Reliance Retail, the retail arm of Reliance Group of Industries has already begun tapping Future’s network for its logistical and warehousing need in the food, groceries and fashion retail while the final approval on the reliance-future deal is still awaited.
Earlier on 20th January, Market regulator Securities and Exchange Board of India (SEBI) had given the nod to the acquisition of Future Group’s retail arm by Reliance Retail.
However, several approvals such as National Company Law Tribunal (NCLT), no objection from Future Group’s creditors and minority stakeholders are still pending.
Reliance Retail is in the process of utilising other Future Group companies for its operations as well.
“Futures’ capacity utilisation, which currently stands at 30%, will increase upto 85-90% with Reliance as its principal client.”
~Mayur Toshniwal, Managing Director, Future Supply chain told ET
Furthermore, with this deal, Reliance will also acts as a saviour for the other Future Group companies such as Future Consumer and apparel manufacturing company Future Enterprises. Reliance has already placed large orders with these companies.
The Future Supply Chain has 70 warehouses with a space of 7.5 million square feet. The company posted INR 1,140 crore revenues in the financial year ended March 2020 but it declined to just INR 200 crore in the six months through September subsequently due to the pandemic induced lockdown.
With this INR 24,713-crore Reliance-Future deal, retail and wholesale operations of Future Group will be hived off into Reliance Retail & Fashion Lifestyle, a wholly-owned subsidiary of Reliance Retail.
While the merger scheme has been given a green flag by the competition commission of India and SEBI, the deal is facing some legal difficulties with American e-commerce giant Amazon, which is an investor in future group entities and holds a 49% stake in Future Group’s promoter holding company Future Coupons.
The e-commerce giant has asked Sebi to suspend its review of the INR 24,713 crore deal and not grant a no-objection certification on the ground that its challenge to the agreement was before the Delhi High Court.
