MUMBAI: FUTURE Ventures India, the venture capital arm of the Kishore Biyaniowned Future Group, has received regulatory approval for its initial public offering (IPO). However, the Securities and Exchange Board of India (SEBI) has put some riders on the company as it will be the first public offering by a venture capital firm in Indian capital market history. The market watchdog has said that fund raised by Future Ventures should be deployed within three years. In case the fund is not fully deployed within this period the money should be returned to the investors. Also, the firm should take approval from shareholders if it wants to pick up more than 20% stake any company.
Sebi also said that it is exploring the option of getting a separate segment for listing the firms stock as and when the IPO is completed. It is not clear what segment Sebi has in mind. Debt and equity are the only two segments in the countrys two leading stock exchanges. These conditions have been communicated to the merchant bankers in the approval letter.
When contacted Kishore Biyani confirmed that the firm has received the approval from Sebi, but refused to comment on the conditions set by Sebi. According to sources, the regulator is treating this company more like a collective investment scheme which is seeking to raise funds from the public to invest in new businesses. It is the first time that a venture capital company is looking to raise public money through the stock market. Future Ventures will act as fund raising vehicle while the actual investment and management will be done by Future Capital holdings, an affiliate. FCH has been appointed as a consultant for all investments by Future Ventures. FCH will be paid a fixed annual fee as well as share in the profits.
In February, the firm had filed DRHP for IPO with the market regulator, Sebi. The company said it was looking to raise close to Rs 3,700 crore from the market through the issue of 373.6 crore shares of Rs 10 face value. The issue will be 100% book built.
Future Ventures is set up as a venture capital fund and is looking to invest in consumptionled sectors closely allied with the groups main business of retail. The Future group is trying exploit its expertise in incubating and growing new businesses such as Pantaloons, Central, Big Bazaar, Food Bazaar and Home Town.
Future Ventures already has investments in about a half a dozen companies such as Biba Apparels, Sankalp Retail Value Stores, SSIPL Retail Pvt Ltd, Converge m Communication and Footmarket Retail. The company in its DRHP said that "We aim to create, build, acquire, invest in and operate innovative and emerging businesses in India with a focus on consumption-led sectors."
TOUGH CALL
The market watchdog has said that fund raised by Future Ventures should be deployed within three years
The company should take approval from shareholders if it wants to pick up more than 20% stake any firm
Sebi is exploring the option of getting a separate segment for listing the firms stock as and when the IPO is completed
These conditions have been communicated to the merchant bankers in the approval letter
Kishore Biyani confirms that the firm has received the approval from Sebi
