Kishore Biyani’s Future Ventures India plans to raise its stake in women’s ethnic wear maker Biba Apparels and edutainment company Amar Chitra Katha, and is also seeking new opportunities to invest in the fast moving consumer goods and fashion sectors.
Currently Future Ventures holds 17.3% stake in Biba, which will be upped to 28% soon, the company’s chief executive officer KK Rathi said.
It also plans to increase its stake in Amar Chitra Katha to 26% from 13.7% presently, he said.
Future Ventures is promoted by various Future Group companies. It has invested in several companies including Indus League Clothing, Biba Apparel, AND Designs and Global Desi in fashion; Capital Foods and Future Consumer Enterprises in food and FMCG and Aadhar Retailing in rural retail.
The company will raise Rs 750 crore rupees through its initial public offering of shares, which will be used to raise stakes in some of the companies it has already invested in and also seek new acquisition opportunities.
The IPO has been priced at Rs 10-11 a share. It will open for subscription on April 25 and close for retail investors on April 29. The issue will close on April 28 for qualified institutional buyers.
Out of the funds raised via the IPO, Rs 120-150 crore will be invested in existing businesses, while the remaining amount will be used for acquisitions, Anand B, Future Group’s director finance said.
Future Ventures has so far invested around Rs 450 crore in apparel makers, and Rs 250 crore in processed foods and consumer goods space.
The promoters currently hold about 60% in Future Ventures and their stake will be diluted by 45% via the share sale.
While Future Ventures is seeking new investment opportunities and is looking at raising its existing investments in some companies, it is open to the idea of initial public offerings of some companies to unlock value in the future.
For instance, Future Group head Kishore Biyani, who is also the managing director of Future Ventures, said that they could look at the IPO route for companies like Biba and Indus League Clothing once they achieve a significant scale in the future.
However no such plans are currently on the cards, he said.
Future Ventures had posted a consolidated net loss of Rs 10.68 crore on total income of Rs 177.91 crore in 2009-10.
Company officials claim that most of the companies that Future Ventures has invested in are breaking even at the EBITDA (earnings before interest, taxes, depreciation and amortization) level and the results will improve going ahead.
Future Ventures is a part of Future Group, which owns companies like Pantaloon Retail India, Future Value Retail and non banking finance company Future Capital Holdings.
Future Ventures will rely on Future Capital Holdings in various respects, including for research services and recommendations in relation to treasury assets, supporting resource mobilisation for business ventures, advising on mergers, acquisitions and exit strategies, it said in its draft prospectus.
Pantaloon Retail is to provide mentoring services to its business ventures, it said. Company officials said the mentoring business will be capped at around Rs 15-16 crore per year.
Source: Money Control