Future Retail share surged over 17% 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 Bazar, upmarket food stores Foodhall, and bargain clothing chain Brand Factory. This gives them an edge into all these areas of business.
"Future's portfolio composition in apparel, general merchandises, 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 a 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 agreements 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 focusses business model and a stronger balance sheet."
The stock price surged over 105% in the last three months and was trading at Rs 158, up Rs 22.75, or 16.82%. It has touched an intraday high of Rs 162.30 and an intraday low of Rs 152.
It was also one of the most active stocks on NSE with 3,77,91,060 shares being traded.
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