Future Group exits Capital First, sells remaining 9.22% for $22.5M

By TEAM VCC

  • 20 May 2014

Kishore Biyani-led Future Group has sold off its remaining stake in non-banking finance company Capital First (formerly Future Capital) by offloading its remaining holding through open market transactions on Tuesday.

Future Retail (formerly Pantaloon Retail) sold its entire 7.84 per cent stake for Rs 113.14 crore while a private promoter holding arm sold 1.38 per cent for Rs 20.13 crore.

This comes just around two years after the group decided to divest controlling stake in the NBFC to private equity major Warburg Pincus.

Warburg Pincus had first picked stake in the Mumbai-based NBFC by acquiring a large chunk of Future Group’s holding in Capital First and simultaneously putting in around Rs 100 crore more in the company through a mix of equity and   in mid-2012.

It increased its stake in the firm to over 68 per cent after completing the mandatory open offer, which got a positive response from public shareholders. Warburg Pincus acquired 24.43 per cent stake in the financial services firm for Rs 270.7 crore in the open offer. It had been slowly adding more shares through open market purchases.

As on March 31, 2014, Warburg Pincus held a controlling 71.99 per cent equity stake in Capital First.

It is now co-investing around Rs 178 crore ($28 million) with HDFC Standard Life Insurance Co in a preferential allotment. The two companies are subscribing up to 11.6 million shares on a preferential basis at a share price of Rs 152.80.

Warburg Pincus, through its associate company Cloverdell Investment Ltd, will be allotted 83,57,145 equity share worth Rs 128 crore, while HDFC Standard Life Insurance Co will be allotted 32,50,000 equity shares worth Rs 50 crore.

The PE firm will maintain its existing holding after the preferential allotment.

Future Group has sold its remaining stake at around 10 per cent mark up to the original deal with Warburg Pincus in 2012.

(Edited by Joby Puthuparampil Johnson)