ipo

1. Capital structure
The main problem of the capital structure is how to raise the capital. The structure of various
sources of capital is called „Capital Structure‟. The capital structure of a company may consist
of equity shares only, or of equity shares and preference shares both, or of equity shares,
preference shares and debentures too etc. it may be simple or may be complex. The debts in the
capital structure impose fixed burden of interest on the company while equity in the capital
structure does not involve such burden of payment.
Meaning of Capital Structure:
simply saying, it‟s the „composition of capital‟. Also we can say that “Capital structure of a
company refers to the make up of its capitalization”.
The ratio of equity shares to the total of preference shares and debt is called „Capital Gearing.‟ If
the ratio of preference shares and debt is high, the capital structure is said to be highly geared. If
the ratio of equity shares is high, the capital structure is said to be low geared.
Future Venture
Incorporated in 1996, Future Ventures India Ltd is part of Future Group (led by Kishore Biyani
and owners of Future Bazaar, Pantaloons, Central, Big Bazaar, Food Bazaar, Home Town and E-
zone).
Future ventures India Ltd is in the business of creating, building, acquiring, investing in and
operating innovative and emerging businesses in consumption-led sectors in India. Within the
consumption-led sectors, Future ventures has primary focus on opportunities in the business
segments of Fashion, FMCG, Food Processing, Home Products, Rural Distribution and
Vocational Education.
As of date, company has 13 Business Ventures, six of which are its subsidiaries. Company
believes in applying a disciplined investment approach and building strong partnerships with
management and promoters.
Company Promoters:
The Promoters of the company are:
Individual Promoter: Kishore Biyani

2. Corporate Promoters:
1. Future Capital Investment Private Limited;
2. Future Corporate Resources Limited (erstwhile PFH Entertainment Limited);
3. Future Knowledge Services Limited;
4. Pantaloon Industries Limited; and
5. Pantaloon Retail (India) Limited.
CAPITAL STRUCTURE BEFORE AN IPO
The share capital of the Company as at the date of the Red Herring Prospectus is set forth below:
(In Rs., except share data)
Aggregate Value at Aggregate
Face value Value at Issue
Price
A) AUTHORISED SHARE CAPITAL
5,00,00,00,000 Equity Shares of ` 10 each 50,00,00,00,000
B) ISSUED, SUBSCRIBED AND PAID UP EQUITY
SHARE
CAPITAL BEFORE THE ISSUE
82,62,43,700 Equity Shares of ` 10 each 8,26,24,37,000
C) PRESENT ISSUE IN TERMS OF THIS RED
HERRING
PROSPECTUS
[●] Equity Shares of face value of ` 10 each [●] [●]
D) ISSUED, SUBSCRIBED AND PAID UP EQUITY
SHARE
CAPITAL AFTER THE ISSUE
[●] Equity Shares of ` 10 each fully paid up shares [●] [●]
E) SHARE PREMIUM ACCOUNT
Before the Issue Nil
After the Issue [●]
Changes in Authorized Share Capital

3. The initial authorized share capital of ` 1,00,00,000 divided into 10,00,000 Equity Shares was
increased to 5,00,00,000 divided into 50,00,000 Equity Shares pursuant to the resolution of
the shareholders dated August 10, 2007.
The authorized share capital of the Company was further increased from 5,00,00,000 divided
into 50,00,000 Equity Shares to ` 30,00,00,00,000 divided into 3,00,00,00,000 Equity Shares
through a resolution passed by the members of the Company at the EGM held on October 11,
2007.
The authorized share capital of the Company was further increased from 30,00,00,00,000
divided into 3,00,00,00,000 Equity Shares to 50,00,00,00,000 divided into 5,00,00,00,000
Equity Shares through a resolution passed by the members of the Company at the EGM held
on February 5, 2008.
Notes to Capital Structure
Share Capital History
(a) The following is the history of the equity share capital and securities premium account of the
Company:
Date of No. of Face Issu Nature Cumulative Cumulative Cumulati Nature of
allotmen Equity Valu e of no. of Paid-up ve Allotment
t Shares e Pric Consider Equity Equity share Share
of the Allotted (`) e ation Shares capital (`) Premium
Equity (`) (`)
Shares
August 700 10 10 cash 700 7000 Nil Issue of
9,1996 shares on
subscription
to
Memorandu
m
and Articles
of
Association
Novemb 58000 10 10 Cash 58700 587000 Nil Preferential
er allotment
16, 1996
Decemb 10000 10 10 Cash 68700 687000 Nil Preferential
er allotment
5, 1996
June 25, 183000 10 10 Cash 251700 2517000 Nil Preferential
1997 allotment
Septemb 72000 10 10 Cash 323700 3237000 Nil Preferential
er allotment
23, 1997
Septemb 22000 10 10 Cash 345700 3457000 Nil Preferential
er allotment
25, 1997
Februar (52000) 10 - - 293700 2937000 Nil -
y
26, 2002
October 4706300 10 10 Cash 5000000 50000000 Nil Preferential

