Future Enterprises' insolvency proceedings begin year after Mukesh Ambani called off acquisition

With retail chains such as Pantaloons and Big Bazaar spread across Indian cities, Kishore Biyani's Future Group was known for building iconic brands. But by 2020, the firm was crumbling under a Rs 28,000 crore loan, and was to be acquired by Reliance, through a deal that was later called off. With Future Retail's debt resolution hanging in the balance, now Future Enterprises has also been admitted for insolvency.

What comes next for the Future Group?

After an order by the Mumbai bench of the National Company Law Tribunal, the manufacturing and logistics of the embattled Future Group will be auctioned off. The powers of the board of directors have been suspended and administration has been handed over to a resolution professional, till a bidder acquires Future Enterprise. NCLT initiated insolvency proceedings following a plea by supplier Foresight Innovations, over a Rs 1.58 crore payment default.

Retail Detailz India has also filed a plea following a Rs 4 crore payment default by Future Enterprises. It was earlier supposed to be acquired by Mukesh Ambani's Reliance Retail along with 19 other Future Group entities. But Amazon's objection to the deal based on a shareholder contract, forced Reliance to call off the deal after multiple delays.

Future Retail already struggling to find takers

The proceedings for Future Enterprises have started at a time when Future Retail has failed to retail any proposals for its debt resolution. Its resolution process was pushed to April 2023, while Reliance Retail and Adani Group were expected to submit plans to take over the firm.

Following the bankruptcy, the iconic Big Bazaar has disappeared from Indian cities, and has since been rebranded as Smart Bazaar by Reliance, after Future Retail defaulted on rent payments.