Expect to launch "Future" credit card soon: Future Cap

The company is in three lines of business. Future Capital Holdings is part of the Future Group, which is India’s largest retail player, the owners of Pantaloon Retail India Limited, India’s largest retail company. Future Capital has tremendous synergies with Pantaloon Retail.

Future Capital has three major lines of business. First, it does investment advisory services. It has about USD 1.2 billion worth of assets under management and all of these assets are related to the retail business. For example- one fund that it is an advisor to develops retail malls. Another fund that it is an advisor to acquires real estate, that is then used to develop real estate and commercial property. So, it is really all connected to the retail space.

Another line of business that Future Capital is in is the lending of money or what they call- the retail financial services. Through a company called Future Capital, it actually lends money to, or gives personal loans, to Pantaloon Retail customers who walk in.

They are also going to be a financial services distributor. So, they plan to distribute home loans and money transfer services. They also plan to distribute life and general insurances products. So, it is really an all-in-one service for Pantaloon Retail’s customers. This is really on the lines of other large retailers around the world. For example- Wal-Mart, Kraft Food and Tesco, all of them do this. In India, this is going to be a first.

Another line of business that Future Capital is in is in the research business. This arm constantly researches on consumer spending, consumer behaviour and consumer patterns. This is used as an engine or a driver for future ventures by the Future Group.

It plans to use the money raised for the retail financial services business. It plans to ramp up infrastructure very quickly. Right now, the company has about 95 Future Money outlets and it has done this in the last six-months. So, about 2.5-3 stores are being opened every week.

The company says it will continue to grow at this pace and is expecting to piggyback on the back of Pantaloon Retail. So, in every format that Pantaloon Retail opens up, especially the larger formats, like home solutions or larger electronic goods, that is where Future Money and Future Capital hopes to capitalize on. So, it is really piggybacking on the success of Pantaloon Retail.  

Excerpts from CNBC-TV18's interview with Samir Sen:

Q: Tell us a little bit about the various parts that make a whole Future Capital Holdings and what your plans are really?

A:Future Capital was created on three principles. We basically wanted to be a third leg in the Indian financial services story and to really have an interesting mindset to build their businesses on an investment platform. Coming from the stable of the largest retailer in India, Pantaloon Retail, we wanted to capture a significant portion of the retail financial services market and so that was a second foundation with Future money which we built and will continue to execute on and will regards to retail financial services business.

The third is really to be a platform for what we believe will be the finest talent in India and for Indians from outside the India who basically wish to come back and have a platform whereby they can be entrepreneurial and continue to do what they do best. So that is what Future Capital is all about.

Q: What do you have right now by way of an assets under management or AUM, what your plans are by way of investment advisory in retail and what kind of growth targets you have over there because those are still very nascent for you?

A: I can tell you that our advise and the investment advisory business reaches out to multiple USD 100 millions and we continue to hope that we will grow on that significantly. With regards to the retail financial services business, we already have 95 outlets up and running in six months time, which we think is a pretty good execution and we will continue to grow on that and execute dramatically. We already have a credit booked at is in the crore of rupees and will continue to grow from here. So that is about as much as I can share with you about the numbers but I am not going to make any forward looking statements at this point but watch the space for more growth.

Q: What is the target though for Future Capital in terms of when you hope to breakeven?

A: I cannot give more specifics than what has published in the RHP but I think that we are building the foundations of a business and a part of that is to basically invest heavily in this foundation.

Q: Going ahead though what do you see as the strongest line of revenue for you, will it be the real estate advisory service that you have running right now? Is it the retail financing and hoping to prop up that part as more of an MBFC? What do you think will be the strongest revenue line?

A: The investment advisory business is a very healthy revenue-oriented business simply because your charge is a fee-based model, you charge fees and as the advice that you give reaches out to more and more assets, you tend to get healthier fees that’s a bit of annuity revenue. Having said that over the long run the value creation will probably come from our aspiration to be India’s largest retail financial services business exactly what we were accomplished on the general retail business, the Pantaloon.

So it’s a mixed bag in the long run there will be reasonably equitable split windows between the two businesses as they go out.

Q: Just one final word on how many future money outlets you have right now? How much that is expected to go up by the end of this calendar year?

A: We have opened 95 in six-months and if you just assume that we continue to execute along those same rates, the numbers are fairly significant. Again I can’t go into specifics in terms of how many, but it is our aspiration to have the largest number of outlets and the largest pipes that caters to the Indian consumer.

Q: Let me get in just one final comment on your distribution business and how you have valued that yourself as part of your entire business? I also mean the kind of credit card payout or a programme that you have planned?

A: We have a co-branded card with ICICI currently called as ICICI Big Bazaar, which is going to be migrated to something called the Future Card, which will be an innovative credit card that will combine the loyalty programme of all the Pantaloon Retail Group outlets and also have a credit card embedded in this. We plan to launch this shortly and it should be a significant campaign and we looking to be one of the largest co-branded credit cards although it will be technically co-branded it will really be called the Future Card and will have the ability to be used within our stores and outside our stores we have the Master Card and Visa capability as well.