Tata Sons comes to rescue of Tata Play as it faces growth headwinds

The reported buyback of Temasek’s 20 per cent stake in Tata Play by Tata Sons will be the third instance of Tata Group providing an exit to a foreign partner in recent years. In 2018, Tata Sons paid $1.27 billion to DoCoMo to buy back 26 per cent of the group’s telecommunication venture, Tata Teleservices. This was followed by Tata Sons acquiring AirAsia Berhad’s 49 per cent stake in AirAsia India in two tranches to make it a wholly owned subsidiary.

AirAsia India became Tata Sons’ fully owned subsidiary in 2019.

All of these buybacks and exits by foreign partners largely occurred due to the poor financial performance of the joint ventures, making it tough for foreign investors to sell their stakes to other investors.