Pantaloon Retail has approved an initial public offer for its unit, Future Capital Holdings which offers asset management services and housing credit in a joint partnership with the Italian insurance company, Generali.

The company is going ahead with expansion plans in the consumer credit division. Pantaloon Retail has a 68% share in Future Capital, while Och-Ziff Capital holds 10%. Future Capital manages over USD 1 billion assets, and has been valued between USD 500 to 700 million.

The listing of the company would help value Future’s other ventures in the media and real estate. Managing private equity and real estate funds so far, Future plans to offer insurance and consumer finance services as well Investors would get an opportunity to participate in Future’s non-retail business, which is expected to perform handsomely in the coming years.

The company has projected a revenue of Rs.2 billion by June 2008. Pantaloon also intends to raise USD 291 million (Rs.12.6 billion) through sale of stocks to private investors and warrants to its employees and founder members.

The funds would be utilised for Pantaloon’s expansion into small discount and large format stores. Last November, the Chairman Kishore Biyani had divulged the group’s plans to open 4000 outlets by 2010.

It faces competition from Reliance, Aditya Birla Group and the RPG Group currently in their existing format. The Walmart-Bharti combine will operate cash-and-carry wholesale stores.

The Indian retail market is expected to grow to USD 700 billion by 2015. Pantaloon shares are well poised at Rs. 487.5 at the BSE, trading better than its competitors Shopper’s Stop and Trent Ltd.

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