AION Capital Partners Ltd, a private equity fund, is in advanced talks to acquire a stake in Future Corporate Resources Ltd., the holding company of Kishore Biyani’s Future Group, for between $125 million and $150 million, two people with knowledge of the plan said.
The deal, which is in the final stages, will give AION indirect access to the gamut of Future Group’s retail chains — from food and groceries to fashion garments.
AION is an India-focused special situations fund jointly promoted by US private equity fund Apollo Global Management and local fund ICICI Venture Fund Management Co. Ltd.
“There are discussions, but nothing has been finalised,” Future Group chairman Biyani said, declining to give further details.
Future Group, India’s largest retailer, has almost doubled its market value in the past three months, adding more than $1 billion to its three listed companies – Future Lifestyle Fashions, Future Consumer and Future RetailBSE 4.50 %, which now have a combined valuation exceeding Rs 24,000 crore. This is a sharp turnaround from five years ago when the group sold its flagship garment chain Pantaloons to the Aditya Birla Group after considering a merger with rivals Shoppers Stop and Lifestyle.
Biyani started consolidating his ownership into one holding the company in 2010 to avoid cross-holdings between group companies and help divide operating firms for the next generation, apart from raising fresh capital from large private equity funds.
The group plans to sell home furnishings business HomeTown, shut sportswear arm Planet Sports and merge stores of electronics chain Ezone within supermarket Big Bazaar.
As part of a strategy to more than treble revenue to Rs 75,000 crore-Rs 1 lakh crore by 2021, the group has made more than a dozen acquisitions in the local and overseas markets over the past few years. It recently entered into a joint venture with Hain Celestial to manufacture and sell food products in the health and wellness space in India. It formed a joint venture with Mibelle AG, a division of Migros Group, Switzerland, and tied up with US brand Sunkist to distribute its products in India.
Big Bazaar, Future Group’s hypermarket, is already India’s leader with a 22.4% share of the organised, store-based retail market in 2016, according to Euromonitor.
