InvestorQ : How do you see the Future Group and Reliance Retail benefiting if the deal by RIL to acquire Future Retail takes place?
NISHA Nayak made post

How do you see the Future Group and Reliance Retail benefiting if the deal by RIL to acquire Future Retail takes place?

Answer
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3 months ago


While there is still not clarity on whether and how the deal will work out, there have been a number of reports about a likely deal where Reliance Retail could buy a controlling stake in Future Retail. Prima facie the deal should add value to the Reliance group and also to the Future group, which finds itself in a financial mess at this point of time.

Firstly, it surely makes sense for Reliance. Let us look at the numbers here. RIL has 11,784 stores across 29 million SFT. The Future Retail deal will help Reliance add another 1500 stores with a combined area of 16 mn SFT across 400 cities. That is a large enough spread and reach that would attract even RIL. RIL also gets hold of the retail franchise cheap.

No prizes for guessing but Future group will be desperate for the deal. It saves Biyani from the Rs.12,700 crore debt default risk. Biyani family has virtually pledged its entire stake to banks. Reliance deal offers Future Group as well as a ready digital platform. Future Group can now take on take on the likes of Amazon and Wal-Mart in the online turf.