4. 11, 2007 allotment
Novemb 222043700 10 10 Cash 227043700 2270437000 Nil Preferential
er allotment
28, 2007
January 36800000 10 10 Cash 263843700 2638437000 Nil Preferential
28, 2008 allotment
March 100000000 10 10 Cash 363843700 3638437000 Nil Preferential
28, allotment
2008
July 23, 5000000 10 10 Cash 368843700 3688437000 Nil Preferential
2008 allotment
January 162400000 10 10 Cash 531243700 5312437000 Nil Preferential
30, 2010 allotment
March 45000000 10 10 Cash 576243700 5762437000 Nil Preferential
4, allotment
2010
May 29, 100000000 10 10 Cash 676243700 6762437000 Nil Preferential
2010 allotment
August 150000000 10 10 Cash 826243700 8262437000 Nil Preferential
6, allotment
2010
History of the Equity Share Capital held by the Promoters
(a) Details of the build up of the Promoter’s shareholding in the Company:
Date of No. of Equity Cumulative Face Total Issue / Nature of Nature of
Allotment Shares No. of Value Acquisition Consideration Transaction
/ Issued/Transferred Equity (`) Price (`)
Transfer Shares
Future Capital Investment Private Limited
January 18,00,000 18,00,000 10 1,80,00,000 Cash Preferential
28, allotment
2008
May 29, 10,00,00,000 10,18,00,000 10 100,00,00,000 Cash Preferential
2010 allotment
Future Corporate Resources Limited
January 1,94,00,000 1,94,00,000 10 19,40,00,000 Cash Preferential
30, allotment
2010
March 4, 4,50,00,000 6,44,00,000 10 45,00,00,000 Cash Preferential
2010 allotment
March 11, 36,45,000 6,80,45,000 10 3,64,50,000 Cash Purchase
2010
Future Knowledge Services Limited
August 6, 2,77,93,700 2,77,93,700 10 28,08,00,000 Cash Purchase
2010
PIL Industries Limited (formerly known as Pantaloon Industries Limited)
January 12,20,00,000 12,20,00,000 10 122,00,00,000 Cash Preferential
30, allotment

5. 2010
Pantaloon Retail (India) Limited
August 6, 15,00,00,000 15,00,00,000 10 1,50,00,00,000 Cash Preferential
2010 allotment
Kishore Biyani
N.A. Nil Nil N.A. N.A. N.A. N.A.
Details of Promoters’ contribution and Lock-in:
The Promoters shall contribute Equity Shares in the Issue constituting not less than 20% of the
post-Issue capital, which shall be locked in for a period commencing from the date of Allotment
in the Issue and shall remain locked-in for a period of (i) three years thereafter, or (ii) three years
from the date of complete utilization of the Net Proceeds, or (iii) three years from the date when
the Net Proceeds or any part thereof are distributed to the shareholders of the Company in the
manner indicated in the section entitled “Objects of the Issue” beginning on page 82, whichever
is later. The requirement regarding lock-in of the Equity Shares for the period of three years from
the date of commencement of commercial production shall not be applicable as the Company is
not a manufacturing company. The Equity Shares constituting Promoters‟ contribution shall be
eligible therefor in terms of the SEBI Regulations.
As of the date of this Red Herring Prospectus, the Promoters hold 46,96,38,700 Equity Shares
which constitutes 57% of the pre-Issue paid-up equity share capital of the Company. Out of the
aggregate shareholding of the Promoters of 46,96,38,700 Equity Shares, the Promoters have
acquired 46,78,38,700 Equity Shares during the one year preceding the date of the Draft Red
Herring Prospectus at a price which may be lower than the Issue Price of which 43,64,00,000
Equity Shares (the “Available Contribution Shares”) are available to be contributed towards
minimum Promoters‟ contribution.
The Promoters shall provide the difference between (a) the acquisition price of Equity Shares to
be contributed towards minimum Promoters‟ contribution from the Available Contribution
Shares and (b) the Cap Price, for an amount aggregating ` [●] lakhs. The said amount will be
brought into an escrow account at least one day prior to the Bid/Issue Opening Date and will be
utilized in accordance with the SEBI Regulations if the conditions specified in Regulation
33(1)(b) of the SEBI Regulations are not complied with. In the event that the Issue Price is lower
than the Cap Price, the difference between the Issue Price and the Cap Price lying to the credit of
the escrow account will be refunded to the Promoters. The Company undertakes that the Equity
Shares constituting minimum Promoters‟ contribution in the Issue, which shall be locked-in for
three years, shall be eligible for minimum Promoters‟ contribution in terms of the SEBI
Regulations.
The details of the Equity Shares, which shall be locked-in for a period commencing from the
date of Allotment in the Issue and shall remain locked-in for a period of (i) three years thereafter,
or (ii) three years from the date of complete utilization of the Net Proceeds, or (iii) three years
from the date when the Net Proceeds or any part thereof are distributed to the shareholders of the
Company.

