InvestorQ : When do you see the Tata deal with Big Basket getting completed? How do you see the group benefiting by buying Big Basket?
vidhya Laxmi made post

When do you see the Tata deal with Big Basket getting completed? How do you see the group benefiting by buying Big Basket?

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sarah Leo answered.
6 months ago
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While the discussions have been going on for some time now and the news has also been in the press, latest reports suggest that the Tata Group may be very close to sealing the deal to buy 80% in Big Basket.

While there is no clue on the price to be paid, the indicative valuations that would be implied in the transaction would be closer to $1.60 billion overall, as that is the price at which the last fund raising was done by Big Basket.

By that benchmark, the Tatas are expected to pay around $1.30 billion for the 80% stake in Big Basket. With retail sales of FMCG products increasingly gravitating towards the online ecommerce model, the Tatas have been scouting for local e-commerce properties for quite some time now.

India’s most valuable company, Reliance Industries, is already on the job of using its network franchise to tap the small time grocers across India. About half of India’s $1 trillion retail market comprises grocery sales and that remains the biggest challenge and also the biggest opportunity for the retail business model in India.

The pandemic has made this need more urgent and hence timelines are shortening for the transformation to a digital model. Even Tatas are clear that it has to be quick and seamless. The trend was set by Wal-Mart infusing $16 billion into Flipkart and this deal could lead to a positive rethink of retail players.

Above all, Tatas also wants to do a much better segregation of its value ahead of the buyout of the stake of the Mistry family in Tata Sons as a full and final settlement.

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