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DRAFT RED HERRING PROSPECTUS
Dated February 1, 2016 Please read Section 32 of the Companies
Act, 2013
Book Built Issue
Our Company was incorporated as Dilip Buildcon Private Limited
on June 12, 2006 as a private limited company under the Companies
Act, 1956, with the Registrar of Companies, Madhya Pradesh
at Gwalior (the “RoC”). Our Company was converted into a public
limited company and consequently, the name of our Company was
changed to Dilip Buildcon Limited and a fresh certificate of
incorporation was issued by the RoC on August 26, 2010. For
further details of change in the name and registered office of our
Company, please see the section entitled “History and Certain
Corporate Matters” on page 173.
Registered and Corporate Office: Plot No. 5, Inside Govind
Narayan Singh Gate, Chuna Bhatti, Kolar Road, Bhopal 462 016,
Madhya Pradesh
Contact Person: Abhishek Shrivastava, Company Secretary and
Compliance Officer; Tel: +91 755 4029999; Fax: +91 755 4029998
E-mail: [email protected]; Website:
www.dilipbuildcon.co.in
Corporate Identity Number: U45201MP2006PLC018689
OUR PROMOTERS: DILIP SURYAVANSHI, SEEMA SURYAVANSHI, DEVENDRA
JAIN AND SURYAVANSHI FAMILY TRUST
PUBLIC ISSUE OF UP TO [●] EQUITY SHARES OF FACE VALUE OF ` 10
EACH (THE “EQUITY SHARES”) OF DILIP BUILDCON LIMITED (“OUR COMPANY”
OR THE “ISSUER”) FOR
CASH AT A PRICE OF ` [●] PER EQUITY SHARE (INCLUDING A SHARE
PREMIUM OF ` [●] PER EQUITY SHARE) AGGREGATING UP TO ` [●] MILLION
(THE “ISSUE”)
COMPRISING A FRESH ISSUE OF UP TO [●] EQUITY SHARES AGGREGATING
UP TO ` 4,300 MILLION (THE “FRESH ISSUE”) AND AN OFFER FOR SALE OF
UP TO 1,136,364 EQUITY
SHARES BY DILIP SURYAVANSHI, 1,136,364 EQUITY SHARES BY DEVENDRA
JAIN (DILIP SURYAVANSHI AND DEVENDRA JAIN COLLECTIVELY REFERRED TO
AS THE
“PROMOTER SELLING SHAREHOLDERS”) AND 7,954,545 EQUITY SHARES BY
BANYANTREE GROWTH CAPITAL, LLC (THE “INVESTOR SELLING SHAREHOLDER”)
(THE
PROMOTER SELLING SHAREHOLDERS AND THE INVESTOR SELLING
SHAREHOLDER COLLECTIVELY, THE “SELLING SHAREHOLDERS”) AGGREGATING
UP TO ` [●]
MILLION (THE “OFFER FOR SALE” AND TOGETHER WITH THE FRESH ISSUE,
THE “ISSUE”). THE ISSUE WILL CONSTITUTE [●] % OF OUR POST-ISSUE
PAID-UP EQUITY SHARE
CAPITAL.
THE FACE VALUE OF THE EQUITY SHARES IS ` 10 EACH. OUR COMPANY
AND THE SELLING SHAREHOLDERS MAY, IN CONSULTATION WITH THE BOOK
RUNNING LEAD
MANAGERS, OFFER A DISCOUNT OF UP TO [●]% (EQUIVALENT TO ` [●])
ON THE ISSUE PRICE TO RETAIL INDIVIDUAL BIDDERS (“RETAIL DISCOUNT”)
. THE PRICE BAND,
THE RETAIL DISCOUNT AND THE MINIMUM BID LOT WILL BE DECIDED BY
OUR COMPANY AND THE SELLING SHAREHOLDERS IN CONSULTATION WITH THE
BOOK
RUNNING LEAD MANAGERS (“BRLMS”) AND WILL BE ADVERTISED IN ALL
EDITIONS OF BUSINESS STANDARD (A WIDELY CIRCULATED ENGLISH NATIONAL
DAILY
NEWSPAPER) AND ALL EDITIONS OF BUSINESS STANDARD (A WIDELY
CIRCULATED HINDI NATIONAL DAILY NEWSPAPER WITH WIDE CIRCULATION IN
MADHYA
PRADESH) AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/ISSUE
OPENING DATE.
In case of any revision to the Price Band, the Bid/Issue Period
will be extended by three additional Working Days after such
revision of the Price Band, subject to the total Bid/Issue Period
not exceeding 10
Working Days. Any revision in the Price Band and the revised
Bid/Issue Period, if applicable, will be widely disseminated by
notification to the BSE Limited (“BSE”) and the National Stock
Exchange of India
Limited (“NSE”), by issuing a press release, and also by
indicating the change on the website of the BRLMs and at the
terminals of the other members of the Syndicate.
In terms of Rule 19(2)(b)(ii) of the Securities Contracts
(Regulation) Rules, 1957, as amended (“SCRR”), this is an Issue for
at least such percentage of the post-Issue Equity Share capital of
our Company that
will be equivalent to ` 4,000 million calculated at the Issue
Price. The Issue is being made through the Book Building Process
wherein not more than 50% of the Issue shall be available for
allocation on a
proportionate basis to Qualified Institutional Buyers (“QIBs”)
(the “QIB Portion”), provided that our Company and the Selling
Shareholders, in consultation with the BRLMs, may allocate up to
60% of the
QIB Portion to Anchor Investors on a discretionary basis.
One-third of the Anchor Investor Portion shall be reserved for
domestic Mutual Funds, subject to valid Bids being received from
domestic Mutual Funds
at or above the Anchor Investor Allocation Price. 5% of the QIB
Portion (excluding the Anchor Investor Portion) shall be available
for allocation on a proportionate basis to Mutual Funds only, and
the
remainder of the QIB Portion shall be available for allocation
on a proportionate basis to all QIB Bidders (other than Anchor
Investors), including Mutual Funds, subject to valid Bids being
received at or above
the Issue Price. Further, not less than 15% of the Issue shall
be available for allocation on a proportionate basis to
Non-Institutional Bidders and not less than 35% of the Issue shall
be available for allocation to
Retail Individual Bidders in accordance with the Securities and
Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 (the “SEBI Regulations”), subject
to valid Bids being
received at or above the Issue Price. All potential Bidders,
other than Anchor Investors, are required mandatorily to utilise
the Application Supported by Blocked Amount (“ASBA”) process by
providing details of their respective bank account which will be
blocked by the Self Certified Syndicate Banks (“SCSBs”) to
participate in the Issue. For details, please see the section
entitled “Issue Procedure” on page 441.
RISK IN RELATION TO THE FIRST ISSUE
This being the first public issue of our Company, there has been
no formal market for the Equity Shares of our Company. The face
value of the Equity Shares is `10 and the Floor Price is [●] times
the face value
and the Cap Price is [●] times the face value. The Issue Price
(determined and justified by our Company in consultation with the
Selling Shareholders and the BRLMs as stated under the section
entitled “Basis
for Issue Price” on page 101) should not be taken to be
indicative of the market price of the Equity Shares after the
Equity Shares are listed. No assurance can be given regarding an
active or sustained trading in
the Equity Shares or regarding the price at which the Equity
Shares will be traded after listing.
GENERAL RISKS
Investments in equity and equity-related securities involve a
degree of risk and investors should not invest any funds in the
Issue unless they can afford to take the risk of losing their
entire investment. Investors
are advised to read the risk factors carefully before taking an
investment decision in the Issue. For taking an investment
decision, investors must rely on their own examination of our
Company and the Issue,
including the risks involved. The Equity Shares in the Issue
have not been recommended or approved by the Securities and
Exchange Board of India (“SEBI”), nor does SEBI guarantee the
accuracy or adequacy
of the contents of this Draft Red Herring Prospectus. Specific
attention of the investors is invited to the section entitled “Risk
Factors” on page 14.
ISSUER’S AND SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts
responsibility for and confirms that this Draft Red Herring
Prospectus contains all information with regard to our Company and
the Issue, which is
material in the context of the Issue, that the information
contained in this Draft Red Herring Prospectus is true and correct
in all material aspects and is not misleading in any material
respect, that the opinions
and intentions expressed herein are honestly held and that there
are no other facts, the omission of which makes this Draft Red
Herring Prospectus as a whole or any of such information or the
expression of any
such opinions or intentions misleading in any material respect.
Further, each of the Promoter Selling Shareholders severally accept
responsibility that this Draft Red Herring Prospectus contains all
information
about him as a Selling Shareholder in the context of the Offer
for Sale and further assumes responsibility for statements in
relation to him included in this Draft Red Herring Prospectus. The
Investor Selling
Shareholder accepts responsibility only for statements
specifically made by the Investor Selling Shareholder in this Draft
Red Herring Prospectus with respect to itself and the Equity Shares
offered by it in the
Offer for Sale, and that such statements are true, complete and
correct in all material respects and are not misleading in any
material respect.
