Pantaloon Renamed as Future Markets and Consumer Group Limited

We have received fax from our reporter about the recently concluded board meeting of India’s largest retailer – Pantaloon Retail India Ltd in which the board has approved to change the name of this listed entity to Future Markets and Consumer Group Limited. Further, it will raise Rs2.8bn through a preferential allotment to promoters / their associates, implying equity dilution of 9.5%. Additionally, it will issue 5m warrants (at Rs183) convertible over the next 18 months.

Future group / Pantaloon Retail Corporate Governance under Scanner:
There is no clarity (as yet) on the terms of transfer of the operating businesses to wholly owned subsidiaries. Our concerns are based on – whether disclosures will improve / deteriorate, as these businesses are transferred, the potential adverse impact on PART’s minority shareholders – holding company structures by their very nature trade at a discount to their underlying operating assets. The fund infusion is a mixed positive – PRIL requires funds to meet its expansion plans, and given the tight equity / credit markets, we don’t envisage any other route to access capital.