Future Ventures plans Rs 3,750 cr IPO

Future Ventures India Ltd (FVIL), the venture capital arm of Kishore Biyani's Future Group, is ready to hit the market with an initial public offer of around Rs 3,750 crore.

The issue will carry a small price band to make it affordable to the retail investor. The company will issue 3,736.15 million shares.

"The idea is to make it affordable to retail investors as the group did with retail ventures such as Big Bazaar, which attracted the masses with low prices," sources said.

The last at-par issue was done by Saamya Biotech India, which raised nearly Rs 15 crore from the market.

The announcement comes barely three weeks after the listing of Future Capital Holdings (FCH), the financial arm of Kishore Biyani's Future Group. FCH raised nearly Rs 490 crore from the market.

Future Ventures has already filed a draft red herring prospectus with the Securities and Exchange Board of India (Sebi) for the proposed issue.

Carved off as a separate company with initial capital of Rs 250 crore, Future Ventures has received Rs 325 crore funding from parent Pantaloon.

Future Ventures is expected to invest in new areas and the real estate projects of the Future group. FVIL is also expected to invest and execute the Future group's joint ventures and investments, which were so far done by the listed entity Pantaloon, sources in the group said.

According to sources, FVIL is in talks with a couple of food and grocery chains in East and South India for an acquisition, which is expected to be completed by the third quarter of this year.

Though the $425 million Indivision Fund, managed by Future Group's financial arm Future Capital, has picked up stakes in several consumer-focused companies, the curbs on foreign direct investments in the retail sector have deterred it from investing in retail companies.

Investors can expect a series of IPOs from Future Group as Biyani has expressed willingness to spin off the group's various ventures. Pantaloon, India's largest listed retailer, owns Pantaloon, Central, Brand Factory, Big Bazaar and Food Bazaar.

The IPO comprises a net issue to the public of 2,660 million equity shares and a reservation of up to 50 million shares for employees and 25 million shares for the shareholders of Pantaloon Retail.

JM Financial Consultants, Enam Securities, Kotak Mahindra Capital, ICICI Securities and Edelweiss Capital are the lead managers to the issue and Centrum Capital, Collins Stewart Inga and India Infoline co-lead managers.