SUMMARY
BigBasket CFO said that the startup was open to raising more funding before the much awaited IPO
The right time to approach capital markets is when you have a stable, growing business and increasing profitability: CFO Parekh
The statement came after the Bengaluru-based startup raised $200 Mn from Tata Digital and other investors at a valuation of $3.2 Bn
Tata Group-backed online grocery giant BigBasket reportedly plans to list on the Indian bourses within the next three years.
Speaking to Bloomberg, the startup’s chief financial officer (CFO) Vipul Parekh said that it may choose to go for an initial public offering (IPO) in the next 24 to 36 months, adding that the startup is open to raising more funding before the much awaited IPO.
Refusing to specify an exact timeframe, the top executive said that the company would preferably list when it has a stable and growing business that is increasingly profitable.
“We’ll head to public markets at some point in time… The right time to approach capital markets is when you have a stable, growing business, when you have reasonable confidence in your forward forecast and we have increasing profitability – the markets can be brutal,” Parekh was quoted as saying.
The statement came after the Bengaluru-based startup raised $200 Mn from Tata Digital and other investors at a valuation of $3.2 Bn.
Tata Digital has invested close to $550 Mn in BigBasket since its acquisition 18 months ago. The latest investment was the fourth such fund infusion by Tata Digital in the startup.
The statement comes at a time when the ongoing funding winter and macroeconomic pressures such as inflation, tightening monetary policies of central banks and apprehensions of a recession have made many Indian tech startups shelve their IPO plans.
Besides, the funding crunch has also brought the focus on profitability and made investors cautious about investing in loss making startups with high valuations.
As per its latest filings, BigBasket reported a loss of INR 812.7 Cr in the financial year 2021-22 (FY22), while its operating revenue stood at INR 7,078.5 Cr.
While 11 startups, including Zomato, Paytm and Nykaa, listed on the stock exchanges in 2021, just three startups – Delhivery, Tracxn and DroneAcharya – went public this year.
BigBasket competes with the likes of Blinkit, Amazon and Flipkart in the burgeoning online grocery segment which is still in its infancy in the country. The Indian egrocery market forms just 2% of the total grocery sales. As such, it presents a lucrative space for players, including BigBasket, to scale and deploy their offerings.
A recent report pegged the homegrown online grocery market at $4.3 Bn in 2021 and estimated it to soar to $38.9 Bn by 2028.
