Study on Future capital holding (Group Company of future group) Prepared by: - Soni Mulani 3rdsem.

(F-1) Roll no: 17

Submitted to: - Prof. Shailaja Parmar

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The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather in a lack of will." Vincent T. Lombardi

Preface
Management as a separate field has been emerging during last few decades. In todays era M.B.A. curriculum is designed in such a way as students can get knowledge & practical exposure to the corporate world in minimum time. Business schools of today have realized the importance of practical knowledge over theoretical base. The live project is necessary for the fulfillment of curriculum as well as it provides opportunity to get depth knowledge of topic on which report is based. It increases our analytical as well as intellectual skills. It gives opportunity to relate your theoretical knowledge with actual practice, test the validity & acceptability of classroom learning in real corporate world. My project is based on the services provided by NBFC called FUTURE CAPITAL HOLDING. Generally NBFCs are considered as complementary to banking sectors. Today NBFC sector has grown like anything. FCH is the company of future group which is well diversified in consumption sector. FCH is considered to grow by 100% by next year.

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It takes 20 years to make an overnight success." Eddie Cantor

Acknowledgement
It gives me great pleasure to express my sincere gratitude to those

without whom the project would not possible for me. Nothing can be gained without inspiration and guidance. I take great pleasure to express thankful gratitude to the people who have supported me in collecting the required data for the purpose of preparation of this live project and spent their valuable time for me. I am also very thankful to Mr.Shailaja Parmar faculty member of IIMT who gave me guidance for this live project. I would like to thank Mr. Trilok Sharma, the Director of IIMT for giving me a global opportunity to get an exposure of the corporate world, thereby, applying my theoretical concept to gain practical knowledge. I am also thankful to all the staff member of IIMT College.

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Content Preface.2 Acknowledgement3

s.no 1. 2. 3. 4. 5. 6. 7. 8. 9. 10,

Particular NBFC Over view of Future Group Overview of FCH Business of FCH Spilt of FCH After Spilt result Everstone Financial Ratios Performance on stock market Future of FCH

p.no 5 6-8 9 10-12 13 14 15 16-17 18-19 20

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Non Banking financial companies

Non-banking financial companies (NBFCs) form an integral part of the Indian financial system. Non-banking financial companies (NBFCs) are fast emerging as an important segment of Indian financial system. It is an heterogeneous group of institutions (other than commercial and co-operative banks) performing financial intermediation in a variety of ways, like accepting deposits, making loans and advances, leasing, hire purchase, etc. They raise funds from the public, directly or indirectly, and lend them to ultimate spenders. They advance loans to the various wholesale and retail traders, small-scale industries and self-employed persons. Thus, they have broadened and diversified the range of products and services offered by a financial sector. Gradually, they are being recognized as complementary to the banking sector due to their customer-oriented services; simplified procedures; attractive rates of return on deposits; flexibility and timeliness in meeting the credit needs of specified sectors; etc. The working and operations of NBFCs are regulated by the Reserve Bank of India (RBI) within the framework of the Reserve Bank of India Act, 1934 (Chapter III B) and the directions issued by it under the Act.

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Overview of Future group The Future Group is a leading Indian business group promoted by Kishore Biyani which focuses on consumption-led businesses. Through PRIL, the Future Group has established one of Indias leading organized multi-format retail networks. Led by its flagship enterprise, Pantaloon Retail, the group operates over 16 million square feet of retail space in 73 cities and towns and 65 rural locations across India. Headquartered in Mumbai (Bombay), Pantaloon Retail employs around 30,000 people and is listed on the Indian stock exchanges. The company follows a multi-format retail strategy that captures almost the entire consumption basket of Indian customers retail. Future Groups vision is to, deliver Everything, Everywhere, Every time to Every Indian Consumer in the most profitable manner. One of the core values at Future Group is, Indianess and its corporate credo is Rewrite rules, Retain values. (Change rules for being Ethical). Future group operates in following verticals.

