- Future Retail is currently in talks with Reliance, Premji Invest and Samara Capital for a stake sale.
- Due to the speculated Mukesh Ambani push, the share price of Future Retail has jumped 5% today and is at its highest since the lockdown in late March.
- Biyani and his family hold a 33.5% stake in Future Group, but almost all of it has been pledged to lenders.
And because of the speculated Mukesh Ambani push, the share price of Future Retail has jumped 5% today and is at its highest since the lockdown in late March.
The deal could be finalised before the month ends, says a source.
In January 2020, global e-commerce giant Amazon had already signed a long-term business agreement with Kishore Biyani’s Future Group. As per the deal, Amazon had become Future Retail’s authorized online sales channel.
Biyani and his family hold a 33.5% stake in Future Group, but almost all of it has been pledged to lenders.
Biyani has been struggling to find investors for some time now. Earlier this month, Future Retail board also approved to issue non-convertible debentures for upto ₹650 crore. Future Consumer is currently looking to raise ₹300 crore through a rights issue.
By March 2020, ratings agency ICRA had already placed a negative rating on Biyani’s company because of its debt. “Icra notes the increase in debt is mainly on account of an increase in debt of the operating companies, with the total debt at the group’s listed companies increased to ₹12,778 crore as on 30 September 2019 from ₹10,951 crore as on March 31, 2019," the rating agency said.
The rising debt is coupled with the problems from the coronavirus pandemic where Future Retail has seen its revenues take a serious hit. In the third quarter of FY20 ending December 2019, Future Retail posted a 15% fall in profit and a 3% fall in revenue. The disruptions due to COVID-19 pandemic will only make it worse.
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