US-based online retailer Amazon.com Inc. is investing Rs 51 crore ($7.4 million) in Quess Corp Ltd, a business services provider controlled by Canadian billionaire Prem Watsa’s Fairfax group.
Quess Corp said in a stock-exchange filing that it will issue 7.54 lakh preferential shares to Amazon at Rs 676 apiece. This is 40% higher than Quess Corp’s closing price of Rs 480.95 on Friday.
Amazon will own a 0.51% stake in the Indian company after the investment, Quess said.
Quess also said that, under the investment agreement with Amazon, it will use the proceeds from the proposed share issue to grow the business of wholly owned subsidiary Qdigi Services Ltd.
Qdigi provides after-sales services for mobile phones and consumer electronic goods through a country-wide network of service centres. The investment will help Amazon bolster its after-sales services for these products, which make up a large part of sales on its online platform.
Qdigi was earlier known as HCL Computing Products Ltd and was part of HCL Infosystems Ltd. Quess had acquired HCL Computing in early 2018 for up to Rs 30 crore and renamed it Qdigi.
Quess was founded by serial entrepreneur Ajit Isaac. It was acquired by travel company Thomas Cook in 2013. Thomas Cook itself was acquired in 2012 by Fairfax, which is controlled by India-born Watsa, the founder of Toronto-based Fairfax Financial Holdings.
For Amazon, the deal adds to its minority investments in a number of Indian companies. The e-commerce giant has previously in companies such as bus aggregation platform Shuttl, online insurance startup Acko General Insurance Co. Ltd and digital lending platform Capital Float.
These investments are part of the US e-tailing giant’s strategy to ramp up its India play as it takes on the newly formed Walmart-Flipkart combine in the country.