Quess Corp To Issue Over 7.5 Lakh Preferential Shares To Amazon
Amazon has so far invested more than $4.7 billion in India to fend off competition from Walmart-backed Flipkart.
Quess Corporation Ltd. approved issuing of over 7.5 lakh equity shares to the investment arm of Amazon.com Inc. for close to Rs 51 crore.
The technology and services business provider would sell the shares, with a face value of Rs 10 apiece, on preferential basis to Amazon NV Investment Holdings LLC for Rs 676 per share, according to a statement. That’s a 54 percent premium to Quess Corp’s Thursday’s close of Rs 440.15 apiece.
The preferential issue follows an investment agreement between Amazon NV Investment Holdings, Quess Corp. and its subsidiary Qdigi Services Ltd. The proceeds from the share issue shall be utilised towards the business of the Qdigi Services, according to the statement. As part of the transaction, Amazon will get “affirmative rights in respect of certain matters pertaining to the ownership, business operations and other corporate actions” of Qdigi Services.
Amazon invested in the parent as it could not invest in the unlisted arm, Ajit Isaac, chairman and managing director of Quess Corp, told BloombergQuint in an interview. Amazon will get 0.51 percent equity in Quess Corp. once all the requisite approvals are in place, he added.
The Rs 51-crore investment will be used by Qdigi Services to expand the store count to 400 from 250 currently, and build technology platforms and train professionals to bolster its services portfolio, Isaac added.
Quess Corp. had purchased Qdigi Services—an after-sales service provider for electronic products—from HCL Infosystems Ltd. in April last year.
This is the second investment of the world’s largest e-retailer in an Indian listed company after it bought 5 percent stake in Shoppers Stop for around Rs 180 crore in September 2017. Amazon has so far invested more than $4.7 billion in India to fend off rising competition from its biggest rival, Walmart Inc.-controlled Flipkart.
Shares of Quess Corp. rose as much as 9.1 percent, the most in nearly six months, to Rs 479.90. The stock has extended gains for the fifth consecutive trading session, its longest gaining streak in four months.