Future Retail share price hit upper circuit of 20% today after Reliance Industries Ltd (RIL) announced the acquisition of the retail, wholesale, logistics and warehousing businesses of the Future Group for Rs 24,713 crore through its subsidiary, Reliance Retail Ventures. Reacting to the development, share price of Future Retail opened 20% higher at Rs 162.30 against previous close of Rs 135.25 on BSE.
The stock has gained 36.62% in the last 3 days. The share fell to intra day low of Rs 152. At 12:17 pm, the stock was trading 19.85% or 26.85 higher at Rs 162.10 on BSE.
The share trades higher than 5 day, 20 day, 50 day and 100 day moving averages but lower than 200 day moving averages. The share has lost 59% in one year and fallen 52.62% since the beginning of this year.
In one month, the share has gained 46.92%. It took just one week for the stock to rise 41.84%.
Total 51.95 lakh shares changed hands amounting to turnover of Rs 83.20 crore on BSE. Market cap of the firm rose to Rs 8,778 crore.
The share hit 52-week high of Rs 415.05 on September 12, 2019 and 52 week low of Rs 61.05 on April 9 this year.
Future Retail operates over 1,500 stores in India and owns several supermarket brands, comprising budget department and grocery chain Big Bazaar, Ezone, Fashion at Big Bazaar (FBB), Foodhall and Easyday.
Meanwhile, share price of Mukesh Ambani-led RIL opened with a gain of 2.67% at Rs 2,172 (intra day high) today against previous close of Rs 2,115 on BSE. In afternoon session, the large cap share pared some gains and was trading 0.92% lower at Rs 2,135.
Jyoti Roy, DVP- Equity Strategist at Angel Broking said, "We believe that this acquisition by Reliance Industries will help the company further consolidate its position in the retail business and make it the undisputed leader in the retail space. We remain positive on Reliance industries Ltd. and have a buy rating on the stock with a target of Rs 2,366."
Future Group said, "Post this exercise, FEL will emerge strong with businesses in manufacturing and distribution of FMCG products and integrated fashion sourcing and merchandising. These businesses will further benefit from supply agreement with RRFLL. This deal will also enable FEL to focus on the creation of new-age brands in the FMCG and fashion space and expand its reach. The transaction will help FEL to expand with a focussed business model and a stronger balance sheet."
"The above acquisition is being done as part of the Scheme in which Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises Limited (FEL)," RIL said.