LISTING
The Equity Shares offered through this Draft Red Herring
Prospectus are proposed to be listed on the BSE and the NSE. Our
Company has received an ‘in-principle’ approval from the BSE and
the NSE for the
listing of the Equity Shares pursuant to letters dated [●] and
[●], respectively. For the purposes of the Issue, [●] will be the
Designated Stock Exchange. A copy of the Red Herring Prospectus and
the Prospectus shall be delivered for registration to the RoC in
accordance with Section 26(4) of the Companies Act, 2013. For
details of the material contracts and documents available for
inspection from the date of the Red
Herring Prospectus up to the Bid/Issue Closing Date, please see
the section entitled “Material Contracts and Documents for
Inspection” on page 497.
BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE
Axis Capital Limited
Axis House, 1st Floor, C-2
Wadia International Center
P. B. Marg, Worli
Mumbai 400 025
Maharashtra
Tel: +91 22 4325 1199
Fax: +91 22 4325 3000
E-mail: [email protected]
Investor grievance e-mail:
[email protected]
Website: www.axiscapital.co.in
Contact Person: Akash Aggarwal
SEBI Registration No.:
INM000012029
IIFL Holdings Limited
10th Floor, IIFL Centre
Kamala City, Senapati Bapat Marg
Lower Parel (West)
Mumbai 400 013
Maharashtra, India
Tel: +91 22 4646 4600
Fax: +91 22 2493 1073
E-mail: [email protected]
Investor grievance E-mail:
[email protected]
Website: www.iiflcap.com
Contact Person: Gururaj Sundaram/
Kunur Bavishi
SEBI Registration No.:
INM000010940
JM Financial Institutional Securities
Limited*
7th Floor, Cnergy Building
Appasaheb Marathe Marg
Prabhadevi
Mumbai 400 025
Tel: +91 22 6630 3030
Fax: +91 22 6630 3330
E-mail: [email protected]
Investor Grievance E-mail:
[email protected]
Website: www.jmfl.com
Contact Person: Lakshmi Lakshmanan
SEBI Registration No.: INM000010361
* Formerly JM Financial Institutional
Securities Private Limited
PNB Investment Services Limited
11th Floor, Dalamal House
Nariman Point
Mumbai 400 021
Maharashtra
Tel: +91 22 4347 4031
Fax: +91 22 2284 0854
E-mail: [email protected]
Investor grievance e-mail:
[email protected]
Website: www.pnbisl.com
Contact Person: Vinay N. Rane
SEBI Registration No.:
INM000011617
Link Intime India Private Limited
C-13, Pannalal Silk Mills
Compound, L.B.S. Marg
Bhandup (West)
Mumbai 400 078
Maharashtra
Tel: +91 22 6171 5400
Fax: +91 22 2596 0329
E-mail: [email protected]
Website: www.linkintime.co.in
Contact Person: Sachin Achar
SEBI Registration No.:
INR000004058
BID/ISSUE PROGRAMME
BID/ISSUE OPENS ON [●](1)
BID/ISSUE CLOSES ON [●](2) (1) Our Company and the Selling
Shareholders may, in consultation with the BRLMs, consider
participation by Anchor Investors in accordance with the SEBI
Regulations. The Anchor Investor Bid/Issue Period
shall be one Working Day prior to the Bid/Issue Opening Date.
(2) Our Company and the Selling Shareholders may, in consultation
with the BRLMs, consider closing the Bid/Issue Period for QIBs, one
Working Day prior to the Bid/Issue Closing Date in accordance with
the
SEBI Regulations.
mailto:[email protected]
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TABLE OF CONTENTS
SECTION I:
GENERAL..............................................................................................................................
1
DEFINITIONS AND ABBREVIATIONS
...................................................................................................
1
PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET
DATA............................................. 11
FORWARD-LOOKING
STATEMENTS.....................................................................................................
13
SECTION II: RISK FACTORS
.................................................................................................................
14
SECTION III:
INTRODUCTION..............................................................................................................
53
SUMMARY OF INDUSTRY
........................................................................................................................
53
SUMMARY OF BUSINESS
.........................................................................................................................
57
SUMMARY FINANCIAL
INFORMATION...............................................................................................
65 THE ISSUE
....................................................................................................................................................
72 GENERAL INFORMATION
........................................................................................................................
73
CAPITAL STRUCTURE
...............................................................................................................................
82 OBJECTS OF THE ISSUE
............................................................................................................................
93 BASIS FOR THE ISSUE PRICE
..................................................................................................................
101
STATEMENT OF TAX BENEFITS
.............................................................................................................
105
SECTION IV: ABOUT THE
COMPANY................................................................................................
119
INDUSTRY OVERVIEW
..............................................................................................................................
119
OUR BUSINESS
............................................................................................................................................
139 REGULATIONS AND POLICIES
...............................................................................................................
169
HISTORY AND CERTAIN CORPORATE MATTERS
............................................................................
173 OUR SUBSIDIARIES
....................................................................................................................................
178 OUR MANAGEMENT
..................................................................................................................................
190
OUR PROMOTERS AND PROMOTER GROUP
......................................................................................
209 OUR GROUP COMPANIES
.........................................................................................................................
214
RELATED PARTY
TRANSACTIONS........................................................................................................
220 DIVIDEND
POLICY......................................................................................................................................
221
SECTION V: FINANCIAL INFORMATION
.........................................................................................
222
FINANCIAL STATEMENTS
.......................................................................................................................
222
FINANCIAL INDEBTEDNESS
..................................................................................................................
343 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL INFORMATION
AND
RESULTS OF OPERATION
.........................................................................................................................
374
SECTION VI: LEGAL AND OTHER INFORMATION
......................................................................
399
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS
................................................ 399
GOVERNMENT APPROVALS
...................................................................................................................
416 OTHER REGULATORY AND STATUTORY DISCLOSURES
..............................................................
419
SECTION VII: ISSUE INFORMATION
.................................................................................................
433
TERMS OF THE ISSUE
................................................................................................................................
433 ISSUE STRUCTURE
.....................................................................................................................................
438
ISSUE
PROCEDURE.....................................................................................................................................
441 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
.......................................... 485
SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION
......................... 486
PART A OF THE ARTICLES OF ASSOCIATION
...................................................................................
486
PART B OF THE ARTICLES OF ASSOCIATION
...................................................................................
493
SECTION IX: OTHER INFORMATION
................................................................................................
497
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
................................................... 497 DECLARATION
............................................................................................................................................
499
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SECTION I: GENERAL
DEFINITIONS AND ABBREVIATIONS
This Draft Red Herring Prospectus uses certain definitions and
abbreviations which, unless the context
otherwise indicates or implies, shall have the meaning as
provided below. References to any legislation, act,
regulation, rule, guideline or policy shall be to such
legislation, act, regulation, rule, guideline or policy, as
amended, supplemented or re-enacted from time to time.
The words and expressions used in this Draft Red Herring
Prospectus but not defined herein, shall have, to the
extent applicable, the meaning ascribed to such terms under the
Companies Act, the SEBI Regulations, the
SCRA, the Depositories Act or the rules and regulations made
thereunder.
Notwithstanding the foregoing, terms used in of the sections
entitled “Statement of Tax Benefits”, “Financial
Statements” and “Main Provisions of Articles of Association” on
pages 105, 222 and 486, respectively, shall
have the meaning ascribed to such terms in such sections.
