Tata Sons has approached the Competition Commission of India (CCI) to pick up a majority stake in online grocery delivery platform BigBasket. The salt-to-software conglomerate intends to acquire the stake through its wholly-owned subsidiary Tata Digital and is looking to acquire up to 64.3 percent stake in online grocery startup, BigBasket's B2B entity Supermarket Grocery Supplies.
The proposed transaction entails BigBasket's B2B arm acquiring sole control of B2C arm - Innovative Retail Concepts Private Limited. Bengaluru-based BigBasket competes with Walmart Inc-owned Flipkart and Amazon's Fresh service as more consumers stay indoors and choose to shop online amid the COVID-19 pandemic, therefore witnessing manifold growth in the competitive online grocery retail market. The BigBasket management, including CEO Hari Menon will continue under the new ownership, CNBC-TV18 had earlier reported.
The Tata Group is set to acquire majority stake in BigBasket through an amalgamation of primary and secondary acquisitions, including complete exits of BigBasket's early backers Alibaba and Abraaj Group, according to sources.
Tata Digital is likely to buy out entire Alibaba stake which stand at 29.1 percent.
The aforementioned acquisition is likely to boost Tata Digital's plan to set up a 'super app' for users to get access to multiple internet services through its platform with the proposed transaction entailing BigBasket's B2B arm acquiring sole control of B2C arm - Innovative Retail Concepts Private Limited.
In its application, Tata Digital said the Proposed Transaction will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India, with BigBasket reporting a 36 per cent year-on-year (YoY) increase in its revenue at Rs 3,818 crore during the financial year ended March 31, 2020. The company's expenses rose 31 per cent YoY to Rs 4,411 crore in FY20, The Economic Times reported, quoting documents sourced from business intelligence platform Tofler. Its losses also zoomed 26 per cent to Rs 710 crore during the year.