this story originally appeared in on jun 3 2012mumbai us private equity giant warburg pincus will expand its presence in the countrys financial services sector by buying a majority stake in future capital the troubled finance arm of one of indias future group the deal will add one more nonbanking finance company to warburgs portfolio at a time when the sector is being squeezed by new rules imposed by a concerned regulator the reserve bank of india in march this year warburg bought a stake in au financial a jaipurbased nbfc senior executives close to the transaction told et on sunday that the deal will be discussed on monday in future capitals board meet future capital provides consumer and mortgage loans the 40 billion buyout firm is likely to pay 165170 per share to a premium to fridays closing price of 138 the deal will help pantaloon retail the groups listed flagship company which holds the majority stake in future group to cut debt and improve cash flows and address investor criticism of reckless expansion the deal is finalised and regulatory approvals are in place the board will take it up on monday said a person close to the transaction the deal will probably mark the successful end to future group founder kishore biyanis efforts to extricate pantaloon from a morass of high debt and poor cash flows investors had criticised biyani for focusing on finance at the expense of the core retail business the group has been trying to find a partner or a buyer for finance and some of its other businesses and though there were offers for future capital last year the retail deal involving pantaloons fashion business got completed earlier in may pantaloon retail agreed to transfer its apparel fashion business to a joint venture with the aditya birla group biyani along with former goldman sachs executive sameer sain set up future capital hoping to capitalise on surge in consumer demand in a booming economy sain later parted ways to form everstone capital and the entire financial services business was consolidated under future capital future capital sank into losses as the recession in 2008 poured cold water on consumer demand forcing kishore biyani to appoint morgan stanley to find a buyer for the a lossmaking nbfc total consolidated debt for the year ended june 30 2011 was rs 7846 crore and rs 2173 crore on a standalone basis the mandate was taken out of morgan stanley in march this year as it could not finalise any transaction future capital managing director v vaidyanathan and the promoter of a leading investment bank in mumbai spearheaded the transaction with warburg hyderabadbased deccan chronicle holdings was also a strong contender to acquire majority stake in future capital