Tuesday, April 19, 2011

Future Ventures IPO - Analysis, Recommendation, Review

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Future Ventures, a unit of the Future Group which runs the country's top listed retailer Pantaloon Retail, has come out with an IPO of 7.5 billion shares. The company invests in businesses which are strategically important to the group's retail business. It has invested in several companies including 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.

The promoters currently hold about 60% in Future Ventures and their stake will be diluted by 45% via the share sale.

The issue will open on April 25 and close on April 27 for qualified institutional bidders and on April 28 for retail and non-institutional bidders. The company has fixed a price band of Rs 10-11 per share.

The company plans to use a large part of the IPO funds for acquiring new businesses while a small part of the proceeds will be used to grow the existing businesses.

Future Ventures had posted a consolidated net loss of Rs 10.68 crore on total income of Rs 177.91 crore in 2009-10.

Enam Securities, JM Financial, Kotak Mahindra Capital are the book running lead managers to the issue.

CARE has assigned Grade 3 to the IPO indicating average fundamentals. We would recommend investors to invest in this IPO.
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