Pantaloon Retail and Future Ventures India have said that they will demerge their fashion businesses, which will now come under a new entity Future Fashion.

The board of two companies has approved the move and there are indications that the new fashion unit will be listed, according to a filing with the stock exchange. Under the new plan, all the fashion brands of Pantaloon Retail and group firm Future Ventures will be transferred to the new entity. Future Fashion will also take over a debt of 12.26 billion rupees.

Future Fashion will own and operate retail chains Central, Brand Factory, aLL and Planet Sports across the country. The new entity will manage around 3.5 million square feet of retail space across 140 departmental and specialty retail stores in the country. The shareholders of Pantaloon Retail will get one share of Future Fashions for every three held, while Future Ventures shareholders will get 2 shares in the new entity for every 31 existing shares.

Kishore Biyani, CEO of Future Group, said in the statement said, "We grew multiple formats in the early stages of our growth, and now as each one of them has become sizeable, we are giving them independence to propel their growth."

The company will now seek approval for its plans to raise 15 billion rupees through public or private offerings of shares.