The Tata group is in active discussion to acquire a controlling stake in BigBasket by purchasing several existing investors of online grocery, three people reported directly to the conversation.
If the talks are successful, the Tata group could make a cash payment of $ 500-700 million to financial investors, mainly private equity funds, and China’s Alibaba Group, BigBasket’s largest investor, people said, requesting anonymity.
One of the three people said, “The Tata group has currently negotiated the Tata group deal after the company’s deal.”
“While the current investors of BigBasket are not behind the idea of selling a controlling stake to the Tata Group, they also want the current management, led by the founders, to remain at the helm,” the person said. The person above said, “Investors want BigBasket to also hit the IPO (initial public offering) market in the next calendar year, even if it is coming to Tata.”
A spokesperson for the Tata group declined to comment.
If the deal goes through, the Tata group will have an immediate start to take on three big players in India’s thriving online grocery market: Reliance Industries Ltd, Walmart-owned Flipkart and Amazon.
For the Tata group, the deal is aimed at gaining as much control as possible in India’s fast-growing e-commerce market ahead of Reliance Industries Ltd. and Flipkart has become huge, another person said.
Peppermint On October 14, it was reported that the Tata group had joined talks to take a minority stake in Bengaluru-based BigBasket, which is looking to raise $ 200 million in development capital.
Along with the Tata group, private equity fund Temasek and Generation Investment Management were also in discussions to invest in BigBacket.
BigBacket has seen strong tailwinds due to the Kovid-19 epidemic, reflecting industry estimates that grocery will be the biggest driver of online e-commerce, contributing 40% to gross merchandise volume between 2019 and 2024.
The online penetration of the grocery market is currently only 0.5% and full size is $ 2 billion. It is projected to increase to $ 3 billion by the end of this year from $ 1.9 billion in 2019, according to a September RedSear report.
BigBasket, which has the largest market share in the online grocery space, saw new customers on its delivery platform increase by 84% between January and July, while customer retention rates increased by 50%.
in August, financial Times Reported that the Tata group is building a new platform, intended to be launched in December or January, to put together a variety of salt-to-steel conglomerate offerings on a platform, dubbed by Tata as “Super App “Named.
Tata Sons chairman N Chandrasekaran recently said, “The app will eventually cover services ranging from food and groceries to fashion, lifestyle, electronics, insurance, financial services, education, healthcare and bill payments.”
BigBasket is India’s largest online food and grocery company with over 18,000 products and 1,000 brands.
The Bengaluru-based startup, which recently became a Unicorn, has a market share of more than 50% in the online grocery market.
Its revenue grew by 70% to Rs 3,200 crore in FY19. However, the deficit increased, surpassing the annual gross sales rate of $ 1 billion for the first time in May.
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