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Future Group stock shares surge after RIL buys firm's retail business

The deal was crucial for Biyani-led Future Group which came under immense pressure from the lenders' consortium led by SBI to address its rising debt which stood at Rs 12,778 crore as of September 2019.

August 31, 2020 / 11:31 AM IST
Kishore Biyani

Kishore Biyani

 
 
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Future Retail share price surged over 17 percent in the morning session on August 31 after Reliance Industries Limited (RIL) bought the company's retail and wholesale business, as well as the logistics and warehousing business, for a consideration of Rs 24,713 crore.

The Future Group houses leading retail formats, including supermarket chain Big Bazaar, upmarket food stores Foodhall, and bargain clothing chain Brand Factory. This gives them an edge into all these areas of business.

Future Enterprises, Future Retail, Future Consumer, Future Lifestyle Fashions, Future Supply Chain Solutions Chain

Share price of Future Enterprises jumped 5 percent intraday on August 31. The stock witnessed spurt in volume by more than 10.32 times and hit touched upper circuit of Rs. 21.20 per share.

Share price of Future Retail surged over 18 percent. It also saw spurt in volume by more than 1.62 times and hit upper circuit of Rs 162.30 per share.

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Future Consumer stock gained 5 percent. It also touched upper circuit of Rs 12.05 per share on BSE. Future Lifestyle Fashions share price also touched upper circuit of Rs 152.35 per share while Future Supply Chain Solutions also touched upper circuit of Rs 158.60 per share on BSE.

“Future’s portfolio composition in apparel, general merchandise and own FMCG brands will allow for a wider offering to its customers,” the firm further added. RRVL reported a consolidated turnover of Rs 162,936 crore and net profit of Rs 5,447.96 crore for the year ended March 31, 2020.

The deal was crucial for Biyani-led Future Group which came under immense pressure from the lenders' consortium led by SBI to address its rising debt which stood at Rs 12,778 crore as of September 2019.

In its official statement, Future Group said, “ Post this exercise, FEL will emerge strong with businesses in manufacturing and distribution of FMCG products and integrated fashion sourcing and merchandising. These businesses will further benefit from supply agreement with RRFLL. This deal will also enable FEL to focus on the creation of new-age brands in the FMCG and fashion space and expand its reach. The transaction will help FEL to expand with a focussed business model and a stronger balance sheet.”

The stock price surged over 105 percent in the last three months and was trading at Rs 158.00, up Rs 22.75, or 16.82 percent. It has touched an intraday high of Rs 162.30 and an intraday low of Rs 152.00.

It was also one of the most active stocks on NSE with 3,77,91,060 shares being traded.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
Moneycontrol News
first published: Aug 31, 2020 09:47 am

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