General Terms
Term Description
“our Company”, the
“Company”, or the “Issuer”
Dilip Buildcon Limited, a company incorporated under the
Companies Act,
1956, having its registered and corporate office situated at
Plot No. 5, Inside
Govind Narayan Singh Gate, Chuna Bhatti, Kolar Road, Bhopal 462
016,
Madhya Pradesh
we/us/our Unless the context otherwise indicates or implies, our
Company, its
Subsidiaries and its Joint Ventures, on a consolidated basis
Company Related Terms
Term Description
Articles of Association The articles of association of our
Company, as amended
Audit Committee The audit committee of the Board of Director
described in the section entitled
“Our Management” on page 190
Auditors/Statutory Auditors The joint statutory auditors of our
Company, Mukund M. Chitale & Co.,
Chartered Accountants and Naresh Rajani & Co., Chartered
Accountants
Board/Board of Directors The board of directors of our Company
or a duly constituted committee
thereof
BTGC Agreement The subscription and shareholders’ agreement
dated February 14, 2012
entered into between our Company, our Promoters and BanyanTree
Growth
Capital, LLC as amended on March 27, 2015 and January 27,
2016
Compulsorily Convertible
Preference Shares
0.01% compulsorily convertible preference shares of our Company
of face
value `100,000 each
Director(s) The director(s) of our Company
Equity Shares The equity shares of our Company of face value of
`10 each
Group Companies Companies which are covered under the applicable
accounting standards and
other companies as considered material by our Board. For
details, please see
the section entitled “Our Group Companies” on page 214
Investor Selling Shareholder BanyanTree Growth Capital, LLC, a
company incorporated under the laws of
Mauritius with its principal office at 13, Nexteracom 1,
Cybercity, Ebene,
Mauritius
Joint Ventures The joint ventures formed by our Company, namely,
(i) ‘Valecha Dilip JV’
(formed in partnership with Valecha Engineering Limited); (ii)
‘Dilip
Buildcon Private Limited and ITS Infrastructure Private Limited
(JV)’ (formed
in partnership with ITS Infrastructure Private Limited); (iii)
KCC Buildcon
Private Limited-Dilip Buildcon Limited JV; (iv) Dilip Buildcon
Ltd. & Ranjit
Buildcon Ltd. JV; (v) Dilip Buildcon - Varaha Infra Limited (JV)
(formed for
bidding for Ghaghra Bridge to Varanasi section of NH-233 (Pkg-I)
project);
and (vi) Dilip Buildcon Limited-Varaha Infra Limited (JV)
(bidding for
Ambala-Kaithal Section of NH-65 Ambala-Kaithal Section of NH-65
project)
Key Management Personnel Key management personnel of our Company
in terms of the Companies Act,
1
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Term Description
2013 and the SEBI Regulations as disclosed in the section
entitled “Our
Management” on page 205
Memorandum of Association The memorandum of association of our
Company
Promoters The promoters of our Company namely, Dilip
Suryavanshi, Seema
Suryavanshi, Devendra Jain and Suryavanshi Family Trust. For
details, please
see the section entitled “Our Promoters and Promoter Group” on
page 209
Promoter Group Persons and entities constituting the promoter
group of our Company in terms
of Regulation 2(1)(zb) of the SEBI Regulations. For details,
please see the
section entitled “Our Promoters and Promoter Group” on page
212
Promoter Selling Shareholders Dilip Suryavanshi and Devendra
Jain
Registered and Corporate
Office
Registered and corporate office of our Company situated at Plot
No. 5, Inside
Govind Narayan Singh Gate, Chuna Bhatti, Kolar Road, Bhopal 462
016,
Madhya Pradesh
Shareholders Shareholders of our Company
Subsidiaries Subsidiaries of our Company set out in the section
entitled “Our Subsidiaries”
on page 178
Issue Related Terms
Term Description
Acknowledgement Slip The slip or document issued by the
Designated Intermediary to a Bidder as
proof of registration of the Bid cum Application Form
Allot/Allotment/Allotted Unless the context otherwise requires,
allotment of the Equity Shares pursuant
to the Fresh Issue and transfer of the Equity Shares offered by
the Selling
Shareholders pursuant to the Offer for Sale to the Allottees
Allottee A successful Bidder to whom the Equity Shares are
Allotted
Allotment Advice Note, advice or intimation of Allotment sent to
the Bidders who have been or
are to be Allotted the Equity Shares after the Basis of
Allotment has been
approved by the Designated Stock Exchange
Anchor Investor A Qualified Institutional Buyer, applying under
the Anchor Investor Portion in
accordance with the requirements specified in the SEBI
Regulations and the
Red Herring Prospectus
Anchor Investor Application
Form
The form used by an Anchor Investor to make a Bid in the Anchor
Investor
Portion and which will be considered as an application for
Allotment in terms
of the Red Herring Prospectus and Prospectus
Anchor Investor Bid/Issue
Period
One Working Day prior to the Bid/Issue Opening Date, on which
Bids by
Anchor Investors shall be submitted and allocation to the Anchor
Investors
shall be completed
Anchor Investor Issue Price Final price at which the Equity
Shares will be Allotted to Anchor Investors in
terms of the Red Herring Prospectus and the Prospectus, which
price will be
equal to or higher than the Issue Price but not higher than the
Cap Price
The Anchor Investor Issue Price will be decided by our Company
and the
Selling Shareholders in consultation with the BRLMs
Anchor Investor Portion Up to 60% of the QIB Portion consisting
of up to [●] Equity Shares which may be allocated by our Company
and the Selling Shareholders in consultation
with the BRLMs to Anchor Investors on a discretionary basis
One-third of the Anchor Investor Portion shall be reserved for
Mutual Funds,
subject to valid Bids being received from Mutual Funds at or
above the price
at which allocation is being done to Anchor Investors
Application Supported by
Blocked Amount or ASBA
An application, whether physical or electronic, used by ASBA
Bidders to
make a Bid by authorising an SCSB to block the Bid Amount in the
ASBA
Account
ASBA Account A bank account maintained with an SCSB and
specified in the ASBA Form
for blocking the Bid Amount mentioned in the ASBA Form
ASBA Bid A Bid made by an ASBA Bidder including all revisions
and modifications
thereto as permitted under the SEBI Regulations
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Term Description
ASBA Bidder All Bidders other than Anchor Investors
ASBA Form An application form, whether physical or electronic,
used by ASBA Bidders
which will be considered as the application for Allotment in
terms of the Red
Herring Prospectus and the Prospectus
Banker(s) to the Issue/Escrow
Collection Bank(s)
Banks which are clearing members and registered with SEBI as
bankers to an
issue and with whom the Escrow Account and the Public Issue
Account will
be opened, in this case being [●]
Basis of Allotment The basis on which the Equity Shares will be
Allotted to successful Bidders
under the Issue and which is described in the section entitled
“Issue
Procedure” on page 441
Bid An indication to make an offer during the Bid/Issue Period
by an ASBA
Bidder pursuant to submission of the ASBA Form, or during the
Anchor
Investor Bid/Issue Period by an Anchor Investor pursuant to
submission of the
Anchor Investor Application Form, to subscribe to or purchase
the Equity
Shares of our Company at a price within the Price Band,
including all
revisions and modifications thereto as permitted under the SEBI
Regulations
Bid Amount The highest value of optional Bids indicated in the
Bid cum Application Form
and payable by the Bidder or blocked in the ASBA Account of the
Bidder, as
the case may be, upon submission of the Bid in the Issue
Bid cum Application Form The Anchor Investor Application Form or
ASBA Form, as the context requires
Bid/Issue Closing Date Except in relation to any Bids received
from the Anchor Investors, the date
after which the Designated Intermediaries will not accept any
Bids, which
shall be published in all editions of Business Standard (a
widely circulated
English national daily newspaper) and all editions of Business
Standard (a
widely circulated Hindi national daily newspaper with wide
circulation in
Madhya Pradesh)
Our Company and the Selling Shareholders may, in consultation
with the
BRLMs, consider closing the Bid/Issue Period for the QIB
Category one
Working Day prior to the Bid/Issue Closing Date in accordance
with the SEBI
Regulations.
Bid/Issue Opening Date Except in relation to any Bids received
from the Anchor Investors, the date on
which the Designated Intermediaries shall start accepting Bids,
which shall be
published in all editions of Business Standard (a widely
circulated English
national daily newspaper) and all editions of Business Standard
(a widely
circulated Hindi national daily newspaper with wide circulation
in Madhya
Pradesh)
Bid/Issue Period Except in relation to Anchor Investors, the
period between the Bid/Issue
Opening Date and the Bid/Issue Closing Date, inclusive of both
days, during
which prospective Bidders can submit their Bids, including any
revisions
thereof
Bid Lot [●] Equity Shares
Bidder Any prospective investor who makes a Bid pursuant to the
terms of the Red
Herring Prospectus and the Bid cum Application Form and unless
otherwise
stated or implied, includes an Anchor Investor
Bidding Centers Centers at which the Designated Intermediaries
shall accept ASBA Forms, i.e,
Designated SCSB Branch for SCSBs, Specified Locations for
Syndicate,
Broker Centres for Registered Brokers, Designated RTA Locations
for RTAs
and Designated CDP Locations for CDPs
Book Building Process Book building process, as provided in
Schedule XI of the SEBI Regulations, in
terms of which the Issue is being made
Book Running Lead Managers/
BRLMs
The book running lead managers to the Issue namely, Axis Capital
Limited,
IIFL Holdings Limited, JM Financial Institutional Securities
Limited and PNB
Investment Services Limited
Broker Centres Broker centers notified by the Stock Exchanges
where Bidders can submit the
ASBA Forms to a Registered Broker
The details of such Broker Centers, along with the names and
contact details
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Term Description
of the Registered Brokers are available on the websites of the
respective Stock
Exchanges
CAN/Confirmation of
Allocation Note
Notice or intimation of allocation of the Equity Shares sent to
Anchor
Investors, who have been allocated the Equity Shares, after the
Anchor
Investor Bid/Issue Period
Cap Price The higher end of the Price Band, above which the
Issue Price will not be
finalised and above which no Bids will be accepted
Client ID Client identification number maintained with one of
the Depositories in
relation to a demat account
Collecting Depository
Participant or CDP
A depository participant as defined under the Depositories Act,
1996,
registered with SEBI and who is eligible to procure Bids at the
Designated
CDP Locations in terms of circular no.