6. The minimum Promoters contribution has been brought to the extent of not less than the
specified minimum lot and from the persons defined as Promoters under the SEBI Regulations.
The Promoters contribution constituting not less than 20% post-Issue paid-up equity share capital
shall be locked-in for a period commencing from the date of Allotment in the Issue and shall
remain locked-in for a period of (i) three years thereafter, or (ii) three years from the date of
complete utilization of the Net Proceeds, or (iii) three years from the date when the Net Proceeds
or any part thereof are distributed to the shareholders of the Company in the manner indicated in
the section entitled “Objects of the Issue” beginning on page 82, whichever is later.
Details of pre-Issue Equity Share capital locked in for one year:
In addition to the 20% of the post-Issue equity shareholding of the Company held by the
Promoters and locked in for three years as specified above, the entire pre-Issue equity share
capital will be locked-in for a period of one year from the date of Allotment.
Other requirements in respect of lock-in:
The Equity Shares held by the Promoters may be transferred to and amongst the Promoter Group
or to a new promoter or persons in control of the Company, subject to continuation of the lock-in
in the hands of the transferees for the remaining period and compliance with the SEBI Takeover
Regulations as applicable.
The Equity Shares held by person other than the Promoters prior to the Issue may be transferred
to any other person holding Equity Shares which are locked-in along with the Equity Shares
proposed to be transferred, subject to continuation of the lock-in in the hands of the transferees
for the remaining period and compliance with the SEBI Takeover Regulations, as applicable.
The Equity Shares held by the Promoters which are locked-in for a period of three years from the
date of Allotment in the Issue can be pledged with any scheduled commercial bank or public
financial institution as collateral security for loans granted by such banks or institution, provided
that the pledge of Equity Shares can be created when the loan has been granted by such bank or
financial institution for financing one or more of the objects of the Issue and pledge of Equity
Shares is one of the terms of sanction of the loan.
The Equity Shares held by the Promoters which are locked-in for a period of one year from the
date of Allotment in the Issue can be pledged with any scheduled commercial bank or public
financial institution as collateral security for loans granted by such bank or financial institution,
provided that the pledge of the Equity Shares is one of the terms of sanction of the loan.
The shareholding pattern of the Company
The table below presents the shareholding pattern of the Company as on the date of filing this
Red Herring Prospectus:
Category of No. of Total No. of Total No. of Total Shareholding as Shares pledged or
Shareholder Shareholde Shares Shares held in a % of total No. of otherwise encumbered
rs Dematerialized Shares
Form

7. As a As a % of No. of As a
% of (A+B+C) shares % of (IX) =
(A+B) (VIII/IV)*10
0
A. Shareholding
of
Promoter and
Promoter Group
1. Indian
Individuals / - - - - - - -
Hindu
Undivided
Family
Central - - - - - - -
Government /
State
Government(s)
Bodies 6 49,06,38,700 38,88,38,700 59.38 59.38 - -
Corporate
Financial - - - - - - -
Institutions
Any Other - - - - - - -
(Specify)
Sub Total (A1) 6 49,06,38,700 38,88,38,700 59.38 59.38 - -
2. Foreign
Individuals / - - - - - - -
(Non-
Resident
Individuals/
Foreign
Individuals)
Bodies - - - - - - -
Corporate
Institutions - - - - - - -
Any Other - - - - - - -
(Specify)
Sub Total (A2) - - - - - - -
Total 6 49,06,38,700 38,88,38,700 59.38 59.38 - -
shareholding of
Promoter and
Promoter Group
(A1) + (A2)
B. Public
Shareholding
1. Institutions
Mutual Funds / - - - - - - -
UTI
Financial - - - - - - -
Institutions/
Banks
Central - - - - - - -
Government/
State
Government(s)
Insurance - - - - - - -
Companies
FIIs - - - - - - -
Foreign Venture - - - - - - -
Capital
Any Other - - - - - - -
(specify)
Sub Total (B1) - - - - - - -
2. Non-
Institutions
Bodies 92 21,31,26,680 19,20,76,680 25.79 25.79 0 0.00
Corporate
Individuals - - - - - - -

