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JPMorgan, KKR, Could Buy India’s Future Capital

(Reuters) – India’s Future Group is in talks with a clutch of potential buyers including JPMorgan and Kohlberg Kravis Roberts and Co to sell its financial services arm, Future Capital Holdings, three sources with direct knowledge of the matter told Reuters.

The group, which has hired Morgan Stanley to run the sale process, is also in talks with Indian business conglomerate Piramal group, said the sources, who declined to be named as they were not authorized to speak to the media.

Shares in Future Capital, which have lost 18.2 percent in value over the last one month, rose more than 7 percent in a Mumbai market that was up 0.85 percent at 0556 GMT (1:56 a.m. ET).

Future Capital is a non-bank finance company that makes consumer and mortgage loans and has a market capitalization of $214 million.

Future Group and the Piramal group declined to comment, while JPMorgan did not return an e-mail seeking comment. An official with U.S.-based private equity giant KKR was not immediately available for a comment.

The controlling shareholders of Future Capital run India’s largest retail chain by market value, Pantaloon Retail, and consider the finance unit a non-core business, according to a source.

The Mumbai-based Future Group owns 54 percent of Future Capital, which has more than 30 billion rupees ($653 million) of assets.

Piramal group firm Piramal Healthcare said in May it was entering the financial services business. Piramal Healthcare is armed with a war chest after selling its domestic formulations business for $3.7 billion.

($1 = 46.01 rupees)

(By Indulal PM; additional reporting by Kaustubh Kulkarni, Nandita Bose and Sumeet Chatterjee; editing by Tony Munroe)