Amazon Looks to Buys Out Narayana Murthy Firm’s Stake In Cloudtail

Amazon is planning to buy Narayana Murthy’s investment firm Catamaran’s 76% stake in Prione, which operates Cloudtail. It is the largest seller on the Amazon India marketplace with revenue of over Rs 16,600 crore in the fiscal year 2021.

On Wednesday, Amazon claimed it approached the Competition Commission of India (CCI) for approval to acquire the stake. Reportedly, if CCI approves the deal, Amazon will fully own Prione.

N.R. Narayana Murthy’s Catamaran and Amazon Joint Venture

Billionaire N.R. Narayana Murthy’s Catamaran and Amazon launched the joint venture in India in 2014. On 9 August 2021, Prione Business Services Pvt. Ltd, the joint venture between Catamaran and Amazon, had announced its decision to not continue the Joint Venture beyond the end of its current term of May 2022.

Now, Amazon India and Catamaran said in a joint statement that Amazon will buy Catamaran’s shareholding in Prione in compliance with applicable laws. The announcement comes as a surprise as Catamaran owns a 76% stake in Prione. Amazon already holds a 24% stake in Prione. Now, it will fully own Prione. However, Amazon did not disclose the value of the deal.

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Indian laws for marketplace operator

Reportedly, Indian laws prohibit a marketplace operator to be a seller on the platform. So Amazon cannot run Cloudtail on its own platform. If Amazon takes full ownership, Cloudtail will not be able to continue as a seller on the marketplace under India’s current rules.

Amazon has a million sellers on its platform. Most of the sellers are small and medium businesses. Half of them are from tier-2 & 3 towns. Prione played an important role in getting these sellers on Amazon. According to Mint,  an Amazon spokesperson declined to comment on the future of Cloudtail. Amazon’s move comes at a time when India decided to tighten rules for e-commerce business.