Empee Distilleries Limited
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C M Y K Prospectus Please read Section 60B of the Companies Act, 1956 Dated: November 10, 2007 100% Book Building Issue EMPEE DISTILLERIES LIMITED (Our Company was originally incorporated as a Private Limited Company in the name of Empee Distilleries Private Limited on September 15, 1983 under the Companies Act, 1956 with the Registration Number: 10313. We subsequently changed the name of our Company to Empee Distilleries Limited with effect from December 01, 1983 under the provisions of Section 44 of the Companies Act, 1956) Registered Office: 693, Mount Road, Chennai, Tamil Nadu, - 600006 Tel: + 91 44 28297111; Fax: +91 44 27156231; E-mail: [email protected] Website: www.empeegroup.co.in Corporate Office: Empee Tower, 59, Harris Road, Pudupet, Chennai, Tamil Nadu - 600002 Tel: +91 44 2852 2510 Fax: +91 44 2855 5163; E-mail: [email protected] ; Website: www.empeegroup.co.in Contact Person / Compliance Officer: Mr. N.S. Suryanarayanan, Company Secretary & Vice President (Corporate Affairs) Tel: + 91 44 2852 2510; Fax: +91 44 2855 5163 Email: [email protected] PUBLIC ISSUE OF 48,00,000 EQUITY SHARES OF RS. 10/- EACH AT A PRICE OF RS. 400 PER EQUITY SHARE FOR CASH AT A PREMIUM OF RS. 390 PER EQUITY SHARE AGGREGATING TO RS. 19200 LAKHS (HEREINAFTER REFERRED TO AS THE "ISSUE") BY EMPEE DISTILLERIES LIMITED ('THE COMPANY" OR THE "ISSUER"). THE ISSUE WILL CONSTITUTE 25.26% OF THE POST ISSUE PAID-UP CAPITAL OF THE COMPANY. THE ISSUE PRICE IS 40 TIMES THE FACE VALUE OF RS. 10/- This Issue is being made through a 100% Book Building Process wherein not more than 50% of the Issue to Public shall be available for allocation on a proportionate basis to Qualified Institutional Buyers ("QIBs"). 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only. Further, not less than 15% of the Issue to Public shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 35% of the Issue to Public shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at or above the Issue Price. In case of revision in the Price Band, the Bidding/Issue Period shall be extended for 3 additional working days after such revision, subject to the Bidding / Issue Period not exceeding 10 working days. Any revision in the Price Band, and the revised Bidding/Issue Period, if applicable, shall be widely disseminated by notification to the Bombay Stock Exchange Limited and National Stock Exchange of India Limited, by issuing a press release and by indicating the change on the websites of the Book Running Lead Manager ("BRLM") and the terminals of the member of the Syndicate. RISK IN RELATION TO THE FIRST ISSUE This being the first issue of Equity Shares of Empee Distilleries Limited ("the Issuer"), there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares of the Company is Rs. 10/- per Equity Share and the Issue Price is 40 times of the face value. The issue Price (as determined and justified by the Company in consultation with the Book Running Lead Managers, on the basis of assessment of market demand for the Equity Shares by way of Book Building) 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 and / or sustained trading in the Equity Shares of the Company nor 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 this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issuing. For taking an investment decision, investors must rely on their own examination of the issuer and the Issue including the risks involved. The Equity Shares Issued 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 this Prospectus. Specific attention of the investors is invited to the section titled 'Risk Factors' beginning on page no. iii of this Prospectus. ISSUER'S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to the issuer and the issue, which is material in the context of the issue, that the information contained in this 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 Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The Equity Shares Issued through this Prospectus are proposed to be listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE). The in-principle approvals of NSE and BSE for the listing of the Equity Shares of the Company have been received pursuant to letters dated August 7, 2007 and June 29, 2007 respectively. BSE shall be the Designated Stock Exchange for the purpose of this Issue. IPO GRADING The Issue has been graded by CARE. CARE has assigned IPO Grade 3 to the Initial Public Offering of the Company. For more information on IPO Grading, please refer to page no. 12 of this Prospectus. BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUE Almondz Global Securities Limited Cameo Corporate Services Limited (formerly Allianz Securities Limited) Subramanian Building, No.1, Club House Road 3, Scindia House, 2nd Floor, Janpath, New Delhi- 110001 Chennai - 600 002 Phone: +91 11 41514666; Fax: +91 11 41514665 Ph: +91 44 28460390 Email: [email protected] Fax: +91 44 28460129 Investor Email Id: [email protected] E-mail: [email protected] Website: www.almondzglobal.com Website: www.cameoindia.com Contact Person: Mr. Sunit Shangle Contact Person: Mr. R D Ramaswamy SEBI Registration No: MB/INM 000000834 SEBI Registration No: INR 000003753 BID / ISSUE PROGRAMME BID/ISSUE OPENED ON : THURSDAY, NOVEMBER 1, 2007 BID/ISSUE CLOSED ON : TUESDAY, NOVEMBER 6, 2007 C M Y K TABLE OF CONTENTS Page No. SECTION I: GENERAL Definitions ............................................................................................................................................................ a General / Conventional Terms ............................................................................................................................ a Issue Related Terms ............................................................................................................................................ b Company / Industry related terms ....................................................................................................................... f Abbreviations of General terms........................................................................................................................... g SECTION II: RISK FACTORS Certain Conventions; Use of market data ........................................................................................................... i Forward Looking Statements .............................................................................................................................. ii Risk factors ........................................................................................................................................................... iii SECTION III: INTRODUCTION Summary .............................................................................................................................................................. 1 The Issue .............................................................................................................................................................. 8 General Information ............................................................................................................................................. 9 Capital Structure .................................................................................................................................................. 16 Objects of the Issue ............................................................................................................................................. 26 Basis for Issue Price ............................................................................................................................................ 66 Statement of Tax Benefits .................................................................................................................................... 69 SECTION IV: ABOUT THE COMPANY Industry Overview ................................................................................................................................................ 74 Our Business ........................................................................................................................................................ 80 Regulations and Policies .................................................................................................................................... 101 History and Certain Corporate Matters ..............................................................................................................