The Tata group is finalising a cash infusion plan in online grocery shopping app BigBasket for a reported $200-$250 million to hold a majority stake in the company. The multinational conglomerate is also planning to buy a majority stake in online pharmacy 1mg, The Economic Times reported.
Tata will conclude the deal at a total of $1.2 billion in a mix of a primary and secondary sale of shares to get a 60% stake in BigBasket. This would mean that two of the major stakeholder in the company, Chinese Alibaba and private equity firm Abraaj Group would be given full-exit options by Tata.
Both firms are struck with major problems. The Alibaba Group has been facing wrath from the Chinese regulators over its co-founder Jack Ma’s remark row. Meanwhile, the Abraaj Group has been hit by a scandal, draining its capital drive.
While Alibaba holds a 27.58% stake in the company, Abraaj Group owns about 18.05%, according to data from business intelligence platform Paper.vc. Acquiring the stakes of just these two investors will give Tata close to the majority stake it’s seeking in BigBasket.
Tata is also in the last lap of executing a secondary transaction of $200-250 million to acquire a 55% stake in online pharmacy 1mg, according to ET sources. The e-pharmacy segment, like the online grocery space, surged due to the Covid-19 pandemic, as consumers sought the safety of buying online rather than stepping into offline stores. Analysts and company insiders estimate that the online pharmacy segment doubled sales in the first three months of the lockdown.
Tata is also planning to launch a common platform to integrate both the online applications. This app, supposedly named Tata Super App, will give consumers a single point of access to myriad services, including online shopping for groceries, medicines, electronics, fashion and more.