CIR/CFD/POLICYCELL/11/2015
dated November 10, 2015 issued by SEBI
Cut-off Price Issue Price, finalised by our Company in
consultation with the BRLMs
Only Retail Individual Bidders are entitled to Bid at the
Cut-off Price. QIBs
and Non-Institutional Bidders are not entitled to Bid at the
Cut-off Price
DP/ Depository Participant A depository participant as defined
under the Depositories Act
DP ID Depository Participant’s Identification
Demographic Details Details of the Bidders including the
Bidder’s address, name of the Bidder’s
father/husband, investor status, occupation and bank account
details
Designated CDP Locations Such locations of the CDPs where
Bidders can submit the ASBA Forms.
The details of such Designated CDP Locations, along with names
and contact
details of the Collecting Depository Participants eligible to
accept Bid cum
Application Forms are available on the respective websites of
the Stock
Exchanges (www.bseindia.com and www.nseindia.com)
Designated Date The date on which funds are transferred from the
Escrow Account and the
amounts blocked by the SCSBs are transferred from the ASBA
Accounts, as
the case may be, to the Public Issue Account or the Refund
Account, as
appropriate, after filing of the Prospectus with the RoC
Designated Intermediaries
/Collecting Agent
Syndicate, sub-syndicate/agents, SCSBs, Registered Brokers, CDPs
and
RTAs, who are authorized to collect ASBA Forms from the ASBA
Bidders, in
relation to the Issue
Designated RTA Locations Such locations of the RTAs where
Bidders can submit ASBA Forms to RTAs.
The details of such Designated RTA Locations, along with names
and contact
details of the RTAs eligible to accept Bid cum Application Forms
are available
on the respective websites of the Stock Exchanges
(www.bseindia.com and
www.nseindia.com)
Designated SCSB Branches Such branches of the SCSBs which shall
collect the ASBA Forms, a list of
which is available on the website of SEBI at
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries
or at such other website as may be prescribed by SEBI from time
to time
Designated Stock Exchange [●] Draft Red Herring Prospectus
or DRHP
This draft red herring prospectus dated February 1, 2016, issued
in accordance
with the SEBI Regulations, which does not contain complete
particulars of the
price at which the Equity Shares will be Allotted and the size
of the Issue
Eligible NRI(s) NRI(s) from jurisdictions outside India where it
is not unlawful to make an
offer or invitation under the Issue and in relation to whom the
ASBA Form
and the Red Herring Prospectus will constitute an invitation to
purchase the
Equity Shares
Escrow Account An account opened with the Escrow Collection
Bank(s) and in whose favour
Anchor Investors will transfer money through direct
credit/NEFT/RTGS in
respect of the Bid Amount when submitting a Bid
Escrow Agreement The agreement dated [●] to be entered into
between our Company, the Selling
Shareholders, the Registrar to the Issue, the BRLMs, the
Syndicate Members,
the Escrow Collection Bank(s) and the Refund Bank(s) for
collection of the
4
-
Term Description
Bid Amounts from Anchor Investors and where applicable, refunds
of the
amounts collected from Anchor Investors, on the terms and
conditions thereof
First Bidder Bidder whose name shall be mentioned in the Bid cum
Application Form or
the Revision Form and in case of joint Bids, whose name shall
also appear as
the first holder of the beneficiary account held in joint
names
Floor Price The lower end of the Price Band, subject to any
revision thereto, in this case
being ` [●] at or above which the Issue Price will be finalised
and below
which no Bids will be accepted
Fresh Issue The fresh issue of up to [●] Equity Shares
aggregating up to `4,300 million by
our Company
General Information
Document/GID
The General Information Document prepared and issued in
accordance with
the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013
notified by
SEBI, suitably modified and included in “Issue Procedure” on
page 451
Issue The public issue of up to [●] Equity Shares of face value
of `10 each for cash
at a price of ` [●] each, aggregating up to ` [●] million
comprising the Fresh
Issue and the Offer for Sale
Issue Agreement The agreement dated January 27, 2016 entered
into between our Company, the
Selling Shareholders and the BRLMs, pursuant to which certain
arrangements
are agreed to in relation to the Issue
Issue Price The final price at which the Equity Shares will be
Allotted to Bidders other
than Anchor Investors. Equity Shares will be Allotted to Anchor
Investors at
the Anchor Investor Issue Price in terms of the Red Herring
Prospectus
The Issue Price will be decided by our Company in consultation
with the
Selling Shareholders and the BRLMs on the Pricing Date
Issue Proceeds The proceeds of the Issue that are available to
our Company and the Selling
Shareholders
Maximum RIB Allottees The maximum number of Retail Individual
Bidders who can be allotted the
minimum Bid Lot. This is computed by dividing the total number
of Equity
Shares available for Allotment to Retail Individual Bidders by
the minimum
Bid Lot
Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor
Investor Portion), or [●] Equity
Shares which shall be available for allocation to Mutual Funds
only
Mutual Funds Mutual funds registered with SEBI under the
Securities and Exchange Board
of India (Mutual Funds) Regulations, 1996
Net Proceeds Proceeds of the Fresh Issue less our Company’s
share of the Issue expenses.
For further information about use of the Issue Proceeds and the
Issue
expenses, please see the section entitled “Objects of the Issue”
on page 93
Non-Institutional Bidders/
NIBs
All Bidders that are not QIBs or Retail Individual Bidders and
who have Bid
for the Equity Shares for an amount more than `200,000 (but not
including
NRIs other than Eligible NRIs)
Non-Institutional Portion The portion of the Issue being not
less than 15% of the Issue comprising of [●]
Equity Shares which shall be available for allocation on a
proportionate basis
to Non-Institutional Bidders, subject to valid Bids being
received at or above
the Issue Price
Non-Resident Indian/ Non-
Resident
An individual resident outside India who is a citizen or is an
‘overseas citizen
of India’ cardholder within the meaning of Section 7A of the
Citizenship Act,
1955 and includes a Non Resident Indian, FVCIs, FIIs and
FPIs
Offer for Sale The offer for sale of up to 1,136,364 Equity
Shares by Dilip Suryavanshi, up
to 1,136,364 Equity Shares by Devendra Jain and up to 7,954,545
Equity
Shares by the Investor Selling Shareholder at the Issue Price
aggregating up to
`[●] million in terms of the Red Herring Prospectus
Price Band Price band of a minimum price of ` [●] per Equity
Share (Floor Price) and the
maximum price of ` [●] per Equity Share (Cap Price) including
any revisions
thereof
The Price Band, the Retail Discount and the minimum Bid Lot size
for the
5
-
Term Description
Issue will be decided by our Company and the Selling
Shareholders in
consultation with the BRLMs and will be advertised, at least
five Working
Days prior to the Bid/Issue Opening Date, in all editions of
Business Standard
(a widely circulated English national daily newspaper) and all
editions of
Business Standard (a widely circulated Hindi national daily
newspaper with
wide circulation in Madhya Pradesh)
Pricing Date The date on which our Company, in consultation with
the Selling Shareholders
and the BRLMs, will finalise the Issue Price
Prospectus The Prospectus to be filed with the RoC after the
Pricing Date in accordance
with Section 26 of the Companies Act, 2013, and the provisions
of the SEBI
Regulations containing, inter alia, the Issue Price that is
determined at the end
of the Book Building Process, the size of the Issue and certain
other
information, including any addenda or corrigenda thereto
Public Issue Account A bank account opened in accordance with
Section 40 of the Companies Act,
2013 to receive monies from the Escrow Account and from the
ASBA
Accounts on the Designated Date
QIB Category/QIB Portion The portion of the Issue (including the
Anchor Investor Portion) being not
more than 50% of the Issue comprising of [●] Equity Shares which
shall be
Allotted to QIBs including Anchor Investors
Qualified Institutional Buyers
or QIBs or QIB Bidders
Qualified institutional buyers as defined under Regulation
2(1)(zd) of the
SEBI Regulations
Red Herring Prospectus or RHP The Red Herring Prospectus dated
[●] issued in accordance with Section 32 of
the Companies Act, 2013 and the provisions of the SEBI
Regulations, which
will not have complete particulars of the price at which the
Equity Shares will
be offered and the size of the Issue
The Red Herring Prospectus will become the Prospectus upon
filing with the
RoC after the Pricing Date
Refund Account(s) The account opened with the Refund Bank(s),
from which refunds, if any, of
the whole or part of the Bid Amount to Anchor Investors shall be
made
Refund Bank(s) [●]
Registered Brokers Stock brokers registered with the stock
exchanges having nationwide
terminals, other than BRLMs and the Syndicate Members, eligible
to procure
Bids in terms of Circular No. CIR/CFD/14/2012 dated October 4,
2012 issued
by SEBI
Registrar to the Issue or
Registrar
Link Intime India Private Limited
Registrar and Share Transfer
Agents or RTAs
Registrar and share transfer agents registered with SEBI and
eligible to
procure Bids at the Designated RTA Locations in terms of
circular no.
