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Limbo dance

A

few years 

ago Future Group was seen

as, well, the future of Indian retail.

From humble beginnings making trousers

in the 1980s, Kishore Biyani, its founder,

built 2,000 shops in 400 cities across In-

dia, selling all manner of consumer goods.

That is second only to the 3,700 retail out-

lets run by Reliance Industries, India’s larg-

est conglomerate, which peddles every-

thing from motor fuel to mobile phones.

Future’s Big Bazaar supermarkets or Food-

hall, a posh grocer, are enviably large and

modern, as is its logistics network.

So enviable, in fact, that on August 29th

Reliance said it would pay $3.4bn for most

of the company. The combined group

would account for one in three formal

shops in India. “This transaction takes into

account the interest of all stakeholders in-

cluding lenders, shareholders, creditors,”

said Mr Biyani in a statement. 

Amazon might beg to differ. Last year

the American e-empire struck a complex

deal to provide Future, whose expansion

had left it deeply indebted, with cash in ex-

change for an option to buy it later—law

permitting. Despite fiddly visits from In-

dia’s regulators and trustbusters, Amazon’s

hope was that the deal would go ahead. No

such luck. On the contrary, India’s govern-

ment has been making it harder for for-

eigners to own Indian warehouses and de-

livery fleets. It has tightened restrictions

further amid the covid-19 pandemic. 

As an Indian firm, Reliance faces no

such obstacles. In the past year it has

emerged as India Inc’s undisputed champi-

on. It now accounts for 18% of the market

value of India’s 30 biggest firms (see chart)

and has secured $20bn in foreign invest-

ments in Jio, its mobile-network-turned-

digital-platform. Investors including Face-

book, a social-media giant, and 

kkr

, a priv-

ate-equity one, appear to have concluded

that the best way to get a piece of India’s fu-

ture is through a piece of its biggest player. 

Mr Biyani may have had no choice but to

find a buyer for his group. In a securities fil-

ing in March he said Future Group was in-

vestigating “baseless and false” rumours

about the finances of subsidiaries that

were undermining their share price. On

August 31st a subsidiary defaulted on some

bonds held by mutual funds run by Frank-

lin Templeton, a big American asset man-

ager. The debt is supposed to be repaid

from the proceeds of the sale to Reliance,

Franklin Templeton said. Still, being part

of Mr Ambani’s empire may not have been

the sort of future Mr Biyani had in mind.

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