Is the Reliance purchase of Future Retail likely to go through or has it been put off?

It has been reported that finally the Reliance group may be close to buying a significant stake in the Future group. The talks had been stuck in the past due to differences over valuation as the Future group was expecting a much higher valuation than what Reliance was willing to offer.

The deal is likely to be a win-win situation for both the groups. For RIL, with massive retail plans for Reliance Retail and Jio Mart, the acquisition of Future group gives them access to a huge bank of brick and mortar stores which can be effectively used for fulfilment. For the Future Group, this deal infuses the much needed liquidity into the group.

Future group troubles have been out in the open over the last one year and the COVID-19 pandemic has only made it worse. Recently, Future group once again defaulted on its dollar loans and the situation may be almost desperate for the group. More so, considering that nearly 75% of the promoter’s 42% holding in the group is already pledged.