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The competition in the Indian ecommerce space is getting hotter every day. In a bid to compete with the homegrown marketplace Flipkart, the US-based online marketplace eBay Inc, may have retained the right to buy a controlling stake in Snapdeal, according to regulatory filings.

With this move, eBay Inc. would appear to have stronger shareholder rights as compared to SoftBank Group, despite SoftBank’s much higher investment in Snapdeal. However, Snapdeal has denied any such move and refused to shed more light on the development. Softbank had invested $627 Mn in Snapdeal in October last year.

According to the filings, eBay has retained the right with some time-bound riders—to undertake a so-called control transfer in Snapdeal; which will allow eBay to negotiate with other investors apart from SoftBank of Japan to buy a majority stake in Snapdeal.

Besides, SoftBank and its affiliates cannot own more than 49% of the share capital of Jasper Infotech Pvt. Ltd, Snapdeal’s holding company, for the next three years without eBay’s approval.

According to the documents available on public domain from the Registrar of Companies (RoC), eBay is formally referred to as the lone “strategic investor” in Jasper Infotech. The other three major investors include SoftBank, Nexus Venture Partners and Indo-US Venture Partners (which includes Kalaari Capital and New Enterprise Associates, or NEA).

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The documents also states that if SoftBank wants to sell its shares in Snapdeal over the next five years, eBay has the first right to buy them.

Snapdeal formally closed its Series G round of funding led by SoftBank on 13 November.

Currently, SoftBank is by far the largest investor in Snapdeal with an estimated stake of 36-38%. The filings says that eBay and Snapdeal have entered into an “eBay Letter Agreement” that shall “govern over” the article of association in the event of any conflict.

In April 2013, eBay poured $50 Mn into Snapdeal. In February 2014, it led a $133.7 Mn round along with other investors such as Kalaari Capital and Bessemer Venture Partners.

It is to be noted that eBay’s formal title as strategic investor in Snapdeal may also indicate that the company wants to hold the option of buying out Snapdeal. eBay had earlier also tried to acquire Snapdeal on two separate occasions unsuccessfully.

Snapdeal, which raised about $1 Bn last year, is in talks with several new investors to raise its next round of funds. Recently, China’s Alibaba Group cancelled its plans to invest in Snapdeal for now. Snapdeal also acquired online fashion retailer Exclusively.com for an undiclosed amount along with reports that the firm has picked up stake in logistics company, Gojavas.

eBay is currently the only international ecommerce company that has invested directly in an Indian rival. Earlier last year, Flipkart had also closed a $700 Mn funding round from Baillie Gifford, Greenoaks Capital, Steadview Capital, T. Rowe Price Associates and Qatar Investment Authority. The firm has also announced its plans to raise $5 Bn via IPO.

Only time will tell what these ecommerce battles have in store for us.

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