Mumbai/Bengaluru, NFAPost: Stage is set for big shift in Indian retail and e-commerce sector as Tatas are going ahead with its acquisition deal of Bigbasket. Sources privy to the development said to NFAPost that Tata Group will acquire a majority stake of 68% BigBasket for about Rs 9,300-9,500 crore.
NFAPost recently reported that 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 Tata Group and BigBasket refused to comment on the matter officially. The deal is happening at a time when India’s e-grocery market 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%, it is expected to touch $18 billion by 2024.
According to Arvian Research, Tata Group deal to acquire online grocery company BigBasket for a total values BigBasket at Rs 13,500 crore (around $1.85 billion).
“The acquisition of BigBasket fits the Tata Group’s plans for serious online play. 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),” states Arvian Research.
The historical deal, which is expected to close in the next four to five weeks, will likely to give exit to existing investors Alibaba, Abraaj Group and IFC. It is expected that the companies involved are awaiting approval from the Competition Commission of India (CCI).
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%)
It is interesting to note that 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. Reliance has the advantage of both its retail network across various segment and the recent acquisition of Kishore Biyani-owned BigBaazar.