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RIL, Future Group Stocks Fall Sharply In Trade On October 26, 2020: Here's Why

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The shares of heavyweight stock Reliance Industries (RIL) in trade on October 26, 2020 cracked a huge 4% to Rs. 2028.7 apiece on the BSE as against previous closing price of Rs. 2112.55. The conglomerate's stock price came under pressure after Future Retail was held back by the Singapore arbitration court on Sunday to go ahead with the Future-RIL transaction. To dominate the country's e-commerce segment and compete with Amazon, Reliance in August this year intended to take over Future Group's assets including retail, logistics, wholesale and warehousing units for $3.4 billion.

RIL, Future Group Stocks Fall Sharply Today: Here's Why
 

Notably, Amazon last year agreed to acquire 49 percent of Future Group's unlisted business and the pact also provided for the right to buy into Group's retail business after a period of 3-10 years.

As the likely deal between Reliance Retail Ventures Limited and Future Group would prove to be detrimental for Amazon, the US-based e-commerce entity was propelled to make an emergency appeal to get a stay on the deal, wherein Amazon claimed that Future-RIL transaction violates a non-compete term it entered into with Future Group.

However despite the interim relief awarded to Amazon in the arbitration, RIL's unit late Sunday made a statement that it wants to go ahead with the deal and said it intends to purchase Future Retail's assets "without any delay. And on Monday, Future Retail said it wasn't party to the Singapore arbitration and the ruling "will have to be tested" in accordance with the Indian arbitration law. Besides, Kishore Biyani-led Future Retail said it would take necessary measures such that the proposed deal with Reliance Retail progresses without any delay and more hindrances.

On the decision, Future Group stocks also tumbled with Future Lifestyle Fashions cracking the most by over 9%, while stock price of Future Retail, Future Consumer and Future Enterprises dived 5% each.

GoodReturns.in

Story first published: Monday, October 26, 2020, 17:04 [IST]
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