Tata’s digital platform will center around an all-in-one e-commerce app that aims to bring disparate online businesses of its entrenched consumer units under one umbrella.
Tata Group, India’s conglomerate that sells almost everything from cars to apparel and steel, is seeking to buy Indian online retailers to beef up its presence in e-commerce, people familiar with the matter said.
The group has reached out to IndiaMart
InterMesh Ltd., a business-to-business marketplace, for a potential stake purchase, the people said, asking not to be identified as the plans are confidential. IndiaMart’s shares have surged 142% in Mumbai this year, giving it a market value of about $2 billion. Supermarket Grocery Supplies Pvt., commonly known as BigBasket, is also among Tata’s potential investment targets, one of the people said.
Deliberations are at an early stage and there’s no certainty Tata’s pursuit of the assets will result in transactions, the people said. The Financial Times reported Tata’s talks with BigBasket on Wednesday and The Economic Times on Thursday reported that Tata has held initial discussions with IndiaMart.
A representative for Tata declined to comment, while V.S. Sudhakar, one of the BigBasket founders, also declined to comment.
“Any talk of IndiaMart
being in discussions with Tata Group
for investment or acquisition is completely baseless,” Dinesh Agarwal, founder and chief executive officer of IndiaMart, said in a response to a Bloomberg News
Mumbai-based Tata Group, which owns Jaguar Land Rover and tea maker Tetley, is scouting for local e-commerce assets at a time when the race for Indian online shoppers is heating up. While billionaire Mukesh Ambani’s JioMart is seeking to shake up the industry dominated by the local units of Amazon.com Inc. and Walmart Inc., Tata is seeking potential acquisitions to narrow the gap with its rivals.
Tata is pursuing a two-pronged strategy to modernize its online model, which is at present fragmented. Besides seeking acquisitions, it is also in talks with potential investors about taking stakes in a digital platform it is creating, people familiar with the matter said last month.
Tata’s digital platform will center around an all-in-one e-commerce app that aims to bring disparate online businesses of its entrenched consumer units under one umbrella. These include Tanishq jewelry stores, Titan watch showrooms, Star Bazaar supermarkets, chain of Taj hotels and a joint venture with Starbucks Corp. in India.
The expansion of Ambani’s Reliance Industries Ltd. into technology and retail businesses has added urgency to Tata’s plans. The tycoon, who’s Asia’s richest man, raised more than $20 billion this year, selling 33% of his technology venture Jio Platforms Ltd. to investors including Facebook Inc. and Google. His Reliance Retail Ventures Ltd. has embarked on its own fundraising spree, mopping up $5.1 billion from private equity and sovereign wealth funds in the past two months.
On its website, IndiaMart says it controls 60% of the Indian online B2B classified market, providing a platform to small and medium enterprises. It was founded in 1999 and has 3,150 employees located across 84 offices across the country.
Bigbasket, started in 2011, delivers groceries in some of India’s biggest cities and towns. The company became a so-called unicorn last year with a $1 billion valuation.
--With assistance from Saritha Rai.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.