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by
SEBI
Registrar Agreement The agreement dated January 27, 2016 entered
into between our Company, the
Selling Shareholders and the Registrar to the Issue in relation
to the
responsibilities and obligations of the Registrar to the Issue
pertaining to the
Issue
Restated Consolidated
Financial Statements
Restated consolidated financial statements of assets and
liabilities as at, and
for the six months ended, September 30, 2015 and as at, and for
the years
ended, March 31, 2015, 2014, 2013, 2012 and 2011 and statement
of profit
and loss and cash flows for the six months ended September 30,
2015 and for
the years ended March 31, 2015, 2014, 2013, 2012 and 2011 of our
Company
which were prepared in accordance with Indian GAAP and the
Companies
Act) and restated in accordance with the SEBI Regulations
Restated Financial Statements Collectively, the Restated
Consolidated Financial Statements and the Restated
Unconsolidated Financial Statements
Restated Unconsolidated
Financial Statements
Restated unconsolidated financial statements of assets and
liabilities as at, and
for the six months ended, September 30, 2015 and as at, and for
the years
ended, March 31, 2015, 2014, 2013, 2012 and 2011 and statement
of profit
and loss and cash flows the six months ended September 30, 2015
and for the
years ended March 31, 2015, 2014, 2013, 2012 and 2011 of our
Company
6
-
Term Description
which were prepared in accordance with Indian GAAP and the
Companies
Act) and restated in accordance with the SEBI Regulations
Retail Discount Discount of [●]% (equivalent of ` [●]) to the
Issue Price given to Retail
Individual Bidders
Retail Individual Bidders/ RIBs Individual Bidders who have Bid
for the Equity Shares for an amount not
more than `200,000 in any of the bidding options in the Issue
(including HUFs
applying through their Karta and Eligible NRIs and does not
include NRIs
other than Eligible NRIs)
Retail Portion The portion of the Issue being less than 35% of
the Issue consisting of [●]
Equity Shares which shall be available for allocation to Retail
Individual
Bidder(s) in accordance with the SEBI Regulations
Revision Form Form used by the Bidders to modify the quantity of
the Equity Shares or the
Bid Amount in any of their ASBA Forms or any previous Revision
Forms.
QIB Bidders and Non-Institutional Bidders are not allowed to
withdraw or
lower their Bids (in terms of number of Equity Shares or the Bid
Amount) at
any stage. Retail Individual Bidders can revise their Bids
during the Bid/Issue
Period and withdraw their Bids until the Bid/Issue Closing
Date
Self Certified Syndicate
Bank(s) or SCSB(s)
Banks registered with SEBI, offering services in relation to
ASBA, a list of
which is available on the website of SEBI at
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1365051213899.html
Selling Shareholders The Promoter Selling Shareholders and the
Investor Selling Shareholder
Share Escrow Agent Escrow agent appointed pursuant to the Share
Escrow Agreement, being, [●]
Share Escrow Agreement The agreement dated [●] entered into
between our Company, the Selling
Shareholders, the BRLMs and the Share Escrow Agent in connection
with the
transfer of Equity Shares under the Offer for Sale by the
Selling Shareholders
and credit of such Equity Shares to the demat accounts of the
Allottees
Specified Locations Bidding centres where the Syndicate shall
accept ASBA Forms from Bidders
Stock Exchanges BSE Limited and the National Stock Exchange of
India Limited
Syndicate Agreement The agreement dated [●], entered into
between the BRLMs, the Syndicate
Members, our Company, the Selling Shareholders and Registrar to
the Issue in
relation to collection of Bid cum Application Forms by the
Syndicate
Syndicate The BRLMs and the Syndicate Members
Syndicate Members Intermediaries, registered with SEBI who are
permitted to carry out activities
as an underwriter, being, [●]
Underwriters The BRLMs and the Syndicate Members
Underwriting Agreement The agreement dated [●] to be entered
into between the Underwriters, our
Company and the Selling Shareholders to be entered into on or
after the
Pricing Date
Working Day Any day, other than 2nd
and 4th
Saturday of the month, Sundays or public
holidays, on which commercial banks in Mumbai are open for
business,
provided however, that for the purpose of the time period
between the
Bid/Issue Closing Date and listing of the Equity Shares,
“Working Days” shall
mean all trading days of the Stock Exchanges, excluding Sundays
and holidays
for commercial banks in Mumbai
Technical/Industry Related Terms /Abbreviations
Term Description
AIBP Accelerated Irrigation Benefits Program
BOT Build, Operate and Transfer
BOT (Annuity) Annuity based BOT projects
BOT (Toll) Toll based BOT projects
CAD Command Area Development
COD Date of commencement of the commercial operation of
project
Construction Workers Act The Building and Other Construction
Workers (Regulation of Employment
and Conditions of Service) Act, 1996
DBFOT Design, Build, Finance, Operate and Transfer
7
-
Term Description
DBFOMT Design, Build, Finance, Operate, Maintain and
Transfer
EPC Engineering, Procurement and Construction
GST Goods and Services Tax
Minimum Wages Act The Minimum Wages Act, 1948
MoRTH The Ministry of Road Transport and Highways, Government of
India
MPRDC Madhya Pradesh Road Development Corporation Limited
NH National Highway
NH Act National Highways Act, 1956
NH Fee Rules National Highways Fee (Determination of Rates and
Collection) Rules, 2008
NHAI National Highways Authority of India
NHAI Act National Highways Authority of India Act, 1988
NHDP National Highways Development Project
O&M Operation and Maintenance
SPV Special Purpose Vehicle
Wages Act The Payment of Wages Act, 1936
Conventional and General Terms or Abbreviations
Term Description
AGM Annual General Meeting
AIF Alternative Investment Fund as defined in and registered
with SEBI under the
Securities and Exchange Board of India (Alternative Investments
Funds)
Regulations, 2012
AS/Accounting Standards Accounting Standards issued by the
Institute of Chartered Accountants of India
Axis Axis Capital Limited
Bn/bn Billion
BSE BSE Limited
CAGR Compounded Annual Growth Rate
Category I Foreign Portfolio
Investors
FPIs who are registered with SEBI as “Category I foreign
portfolio investors”
under the SEBI FPI Regulations
Category II Foreign Portfolio
Investors
FPIs who are registered with SEBI as “Category II foreign
portfolio investors”
under the SEBI FPI Regulations
Category III Foreign Portfolio
Investors
FPIs who are registered with SEBI as “Category III foreign
portfolio investors”
under the SEBI FPI Regulations
CDSL Central Depository Services (India) Limited
CENVAT Central Value Added Tax
CESTAT Customs, Excise and Service Tax Appellate Tribunal
CIN Corporate Identity Number
CIT Commissioner of Income Tax
Cess Act Building and Other Construction Workers Welfare Cess
Act, 1996
Companies Act Companies Act, 1956 and/or the Companies Act,
2013, as applicable
Companies Act, 1956 Companies Act, 1956, as amended (without
reference to the provisions thereof
that have ceased to have effect upon the notification of the
Notified Sections)
Companies Act, 2013 The Companies Act, 2013, to the extent in
force pursuant to the notification of
the Notified Sections
CLRA Contract Labour (Regulation and Abolition) Act,1979
C.P.C Civil Procedure Code, 1908
Cr.P.C Criminal Procedure Code, 1973
Depositories NSDL and CDSL
Depositories Act The Depositories Act, 1996
DIPP Department of Industrial Policy and Promotion, Ministry of
Commerce and
Industry, Government of India
DIN Director Identification Number
EGM Extraordinary General Meeting
EPS Earnings Per Share
ESI Act Employee State Insurance under the Employees State
Insurance Act, 1948
FCNR Foreign Currency Non-Resident
8
-
Term Description
FDI Foreign Direct Investment
FDI Policy Consolidated Foreign Direct Investment Policy
notified by DIPP by
notification D/o IPP F. No. 5(1)/2015-FC-1 dated May 12, 2015,
effective
from May 12, 2015
FEMA Foreign Exchange Management Act, 1999, read with rules and
regulations
thereunder
FEMA Regulations Foreign Exchange Management (Transfer or Issue
of Security by a Person
Resident Outside India) Regulations, 2000 and amendments
thereto
FII(s) Foreign Institutional Investors as defined under the SEBI
FPI Regulations
FPI(s) A foreign portfolio investor as defined under the SEBI
FPI Regulations
Financial Year/Fiscal/FY The period of 12 months ending March 31
of that particular year
FIPB Foreign Investment Promotion Board
FIR First Information Report
FVCI Foreign venture capital investors as defined and registered
under the SEBI
FVCI Regulations
GDP Gross Domestic Product
GIR General Index Register
GoI or Government Government of India
HUF Hindu Undivided Family
ICAI The Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards
IIFL IIFL Holdings Limited
Income Tax Act The Income Tax Act, 1961
India Republic of India
Indian GAAP Generally Accepted Accounting Principles in
India
IPC Indian Penal Code, 1860
IPO Initial Public Offering
IRDAI Insurance Regulatory and Development Authority of
India
IST Indian Standard Time
IT Information Technology
JM Financial JM Financial Institutional Securities Limited
LIBOR London Interbank Offered Rate
MICR Magnetic Ink Character Recognition
Mn Million
N.A./NA Not Applicable
NAV Net Asset Value
NECS National Electronic Clearing Services
NEFT National Electronic Fund Transfer
Notified Sections The sections of the Companies Act, 2013 that
have been notified by the
Ministry of Corporate Affairs, Government of India
NRE Account Non Resident External Account
NRI A person resident outside India, who is a citizen of India
or a person of Indian
origin, and shall have the meaning ascribed to such term in the
