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Exclusive: Amazon pumps $215 mn into India data services arm

25 July, 2017

US-based e-commerce major Amazon.com Inc has infused Rs 1,381.6 crore ($214.6 million) into its Indian data services arm, regulatory filings show.

According to an 18 July filing to the Registrar of Companies, Delhi-based Amazon Data Services India Pvt. Ltd raised Rs 13.8 crore from Amazon.com Inc and Rs 1,368 crore from A 100 Row Inc in November 2016 by allocating 138.16 crore shares at a face value of Rs 10 apiece.

Amazon Data Services India was incorporated in June last year with an authorised share capital of Rs 900 crore. This was increased to Rs 2,300 crore in November last year.

The company mainly offers cloud computing services for data storage and protection, besides web hosting services. It shares its registered office address with Delhi-based Amazon Internet Services Pvt. Ltd, which is the local reseller of Amazon Web Services Inc (AWS) in India. Amazon Internet was incorporated in 2011.

Though both Amazon Data Services and Amazon Internet are part of the e-tailer’s web services business, it is not clear how these two companies are distinct in terms of operations. E-mail queries sent to Amazon seeking clarity did not elicit a response at the time of filing this report.

An industry observer, however, said the creation of Amazon Data Services could be aimed at reducing tax.

AWS is the global leader in web services and cloud computing, and is also the main cash cow for the US online retailer. The profit generated from this business has helped the company offset losses incurred in its e-commerce business.

In February this year, media reports said that AWS contributed a little over $12 billion in total revenue for Amazon and that it was expected to generate $14 billion in annualised revenue within the next two quarters.

In recent times, Microsoft’s cloud computing platform Azure has threatened to dethrone Amazon from its leadership position in the segment.

In India, Amazon Internet generated a two-fold rise in revenue to Rs 208.7 crore in 2015-16 versus Rs 101.1 crore the year before. Total expenditure rose 2.2 times to Rs 188.3 crore versus Rs 85.3 crore.

Amazon has made its intent clear about capturing the Indian e-commerce market, having committed $5 billion into this business. Recently, the company also received approval from the Department of Industrial Policy and Promotion to invest $515 million in India’s online food retail sector.

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Exclusive: Amazon pumps $215 mn into India data services arm

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