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Future group companies

Pantaloon Retail (India) Limited: - Pantaloon Retail (India) Limited (PRIL), is Indias leading retailer that operates multiple retail formats in both the value and lifestyle segment of the Indian consumer market. Pantaloon Retail is part of the Future Group which has presence in multiple businesses in the consumption space including consumer finance, capital, insurance, retail media, mall development, logistics and brand development. Home Solutions Retail (India) Limited: - It offers complete retailing solutions for all products and services related to home building and home improvement. Future Brands Limited: - It is involved in the business of creating, developing, managing, acquiring and dealing in consumer-related brands and IPRs (intellectual property rights). Future Media (India) Limited :- Future Media (India) Limited (FMIL) was incorporated as the Groups media venture, offers relevant engagement through its media properties like Visual Spaces, Print, Radio, Television and Activation. Future Supply Chain Solutions Limited: - It is involved in the business of providing logistics, transportation and warehousing services for all group companies and third-parties. Convergem Communication (India) Limited:Convergem Communication (India) Limited (CCIL) (formerly known as Convergem Retail (India) Limited) was incorporated to set up a chain of retail outlets for dealing in areas of communication, data & voice storage and other related products Future Ventures India Limited: - Future Ventures seeks to promote and participate in innovative and emerging business ventures in India.

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Future Generali India Insurance Company Limited \ Future Generali India Life Insurance Company Limited

Future Consumer Products Limited: - FCPL is a subsidiary company of Pantaloon Retail India Limited, incorporated in September 2007. The company has two brands under its umbrella - SACH & S Drive, inspired by Sachin Tendulkar. These brands operate in categories such as foods, apparels, personal care and general merchandize among others, and are available through future group formats.

Galaxy Entertainment Corporation Ltd: - It is a group company that operates leisure and entertainment chains, The Bowling Company, the Brew Bar, the Sports Bar, Sportsbar Express and Chamosa.

Staples Future Office Products Private Limited:-It is involved in the business of dealing in all kinds of office supplies, office equipments and products. SFOPPL is a joint venture between the Company and Staples Asia Investment Limited (a subsidiary of Staples Inc USA).

Future bazaar India Limited :-Future bazaar India Limited (FBIL) is set up as the e-Retailing arm of the Future Group for providing on-line shopping experience. Futurebazaar.com was launched on January 2, 2007, and has emerged as one of the most popular online shopping portals in India.

Future knowledge services ltd Future Knowledge Services Limited (FKSL) was incorporated on January,

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2007 and is engaged in the business of business process outsourcing and knowledge process outsourcing.

Future Capital Holdings Limited (FCH):- It was formed to manage the financial services business of Pantaloon Retail (India) Limited and other group entities. The company operates a consumer finance retail format, Future Money and manages assets worth over US$ 1 Billion through its various funds including Indivision, Kshitij, Horizon and Future Hospitality.

Future Capital Holding (Overview)

Future Capital Holdings Limited (FCH) is the financial services arm of the Future Group, which is a business group focusing on consumption-led businesses in India and which is also one of Indias leading organized multi-format retailers. Future Capital Holdings Limited was incorporated on October 18, 2005 as KB Infin Private Limited, a private limited company under the Companies Act, 1956. Pursuant to a resolution of companys shareholders dated April 27, 2006 and by virtue of the acquisition of its entire share capital by PRIL, it converted to a public limited company with effect from August, 21, 2006. A fresh certificate of incorporation consequent to the change of its name to KB Infin Limited was granted to Company on August 31, 2006 by the RoC. Further, pursuant to a resolution of our shareholders dated November 29, 2006, the name of Company was changed to Future Capital Holdings Limited with effect from December 21, 2006. One of the investors in such Company is Och-Ziff, a prominent international fund. The Bombay Stock Exchange-listed Future Capital, with a net worth of Rs 750 crore and a loan book of Rs 2,000 crore as of September, provides consumer loans and has a 30,000-strong customer base.

