Tata Sons is reportedly not happy with the group’s rival to Swiggy, Zepto and Blinkit — BigBasket. According to a report in Economic Times, Tata Sons isn’t too pleased with what it regards as BigBasket’s sluggish response to the rapid rise of quick commerce, calling this a strategic misstep that has left the Tata Digital unit trailing rivals Blinkit and Zepto.
Tata Sons to BigBasket: Raise your own funding
According to the report, quoting a person aware of Tata Digital’s plans, Tata Sons pushed back on leading the estimated $1-billion funding in BigBasket. Tata Sons has reportedly held talks with the BigBasket management to onboard a financial investor and to secure up to $1 billion (approximately Rs 10,000 crore) from external investors to regain market share lost to competitors. Bankers have recently convened meetings to discuss this funding strategy.
Tata Sons has invested over $2 billion in Tata Digital’s Neu superapp till date, but the performance hasn’t met expectations. Tata Sons chairman N Chandrasekaran is reported to be seeking accountability, having made it clear that businesses must show profits and endless investments will not be made.
Tata Sons hold 65% stake in BigBasket
Sources indicate that Tata Sons prefers onboarding a significant financial investor directly into BigBasket, rather than at the Tata Neu level, with existing investors contributing additional capital. This approach could pave the way for an independent initial public offering (IPO) for BigBasket. Currently, Tata holds over 65% ownership of BigBasket, which was last valued at $3.2 billion.
Competitors such as Blinkit, Zepto, and Instamart each possess over $1 billion in cash reserves, enabling aggressive market expansion. A Citi Research report highlights that daily active user traffic for quick commerce has now surpassed that of food delivery, emphasizing the model’s swift rise.
BigBasket remains a significant contributor to Tata Digital’s revenue. In FY24, Tata Digital’s loss narrowed to Rs 1,200.82 crore from Rs 1,370.09 crore the previous fiscal year, while revenue more than doubled to Rs 420.51 crore from Rs 204.35 crore in FY23. The company reported a gross merchandise value of Rs 37,355 crore, with 20.76 million transacting customers. Other key businesses under Tata Neu include epharmacy 1mg, Tata Cliq Fashion, and Croma.
