Ratan Tata is known to be a visionary and he has been turning markets and making himself and the Tata group, good enough profits with the acquisitions and more. Now, in their next gamble, they have eyes on the online grocery seller, BigBasket.
Tata Sons Pvt. Ltd is planning to buy a majority stock in the Supermarket Grocery Supplies Pvt. Ltd (SGS). The worth of which is said to be 1 Billion Dollars. If we’re to sum up the acquired share percentage then it comes around 64.3%, making Tata Sons Pvt. Ltd majority shareholder and the owner of the company.
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This step is called a gamble because the online grocery market has been rising at an exponential rate and Tata wants to juice out the market for themselves as well. This is the reason they are going after one of the biggest online grocery retailers.
In the proposed acquisition, Tata will get the majority of shares which will give exit to the non-promoter investors and the founding investors will keep their stakes. But the overall control of SGS will shift to Tata.
Alibaba, one of the big stakeholders at SGS is in the mood to sell all their stocks to Tata. They currently have 29% of the total shares.
Apart from this, if we talk about numbers then, the retention rate of customers is at 50% for Bigbasket and their customer base increased by 84%, which is a huge margin.
Online grocery is said to be an untapped market that needs some big players and Tata cannot let that opportunity to capture the market go to waste.
Apparently, even after the acquisition, the original staff and management will remain the same probably as this is the recommendation of all the stakeholders, irrespective of the fact that they are selling stocks or staying in. The final announcement will be out in a few weeks after the deal gets closed.
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