According to the report, Future Group is reportedly in talks with Amazon.
Kishore Biyani-led Future Retail may close a deal with a foreign investor in the next two months on the back of a large database created from nearly 500 million customers.
“Ultimately, it is all about how formidable we all are as players get bigger and you need an alliance. We can’t sell more than 10 percent and foreign portfolio investor (FPI) is the only route available. It should take 2-3 months for any deal to fructify,” Biyani told The Economic Times.
According to the report, Future Group is reportedly in talks with Amazon.
Analysts believe that Amazon can invest in a retail company through its investment arm. An arm, registered as a foreign portfolio investor (FPI), can acquire up to 10 percent in an Indian entity as a single firm. Amazon has acquired a 5 percent stake in Shoppers Stop via this route. An Indian company, however, can dilute up to 49 percent stake to multiple FPIs.
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Biyani believes that data and not merely physical stores will help seal the deal as many consumer companies are relying on external data to gauge their sales and plan new launches. The retailer has data on consumption and buying frequency pattern of nearly 30 million loyal customers and about 500 million consumers who have visited Future Group stores last year.
“While everyone needs a physical presence, data is my biggest wealth. Data is my oil,” Biyani said.
Future Retail has a presence in 255 cities through over 1,030 stores. In the last six years, Biyani has acquired half a dozen supermarket store chains and put together a total retail space of 13.6 million sq ft.
The retailer feels a physical presence by online companies is key to the Indian market. “Amazon in India is building itself beyond online space and would obviously want to learn from successful retailers in physical space,” Ruchi Sally, director at Elargir Solutions told the paper.