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Kishore Biyani’s Future Group stocks hit the upper circuit, FRL, FEL jump 10% on Delhi HC’s nod to Future-RIL deal

Future Group share prices hit the upper circuit on Tuesday after the Delhi High Court allowed the Kishore Biyani company to go-head with Reliance Industries Ltd (RIL) deal. On Monday, Delhi HC’s division bench stayed the single judge’s order passed which had directed Future Group to maintain status quo till further orders with regard to its Rs 24,713-crore deal with Reliance Retail. Future Retail Ltd shares hit 10 per cent upper circuit at Rs 80.50, Future Enterprises Ltd at Rs 11.78 apiece, Future Market Networks Ltd at Rs 19.15 apiece, Future Lifestyle Fashions Ltd at Rs 91.35 apiece, and Future Supply Chain Solutions Ltd at Rs 99.05. Similarly, Future Consumer Ltd shares were locked into 10 per cent upper circuit at Rs 8.67 apiece.

The legal battle involving Amazon, Future group & Reliance continues to influence the stock prices of the above mentioned companies leading to uncertainty and high volatility, says AR Ramachandran, Co-founder & Trainer, Tips2Trade. He advises investors to use every uptrend to exit Future group stocks as this legal battle could stretch out for a very long time. Ramachandran told Financial Express Online that currently, Rs 83-90 remains a strong resistance zone for Future Retail Ltd.

Reliance Industries Ltd (RIL) share price gained as much as 2 per cent to Rs 1,990 apiece on BSE. So far in the trade, 3.43 lakh have been traded on BSE, while 50.80 lakh shares have exchanged hands on the National Stock Exchange (NSE). Following this order from Delhi HC, now Future group can go ahead with the formalities related to the completion of the transaction. So far, the Competition Commission (CCI) and the Securities and Exchange Board of India (Sebi) have given their approval for the FRL-RIL deal. This deal now requires the approval of the National Company Law Tribunal (NCLT), which got stalled by the single judge’s February 2, 2021 order.

In the noon deals, BSE Sensex was trading 364 points or 0.71 per cent higher at 51,713, while the broader Nifty 50 index surged 110 points or 0.72 per cent to 15,225 levels.

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Stove Kraft stocks debut with premium, list at 21% bonus over IPO price on bourses

The kitchen appliance manufacturer and home solutions firm, Stove Kraft made its share market debut at Rs 467 per share, a premium of Rs 82 or 21.30% from the issue price on BSE. Stove Kraft became the fourth IPO of the calendar year 2021 to list on exchanges. On National Stock Exchange (NSE), the stock listed at Rs 498 per share, rising 29.35 per cent from the issue price. On listing, the kitchen appliance manufacturer was commanding a market capitalization of Rs 1,500.31 crore. The Rs 412-crore initial public offer (IPO) was subscribed 18 times with non-institutional investors bidding 32.72 times the allocated quota of shares. In the previous session, Stove Kraft shares were seen quoting a premium of Rs 35-40 apiece, over the issue price.

Issue was opened last week, where investors were offered the shares in a bid lot of 38 equity shares or multiples, priced at Rs 384-385 per share. The initial public offer (IPO), comprised a fresh issue of up to Rs 95 crore and an offer for sale of up to 82.50 lakh equity shares. Stove Kraft caters in the sub-premium and premium segment through its brands such as Pigeon, Gilma, and BLACK + DECKER. The qualified institutional buyers (QIBs) category was subscribed 8 times, non-institutional investors 32.72 times and retail individual investors 26 times.

Analysts at Angel Broking Ltd said that Stove Kraft priced its issue at 34.5x PE on a trailing basis, its peers TTK Prestige and Hawkins Cookers were currently trading at 61.0x and 47.5x respectively. Cost such as travelling, advertisement reduced in H1FY21 due to Covid-19 is going to come back once business comes back to normalcy. Those at KRChoksey Research said that at the upper band of the issue price, Stove Kraft will trade at a Price/EPS multiple of 12.0x of its annualized H1FY21 revenue, which is at a discount to its listed peers like TTK Prestige Ltd (45x), Hawkins Cookers (42.3x), and Butterfly Gandhimathi (284.3x). “We believe that the current price band is undervalued, looking at the growth potential in the company we anticipate listing gains,” they added.

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Future group stocks hit lower circuit after Sebi bans Kishore Biyani and other promoters from capital markets

Most of the Future group shares have hit their respective lower circuits on Thursday, after the capital market regulator Sebi banned Kishore Biyani, along with certain other promoters of Future Retail Ltd from the capital market for one year for indulging in insider trading in the shares of the company. Future Consumer Ltd shares hit 5 per cent lower circuit at Rs 7.80, Future Enterprises Ltd at Rs 11.15 apiece, Future Market Networks Ltd at Rs 19.95 apiece, Future Lifestyle Fashions Ltd at Rs 83.95 apiece, Future Retail at Rs 74.20 apiece and Future Supply Chain Solutions Ltd at Rs 95.15 apiece.

