Rs 5,000 crore IPO of finance arm likely by September
India’s biggest retail player, Kishore Biyani, will raise between Rs 4,500 crore and Rs 5,000 crore though an initial public offer of shares of one of his Future Group companies by September.
Future Capital Holdings, the group’s financial services company and the largest after retailing, will enter the capital market. Investment banking sources said the company would morph into the group’s private equity arm.
Future Capital Holdings manages assets worth over $1 billion that are being invested in retail real estate and consumer-related brands and hotels. The group has launched a consumer credit and financial supermarket format, Future Money, and plans to offer insurance products through a venture with Italy’s Generali.
Currently, Pantaloon Retail is the Rs 4,000 crore group’s only listed company and the new entity would be partly owned by it, sources said. “This will be biggest IPO in the retail sector,” sources said.
The Future Group operates in six verticals: retailing, capital, brands, space, media and logistics. Apart from Pantaloon Retail, the group’s presence in retailing is complemented by group companies, Indus League Clothing--which owns apparel brands like Indigo Nation, Scullers and Urban Yoga--and Galaxy Entertainment Ltd--which operates Bowling Co, Sports Bar, F123 and Brew Bar.
Pantaloon Retail, the group flagship, has 9 subsidiaries, 8 partnerships and 10 retail chains like Food Bazaar, Big Bazaar and Central. The group’s joint venture partners include French retailer ETAM Group, US stationery retailer Staples and UK’s Lee Cooper. Group company Planet Retail operates franchises for international brands like Marks & Spencer, Next, Debenhams and Guess. The Indian joint venture partners include Manipal Healthcare, Talwalkar’s, Blue Foods and Liberty Shoes.
Investment bankers Kotak Mahindra Capital Company, JM Financial and Enam are working on the proposed IPO. When contacted Kishore Biyani said he was not planning to raise resources from the capital market in the immediate future. “The group has ambitious plans for the next three years and we will continue to raise resources as and when required,” he said.
The Future Group is targeting revenues of Rs 8,000-10,000 crore by March 2008 and Rs 30,000 crore by 2010-11. It is developing over 50 malls and consumption centres across the country and has a joint venture on mall management with Singapore-based CapitaLand, one of Asia’s largest property companies.