The Tata Group and BigBasket have formally signed on the dotted line, finalising a $1.2 billion deal giving India’s largest conglomerate 60-63% stake in the e-grocer. This is as per a report by the Economic Times.
The transaction, which is a mix of a primary and secondary sale of shares, will provide a full exit to two of BigBasket’s biggest investors, Chinese e-commerce giant Alibaba and scandal-hit private equity firm Abraaj Group, as it was reported in January. The transaction will see a $200-250 million primary cash infusion in BigBasket by Tata, as part of its larger deal to acquire a majority stake in the country’s largest online grocery company, people close to the matter said.
Both sides are awaiting regulatory clearances, especially from the Competition Commission of India, officials said.
Tata plans to take BigBasket public by 2022 as part of the deal terms.
“A formal announcement will take some time,” a group official said. Both sides have refrained from commenting on the closure of the deal.
The transaction is seen as one of the largest mergers and acquisitions (M&A) deals in the digital economy. BigBasket’s last-round valuation was $1.2 billion.
While Alibaba Group holds a 27.58% stake in the company, Abraaj owns about 18.05%, according to data from business intelligence platform Paper.vc. Acquiring the stakes of just these two investors will give Tata Group close to the majority stake it’s seeking in BigBasket.
The transaction may provide partial exits to smaller investors.
In September last year, BigBasket said that the number of new customers on its platform had increased by 84% from pre-pandemic levels and that retention rates had risen to 50% from 30-45% earlier. The company also said it was processing more than 20 million orders per month and had hit a run-rate of $1 billion in annual revenue.
The investments in BigBasket and 1mg will give wings to Tata’s upcoming digital service along the lines of a super app, which will give consumers a single point of access to myriad services, including online shopping for groceries, medicines, electronics, fashion and more.
The push is part of a renewed look at omni-channel retailing at the Tata Group.