A person familiar with the matter said the Tata Group is in advanced talks to buy up to 80% of BigBasket in a deal that is likely to value the local online supermarket backed by Alibaba Group Holdings Limited at around $ 1.6 billion.
The group is now negotiating how much equity to purchase in Innovative Retail Concepts Pvt. , Which is known as BigBasket.com, said the person who requested anonymity to discuss details of the private conversations. Mint reported earlier that Tata might buy about 80% for $ 1.3 billion.
A Tata spokeswoman declined to comment, while BigBasket did not respond to requests for comment.
Mumbai-based Tata Group, with combined revenues of around $ 113 billion and big-name brands like Jaguar Land Rover and tea maker Tetley, is seeking assets for local e-commerce at a time when the race for Indian online buyers has been advancing. While JioMart, billionaire Mukesh Ambani, seeks to transform the industry dominated by local units at Amazon.com Inc. And Walmart Inc., Tata is seeking potential acquisitions to fill the gap with competitors.
The online grocery store in India has grown at an astonishing rate during the pandemic, but the field remains open as none of the players made an impact. About half of India's $ 1 trillion retail markets is made up of grocery sales and there is huge potential for growth.
The pandemic is shortening internal capacity-building schedules, and for Tata, Walmart's $ 16 billion acquisition of Indian online retailer Flipkart in the summer of 2018 could serve as evidence. Flipkart is now facing to face with Amazon in the Indian market.
Mint reported that Chinese giant Alibaba is likely to give up its entire stake in the deal. Alibaba representatives declined to comment.