The Tata group is planning to buy more than 60 percent stake in Big Basket and for this, the company has approached the Competition Commission of India, ie CCI. According to the information given to CCI, Tata is thinking of buying a 64.3 percent stake in the company and the deal will be done through Tata Digital, a subsidiary of the group. For exceeding the specified limit, approval from the Competition Commission of India is required. Tata Digital also said that Supermarket Grocery Supplies Innovative Retail Concepts Private Limited (IRC) can buy the entire stake which handles the Business to Consumer segment for Big Basket. Tata Group plans to launch a super app that will give a single platform to its consumer business.
China’s retail company Alibaba holds a major stake in BigBasket. Alibaba holds the maximum share of 29 per cent, which it wants to sell. Among other big investors of BigBasket are several companies including Abraaj Group, Ascent Capital etc. Big Basket has recorded a growth of 36% on an annual basis. Its revenue stood at Rs 3818 crore as of 31 March 2020. The company’s expenditure in the financial year 20189-20 increased by 31 percent to Rs 4411 crore. In that financial year, the loss of the company increased by 26 percent to Rs 710 crore. This stake of Tata will be converted into BigBasket’s enterprise value of Rs 13,500 crore. This would mean that more than half of the shares of Big Basket would become in the name of Tata Group for Rs 9500 crores.
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This online grocery business is developing very rapidly especially in the COVID lockdown period, the pace of growth has been very high. Currently, companies such as Amazon, Walmart acquired Flipkart, Reliance, and Grofers are competing in this segment. In the CCI filing, Tata Digital said it intends to buy a 64.30 percent stake in Super Market Grocery Supply Private Limited (SGS), which oversees business-to-business sales for Big Basket. Another reason for TATA to invest in BigBasket is to compete with Mukesh Ambani’s ambitious Jio Mart project.