PremjiInvest, the private investment arm of Wipro chairman Azim Premji, has invested in a private holding arm of Kishore Biyani-controlled Future Group which would help the group participate in the rights issue of its flagship firm Future Retail.
In a stock market disclosure Future Group firms said the transaction is at a promoter entity level without sharing details. They were responding to media reports which said the promoter company is raising Rs 175 crore (around $27.5 million) through issue of zero coupon redeemable preference shares to PremjiInvest with a maturity of three years.
This will bring funds to Biyani to invest and possibly even raise its holding in its flagship company in the upcoming rights issue of Future Retail.
“It is a relationship-building exercise between the two groups. For the first time, an external investor is coming as a promoter entity as we are preparing for the rights issue in January,” Biyani told The Economic Times last week.
PremjiInvest, however, had also picked around 8 per cent in the group company Future Lifestyle Fashions for around Rs 125 crore earlier this year, through a preferential allotment.
Biyani runs a string of retail chains in different formats and his Future group is the second-largest retailer in the country behind Reliance Retail.
Future group has been divesting stakes in its ventures to bring down its debt. Earlier in 2012, the company had sold Pantaloons to Aditya Birla Group for Rs 1,600 crore, Future Capital to Warburg Pincus, life insurance arm stake to IITL.
Future Lifestyle Fashions had also offloaded mature investments in brands like Biba and AND.
There have been several PE investment deals involving private holding firms of listed firm such as KKR-Apollo Hospitals; KKR & AION- Avantha; Blackstone-Jagran Prakashan among others. Many of these were structured deals like the latest transaction involving PremjiInvest.