Saturday, December 9

Amazon to Take up Stake in Kishore Biyani’s Future Retail

The e-commerce giant Amazon is all set to acquire a stake of just under 10% in Kishore Biyani-led Future Retail. The deal is likely to be approved by the latter’s board on October 29.

The retail major is expected to pick up shares through the foreign portfolio investors route at a hefty premium to the prevailing share price for gaining business exclusivity and future shareholding rights.

Future Retail shares ended 14% higher at Rs 494 apiece after television channels stated that Amazon was going to buy a 7-8% stake in the India-based company. Future Retail that operates Big Bazaar and Easy Day supermarkets would reach Rs 25,000-crore market value after this deal.

Amazon’s investment has strategic underpinnings and could evolve alongside regulatory and business developments. The Seattle-headquartered online retailing behemoth is placing huge bets on an omni-channel play in its pursuit of leadership in Asia’s third-largest economy.

The company is expected to face a good resistance from Walmart, which acquired local e-commerce leader Flipkart, and Chinese internet giant Alibaba which has investments in Paytm Mall and e-grocer BigBasket.

This explains Amazon’s eagerness to gain exclusivity with India’s largest retailer, Future Group. Incidentally, domestic organised retailing pioneer Biyani has had talks with Alibaba-Paytm even as talks with Amazon gathered momentum.