Tata Group plans to raise $1 billion for its multi-brand retail business BigBasket as part of a $1.3 billion fundraise which will also send funds to its online pharmacy company 1mg. Global investment banks Moelis and Citi have been mandated to raise the capital from external investors.

Tata Group is keen to level up BigBasket to enable it to compete in the high stakes quick commerce and e-commerce spaces, ET Bureau reported. Both BigBasket and 1mg are part of Tata Group’s Tata Digital arm and the fundraising round is expected to kick off by the end of this April.

“Tata Sons has invested significant funds into Tata Digital’s various businesses, and it feels it’s time to show results,” an anonymous executive close to the development told ET Retail. “While businesses like BigBasket are seen as mature enough to drive growth based on market realities, it has to move swiftly in spaces ignored earlier, and that needs big funds. Investors may not be too confident about the valuation expected by the management. Their comfort comes from the fact that it has the backing of Tata Sons.”

BigBasket’s last valuation was at around $3.2 billion in 2022. The business’ revenue makes up the majority of Tata Digital’s income and Tata Group owns more than 65% of BigBasket.

Author Credits- Isabelle Crossley, FASHION NETWORK