High levels of debt clubbed with COVID-19 pandemic led Future Group stocks – Future Enterprises, Future Lifestyle Fashion, Future Retail and Future Supply Chain Solutions – lose 48-68 per cent of their value since the beginning of 2020.
With several deals struck across group companies such as Amazon, private equity firm Blackstone and Japan’s Nippon group in the last 6 months, Future Group led by Kishore Biyani has been in a fix in the last few weeks. Current scenario has led to panic among lenders.
Future Retail on Tuesday said that certain lenders who held NCDs through IDBI Trusteeship Services Ltd. have summoned promoter-pledged shares worth 8 per cent. IDBI Trusteeship said that it had invoked the shares in a stock exchange filing, given that an event of default has occurred.
According to Icra, “increase in debt is mainly on account of an increase in debt of the opcos, with the total debt at the Group’s listed companies increased to Rs. 12,778 crore as on 30 September 2019 from Rs. 10,951 crore as on 31 March 2019.”
Meanwhile, the lockdown across the country is expected to reduce the operating revenues as all non-essential business activities have been shut down.
Future Group stores, especially the apparel business under Future Lifestyle Fashion, are facing the brunt as almost all the stores are closed.