Future Retail Q3 profit rises 10% to Rs 201 crore, to raise Rs 2,000 crore from promoters

Future Retail Monday posted a 10 per cent year-on-year growth in its net profit at Rs 201.43 crore for the quarter ended on December 31, 2018.

The company had reported a net profit of Rs 183.14 crore for the same period of previous fiscal, Future Retail Ltd said in a regulatory filing.

Total income of the company stood at Rs 5,306.28 crore for the October-December period of the current fiscal. It had reported a total income of Rs 4,696.07 crore in the same period of 2017-18.

"Consequent to the demerger of home retail business undertaking and vesting with Praxis Home Retail Ltd and vesting of demerged retail business Undertaking of Hypercity Retail (India) Ltd with the company, the financial results for the quarter and nine months ended December 31, 2018 are not comparable with corresponding periods of previous years," Future Retail Ltd said.

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The company's board has also approved raising of nearly Rs 2,000 crore through issue of warrants to its promoters on a preferential basis.

The board of directors in its meeting approved issuance and allotment of over 39.60 lakh warrants convertible into 39.6 lakh equity shares of Rs 2 each at a premium of Rs 503 per share aggregating to Rs 1,999.99 crore to promoter group firm Future Coupons Ltd, the company said in a regulatory filing.

The allotment on a preferential basis will be subject to shareholder approval for which an extraordinary general meeting (EGM) will be held on March 5, it added.

Elaborating on where the funds would be utilised, the company said the equity infusion, coupled with inflow of upside share, shall aid in reducing the lease rentals payable to FEL.

"The endeavour is to completely do away with lease rentals in next 18 months. Management firmly believes that this shall be hugely accretive to margins for business and will give a strong philip to growth," it said, adding that it would also maintain strong trajectory of improving return on capital at FRL.

The company said over the past four years, FRL has integrated its operations efficiently and built a pan-India network of 1,444 stores in 409 cities of India.