Pantaloon to sell stake

Pantaloon Retail will sell its 54 per cent equity in Future Capital Holdings. To facilitate this,

Pantaloon has hired investment bank Morgan Stanley to find a buyer for its stake. Future Capital is a non-banking finance company with assets worth Rs 3,000 crores comprising retail, wholesale and mortgage loans. It was conceptualized as a New Age capital management and investing business that could play a vital role in the development of the consumption-led economy in India. The country’s leading retailer has decided to divest its holding in Future Capital since it’s now in a position to do so. In the past one year, FCH has done quite well, giving Pantaloon the option of exiting at a good valuation.

Incorporated in 2005, Future Capital Holdings was listed in February 2008. The share price rose 4.66 per cent to Rs 146.44 after reports of Pantaloon’s possible exit became public. The market capitalization of the company rose from Rs 906 crores to Rs 948 crores. FCH exited a JV, merged its subsidiary Future Capital Financial Services with itself and roped in professionals from Citi, Merrill and Morgan Stanley to head businesses such as retail, wholesale and corporate. Besides, the buzz is that Kishore Biyani may exit Future Capital Holdings (FCH), the financial services arm of the Future Group completely. The Future Group founder and chairman is also likely to sell the 7.37 per cent that he holds in his personal capacity. The good news is in the past one year, FCH has done quite well, giving Biyani the option of exiting at a good valuation. FCH was set up by Kishore Biyani and Sameer Sain, who was earlier with Goldman Sachs. Sain holds 7.5 per cent in the firm. Vaidyanathan joined from ICICI Prudential a year ago. He was given two million warrants convertible into Future Capital shares on February 2012.