Tata 1mg plans to raise $200 million; Novo, CPPIB show interest but seek lower valuation: Report

1mg

Tata Group's loss-making online pharmacy 1mg is looking to raise $200 million of primary capital to fund its next phase of growth, Economic Times reported. Novo Holdings, the controlling shareholder of Danish diabetes drugmaker Novo Nordisk, Canadian pension fund CPPIB, Permira and Chrys Capital have shown interest to invest in the company, the report added.

This is part of the larger capital raise of Tata Digital units including grocery delivery platform Big Basket, the report said. Notably, 1mg is currently seen as one the best performing businesses in the Tata Digital portfolio, the report further said.

'Prospective investors disagree on valuation'

However, the four prospective investors are not agreeing to the $1.25 billion post-money valuation pegged in 2022 and have instead suggested a $750-800 million valuation instead, ET cited its sources as saying. Some of them have even sought board seats and other affirmative rights, which Tata has not agreed to.

'Tata Sons may infuse $75 million if disagreements persist'

If these issues are not resolved between the salt-to-software group and the prospective investors, then Tata Sons may choose to infuse around $75 million on its own and seek external capital for the rest, as the business needs $125 million of fresh capital, Economic Times said.

Moneycontrol couldn't independently verify the report.

Tata 1mg, previously knowns as 1mg, was hived off from healthtech platform Healthkart in 2015 as a separate online pharmacy entity. Under Healthkart, the online pharmacy vertical was called HealthkartPlus. After spinning it off as 1mg under 1mg Technologies, the company raised $6 million from a bunch of investors.

In 2021, 1mg was acquired by Tata and as per media reports, Tata Digital spent over Rs 700 crore to buy about 63 percent stake in the startup that was rebranded as Tata 1mg.