Shares of Reliance Industries Ltd. and Future Retail Ltd. fell after the Supreme Court halted the Mukesh Ambani-controlled firm's acquisition of the Mumbai-based supermarket chain operator.
The apex court, in its order, found the Singapore arbitrator's interim award favouring Amazon.com Inc. to be valid and enforceable in India.
As a result, Reliance's shares plunged 2.6%, or the most in two weeks, to Rs 2,078.75 apiece on Friday, while Future Retail's shares were locked in the lower circuit—or down 10%—at Rs 52.55 its lowest since March.
That triggered a collapse in other Kishore Biyani-led Future Group companies as well. While Future Supply Chain Solutions Ltd. and Future Enterprises Ltd. were locked in the lower circuit, Future Consumer Ltd. declined as much as 17%.
Future Retail's dollar bond declined to the lowest in more than nine months after the verdict. Its 5.6% 2025 note was trading about 4.5 cents lower at 68.33, its lowest level since Oct. 20, Bloomberg data showed.
Future Retail, in its response to the verdict, said it intends to pursue all available avenues to conclude the deal to protect the interests of stakeholders and workforce. "The judgment addresses two limited points related to the enforceability of the Emergency Arbitrator's order and not the merits of the disputes. Future Retail is advised that it has remedies available in law, which it will exercise," it said in an exchange filing.
The unfavourable verdict may not deal a hard blow for Reliance Industries' consumer market prospects, as its retail unit could still witness about 30% annual sales growth, according to Horace Chan, a senior analyst at Bloomberg Intelligence.
"The company's push for e-commerce, recent investments such as its acquisition of Just Dial Ltd., accelerated store openings and the launch of new brands could power growth," he said. "It may seek other acquisition targets, including Subway's Indian franchise, to expand its retail empire."
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