Amazon Set to Pick Up 49% Stake in Future Coupons and Minority Holding in Future Retail

As far as e-commerce is concerned Amazon is at a different level altogether, and over the years, the company has aggressively expanded in new markets across the world. However, after it lost the battle in China to Alibaba, Amazon set its eyes on India and has spent billions of dollars in its quest to become the leading e-commerce player in Asia’s second-biggest economy. On the other hand, Amazon has also been making important deals to further improve its position in the Indian market as competition intensifies in the e-commerce space. In a new development, it has emerged that Amazon’s Indian arm, Amazon India has decided to pick up a 49% stake in Future Retail’s subsidiary Future Coupons Ltd. 

The financial details of the transaction have not been revealed by either party. However, it is interesting to note that by way of this transaction, Amazon will also get a stake in Future Group’s brick and mortar entity Future Retail Limited. Future Coupons has a 7.3% stake in Future Retail, and hence Amazon will now indirectly have a 3.58% stake in it. It is important to note that Future Retail is one of the biggest retailers in India and operates as many as 1600 stores in the country. Some of those stores include EasyDay, Big Bazaar, and Nilgiris. The 3.58% stake that Amazon now owns in Future Retail is currently valued at $104 million. Future Retail currently has a market capitalization of $2.91 billion.

Future Retail published a statement with regards to the transaction. In the statement, the company stated,

We have been informed by Mr. Kishore Biyani (the owner) on behalf of the existing shareholders forming part of the promoter group and Future Coupons Ltd that they have entered into a share subscription agreement and a shareholders’ agreement with Amazon.Com NV Investment Holdings LLC (Amazon).

It is a hugely important deal for Amazon since the e-commerce space is heating up in India due to the presence of Walmart owned Flipkart and also because of the potential entry of Reliance Industries Limited with its own e-commerce business. Reliance is owned by Asia’s richest man Mukesh Ambani and Amazon will need to be at the top of its game if it is to emerge as the biggest e-commerce player in the country. It could be an interesting few months for businesses in this sector in India.