Reliance

Reliance to acquire 87.6% of Fynd’s stake for Rs 295 crore

Reliance Industries Ltd will gain an 87.6 percent interest in Shopsense Retail Technologies, also known as Fynd, in a declaration for some 295 crore ($42.33 million).

The company said its fully-owned subsidiary Reliance Industrial Investments and Holdings Ltd has an opportunity to continue investing in Fynd, a software technology company founded in September 2012, up to one hundred crore by December 2021.

REL Industries is already operating retail outlets and declaring plans for e-commerce diversification.

Fynd offers merchants with technology platform and solutions to handle their inventory and sales across various consumer demand channels, including platforms for e-commerce.

ON THE OTHR HAND

AMAZON WANTS TO ACQUIRE 26% OF RELIANCE SHARE.

Amazon.com Inc (AMZN.O) is in talks with the retail division of Reliance Industries Ltd (RELI.NS) to acquire a stake in India’s biggest brick-and-mortar dealer, according to sources.

The massive internet reach of Amazon could help strengthen the company of consumer and private labels of Reliance. More importantly, a partnership would help the duo tackle Walmart (WMT.N), who last year spent $16 billion in India’s Flipkart, compete for a bigger share of the rapidly-growing e-commerce market in India.

India changed laws on foreign direct investment (FDI) in e-commerce at the end of December, creating additional difficulties for companies like Amazon and Flipkart, and granting an advantage to companies like Reliance.

Amazon had made Reliance’s proposal for the partnership— operated by Mukesh Ambani, India’s wealthiest man — and it was not obvious if an agreement would happen, one of the sources said.

The second source said that since this February, Amazon has been debating a proposition to acquire up to 26 percent stake in the Reliance unit.

Reliance on Friday replied to its declaration on Thursday, which said that stock exchanges would make any declarations as and when needed.

What does it mean to both companies?

Reliance could possibly utilize the global expertise of Amazon in technology, distribution network, and logistics as it seeks to digitally link grocery shops throughout the nation via its Jio telecoms network–the largest subscriber network in India.

Picking up a share in a Reliance group could indicate accessing the Jio telecoms service and its huge retail footprint of over 10,600 shops throughout India for Amazon.

Amazon based in Seattle is eager to acquire a larger share of India’s e-commerce market, which Deloitte expects between 2017 and 2021 to be more than twice as high as $84 billion.

Reliance had earlier been in talks with China’s Alibaba (BABA.N) to sell a share in Reliance Retail but, according to a person close to the case, a deal could not be sealed due to changes in valuation