SSG Cap­i­tal Buys 40% in Fu­ture Sup­ply Chain

Fu­ture Re­tail off­loads 14% in co, Hong Kong’s Fung Cap­i­tal sells en­tire 26% stake

The Economic Times - - Business Of Brands - Ra­sul.Bailay@ times­group.com

₹ New Delhi: Pri­vate equity firm SSG Cap­i­tal Man­age­ment has picked up a 40% stake in Kishore Biyani-pro­moted Fu­ture Sup­ply Chain So­lu­tions from ex­ist­ing in­vestors for .₹ 580 crore. Fu­ture Re­tail, the largest share­holder, off­loaded14% and Hong Kong-based Li & Fung ex­ited by sell­ing its 26% stake in the lo­gis­tics com­pany.

Fung Cap­i­tal, the PE in­vest­ment arm of the fam­i­lies of Vic­tor Fung and Wil­liam Fung that con­trols Li & Fung in Hong Kong, re­ceived about .₹ 380 crore ($57 mil­lion) for its stake, ac­cord­ing to peo­ple fa­mil­iar with the deal. It had in­vested $30 mil­lion to ac­quire the stake in 2009.

Fu­ture Re­tail still owns a 57% stake in the com­pany, which has been val­ued at .₹ 1,450 crore. Sin­ga­pore-based Bantry Cap­i­tal was the sole ad­vi­sor for the trans­ac­tion, ac­cord­ing to a joint state­ment by SSG and Fu­ture Re­tail. Hong Kong-based SSG Cap­i­tal, founded by Shyam Ma­hesh­wari, has about $2 bil­lion of as­sets un­der man­age­ment in the Asia-Pa­cific re­gion.

Started as Fu­ture Lo­gis­tics to ca- ter to group com­pa­nies, Fu­ture Sup­ply Chain So­lu­tions later ex­panded and now gets about 55% of its rev­enue from clients in­clud­ing ITC, Tata Mo­tors and Mon­delez, ac­cord­ing to Anshuman Singh, the man­ag­ing di­rec­tor.

Over the years, it ex­tended its ser­vices to ecom­merce and counts Snapdeal and Pep­per­Fry among its cus­tomers.For the year ended March 2015, Fu­ture Sup­ply Chain made a profit of .₹ 25 crore on rev­enues of .₹ 408 crore.

This is the sec­ond In­dia in­vest­ment for SSG Cap­i­tal. In 2014, the PE firm ac­quired a 49% stake in Asset Care & Re­con­struc­tion En­ter­prise for .₹ 41 crore, mark­ing the first en­try of an over­seas in­vestor in asset re­con­struc­tion through the for­eign di­rect in- vest­ment route. Amid rapid growth of ecom­merce as well as the po­ten­tial of the over­all sup­ply chain sec­tor in In­dia, for­eign in­vestors and PE firms have been show­ing in­creas­ing ap­petite for ware­hous­ing and lo­gis­tics com­pa­nies in the coun­try.

Ac­cord­ing to real es­tate con­sul­tancy firm JLL In­dia, the sec­tor re­ceived .₹ 1,438 crore in in­vest­ment in 2015 through two ma­jor deals, top­ping the .₹ 1,350 crore in­flow in 2012 through five deals. US-based PE firm War­burg Pin­cus had formed a joint ven­ture with Em­bassy Group to in­vest .₹ 650 crore in Oc­to­ber for set­ting up ware­houses across ma­jor cities in the coun­try. It also com­mit­ted .₹ 850 crore in June to Ecom Ex­press, a lo­gis­tics so­lu­tions provider.

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