Warburg Pincus to meet today to decide Future Cap valuation

New Delhi: US-based private equity firm Warburg Pincus is likely to pick up a majority stake in financial services firm Future Capital Holdings for an estimated Rs 600 crore.

"The board of Future Capital will meet tomorrow to decide on the valuation for divestment of the entire promoter stake of 56.30 percent stake to Warburg Pincus," said sources.

Warburg Pincus would be offering somewhere between Rs 155-165 a share, valuing the stake at around Rs 600 crore, they added. The price of Rs 165 a share is at a premium of 20 percent over Friday's closing of Future Capital Holdings.

[caption id="attachment_330852" align="alignleft" width="380" caption="The price of Rs 165 a share is at a premium of 20 percent over Friday's closing of Future Capital Holdings. Reuters"][/caption]

Currently Pantaloon Retail is the promoter group firm and holds 56.30 per cent stake in Future Capital Holdings. The remaining is with the public. Pantaloon Retail is deleveraging its balance sheet by selling stake, sources said, adding that V Vaidyanathan will continue as the Chairman and Managing Director of the company.

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For the fiscal ended March 31, 2012, Future Capital Holdings reported a net profit of Rs 105.8 crore, a jump of 115 percent from Rs 49.1 crore in the year ago period. Its asset base stands at Rs 4,700 crore.

The company, which provides consumer and mortgage loans, has improved its asset quality during the fiscal with the gross non-performing asset ratio dropping to 0.08 percent from the year ago's 0.25 percent.

Warburg Pincus manages assets worth about $40 billion globally and has also invested in Indian companies across sectors.

PTI