@rahpar, pls refer to my previous posts - FEL was always a very poor business and I have written in details about the same.
When good quality stuff is available in cheap, why should one consider a business with FEL always marred with uncertainties.
I hope you are also aware about the liquidity and debt challenges at the future group. While some of it can be resolved through deals, no-one knows whether or not it will materialise.
FUTURE GROUP SHARES AFTER DEAL WITH RIL
I am trying to understand surprising trend reversal in Future Group shares,
Future Retail was up 20% on Monday after deal with over 10 cr traded shares in NSE and importantly when Nifty came down 500 points from days top. But Future Retail didânt fell, closed at upper 20% freeze.
And Tuesdayâs trend as well as todayâs trend reversal surprising me.
Many analyst says its due to deal has slump sale of Retail business of Future Grp to RIL and not a company takeover so shareholders of Future grp will not be benefited and RIL will get great business in slump sale. In all any such deal of promoter with buyer where such discrepancy is there. Its a cheating.
Secondly Kishore Biyanis business was doing well except COVID period, and crisis was mainly loan against Pledged shares of promoters (almost 100%). Deal news does not talk about it and if KB doesnt comes out of this crisis, why will he sell his dream business, which is currently valued at around 20% of real valuation. ( Future grp shares were ruling around 3-5 times higher then current price 6-12 months ago, Amazon took stake in FRL @450 per share)
Did you understood it, if yes pls share your views, i am trying to find out.
Yes,this is pure corruption on promoter part, shareholders should go into court. We didnât buy shares so that the business should go to ambani and adani. Amazon ll also try to stop this deal since itâs money is at stake. Because hostile takeover ll be acceptable to shareholders than this slump sell.
Hostile takeover is a very distant possibility. When the business is in distress, valuations will always go down. Had future group companies defaulted on loans, even these valuations would have not been possible. Reliance has saved thousands of jobs second time. They saved Eenadu Group from bankruptcy a few years ago gaining substantial inroads into Media industry. Corporate world wonât work on greater good theory. We are in India and our analysis should factor in the level of corporate governance and safeguards available to minority shareholders in our country. I wonât see much future in future group companies.
Disclosure: Invested in Future Group companies.
Finally, amazon does it
"Have To Accept Reality": Future Retail Chairman Kishore Biyani Resigns.
Marks a closure to one of the worst-run groups but not before it made a lot of retail investors lose their investments. Interestingly the AGM attendance to one of their group companies by me many years back made me realize how the real promoter psyche is. Numbers were there to analyze for anyone who cared about them but interestingly too many people just listen to the story and hold on for too long even when the story is not playing out.
Disclosure - I run a SEBI-registered PMS. Views are personal.
Who is the new owner of Big Bazaar, foodhall etc? Hearing that BigBazaar stores have resumed operations.