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Business of future capital holding

Future Capital Holding

Investment Advisory services

Retail financing

Research

Consumer durable loan Loan against property Loan against security Loan against gold

Investment Advisory services:- The company provide private equity & real estate investment advisory services to onshore and offshore clients. These investment advisory services include investment analysis, research and recommendations. It acts as the investment advisor to the Rs. 350 crore

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(approximately US$89 million) Kshitij Venture Capital Fund (the Kshitij Fund), an onshore SEBI-registered venture capital fund, whose main focus is developing retail malls in India. The Board of Trustees of the Kshitij Fund evaluates the investment advice it provides to them and then makes the final investment decision. It also acts as the investment advisor to three offshore investment managers namely: Indivision Capital Management, the offshore investment manager of the US$425million (approximately Rs. 1,671 crore) offshore private equity fund, Indivision India Partners (the Indivision Fund);

Horizon Development Management, the offshore investment manager of the US$ 350 million (approximately Rs. 1,376 crore) offshore real estate fund, Horizon Realty Fund, LLC (the Horizon Fund); and

FHL Developments Company LLC, the offshore investment manager of the US$200 million (approximately Rs. 786 crore) offshore hotel fund, Indus Hotel Ventures LLC (the Indus Fund). The offshore investment managers evaluate the investment advice it provides to them and may then make an investment recommendation to the Board of Directors of the respective funds they manage. The Board of Directors of the respective fund then makes the final investment decision. Within private equity investment advisory services, it focuses primarily on evaluating investments in high growth companies backed by entrepreneurial talent in consumption-led sectors, which are sectors whose growth and development will in general view be determined by the growing purchasing power of Indian consumers and their changing tastes, lifestyle and spending habits. Within real estate investment advisory services, it advises clients on developing real estate assets, including malls and market cities, which are integrated developments that include convention centers, three- or four- star hotels, service apartments, commercial offices, residential apartments, community centers and various forms of retail space. . As an integral part of the private equity investment advisory services it provides, it pursues a mentoring approach with regard to the

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investments it advises on. This involves actively assisting businesses with their strategies and with the implementation of their growth plans.

Retail Financial Services :- In June 2007, company launched its retail financial services offering Future Money with the objective of becoming one of the leading retailers of financial products and services in India. Pursuant to an agreement with PRIL, we have the exclusive right to provide financial products and services at present and future malls, stores and retail outlets in India which are owned, controlled or managed by PRIL and its subsidiaries. This arrangement provides us with access to PRILs large customer base.

Consumer durable loan: - FCH has built excellent platform for financing the customers purchase of durables like refrigerator, car, furniture etc. from stores of Pantaloons Retail India Limited.

Loan against property: - These loans are typically availed by Small and Medium Enterprises, and funds are typically used for investment in their businesses. These loans provide liquidity against valuable physical assets of the customers.

Loan against securities: - Loans/Overdraft facility is provided to individuals against listed liquid shares for 3 12 months for meeting short term needs, as well as to employees for funding their ESOPs. These are typically taken by customers to tide over short term liquidity issues by taking loan against the shares, without selling them.

Loan against gold: -These loans help the customers to unlock the value of their gold usually in the form of jewellery, to avail of funds. Customers usually take these loans for a period of 3-12 months.

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Research: - : Future Capital Research, its research business, conducts and

publishes economic research on India with the objective of enhancing value creation across its other businesses. In particular, Future Capital Research conducts research on macro-economic trends in India to identify short- and medium-term trends as well as long-term structural shifts in Indias Economy. It also develops proprietary indices to highlight trends in consumer behavior. It utilizes the research generated by Future Capital Research in its advisory activities.

Spilt of Future capital holding

Call it irreconcilable differences that led to the split. The promoters of Future Capital Holdings (FCH), Kishore Biyani and Sameer Sain, a former managing director from Goldman Sachs, decided that doing business together was getting too difficult, and split the companys two broad business lines investment advisory services and consumer banking between them. The investment advisory which includes one private equity fund and three real estate investment funds have gone to Everstone Investment Advisors, where Sain is managing partner along with Atul Kapur, another Goldman Sachs alum. Mr. Biyani kept FCHs retail financial services, which distributes financial products, the consumer/ retail credit business and strategic joint ventures in wealth management and foreign exchange. A demerger would have required FCH to be split into two listed companies with the same shareholding pattern. This would have defeated the purpose of both being able to have majority stakes in their respective businesses.

