Shares of Future Retail, that owns entities such as Big Bazaar among others, plunged 7.95% to Rs 380.60 in opening session Friday, after the retail firm reported 49% stake acquisition by the global e-commerce giant Amazon in Future Coupons, a Future Group entity that holds minority stake in Future Retail. Future Coupons owns a 7.3% interest, a minority stake in India's Future Retail that owns several supermarket brands, including Big Bazaar and Easyday. That would give Amazon a 3.58% indirect stake in the brick-and-mortar retailer.
The stock opened 1.6% higher at Rs 420 against the previous close of Rs 413.45 on BSE and touched an intraday high of Rs 424.30, registering an advance of 2.62%.
Later, the share pared all initial gains to trade lower by the first hour of the Friday's trading session. The share price plunged 7.95% to touch the intraday low of Rs 380.60 on BSE.
The stock has traded in a wide range of Rs 43.70 and trades highly volatile, with an intraday volatility of 6.11%. Overall 1.6 lakh shares and 26.17 lakh shares currently change hands on the exchange platform BSE and NSE, both above 5, 10 and 30-day average volume traded.
Future Retail has formed a strong bearish bar reversal chart pattern today and its share value trades lower than the 5, 20, 50, 100 and 200-day moving averages. The stock has fallen 5.41% in the last 2 sessions.
Future Retail, one of the largest retailers of the nation with the store count of 1,557 stores (spanning 16.27 million square feet) and presence in 437 Indian cities, said in a release, "Amazon has agreed to make an equity investment in Future Coupons Limited for acquiring a 49% stake comprising both, voting and non-voting shares".
As per the filing, the department store domain company has entered into a share subscription agreement and a shareholders' agreement with Amazon.Com NV Investment Holdings LLC . Amazon has agreed to make an equity investment in Future Coupons for acquiring a 49% stake comprising both, voting and non-voting shares.
As part of the agreement, Amazon has been granted a call option. This call option allows Amazon to acquire all or part of the promoters' shareholding in Future Retail and is exercisable between the third and tenth years, in certain circumstances, subject to applicable law, the company said.
Last year, Amazon had bought a stake in Indian supermarket chain More. Amazon also owns a stake in the Indian department store chain Shopper's Stop.
The stock price of Future Retail currently trades 4.97% down at Rs 392 on BSE, mere 4.73% away from 52-week low of Rs 375.
Edited by Rupa Burman Roy