Future Ventures hikes stake in Amar Chitra Katha to 56%

Future Ventures India, the listed investment company of the Kishore Biyani-led Future Group, has increased its stake in Amar Chitra Katha Private Limited to 56%, from 26% held till now. Earlier, its financials would have been consolidated as an associate of Future Ventures, but now it will reflect in its revenues and profits as well, under what is known as the line-by-line method of consolidation.

This method refers to the subsidiary’s financials being added to the holding company’s financials, while the minority investors’ profit will be deducted from the net profit to reflect the true picture.

In 2010-11, ACK had a turnover of Rs 58 crore, which would have added about 11% to Future Ventures’ top line in that year, if it had been a subsidiary. The company brings out a range of popular children’s titles, including the flagship after which it is named, and Tinkle and the relatively newer Karadi audio story books. It also owns India Book House, a distributor of publications.

No consideration has been disclosed for this deal, however. Recently, Future Ventures had also increased its stake in Indus League Clothing by about 5% to 91%. In June, it had announced that it increased its stake in ACK to 26% and had acquired a 50% stake in Clarks Future Footwear, a group company earlier owned by Pantaloon Retail India Ltd.

Future Ventures’ website says the company intends to invest in emerging businesses in consumption-led businesses either from scratch or via acquisitions. It will focus on fashion, fast moving consumer goods, food processing, home products, rural distribution and vocational education. It intends to have operational control or influence over its portfolio of businesses, be a long term owner and play an active role in growing these businesses.

It has a mentoring services agreement with Pantaloon Retail India for mentoring its investee companies and a consulting and advisory agreement with Future Capital Holdings for capital market-related advice.

That will be put to use at ACK, as Future Ventures will attempt to grow the business both in size and profits. One can expect it to attempt to grow on the existing brand equity, mostly among parents. But the fight for the attention span of children is getting fierce.

There are devices on one hand –television, internet and tablets/e-books- and then there is the medium itself –social networking, and gaming for example. ACK’s turnover can grow manifold, if the potential market is tapped well. That is where the Future Group will step in, using its knowledge of the Indian consumer and repeat the success that its retail stores have enjoyed, barring some hiccups.

Read the press release from Future Ventures here.

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