Diversified conglomerate Tata Group has secured regulatory approval to acquire a majority stake in India-based online grocer BigBasket, with e-commerce group Alibaba set to exit, according to the Economic Times.
The deal was agreed in February this year and is set to be conducted by the corporate’s Tata Digital subsidiary, which will pay a reported $1.2bn for a 64.3% stake in BigBasket, valuing it at nearly $1.87bn.
Tata Digital will make a primary investment of $200m to $250m with the rest to come through secondary share sales which will likely involve Alibaba divesting a 29.6% stake – for roughly $550m – and investment firm Artis a 16.5% stake, according to ET.
BigBasket runs an online platform that enables customers to buy a range of food, beverages and household goods for rapid home delivery. It said it has increased sales by about 25% year on year this month, with the covid-19 pandemic driving significant business online.
Alibaba provided $146m to lead a $300m round for the company in 2018, investing at a $950m valuation alongside Abraaj Group, Sands Capital Management, Bessemer Venture Partners (BVP), Helion Ventures, Trifecta Capital and International Finance Corporation (IFC).
BVP, Helion Ventures, Trifecta Capital and IFC took part as existing investors while Zodius Capital and Ascent Capital are also among BigBasket’s earlier backers.
The company raised $150m from Alibaba, Mirae Asset Global Investments and CDC Group in mid-2019 before Alibaba supplied $50m in bridge funding in April 2020.
