Amazon Exits Shoppers Stop By Selling 4% Stake For INR 276 Cr

Ecommerce major Amazon has exited Shoppers Stop by selling nearly 4% stake in the retail chain for INR 275.88 Cr via a block deal. 

As per NSE data, Amazon.com NV Investment Holdings offloaded 43.95 Lakh shares of Shoppers Stop at INR 627.6 apiece on Wednesday (December 18). The shares that flooded the market were lapped up by Morgan Stanley Asia Singapore, 360 One, Kotak Mahindra Mutual Fund and Tata Mutual Fund. 

While Morgan Stanley picked up 6.37 Lakh shares, Kotak Mahindra Mutual Fund and Tata Mutual Fund bought 9.56 Lakh and 19.12 Lakh shares, respectively. Meanwhile, asset management company 360 One acquired 6.44 Lakh shares at INR 627.6 apiece. 

Shoppers Stop sells branded apparel and accessories, beauty care products, kids and baby care products, home décor and furniture, among others, through its chain of stores.

It is pertinent to note that Amazon’s shareholding in Shoppers Stop has been fraught with controversy for half a decade now. The investment arm of the ecommerce giant first announced the acquisition of a 5% minority, non-controlling stake in the company for INR 179.25 Cr in September 2017. 

Thereafter, Amazon approached the Competition Commission of India (CCI) to seek approval for the transaction in December 2017, and received the watchdog’s nod in January 2018.

However, in December 2018, the Centre announced changes in foreign direct investment (FDI) rules for ecommerce platforms, which effectively prohibited large online marketplaces from controlling inventory of their partner sellers and also from having any exclusive product launches. 

After the new rules came into effect in February 2019, Shoppers Stop discontinued selling its products on Amazon. After nearly five years, Amazon has now offloaded its stake in the retail store chain as it charts a new course in India. 

The stake sale comes at a time when Amazon has been trying to douse fires on multiple fronts. An internal CCI probe earlier this year found the ecommerce major, along with rival Flipkart, guilty of flouting antitrust rules by prioritising certain sellers. 

Meanwhile, a slew of Amazon sellers have dragged the competition watchdog to various courts, challenging various aspects of the CCI’s investigation.

Shares of Shoppers Stop closed 1.41% higher at INR 635.45 on the BSE on Wednesday. 

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