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Tata Digital acquires majority in BigBasket

MUMBAI: Tata Digital, a unit of Tata Group, said on Friday that it has acquired a majority stake in India’s largest e-grocer BigBasket, pitting the conglomerate head-to-head with rivals Reliance Industries and Amazon.
The BigBasket deal is the building block to create a large consumer digital ecosystem covering retail, travel and financial services by the Mumbai-based company. Last month, the country’s antitrust watchdog CCI gave Tata Digital the nod to purchase 64.3% of BigBasket.
The deal, valued at $1.5-2 billion, involved the purchase of stakes of BigBasket’s largest shareholder, Chinese giant Alibaba (29.76%), and some others such as Actis (17%).
“We just closed the largest investment by an Indian conglomerate in an Indian startup,” tweeted Mirae Asset Venture Investment CEO Ashish Dave and an investor in BigBasket.
BigBasket’s founding team of five members including CEO Hari Menon will continue with the outfit to help major shareholder Tata Digital ramp up the online food and grocery business.
The ongoing Covid pandemic has accelerated the growth of e-groceries as consumers seek the convenience of getting essentials delivered to their homes. The founders collectively own about 5% in BigBasket, which posted a loss of Rs 1,035 crore on a revenue of Rs 7,240 crore in fiscal 2020. Tata Sons director Saurabh Agarwal will be the chairman of BigBasket.
Tata Sons established Tata Digital in August 2019 as the group lagged in consumer-internet offerings.
With the BigBasket deal, Tata Group is now among the frontliners in the e-grocery space. Tata Digital had earmarked $1.6 billion for M&A and investments.
At present, it is in the midst of launching a super app to bring Tata Group’s disparate consumer services under one umbrella. It is also in the final stage to purchase over 50% stake in e-pharmacy 1mg in a deal valued at $240 million even as it continues to be on the prowl to acquire more online platforms across consumer-focused services.

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