Tata BigBasket deal acquire 68% stake in Alibaba-backed online grocery major Big Basket for $1.31 billion

Tata-BigBasket deal– In online grocery app space this deal is the biggest so far, values BigBasket at 13,500 cr; will give exit to investors Alibaba, Abraaj and IFC.

This comes about 20 months after the Hari Menon-led Bengaluru company had entered the unicorn club (companies with valuation of at least $1 billion). BigBasket & Tata Group refused to comment on the Tata Bigbasket Deal.

The deal gains importance as the Tata’s can start building their digital dream with BigBasket. It is worth mentioning here that the Tata Sons’—the principal holding company of the $113-billion Tata Group—entry into online grocery could intensify competition, especially at a time Reliance Retail is poised to expand its footprint into the e-retail space after a successful fund-raising exercise.

India’s e-commerce market amid a surge in online sales post covid-19
With big names including Tatas, Amazon, Reliance, Walmart-owned Flipkart and Udaan making their presence felt in this space, e-grocery is emerging as one of the most coveted retail segments. As marquee players line up, BigBasket will need serious money to remain a leader in the game, according to experts. The total size of the e-grocery market in the country is expected to grow $18 billion by 2024.

The deal(Tata-BigBasket deal), which is expected to close in the next four to five weeks, will give exit to investors Alibaba, Abraaj Group and IFC. The parties are awaiting approval from the Competition Commission of India (CCI).CEO Hari Menon to stay on board including Top management, said the source.

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“BigBasket has created a significant presence in the online space that has got certified further in the past 12 months. For Tatas to make a transition from a physical to a digital space, an inorganic route makes more sense,” said analyst and chief executive of Third Eyesight Devangshu Dutta. This transaction would allow the conglomerate access to a large customer base.

Supermarket Grocery had reported a consolidated net loss of ₹ 611 crore in FY20, a 6.7 per cent rise from ₹ 572 crore in the previous year. The company posted a 36 per cent jump in revenue at ₹ 3,822 crore in FY20, according to business intelligence platform Tofler.

Nureca, a home healthcare and supplements company is pegged at ₹20,757 crore and is expected to grow to ₹38,920 crore by 2025.

BigBasket had earlier said it had seen an almost 84 per cent increase in the number of new customers accompanied by 50 per cent higher retention rates during the pandemic, compared to the pre-Covid levels. The Alibaba-backed company is currently recording about 20 million orders per month and reached the milestone of $1 billion run-rate in annual revenues last year.

This Tata-BigBasket deal will definitely force the major e-retail platforms to consider, Sources said market will also plunge after confirmation of this Tata Bigbasket Deal.

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