Tata Group eyes stake in Big Basket for online groceries push: Report

In a bid to catch up with rivals retail giants Amazon and Reliance Retail, Tata Group is in talks with Bangalore-based online groceries unicorn Big Basket to help bolster its digital arsenal amid Covid-19-induced lockdown, according to a report by the Financial Times citing sources.

Tata would acquire a 20 per cent stake in Big Basket and clinch two seats on the board in the potential “strategic” deal, a source told the publication. A decision on the deal would be taken by the end of October, as per the report.

DH independently could not verify the report.

Big Basket, backed by Jack Ma’s Alibaba, with a valuation of $1.3 billion, plays an important role in India’s nascent online groceries market. The company became profitable during the Covid-19 pandemic and is expected to double revenue to $1 billion in FY21.

The potential move is said to come at a time when new FDI rules have been put forward to thwart Chinese companies staging a hostile takeover of Indian firms. This would prevent Alibaba, a pioneer of the ‘super-app’ model, from lifting their stake in Big Basket.

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Earlier this year, N Chandrasekaran, Chairman of Tata Group had told the publication that the company aims to create a super app to bring together its disparate consumer businesses.

“Retail has always been an area of interest for Tatas. They aren’t going to give up without a fight,” Ausang Shukla, managing director of corporate finance at Ambit told the publication.

Another major player in the online groceries market is Reliance Retail, that has brought in investments from Silver Lake, KKR, General Atlantic among other investors. The company earlier in the year bought Future Group, a supermarket and retail chain, which the company plans to use to boost Reliance JioMart’s supply chain.