Future Ventures India, the venture capital arm of the Future Group, has recieved the approval of market regulator Securities and Exchange Board of India (SEBI), for an initial public offering (IPO). Interestingly, SEBI has cleared the IPO with certain riders. VC Circle contacted officals from Future Group who confirmed the development.
The market regulator has said that Future Ventures, which is modelled on the basis of a venture fund, has to invest the amount raised in three years and if not, it should be returned to the investors. Also if the firm decides to pick up a stake larger than 20%, then it has to seek shareholder approval. SEBI is looking to list the fund in a seperate segment, although details are not known.
According to ET, SEBI may treat Future Ventures more "like a collective investment scheme which is seeking to raise funds from the public to invest in new businesses". In that case, it may be treated like an NBFC rather than a venture fund. RBI is the regulator for NBFC, while SEBI regulates venture capital funds.
In February, Future Ventures had filed for the IPO to raise close to Rs 3,700 crore from the market through the issue of 373.6 crore shares of Rs 10 face value.
While the actual investment and management will be done by Future Capital holdings (FCH), Future Ventures will act as the fund-raising vehicle. FCH has been appointed as a consultant for all investments by Future Ventures and will be paid a fixed annual fee as well as a share in the profits.
Future Ventures will be the second Indian fund to be listed in stock markets. IL&FS Investment Managers is the only private equity firm to be listed in stock exchanges currently. Quite a few private equity firms with their investment focus on India are listed on Alternate Investment Market (AIM) of LSE and Euronext in Amsterdam. Kubera Cross-Border Fund and India Infrastructure Fund are some of the funds listed on AIM. Yatra Capital Ltd, a real estate focused fund, is listed on the Euronext.
Some of the biggest private equity firms in the world are listed. While the UK-based 3i Group and Blackstone are already listed, buyout giant Kohlberg Kravis & Roberts will go public on NYSE later this year.
FCH already manages three funds - Indivision Capital, a Mauritius registered private equity arm, Kshitij and Horizon, real estate and retail focused funds. FCH also has a $350 million logistics fund called Indospace Logistics Partners, which invests in industrial warehousing facilities across India.