Why Future Retail shares hit 10% lower circuit in opening trade

Shares of Future Retail plunged 10 per cent in opening to hit lower circuit at Rs 55.85 on the Bombay Stock Exchange on Friday after Delhi High Court upheld the order by Singapore International Arbitration Centre prohibiting Future Group firm from going ahead with its deal with Reliance Retail. Singapore's Emergency Arbitrator (EA) had restrained the Rs 24,713-crore Future-Reliance deal against a plea by global retail major Amazon.

Weighed down by the development, Future Retail share price opened lower at Rs 55.85 against previous close price of Rs 62.05. The market cap of Kishore Biyani-led firm tumbled to Rs 3,028.66 crore. On the volume front, 1.25 lakh shares changed hands in opening deals on the BSE. Meanwhile, the S&P BSE Sensex opened 358 points or 0.73 per cent lower at 48,857, and NSE Nifty 50 index dropped 86 points or 0.6 per cent to open at 14,471.15.

In a similar trend, Future Retail shares were locked in lower circuit of 10 per cent at Rs 55.90 on the National Stock Exchange (NSE).

Meanwhile, shares of Reliance Industries also opened lower on Friday. The stock was down 1.19 per cent at Rs 1,985.55 after opening lower at Rs 1,988.30 on the BSE.

The bench of Justice JR Midha held that Kishore Biyani-led Future Group wilfully violated Singapore Arbitrator's order and directed it not to take further any action on the deal.

Why Future Group shares tanked up to 10% in trade today

The court has ordered attachment of properties of Biyani and others related to the Future Group. It also imposed Rs 20 lakh cost on Future Group and its directors and ordered that the amount should be deposited in Prime Minister's Relief Fund for providing COVID-19 vaccines to senior citizens of Below Poverty Line (BPL) category.

On August 29, 2020, Future Group announced Rs 24,713-crore deal with Reliance Retail to sale its retail and wholesale assets to the retail subsidiary of Reliance Industries (RIL). A year before, in August 2019, Amazon had bought 49 per cent stake in Future Coupons for Rs 1,500 crore. The world's largest e-commerce giant says that the 2019 deal blocks Future Group from selling shares of Future Retail to rival RIL as it indirectly owned about 3.5 per cent stake in Future Retail.

Also read: Future-RIL deal: Delhi HC halts Rs 24,713 crore acquisition; orders attachment of Biyani's assets

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