Leading credit rating agency, ICRA assigned an IPO Grade 3 indicating average fundamentals, to the proposed initial public offering of Future Capital Holdings (FCH). FCH is proposing an initial public offering of 6.4 million shares of face value Rs 10 each, through the 100% book building route. The IPO proceeds will be primarily used to augment the capital base to meet future capital requirements for expansion of the retail financial services business and for other general corporate purposes.

The IPO grading factors in FCH`s ability to leverage on the synergy with other Future Group companies, the exclusive agreements with Pantaloon Retail and its group companies to distribute financial services products within their outlets, the group`s knowledge and understanding of the Indian retail sector and a strong and experienced management.

The strong economic growth and the rising consumption levels provide FCH with opportunities to leverage the groups franchise and build on its business volumes. The investment advisory business is currently the main revenue generating business for FCH, leveraging on the track record and the experience of its senior executives. Within two years of operations, FCH has over USD 1.5 billion assets under advice/management.

The key executives of FCH come with a rich experience that can be leveraged to grow the business volumes. Also the large operating team at FCH provides them with ability to better service their clients, investment managers of various funds. The grading is constrained by the limited operating track record.