Amazon.com NV Investment Holdings LLC, a subsidiary of American e-commerce company Amazon.com Inc., on Wednesday sold its entire stake in Indian brick-and-mortar retail chain Shoppers Stop Ltd.
Amazon sold about 4.4 million shares, or a 4% stake in the Indian company, at Rs 627.60 apiece. This totals to almost Rs 275.9 crore ($32.5 million).
Kotak Mahindra Mutual Fund, Tata Mutual Fund and Morgan Stanley were among the buyers, stock-exchange data showed.
The sale comes a little more than seven years after Amazon invested around Rs 180 crore ($27.77 million then) in September 2017 to buy a 5% stake in Shoppers Stop. The deal valued Shoppers Stop around Rs 3,600 crore. Amazon’s stake diluted over time as the retailer issued more shares.
Shares of Shoppers Stop gained 1.4% on Wednesday to end at Rs 635.45 on the BSE, giving the company a market capitalisation of Rs 6,990.63 crore.
For the year ended March, Shoppers Stop’ net profit fell 29% on year to Rs 83.74 crore. Net sales rose to Rs 4,316.6 crore from Rs 4,022.1 crore in FY23.
Amazon’s investment in Shoppers Stop was part of its strategy to expand its exposure to India’s offline retail sector, which is dominated by the homegrown companies such as Reliance Retail and Aditya Birla Group. As part of the same game plan, Amazon had also acquired the More retail chain from the Aditya Birla Group in a tie-up with private equity firm Samara Capital in 2018.
In interactions with media outlets after the 2017 deal, Shoppers Stop managing director Govind Shrikhande had said that it was a "financial investment" and that Amazon had no say in the company's day-to-day operations.
The company had intended to use proceeds from Amazon’s investment to strengthen its market position by bringing its catalogue of 400 brands onto Amazon’s India ecommerce platform.
However, the plan ran into rough weather in 2019 and Shoppers Stop had to delist itself from Amazon because of the government's foreign investment policy that barred marketplaces from controlling inventory.