There was always a retail war between two giant retail king reliance and amazon. But nowadays this war became brutal as foreign and Indian court have to enter to solve a problem. In this post we will discuss how the recent war start between two and what will be the consequence and how Future group fate is depending on this war.
During this pandemic if one company get profit a huge in Indian Market that is Reliance. Two biggest tech giant Google and Facebook who are considered rival in international market,they both heavily invested in Reliance. Some further investment was also happened several other companies. By this Reliance almost cleared all its debt of Indian market and they still have a huge amount to invest.
On the other hands, Future group which once considered retail king in Indian market they started to lose a huge market in pandemic time. It try to survive by giving more share and bond to the market.
But they dangerously failed to compete the market as they have more than 20,000 crore rupee debt in bank and market and they hardly have more bond to receive money.
In this condition they asked Amazon which was a 5% shareholder in future group to buy them. But Amazon also witnessed a huge lose in pandemic time, so they seem to have no interest to take the huge amount pressure in them.
RELIANCE COME AS A SAVIOUR
At that time, reliance came as a saviour as they agree to buy Future Group by 25000 crore rupees. By these Future Group can get totally free from debt in the market. Bank and Market people were also happy as they are going to getting their money back. The deal even happened between Reliance and Future groups.
After getting a huge market share in retail market by getting 11 food and grocery company of Future Group,It was assuming by market experts that Reliance will dominate the retail market as they did in telecom industry.
Kishore Biyani also agreed that he will not enter in this market for next 15 years. Everything was getting in smooth pace but suddenly Amazon came as a speed breaker.
WEAPON OF AMAZON
The main rival of Reliance which was Amazon, they were watching all this progress in sharp eye from early days.They had a great weapon too in their hand. As It was mentioned earlier Amazon have 5 % share in Future group, during that deal amazon give a condition that this group can`t sell themselves to 15 different companies including Reliance.
It was a common practice in big companies to give disadvantage to rival companies. Reliance did know the factor. They try to keep aside that deal by another technique but that did not bring success. Amazon company give notice to Singapore based Arbitration centre and Indian high court to stop this agreement.
Court decided to pause the agreement between Reliance and Future group until all deal become clear between three. Law experts suggest that this deal have to go through such a long way to happen as no company is in not mood to surrender. If the deal got more delayed.
In this condition if reliance step back to their decision to buy what will happen to Future group and shareholders including banks is still unknown to everyone.