Tata Group To Acquire 50% Stake In BigBasket: A Winning Edge Against JioMart?

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The Tata Group has apparently found its winning edge against Ambani’s JioMart and might add this newfound opportunity to their shopping list for its super app!

According to some individuals in the know, the salt-to-software services conglomerate is currently in advanced talks with BigBasket – the country’s largest e-grocer. The deal which is still evolving as of this moment could potentially result in the Tata Group acquiring a whopping 50% stake in BigBasket for close to $1 billion.

This is not the first time when BigBasket is exploring options to offload a sizeable stake. Before knocking on Tata Group’s doors, the grocery delivery startup held discussions with several other investors such as Singapore’s Temasek, US-based Generation Investment Management, Fidelity and Tybourne Capital for a financing round of $350-$400 million.

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The sources have revealed that the proposed deal has surfaced as a result of the Chinese origin Alibaba, one of the initial investors of the e-grocery company, looking to unload its entire shareholding in BigBasket which is close to 26%.

No further specifics about the probable fruition of the deal has been disclosed. The discussions related to the deal are currently termed as a ‘work-in-progress’ by the people in the know.

BigBasket Stake: A Competitive Edge Against JioMart?

If the talk materialises and the Tata Group secures a sizeable stake in the e-grocery company BigBasket successfully, there’s a lot to be gained for the conglomerate’s upcoming super app.

The fruition of the deal will undeniably help Tata Group gain a competitive edge against Ambani’s JioMart which has reportedly been doing exceptionally well in the O2O aka offline-to-online space. JioMart observed 4x times more orders than it was receiving in the pre-lockdown period.

That being said, this deal appears to be a tough nut to crack according to some sources. BigBasket is putting a tough negotiation on the table for TATA Group.

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As there are multiple investors involved, the people in the know who have asked to keep their identities anonymous, believe it is not an easy deal to be pulled off and thus the finality to the talks might take a couple of more weeks.

Subsequently, the sources revealed that the Tata Group, which is also in discussions with Walmart to have the latter pour $25 billion into its super app, will likely execute the deal with BigBasket via its digital arm Tata Digital.

This opportunity is a crucial step forward for Tata Group towards the better positioning of their super app in the Indian e-commerce space. Currently, none of their retail businesses has the ‘depth of scale’ according to a Tata Group executive who asked to remain anonymous. 

Therefore, the deal with BigBasket can be viewed as a be a good starting point for the conglomerate to scale their O2O business operations before they actually go ahead and unveil their super app to the market.

As of now, neither Tata Sons nor Alibaba has commented on the discussions about the proposed deal. 

If the Tata Group will go forward with acquiring a stake in BigBasket or if the deal will fall through is anybody’s guess right now. However, there’s one concrete fact that holds to be true no matter what. The Tata Group, quite undoubtedly, needs to ramp up its efforts in terms of acquisitions and collaborations to increase its digital presence so that it can have a fighting chance against Jio’s offerings. We will keep you updated on all future developments. Until then, stay tuned.

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