Future Ventures, the corporate venturing division of Indian retail conglomerate Future Group, could reportedly sell 10% of its shares to two US investors ahead of its larger-than-expected flotation.
News provider Financial Express said bank Citigroup and hedge fund DE Shaw could invest R500 crore ($100m) through a private placement for 10% of Future Ventures.
Advertising company Bennett Coleman owns 12% of Future Ventures after investing a reported R100 Crore.
Future Ventures plans to raise R750 crore ($160m) in its initial public offering (IPO) in India.
Future Group, which runs Pantaloon Retail and also runs a private equity firm Future Capital which has hedge fund manager George Soros as an investor, will use the IPO proceeds to "build, invest in or acquire businesses in India’s growing ‘consumption-led’ sectors," according to the prospectus posted on the issue managers’ website quoted by local news providers.
Enam Securities, JM Financial and Kotak Mahindra Capital are the book running lead managers for the offering for an undisclosed date.
For analysis ofthe listing see India news provider Business Standard, extract below:
Kishore Biyani, the founder of Future Group, is treading cautiously with the initial public offer (IPO) of his venture capital arm, Future Ventures (FVIL), this time.
FVIL is modelled on iconic investor Warren Buffett’s investment company, Berkshire Hathaway, which invests in companies and holds stakes for the long term. FVIL first filed for an IPO in 2008, but didn’t proceed with it. It has now applied again to do so, only the second venture capital firm to go for an IPO after IL&FS Investment Managers tapped the markets earlier.
A close look at the draft red herring prospectus (DRHP) filed by FVIL then and now reveal many changes in IPO size, operating structures and so on. To begin, the promoters, Biyani and his flagship Pantaloon Retail, among others, have scaled down the IPO size by at least five times, at Rs 750 crore. The IPO target in 2008 was Rs 3,730 crore.
Though the company executives declined to comment, an informed source said: "When they filed the IPO for the first time, we were in the boom time. Now we are in the recovery stage. Targeting such amounts is unrealistic now.”
The company has also changed its operating structure. Instead of just a fund structure – investing and picking up stakes in businesses – it says it also an operating company, which plays a role in operations of the company invested in, apart from holding stake.