BSE To Consult SEBI On Future-Reliance Deal After Amazon’s Objection

The Bombay Stock Exchange (BSE) has decided to consult markets regulator Securities and Exchange Board of India (SEBI) to seek clarifications from Future Retail and Reliance Industries about their INR 24,713 Cr deal, following Amazon’s objection to the deal.

The development comes a day after the ecommerce giant wrote to SEBI, BSE and National Stock Exchange (NSE), urging them to take into consideration the Singapore arbitrator’s interim judgment that has put the deal on hold.

A BSE source told Reuters that it will consult SEBI about its stance on the deal and the exchange later on Friday also plans to seek clarification from Future and Reliance Retail.

The development follows reports of the US tech and ecommerce giant planning to file a case with an Indian high court against the deal. 

The Future Group-RIL deal is subject to approvals from various regulatory authorities, including SEBI and the Competition Commission of India (CCI).

It is worth noting that India’s antitrust watchdog, the Competition Commission of India (CCI) is also reviewing the online and offline aspects of the Reliance and Future Group deal and their impact on competition in the sector.

Last Sunday, Amazon got an interim relief over its dispute with Future Group, managing to pause the merger process for at least 90 days.

Amazon argues that a 2019 deal it had with a Future unit had clauses saying the Indian group couldn’t sell its retail assets to anyone on a “restricted persons” list including any firms from Reliance chief Mukesh Ambani’s group.

Amazon has shared a copy of the Singapore arbitrator’s interim order with SEBI and the two stock exchanges, hoping they would step in to stall the approval, a source told Reuters.

Amazon vs Reliance

Amazon’s decision to pursue legal action against Future Group will also have a bearing on the competition among the retail giants in India. 

With the launch of its online store JioMart earlier this year, Reliance Retail entered into direct competition with Amazon in the ecommerce sector. Both platforms have beefed up their online offerings, in terms of product categories and discounts, as the Diwali festive season nears. 

In the last couple of months, Reliance Retail has been attracting investments from several companies, some of which have previously invested in Reliance’s digital venture Jio Platforms as well. On October 6, Inc42 reported that the United Arab Emirates (UAE)-based sovereign wealth fund Abu Dhabi Investment Authority (ADIA) has committed to invest INR 5,512.50 Cr in Reliance Industries’ retail unit Reliance Retail in exchange for 1.20% equity stake on a fully diluted basis. 

When the investment comes through, Reliance Retail will have raised INR 37,710 Cr from global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA in less than four weeks.