Ratan Tata may buy stake in e-tailer Snapdeal: report

Ratan Tata, Chairman Emeritus of the Tata Group, is likely to buy a stake in e-commerce firm Snapdeal, with reports suggesting that he is considering buying out an existing investor in the firm through the secondary route.

Speaking to members of a Ladies Study Group in Kolkata on Wednesday, Ratan Tata said he was looking to invest in the fledgling e-commerce sector, which, according to him, has great potential in a country with large population like India.

Tata said ''e-commerce was hot'' business proposition in the country with over a billion people trying to access products and services without difficulty. ''You can just walk away with what you want. This adds new dimension in a huge market,'' he said.

In fact, he had taken a personal interest in the e-commerce firm and had visited the firm's Delhi headquarters last month to address employees, when he expressed willingness to become a minority investor in the e-tailer.

Neither Tata, nor the founders of Snapdeal confirmed the stake that Tata looks to acquire.

Ratan Tata may be the third Indian business tycoon after Wipro's Azim Premji and Infosys' Narayan Murthy to invest in e-commerce business.

While Premji has taken up minority stakes in Snapdeal and fashion e-tailer Myntra through his family venture PremjiInvest, Infosys co-founder Narayan Murthy has also ventured into e-commerce through a joint venture with Amazon through his investment firm Catamaran Ventures.

Tata's interest in e-commerce is justified going by the projections that online marketing business in India is expected to reach $9 billion in the next two years, as forecast by US venture capitalist firm Accel Partners.

The e-commerce bubble is already growing, and with the booming online retail business in India local firms Flipcart and Snapdeal are arming themselves with the necessary funds to take on global giant Amazon, which is also expanding its India operations.

Tata's investment could push Snapdeal, which sells five million products to more than 25 million customers in India, to give tough competition to Flipkart and Amazon, which are currently dominating the e-commerce market in India.

Snapdeal's total capital touched $350 million this year through fundings from investors, including e-bay Inc, BlackRock, Intel, PremjiInvest, Nexus Venture Partners and others.

Snapdeal was set up by Kunal Bahl, a Wharton graduate, and Rohit Bansal, an IIT-Delhi graduate, in 2010 as a daily deals site and was later developed into an online marketplace to allow merchants to sell their products.