Discussions between Tata Group and Bigbasket have reached their final stage. The Tata Group is likely to acquire majority shares in the e-commerce giant Bigbasket. Bigbasket makes up to 50% of India’s grocery segment, making it India’s largest online grocer company.Embed from Getty Images
The internal M&A team at Tata Sons are working rigorously towards closing the deal with Bigbasket. Tata Group is mot likely to buy out the stakes from other investors in the company. Tata Group is also very likely to buy out all the stakes from Chinese retail and internet giant Alibaba, which holds nearly 29% stakes in Bigbasket.
It is believed that Tata Group would acquire 80% shares in Bigbasket for nearly $1.3 Billion. The overall valuation of Bigbasket is said to be nearly $1.6Billion.
Negotiation on the deal structure between Tata Group and Bigbasket has been going on for nearly five months now. According to recent developments, it is believed that Tata Group would be infusing fresh funds in Bigbasket by buying additional stakes for about 20% to 30%. This development would bring the total share of Tata Group to about 80%.
Tata Group is likely to procure 50% to 60% of stakes from existing investors. Chinese retail and internet giant Alibaba holds majority stakes in Bigbasket. Other key investors in Bigbasket are Abraaj group with 10% shares, Ascent Capital with 9%, Helion Venture Partners with 7%, Bessemer Venture Partners with 6%, Mirae Asset- Naver Asia Growth with 5% stakes.
Bigbasket is a Bengaluru based online grocery firm, and the company receives nearly 3 lakh orders per day. The valuation of Bigbasket is about $1.6 Billion. The company made rupees 5,200 crores in revenue in 2020 but lost nearly rupees 920 crores. Bigbasket as a company has been consistently making big revenue but at the same time has been witnessing big losses. The major reason behind the loss is believed to be the huge operations and expenses of the company. Bigbasket would also be looking for big players to counter the competition from Reliance Industries Ltd.
Tata Group has been planning to expand its territories into the Indian e-commerce market. Tata Group has been preparing for the launch of its ambitious Tata Digital’s Supr App. Bigbasket would act as a key acquisition, as a wide range of household items and grocery products could also be introduced into the Super App.
The value of e-commerce business in India would be worth nearly $99 Billion by 2024, and India’s online grocery business would be worth nearly $29 Billion. Thus, a lot of companies would be targeting to grab maximum opportunities in the online market. This atmosphere would lead to healthy competition in the sector.