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Tata Group to Further Expand Looks To Acquire BigBasket 1mg For $1.2 Billion

Tata Group is looking to strip out approximately $1.2 Billion in order to obtain a formal entrance into the online grocery and medicine segment by obtaining a majority stake in BigBasket also 1mg. The company is looking to invest about $940 Mn - $950 Mn in BigBasket for about 67% stake, and $250 Mn in 1mg for a majority stake as well.

Tata is presumed to obtain out Alibaba’s 30% stake in BigBasket, giving the Chinese firms’ exit from one of the essential investments in India. The China-based e-commerce platform has also funded in digital payments giant Paytm and e-commerce giant Snapdeal.

BigBasket was started in 2011 by VS Sudhakar, Hari Menon, Vipul Parekh, V S Ramesh and Abhinay Choudhari. It entered the unicorn club last May after bringing $150 Mn up in Series F financing from Chinese internet business giant Alibaba, South Korea's Mirae Asset Global Investments and the UK government-sponsored CDC Group.

The organization is presently hoping to raise $200 Mn – $300 Mn from both new and existing investors at a valuation of $1.5 Bn to $2 Bn, CEO Hari Menon has declared. The company is reportedly in negotiations to raise that finance from Singapore-based Temasek, hedge fund Tybourne Capital and former US vice-president Al Gore’s Generation Investment Management. The most advanced improvement on stake sale was reported by TOI.

The approach of Tata is all an effort to overtake the digital empire created by Amazon and Reliance. Tata is looking to begin a SuperApp, which will help the customers avail a variety of services — food and grocery ordering, fashion and lifestyle, consumer electronics and consumer durables, insurance and financial services, education, healthcare and bill instalments.

Therefore, it is studying at hot segments like online grocery and e-pharmacy to catch a lead. Tata’s investment in 1mg is assumed to be a mix of primary and subsequent capital infusion, providing partial exit to the startup’s early stake investors. 1mg was on a lookout to raise $100 Mn from several investors, including Gaja Capital, when Tata Group dived in with their proposal to obtain a meaningful stake in the company.

1mg has the most significant division in the online medicine segment, but other startups have forged strategic alliances to take on the Gurugram-based company. While Reliance Retail took Netmeds, PharmEasy and Medlife selected to do a merger. Even Amazon has entered the segment with its online pharmacy.

1mg was begun in April 2015 following Healthkart distributed its generic drug search business, HealthkartPlus, and rebranded it as 1MG. The company has three market verticals — pharmaceuticals, labs, and doctors. Its founders include Prashant Tandon, Gaurav Agarwal, and Vikas Chauhan.