Tata Group, the Indian conglomerate that sells almost everything from cars to clothing to steel, is looking to buy Indian retailers online to bolster its e-commerce presence, people familiar with the matter said.
The group has reached out to IndiaMart InterMesh Ltd., a business-to-business marketplace, for a possible stake purchase, said the people, who asked not to be identified as the plans are confidential. IndiaMart’s shares have risen 142% in Mumbai this year, giving it a market value of around $ 2 billion. Supermarket Grocery Supplies Pvt., Commonly known as BigBasket, is also among Tata’s potential investment targets, one of the people said.
The deliberations are at an early stage and there is no certainty that Tata’s search for the assets will result in transactions, the people said.
A representative for Tata declined to comment, while VS Sudhakar, one of BigBasket’s founders, also declined to comment.
“Any conversation about IndiaMart in discussions with the Tata Group for investment or acquisition is completely unfounded,” said Dinesh Agarwal, founder and CEO of IndiaMart, in response to a query from Bloomberg News.
Mumbai-based Tata Group, owner of Jaguar Land Rover and tea maker Tetley, is seeking local e-commerce assets at a time when the race for Indian online shoppers is intensifying. While billionaire Mukesh Ambani’s JioMart seeks to shake up the industry dominated by local units Amazon.com Inc. and Walmart Inc., Tata seeks potential acquisitions to bridge the gap with its rivals.
Tata is pursuing a two-pronged strategy to modernize its online model, which is currently fragmented. In addition to seeking acquisitions, it is also in talks with potential investors to take stakes in a digital platform it is creating, people familiar with the matter said last month.
Tata’s digital platform will focus on an all-in-one e-commerce application that aims to bring disparate online businesses together from its entrenched consumer units under one umbrella. These include Tanishq jewelry stores, Titan watch showrooms, Star Bazaar supermarkets, the Taj hotel chain, and a joint venture with Starbucks Corp. in India.
Ambani’s Reliance Industries Ltd. expansion into technology and retail businesses has added urgency to Tata’s plans. The tycoon, who is the richest man in Asia, raised more than $ 20 billion this year and sold 33% of his technology company Jio Platforms Ltd. to investors such as Facebook Inc. and Google. His Reliance Retail Ventures Ltd. has embarked on its own fundraising wave, collecting $ 5.1 billion from private equity funds and sovereign wealth funds in the past two months.
On its website, IndiaMart says it controls 60% of the Indian market for online B2B classifieds, providing a platform for small and medium-sized businesses. It was founded in 1999 and has 3,150 employees located in 84 offices throughout the country.
Bigbasket, which started in 2011, delivers groceries in some of the largest cities and towns in India. The company became the so-called unicorn last year with a valuation of $ 1 billion.
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