Google and Paytm may come together to take 10% stake in Future Retail

Search engine behemoth Google and payment major Paytm are all set to join hands to buy stake in Future Retail. Both the firms are planning to invest Rs 3,500 - 4,000 crore for about 10 per cent stake in Future Retail Ltd (FRL).

The Google-Paytm Mall combine force will be in direct competition against Jeff Bezos-owned Amazon, which submitted a term sheet to pick up 10 per cent stake in Future Retail Ltd.

Google, which sees India as one of the key markets, has keenly working to have a stake in hyperlocal retail space in the country. Google is also preparing to launch e-commerce platform for a year which may go live by Diwali.

At present, through Google Shopping, it has been acting as promoting medium for grocery firms Grofers and Bigbasket. It is also planning to bring Google online shopping platform Google Express to India.

Besides, Walmart, after Flipkart acquisition, to fight Amazon had reportedly held talks with Google for potential investment in Flipkart. Whereas Alibaba backed Paytm is also trying everything to win the payments and retail space in the country.

If the deal gets through, it will serve a big blow to Amazon, which is eyeing to consolidate its position.

Two weeks ago, Future Group CEO Kishore Biyani had said that he may close a deal with a foreign investor in the next two-three months. The fund infusion, he added, could be through the primary and secondary share sale.

According to Biyani, Future Group has data on consumption and buying frequency pattern of nearly 30 million loyal customers and a whopping 500 million footfalls or consumers who have visited its stores last year.

In February, the group reportedly was in talks with Amazon, which is said to put in around $600 million in the company at a valuation of around $6 billion.

Amazon India arm registered as a foreign portfolio investor (FPI) is said to acquire up to 10 per cent in an Indian entity as a single firm. In 2017, US-based e-tailer picked up a 5 per cent stake in Shoppers Stop through its investment arm.

Since its arrival in India, Amazon has made strategic investments in firms such as Housejoy, Bankabazaar, and offline retailer Shopper’s Stop.

Amazon CEO Jeff Bezos had time and again, emphasised to stay committed to its Indian expansion. It has already made $4 billion investment in India.

The development was reported by ET.