Future Ventures (FVIL), promoted by Kishore Biyani’s Future group entities, plans to use the initial public issue proceeds to invest in its existing investee companies and acquiring stakes in new firms in sectors such as fashion, food and fast moving consumer goods among others. The company said in its draft red herring prospectus.
FVIL, modelled on the iconic investor Warren Buffett’s investment company Berkshire Hathway, is looking to raise Rs 750 crore from the public issue, which is expected to hit the market by month end. This is the third IPO from the Future Group after Pantaloon Retail in 1992 and Future Capital, which tapped the market in 2008.
“We intend to promote or hold a significant stake in our business ventures and exert operational control or influence over them by a maintaining a board or senior executive representation as well as placing persons in management or advisory roles,” the company said in the DRHP.
FVIL now holds stakes in 13 companies — 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 among others. The company is also setting up mega food parks in the country.
FVIL first filed DRHP for an IPO in 2008, but did not proceed with it. It filed a DRHP again in August 2010. The promoters have cut the IPO size by five times at Rs 750 crore from the original target of Rs 3,730 crore. The company’s operating structure has also changed from a fund structure to operating company which plays a role in the operations of the company, apart from holding stake.
There is a change in focus, too. The first DRHP said the company wanted to invest in consumption-led sectors. The second one has narrowed its focus to FMCG, fashion, food processing, home products, rural distribution and education.
While the Future Group entities hold around 60 per cent stake in the company, media house Bennett Coleman holds 10 per cent and the rest is held by individual investors.
The company’s consolidated losses had come down to Rs 21.34 crore in 2009-10 from Rs 55.60 crore in 2008-09. The company’s total income had increased 36 per cent at Rs 177.91 crore in 2009-10 from Rs 130.64 crore the year ahead. The company has no debt on the books.