Future Retail shares dive after the Big Bazaar operator skips a foreign currency payment

• The company had missed the payment of $14 million due on foreign currency convertible bonds worth $500 million
• The ₹5,600 crore ($750 million) retailer ⁠— with a debt of nearly $2 billion⁠— that operates the Big Bazaar chain of multi-brand department stores is on the brink of bankruptcy with huge debt and declining fortunes
• Check out the latest news and updates on Business Insider.

The shares of Future Retail took a dive of as much as 4% on Thursday (July 23) morning after reports that the company had missed the payment of $14 million due on foreign currency convertible bonds worth $500 million.

It’s not a default yet because the company gets a 30-day grace period to cough up the sum.

The ₹5,600 crore ($750 million) retailer ⁠— with a debt of nearly $2 billion⁠— that operates the Big Bazaar chain of multi-brand retail stores is on the brink of bankruptcy with massive debt and declining fortunes. While the operating profit has seen healthy growth in the last two years, the finance cost at the end of December 2019 was 1.5 times the net profit. Future Retail is yet to declare the earnings for the two quarters gone by this year.

The net worth of Kishore Biyani and his family is down to less than a third of what it was about a year ago. It was a clear case of stretching themselves too thin. “We got into so many categories of business….We didn't have that kind of bandwidth and we didn't have that kind of resources and we have done too many things," Kishore Biyani admitted last year.

Biyani and his family hold a 33.5% stake in Future Group, but almost all of it has been pledged to lenders.


Future Retail operates 1,500 retail stores that cover over 16 million square feet of retail space in 400 cities. This includes its flagship Big Bazaar chain aside from EasyDay Club and Heritage Fresh.

But before he could correct his mistakes, the COVID-19 pandemic struck. Now, the only hope for the founder-promoter Kishore Biyani seems to be a white knight, which according to reports could be the country’s richest man Mukesh Ambani who has his eyes set on the retail throne.

On the other hand, Reliance Retail operates a network of 11,784 stores covering 28.7 million square feet and reported a revenue of Rs 38,211 crore in the January-March quarter.

SEE ALSO:
Once India’s ‘retail king’, Future Retail promoter Kishore Biyani is straddling high debt, coronavirus and negative ratings⁠⁠— and nearly his entire stake is already pledged

Mukesh Ambani’s next goal seems to be the ‘retail king of India’

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