By Offering A 4% Stake For INR 276 Cr, Amazon Exits Shoppers Stop

Nitin Konde, Varun Bhardwaj

Dec 20, 2024 — 2 min read

Amazon Sells 4% Stake in Shoppers Stop for INR 276 Crore

By selling a nearly 4% share in the retail chain for INR 275.88 Cr in a block deal, e-commerce giant Amazon has left Shoppers Stop. According to NSE statistics, on December 18, Amazon.com NV Investment Holdings sold 43.95 lakh Shoppers Stop shares for INR 627.6 each. Morgan Stanley Asia Singapore, 360 One, Kotak Mahindra Mutual Fund, and Tata Mutual Fund all snatched up the shares that were flooding the market. Kotak Mahindra Mutual Fund and Tata Mutual Fund purchased 9.56 lakh and 19.12 lakh shares, respectively, while Morgan Stanley purchased 6.37 lakh shares. In the meantime, 360 One, an asset management firm, paid INR 627.6 per share for 6.44 lakh shares. Through its chain of stores, Shoppers Stop offers a variety of products, including furniture, home décor, kids' and baby care items, branded clothing and accessories, and cosmetics.

Changes in FDI Norms Transformed the Business Dynamics

It is important to remember that for the past five years, Amazon's ownership of Shoppers Stop has been an issue of dispute. In September 2017, the e-commerce giant's investment arm initially revealed that it had paid INR 179.25 Cr to acquire a 5% minority, non-controlling stake in the business. Amazon then requested approval for the deal from the Competition Commission of India (CCI) in December 2017, and the watchdog gave its approval in January 2018. However, the Centre announced amendments to the rules governing foreign direct investment (FDI) for e-commerce platforms in December 2018. These changes effectively barred big online marketplaces from having exclusive product releases or controlling the inventory of their partner vendors. Shoppers Stop stopped selling its products on Amazon in February 2019 once the new regulations went into force. As it forges a new path in India, Amazon has now sold off its share in the chain of retail stores after almost five years.

Amazon India Currently Navigating Through Troubled Waters

Amazon has been attempting to fizz off fires on numerous fronts, and this stake sale is part of that strategy. The e-commerce giant and competitor Flipkart were found guilty of violating antitrust laws by giving preference to specific suppliers in an internal CCI investigation earlier this year. In the meantime, other Amazon merchants have challenged different parts of the CCI's probe and taken the competition watchdog to different courts.

However, on December 16, the Supreme Court stated that it believed the Karnataka High Court should handle all complaints brought by sellers connected to Amazon and Flipkart against the Competition Commission of India's (CCI) inquiry into purported anti-competitive conduct.