Future Group companies’ shares hit 20% upper circuit after CCI suspends Amazon-FRL deal

Kishore Biyani-led Future Group companies were on a roll, on Monday, with almost all companies touching 20 per cent upper circuit on the BSE intraday in an otherwise weak market.  

The surge is mainly on the back of the Competition Commission of India (CCI) suspending Amazon's deal with Future Retail (FRL) on Friday and also imposing Rs 200 crore penalty on Amazon Inc for certain contraventions.  

In its 57-page order, CCI said , “It considered necessary to examine the combination afresh, given that the two players were known in the online marketplace and offline retailing and had contemplated strategic alignment between their businesses.” 

“Amazon had suppressed the actual scope of the Combination and had made false and incorrect statements in relation to the BCAs, which are intertwined into the scope and purpose of the Combination,” the order further said.

Individually, the Future Group companies stocks closed: Future Retail (Rs 57.50 per share) and Future Supply Chain Solutions (Rs 80.75 per share), Future Lifestyle Fashions (Rs 60 per share), Future Enterprises (Rs 11.61 per share), and Future Consumer (Rs 8.19 per share) on the BSE. 

Most of these stocks were down between 15 per cent and 35 per cent from their respective 52-week highs despite today's surge. In comparison, the BSE Sensex closed over 2 per cent lower. 

Earlier in August 2019, the e-commerce giant Amazon acquired a 49 per cent stake in Future Coupons, the promoter entity of Future Retail, for around Rs 1,500 crore. However, exact a year later, the Future Group struck a $3.4-billion asset-sale deal with Reliance Industries (RIL) in August 2020. 

The CCI order comes in the backdrop of the Supreme Court’s decision in November after Confederation of All India Traders (CAIT) had filed a plea in the apex court regarding the anti-trust activity. The top court had directed CCI to decide on the Show Cause Notice within 2 weeks, after hearing Amazon.