PremjiInvest picking 8% in Future Lifestyle Fashions for $21M

Future Lifestyle Fashions, the fashion apparel, accessories and associated products arm of Kishore Biyani-led Future Group, is raising Rs 125 crore ($20.8 million) from PremjiInvest, the private investment arm of Wipro chairman Azim Premji.

Simultaneously, Future Group is putting in around Rs 175 crore to retain its holding in the company.

An investment entity associated with PremjiInvest is picking 15.5 million shares at Rs 80.50 a unit. It will own around 8.1 per cent in Future Lifestyle Fashions, post the preferential allotment.

Future Group, which already owns around 56.7 per cent in Future Lifestyle Fashions, is picking 3.1 million shares and 18.63 million compulsory convertible debentures (CCDs) both at Rs 80.50 a share aggregating to Rs 175 crore. This preferential allotment is routed through Ryka Commercial Ventures Private Limited, part of the promoter group.

The preferential allotment together will mean an infusion of around Rs 300 crore in the company.

Future Lifestyle Fashions was spliced out in a group restructuring and listed as a separate company last October. The firm was created through the demerger of the lifestyle fashion businesses of Future Retail Ltd (formerly Pantaloon Retail (India) Ltd) and Future Consumer Enterprise (formerly Future Ventures India Ltd).

Future Lifestyle Fashions made its debut at Rs 148 a share but more than halved in less than two months. It has been trading in the Rs 60-75 range but spiked more than 50 per cent over the last one month.

It was quoting at Rs 98.5 a share, up 2 per cent in mid-day trades on BSE in a strong Mumbai market on Monday.

The firm seeks to allot shares at around 18 per cent discount to the current market price. The EGM to approve the preferential allotment is scheduled on May 31, 2014.

Future Lifestyle Fashions has been investing in retail brands aggressively since late last year and has made successful exits too. Since listing on October 1 last year, it has announced investment in three companies.

In January this year, Fashion Lifestyle Fashions had acquired 27.5 per cent stake in Resource World Exim Pvt Ltd, a company engaged in women’s fashion apparel business under the brand 'Desi Belle' in India, for an undisclosed amount. Previously, in December last year, it had invested Rs 55 lakh to buy an 11 per cent stake in footwear brand Famozi. Recently, it invested an undisclosed amount in the Delhi-based Unico Retail Private Limited, which is a manufacturer and marketer of accessory lifestyle brands & products.

The company has also struck two exits from its previous investments, including divestment of holdings in AND Designs and Biba Apparel.

For PremjiInvest, the family office managing private wealth of Azim Premji, this would mark another bet on the retail side. It had previously invested in firms like Tata Group’s retail arm Trent besides Fabindia and Koutons. More recently it also invested in online lifestyle retailer Myntra.

(Edited by Joby Puthuparampil Johnson)

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