Future group stocks jump on Monday
Future group stocks were on the overdrive on Monday, fuelled by the possibility of Future Retail Ltd (FRL) taking the legal route to terminate all the cases filed by Amazon against the takeover of Future Retail by Reliance Retail.
The rally came after the Competition Commission of India (CCI) last Friday suspended a 2019 deal between Amazon and Future Coupon Pvt Ltd (FCPL), a promoter entity, for suppressing the “actual scope and purpose” of its investment. The transaction had played a key role behind the Singapore International Arbitration Centre’s (SAIC) decision not to allow the Reliance-Future deal.
Amid a carnage in the markets on Monday, Future group stocks stole the limelight by rising up to 20 per cent. Shares of Future Retail were locked in at the upper circuit as they gained Rs 9.55 to close at Rs 57.50.
A similar trend was seen among other the other Future group shares on the BSE: Future Enterprises surged 19.94 per cent to Rs 11.61, Future Consumer by 19.91 per cent to Rs 8.19, Future Lifestyle Fashions by 20 per cent to Rs 60.
Similarly, the Future Supply Chain Solutions scrip gained 19.99 per cent to settle at Rs 80.75. However, shares of Reliance Industries fell victim to the weak market sentiment and it ended lower by 2.73 per cent at Rs 2277.20.
This across-the-board rally came on a report that FRL may approach various courts and tribunals that include the Supreme Court and SIAC urging that all the cases be quashed following the CCI order.
However at the same time, observers are not ruling out the possibility of the US e-commerce giant approaching the courts or the National Company Law Tribunal (NCLT) seeking a stay on the CCI order.
In its order, the competition watchdog said its rationale behind the investment was the business potential of FCPL to create long term value and provide return on its investment.
Referring to the internal correspondence of Amazon, CCI said it clearly showed a different purpose for envisaging the combination.