However, funding will not be a problem for Tata Sons as it enjoys the existing steel upcycle, the consistent performance of TCS and the impressive market capitalization growth of its operating companies. The market value of its investments is over Rs 12 lakh crore against its debt of Rs 25,396 crore, putting Tata Sons in a comfortable position. It also allows it to raise capital by monetizing its investments.
Recently, the holding company of Tata Group Spent a lot of money to buy bigbasket, 1MG and Tejas Network, among others, and is planning to spend more to beat the competition. However, some trackers at Tata Sons object and feel that aviation, which has been touted as a capital-intensive and money-losing venture, may drag down the salt-to-software conglomerate. Internally, Bombay House, the Tata Group’s headquarters in Mumbai, has forecast that the business will not turn a profit for five years until 2025, when global passenger traffic is expected to return to pre-Covid levels. Tata Sons’ existing airline startups – AirAsia India and Vistara, in which it has invested over Rs 6,000 crore since commencement of operations – have so far incurred losses of over Rs 9,000 crore.
Tata Sons may have to shell out money equivalent to Air India’s bid to restructure the carrier, which will be the second largest purchase under the Tata Sons chairman. N Chandrasekharni. But, as one industry person pointed out, “a low cost structure is critical to scripting success in aviation.”
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