Future Group shares slide 20% as Reliance deal fails

Stocks hit lower circuits after weekend filing

Shares of listed Future Group companies came under sharp selling pressure after Reliance Industries (RIL) said its proposed acquisition of Future Group assets cannot be implemented. On Monday, multiple Future Group counters fell as much as 20% on the BSE, with several stocks locking at their lower circuit limits. The selling extended into Tuesday, when some group stocks again hit their lower circuits for a second straight session.

The immediate trigger was RIL’s disclosure that secured creditors of Future Retail Ltd (FRL) voted against the scheme of arrangement required for the transaction. With creditor approval a key condition, Reliance said the scheme cannot go through.

What Reliance said about the ₹24,713-crore transaction

In a regulatory filing, Reliance said Future Group companies, including FRL and other listed entities involved in the scheme, intimated the voting results from meetings of shareholders and creditors. Reliance’s statement focused on the decisive rejection by FRL’s secured creditors.

RIL said the scheme related to the transfer of Future Group’s retail and wholesale business and its logistics and warehousing business to Reliance subsidiaries Reliance Retail Ventures Ltd (RRVL) and Reliance Retail and Fashion Lifestyle Ltd (RRFLL). The deal value referenced in the coverage was ₹24,713 crore, also described as about $1.4 billion.

How the voting split for Future Retail

While FRL’s shareholders and unsecured creditors voted in favour, secured creditors did not. In one exchange update cited in the coverage, FRL said 69.29% of secured creditors voted against the scheme and 30.71% voted in favour. FRL also disclosed shareholder voting, with 85.94% voting in favour and 14.06% voting against.

The voting outcome mattered because the scheme required meeting the approval threshold set under Section 230(6) of the Companies Act, 2013. The provision requires approval by a majority representing three-fourths in value at meetings of creditors or members.

Other Future Group entities also flagged implementation risk

Several listed Future Group companies said in their own regulatory filings that the composite scheme of arrangement with Reliance Group entities cannot be implemented due to the outcome of voting. The entities referenced included FRL, Future Enterprises Ltd, Future Market Networks Ltd, Future Consumer Ltd, Future Supply Chain Solutions Ltd, and Future Lifestyle Fashions Ltd.

The coverage also noted that, except for Future Supply Chain Solutions Ltd, other listed Future Group entities including Future Retail, Future Lifestyle Fashion Ltd, Future Market Networks and Future Consumer failed to get the mandatory 75% voting in favour of the scheme.

Secured creditor opposition across group companies

Beyond FRL, the reports cited heavy opposition from secured creditors in other Future Group companies. Voting results referred to in the coverage included:

• Future Enterprises Ltd (FEL): 99.97% of secured creditors opposed the scheme. Shareholders support was cited at 99.99%. Unsecured creditor voting was reported as 62.65% in favour and 37.34% against.
• Future Consumer and Future Market Networks: 100% of secured creditors voted against the deal.

The coverage also stated that lenders rejected Reliance Retail’s takeover bid citing that Reliance lowered the deal value, and that creditors voted against the deal as they were not getting clarity from RIL.

Market reaction: sharp falls across Future Group and RIL

On Monday, five Future Group stocks were reported lower by up to about 20% on the BSE:

• Future Consumer: down 19.91%
• Future Supply Chain Solutions: down 19.96%
• Future Lifestyle Fashions: down 19.89%
• Future Enterprises: down 9.87%
• Future Retail: down 4.96%

RIL’s own stock also reacted. The reports said Reliance shares fell as much as 1.75% to an intraday low of ₹2,710.15 on the BSE, in a session described as tracking broader market weakness.

Key data points at a glance

Background: 2020 agreement and the Amazon dispute

Reliance Retail Ventures Ltd signed the agreement in August 2020 to take over Future Group’s retail and logistics business, but the transaction could not be closed. The coverage said US-based e-commerce company Amazon contested the deal, citing violation of certain contracts.

The reports also linked Future Retail’s stress to the COVID-19 period, citing a slump in sales during the pandemic and lockdowns as part of the backdrop.

Insolvency risk and NCLT references in the filings

With the Reliance transaction called off, the reports said lenders planned to move listed group companies to bankruptcy court to recover dues under the Insolvency and Bankruptcy Code. It also said Future Group companies with exposure to bank loans, including Future Consumer, Future Retail and Future Enterprises, face insolvency proceedings.

Separately, the coverage noted that public sector lender Bank of India moved the Mumbai bench of the National Company Law Tribunal (NCLT) seeking insolvency proceedings and a moratorium over assets.

Why this matters for investors

The episode underlines how creditor voting can override shareholder approval in schemes of arrangement, especially when the company is debt-laden and the transaction is positioned as a resolution path. The sharp, repeated lower-circuit moves also show how quickly liquidity can evaporate in stressed counters once a key deal falls through.

For Reliance, the update clarified that the structure intended to transfer Future’s retail, wholesale, logistics and warehousing businesses to Reliance subsidiaries is no longer implementable under the voted scheme.

What to watch next

The next milestones will come from creditor-led actions and tribunal proceedings referenced in the coverage, including developments at the NCLT. Investors will also track any further exchange disclosures from Future Group entities and lenders on insolvency filings, timelines, and asset-related moratorium requests.