Future Ventures India, the venture capital arm of the country?s largest retailing group Future Group, is in talks with private equity funds Citi and DE Shaw for a possible stake sale as part of pre-IPO private placement.
The company is likely to sell around 10% stake in the unlisted company for around Rs 500 crore to the PE funds. The stake sale would peg the company?s valuation at Rs 5,000 crore, two persons in the know of the development said.
Future Ventures that promotes various business ventures and is a non-deposit taking NBFC had filed for its IPO to raise Rs 750 crore in August. When contacted, Future Group chairman Kishore Biyani denied any plans of pre-IPO placement of equity and having been in talks with funds. The IPO is slated to be in the first quarter of next fiscal.
The company, which had earlier filed a draft prospectus to raise Rs 3,700 crore over two years ago, had decided not to go ahead with the IPO as the stock markets crashed. At that time, it was coming out with one of the rare issues that was priced at par with its face value.
The firm is backed by ad-for-equity investor Bennett Coleman & Co (BCCL), that is incidentally also an early investor in Pantaloon Retail. BCCL holds 12% stake in Future Ventures with an estimated investment of around Rs 100 crore.
The company has not stated the pricing structure for the issue yet. If the promoters are planning to retain majority stake then they would need to issue around 160 million shares translating into a price of around Rs 50 per share. At this price, the company would be valued around Rs 5,000 crore or a little over $1 billion.
As per the draft, Future Ventures seeks to create, build, acquire, invest in and operate innovative and emerging businesses in growing ?consumption-led? sectors in India focusing on fashion, FMCG, food processing, home products, rural distribution and vocational education. This would make it a venture capital firm with significant operational control over business ventures that it may look to spin out as they mature.
It has, at present, 13 Business Ventures around half of which are its subsidiaries. In the fashion category, its portfolio includes women?s apparel business under Biba Apparels Private besides Holii Accessories Private , a joint venture with Hidesign India Private which is a manufacturer and retailer of fashion accessories such as leather handbags and wallets.
