Future Retail falls 45% in 2 days post demerger

Future Retail shares extended their decline on Monday, falling as much as much 19 per cent before making some recovery. The stock had fallen as much as 42.8 per cent on Friday before ending the day 33 per cent down at Rs 98.60 on the BSE.

At 1:33 pm, shares of Future Retail were trading 10.34 per cent down at Rs 88.40, while the Sensex was 0.9 per cent down.

The stock has come under sharp selling pressure after the retailer's fashion brands were spun off into a separate unit on Friday. Future, formerly known as Pantaloon Retail Ltd, and Future Ventures India agreed in November 2012 to demerge their fashion businesses into a new listed unit that will simplify the businesses into three main segments.

Analysts told NDTV that Future Lifestyle contributed 20 per cent to revenues of Future Retail. Post the demerger of high margin lifestyle business, Future Retail is now left with low margin businesses such as Big Bazaar and Food Bazaar.

Investors are keen in investing in high margin Future Lifestyle business, analysts added.

Under the restructuring, all fashion brands currently held by Future Retail and Future Ventures will be transferred to Future Lifestyle, along with a debt of Rs 1,226 crore.

(With inputs from Reuters)