Future Enterprises share price hit upper circuit of 5% today a day ahead of the board members will take a final decision for sale of group retail business to Reliance Retail. Share price of Future Enterprises opened 5% higher at Rs 20.20 against previous close of Rs 19.25 on BSE.
Total 32.68 lakh shares of Future Enterprises changed hands amounting to turnover of Rs 6.52 crore. Market cap of the firm rose to Rs 998.50 crore. During the day, stock hit a low of Rs 19.30. The share saw only buy orders, no sell orders in morning trade.
The microcap stock has gained 16.09% in 4 days. Future Enterprises share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
However, the share has lost 19% in a year and fallen 7.13% since the beginning of this year. In a month, the share has risen 42%.
The company's board members could give the final approval rose for the sale of the group's retail business to Mukesh Ambani's Reliance Retail, a deal that'll help it cut debt and liabilities.
The Reliance Retail-Future Group all-cash deal is supposed to be worth Rs 29,000-Rs 30,000 crore. The detail will entail Future Enterprises Ltd (FEL) merging grocery, apparel, supply chain and consumer business into itself, which will then sell Future Retail assets to Reliance Retail, The Economic Times reported.
RIL chairman Mukesh Ambani is gearing up to offer competition to US-based Amazon's India business in the ecommerce space by eyeing a majority stake in the Future Group.
RIL aims to compete with Amazon India by consolidating its position in the industry by adding Future Groups assets to its kitty. According to reports, RIL is likely to acquire Kishore Biyani-controlled Future Group's retail business for Rs 24,000-27,000 crore. However, RIL will have to fulfil claims of Future Group's creditors before the takeover comes into effect.
Future Group has accumulated a pile of debt over the years. As of September 30, 2019, debt at Future Group's listed entities rose to Rs 12,778 crore from Rs 10,951 crore as on March 31, 2019.