Future group shares tumble up to 20% as future remains uncertain 

Shares of Future group tumbled over 20 per cent on Dalal Street on Monday after Reliance Industries announced that its Rs 24,713-crore deal with the Future Group cannot go ahead as secured creditors of the latter have voted against it. 

Future Retail, Future Enterprises, Future Lifestyle, Future Consumer and Future Supply shares hit their respective lower circuits in intra-day trade. 

In a regulatory filing, Reliance said Future Group companies comprising Future Retail Limited (FRL) and other listed companies involved in the scheme have intimated the results of the voting on the scheme of arrangement by their shareholders and creditors at their respective meetings. 

“… The secured creditors of FRL have voted against the scheme. In view thereof, the subject scheme of arrangement cannot be implemented,” said RIL, while updating on the scheme of arrangement for the transfer of retail and wholesale business and the logistics and warehousing business of Future Group to its subsidiary Reliance Retail Ventures Ltd (RRVL) and Reliance Retail and Fashion Lifestyle Ltd (RRFLL). 

FRL did not get the requisite 75 per cent favourable voting from secured creditors. The company secured only 30.7 per cent vote in favour of the deal while 69.29 per cent voted against it. 

Kranthi Bathini, equity strategist, WealthMills Securities said that FRL may seek capital restructuring post insolvency process. Secured lenders may get major haircuts.  At present, trading in Future group stocks is highly speculative. We have to wait and watch whether there is any room left for retail investors or not, he added.

Earlier this month, FRL missed the due date for repayment of Rs 5,322.32 crore to lenders on account of the ongoing litigations with e-commerce major Amazon and other related issues. 

In March 2022, Future Enterprises Ltd defaulted on payment of Rs 19.16 crore to Punjab National Bank, Canara Bank and Union Bank of India under the one-time restructuring plan. 

In August 2020, Future Group announced the Rs 24,713-crore deal to sell 19 companies operating in retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd (RRVL). 

Meanwhile, the shares of Reliance Industries Limited were trading 3 per cent lower at Rs 2678.30 on BSE. Market cap of the firm fell to Rs 18,11,850.67 crore.