Foreign
Exchange Management (Deposit) Regulations, 2000
NRO Account Non Resident Ordinary Account
NSDL National Securities Depository Limited
NSE The National Stock Exchange of India Limited
OCB/Overseas Corporate Body A company, partnership, society or
other corporate body owned directly or
indirectly to the extent of at least 60% by NRIs including
overseas trusts, in
which not less than 60% of beneficial interest is irrevocably
held by NRIs
directly or indirectly and which was in existence on October 3,
2003 and
immediately before such date had taken benefits under the
general permission
granted to OCBs under FEMA. OCBs are not allowed to invest in
the Issue
p.a. Per annum
P/E Ratio Price/Earnings Ratio
PAN Permanent Account Number
PAT Profit After Tax
9
-
Term Description
PNBISL PNB Investment Services Limited
RBI The Reserve Bank of India
RoC Registrar of Companies, Madhya Pradesh situated at 3rd
Floor, 'A' Block,
Sanjay Complex, Jayendra Ganj, Gwalior, Madhya Pradesh
RoNW Return on Net Worth
`/Rs./Rupees/INR Indian Rupees
RTGS Real Time Gross Settlement
SCRA Securities Contracts (Regulation) Act, 1956
SCRR Securities Contracts (Regulation) Rules, 1957
SEBI The Securities and Exchange Board of India constituted
under the SEBI Act,
1992
SEBI Act Securities and Exchange Board of India Act, 1992
SEBI AIF Regulations Securities and Exchange Board of India
(Alternative Investments Funds)
Regulations, 2012
SEBI FII Regulations Securities and Exchange Board of India
(Foreign Institutional Investors)
Regulations, 1995
SEBI FPI Regulations Securities and Exchange Board of India
(Foreign Portfolio Investors)
Regulations, 2014
SEBI FVCI Regulations Securities and Exchange Board of India
(Foreign Venture Capital Investors)
Regulations, 2000
SEBI Listing Regulations Securities and Exchange Board of India
(Listing Obligations and Disclosure
Requiements) Regulations, 2015
SEBI Regulations Securities and Exchange Board of India (Issue
of Capital and Disclosure
Requirements) Regulations, 2009
SEBI VCF Regulations Securities and Exchange Board of India
(Venture Capital Fund) Regulations,
1996
Securities Act United States Securities Act of 1933
SICA Sick Industrial Companies (Special Provisions) Act,
1985
Sq. ft. Square feet
STT Securities Transaction Tax
State Government The government of a state in India
Stock Exchanges The BSE and the NSE
Takeover Regulations Securities and Exchange Board of India
(Substantial Acquisition of Shares and
Takeovers) Regulations, 2011
U.K. United Kingdom
U.S./U.S.A/United States United States of America
US GAAP Generally Accepted Accounting Principles in the United
States of America
USD/US$ United States Dollars
VAS Value Added Services
VAT Value Added Tax
VCFs Venture Capital Funds as defined in and registered with
SEBI under the SEBI
VCF Regulations or the SEBI AIF Regulations, as the case may
be
10
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PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
Certain Conventions
All references in this Draft Red Herring Prospectus to “India”
are to the Republic of India and all references to
the “U.S.”, “U.S.A” or “United States” are to the United States
of America.
Unless stated otherwise, all references to page numbers in this
Draft Red Herring Prospectus are to the page
numbers of this Draft Red Herring Prospectus.
Financial Data
Unless stated otherwise, the financial information in this Draft
Red Herring Prospectus is derived from our
Restated Financial Statements.
In this Draft Red Herring Prospectus, any discrepancies in any
table between the total and the sums of the
amounts listed are due to rounding off. All figures in decimals
have been rounded off to the second decimal and
all percentage figures have been rounded off to one decimal
place.
Our Company’s financial year commences on April 1 and ends on
March 31 of the next year; accordingly, all
references to a particular financial year, unless stated
otherwise, are to the 12 month period ended on March 31
of that year.
There are significant differences between Indian GAAP, U.S. GAAP
and IFRS. Our Company does not provide
reconciliation of its financial information to IFRS or U.S.
GAAP. Our Company has not attempted to explain
those differences or quantify their impact on the financial data
included in this Draft Red Herring Prospectus
and it is urged that you consult your own advisors regarding
such differences and their impact on our financial
data. For further details, please see the section entitled “Risk
Factors – Significant differences exist between
Indian GAAP and other accounting principles with which investors
may be more familiar” on page 49.
Accordingly, the degree to which the financial information
included in this Draft Red Herring Prospectus will
provide meaningful information is entirely dependent on the
reader’s level of familiarity with Indian accounting
policies and practices, the Companies Act, the Indian GAAP and
the SEBI Regulations. Any reliance by persons
not familiar with Indian accounting policies and practices on
the financial disclosures presented in this Draft
Red Herring Prospectus should accordingly be limited.
Unless the context otherwise indicates, any percentage amounts,
as set forth in the sections entitled “Risk
Factors”, “Our Business”, “Management’s Discussion and Analysis
of Financial Conditional and Results of
Operations” on pages 14, 139 and 374, respectively, and
elsewhere in this Draft Red Herring Prospectus have
been calculated on the basis of our Restated Financial
Statements.
Currency and Units of Presentation
All references to:
“Rupees” or “`” or “INR” or “Rs.” are to Indian Rupee, the
official currency of the Republic of India;
“USD” or “US$” are to United States Dollar, the official
currency of the United States; and
Our Company has presented certain numerical information in this
Draft Red Herring Prospectus in “million”
units. One million represents 1,000,000 and one billion
represents 1,000,000,000.
Exchange Rates
This Draft Red Herring Prospectus contains conversion of certain
other currency amounts into Indian Rupees
that have been presented solely to comply with the SEBI
Regulations. These conversions should not be
construed as a representation that these currency amounts could
have been, or can be converted into Indian
Rupees, at any particular rate.
The following table sets forth, for the periods indicated,
information with respect to the exchange rate between
the Rupee and the US$ (in Rupees per US$):
11
-
(Amount in `, unless otherwise specified)
Currency As on March
31, 2011
As on March
31, 2012
As on March
31, 2013
As on March
31, 2014
As on March
31, 2015
As on
September 30,
2015
1 US$ 44.65 51.16(1)
54.39(2)
60.10(3)
62.59 65.74 Source: RBI Reference Rate (1) Exchange rate as on
March 30, 2012, as RBI Reference Rate is not available for March
31, 2012 being a Saturday. (2) Exchange rate as on March 28, 2013,
as RBI Reference Rate is not available for March 31, 2013, March
30, 2013 and March 29,
2013 being a Sunday, Saturday and a public holiday,
respectively. (3) Exchange rate as on March 28, 2014, as RBI
Reference Rate is not available for March 31, 2014, March 30, 2014
and March 29,
2014 being a public holiday, a Sunday and a Saturday,
respectively.
Industry and Market Data
Unless stated otherwise, industry and market data used in this
Draft Red Herring Prospectus has been obtained
or derived from publicly available information as well as
industry publications, ‘Roads and Highway, Annual
Review October 2015’ issued by CRISIL Research, a division of
CRISIL Limited and other sources.
Industry publications generally state that the information
contained in such publications has been obtained from
publicly available documents from various sources believed to be
reliable but their accuracy and completeness
are not guaranteed and their reliability cannot be assured.
Accordingly, no investment decisions should be based
on such information. Although we believe the industry and market
data used in this Draft Red Herring
Prospectus is reliable, it has not been independently verified
by us or the BRLMs or any of their affiliates or
advisors. The data used in these sources may have been
re-classified by us for the purposes of presentation. Data
from these sources may also not be comparable.
The extent to which the market and industry data used in this
Draft Red Herring Prospectus is meaningful
depends on the reader’s familiarity with and understanding of
the methodologies used in compiling such data.
There are no standard data gathering methodologies in the
industry in which business of our Company is
conducted, and methodologies and assumptions may vary widely
among different industry sources.
In accordance with the SEBI Regulations, the section entitled
“Basis for the Issue Price” on page 101 includes
information relating to our peer group companies. Such
information has been derived from publicly available
sources, and neither we, nor the BRLMs have independently
verified such information.
12
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FORWARD-LOOKING STATEMENTS
This Draft Red Herring Prospectus contains certain
“forward-looking statements”. These forward-looking
statements generally can be identified by words or phrases such
as “aim”, “anticipate”, “believe”, “expect”,
“estimate”, “intend”, “objective”, “plan”, “project”, “will”,
“will continue”, “will pursue” or other words or
phrases of similar import. Similarly, statements that describe
our strategies, objectives, plans, prospects or goals
are also forward-looking statements. All forward-looking
statements are subject to risks, uncertainties and
assumptions about us that could cause actual results to differ
materially from those contemplated by the relevant
forward-looking statement.
