In the race to expand its online presence, there are reports of Tata group mulling to get a controlling stake in BigBasket by buying out several existing investors of the online grocer, as per the report in business daily Mint. With the competition in the online retail market getting fierce, bigger retails players are eyeing stake in the online grocery platforms to expand their market presence. Also Read: EXPLAINED | Banks To Give Cashback For Interest Waiver To Borrowers Before Diwali: Understand In 10 Points

As per the report, if the deals gets through then Tata group might have to shell out $500-700 million in cash to its financial investors including private equity funds and China’s Alibaba group.

At present the discussions are focused on the proposed stake of Tata group in the company post the deal even as the online retailer BigBasket’s existing investors are not opposed to the idea of selling a controlling stake to Tata group. According to the Mint report, the investors also want the current management, led by the founders, to remain at the helm.

It is reported that investors are seeking for the company’s initial public offering by the next calendar year, irrespective of Tata’s stake.

What does it mean for India’s booming retail market?

Once the deal is through, Tata group will be well positioned to compete with the biggest e-commerce companies which are betting on India’s growth story. The top players in the online grocery marketplace includes Reliance Industries Ltd, Walmart-owned Flipkart and Amazon.

For the Tata group, the deal will be aimed in getting a bigger pie of the India’s fast-growing e-commerce market. Earlier the Tata group’s discussion to pick up a minority stake in BigBasket was reported as the latter was looking to raise $200 million in growth capital.

BigBasket has been going strong in retention of customers and remains the biggest market share in the online grocery space. The company saw new customers on its delivery platform increasing by 84% between January and July, while the retention rate of customers increased 50%. Meanwhile Tata group is preparing a new platform and aiming to launch in December or January that will bring together the salt-to-steel conglomerate’s varied offerings on a single platform, christened a “super app" by the Tatas.