Bengaluru, NFAPost: According to sources, the acquisition deal of Bigbasket with Tata Group is on advance stage with various associates processing the valuation. The Tata Group is set to acquire a majority stake in the e-grocer and the deal could be closed by the end of December.
The new move assumes significance as the government is looking at ecommere sector with the regulatory framework and finds many FDI violation from major players, including Flipkart and Amazon. There is a renewed attempt to come up with new regulatory authority to further monitor the sector as it is now only around 5% of total trade in India.
According to a recent data released Forrester, BigBasket is among the largest e-grocers in the country with nearly 3 lakh orders per day. BigBasket’s valuation as of March this year was $1.23 billion and according to research platform Tofler, the company clocked revenues of Rs 5,200 crore and a loss of around Rs 920 crore.
Tata Group decision comes at a time when its competitor Relienace is far ahead in the space with the launch of Jio Mart backed by its pan India telecom network. The company has the advantage of both its retail network across various segment and the recent acquisition of Kishore Biyani-owned BigBaazar.
The late entry of tata group in the e-commerce race in the country even though it has few retail chains like Croma and tie-up with Tesco. Also, the company has its own brand presence by way of Titan products and Voltas selling its various consumer brands. Industry watchers see the move as part of the Tata Group’s strategy to build a super app. The firm’s internal M&A team is working on the deal.
Tata Group is likely to buy out Alibaba’s entire 29.1% stake, as well as, the stakes of some other investors. The other major investors, according to data by Traxcn are Abraaj Group (16.3%), Ascent Capital (8.6%), Helion Venture Partners (7%), Bessemer Venture Partners (6.2%), Mirae Asset Naver Asia (5%), International Finance Corporation (4.1%), Sands Capital (4%), and CDC Group (3.5%)