Tata Group acquires India's online grocery leader BigBasket for $1.2 billion

The Economic Times of India reported in February that Tata Group had finalized a deal to acquire a majority stake in BigBasket for $1.2 billion , of which $ 200 million to $250 million would be in cash . At the time, both parties to the transaction were waiting for approval from the CCI ( Competition Commission of India ) .

And now, one of the largest acquisitions in India’s digital industry has finally come to an end! According to DealStreetAsia, India’s CCI has approved Tata Group’s acquisition of 64.3% of the shares of e-commerce platform BigBasket , which also makes BigBasket’s post - financing valuation $1.8 billion.

The approval of this acquisition also fired an important shot in the battle among giants in the rapidly growing Indian online grocery market.

The acquisition will be made through Tata Digital , a subsidiary of the Tata Group , through a mix of primary and secondary shares to acquire a 64.3% stake in BigBasket's B2B subsidiary Supermarket Grocery Supplies, which reportedly operates BigBasket's online retail business, giving the Tatas group control over both the wholesale and online retail business units.

BigBasket, currently the leader in India's online grocery space , said it had surpassed $1 billion in annual revenue in the year ended September , driven by growing demand for online groceries due to the COVID-19 pandemic .

After the acquisition is completed, the newly formed company may also become India's largest food and grocery e-commerce platform , which will enable the Tata Group to compete directly with Reliance's Jio Mart, Amazon and Walmart's Flipkart, and Grofers backed by SoftBank Vision Fund .

While Amazon and Flipkart have a much larger footprint, their online grocery businesses have always been a small part of the business, even as they too have been working hard to grow over the past two years .

According to market researcher RedSeer Consulting, India’s grocery market was worth more than $600 billion in 2019 and is expected to reach $850 billion by 2025. However, 95% of the market is dominated by corner stores that are not controlled by organized retailers , which provides significant room for growth for organized players .

India

Acquisition

Online Grocery