In order to grab the largest share in the ecommerce marketplace in India, Amazon India has almost doubled its authorised capital to $2.4 Bn (INR 16,000 Cr), exceeding its capital commitment of $2 Bn (about INR 13,000), that it committed in July 2014, reports Livemint.
Authorised capital is the maximum amount of capital which a company can raise through sale of its shares, allowing the company to issue stock to raise capital when it needs funds.
Amazon’s Indian flagship firm Amazon Seller Services’ authorised capital was $226 Mn (INR 1,500 Cr) in July 2014, as per the Registrar of Companies’ filings. This was around the time when Jeff Bezos promised to invest $2 Bn in its Indian operations for the infrastructure, new fulfillment centres, customer acquisition, new product categories, payments, SMEs, and mobile.
The report also states that since the $2 Bn commitment from Bezos, Amazon Seller Services has been infused with about $1.6 Bn (INR 10,730 Cr) to spend on discounts, advertising, hiring and other things. This investment is separate from Amazon’s investment in its logistics unit Amazon Transportation Services Pvt. Ltd and Cloudtail India Pvt. Ltd (Amazon’s joint venture with Catamaran Ventures).
An email sent to Amazon India regarding the latest capital infusion did not elicit any response.
Amazon has been investing heavily in India to overtake its local rivals Flipkart and Snapdeal. In February 2016, Amazon invested about $300 Mn (INR 1,980 Cr.) in Amazon Seller Services, as per ROC. Earlier it infused $250 Mn (INR 1,696 Cr) through a rights issue in December 2015.