Future Group eyes stake sale in non-core biz
13 Sep 2011
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Kishore Biyani's Future Group, which runs the country's largest listed retail chain, Pantaloon Retail, plans to divest stakes in non-core businesses in the next 6-12 months, Business Standard reported today.
The group is in the process of valuing its businesses such as insurance, financial services, logistics, media and textile mills, in which it plans to sell stakes. The total valuation is Rs4,500-5,000 crore, the newspaper quoted an unnamed executive.
The group is in talks with global private equity giants such as KKR and JP Morgan to sell its stake in its financial services arm Future Capital, which offers financial services to consumers and wholesale businesses, according to reports.
The Future Group has a joint venture with Italy's Generali for life and non-life ventures, where it holds a 74-per cent stake.
''As we start divesting our stake in non-retail businesses, we can easily bring down the debt levels to Rs1,500 crore. After that, we can look for inorganic growth,'' group CEO Kishore Biyani said.
In a separate report, the newspaper said Kishore Biyani's plans to sell stake in Future Capital Holdings (FCH) has hit a valuation hurdle.
According to investment bankers, Biyani is seeking a valuation of Rs2,000 crore for the financial services arm, which is slightly over two-and a-half-times the book value of Rs770 crore.
However, potential investors are finding that expensive. ''Given that the business is new, potential buyers would be more comfortable with Rs 1,200-1,500 crore – one to one-and a-half times' valuation,'' said an investment banker.
The group is in the process of valuing its businesses such as insurance, financial services, logistics, media and textile mills, in which it plans to sell stakes. The total valuation is Rs4,500-5,000 crore, the newspaper quoted an unnamed executive.
The group is in talks with global private equity giants such as KKR and JP Morgan to sell its stake in its financial services arm Future Capital, which offers financial services to consumers and wholesale businesses, according to reports.
The Future Group has a joint venture with Italy's Generali for life and non-life ventures, where it holds a 74-per cent stake.
''As we start divesting our stake in non-retail businesses, we can easily bring down the debt levels to Rs1,500 crore. After that, we can look for inorganic growth,'' group CEO Kishore Biyani said.
In a separate report, the newspaper said Kishore Biyani's plans to sell stake in Future Capital Holdings (FCH) has hit a valuation hurdle.
According to investment bankers, Biyani is seeking a valuation of Rs2,000 crore for the financial services arm, which is slightly over two-and a-half-times the book value of Rs770 crore.
However, potential investors are finding that expensive. ''Given that the business is new, potential buyers would be more comfortable with Rs 1,200-1,500 crore – one to one-and a-half times' valuation,'' said an investment banker.
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