Digbijay.Mishra@timesgroup.com
Bengaluru: Tata Group is set to invest around $1.2 billion for its entry into digital commerce with majority stakes in e-grocer Bigbasket and e-pharma platform 1MG, according to two sources briefed on the matter.
These sources said Tatas are finalising an investment of $940-950 million in Bigbasket for under 70% stake, valuing the company at around $1.4 billion. The Mumbai-based conglomerate is also putting about $250 million in 1MG. Both these investments are in their final stages and expected to be completed over the coming weeks.
The Tatas are expected to buy out Alibaba’s stake of about 30% in Bigbasket. The investment in 1MG is also expected to be a mix of primary and secondary capital infusion, with 1MG’s early investors partially selling their stakes. In a secondary transaction, the new investor buys stake from existing investors and the money goes to the latter, instead of the company’s coffers.
Alibaba’s exit would be the first by the Chinese e-commerce group from one of their key investments in India since the border tension started this year between the two countries. Alibaba group affiliate Ant Group had said in August it had to review its follow-on investment in Zomato following the changes in foreign investment rules by the government. These changes are said to have been a result of the border conflict.
“Tatas are likely to end up with around a 67% stake in Bigbasket. For 1MG, the investment is around $250 million for a majority stake. 1MG is finalising the details of other financial investors joining the round,” a person close to the development said. TOI reported last month that financial investors like Gaja Capital are holding talks with 1MG to invest in this round.
Emails to Tata Group, Alibaba, and Bigbasket did not elicit any response on the matter. 1MG co-founder and CEO Prashant Tandon and Bigbasket co-founder and CEO Hari Menon declined to comment.
Tata Group, which has ambitious plans for a super-app play, is entering segments that have received a strong boost due to the pandemic, online grocery in particular. Bigbasket recently hit an annualised gross sales run-rate of $1 billion.
Other big groups are also investing heavily in online channels. Reliance’s retail arm recently picked up a 60% stake in online pharmacy Netmeds. Amazon India is scaling up its play in the segment. PharmEasy is merging with smaller rival Medlife. This combined entity is also in talks to raise new capital to battle the bigger conglomerates. In online grocery, Amazon, Walmart-owned Flipkart, and Reliance’s JioMart are all scaling up operations fast.
Bengaluru: Tata Group is set to invest around $1.2 billion for its entry into digital commerce with majority stakes in e-grocer Bigbasket and e-pharma platform 1MG, according to two sources briefed on the matter.
These sources said Tatas are finalising an investment of $940-950 million in Bigbasket for under 70% stake, valuing the company at around $1.4 billion. The Mumbai-based conglomerate is also putting about $250 million in 1MG. Both these investments are in their final stages and expected to be completed over the coming weeks.
The Tatas are expected to buy out Alibaba’s stake of about 30% in Bigbasket. The investment in 1MG is also expected to be a mix of primary and secondary capital infusion, with 1MG’s early investors partially selling their stakes. In a secondary transaction, the new investor buys stake from existing investors and the money goes to the latter, instead of the company’s coffers.
Alibaba’s exit would be the first by the Chinese e-commerce group from one of their key investments in India since the border tension started this year between the two countries. Alibaba group affiliate Ant Group had said in August it had to review its follow-on investment in Zomato following the changes in foreign investment rules by the government. These changes are said to have been a result of the border conflict.
“Tatas are likely to end up with around a 67% stake in Bigbasket. For 1MG, the investment is around $250 million for a majority stake. 1MG is finalising the details of other financial investors joining the round,” a person close to the development said. TOI reported last month that financial investors like Gaja Capital are holding talks with 1MG to invest in this round.
Emails to Tata Group, Alibaba, and Bigbasket did not elicit any response on the matter. 1MG co-founder and CEO Prashant Tandon and Bigbasket co-founder and CEO Hari Menon declined to comment.
Tata Group, which has ambitious plans for a super-app play, is entering segments that have received a strong boost due to the pandemic, online grocery in particular. Bigbasket recently hit an annualised gross sales run-rate of $1 billion.
Other big groups are also investing heavily in online channels. Reliance’s retail arm recently picked up a 60% stake in online pharmacy Netmeds. Amazon India is scaling up its play in the segment. PharmEasy is merging with smaller rival Medlife. This combined entity is also in talks to raise new capital to battle the bigger conglomerates. In online grocery, Amazon, Walmart-owned Flipkart, and Reliance’s JioMart are all scaling up operations fast.
