Future Retail is looking to get cheaper loans to pay off old debts⁠— that’s good enough for the stock to jump 5%

• In a board meeting today, Future Retail approved to issue non-convertible debentures for upto ₹650 crore.
• Kishore Biyani led Future Retail has rising debts as well as loss in revenue due to the coronavirus pandemic in its increasing list of problems.
• Future Consumer is currently looking to raise ₹300 crore through a rights issue.

Kishore Biyani led Future Retail is looking to raise money through cheaper loans to repay some of its debt that has piled up to nearly $2 billion. Investors cheered the approval from the Board of Directors and the stock of Future Retail, which runs Big Bazaar, Eazyday stores across India, jumped as much as 5%

In a board meeting today, Future Retail approved to issue non-convertible debentures for upto ₹650 crore. The filing on the stock exchange says that it will be done in “one or more tranches from time to time mainly to replace its existing high cost current or near term maturity debts requirements.”

Biyani has been struggling to find investors for some time now. Future Consumer is currently looking to raise ₹300 crore through a rights issue.

By March 2020, ratings agency ICRA had already placed a negative rating on Biyani’s company because of its debt. “Icra notes the increase in debt is mainly on account of an increase in debt of the operating companies, with the total debt at the group’s listed companies increased to ₹12,778 crore as on 30 September 2019 from ₹10,951 crore as on March 31, 2019," the rating agency said.

The rising debt is coupled with the problems from the coronavirus pandemic where Future Retail has seen its revenues take a serious hit. In the third quarter of FY20 ending December 2019, Future Retail posted a 15% fall in profit and a 3% fall in revenue. The disruptions due to COVID-19 pandemic will only make it worse.


The chain of stores don’t just sell grocery but a major source of its revenue comes from its apparel section which saw no sales for the lockdown period. ““Future Retail is only able to sell its lower-margin essential items, which has led to monthly sales declining by around 75% in March and April 2020 from normal levels, and continues to limit Future Retail’s ability to generate cash to meet working capital requirements,” Fitch reportedly said citing ‘substantial risk’ to its rating.

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