One of the largest e-commerce marketplace in India, Amazon is all set to invest Rs. 179.25 crore for 5% of the equity in the fashion brand Shoppers Stop.
Govind Shrikhande, Managing Director of Shoppers Stop said that it will use the funds to continue its investments in expanding physical and online retail businesses.
“Amazon’s US-based subsidiary is registered as category three foreign portfolio investor (FPI) with SEBI in India. So it is different from FDI which mostly means buying controlling stake. There is currently no proposal to increase their stake and Amazon as a retailer is not involved,” said Govind Shrinkhande, MD at Shoppers Stop. “Amazon’s arm is a pure foreign investor which believes that our brick-and-mortar model is strong and has potential to grow.”
The company will now hold an extraordinary general meeting (EGM) of its shareholders to seek their approval for this deal as per the report by The Mint. However, Shrikhande said the company did not have an exact timeline yet for when this investment proposal will have gone through all necessary approvals.
According to the joint statement issued by the firms yesterday, Amazon Experience Centers will be created across the network of 80 Shoppers Stop stores to bring in the touch and feel aspect on Amazon.in assortment. Shares of Shoppers Stop surged as much as 20%, headed for their biggest gain in eight years at the time of filing this report. (Image- Amazon.in)