Mumbai: Shares of department stores chain Shoppers Stop Limited soared Monday morning, as Amazon picked up 5% stake in the company.
Shoppers Stop announced on Saturday (23 September 2017) that its board agreed to sell 5% of shares of the company to Amazon's investment arm.
The company said that its board gave its nod to the execution of commercial agreement with Amazon Seller Services. The board approved the issue of 43.96 lakh shares to Amazon.com NV Investment Holdings LLC, a foreign portfolio investor, registered with SEBI, at a price of Rs 407.78 per share, on a preferential basis.
Following the deal, Shoppers Stop can now list its entire portfolio of over 400 brands on Amazon.in and Amazon can set up experience centres across the physical network of the Raheja Corp Group's retail arm.
Shoppers Stop also announced that post the allotment of securities, Amazon shall not have ny any special rights under the Agreement and will only be entitled to exercise such rights that are exercisable by the ordinary shareholders of the company.
On BSE, the Shoppers Stop counter has clocked a volume of 1.28 lakh shares so far in the session, more than 9 times the average daily volume. On the National Stock Exchange, the counter has clocked a volume of about 1.03 million shares so far this morning.
The stock, which hit a new high at Rs 501.70 today on the National Stock Exchange (Rs 499.70 on BSE), is now up 15.4% at Rs 482.50.
Shoppers Stop department stores sell a wide range of products that include cosmetics, fashion accessories and apparel, among others.
The company posted net loss of Rs 3.72 crore in the first quarter ended June 2017, much lower than net loss of Rs 13.56 crore it had incurred in the corresponding quarter of the previous year. Sales increased nearly 22% to Rs 941.08 crore in the April - June 2017 quarter, over the year-ago quarter.