Walmart Looks To Invest Up To $25B In Tata's India Retail App, As Other US Giants Rush To Rival: Report

Walmart Inc WMT is in negotiations with India's Tata Group regarding buying a stake in a new "super app" focused on retail, local media reported Tuesday (New Delhi time).

What Happened: The super app will encompass a wide range of products in the retail segment, according to India’s Mint newspaper.

The investment by Arkansas-based retail giant could be in the region of $20-25 billion, sources familiar with the matter told Mint. 

The digital platform could reportedly be launched as a joint venture between the Indian group and the retail behemoth, with additional foreign investors joining the two.

Walmart-owned Flipkart, which is a rival to Amazon.com, Inc’s AMZN Indian operations, may be able to offer its product line on the emergent platform or conversely the e-commerce marketplace could be powered by Tata, an unnamed source told Mint.

Goldman Sachs Group Inc GS has been chosen as an investment banker for the likely deal by Walmart, as per a source of Mint.

The app is likely to be launched in December or January in India.

Why It Matters: The valuation of the super app is pegged around $50-60 billion, according to Mint.

Tata Group, whose product portfolio spans from salt to satellite television, is reportedly aiming to merge all retail businesses of the conglomerate into one channel.

The negotiations could lead to India’s largest retail deal, which would be bigger than Walmart’s 2018 purchase of a 66% stake in Flipkart for $16 billion, Mint noted. 

This could also be a chance for Tata Group to trim debt which stood at $14 billion as of June 30, Bloomberg reported.

Tata's digital platform will compete with Mukesh Ambani’s Reliance Retail in which Amazon is said to be looking to pick up a 10% stake.

Facebook Inc FB acquired a nearly 10% stake in Ambani’s Jio Platforms for $5.7 billion in April. Alphabet Inc. GOOGL GOOG followed with a $4.5 billion funding in July.

Jio, which operates the country’s largest mobile network, has also attracted $748 million investment from Silver Lake and $253.5 million from Intel Corporation INTC.

Price Action: Walmart shares rose 0.1% to $137.42 in the after-hours session after closing mostly unchanged on Monday.