The Covid-19 pandemic induced stock market carnage coupled with high debt levels has put Future Group promoter Kishore Biyani in a tight spot. Biyani, whose business appeared to be cruising along well, having struck several deals across group companies with the likes of Amazon, private equity firm Blackstone and Japan’s Nippon group in the last six months and whose group raised its first offshore bond in January, has seen his business upended in the last few weeks.
The combined headwinds of debt and Covid-19 panic have led to Future group stocks—Future Enterprises, Future Lifestyle Fashion, Future Retail and Future Supply Chain Solutions, losing 48-68 per cent of their value since the start of the year.
The situation has led to panic among lenders and sent Biyani scurrying to provide more collateral for his pledged shares to soothe his lenders. But the task has not been an easy one so far.
The move came after rating agency Icra downgraded Future Corporate Resources, a promoter entity, to junk rating of BB+ from its previous rating of BBB- (ratings below BBB- are considered below investment grade). The downgrade, the on account of high group level debt and falling stock prices which were bound to put pressure on promoter pledges.
The group is making several efforts to bring in capital to tide over its debt issues.