Past Reports

Exhibit 4
Public markets as a source of venture capital: The case of
Future Ventures India Limited
Given the specialized and complex nature of the VCPE asset class, VCPE funds have largely raised their capital from
private markets. Even within the private markets, only the large institutional investors and sophisticated family offices
or wealthy individuals have predominantly participated in VCPE fund raisings. While there are global examples of VCPE
funds raising capital from public markets (such as Medley Capital, Hercules Technology Growth Capital and Solar
Capital), they were few and far between. In India, the phenomenon of VCPE funds raising capital from public markets
was practically non-existing. For a long time, IL&FS Investment Managers Limited was the only publicly traded PE
Company. So, when Future Ventures India Limited (FVIL) raised capital from the public markets in 2011, it broke new
ground in the industry.
Background
FVIL, later renamed as Future Consumer Enterprises Limited (FCEL) 1 , was a part of the Future Group, founded by Mr.
Kishore Biyani. The Future Group focused on consumption led businesses in India and was one considered as one of the
leading names in organized multi-format retailers. FVIL was formed with the objective of profiting from the emerging
opportunities in “consumption-led” sectors in India. Specifically, the company intended to primarily focus on the intend
to focus primarily on opportunities in the business segments of (i) fashion, (ii) FMCG, (iii) food processing, (iv) home
products, (v) rural distribution and (vi) vocational education.
FVIL had an interesting business model. Instead of being an operating company like the other businesses of the Future
Group, FVIL was set up as an investment or holding company that would invest in various “business ventures”. In a
sense, FVIL resembled closely to a VCPE fund that invested in sector specific businesses. Since the Future Group had a
good knowledge of the consumer businesses, FVIL intended to have strong operational control of the businesses and
also mentor them with the resources of the Future Group, apart from providing capital. FVIL also intended to be a long
term investor in the businesses that they had invested. The initial capital for investing in the different businesses came
from Future Group. FVIL did not resort to any borrowing for making these investments, and entire investment was out
of Networth. As of Dec 31, 2010, the company had a tangible Networth of about Rs. 8,291 million 2 . As of April 2011,
FVIL had 14 investments in different segments as given below:
1. Fashion: (i) AND Designs India Limited, a women’s apparel business; (ii) Biba Apparels Private Limited, a women’s
apparel business; (iii) Holii Accessories Private Limited, a joint venture with Hidesign India Private Limited; (iv) Indus-
League Clothing Limited, a designer, manufacturer and retailer of ready-made garments under various brands, such as
“Indigo Nation”, “John Miller”, “Scullers” and “Urban Yoga”; (v) Celio Future Fashion Limited, a joint venture with a
global brand of men’s apparel and accessories based in France; (vi) Lee Cooper (India) Limited, a manufacturer and
retailer of Lee Cooper-branded products; and (vii) Turtle Limited, manufacturer, distributor, exporter and retailer of
men’s wear products.
2. Home Products: Indus Tree Crafts Private Limited, a social entrepreneurship which distributed hand crafted furniture
and home accessories under the brand “Mother Earth”.
3. Food Processing: Capital Foods Exports Private Limited, a food processing company with various brands, including
“Ching’s Secret”, “Smith & Jones”, “Raji”, “Mama Marie” and “Kaeng Thai”.
4. FMCG: (i) Future Consumer Enterprises Limited, a company with FMCG products under brands such as “Tasty Treat”,
“Clean Mate”, “Care Mate”, “Premium Harvest” and “Fresh and Pure”; and (ii) Future Consumer Products Limited, a
company engaged in branding of FMCG products under the brand “Sach”.
5. Rural distribution: Aadhaar Retailing Limited, a rural and semi-urban retailer of agricultural products and consumer
products.
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