Tata Digital’s Super App Delayed With BigBasket Deal Awaiting CCI Nod

SUMMARY

Tata is expected to buy a 68% stake in BigBasket for around INR 9,100 Cr

Tata was also reported to have submitted a proposal to RBI for an NUE license to create a countrywide retail payments network

Tata Digital operates ecommerce platform Tata CLiQ, online grocery store StarQuik and electronics store Croma

The launch of Tata Digital’s much-hyped super app has been delayed due to pending regulatory approval from the Competition Commission of India (CCI) for Tata’s acquisition of online grocery unicorn BigBasket. Besides the antitrust watchdog, the Tata Group has also applied to the National Company Law Appellate Tribunal (NCLAT) for approval of the transaction.

According to ET, which first reported the development, the super app’s planned launch was on March 3, 2021, the Tata Group’s founder’s day. Previously, the multinational conglomerate had planned to launch the app in late 2020.

“We expected the CCI approval to come in sooner, but technically it is not an unusual delay. Bigger deals usually take a month for requisite approvals,” a source told the publication.

According to reports, Tata will buy a 68% stake in BigBasket for around INR 9,100 Cr, which will be a critical link in the super app plan, which seeks to bring together Tata’s various retail and consumer services brands under one roof. So far, the conglomerate’s digital venture Tata Digital operates ecommerce platform Tata CLiQ, online grocery store StarQuik and online electronics platform Croma.

Last month, Tata was also reported to have submitted a proposal to the Reserve Bank of India (RBI) for setting up a New Umbrella Entity (NUE) to create a countrywide retail payments network, such as the one currently owned and operated by the state-owned National Payments Corporation of India (NPCI).

Tata Group will promote the proposed NUE through its subsidiary Ferbine Pvt Ltd and is expected to hold the majority stake. Airtel Digital will buy a 10% stake in Ferbine while HDFC Bank and Kotak Mahindra reportedly have a 9.9% stake each in the venture. Flipkart, Mastercard and PayU will reportedly acquire a 30% stake in Ferbine.

The acquisition of online grocery unicorn BigBasket would further bolster Tata’s presence in the space, especially with Reliance also looking to launch a super app centred around the Jio Mart ecommerce platform. Besides Tata, ecommerce majors Flipkart and Amazon are also moving closer to becoming super apps, by integrating a range of offerings such as grocery, pharmacy, travel and payments on their portals.