In advanced negotiations, India’s Tata Group is buying as much as 80% of BigBasket in a transaction that is expected to value the local online grocer sponsored by Alibaba Group Holding Ltd. at around $1.6 billion, a person familiar with the matter said.
The conglomerate is now discussing how much stake it will buy in Innovative Retail Concepts Pvt., widely referred to as BigBasket.com, the entity said, asking not to be acknowledged sharing private talks information. Earlier, a newspaper reported that Tata could purchase nearly 80 per cent for $1.3 billion.
Tata Group is said to seek e-commerce deals in order to raise retail. A Tata spokesperson refused to comment while BigBasket did not answer any comment requests.
Tata Group, headquartered in Mumbai, is searching for e-commerce properties at a time when the Indian online shopping race is on the rise with a cumulative turnover of approximately $113 billion and brands such as Jaguar, Land Rover and the Tea Manufacturer Tetley.
Though Mukesh Ambani’s JioMart attempts to shake the market of Amazon.com Inc.’s and Walmart’s local divisions, Tata tries to reduce the distance between its rivals through future acquisitions.
In Financial Year 2019, BigBasket reported Rs 5,200 and Rs 920 crore losses. The corresponding estimates for Supermarket Grocery—with the B2C portion of the business—resulted at Rs 2,803 crore and Rs 563 crore according to details obtained from Tofler, while B2B Creative Retail Conception, with Rs 2,381 crore and Rs348 crore losses, was at Rs 2,803 crore and Rs 563 crore. There are no details available for the financial year 2020.
In discussions with Singapore’s Temasek lender, and in a bunch of other prospective sponsors for a $400 million funding, Major Basket—which strongly tried to find non-Chinese sponsors to replace Alibaba. The contract, however, included concerns of evaluation and management. In addition to Aliba, current BigBasket suppliers include Abraaj Group, Ascent Capital, Helion Venture Partner, Bessemer Venture Partners, Mirae Asset Naver Asia, Sands Capital and CDC Group.
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