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Tata Group reaches agreement to buy majority stake in BigBasket

Manish Singh
·2 min read

Indian conglomerate Tata Group has reached an agreement to acquire a majority stake in grocery delivery startup BigBasket, a source familiar with the matter told TechCrunch.

The salt-to-software giant is buying over 60% stake in BigBasket, valuing the Indian startup between $1.8 billion to $2 billion, the source said, requesting anonymity as the deal is still private. BigBasket has raised over $750 million prior to the deal with Tata.

Indian news network ET Now reported on Tuesday that the two firms were in advanced talks, signals of which began to emerge in local media two quarters ago. Two BigBasket co-founders and Tata Group did not respond to a request for comment.

Chinese internet giant Alibaba, which owns nearly 30% stake in BigBasket, and a handful of other investors are getting a near complete exit from the startup as part of the deal with Tata Group, the source said. New Delhi introduced restrictions last year that made it difficult for Chinese investors to write checks to Indian firms.

The move comes as Mumbai-headquartered Tata Group, which reported a revenue of $113 billion in 2019 and operates several popular brands such as Jaguar Land Rover and tea maker Tetley, looks to expand to more consumer businesses and works to develop a so-called superapp in the world’s second largest internet market.

Bangalore-headquartered BigBasket, which competes with SoftBank-backed Grofers and Reliance’s JioMart, operates in over two dozen cities in India and turned profitable months into the coronavirus pandemic as sales skyrocketed on the platform.

BigBasket and Grofers's userbases skyrocketed by as much as 80% last year, analysts at Citi Bank estimated in recent note, adding that JioMart, run by India's richest man Mukesh Ambani, had already started to pose serious competition.

In a recent note to clients, Bank of America analysts estimated that the online grocery delivery market could be worth $12 billion in India by 2023.

“Competition is high in the sector with large verticals like BigBasket/Grofers and horizontal like Amazon/Flipkart trying to convert the unorganized market to organized one. Till recently the No 1 player in the space was BigBasket, with it hitting $1 billion annualized GMV & selling over 300,000 orders every day. Reliance Industries also threw its hat with the company launching its JioMart app in May-20 across 200 cites,” they wrote.

The expansion of Reliance Industries, one of India's largest industrial houses, in e-commerce last year may have prompted Tata Group to accelerate its digital efforts. Ambani raised more than $26 billion for his telecom and retail empires Jio Platforms and Reliance Retail last year from a roster of marquee investors including Facebook and Google.

Tata Group was working to expand to several consumer-facing digital services as early as 2016, but a boardroom coup put all those plans on the back burner, The Information reported in December.

