news-details

Amazons deal with Future Retail stuck on new e-commerce FDI norms - Business Standard

  • 2 January 2019

Shares of Kishore Biyani-promoted have fallen over 11 per cent in the past four trading sessions after the government announced changes to foreign direct investment (FDI) norms for e-commerce

ALSO READ: Amazon, Flipkart may feel the pinch after govt bars exclusive deals

The Centre last week announced changes to to check predatory pricing and deep discounting. According to the new policy, e-commerce portals can’t force vendors to have exclusive deals, and will give uniform terms to all sellers. The government also aims to put a cap of 25 per cent on the inventory that a marketplace entity or its group can purchase from a vendor.

According to market buzz, Amazon’s deal with is not progressing in the wake of policy changes. But Kishore Biyani, chairman and managing director of Future Retail, denied such development. An spokesperson said: “We do not comment on speculations of what we may or may not do.”

ALSO READ: E-commerce firms Amazon, Flipkart, others pad up to save private labels biz

is in talks to pick up a 10 per cent stake in for Rs 2,000 crore through (FPI) route. “The Future Retail stock ran on the premise of Amazon-Future Retail deal. Hence, the stock is correcting as the deal has not happened yet. must be studying the new policy changes,” said the research head of a Mumbai-based brokerage wishing not to be quoted.

Future’s stock rose 32 per cent between October 8 and December 24 this year. Abneesh Roy, senior vice-president at Edelweiss Securities, said: “The FDI rules in e-commerce have been changed. That’s why retail stocks have turned volatile.”