Mukesh Ambani will be the owner of Biyani's future retail business, a deal can be done for 27 thousand crores rupees
Business Desk. Kishore Biyani, founder and CEO of Future Group, which has formed a big chain of retail business in the country, is going to deal with his company Mukesh Ambani. Explain that the foundation of retail business in the country was laid by Kishore Biyani through Big Bazaar stores. Let me tell you that Mukesh Ambani has been running the matter of buying Future Group's retail company Big Bazaar for a long time. According to the information, the retail company Big Bazaar has sunk into debt.Azim Premji, chairman of Wipro Limited, has also bought about 6% stake in Biyani's Future Retail. Amazon also holds 3.6 percent of its shares.
Deal was already going to be final
Future Retail has around 1700 stores across the country. It is considered to be the largest retail chain in India. Mukesh Ambani's deal with Kishore Biyani to buy Big Bazaar was going on long back. It was expected that the deal would be finalized before the annual general meeting (AGM) of Reliance Industries, but it could not happen due to some reason.
Mukesh Ambani can emerge as retail king
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Mukesh Ambani has already made a foray into retail. He wants to take his company to the forefront of retail and telecommunications, along with petroleum and petrochemicals. Mukesh Ambani has launched Geomart, an online retail platform, as a subsidiary of Reliance. Mukesh Ambani can come to the forefront of this field by purchasing Future Group's retail company.
Deal can be done by the end of this month
According to the information, Mukesh Ambani's Reliance Industries can buy the retail business of Kishore Biyani's Future Group for 24 to 27 thousand crores. It is expected that the deal will be final by the end of this month.
These companies may merge
According to the news, Future Retail Ltd, Future Consumer, Future Lifestyle Fashion, Future Supply Chain and Future Market Network will be merged into Future Enterprises Ltd before Future Retail Business is sold. With this, Mukesh Ambani will own the entire Future Group.
Mukesh Ambani owned Big Bazaar, Brand Factory
Under the deal, Future Group's listing companies Big Bazaar, Foodhall, Eucalyptus, FBB, Central, Heritage Foods, Brand Factory, Fashion and Grocery Retail Format, Brand Lee Cooper and All-Barring will be owned by Mukesh Ambani. All these companies of Future Group will be part of Reliance Industries.
Future Group is facing losses
Big Bazaar emerged as the most popular retail chain in India. There was a time when the turnover of Future Group reached 9,000 crore rupees and in 2017 Kishore Biyani was also included in the list of 100 rich people of the country. Later the company's condition started to weaken. In the last quarter of 2019, Future Retail's profits fell by 15 per cent, while its revenue also declined by 3 per cent. The retail business suffered significant losses due to the coronavirus epidemic and lockdown.
Increasing debt
The debt of Future Group continued to grow and due to this the rating agency ICRA gave negative rating to the company in March. At the moment, the Future Group is struggling with a cash shortage problem. The company has failed to repay the loan.
Holding company has defaulted
Biyani's holding company has defaulted in loan repayments due to continuous increase in debt and shortage of cash. Biyani had also started talks with some other investors to resolve this problem, but Mukesh Ambani's RIL deal will be resolved once the deal is finalized.
Biyani's retail business is decades old
Kishore Biyani's retail business is decades old. The Future Group began to structure the retail business itself in the 1980s. In 1991, Kishore Biyani changed the name of his company to Pantaloon Fashion Limited. In 2001, the company opened Big Bazaar stores across the country, which emerged as a unique brand in the retail sector and Biyani came to be known as the poster boy of India's retail sector.
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