"We are separating the speciality retail and would concentrate on the small-store and big-store retail," Future Group CEO Kishore Biyani told PTI.
Future Retail, which is demerging its home retail and e-commerce home retail businesses into a single entity — Praxis Home Retail — would concentrate on core format of small store and big store retail from now on. “This is demerger of the home retail business. We are separating the speciality retail and would concentrate on the small-store and big-store retail,” Future Group CEO Kishore Biyani told PTI. The Future Retail Ltd (FRL) board has approved plan to demerge its home retail business, operated through HomeTown stores, into a separate entity called Praxis Home Retail Pvt Ltd (PHRPL) along with e-commerce home retail business operated by Blue eServices which owns Fabfurnish.com.
“The group has demerged and alloted its shareholders, share of home retail, which is speciality retail. It has a different set of investors, customers and a different kind of thought also. Now, the company would take its own course for growth,” he added. Under the scheme of arrangement, PHRPL will issue one share to FRL shareholders for every 20 shares of the latter. “PHRPL will issue one fully paid up equity shares of Rs 5 each to the equity shareholders of FRL as in the record date for every 20 fully paid up equity share of Rs 2 each of FRL,” the company had said yesterday in a regulatory filing. Future group has also plans to list PHRPL on the stock exchanges, it added.
Home Town format was initially established in 2007 and was vested with the company from Future Enterprise Ltd as part of the demerged business from October 31, 2015. It had a turnover of Rs 187.36 crore which is 2.79 per cent of the total turnover of the company of Rs 6,716.01 crore of FY 2015-16. The merger would have “consolidation of offline and online home retail business under a single entity” and would have “more focused leadership and dedicated management,” Future Retail said.
It further said that there would be “no change in the shareholding pattern of FRL post demerger” but for PHRPL “the shareholder of the existing shareholders of PHRPL would get cancelled and the shareholders of FRL would get equity shares of PHRPL”. It further added: “Upon such issue of equity shares, the shareholding pattern of PHRPL shall be identical/mirror image to that of FRL.” Shares of FRL were trading at Rs 303.50 on BSE, down 0.78 per cent from previous close.