Future Retail denies foreign acquisition, share price surge causes speculation

By

Isabelle Crossley

Published
Aug 29, 2018

Future Group’s subsidiary Future Retail’s share price rose by over seven percent during trading hours on Monday following reports of foreign investment and, although the business has denied this, speculation has continued.

On August 27, the Economic Times reported that Google and Paytm Mall will form a partnership and invest between Rs 3,500 and 4,000 crore rupees ($526 to $601 million) in Future Retail to obtain a seven to ten percent stake in the business.

Even though Future Retail notified the Bombay Stock Exchange (BSE) that it had not made such a decision, Future Retail’s stock still ended trading hours on Monday with stock at 5.4 percent higher than the previous trading day.

Although Future Retail has consistently denied speculation that it is about to tie up with a large foreign business, speculation about a possible deal in the near future has not ceased. India’s retail market is growing at a fast pace and could therefore present a growth opportunity for a foreign owned business in the market.

Future Retail has had a less successful year on the BSE compared to the previous financial year (FY18) when it performed well.

The business also reported the slowest same-store sales growth in the past eight quarters in the March quarter this year at six percent. In the June quarter that followed, the figure was at 3.6 percent.

Future Retail’s Easyday stores have been struggling but its Big Bazaar chain has been doing better, especially in the fashion segment. The recently acquired HyperCity chain is also expected to perform well.