Witzig Advisory confirms Amazon investment, says Aditya Birla Retail acquisition complies with FDI norms

By

Isabelle Crossley

Published
Sep 24, 2018

Amazon has invested in the Mumbai-based facility support back-end company Witzig Advisory Services as a minority shareholder along with Samara Capital. All businesses have confirmed that this is in-line with foreign direct investment (FDI) norms. Witzig has also acquired More from Aditya Birla Retal as a downstream investment.

Witzig Advisory Services, which recently acquired the More supermarket chain from Aditya Birla Retail, has confirmed that the business has complied with FDI norms in doing this. As Witzig has acquired More from Aditya Birla Retail, Amazon and Samara Capital have invested in Witzig.

“Samara Capital and Amazon have agreed to co-invest in a facilities support and management and value added services company called Witzig Advisory Services Pvt Ltd,” Paurush Roy, Witzig’s Director and Samara Capital’s Managing Director, said in an email response to ET Bureau. “We confirm Witzig has agreed to acquire… More… We will ensure Witzig complies with all applicable laws and regulations.”

Despite US-based Amazon’s investment in Witzig, the business will still be legally considered an Indian entity, as per FDI laws because Amazon will hold a minority stake of 49 percent.

Samara Alternative Investment Fund, a business run by Indians and thus considered an Indian business, will hold the majority stake of 51 percent. Moreover, a source told ET Bureau that Amazon invested in Witzig through its investment arm Amazon Overseas Holdings Co. and will not be directly involved in managing the More chain.

FDI has been under scrutiny, especially since the protests caused by US-based Walmart’s acquisition of Flipkart, but Witzig has assured that its downstream investment acquisition of Aditya Birla Retail’s More does comply with regulations.

Although Amazon has assured that it will not play a role in running the More business, its seller business will be strengthened by the Witzig acquisition and More is a seller on Amazon Prime Now. It is expected that Amazon will expand More’s network and omni-channel capabilities such as click-and-collect in future.