8. Individual 723 29,15,412 29,00,412 0.35 0.35 0 0.00
shareholders
holding
nominal share
capital
up to Rs. 1 lakh
Individual 582 11,71,02,908 10,93,47,408 14.17 14.17 0 0.00
shareholders
holding
nominal share
capital
in excess of Rs. 1
lakh
Any Other - - - - - - -
(Specify)
(i)
Directors/Relat
Ive
(ii) Clearing 2 14,00,000 14,00,000 0.17 0.17 0 0.00
Member
(iii) Trust - - - - - - -
(iv) NRIs 3 10,25,000 10,25,000 0.12 0.12 0 0.00
(v) NRN 2 35,000 35,000 0.00 0.00 0 0.00
Sub Total (B2) 1,404 33,56,05,000 30,67,84,500 40.62 40.62 0 0.00
Total Public 1,404 33,56,05,000 30,67,84,500 40.62 40.62 0 0.00
shareholding
(B1) + (B2)
Total (A) + (B) 1,410 82,62,43,700 69,56,23,200 100.00 100.00 0 0.00
C. Shares held - - - - - - -
by
Custodians and
against which
Depository
Receipts
have been issued
Total (A) + (B) + 1,410 82,62,43,700 69,56,23,200 100.00 100.00 0 0.00
(C)
Equity Shares held by top 10 shareholders
Sr. Name of the Shareholders No. of Equity Percentage of
No. Shares held Shareholding
1 Pantaloon Retail (India) Limited 15,00,00,000 18.15
2 PIL Industries Limited 12,20,00,000 14.76
3 Future Capital Investment Private Limited 10,18,00,000 12.32
4 Bennett Coleman And Company Limited 10,00,00,000 12.10
5 Future Corporate Resources Limited 6,80,45,000 8.23
6 Future Knowledge Services Limited 2,77,93,700 3.36
7 Mixon Holdings Private Limited 2,50,00,000 3.02
8 Manz Retail Private Limited 2,10,00,000 2.54
9 Gujarat Fluorochemicals Limited 1,50,00,000 1.81
10 Aman Overseas Private Limited 1,50,00,000 1.81
Employee stock option scheme

9. The special resolution passed by the Company at its AGM dated August 10, 2010 approved the
grant of up to 5,00,00,000 equity shares (including up to 1,00,00,000 equity shares in aggregate
for non-executive directors including independent directors on the Board) of face value of Rs. 10
each. As per the resolution, the maximum number of stock options under the ESOP Scheme to
any employee in any financial year shall not exceed 1% of the paid-up equity share capital of the
Company. Out of that options were granted for 1,32,80,000
INITIAL PUBLIC OFFERING
Objects of the issue:
The objects of the issue are:
1. To create, build, invest in or acquire, and operate business ventures
2. For general corporate purposes
3. To meet the issue expenses and achieve the benefits of listing on the stock exchanges.
Issue details:
Issue open : Apr 25, 2011 – Apr 28, 2011
Issue type : 100% Book Built issue IPO
Issue size : 75,00,00,000 Equity shares of Rs. 10
Face value : Rs. 10 per Equity share
Issue price : Rs. 10 – Rs. 11 per equity share
Market lot : 600 shares
Minimum order quantity : 600 shares
Listing at : BSE, NSE
Book Building
Number of Times Issue is Subscribed (BSE + NSE)
As on Date & Time Qualified Non Retail Total
Institutional Institutional Individual
Buyers Investors Investors
(QIBs) (NIIs) (RIIs)
Shares Offered / Reserved 375,000,000 112,500,000 262,500,000 750,000,000
Day 1 - Apr 25, 2011 17:00 IST 0.1800 1.2100 0.0200 0.2800
Day 2 - Apr 26, 2011 17:00 IST 0.1800 3.4800 0.0500 0.6300
Day 3 - Apr 27, 2011 17:00 IST 0.2600 5.1300 0.1600 0.9500
Day 4 - Apr 28, 2011 18:15 IST 0.2600 7.8100 0.6100 1.5200

