Amazon (AMZN) is reportedly in talks to purchase BigBasket, India's largest online grocer. 

Reports of a deal first appeared shortly before Amazon’s announcement that it is acquiring Whole Foods in an all cash deal valued at $13.7 billion. On Friday, the Times of India reported that the Indian firm and the ecommerce giant have entered a 60-day exclusivity agreement during which BigBasket can’t hold talks with other potential suitors about a sale. The Indian retailer can still reach out to investors during the two months to raise more cash. A deal may fall apart during the due diligence portion, which is why the company is looking to raise cash even while the exclusive acquisition talks are on, noted the report. 

Earlier this spring, BigBasket tapped Morgan Stanley to help it raise $150 million, but when that failed it went back to Amazon and inked the exclusivity deal, reported TOI citing an unnamed source. Bloomberg reported last week that Amazon has sought approval to partner and invest with the government in food supply.

Hari Menon, a founder of the five-year-old startup, denied that it is in any talks with Amazon. As for the raising of capital, he said the company will make a comment at the “appropriate time.” The executive noted in the statement that BigBasket had sales of Rs 1,400 crore ($217 million) during the 2016-2017 financial year, putting it in the sixth spot in terms of grocery retailers in the country, including physical retailers. It is also India's largest online grocer. (See more: India Unicorn Flipkart Seeks Cash to Battle Amazon.)

Times of India reported the company has a valuation of around $450 million and it looking to fetch roughly $700 million in a sale. That price tag has prevented a transaction from coming to fruition in the past. Once the due diligence process is completed, a final value for the company will be set. If it goes through, it will give Amazon the ability to tap the grocery and food industry in India, which a Technopak report said has a market size of about $400 billion. Online grocers only have a 4% share, the report said, which means there is a lot of opportunity for players like Amazon. 

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