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Tata group to buy 63% stake in BigBasket, seeks CCI approval

The Tata group is proposing to acquire a majority stake in online grocery startup BigBasket. Tata Digital Limited, a wholly owned subsidiary of Tata Sons, will be acquiring a 64.3% majority stake, a filing with the Competition Commission of India (CCI) has revealed. The acquisition — which was first reported last month — will position the Tata group as a major player in the burgeoning online grocery market. It will also give Alibaba group a chance to exit its investment in the startup, owing to heightened tensions between India and China over the past several months; in August 2020, the Chinese-based group had reportedly paused investments in India.

Per the filing, Tata Digital will acquire up to 64.3% of the total share capital of Supermarket Grocery Supplies Private Limited (SGS), which runs the business-t0-business (B2B) side of BigBasket’s operations. Tata Digital may later also acquire full control of Innovative Retail Concepts Private Limited (IRC), which is engaged in business-to-customer (B2C) sales though BigBasket.com.

It is not yet clear how much the Tata group will be spending on the acquisition. Last month, ET Now had reported that 68% of the stake would cost the conglomerate Rs 9,500 crore, taking BigBasket’s valuation to Rs 13,500 crore.

The Tata group’s investment into the space are a direct challenge to incumbents such as Grofers, Amazon Fresh, Flipkart and new entrants such as Reliance’s JioMart.  It will also likely help the group build it’s “super app“, which it envisions will be a one-stop shop for consumers to buy into its wide range of services and products. In August 2020, Natarajan Chandrasekaran, chair of Tata Sons, had said that the app would combine the group’s offerings across verticals to offer a “beautiful omnichannel experience”.

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