Sensex gold rush: Reliance stock jumps after SEBI approves Future Group deal
After market regulator SEBI gave a nod to Reliance Industries' Rs 24,713 crore-deal with Future Group, company stock jumped more than three percent on Thursday.
This also coincided with the stock market rally that saw the Bombay Stock Exchange (BSE) growing 300 points to breach the 50,000-mark for the first time. Reliance, one of the benchmark indices, was among the top gainers on Thursday.
Concurrent to the stock gains, Reliance Chairman Mukesh Ambani, who controls 42 percent of the petrol-to-telecom-to-retail conglomerate, is likely to add a few billion dollars to his net worth.
At present, Ambani is the 11th richest person in the world with a fortune of $79.5 billion, according to the Bloomberg Billionaires Index.
His personal wealth more than doubled in 2020, following multibillion-dollar FDI inflows into Reliance Jio and Reliance Retail.
Ambani, Biyani together finally
After months of speculation and legal battles, Reliance Retail's acquisition of Kishore Biyani's debt-ridden Future Group was cleared by SEBI on Wednesday night.
The market regulator, however, clarified in a letter that the litigation pending before the Delhi High Court and arbitration proceedings by ecommerce rival Amazon, which accused Future Group of breaching agreements, should specifically be mentioned by the latter while seeking shareholders or the National Company Law Tribunal approval.
Based on SEBI's approval, the BSE has granted its "no adverse observation" report on the Reliance-Future transaction.
The deal was first announced in August 2020, when Reliance bought out Future's retail assets, including Big Bazaar, fbb, Foodhall, Easyday, Nilgiris, Central, and Brand Factory.
The acquisition would give RIL access to 1,800 Future Group stores across 420 cities in India, and birth India's largest retail empire worth $26 billion. The biggest impact of the deal is expected to be felt in the food and grocery segment, which accounts for over 65 percent of Indian retail.
Future Group stores are expected to bring in additional revenues worth $5.5 billion in grocery for Reliance Retail, as per CLSA estimates. It would also give RIL more bargaining power over FMCG players, vendors, and logistics partners, and ease its entry into smaller towns.