Actual results may differ materially from those suggested by the
forward-looking statements due to risks or
uncertainties associated with the expectations with respect to,
but not limited to, regulatory changes pertaining
to the industries in India in which our Company operates and our
ability to respond to them, our ability to
successfully implement our strategy, our growth and expansion,
technological changes, our exposure to market
risks, general economic and political conditions in India which
have an impact on its business activities or
investments, the monetary and fiscal policies of India,
inflation, deflation, unanticipated turbulence in interest
rates, foreign exchange rates, equity prices or other rates or
prices, the performance of the financial markets in
India and globally, changes in domestic laws, regulations and
taxes and changes in competition in the industries
in which we operate. Important factors that could cause actual
results to differ materially from our Company’s
expectations include, but are not limited to, the following:
General economic and business conditions and level of investment
and activity in the infrastructure development and construction
sector;
Inability to identify or acquire new projects or win bids for
new projects;
Changes in Government policies and budgetary allocations for
investments in road infrastructure;
Delays, modifications or cancellations of projects included in
our order book and our future projects;
Lower than expected returns on our investment in BOT projects;
and
Ability to obtain financing in order to meet our capital
expenditure requirements and pursue our growth strategy.
For further discussion of factors that could cause the actual
results to differ from the expectations, please see the
sections entitled “Risk Factors”, “Our Business” and
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations” on pages 14, 139 and 374,
respectively. By their nature, certain market
risk disclosures are only estimates and could be materially
different from what actually occurs in the future. As a
result, actual gains or losses could materially differ from
those that have been estimated.
We cannot assure Bidders that the expectations reflected in
these forward-looking statements will prove to be
correct. Given these uncertainties, Bidders are cautioned not to
place undue reliance on such forward-looking
statements and not to regard such statements as a guarantee of
future performance.
Forward-looking statements reflect the current views of our
Company as of the date of this Draft Red Herring
Prospectus and are not a guarantee of future performance. These
statements are based on the management’s
beliefs and assumptions, which in turn are based on currently
available information. Although we believe the
assumptions upon which these forward-looking statements are
based are reasonable, any of these assumptions
could prove to be inaccurate, and the forward-looking statements
based on these assumptions could be incorrect.
Neither our Company, our Directors, the Selling Shareholders,
the BRLMs nor any of their respective affiliates
have any obligation to update or otherwise revise any statements
reflecting circumstances arising after the date
hereof or to reflect the occurrence of underlying events, even
if the underlying assumptions do not come to
fruition. In accordance with SEBI requirements, our Company and
BRLMs will ensure that the Bidders in India
are informed of material developments until the time of the
grant of listing and trading permission by the Stock
Exchanges. Each of the Selling Shareholders will severally
ensure that Bidders are informed of material
developments in relation to statements and undertakings made by
him/it, in this Draft Red Herring Prospectus
until the time of the grant of listing and trading permission by
the Stock Exchanges.
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SECTION II: RISK FACTORS
An investment in the Equity Shares involves a high degree of
risk. Investors should carefully consider all the
information in this Draft Red Herring Prospectus, including the
risks and uncertainties described below, before
making an investment in the Equity Shares. The risks and
uncertainties described in this section are not the only
risks that we currently face. Additional risks and uncertainties
not currently known to us or that are currently
believed to be immaterial may also have an adverse impact on our
business, results of operations and financial
condition. If any of the following risks, or other risks that
are not currently known or are currently deemed
immaterial, actually occur, our business, results of operations
and financial condition could be materially and
adversely affected and the price of the Equity Shares could
decline, causing the investors to lose part or all of
the value of their investment in the Equity Shares. The
financial and other related implications of the risk
factors, wherever quantifiable, have been disclosed in the risk
factors mentioned below. However, there are
certain risk factors where the financial impact is not
quantifiable and, therefore, cannot be disclosed in such
risk factors.
To obtain a complete understanding, prospective investors should
read this section in conjunction with the
sections entitled “Our Business” and “Management’s Discussion
and Analysis of Financial Condition and
Results of Operations” on pages 139 and 374, respectively, as
well as the other financial and statistical
information contained in this Draft Red Herring Prospectus. The
financial information in this section is derived
from our Restated Financial Statements for the five Financial
Years ended March 31, 2015 and the six months
ended September 30, 2015.
Internal Risk Factors
Risks Relating to our Business
1. There are certain criminal proceedings pending against our
Company, our Promoters and certain Directors and employees.
There are certain criminal proceedings pending against our
Company, our Promoters and certain
Directors which are pending at different levels of adjudication
before various courts. The amounts
claimed in these proceedings have been disclosed to the extent
ascertainable and quantifiable, and
include amounts jointly and severally from our Company and other
parties. There are seven criminal
cases pending against our Company, Promoters and Directors.
Also, there are various criminal cases
pending against our employees in relation to road accidents,
under various sections of the IPC and any
adverse outcome in these cases could have a material adverse
impact on the position of our Company
These proceedings may have a significant impact on our corporate
image, reputation, client
relationships and chances of undertaking new projects, divert
the attention of our management and
Promoters and waste our corporate resources. If we are unable to
neutralize the impact of these
proceedings effectively or efficiently, we may suffer damage to
our reputation and relationships with
our clients, lenders, suppliers and communities and experience
significant project delays or cost
overruns. Our business, prospects, financial condition and
results of operation could be materially and
adversely affected as a result. For details in relation to
certain material litigation, please see the section
entitled “Outstanding Litigation and Material Developments” on
page 399.
2. There are outstanding legal proceedings against our Company,
certain of its Directors, its Promoters, Subsidiaries and its Joint
Ventures, which may adversely affect our business, financial
condition and results of operations.
There are outstanding legal proceedings against us that are
incidental to our business and operations,
including certain criminal proceedings against our Company,
certain of its Directors, its Promoters and
its Subsidiaries and Joint Ventures. These proceedings are
pending at different levels of adjudication
before various courts, tribunals, enquiry officers and appellate
tribunals. Such proceedings could divert
management time and attention, and consume financial resources
in their defense. Further, an adverse
judgment in some of these proceedings could have an adverse
impact on our business, financial
condition and results of operations. Additionally, some
properties on which we are developing projects
are subject to litigation.
A summary of the outstanding legal proceedings against our
Company, its Directors, its Promoters, and
its Subsidiaries and Joint Ventures as disclosed in this Draft
Red Herring Prospectus along with the
amount involved, to the extent quantifiable, have been set out
below (excluding certain cases against
14
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our Company for traffic accidents caused by our drivers that
occurred during the ordinary course of our
business):
Litigation against our Company
Sr. No. Nature of Case Number of Outstanding Cases Amount
involved(1)
(in ` million) 1. Criminal 3(2) Non-quantifiable
2. Civil 178 765.55
3. Actions taken by statutory and regulatory authorities
16 315.55
4. Labour 21 7.78
5. Taxation matters 4 48.99(3)(4) (1) Approximate amounts
involved, may vary due to any penalty or interest. (2) Excluding
151 criminal cases filed against the employees of our Company. (3)
` 10,000 per assessment year from 2007-2008 to 2013-2014. (4) This
amount does not include amounts deposited with the Income Tax
Settlement Commission.
Litigation against the Directors
Sr. No. Nature of Case Number of Outstanding Cases Amount
involved(1)
(in ` million) Dilip Suryavanshi
(2)
1. Criminal 1 Non-quantifiable
2. Civil 1 1.68
3. Actions taken by statutory and regulatory authorities
3 2.47
4. Taxation matters 1 0.07(3)(4)
Seema Suryavanshi(2)
1. Criminal 1 Non-quantifiable
2. Taxation matters 1 0.07(3)(4)
Devendra Jain(2)
1. Criminal 1 Non-quantifiable
2. Civil 2 -
3. Actions taken by statutory and regulatory authorities
1 -
4. Taxation matters 1 23.52
Naval Jawaharlal Totla
1. Taxation matters 1 6.09(5)
Amogh Kumar Gupta
1. Criminal 1 Non-quantifiable (1) Approximate amounts involved,
may vary due to any penalty or interest (2) Also the Promoters of
our Company. (3) ` 10,000 per assessment year from 2007-2008 to
2013-2014. (4) This amount does not include amounts deposited with
the Income Tax Settlement Commission. (5) Additions in income made
in the assessment order.
Litigation against the Subsidiaries and Joint Ventures
Sr.
No.
Nature of Case Number of Outstanding Cases Amount
involved(1)
(in ` million) 1. Civil 4 0.06
2. Arbitration 2 459.51 (1) Approximate amounts involved, may
vary due to any penalty or interest
Litigation against the Group Companies
Sr.
No.
Nature of Case Number of Outstanding Cases Amount
involved(1)
(in ` million) 1. Civil 1 0.50
2. Arbitration 1 -
15
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Sr.
No.
