Future Venture mulls IPO route to exit from investee firms

Future Ventures, a unit of Kishore Biyani's Future Group, will explore unlocking value in some of its investee companies through initial public issue (IPOs) or selling stakes in the next two years, said a top executive of the group.

Future Ventures, modelled on iconic investor Warren Buffett's Berkshire Hathaway, has investments in 14 companies in fashion and fast moving consumer goods (FMCG) businesses.

"Fashion business has matured significantly and most of the brands have become Ebitda (earnings before interest, tax, depreciation and amortisation) positive. Some of them are getting ready for IPO. In the next two years, we can explore IPOs or merge and acquisition possibilities in some of them,” said Kishore Biyani, chief executive of Future Group. Future Venture holds stakes in Indus League Clothing, Biba Apparel, AND Designs, Holii Accessories in fashion and Capital Foods, Future Consumer Products and Future Consumer Enterprises in FMCG. It also holds stake in rural retail venture Aadhar and Amar Chitra Katha.

"Some of the fashion brands are doing business of Rs 40 crore to Rs 50 crore and growing between 25 and 35 per cent. Food firms are growing between 25 and 35 per cent and annualised growth is much higher,” said Biyani. The company posted a net loss of Rs 14.67 crore on a total income of Rs 399.7 crore for the period ending December, according to the red herring prospectus.

Future Ventures is planning to increase its stake in Biba Apparel from 17.3 per cent to 28 per cent. This will happen after the IPO, said K K Rathi, chief executive, Future Ventures.

The company, which is looking to raise Rs 750 crore through an IPO, plans to use around Rs 120 crore in its existing portfolio and the remaining amount in acquiring stakes in companies in food and fashion space.

“There are plenty of opportunities before us. The average size of the acquisitions would be Rs 25-50 crore,” said Anand B, director, finance and executive board member of Future Group.