IndianEra > Business > Amazon Eyes 49% Stake in India’s Future Retail in 2020

In another significant deal in the retail domain, the eCommerce giant Amazon is looking at more investment in the Indian market.

While already having an indirect stake of 1.3 percent in Future Retail, the company is now eyeing for more direct investment soon.

As the sources say, Amazon is planning to buy some potential stock in Future Group, raising its shareholding by at least 49 percent by the 2020 end.

Considering the 25 percent limitations under stock exchange rules, the company is thinking of involving more local investors into the deal.

Amazon India

Under India’s rules, foreign ownership in multi-brand retail trading, including supermarkets and departmental stores, cannot exceed 51 percent.

[Also Read: Amazon India Announces 10,000 EVs in India by 2025]

Moreover, the change of ownership for the Future Retail has challenges linked to the breaching of loan terms, urging them to sell their assets.

Amazon with Future Group

Amazon and Future Group

Amazon has reportedly bought a 49 percent stake in Future Coupons, which holds a 2.7 percent stake in Future Retail, earlier this year.

Under the agreement with Future Coupons, Amazon also has the option of buying it’s the former’s stake in Future Retail from the third year of the deal.

[Also Read: Amazon Eyes India’s Offline Retail Space, Makes Strategic Deal]

Now, Amazon is already an authorized online sales channel for Future Retail’s stores in the Indian retail market.

Meanwhile, Future Group has already utilized 50 percent of emergency credit facilities for its working capital. The lenders have further allowed the company to take Rs. 3 billion from the total Rs. 6.5 billion credit line.

Amazon Indian Retail Market

The company’s shares also fell by 4.9 percent in Mumbai on May 06, 2020, taking their overall year-to-date to 79 percent.

Future Retail holds an overall market value of Rs. 39 billion.

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Posted by IndianEra, 07/05/2020