10. BASIS OF ALLOTMENT
Public issue of 75,00,00,000 equity shares of rs.10 each ("equity shares") of future ventures India
limited (the "company" or the "issuer") for cash at a price of rs.10 per equity share aggregating
up to rs.75,000 lacs (the "issue"). The issue constitutes 47.58% of the post issue paid-up capital
of the company.
The face value of the equity shares is rs.10 each. The issue price of the equity share is rs.10 each
and is 1 time the face value.
Issue opened on April 25, 2011. Issue closed on April 27, 2011 for QIB bidders and on April 28,
2011 for retail and non institutional bidders.
This is an issue for more than 25% of the post-Issue capital in accordance with Rule 19(2)(b)(i)
of the Securities Contracts Regulations Rules, 1957 ("SCRR"). The Issue is being made through
the Book Building Process wherein not more than 50% of the Issue shall be allocated on a
proportionate basis to Qualified Institutional Buyers ("QIB") Bidders. 5% of the QIB Portion
shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder
of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders,
including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further,
not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-
Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a
proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above
the Issue Price.
The Issue received 35,165 applications for 1,106,504,400 Equity Shares resulting
in 1.4753 times subscription. The details of the applications received in the Issue from Qualified
Institutional Buyers, Non-Institutional, Retail Individual Investor and Anchor Investors are as
under: (Before technical rejections)
Category No. of Applications No. of Shares No. of times subscription
A Retail Individual Bidders 35087 143559600 0.5469
B Non Institutional Bidders 69 865543200 7.6937
C Qualified Institutional Bidders 9 97401600 0.2597
Total 35165 1106504400

11. Final Demand
Bid Price No. of Equity Shares % to Total Cumulative Total Cumulative % to total
10 111,149,400 9.653 111,149,400 9.653
11 898,806,600 78.061 1,009,956,000 87.714
CUTOFF 141,462,000 12.286 1,151,418,000 100.000
TOTAL 1,151,418,000 100.000
Allocation to Retail Individual Investors (After Technical Rejections)
The Basis of Allocation to the Retail Individual Investors, who have bid at cut-off or at the
Issue Price of Rs. 10 per Equity Share, was finalized in consultation with the BSE. This
category has been under subscribed to the extent of 0.5414 times. The total number of shares
allotted in Retail Individual Investor category is 142,114,200 Equity Shares
to 34,693 successful applicants. The under subscribed portion of 120,385,800 Equity Shares
have been spilled over to Non-Institutional Bidders. The category-wise details of the Basis of
Allotment are (sample) as under:
Category No. of % to Total No. of % to No. of Ratio Total No. of
Applns. total Equity Shares total Equity Shares Equity Shares
applied allocated allocated
600 12,294 35.44 7,376,400 5.19 600 1:1 7,376,400
1200 6,675 19.24 8,010,000 5.64 1,200 1:1 8,010,000
1800 2,825 8.14 5,085,000 3.58 1,800 1:1 5,085,000
2400 1,716 4.95 4,118,400 2.9 2,400 1:1 4,118,400
3000 1,491 4.3 4,473,000 3.15 3,000 1:1 4,473,000
3600 464 1.34 1,670,400 1.18 3,600 1:1 1,670,400
4200 715 2.06 3,003,000 2.11 4,200 1:1 3,003,000
5400 218 0.63 1,177,200 0.83 5,400 1:1 1,177,200
6000 755 2.18 4,530,000 3.19 6,000 1:1 4,530,000
7200 100 0.29 720,000 0.51 7,200 1:1 720,000
7800 70 0.2 546,000 0.38 7,800 1:1 546,000
9600 139 0.4 1,334,400 0.94 9,600 1:1 1,334,400
10200 61 0.18 622,200 0.44 10,200 1:1 622,200
14400 6 0.02 86,400 0.06 14,400 1:1 86,400
15000 41 0.12 615,000 0.43 15,000 1:1 615,000
15600 9 0.03 140,400 0.1 15,600 1:1 140,400
16200 12 0.03 194,400 0.14 16,200 1:1 194,400
16800 12 0.03 201,600 0.14 16,800 1:1 201,600
19200 2 0.01 38,400 0.03 19,200 1:1 38,400
19800 55 0.16 1,089,000 0.77 19,800 1:1 1,089,000
Allocation to Non Institutional Investors (After Technical Rejections)

