Acquisitions

Tata inches closer to make foray into Online Grocery Biz

Unless something really goes bad, Tata Group should be making an official foray into the online grocery biz by as early as next week. Sources privy to the matter claim that salt-to-steel conglomerate has almost closed on buying nearly 80% stake in BigBasket for $1.3 Bn. The deal reportedly values India’s largest online grocery store at almost $1.6 Bn.

According to several news reports, the Tata Group will acquire existing investors’ stake, which comes to around 50-60%. Additionally, the Mumbai based corporate giant will buy 20-30% new shares of BigBasket. This will take Tata’s stake in the company to 80%.

A pie chart showing the stake of existing investors in BigBasket

How BigBasket Benefits from Tata Acquisition deal   

With Tata likely to become a majority stakeholder in BigBasket once the deal is officially signed, the latter will be in a much more commanding position to take on JioMart. What the Tata Group eventually brings for BigBasket is the funding muscle as well as the reputation of a large conglomerate and deep experience in scaling the business.

Probably no one could have matched Reliance’s funding prowess than the Tatas.

BigBasket in Numbers:

  • Revenue & Losses in Fy20: Revenue = Rs 5,200 Cr & Losses = Rs 902 Cr
  • Revenue & Losses in Fy19: Revenue = Rs 3,200 Cr & Losses = Rs 348 Cr
  • Daily Orders: 3,00,000
  • GMV: $1 Bn

How Tatas will benefit from BigBasket Acquisition Deal  

With BigBasket acquisition deal, Tatas will get a massive market share in India’s online grocery Biz in one shot. The deal is also likely to become a launch pad for Tatas to foray into the e commerce biz in a big way. This foray is likely to happen through a super app, which is likely to be launched once the company seals the BigBasket.

With this super app, Tatas are aiming to dabble into the burgeoning e-commerce sector.

Sources claim that Tatas are sniffing a serious growth in the e-commerce in the post-Covid scenario.

 

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