Future Retail stock falls amid reports of Sebi directive

Shares of Future Retail on Monday fell 5.6 per cent amid reports that market regulator Sebi has sought clarifications from the Kishore Biyani-led company on the manner in which the entity intends to merge its subsidiary Future Value Retail (FVRL) with itself.

Despite making a positive opening, Future Retail's scrip fell 5.58 per cent to Rs 75.25 on BSE.

On the NSE, the stock fell 5.40 per cent to Rs 75.30.

As per media reports, Sebi has sought clarifications on the proposed deal, which involves the merger of FVRL with Future Retail, on concern that the move might lead to dilution of a sizeable equity in the parent firm, hurting minority shareholders.

FVRL, which runs the group's flagship retail chains Big Bazaar and Food Bazaar, has convertible debentures worth Rs 685 crore.

After the merger, these would be replaced by debentures of Future Retail, formerly Pantaloon Retail.

Media reports stated that Sebi is opposed to the deal because there would be dilution of equity capital in Future Retail when the holders convert their debentures into shares.

Last year, the board of Future Retail decided that it would merge FVRL with Future Retail in a bid to cut down costs.