Future Consumer hits the roof on acquiring supermarket chain Nilgiris

Future Consumer Enterprise was locked in 10% upper circuit at Rs 11.42 at 12:18 IST on BSE after company completed the acquisition of the Nilgiris convenience store chain in the southern states of Kerala, Karnataka, Andhra Pradesh and Tamil Nadu.

The announcement was made after market hours on Thursday, 20 November 2014.

Meanwhile, the BSE Sensex was up 198.16 points, or 0.71%, to 28,265.72

On BSE, so far 6.96 lakh shares were traded in the counter with pending buy orders of 5.01 lakh shares at upper circuit. The stock has an average volume of 13.28 lakh shares in the past one quarter.

The stock hit a high of Rs 11.42 and low of Rs 11 so far during the day. The stock hit a record high of Rs 14.75 on 19 November 2014. The stock hit a record low of Rs 4.51 on 26 November 2013.

The stock had underperformed the market over the past one month till 20 November 2014, falling 3.97% compared with the Sensex's 6.2% rise. The stock, however, outperformed the market in past one quarter, surging 18.47% as against Sensex's 6.66% rise.

The small-cap company has an equity capital of Rs 966.45 crore. Face value per share is Rs 6.

According to press release issued by Future Consumer Enterprise, Nilgiris is an iconic brand with origins dating back to 1905 and a household name in South India. It operates a franchisee operated convenience store chain with 140 stores in key urban centers in the four states. Apart from offering a wide assortment of products through its convenience store chain, Nilgiris, also owns a portfolio of brands in dairy, bakery, chocolates and staples along with their manufacturing facilities in Bangalore.

Future Consumer Enterprise said that this acquisition will lead to geographical expansion of the convenience store network in Southern India, as presently the company's existing footprint is primarily concentrated in North and West India. Additionally, Nilgiris' expertise in running a successful franchisee network will be leveraged to expand the existing footprint of convenience stores via a franchisee model, Future Consumer Enterprise added.

Speaking on the acquisition, Kishore Biyani, Group CEO, Future Group, said, This acquisition is synergistic as it enables strengthening and expanding convenience stores through franchises in an asset light model as well as brings in new manufacturing capabilities and brands within the company.

On a consolidated basis, Future Consumer Enterprise reported a net loss of Rs 14.41 crore in Q2 September 2014, lower than net loss of Rs 23.44 crore in Q2 September 2013. Net sales rose 108.9% to Rs 290.55 crore in Q2 September 2014 over Q2 September 2013.

Future Consumer Enterprise is among the fastest growing Indian FMCG companies in India and adopts an integrated approach with presence across the entire food value chain. The company has developed specialized expertise in agri-sourcing, manufacturing, brand development and rural and urban distribution and boasts a number of popular food and FMCG brands.

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