Amazon to acquire minority stake in an Indian supermarket chain operator

 is set to snag a minority stake in India’s Future Retail Ltd (FRTL.NS), which operates more than 900 stores in India and owns several supermarket brands, including Big Bazaar.

In a regulatory filing late on Thursday, Future Retail said Amazon has agreed to acquire a 49% stake in Future Coupons Ltd. That entity in turn owns a 7.3% interest in Future Retail, according to prior regulatory filings.

The companies did not disclose the value of the deal, which gives Amazon a 3.58% stake in the brick-and-mortar retailer, whose stores sell everything from clothes to fresh produce.

A source familiar with the matter told Reuters the transaction valued Future Retail at a “substantial premium” to its existing market price.

Future Retail’s market capitalization currently stands at $ 2.91 billion, pegging the value of a 3.58% stake in the company at more than $ 104 million.

Amazon and Future Retail declined to comment on the value of the transaction that remains subject to regulatory approval.

The regulatory filing said the deal gives Amazon the right of first refusal should Future Retail’s founder, Kishore Biyani, or his family decide to further trim the 47.02% stake they own in company, both directly and via entities like Future Coupons that they control.

The online retailer announced plans on Thursday to launch its Amazon Fresh service to select areas in India’s tech hub of Bengaluru, the e-commerce company’s first such foray into delivering fresh produce in India, seen its last major growth market.

The Future Retail transaction marks Amazon’s second such move to acquire a stake in an Indian supermarket store operator. Last year, Amazon and Indian private equity firm Samara Capital announced a joint investment in an entity that would give Amazon a stake in Indian supermarket chain More. Amazon also owns a stake in Indian department store chain Shopper’s Stop (SHOP.NS).

Early this year, India revised its e-commerce rules, creating hurdles for Amazon and rival Walmart Inc’s (WMT.N) e-commerce subsidiary, Flipkart. One revised rule bars an entity in which a foreign e-commerce company or its group companies have a stake from selling on their online platform.

These and other restrictions forced Amazon to alter how it structures some of its equity holdings in the country.

India’s revised e-commerce regulations, along with its push to compel multinationals to store data locally, have irked the U.S. government and heightened trade tensions. India has argued the rules are aimed at protecting interests of its small traders and privacy of its citizens.

Ahead of the launch of Amazon’s biggest campus in the world in the southern Indian city of Hyderabad on Wednesday, Amazon’s India head Amit Agarwal said India should encourage e-commerce and not try to “define every single guard rail under which it should operate.”