Tata in talks with Walmart to raise $25 bn to counter rising Jio clout

Walmart is in early discussions with the Tata group for stake in proposed super app


In a move that would give Reliance JioMart a run for its money, global retail major Walmart is in early discussions with the Tata group for a large stake purchase in the proposed super app of the salt-to-software conglomerate, Mint reported on Tuesday. Walmart, which already has a significant stake in India's e-commerce space through its Flipkart acquisition, is looking for an investment of up to $25 billion in the Tata Group, the report said. 

The news assumes significance as it signals rising interest in India's e-commerce sector by global majors. “Tata group is in talks with Walmart for a deal entailing a strategic investment by Walmart in the super app platform business. The Walmart investment could touch $20-25 billion eventually for a large stake in the proposed super app to be hosted under a Tata Sons subsidiary," the report said citing people on condition of anonymity.

If the deal fructifies, it will be the country’s largest deal in the retail space ever, eclipsing Walmart’s own May 2018 purchase of a 66 per cent stake in Flipkart for $16 billion. As per the ongoing discussions between Tata and Walmart, the super app, with an estimated valuation of around $50 -60 billion, could be launched as a joint venture between Tata and Walmart, which will enable leveraging on the synergies between Tata’s e-commerce business and Flipkart.

The super app may pave the way for Tata Group to power Flipkart, the leading online marketplace, against JioMart's rising clout in the India e-commerce space. The app would include Flipkart’s offerings from Walmart and the entire retail product franchise housed by the Tata group on one platform for retail customers. 

According to the ongoing talks, the new digital platform business is proposed to be run by Tata-Walmart together, and there could be more foreign investors roped in as investors. The $113-billion coffee-to-cars conglomerate, is working with advisers to explore bringing in financial or strategic investors, including global technology companies, a Bloomberg report said. The group plans to bring together digital assets across various Tata businesses to create the new entity.

Tata Digital’s head Pratik Pal is in charge of building the all-in-one app and the group is preparing the new platform aimed for a December or January launch. Pal has three decades of experience at TCS, where he was global head of retail, and helped with the digital transformation of some of the world’s largest retail chains including Walmart, Tesco, Aldi, Target, Best Buy Co and Marks & Spencer Group Plc.

"We have a very big opportunity,” Tata Sons chairman Natarajan Chandrasekaran told Financial Times earlier, adding that the app would eventually encompass services from food and grocery ordering to fashion, lifestyle, electronics, insurance, financial services, education, healthcare and bill payments.

Compared with Jio Platforms or Amazon, Tata group has the largest franchise of its own branded products, including Tata Cliq (electronics), StarQuick (e-grocery) and streaming options in Tata Sky, that are sold to retail customers.

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