The Tata Group is all set to pump in about $200-250 million in online grocery platform BigBasket as part of its larger deal to acquire a majority stake in the start-up. Talks have been going on for months and have reached the final stage now. In total, Tatas could shell out about $1.3 billion in primary and secondary share sale to BigBasket. It may be eyeing around 60 per cent stake in India's largest e-grocery company.
The majority stake in BigBasket for Tata means full exit of the biggest backers of BigBasket, including Chinese e-comm giant Alibaba and equity firm Abraaj group. Both of them collectively hold about 46 per cent stake in BigBasket.
As per the contours of the deal, the Tata group could end up buying 50-60 per cent stake from the existing BigBasket investors. The deal to investment $200-300 million initially has been finalised, reported The Economic Times citing sources. The formal decision on the deal could be announced very soon.
Investors have reportedly no objections to Tatas buying out their stakes but want the current founders-led top management on board. Once the deal is signed, it could value BigBasket at about $1.6 billion, fuelling its big plans for an IPO (initial public offering) by 2022-23.
The deal suits both Tatas and BigBasket well. BigBasket has big plans when it comes to expanding its business in India. The start-up is aiming to launch an initial public offering in the next two years. Right now, BigBasket holds the biggest share of 50 per cent in the e-grocery segment. It sells over 18,000 products and 1,000 brands on its platform.
Analysts say BigBasket deal could help Tatas in conceptualising its proposed 'Super App', which is touted to be one stop destination for all kinds of products and services. The app is expected to be launched in India this year. The app aims to provide its customers with a range of products and services offered by different platforms of Tata Group, including shopping app Tata CLiQ, grocery e-store StarQuick and online electronics platform Croma.
Besides, Tata group is also in talks to buy about 55 per cent stake in online pharmacy company 1mg. On the lines of Reliance Industries' foray into the segment with the acquisition of 60 per cent stake in Netmeds in November last year, Tatas also want to be a part of this thriving space. Lockdowns and coronavirus curbs have made such platforms all the more relevant, say experts.