E-commerce startups asking high price for parting stakes: Ratan Tata

Stating that start ups in online commerce segment are asking for very high a price for their stakes, Ratan Tata, Tata Sons Chairman Emeritus on Thursday took a dig at the fledgling sector, said that “valuations” and not “evaluations” are driving the play.

“It’s true that the valuations of e-tailing companies are very high and valuation seems to motivating these companies more than traditional matrix of evaluation,” said by Mr.Tata at the 107th AGM of Indian Merchants’ Chamber.

Interestingly, Tata’s personal investment portfolio comprises share holdings in internet commerce start-ups, including Paytm, Bluestone, Snapdeal and Urban Ladder.

Tata also said that , the current trend is similar to what has happened in other sectors elsewhere. “We have to give these young entrepreneurs a chance to prove themselves… shoulder to shoulder… with traditional business”.

Asked about whether the e-commerce bubble will burst, the veteran industrialist said this is the new trend in India’s business.

He said that It’s actually a feeling that internet commerce is really the new trend for the Indian commerce. It serves millions of people. It’s my personal money and not company’s money. I don’t see where the debate is”.

He also added that “I believe that Indian enterprise needs to be encouraged. One needs to lend mentoring to young entrepreneurs, to give them a fair chance. One feels very proud when this new segment is emerging in the country”.

He added that Tata felt overseas investors in online commerce firms will make sure that promoters and the senior management maintain high standards of governance. “The fact that they have outside investors is very good because they will quit if they feel that the firms operating in a grey area”.

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