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"TC Energy will review the decision, assess its implications, and consider its options. However, as a result of the expected revocation of the Presidential Permit, advancement of the project will be suspended.The company will cease capitalizing costs, including interest during construction, effective January 20, 2021, being the date of the decision, and will evaluate the carrying value of its investment in the pipeline, net of project recoveries," TC Energy said in a release last month. The Keystone XL pipeline "is an essential piece that would have allowed Canada and the U.S. to continue the very good relationship they have with transporting energy products across the border," Benedict said. However, suspending pipeline construction doesn't necessarily translate into a one-for-one increase in crude-by-rail volumes, according to Benedict. "The gist of the story is, it's going to have some impact on crude-by-rail. 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We think it creates more support for scaling up and expansion of the DRU. So, we're bullish on that opportunity," Creel said. He continued, "We still see the short-term, not long-term ... pipeline capacity [eventually] catch up [but] we just think there is a longer tail on it right now. So, we think there's going to be a space for some potential upside in both spaces." Meanwhile, in a Jan. 27 interview with Bloomberg, CN President and CEO JJ Ruest called crude-by-rail a "question mark" in terms of what energy outlook the railway is seeing for 2021. Ruest said low oil prices, decreased travel and the Keystone pipeline cancellation are among the factors influencing CN's energy outlook. However, crude-by-rail could be a "slight positive bump on the rail industry," Bloomberg quoted Ruest as saying. CP and CN declined to comment further to FreightWaves about crude-by-rail, and CN directed FreightWaves to the Bloomberg article. Subscribe to FreightWaves' e-newsletters and get the latest insights on freight right in your inbox. Click here for more FreightWaves articles by Joanna Marsh. Related articles: Social risk trumps financial risk for Canadian crude-by-rail Transport Canada issues new speed restrictions for trains hauling dangerous goods Construction of Alberta crude unit expected to start in April Commentary: Railroad tank cars take a hit See more from BenzingaClick here for options trades from BenzingaForward Air Doubles Down Amid Heightened Interest From ActivistsDrilling Deep: Reviewing Q4 Earnings; How Did Werner Do So Well?© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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    Semiconductor stocks saw massive capital inflows last week as many jumped to record highs. With fresh strength taking the industry, now is a perfect time to hunt for opportunities. While some constituents have run beyond low-risk entry points, others still sit at attractive buy areas. We’ve seen increased attention on the worldwide shortage of chips. Causes range from spikes in demand for electronics, a slowdown in production following the pandemic, and the U.S. trade war with China during the Trump presidency. While companies across various industries are grappling with the longer lead times to get their hands on semiconductors, it doesn’t seem to be adversely impacting the price action of chip companies.InvestorPlace - Stock Market News, Stock Advice & Trading Tips 9 Meme Stocks That Social Media Won't Shut Up About Quite the contrary, traders are rushing into the space and extending well-entrenched uptrends. I’ve scoured the top holdings in the VanEck Vectors Semiconductor ETF (NYSEARCA:SMH) and found tasty trade setups in these three stocks. Texas Instruments (NASDAQ:TXN) Applied Materials (NASDAQ:AMAT) KLA Corp (NASDAQ:KLAC) After a brief look at their respective patterns, I’ll share my preferred way to play. 3 Sizzling Semiconductor Stocks to Buy: Texas Instruments (TXN) Click to EnlargeSource: The thinkorswim® platform from TD Ameritrade Perhaps Texas Instruments’ most impressive feat this year was how rapidly it rebounded from its earnings gap. The underwhelming report created a quick trip to the rising 50-day moving average. However, buyers rapidly snatched up the discount. The previous month of consolidation made last week’s breakout all the more appealing. When prices breach resistance after a multi-week base, it signals a new advance is kicking off. This next advance probably will have more legs than if TXN prices were extended ahead of the breakout. The last year’s uptrend has been slow and steady, so I suggest taking a longer-term view if you’re playing this pattern. Bull call spreads should do the trick. The Trade: Buy the May $180/$190 bull call for $4. The max loss is $4, and the max gain is $6. Applied Materials (AMAT) Click to EnlargeSource: The thinkorswim® platform from TD Ameritrade If Texas Instruments is a tortoise, then Applied Materials is a hare. Though we’re only a month-and-a-half into 2021, AMAT stock is already up 34% on the year. Last week’s single session pop saw volume swell past 12 million shares, marking its highest volume day of the year. With that type of participation backing the breakout, you’d be crazy to bet against it. Next week’s earnings report does up the risk factor a bit, but given how quickly buyers came to rescue TXN’s misstep, I highly doubt AMAT stays down if it does happen to slip. To avoid any implied volatility shenanigans surrounding the event, I like the idea of building a spread over buying calls outright. The Trade: Buy the April $115/$125 bull call for $3.85 The max loss is $3.85, and the max gain is $6.15. Semiconductor Stocks: KLA Corp (KLAC) Click to EnlargeSource: The thinkorswim® platform from TD Ameritrade The final of my top three semiconductor stocks, KLA Corp sailed through earnings earlier this month with its fundamental story and uptrend intact. The recent consolidation phase ended last week when prices soared 7%. As with any stock moving toward a record, KLAC is firmly planted above all major moving averages. That means future pauses or pullbacks should be buying opportunities and quickly corrected. At $328, KLAC is a bit rich for buying calls outright. Instead, the bull call vertical is once again my strategy of choice. The Trade: Buy the June $330/$350 bull call for $8.10. The max loss is $8.10, and the max gain is $11.90. On the date of publication, Tyler Craig did not have (either directly or indirectly) any positions in the securities mentioned in this article. For a free trial to the best trading community on the planet and Tyler’s current home, click here! More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post 3 Sizzling Semiconductor Stocks to Buy appeared first on InvestorPlace.

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