Future Ventures plans public issue at ‘par’

A private equity firm for all intentsis entering the capital market to mop up Rs 2,660 crore at face value of Rs 10 each, reports Arun Kumar.

It is a par issue with a difference. Future Ventures, a credit company on paper but a private equity firm for all intents, is entering the capital market to mop up Rs 2,660 crore at face value of Rs 10 each.

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However, it will have to go through book building to discover price because the Securities and Exchange Board of India does not allow a company with a three-year record of profits to set the price of its scrip in an initial public offering.

Future Ventures is creating a corpus of Rs 4,000 crore for equity investments. Of this, the promoters--Kishore Biyani and his group companies--will invest around Rs 1,040 crore at par for a 26 per cent stake. Investment banking sources said the promoters had agreed in principal on an IPO at par so that the cost of the shares would be equal for everyone.

However, to adhere to SEBI norms, the bankers to the issue are expected to keep the price band at Rs 10-10.50 a share, but the final price will be Rs 10.

While company executives refused to divulge details, investment bankers said Future Ventures would remain a credit company but would not engage in any funding activity. “The resources it is raising will be used for the acquiring stakes between 26 per cent and 74 per cent in companies in the consumption space,” bankers said.