TATA EYES 80% STAKE IN E-TAILER BIGBASKET FOR $1.3 BILLION

The Tata group is in advanced talks to buy around 80% in Bigbasket for around $1.3 billion, valuing India’s largest online grocer at around $1.6 billion, three people with direct knowledge of the development said.

After about five months of negotiations, the Tatas and Bigbasket have agreed on the deal structure. According to the proposal, the Tata group is likely to buy 50-60% from existing investors, including Chinese retail giant Alibaba and a few other key investors, one of the two people said.

“Subsequently, the Tata group will infuse fresh money into Bigbasket by buying new shares of about 20-30% of Bigbasket, which will give Tata group almost 80% in Bigbasket. The deal is likely to be formally announced in the next few weeks,” the person said.

Tata’s strategy appears to be to establish a beachhead in India’s e-commerce market amid a surge in online sales because of Covid. For the founders of Bigbasket, having Tata in control will give it the necessary firepower to take on Reliance Industries Ltd, which aims to shake up the e-commerce market with deep discounts just as it did in telecom.

“The main objective of the Tata group is to win a large market share in one shot. Bigbasket can make that possible, and the deal will also help the Tata group in conceptualizing its proposed ‘Super App’ by adding a wide range of household items and grocery products from Bigbasket,” said the second person.

The ‘super-app’ would offer services such as food and grocery, fashion, electronics, insurance, financial services, education, healthcare and bill payments, N Chandrasekaran, chairman of Tata Sons, said at the company’s annual meeting this year.

A Tata group spokesperson declined to comment. Emails and text messages sent to Bigbasket founder Hari Menon remained unanswered.

Alibaba, which owns 29% in Bigbasket, is likely to sell its entire stake to the Tata group.

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