In Short:
In FY24, Tata Sons invested nearly ₹10,000 crore in various subsidiaries, including Tata Projects and Tata Electronics, focusing on growth and capital needs. Total unlisted investments rose 16% to ₹70,732.5 crore. However, many recent investments, like Tata Digital and Air India, are still losing money, with Air India reporting a ₹4,444 crore loss last fiscal year.
Tata Sons Makes Bold Investments in FY24
In a powerful display of confidence, Tata Sons has poured nearly ₹10,000 crore into its subsidiaries and associates during the fiscal year 2024. This hefty investment has primarily flowed into various notable ventures including Tata Projects, Tata Autocomp Systems, Tata Electronics, Agratas Energy Storage, and other players such as Tata Realty, Tata Capital, and Panatone Finvest, according to their annual report.
Joint Ventures on the Rise
Moreover, Tata AIA Life Insurance and Tata Play, representing Tata’s growing interest in joint ventures, also experienced an uptick in their investments from the previous year. It’s important to note that all these companies mentioned are unlisted, adding a layer of intrigue to their growing potential.
Challenges in the Investment Landscape
However, the journey hasn’t been smooth sailing. Apart from Wistron, known for manufacturing iPhones for Apple, most of the firms that Tata Sons has invested in over the last four to five years are still grappling with losses. This includes ambitious ventures like Tata Digital and the relaunched Air India.
Investment Overview
By March 2024, Tata Sons saw its total investments in unlisted equity shares across its subsidiaries, associates, and joint ventures surge by 16 percent, reaching an impressive ₹70,732.5 crore.
In its yearly review, the powerhouse holding company emphasized its strategic investments tailored for each business’s capital needs, growth ambitions, and efforts to cleanse their balance sheets. They are keenly eyeing opportunities presented by India’s growth and sectors poised for a transformation influenced by global energy shifts, resilient supply chains, and innovative technology driven by artificial intelligence and data.
Pioneering Innovations
A standout highlight is Tata Electronics, which has proudly become the first Indian company to manufacture premium smartphones and high-precision components at scale. They’re making waves by establishing the country’s inaugural semiconductor fab in Gujarat and a semiconductor assembly and test facility in Assam.
Agratas is also stepping up, developing crucial manufacturing capacities to support the burgeoning new energy landscape in the automotive sector. With plans for a 40 GWh gigafactory in the UK and a 20 GWh plant in Sanand, their ambition is clear.
Losses in Various Segments
Despite the glimmers of innovation, not all is rosy. Tata Digital, encompassing the super app Tata Neu and platforms like Tata 1mg, bigbasket, Tata Cliq, Croma, and Tata Play, posted a staggering loss of ₹1,200 crore against a turnover of ₹420 crore for FY24.
The online pharmacy Tata 1mg Healthcare Solutions also felt the pinch with losses amounting to ₹339 crore.
Furthermore, Air India, gearing up for its merger with Vistara to be finalized in November, recorded a massive loss of ₹4,444 crore in the last fiscal year. Also facing challenges, Tata Electronics reported losses of ₹1,022 crore.
