Warburg Pincus in advanced talks to buy majority stake in Future Capital: report

US-based private equity firm Warburg Pincus is in advanced talks to buy a majority stake in Indian non-banking finance company Future Capital Holdings Ltd from its founders, the Economic Times today reported.

The New York-based firm, which has invested more than $40 billion in over 650 companies, is seeking to acquire Kishore Biyani-controlled Future Group's 56-per cent stake in Future Capital Holdings.

Warburg Pincus is said to be conducting a second round of due diligence through the law firm AZB & Partners on Future Capital.

"Warburg Pincus has sought clarity on certain issues... If these issues are resolved, the deal is expected to be inked at a valuation of 170 a share," an investment banker close to the transaction told the paper.

The Rs10,000-crore Kishore Biyani-led Future Group had last year hired Morgan Stanley to run the sale process of Future Capital and had already held talks with several potential buyers including private equity firms JPMorgan and Kohlberg Kravis Roberts as well as Piramal Group. 

Future Capital Holdings is registered as a non-banking financial company. In agreement with Kishore Biyani-promoted Pantaloon Retail India Ltd (PRIL), the company provides financial products and services at malls, stores and retail outlets in India that are owned, controlled or managed by PRIL and its subsidiaries.

It also gives home and auto loans, offer s wealth management services and has a tie-up with credit information agencies including Cibil and TransUnion.

It also has an agreement with ICICI Bank for marketing and distributing credit cards offering loyalty points to customers and is also looking to diversify into insurance products and services.