Private equity exit the reason behind Future Supply Chain IPO: Biyani

Griffin Partners had recently also sold about 5% stake in FSCSL to two entities of financial services firm Edelweiss

The upcoming IPO of Future Supply Chain Solutions, which is expected to garner over Rs 700 crore, is primarily to give an exit to private equity firm Griffin Partners, Future Group Chairman Kishore Biyani said on Sunday.

Future Supply Chain Solutions Ltd (FSCSL), a subsidiary of Future Enterprises, has filed a draft red herring prospectus with Sebi for the public issue of up to about 97.84 lakh equity shares representing 24.43 per cent of the existing paid-up equity share capital of FSCSL.

While private equity firm SSG Capital's entity Griffin Partners will sell about 78.27 lakh equity shares in FSCSL, representing up to 20 per cent of the paid-up equity share capital, the promoter company Future Enterprises will offload 19.57 lakh shares, representing around 5 per cent stake.

According to Biyani, FSCSL, the logistics arm of the group, is well capitalised and payment of debt or requirement of immediate funds is not the reason for the IPO.

"We have to give an exit to the private equity. The 5 per cent we are selling will go to Future Enterprises. This (FSCSL) is a good capitalised company and there is a very marginal debt of about Rs 32 crore long term debt," Biyani told PTI.

FSCSL Managing Director Mayur Toshniwal said last year, the company had Rs 55-60 crore EBIDTA and Rs 60 crore of cash in the balance sheet.

Griffin Partners had recently also sold about 5 per cent stake in FSCSL to two entities of financial services firm Edelweiss.

FSCSL is one of the largest third-party logistics service operators offering automated and IT-enabled warehousing, distribution and other logistics solutions.

Its customers include companies in sectors like retail, fashion, automotive and engineering, food and beverage, FMCG, e-commerce, healthcare, electronics and technology.

The company offers services in three key areas -- contract logistics (warehousing, distribution and other value-added services); express logistics (point-to-point, less-than truck-load, time-definite transportation services); and temperature-controlled logistics (cold-chain warehousing, transportation solutions and distribution of perishable products).