Media Speculation: Future Retail Ltd (Rs.47.30) will go bankrupt, post the Supreme Court Verdict!!
My take:
1st of all the recent Supreme Court verdict has nothing to do with the merit of the case. The ruling was regarding whether SIAC order is enforceable in India or not.
It's not regarding whether Amazon, even being a foreign entity can buy into Future Group or not. Foreign marketplaces (like Amazon) are not allowed to take stakes in inventories in India, as per FDI norms. The market has assumed that SIAC will give ruling favouring Amazon. But that is too much speculation. Isn't it?
Besides, how will Future Retail get bankrupt when:
#When Future Retail is undergoing debt restructuring.
#Amazon has invested Rs.1500 Crore.
#Reliance is giving extended credit.
#Future Retail's e-commerce business is going fine, with 50,000 plus orders per day, as per a media report, few months back.
#More and more relaxations are being given everyday regarding lifting of lockdowns.
#The suburban local train services in Mumbai are scheduled to get operational for the general public (fully vaccinated ones) from 15th August, 2021.
#More and more people are getting vaccinated everyday, reducing the chance of any severe 3rd wave of Covid - 19 pandemic.
If the stock of Future Retail Ltd (Rs.47.30) is still hitting LC, then there could be an invisible hand behind it. Today, I saw a Whatsapp message saying Axis Bank has Rs.16,000 Cr exposure to the Future Group, which is absolutely misplaced and erroneous.
Regulators should swing back into action and stop rumor mongering by a section of Indian media. Regulators should investigate why a section of the Media is making stories out of Air.
Also, I fail to understand why investors think that Amazon would destroy the Future Group, even after investing so much funds into it, through Future Coupon.
By the way, what is Narendra Modi government doing at the moment? It should act as a mediator and solve the case.
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