IndiaRetailBiz

“The ultimate goal of our business model is to become a one-stop shop for financial products and services.” Sameer Sain, MD and CEO, FCHL.

Future Capital Holdings Limited (FCHL) — the financial advisory and consumer financing arm of the Kishore Biyani owned Future group, has come out with an initial public offering (IPO) of 6,422,800 equity shares of Rs 10 each, at the price band of Rs 700-Rs 765 per share, to raise between Rs 450 and 490 crore from the capital markets.

The FCHL issue, which opened on 11th January, 2008 has been subscribed 27.02 times the issue size until 9 PM yesterday (15th January) evening.

The proceeds of the offering will be mainly utilised for augmenting the capital base required for funding retail financing services of the group.

While, investment advisory business (private equity and real estate advisory services) of the company manages four funds with a total corpus of USD 1,064 million, each focusing on a particular sector, consumer credit business of the company, operating in the name of Future Money through 95 outlets in 26 cities, offers consumer loans. Future Money plans to expand its business by scaling up its operations to 500 outlets as well as by expanding its portfolio to sales and distribution of products and services like credit cards, life and general insurance, home loans and money transfer.

Future Capital has reported a total income of Rs 31.3 crore and a net loss of Rs 12 crore on consolidated operations for the six months ended September 2007.

At the higher end of the price band of Rs 765, the entire business of the company is valued at a price-book value (P/BV) of about 6.6 times. Assuming the asset-based valuation of the advisory business at 15% of expected assets, the consumer credit business post-IPO would stand valued at 4.5 to 5 times the book value .

The offer, which is closing today on the 16th January, 2008, is expected to garner excellent response from the investing public.