Amazon Takes Stake In India Loyalty/Rewards Platform

Amazon is acquiring a 49 percent stake in Future Coupons, which is owned by India’s second largest retail chain, Future Retail.

The news was revealed in a regulatory filing by Future Retail. An Amazon spokesperson told TechCrunch the investment would “enhance Amazon’s existing portfolio of investments in the payments landscape in India,” adding that “Amazon has agreed to invest in Future Coupons Limited, which is engaged in developing innovative value-added payment products and solutions such as corporate gift cards, loyalty cards, and reward cards primarily for corporate and institutional customers.”

Past regulatory filings showed that Future Coupons owned about a 7.3 percent stake in Future Retail as of early 2019. This recent deal means Amazon now owns a 3.58 percent stake in Future Retail. While financial terms of the deal were not disclosed, Future Retail’s current market cap stands at around $2.9 billion, so a 3.58 percent stake in the company would cost about $104 million.

“Pursuant to these agreements, Amazon has agreed to make an equity investment in Future Coupons Limited for acquiring a 49 percent stake comprising both voting and non-voting shares. As part of the agreement, Amazon has been granted a call option,” Future Retail said in a filing to the local stock exchange.

The agreement gives Amazon the right of first refusal to purchase an additional stake in Future Retail both directly and via entities.

“The Promoters have also agreed to certain share transfer restrictions on their shares in the company for same tenure, including restrictions to not transfer shares to specified persons, a right of first offer in favor of Amazon, all of which are subject to mutually agreed exceptions (such as liquidity allowances and affiliate transfers). The transaction contemplated above is subject to obtaining applicable regulatory approvals and customary closing conditions,” Future Retail stated.

So far, Amazon has invested more than $6 billion in India’s growing internet market. The company announced on Thursday (Aug. 22) that it is bringing its online grocery business, Amazon Fresh, to the country. The news comes on the heels of Amazon’s announcement of its largest campus ever, in Hyderabad.