Future Cap Holdings still in nascent stage

By Sunita Nagpal

Future Capital Holdings is all set to hit the primary markets with an offer of 64 lakh shares. The price band is in the range of Rs 700-765 per share.

It is very difficult to compare it to peers. The peers will be Indiabulls Financial Services or Reliance Capital. But the company is currently in a nascent stage. Out of the three areas, where it operates, only one is fully operational and the others are still being set up. So, it is very difficult to give valuations based on the current financials.

For the first half of the year, the company has posted a net loss of Rs 12 crore. It is very difficult to value the company based on the present criteria. You have to value it based on the future values and see how the businesses are likely to pan out. This company has three main businesses: one is the investment advisory services, under which they do advisory services for a lot of funds (onshore and offshore). Under this, they also operate PE sort of investments. That is where the main revenues are coming from, right now.

The other is the consumer finance business, which they are planning to rollout in the future. At the moment, they have a tie-up with Pantaloon Retail arm, where they have exclusive rights to supply consumer finance for all consumer durables that are being sold in Pantaloon showrooms.

Also, they would be rolling out Future Money, which will be like a distribution arm, which will distribute credit cards and insurance business.

If you look at the valuations, HSBC values the company at Rs 6,000 crore, while DSP Merill Lynch values it at Rs 3,550 crore. So, the IPO is somewhere in between the two valuations.