Kishore Biyani’s Future Retail, once a leading Indian retailer, is being liquidated

The Mumbai bench of the National Company Law Tribunal (NCLT) has ordered the liquidation of Future Retail after all attempts to find a buyer failed. This comes as a severe setback for lenders who are unlikely to recover a significant portion of their loans.

Future Retail, once hailed as a pioneer of modern retail in India, faced financial troubles after Reliance Retail backed out of a deal to acquire the company. Unable to repay its debts, the company was pushed into insolvency in 2022. Despite efforts to find a buyer, the company’s assets were too depleted, primarily due to the sale of its profitable stores to Reliance.

With no viable rescue plan, the lenders and the court decided that liquidation was the only option. This means the company’s assets will be sold to repay creditors, but the recovery is expected to be minimal.

Kishore Biyani, the founder of Future Retail, who was once compared to Walmart’s Sam Walton, will now see his retail empire crumble.

The once-dominant Indian retail player, Future Retail, has met its end with a court-ordered liquidation. After multiple failed attempts to secure a buyer and restructure its debts, the Mumbai bench of the National Company Law Tribunal (NCLT) has determined that the company must be dissolved. This decision marks a significant loss for creditors, who are unlikely to recoup a substantial portion of their investments.

The Mumbai bench of the National Company Law Tribunal (NCLT) on 20 June 2022 admitted Bank of India’s plea to initiate corporate insolvency resolution process (CIRP) against FRL for defaulting on a payment of Rs 856 crore. 

Future Retail, once synonymous with modern retailing in India and led by the high-profile entrepreneur Kishore Biyani, often compared to the founder of Walmart, has fallen on hard times. The company’s financial woes were exacerbated by the collapse of a high-stakes deal with Reliance Retail, which resulted in the loss of numerous profitable stores. With its core assets diminished, Future Retail found itself unable to service its debts, leading to insolvency proceedings.

Despite efforts to rehabilitate the company through a corporate insolvency resolution process, no viable rescue plans materialized. As a result, the creditors opted for liquidation, a drastic measure that will see the company’s remaining assets sold off to partially satisfy outstanding debts. The appointed liquidator will now oversee the process of winding down the business and distributing recovered funds to creditors. The outcome is a stark reminder of the challenges faced by even the most prominent businesses in India’s competitive retail landscape.

Also See: Reliance, Adani Group out of race for Future Retail