12. The Basis of Allocation to the Non-Institutional Investors, who have bid at the Issue Price of Rs.
10 per Equity Share, was finalized in consultation with BSE. This category has been over-
subscribed to the extent of 1.3798times. The total number of Equity Shares allotted in this
category is 510,484,200 Equity Shares to 64 successful applicants. As per the Red Herring
Prospectus, the spill over portion from Retail Category (120,385,800 Equity Shares) and QIB
Category (277,598,400 Equity Shares) added to this category and were allotted Equity Shares
on proportionate basis. The category-wise details of the Basis of Allotment are (Sample) under:
Category No. of % to Total No. of % to No. of Ratio Total No. of
Applns. total Equity Shares total Equity Shares Equity Shares
applied allocated allocated
18600 3 4.69 55,800 0.01 13,480 1:1 40,440
19200 1 1.56 19,200 0 13,915 1:1 13,915
19800 1 1.56 19,800 0 14,350 1:1 14,350
21000 1 1.56 21,000 0 15,220 1:1 15,220
36000 1 1.56 36,000 0.01 26,091 1:1 26,091
72000 2 3.13 144,000 0.02 52,181 1:1 104,362
90000 2 3.13 180,000 0.03 65,227 1:1 130,454
100200 1 1.56 100,200 0.01 72,619 1:1 72,619
117600 1 1.56 117,600 0.02 85,230 1:1 85,230
181800 2 3.13 363,600 0.05 131,758 1:1 263,516
225000 1 1.56 225,000 0.03 163,067 1:1 163,067
300000 1 1.56 300,000 0.04 217,423 1:1 217,423
600000 1 1.56 600,000 0.09 434,845 1:1 434,845
909000 2 3.13 1,818,000 0.26 658,791 1:1 1,317,582
4317600 1 1.56 4,317,600 0.61 3,129,145 1:1 3,129,145
9090600 1 1.56 9,090,600 1.29 6,588,338 1:1 6,588,338
45454200 1 1.56 45,454,200 6.45 32,942,558 1:1 32,942,558
79920000 1 1.56 79,920,000 11.35 57,921,364 1:1 57,921,364
86363400 1 1.56 86,363,400 12.26 62,591,165 1:1 62,591,165
91809600 2 3.13 183,619,200 26.07 66,538,254 1:1 133,076,508
Allocation to QIBs
Allocation to QIBs has been done on a proportionate basis in consultation with the BSE. As per
the SEBI Regulations, Mutual Funds and other QIBs were allocated the available
shares (97,401,600 Equity Shares) on proportionate basis. The under subscribed portion
of 277,598,400 Equity Shares have been spilled over to Non-Institutional Bidders.
Category Fls/Banks Flls Total
No. of Shares 62270400 35131200 97401600
The IPO Committee of the Company at its meeting held on May 5,2011, has taken on record the
basis of allocation of shares approved by the designated Stock Exchange viz., the BSE, Mumbai,

13. of the Issue and has authorized the corporate action for the transfer of the shares to various
successful applicants.
The CAN-cum-Refund Orders and allotment advice and/ or notices have been dispatched to the
address of the investors as registered with the depositories on or prior to May 6,2011. In case the
same is not received within ten days, investors may contact at the address given below. The
Refund Orders have been over-printed with the bank account details as registered, if any, with
the depositories. The Equity Shares allocated to successful applicants are being credited to their
beneficiary accounts subject to validation of the account details with the depositories concerned.
Future Ventures India Ltd IPO Grading:
CARE has assigned an IPO Grade 3 to Future Ventures IPO. This means as per CARE, company
has „Average Fundamentals‟. CARE assigns IPO Grading on a scale 5 to 1, with Grade 5
indicating strong fundamentals and Grade 1 indicating poor fundamentals.
Determining the Capital Structure:
1. Nature of Business:
The nature of business can have a strong effect on the pattern of capital structure. A business
with fixed and regular income can safely rely on debentures and preference shares which
necessitates regular payment of fixed interest and dividends. But if business is risky and its
income is unstable, ordinary shares should be relied upon. Because it‟s not compulsory to
pay dividends on them regularly.
Future Ventures India Limited, a part of the Future Group, creates, builds, acquires and
operates innovative and emerging businesses in India‟s rapidly growing consumption-led
sectors. In addition to allocating and providing capital, they create, operationally manage and
strategically mentor the Business Ventures.
Hence, it‟s clear that they are the „Venture Capitalists‟ and since the business of venture
capital is much risky and the income is not fixed and regular, they have decided to go for the
equity and not for debt.
2. Money Market Conditions:

