Mukesh Ambani’s nothing-short-of legendary investment spree with Jio Platforms, and a similar one with the retail arm ‘Reliance Retail’ has gotten yet another mega Indian business conglomerate to think along those lines. Tata group, which has businesses across every possible industry vertical you can think of, has already been known to speeding up efforts for a Reliance-like mega retail venture.
And while Walmart has been reportedly showing a $20-$25Bn interest in the new Tata venture, a new report from Financial Times now says, that Tatas are in talks with one of India’s largest e-grocery retailers, Big Basket, for a partnership, that would most likely come in the form of an investment. Leading Indian business daily Mint, has also cited sources close to the deal, echoing a similar sentiment.
FT cited people close to the proceedings, who claimed that the company is aiming for a 20% stake in Big Basket, along with 2 seats on the board. A decision on whether the deal will sail through or not, might come as early as within this month.
Reliance has been making major headway in its digital game, and Tata is not ready to give up the fight just yet. Reports started coming out that the 152 year old group might be looking to build an online presence that can rival not just its indigenous rival Reliance, but also global players like Amazon. In fact, another report claimed that Walmart might be looking to invest as much as $20 billion-$25 billion in this new ‘super app.’ Having an e-grocer like Big Basket might help the app become more ubiquitous in the market, as it will become more accessible to the average Indian.
The valuation of Tata’s new platform is expected to be around $50-60 billion and is projected to launch in December or January in India.
Tata’s new super app can largely benefit from the company’s existing presence in the retail and manufacturing business. The Indian conglomerate is already involved in manufacturing and selling FMCG such as tea, spices, packaged food, grains, pulses and etc. It has its own line of apparel, watches, electronics – Croma and Tata Sky, and eyewear.
On the other hand, Big Basket has already been looking for investments, thanks to the huge growth spurt that it witnessed due to coronavirus and online grocery shopping becoming the new big thing. A partner with pockets as deep as Tata’s might help the platform scale up exponentially, allowing it to compete with bigger players like Amazon and Flipkart.
While nothing has been confirmed as of yet, both companies tend to benefit from a partnership, and chances are that we might hear about a merger in the upcoming weeks.