Nature of Case Number of Outstanding Cases Amount
involved(1)
(in ` million) 3. Taxation matters 1 6.07
(1) Approximate amounts involved, may vary due to any penalty or
interest
We cannot assure you that any of these proceedings will be
decided in favour of us, our Promoters, our
Directors, our Subsidiaries or our Joint Ventures or that no
further liability will arise out of these
proceedings. Further, the amounts claimed in these proceedings
have been disclosed to the extent
ascertainable, excluding contingent liabilities and include
amounts claimed. Should any new
developments arise, such as a change in Indian law or rulings by
appellate courts or tribunals,
additional provisions may need to be made by us, our Promoters,
our Directors, our Subsidiaries or our
Joint Ventures in our respective financial statements, which may
adversely affect our business,
financial condition and reputation. For further details of
outstanding litigation against us, our Directors,
our Promoters, our Subsidiaries or our Joint Ventures, please
see the section entitled “Outstanding
Litigation and Material Developments” on page 399.
3. Our Company and certain of our Promoters and Directors have
been subject to search and seizure operations conducted by the
Indian income tax authorities. Any adverse determination by the
tax
authorities in this matter could increase our tax liability and
subject us to monetary penalties.
Search and seizure proceedings were initiated by the Income Tax
Department on June 20, 2012 against
our Company and certain of our Subsidiaries, Promoters,
Directors, Promoter Group entities and Group
Companies (the “Income Tax Search and Seizure Proceedings”).
Pursuant to the Income Tax Search
and Seizure Proceedings, the Deputy Commissioner of Income Tax,
Central, Bhopal issued notices
under Section 153A of the Income Tax Act, 1961 for assessment
years 2007-08 to 2012-13 on
December 27, 2012, and a notice under Section 143(2) of the
Income Tax Act, 1961, for assessment
year 2013-14 on September 10, 2014 against our Company and
certain of our Subsidiaries, Promoters,
Directors, Promoter Group entities and Group Companies. Our
Company has filed a response to the
assessing officer on December 17, 2013, stating that return of
income filed under Section 139(1) of the
Income Tax Act, 1961, for the assessment years 2007-08, 2009-10,
2010-11, 2011-12, and 2012-13,
shall be considered as return of income filed under section 153A
of the Income Tax Act, 1961. Our
Company and two of our Promoters, Dilip Suryavanshi and Seema
Suryavanshi have filed settlement
applications under Section 245C (1) of the Income Tax Act, 1961
along with fresh computation of
incomes before the Income Tax Settlement Commission, Additional
Bench, Mumbai (the “Settlement
Commission”) on March 12, 2015. Our Company, Dilip Suryavanshi
and Seema Suryavanshi have
deposited amounts aggregating ` 71.00 million, ` 107.20 million
and ` 8.80 million, respectively, towards the proposed settlement.
These settlement applications are currently pending before the
Principal Bench, Income Tax Settlement Commission, New Delhi. It
has come to our knowledge that
the Principal Commissioner of Income Tax (Central) Bhopal has
filed a writ petition against Seema
Suryavanshi, Dilip Suryavanshi and our Company challenging the
afore said order dated May 13,
2015; however, neither we nor Seema Suryavanshi or Dilip
Suryavanshi have received any notice in
this regard. The aforesaid writ petition may have a material
adverse effect on the position of our
Company, which we are unable to ascertain as of date of this
Draft Red Herring Prospectus. For details,
please see section entitled “Outstanding Litigation and Material
Developments” on pages 406 - 407.
There can be no assurance that the Settlement Commission will
accept the settlement terms proposed
by our Company, Dilip Suryavanshi and Seema Suryavanshi, and
that there will be no additional tax
liability imposed on our Company, Dilip Suryavanshi or Seema
Suryavanshi. Further, there can be no
assurance that any settlement order passed by the Settlement
Commission will not be challenged by the
Income Tax department. Any adverse determination in such
proceedings may have a material adverse
effect on our financial condition, cash flows, and results of
operations.
4. Our contingent liabilities that have not been provided for
could adversely affect our business, cash flows, financial
condition and results of operations.
We usually need to provide performance guarantees when we
undertake construction projects, which
are often demanded by our clients to protect them against
potential defaults by us. We are also often
required to have our lenders issue letters of credit in favour
of our suppliers for purchases of equipment
and raw materials. We thus may have substantial contingent
liabilities from time to time depending on
the projects we undertake and the amount of our purchases. As of
September 30, 2015, the following
contingent liabilities, on a standalone and on a consolidated
basis, were not provided for in our
Restated Financial Statements:
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(` in million)
As of September 30,
2015
(on a consolidated
basis)
As of September 30,
2015
(on a standalone
basis)
Income Tax matters 0.03 -
Sales Tax/VAT/Other Indirect Taxes matters
(Appeal filed for the year 2008-09)
15.66 15.66
Corporate guarantee given by our Company to
banks for facilities provided to subsidiary
companies.
5,455.13 5,455.13
Bank guarantees issued by bankers in favor of
third parties.
20,133.68 20,133.68
Claims against our Company not acknowledged
as debts
160.97 160.97
Liability arising on account of application made
to the Income Tax Settlement Commission
Amount not
ascertainable
Amount not
ascertainable Note: Future cash outflows, if any, in respect of
the above are dependent upon the outcome of future events, etc. Our
Company
does not expect any reimbursements in respect of above
contingent liabilities.
The aggregate contingent liabilities (to the extent
ascertainable) were ` 25,765.47 million and ` 25,765.44 million as
compared to a net worth of ` 9,146.12 million and ` 9,903.36
million on a
restated consolidated and unconsolidated basis, respectively, in
each case as of September 30, 2015.
If a project is not completed or the required payments are not
made on time, the relevant performance
guarantees or letters of credit may be enforced. If any of these
contingent liabilities materialize, we
may have to fulfil our payment obligations, which may have an
adverse impact on our cash flows,
financial conditions and results of operations. For further
details, see the section entitled “Financial
Statements” on page 222.
5. Projects included in our order book and our future projects
may be delayed, modified or cancelled for reasons beyond our
control which may materially and adversely affect our business,
prospects,
reputation, profitability, financial condition and results of
operation.
As of September 30, 2015, our order book was ` 103,323.84
million. Our order book sets forth our
expected revenues from uncompleted portions of the construction
contracts received. However, project
delays, modifications in the scope or cancellations may occur
from time to time due to either a client’s
or our default, incidents of force majeure or legal impediments.
For example, in some of our projects,
we or our clients are obliged to take certain actions, such as
acquiring land, securing right of way,
clearing forests, securing required licenses, authorizations or
permits, making advance payments or
opening of letters of credit or moving existing utilities, which
may be delayed due to our client’s non-
performance, our own breaches or force majeure factors. In an
EPC project, we may incur significant
additional costs due to project delays and our counterparties
may seek liquidated damages due to our
failure to complete the required milestones or even terminate
the construction contract totally or refuse
to grant us any extension. The schedule of completion may need
to be reset and we may not be able to
recognize revenue if the required percentage of completion is
not achieved in the specified timeframe.
In a BOT project, such delays may result in our payment of
damages to the other parties, the client’s
invocation of our performance security and consequential delays
in our receipt of annuities and/or
collection of tolls in our BOT projects.
We may not have the full protection in our construction
contracts or concession agreements against
such delays or associated liabilities and/or additional costs.
Further, we have escalation clauses in some
of our contracts, which, may be interpreted restrictively by our
counterparties, who may dispute our
claims for additional costs. As a result, our future earnings
may be different from the amount in the
order book. Our contracts may be amended, delayed or cancelled
before work commences or during the
course of construction. Due to unexpected changes in a projects
scope and schedule, we cannot predict
with certainty when or if expected revenues as reflected in the
order book will be achieved. In addition,
even where a project proceeds as scheduled, it is possible that
contracting parties may default and fail
to pay amounts owed or receivables due. If any or all of these
risks materialize, our business, prospects,
reputation, profitability, financial condition and results of
operation may be materially and adversely
affected.
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6. If we are not successful in managing our growth, our business
may be disrupted and our profitability may be reduced.
We have experienced high growth in recent years and expect our
businesses to continue to grow
significantly. We achieved a CAGR of 58.44% of revenue growth on
a consolidated basis for the five-
year period ended March 31, 2015. Our future growth is subject
to risks arising from a rapid increase in
order volume, and inability to retain and recruit skilled staff.
Although we plan to continue to expand
our scale of operations through organic growth or investments in
other entities, we may not grow at a
rate comparable to our growth rate in the past, either in terms
of income or profit.
Our future growth may place significant demands on our
management and operations and require us to
continuously evolve and improve our financial, operational and
other internal controls within our
Group. In particular, continued expansion may pose challenges
in:
maintaining high levels of project control and management, and
client satisfaction;
recruiting, training and retaining sufficient skilled
management, technical and bidding personnel;
developing and improving our internal administrative
infrastructure, particularly our financial, operational,
communications, internal control and other internal systems;
making accurate assessments of the resources we will
require;
adhering to the standards of health, safety and environment and
quality and process execution to meet clients’ expectations;
operating in jurisdictions and business segments where we have
limited experience;
preserving a uniform culture, values and work environment;
strengthening internal control and ensuring compliance with
legal and contractual obligations;