Corporate Grapevine

Published: Dec 29, 2021
Updated: Dec 29, 2021

Bajaj buys out old partner in Mukand

Despite foreign direct investment not allowed in the Indian retail sector, Amazon has successfully managed to nix Reliance Retail’s acquisition of Future’s businesses. Though Kishore Biyani tried all the tricks to leave Amazon with a stake only in shell companies, the Singapore arbitration centre and the Indian courts have sided with Amazon. This now brings Biyani back to the financial mess he was in. The only difference is that this time he is in a bigger financial soup as compared to a year ago with Rs 6,000 crore of group losses.

Industry insiders said that with such huge losses, Reliance will walk away from the transaction — leaving the Indian banks holding the can. This is similar to what Reliance had done with Reliance Communications too, when RIL tried to acquire Reliance Communications after the company was sent to the bankruptcy courts. Biyani has nothing to lose except face while Amazon has managed to weaken Reliance Retail.

The big question is how Mukesh Ambani will retaliate against Amazon as he is not used to getting defeated by a rival. But with the US government backing Amazon, it will not be an easy fight for Ambani.