Tata Group eyes majority stake in India’s largest online grocer BigBasket

INDIA – India multinational conglomerate Tata Group is in advanced talks with Alibaba- backed online grocer BigBasket, to acquire a 50% controlling stake for about $1 billion.

If successful, the deal could see the Alibaba Group which is the grocer’s largest investor sell its 26% stake along with a clutch of financial investors which include Ascent Capital, CDC Group and the Abraaj Group.

The negotiations with Tata Group come at a time when BigBasket is engaged with investors like Temasek, Generation Investment Management, Fidelity and Tybourne Capital, to raise US$350-400 million in prepation for an IPO that is scheduled for next year.

BigBasket, which is currently the market leader with over 18,000 products and 1,000 brands, wants to raise funds to better compete with rivals especially Reliance Industries which intends to push grocery e-commerce through JioMart

The possible investment in BigBasket is expected to be executed through the conglomerate’s digital arm, Tata Digital.

“While BigBasket’s existing investors are not averse to the idea of selling a controlling stake to Tata Group, they also want the current management, led by the founders, to remain at the helm,” India’s Mint newspaper quoted a person privy to the acquisition talks. 

According to a report by Mint, Tata Group is looking to secure as much control as possible in India’s e-commerce market before Reliance Industries and Flipkart become too big.

The deal, if materialized, will allow Tata Group to enter the country’s fast-growing online grocery marketplace and to take on Mukesh Ambani-led Reliance Industries Limited, Walmart-owned Flipkart and Amazon.

Tata Group is also preparing a new single platform which will put together its varied offerings.

The app which is regarded by Tata as the “super app” will be launched early next year equipped with a wide range of product.

Tata Sons chairman N. Chandrasekaran recently told investors that the app would eventually encompass services from food and grocery ordering to fashion, lifestyle, electronics, insurance, financial services, education, healthcare and bill payments.

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