India's Future Group has received board approval for the merger of its Future Value Retail and Pantaloon businesses.

In an announcement on the stock exchange, the retailer noted approval of what is understood to be a merger of its largest business unit Future Value Retail with its smaller retail group Pantaloon.

The filing did not give further details of the merger and a spokesperson for the company declined to comment on the move.

However, according to India's Economic Times, the merger of Future Value Retail, which houses its Big Bazaar and Food Bazaar units, with Pantaloon, is being made to cut operating costs and "restore investor confidence".

Future Value Retail is understood to operate around 148 Big Bazaar stores and 169 Food Bazaar stores across India, in addition to other formats including KB's Fair Price.

Following the merger, Pantaloon Retail, which will be renamed Future Retail, will operate as a single holding entity for all the retail businesses, the publication noted.

The inclusion of Big Bazaar is intended to "strengthen" Pantaloon Retail, which is an amalgam of a number of relatively small retail units such as Central, a chain of department stores, Home Town, which sells furniture, and Ezone, where electronic goods are sold.

Last month, Pantaloon posted a 79% fall in fourth-quarter profits despite booking a rise in sales.

Net income for the quarter ended 30 June was INR211.6m (US$3.8m), compared to INR987.8m the same period last year. The company was hit with a 73.9% increase in finance costs in the quarter to INR323.68m.

Earlier this year, Future Group reportedly halted talks to sell a 49% stake in its sourcing and manufacturing operations to Japanese retailer Lawson Inc.