
While neither of the companies disclosed the amount that is being invested, this move cannot be seen in isolation as it comes at the back of two other acquisitions made by Tata Digital– where in bought a 64% stake in e-grocer BigBasket for $1.2 billion as well as over $75 million for fitness app Cure fit.
“We are delighted to join hands with one of India’s most iconic and respected conglomerates,” said Prashant Tandon, co-founder and chief executive of 1mg, in a statement. “This marks a significant milestone in 1mg’s journey to make high-quality healthcare products and services accessible to customers across India.”
Tata Digital said its investment in 1mg is in line with the groups “vision of creating a digital ecosystem which addresses the consumer needs across categories in a unified manner.”
Experts have lauded the Tata’s move calling it a milestone moment. “This is a milestone moment where a large conglomerate has taken a big step. Paying premia for new-age companies doesn’t normally happen in India. So, this is a very bold and welcome move,” said K Ganesh Founder of GrowthStory.
Rumours are rife about how Tata Digital is a Behemoth in the making and that its so-called super-app can be a tough competitor to Reliance’s ambitious digital plans. Going by its current shopping spree, one can expect many more M&A in the future, which will make up for the late start of this digital game.
The game-plan seems straightforward, building a consumer-centric digital business and leveraging its existing brand like Titan, Trent, Voltas, Taj Hotels, Croma etc.
Rehan Yar Khan of Orios Venture Partners thinks that this is precisely why Tata’s strategy works. “I pay top dollars for a market leader, but then I spend a little less on smaller companies. Then, I cross-pollinate and combine all of this in one Super App and can cross-market it to my user base.”
How and when this Super-App takes shape remains to be seen but seems like all hands are on deck to get things going.