14. During boom period the investors go in for equity shares with the expectation of high
dividends. But in time of depression, they will look more to safety than income and will be
willing to invest in debentures rather than in equity shares. Thus, ordinary shares should be
issued during boom period, while debentures and preference shares should be issued in times
of depression.
If we consider the time period before one month of the Future Venture IPO, i.e. from 21 st
March to 25th April, the stock market was in a boom period. So, this can be considered as one
reason for coming up with equity and not debt. Also the goodwill of the Future Group is very
high. So, they must be confident about the subscription of IPO.
3. Capital Requirement:
Decision about the type of securities to be issued should be taken in the context of overall
capital requirement of the company. If a small amount of capital is needed, only one type of
security such as equity shares can be issued. But if a large amount of capital is required, it
will be necessary to issue different types of securities.
If we consider the recent era, where the companies are coming up with huge public offerings
like for example, Coal India with Rs. 15,000 crore, Reliance Power with Rs. 11,700 crore,
Power finance with Rs. 4,578 crore. And also the Future Group is a huge group and for
Future Group IPO of Rs. 750 crores is not that much large for which they need to come up
with equity and debt both. Also as we said that Future Venture is in the business of venture
capital which is much risky business. So it‟s better for them to come up only with equity.
4. Retaining Control:
When the existing management wants to retain control in their hands, they will issue less of
equity shares and raise more funds through preference shares and debentures. Since
preference shares and debentures have no voting rights, more funds can be raised through
their issue and at the same time control of the company can be retained by the existing
management.
Here in case of Future Venture, the promoters are holding 33.13% shares, other companies
are holding 40.76% shares, general public is holding 22.86% shares and the rest by others.
So, here the management control is not in the hands of only promoters. Also the majority of
the shares are held by the other companies. So, it‟s clear that company doesn‟t want to retain
control in their hands only and that‟s why they come up with the equity shares and not by the
debts.

15. But one point which is to be considered here is that in other companies which are holding
40.76%, most of the companies are of the Future Group. So, actually the management control
is in their hands.
5. Stability of Earnings:
The decision about the type of securities to be issued should be taken in the context of
earnings of the company. If earnings are regular and steady, preference shares and debentures
can be issued.
As we already discussed in the very first point that Future Ventures India Limited, a part of
the Future Group, creates, builds, acquires and operates innovative and emerging businesses
in India‟s rapidly growing consumption-led sectors. In addition to allocating and providing
capital, they create, operationally manage and strategically mentor the Business Ventures.
Hence, it‟s clear that they are the „Venture Capitalists‟ and since the business of venture
capital is much risky and the income is not fixed and regular, they have decided to go for the
equity and not for debt.
6. Long Term Interest of the Company:
Sometimes it happens that the type of security which seems appropriate from the view point
of money market conditions, is not appropriate from the view point of the long term interest
of the company. During depression, for instance, debentures can be easily issued, but looking
to the nature of business, the company may not be in a position to bear the burden of interest
payments. Under such circumstances, long term interest of the company should be given
more importance.
Here the Future Venture in future may or may not be in a position to bear the burden of
interest payment as they are in the business of venture capital. So, considering the long term
interest of the company, it is better for them to go for the equity rather than debt.
7. Nature of Assets of the Company:
If a company does not possess fixed assets of high value, and therefore it cannot mortgage its
assets, it cannot issue debentures. Similarly, if the value of a company‟s assets is subject to
wide fluctuations, it will not be advisable to issue debentures. The company will have to rely
on equity shares.
Here Future Venture have fixed assets of value of Rs. 16,12,959 at the end of the year 2010-
11. Fixed assets consist of office equipments, computers, furniture & fixtures, vehicles and
software. As the total amount of fixed assets is very small to be mortgaged, they should go
for the equity rather than debt. Also the company‟s assets are subject to wide fluctuations. In

16. the last year, the fixed assets were worth Rs. 40,92,659 and the depreciation of Rs. 24,79,700
has been provided on them which is almost 60% of the total fixed assets which shows that
the assets are subject to wide fluctuations. So, from this point of view also they should go for
the equity rather than debt and that‟s why they came up with an IPO of equity shares of Rs.
750 crore.
8. General Level of Interest Rates:
The rates of the interest should be taken into account while deciding the types of securities to
be issued. If interest rates are high, it is better to issue ordinary shares. If the interest rates are
low, it is advisable to issue debentures.
As the RBI has increased the interest rates 8 times in the last year, the base rate has reached
to its highest level of 7%. And if they want to come up with the issue of debt than they must
have to pay higher interest than 7%. So, the interest rates are very high in the current times in
India. So, if the Future Venture comes up with the debts than they must have to pay higher
amount of interest rates. Also they are already in the process of making their profits positive.
Hence, they should come up with the issue of equity shares and that‟s why they came up with
that.
9. Attitude of Investors:
There is a diversity of attitudes among the investors. Some investors prefer safety of high
income. To meet their needs, debentures and preference shares should be issued. Some
investors prefer high income to safety. To meet their needs, equity shares should be issued.
Thus, it is desirable to issue securities of different kinds to obtain subscriptions from people
with different attitude and preferences. This will also ensure wide distribution of securities.
10. Taxation policy of the Government:
When rates of tax on company‟s profits are very high, they prefer to issue debentures,
because debenture is regarded as a debt and hence interest on it is considered as deductible
expenditure in the income tax law. Therefore by issuing debentures, they can reduce their tax
liability and pay a high rate of dividend to the shareholders. If dividends are taxed, then also
the companies prefer to raise funds through debentures rather than shares.
Tax reliefs are different for investors in new shares issued by VCTs and investors who
purchase second-hand shares, for example on the stock market, For second-hand shares, the
reliefs are
 Exemption from income tax on dividends on ordinary shares in VCTs
 Exemption from capital gains tax on disposal of shares in VCTs
For new shares, the same reliefs are available, and in addition

