Tatas to buy 68% in BigBasket for Rs 9,500 cr, deal likely in 4-5 weeks

February 16, 2021 0 By boss

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The deal is the biggest in online groceries space so far, values BigBasket at Rs 13,500 cr; will give exit to investors Alibaba, Abraaj and IFC

Topics
Tata group | BigBasket | Investment

is in the final stages of acquiring a majority stake of 68 per cent in online grocer for about Rs 9,300-9,500 crore, said a source close to the development. According to the deal, the biggest in the space so far, has been valued at Rs 13,500 crore. The deal will also give exit to investors Alibaba, Abraaj and IFC and is likely to be closed in the next 4-5 weeks as the parties are awaiting approval from the Competition Commission of India. The top management, including cofounder and CEO Hari Menon, will continue to stay on board, said the source. The and denied to comment on the matter. BigBasket perfectly fits the criteria for the Tata Group, which has been looking at serious online play, with Chairman N Chandrasekaran talking about ambitions of a super app. “Our e-commerce play will be really big and we’ll not contend with a minor stake in any company,” a spokesperson had last year said in response to a potential stake purchase in BigBasket. “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 Devangshu Dutta, Chief Executive of Third Eyesight.

The deal would allow the conglomerate access to a large customer base through this acquisition.

According to a RedSeer and BigBasket report, the total size of the e-grocery market in the country is expected to grow from $1.9 billion in 2019 to $3 billion by the end of 2020. At an annual growth rate of 57 per cent, it is expected to touch $18 billion by 2024. With big names including Tatas, Amazon and Reliance looking to grab a piece of the e-grocery basket, it will be one of the most hotly contested retail segments in the coming years. As marquee players line up in the e-grocery segment, BigBasket will need serious money to continue with a stronghold in the game, according to experts. Hence, a deal with the Tatas coming in as a strategic partner makes perfect sense, they say. Supermarket Grocery Supplies, which operates BigBasket, had reported a consolidated net loss of Rs 611 crore in FY20, a 6.7 per cent rise as compared to the previous financial year at Rs 572 crore. Given the convenience and safety that home delivery offers, BigBasket had earlier said that it has seen an 84 per cent increase in the number of new customers accompanied by 50 per cent higher retention rates as compared to 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.

Sealing the basket · Deal values BigBasket at Rs 13,500 crore · Investor Alibaba, Abraaj and IFC to exit BigBasket · One of the largest M&A deals in the start-up ecosystem · Likely to be closed in 4-5 weeks · Top management to continue onboard

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First Published: Tue, February 16 2021. 20:23 IST



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