India’s Tata Sons have acquired a majority stake in online grocery retailer BigBasket. As per the reports, this move places the firm in the same category as that of Amazon, Walmart’s Flipkart, and Reliance Industries, making these platforms Tata’s rivalries.
The stake was bought by Tata Digital Limited, a brand of Tata Sons. However, the company has declined to comment on this story and even BigBasket has not yet responded to any interview requests. The deal is supposedly worth 95 billion rupees, or $1.31 billion, and involves Tata buying out the stake of China’s Alibaba. BigBasket’s largest shareholders, Chinese internet giant Alibaba Group Holding Ltd, and private equity firm Actis have fully exited the company, said a person aware of the deal.
Tata Sons Private Limited is the holding company of Tata Group and holds the bulk of shareholding in the Tata group of companies. It is a privately-owned conglomerate of nearly 100 companies encompassing several primary business sectors: chemicals, consumer products, energy, engineering, information systems, materials, and services. Headquarters are in Mumbai.
In a country like India, eCommerce food and grocery sales have increased with the global pandemic acting as a catalyst. There has been noticed a shift to digital, the news outlet notes, and Tata has been looking to launch a “super app” that would tie in with all of its consumer businesses. The app would offer food and grocery ordering, fashion and lifestyle, consumer electronics and consumer durables, insurance, and financial services, education, healthcare, and bill payments.
“Grocery is one of the largest components of an individual’s consumption basket in India and BigBasket, as India’s largest e-grocery player, fits in perfectly with our vision of creating a large consumer digital ecosystem. We are delighted to welcome BigBasket as a part of Tata Digital,” said Pratik Pal, chief executive of Tata Digital.
The announcement of the deal comes about a month after the Competition Commission of India (CCI) approved a proposal by Tata Digital to buy up to 64.3%in Supermarket Grocery Supplies via a mix of primary and secondary transactions.
In addition, an international online grocery retailer has also expressed interest in investing as much as $25 billion in the super app. If that deal went forward, it would be the largest retail action of its kind in India, surpassing Walmart’s $16 billion investment in Flipkart in 2018.