17.  Income tax relief at the rate of 30% on the amount subscribed for the shares (on or after 6
April 2006). This relief is available on investments up to £200,000 in a tax year (£100,000
before 6 April 2006), if they are held for at least 5 years (3 years for shares issued before 6
April 2006).
 For shares issued before 6 April 2004, capital gains tax deferral (that is, tax on the gains on
the disposal of other assets within 12 months before or after the investment could be
postponed until the VCT shares were disposed of)
Hence, there are many tax reliefs available for the investors in the venture capital firms.
So, it‟s easy to attract investors by issuing equity shares and that must be one of the reason
of going through equity and not through debt.
11. Cost of Financing:
The cost of financing differs from security to security. It is relatively high if finance is raised
through the issue of equity shares. Because it necessitates advertisement on a large scale,
payment of underwriting commission and brokerage etc. on the other hand, issue of
debentures necessitates lower expenses as debentures are regarded as safety investment. The
law also requires to pay comparatively low underwriting commission on debentures because
maximum underwriting commission on debentures is 2.5% and on shares it is 5%.
This point is discussed in detail in other part of this project.
12. Future Plan:
Capital plan of a company is not decided on the basis of present situation only but it is
determined on the future plans of the company also. Thus authorized capital is kept to such a
level that in future, if requirement arises, further capital can be raised.
FVIL seeks to create, build, acquire, invest in and operate innovative and emerging
businesses in India‟s consumption-led sectors, which we define as sectors whose growth and
development will be determined primarily by the growing purchasing power of Indian
consumers and their changing preferences, lifestyle, aspirations and spending habits. Within
the consumption led sectors, they intend to focus primarily on opportunities in the following
business segments:
(i) Fashion, (ii) Food, (iii) FMCG and (iv) Rural Distribution.
They intend to exercise significant management control or influence in the Business Ventures
in which they invest in addition to allocating and providing capital. As at March 2011, they
have in their portfolio 13 Business Ventures of which 5 are subsidiaries. They seek to access

18. opportunities at various stages of the enterprise growth cycle, from nascent to more mature
businesses, with a view towards medium to long-term value creation for our shareholders.
Hence, it is clear from its future plans that they will need more and more funds for the
investment. So, this is also one of the reason for going through the equity route. Also it is
clear from the „Audit Report 2010-11‟ that they have the Authorized capital of 500 crore
shares and they have issued only 82.62 crore shares. They have created a large base for their
investment and kept the Authorized capital high seeking the Future plans.
13. Different Types of Securities:
Psychology of different investors is different. Some investors are satisfied with fixed income,
but they want safety of their money. For such investors the company must issue debentures
and preference shares. While some investors want high return for which they are ready to
take risk. For such persons equity shares must be issued. Thus, if a company can issue
different types of securities, it can make wide distribution of its securities. So that
concentration of power in few hands is avoided.
Hence, we can say here that they are targeting the investors who are risk takers.
14. Legal Restrictions:
The companies have to comply with legal provisions regarding the issue of different
securities.
Recent Capital Structure & Shareholding Pattern
Ownership No. of shares % Holding
Promoter’s Holding
Indian Promoters 52,21,58,846 33.13
Foreign Promoters - -
Non Promoter’s Holding
Institutional Investors
Banks, fin. Ins. & Insurance 3,74,57,445 2.38
FII’s 24,34,800 0.15
Sub Total 3,98,92,245 2.53
Other Investors
Private Corporate Bodies 642408173 40.76
NRI's/OCB's/Foreign Others 2287156 0.15
Others 9173645 0.58
Sub Total 653868974 41.48
General Public 360323635 22.86
Grand total 1576243700 100.00

19. References:
http://www.chittorgarh.com/ipo/ipo_alerts_detail.asp?a=1032&b=304
http://www.chittorgarh.com/ipo/ipo_detail.asp?a=304