Future Group's stocks freeze at upper circuit as Sebi approves mega-deal with Reliance Retail

Sebi approved the deal on January 20, however, listed out few conditions in accordance with the Composite Scheme of Arrangement.

Jan 21, 2021 02:01 IST India Infoline News Service

Future Group's listed stocks on Thursday froze at its upper circuit limit after the market regulator approved the Group's composite scheme of arrangements with Reliance Industries (RIL) retail arm Reliance Retail. Overall, RIL will acquire Future Group's listed businesses on stock exchanges for lumpsum aggregating of Rs24,713cr.

At around 2.10 pm, Future Enterprises stood at the upper price band of Rs12.01 per piece. Similarly, Future Supply Chain froze at the upper band of Rs104.15 per piece, Future Retail at Rs81.35 per piece, Future Lifestyle Fashions at Rs90.10 per piece and  Future Consumer at Rs8.56 per piece. These stocks at the upper circuit recorded a 5% rise each on Sensex.

Meanwhile, Future Market Networks froze at the upper band of Rs20.45 per piece higher by 10% on Sensex.

Sebi approved the deal on January 20, however, listed out few conditions in accordance with the Composite Scheme of Arrangement.

In its letter, Sebi on Reliance Retail and Future Group deal, said, "Company shall ensure that the shares of the transferee entity issued in lieu of the locked-in shares of the transferor entities are subjected to lock-in for the remaining period post scheme.”

The regulator also highlighted about the dispute with Amazon in the letter, by saying these should be bought to the notice of the Shareholders of the listed entities involved in the scheme while taking shareholder approval on the scheme. Further the same shall also be brought to the notice of NCLT while filing the draft scheme for their approval.

In August 2020, the Mukesh Ambani-backed RIL signed the merger deal with Kishore Biyani-backed Group's retail and logistic subsidiaries through Reliance Retail Ventures.

According to the agreement, Future Group's retail & wholesale undertaking is being transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of Reliance Retail Ventures (RRVL). Further, the Future Group's logistics & warehousing undertaking will be transferred to RRVL.

The acquisition is being carried as part of the Scheme in which Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises. The companies involved are the ones listed on stock exchanges apart from Future Enterprises.

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