Reliance Retail, the subsidiary of Reliance Industries Limited (RIL), is buying Kishore Biyani's Future Group in a deal of Rs 24,713 crore. With this acquisition deal, Reliance Retail is all set to expand its retail business and compete with the e-commerce giant Amazon.
Reliance Industries' acquisition of Future Group's consumer business will strengthen the retail footprint of India's largest organised retailer. The retail business will be the fastest growing segment for RIL in future, Chairman Mukesh Ambani has said.
Leadership Team – Future Retail. Kishore Biyani is the founder and Group CEO of Future Group. Widely credited as the pioneer of modern retail industry in India, Kishore Biyani is a mentor and role model for many Indian entrepreneurs and a thought leader in Indian business.
Death of Future Group | Reliance Vs Amazon | Let's Analyse
Is Reliance bigger than Apple?
While Tata Group has a market value of $126 billion, Mukesh Ambani-led Reliance Industries is valued at $70 billion. Apple's market value currently stands at $789 billion.
Future group has accrued heavy debt over the years and it was struggling to pay even the interest on the debt. Alongside, there was a massive drop in share value which impacted its liquidity.
Reliance Retail, the subsidiary of Reliance Industries Limited (RIL), is buying Kishore Biyani's Future Group in a deal of Rs 24,713 crore. With this acquisition deal, Reliance Retail is all set to expand its retail business and compete with the e-commerce giant Amazon.
Acquisition. Big Bazaar Converting to Smart Bazaar at Avani Riverside Mall. In 2020, Big Bazaar was acquired by Reliance Retail, the retail division of the Reliance Industries, as part of a ₹24,713 crore ($3.36 billion) sale transaction of Future Group.
These Big Bazaar stores were purchased by Mukesh Ambani's company in February 2022, and they have since been transformed into smart stores. Who is Kishore Biyani? Kishore Biyani, the founder and CEO of the parent organisation, the Future Group, founded Big Bazaar in 2001.
Lack of Customer-Centric Approach: Successful businesses today are those that place the customer at the heart of their operations. Big Bazaar failed in this aspect, often prioritizing cost-cutting over customer satisfaction, which, in the long run, adversely affected its profitability.
Kishore Biyani's Future Group can survive on its own albeit at a reduced scale with the help of banks and lenders if it loses its legal battle to Amazon.
Back in 2010, along with Subroto Roy, chairman of Sahara Group, Reliance Industries wanted to bid for a 51 per cent stake in Liverpool. However, the rumours were denied by then Liverpool chief executive Christain Purslow.
And you also have to consider that Reliance Industries denied these rumours altogether on Sunday. So it's likely that Mukesh Ambani won't be buying Liverpool FC after all.
What is the issue between Reliance and Future Group?
In 2020, the debt-laden Future Group had decided to sell its retail, logistics and warehousing businesses to the Reliance group for just under Rs 25,000 crore. This deal had been negotiated under a resolution framework proposed by the Reserve Bank of India in 2019 to tackle India's burgeoning bad loan mess.
Future - which has more than 1,700 outlets, including popular Big Bazaar stores - has been unable to make lease payments for a bulk of its outlets. With landlords insisting on payments or shutting down of stores, Reliance transferred the leases of some stores to its name and sublet them to Future to operate the stores.
FEL is going through Corporate Insolvency Resolution Process (CIRP) after the Mumbai bench of the National Company Law Tribunal (NCLT) admitted a plea from one of its operational creditors in February this year and appointed Jitender Kothari as IRP suspending the board.
Damani is often referred to as the Retail King of India. His estimated net worth is US$18.3 billion as of January 2024, according to the Bloomberg Billionaires Index, and $17 billion according to Forbes.
Future Retail has a debt of around Rs 30,000 crore and has been undergoing the corporate insolvency resolution process. Despite efforts to attract buyers, including dividing its assets into clusters, the company has been unable to secure a resolution plan.
On the third spot is Samsung, followed by Nvidia, Moutai, Nike, Microsoft, ASML, Paypal, and Netflix. Mukesh Ambani-led oil-to-telecom conglomerate Reliance Industries has been ranked the second biggest brand after Apple on the FutureBrand Index 2020.
The Reliance Industries since its inception led by the visionary leader and entrepreneur Late Shri Dhirubhai Ambani not only relied on thinking big but also beat its key competitors (Like Wadias and current telecom companies) by making thinking big as part of its regular strategy.
With a cash pile of roughly Rs 19.54 lakh crore, Apple can buy out RIL (7.45 lakh crore), TCS (Rs 7.57 lakh crore), Infosys (2.97 lakh crore) in one go and will still be left with over Rs 1.5 lakh crore. To put into perspective, the recent spike in stock prices has pushed Apple's valuation to over $1 trillion.