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The separation, and the process, has surprised and concerned a number of people, both within and outside the financial services industry. The investment advisory side has no balance sheet, while Biyanis share comprises the entire assets of FCH. It is also not clear what shareholders feel about the split.

At the outset, both men recognized that there would be differences but were also clear that different perspectives often led to the best outcomes. For both, the retail ecosystem offered several good opportunities for investing in innovative ideas and creating companies that could enhance consumer value.

Pantaloon Retail and Biyani owned 60 per cent of FCH, making Biyani, in effect, the senior partner, though Sain was co-promoter with a smaller share. Many of Biyanis business associates have had difficulty in understanding why their relationship with the senior partner did not seem to matter in junior partner Sains calculations, which focused on rates of return, contractual obligations and project completion.

After spilt results of revenue

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About Everstone
The investment advisory business now Everstones manages four funds at present: the Rs 350-crore domestic real estate Kshithij Fund, the $425 million in IIP 1 fund, $350 million in the Horizon Realty Fund (HRF) and $250 million in Indospace Global Logistics, an industrial warehousing development fund, a 50:50 joint venture with US-based Real term Global.

Investors in those funds include hedge funds such as Tiger Global, Och Ziff, Goldman Sachs and the Abu Dhabi Investment Authority. Mr.Sain is in the process of raising his next fund: a $550 million IIP 2, something that will take him another few months to build. Unlike IIP 1, this fund will be all Everstones.

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Financial ratio analysis of FCH

particul ars Gross Profit Margin (%) Net Profit Margin (%) Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Asset Turnover Ratio

Mar '07 -1.67

Mar '08 12.71 10.92 2.24

Mar '09 24.18 7.11 1.90 9.30 0.64

Mar '10 53.60 31.04 1.28 21.69 0.59

10.91 --

3.28 0.14

--

0.07

0.36

0.04

3.05

5.24

5.59

12.76

Profitability ratios :- Considering G.P. & N.P ratio we can say that they are becoming double because companys income from various operation have increase almost 1.5 times & expenses specifically administrative expenses & personal expenses which have tremendously declined almost by more than 400 crores & 17 crores respectively. Financial expenses have also declined.

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Debt equity ratio: - Company has increased debt during current year but at same time its reserves & surpluses has increased more than that equity capital being same.

Current Ratio :- Companys current ratio has been increasing during last three years which indicates that its current liabilities are increasing as compared to its asset. Asset turnover ratio :- it has been increasing which indicates that companys assets are becoming more & more efficient leading to more turnover.

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Performance in stock market

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Nifty stock

Findings from above charts

1)

This particular stock has negative co-relation with nifty index.

2) Companys earning is stable but from Jan 2010 it has started increasing. 3) Company was not giving dividend but recently company declared 1Re. dividend.

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4) Companys stock price is highly volatile. During few months it makes higher highs & higher lows leading to uptrend while during few months it made lower highs & lower lows leading to downtrend.

Future of FCH
Future Group to enter mortgage lending The firms financial services arm, Future Capital, is registering the business with the National Housing Bank. The financial services arm of Kishore Biyanis Future Group plans to enter the mortgage lending business, seeking to tap burgeoning demand for home loans in a country where up to 800,000 apartments and houses are expected to be ready for possession in the next three years. Future Capital Holdings Ltd, as the financial services firm is known, has already registered a home finance company named Future Capital Home Finance Pvt. Ltd with the Registrar of Companies (RoC), according to the RoCs website. Now, Future Capital is in the process of registering the business with the housing finance regulator, the National Housing Bank. Home loans are the fastest growing segment for commercial banks, which have a 60% share of the market, with mortgage lenders such as Housing Development Finance Corp. Ltd accounting for the rest. Outstanding home loans are estimated at Rs 5 trillion in a country where between 750,000 and 800,000 new dwelling units will be ready for delivery in three years, according to real estate consultancy Jones Lang LaSalle. Analysts expect housing loans to grow at an annual pace in excess of 20% in the coming year and expect competition in the mortgage lending space to increase.

Analysts expect the overall growth of FCH by 100% by next year.

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