International Finance Corporation will invest Rs 213 crore ($29.7 million) in Future Lifestyle Fashions Ltd, joining private equity firms Blackstone Group Inc. and AION Capital Partners in betting on the company over the past year.
Future Lifestyle will issue 5.14 million shares to IFC at Rs 414 apiece, the Future Group’s fashion arm said in a stock-exchange filing on Thursday. That’s a premium of almost 6.5% from Wednesday’s closing price.
The fashion retailer will also issue 9.66 million shares to promoter group firm FQS Trading Pvt. Ltd to raise almost Rs 400 crore. In total, it will raise around Rs 613 crore as part of this fundraising exercise.
The company said it plans to use the funds to increase its stake in subsidiaries and associates, and to cut debt. The funding will also be accretive from an earnings-per-share perspective, improve its cash flows and simplify its operational and investment structures.
This is the third time Future Lifestyle has raised capital within a year. In July, it was reported that private equity firm AION Capital Partners would invest around Rs 300 crore (around $43.6 million) in the Kishore Biyani-led company. AION Capital is a joint venture of the US-based Apollo Global Management and Indian private equity firm ICICI Venture.
Then, in November, global investment firm Blackstone Group invested Rs 1,200 crore ($167 million) in the Future Lifestyle Fashion’s holding company, Ryka Commercial Ventures Pvt. Ltd. That investment added to the Rs 550 crore it had already committed to the company through its Tactical Opportunities unit.
Separately, in July 2018, Future Lifestyle raised capital from consumer-focussed private equity firm L Catterton Asia. L Catterton also acquired shares from PremjiInvest, the family office of Wipro’s Azim Premji. Another investor in Future Lifestyle is media house Bennett, Coleman & Co. Ltd.
Founded in 2012, Future Lifestyle markets about 30 fashion brands through company-operated chains such as Central and Brand Factory, besides exclusive brand outlets, department stores, and multi-brand outlets. It operates more than 400 stores spread over six million square feet of space.
IFC’s recent India bets
The investment in Future Lifestyle Fashions is the latest example of the Washington-headquartered IFC’s commitment to India, which is its single-largest portfolio market. Apart from its direct investments that involve both equity and debt funding, the institution also actively invests PE and VC funds.
In October last year, for example, it said that it was planning to make an equity investment of up to $20 million (around Rs 141.82 crore) in the overseas unit of agricultural producer Maharashtra Hybrid Seed Company Ltd. (Mahyco India).
In July it took part in business-to-business marketplace Bizongo’s Series C funding round, which saw the startup valued at nearly $100 million. In the same month, the firm said it would provide $150 million in the form of a five-year senior loan to private-sector lender RBL Bank.