AR Ramachandran, Co-founder & Trainer, Tips2Trade, told Financial Express Online that the current development of Sebi announcing a one year ban on Kishore Biyani in securities market along with the legal tangle they find themselves in with Amazon has led to a breakdown in the faith of investors leading to a sharp sell-off in the Future group stocks. “Investors are best advised to look for every opportunity to exit these stocks and invest in better and more stable retail stocks like Avenue Supermarts (DMart) and V-Mart Retail Ltd for better returns,” Ramachandran said.

Sebi has also imposed a fine of Rs 1 crore each on Kishore Biyani, Anil Biyani and Future Corporate Resources. Apart from this, they have been asked to disgorge Rs 17.78 crore for the wrongful gains made by them. In comparison, BSE Sensex was trading 117 points or 0.23 per cent up at 50,373, while the Nifty 50 index was trading 45 points or 0.30 per cent at 14,835.

Moreover, Future Corporate Resources and FCRL Employee Welfare Trust have been directed to disgorge Rs 2.75 crore for the wrongful gains made by it. Anil Biyani and Future Corporate Resources are promoters of Future Retail Ltd. The market regulator had also conducted an investigation in the shares of Future Retail Ltd to ascertain whether certain persons and entities had traded during March 10, 2017, to April 20, 2017 period on the basis of Unpublished Price Sensitive Information (UPSI) pertaining to segregation of certain business of the firm.

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India’s gold demand down 35 pc to 446.4 tonnes in 2020; rebound in 2021 likely

India’s gold demand dropped by over a third in 2020 settling at 446.4 tonne on the back of pandemic-induced lockdowns and lifetime high prices, but a rebound this year is most likely, as normalcy returns and steady course of reforms strengthen the industry, according to the World Gold Council (WGC).

India’s gold demand fell by 35.34 pc to 446.4 tonne in 2020. In 2019, the total gold demand was 690.4 tonne, according to the WGC’s 2020 Gold Demand Trends report.

Gold demand in value terms in 2020, witnessed a decline of 14 per cent and stood at Rs 1,88,280 crore, compared to Rs 2,17,770 crore in 2019, according to the WGC data.

Meanwhile, the total jewellery demand in volume terms in 2020 was down by 42 per cent at 315.9 tonne, compared to 544.6 tonne in 2019, while in terms of value it dipped by 22.42 per cent to Rs 1,33,260 crore, from Rs 1,71,790 crore largely on account of COVID-related restrictions.

The country’s net gold imports dipped by 47 per cent during 2020 to 344.2 tonne compared to 646.8 tonne in 2019, it added. However, as lockdown eased and normalisation efforts were phased in, imports during the last quarter rose 19 per cent year-on-year, pointing to the positive impact of pent-up demand, according to WGC Managing Director, India, Somasundaram PR.

The fourth quarter (October-December) of 2020, saw improved consumer sentiments as gold demand was down by only 4 per cent at 186.2 tonne, compared to overall demand in the same quarter of 2019 at 194.3 tonne.

“In the fourth quarter of 2020, the festive period and the ensuing wedding season revived hopes and drew in jewellery demand worth 137.3 tonnes, the strongest quarter in the year. Investment demand also showed significant resilience, growing 8 per cent to 48.9 tonnes,” Somasundaram PR told PTI.

He pointed out that this can be expected to continue into 2021 as further normalcy returns and steady course of reforms strengthen the industry.

“With the implementation of mandatory hallmarking in June 2021, establishment of the international bullion exchange in GIFT city and Retail Code of conduct under the aegis of the industry steering committee, industry growth will be qualitatively superior underpinned by global ambitions and strong awareness of trust and transparency,” he said.

From the consumers perspective, there is acceptance of the current high price level as the new normal, he stated.

In addition, current high stock indices and low interest rates will add significant weightage to gold amidst inevitable return of celebrations and festivities, he said.

“We could see a strong spurt in gold demand for the next few years, a repeat of what happened after a sharp drop in 2009. In such a scenario, the current high tax on gold increases the lure of smuggling, so duty cut to reasonable levels is absolutely necessary, along with tax concessions for recycling gold, innovations and digital interventions,” he said.

The year 2021 will likely set a trend of long-term growth in Indian gold demand and the benefits of such growth can be explicitly captured if coordinated policy measures are sustained, making gold a mainstream asset class, he noted.

Once the demand picks up during the second half of this year, gold imports are expected to normalise, he added.

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