Tara Jewels Limited

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Tara Jewels Limited DRAFT RED HERRING PROSPECTUS Dated December 30, 2011 PLEASE READ SECTION 60B OF THE COMPANIES ACT, 1956 Book Building Issue TARA JEWELS LIMITED Our Company was incorporated as a private limited company under the Companies Act, 1956 by the name “Tara Ultimo Private Limited” on March 16, 2001. Consequent to the merger of Tara Jewels Export Private Limited and T Two International Private Limited with our Company, as approved by the Bombay High Court by its order dated January 23, 2009, and resolution of our shareholders, the name of our Company was changed to “Tara Jewels Private Limited” and a fresh certificate of incorporation was granted by the Registrar of Companies, Mumbai (“ RoC ”) on March 25, 2009. Subsequently, the name of our Company was changed to “Tara Jewels Limited” and our Company was converted into a public limited company and a fresh certificate of incorporation consequent to change of name was granted on September 23, 2010 by the RoC. For further details in this regard, see section titled “ History and Certain Corporate Matters ” on page 126. Registered Office : Plot No. 122, 15th Road, Near IDBI Bank, MIDC, Andheri (East) Mumbai – 400 093, India Telephone : +91 22 6641 7777 ; Facsimile : +91 22 6641 7712 Corporate Office: Plot No. 29(P) & 30(P), Sub Plot A, SEEPZ, SEZ, Andheri (East) Mumbai – 400 096, India Telephone : +91 22 6677 4444; Facsimile : +91 22 6677 4464 Contact Person and Compliance Officer : Mr. Amol Raje; Telephone : +91 22 6677 4461; Facsimile : +91 22 6677 4464 E-mail : [email protected]; Websites: www.tarajewels.in and www.tarajewellers.in PROMOTER OF OUR COMPANY: MR. RAJEEV SHETH PUBLIC ISSUE OF UP TO [ ●] EQUITY SHARES OF FACE VALUE OF RS. 10 EACH (“EQUITY SHARES”) OF TARA JEWELS LIMITED (THE “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF RS. [ ●] PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF RS. [ ●] PER EQUITY SHARE, AGGREGATING UP TO RS. 2,200 MILLION (THE “ISSUE”) COMPRISING OF A FRESH ISSUE OF UP TO [ ●] EQUITY SHARES BY OUR COMPANY AGGREGATING UP TO RS. 1,500 MILLION (“FRESH ISSUE”) AND AN OFFER FOR SALE OF UP TO [●] EQUITY SHARES BY FABRIKANT H.K. TRADING LIMITED (“SELLING SHAREHOLDER”) AGGREGATING UP TO RS. 700 MILLION (“OFFER FOR SALE”). THE ISSUE INCLUDES A RESERVATION OF UP TO 1% OF THE ISSUE SIZE CONSTITUTING [●] EQUITY SHARES FOR THE ELIGIBLE EMPLOYEES (THE “EMPLOYEE RESERVATION PORTION”). THE ISSUE LESS THE EMPLOYEE RESERVATION PORTION IS REFERRED TO AS THE “NET ISSUE”. THE ISSUE AND THE NET ISSUE SHALL CONSTITUTE [●] % AND [●] % OF THE FULLY DILUTED POST-ISSUE PAID UP CAPITAL OF OUR COMPANY, RESPECTIVELY. Our Company is considering a private placement of up to 1,800,000 Equity Shares for cash consideration aggregating up to Rs. 500 million, at its discretion prior to filing of the Red Herring Prospectus with the RoC (" Pre-IPO Placement "). If the Pre-IPO Placement is completed, the number of Equity Shares issued and transferred pursuant to the Pre-IPO Placement will be proportionately reduced from the Fresh Issue, subject to the Net Issue being at least 25% of the fully diluted post-Issue paid up capital of the Company. THE FACE VALUE OF THE EQUITY SHARES IS RS. 10 EACH THE PRICE BAND AND THE MINIMUM BID LOT SIZE WILL BE DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDER, IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS AND WILL BE ADVERTISED AT LEAST TWO WORKING DAYS PRIOR TO THE BID OPENING DATE In case of any revision in the Price Band, the Bidding Period shall be extended for at least three additional Working Days after such revision of the Price Band, subject to the Bidding Period not exceeding 10 Working Days. Any revision in the Price Band, and the revised Bidding Period, if applicable, shall be widely disseminated by notification to the Self Certified Syndicate Banks (“SCSBs ”), the National Stock Exchange of India Limited (the “NSE ”) and the BSE Limited (the “BSE ”), by issuing a press release and also by indicating the change on the websites of the Book Running Lead Managers and at the terminals of the other members of the Syndicate. The Issue is being made through the Book Building Process in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (the “SEBI Regulations ”), wherein not more than 50% of the Net Issue shall be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs ”). Our Company may, in consultation with the Book Running Lead Managers, allocate up to 30% of the QIB Portion to Anchor Investors at the Anchor Investor Allocation Price, on a discretionary basis, out of which at least one-third will be available for allocation to domestic Mutual Funds only. In the event of under-subscription or non-allocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion. Such number of Equity Shares representing 5% of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to QIBs, subject to valid Bids being received from them at or above the Issue Price. However, if the aggregate demand from Mutual Funds is less than [ ●] Equity Shares, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the Net QIB Portion and allocated proportionately to QIBs in proportion to their Bids. Further, not less than 15% of the Net Issue shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 35% of the Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received from them at or above the Issue Price. Further, up to 1% of the Issue size, constituting [ ●] Equity Shares shall be available for allocation on a proportionate basis to Eligible Employees, subject to valid Bids being received at or above the Issue Price. All Investors other than Anchor Investors may participate in this Issue though the ASBA process by providing the details of their respective bank accounts in which the corresponding Bid Amounts will be blocked by the SCSBs. Specific attention is invited to section titled “ Issue Procedure ” on page 331. RISKS IN RELATION TO FIRST ISSUE This being the first public issue of the Issuer, there is no formal market for the Equity Shares. The face value of the Equity Shares is Rs. 10 each and the Floor Price is [●] times of the face value and the Cap Price is [ ●] times of the face value. The Issue Price (as determined and justified by our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers, as stated in section titled “ Basis for the Issue Price ” on page 81 should not be taken to be indicative of the market price of the Equity Shares after such Equity Shares are listed. No assurance can be given regarding an active and/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 this 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 this Issue. For taking an investment decision, investors must rely on their own examination of the Issuer and this Issue, including the risks involved. The Equity Shares 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 section titled “ Risk Factors ” on page x. ISSUER’S AND SELLING SHAREHOLDER’S 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 this Issue, which is material in the context of this 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, the Selling Shareholder, having made all reasonable inquiries, accepts responsibility for and confirms that the information relating to the Selling Shareholder contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect. IPO GRADING This Issue has been graded by [ ●] and has been assigned the “IPO Grade [ ●]/5” indicating [ ●] in its letter dated [ ●]. The IPO grading is assigned on a five point scale from 1 to 5 with “IPO Grade 5/5” indicating strong fundamentals and “IPO Grade 1/5” indicating poor fundamentals. For more information on IPO grading, see sections titled “ General Information ”, “Other Regulatory and Statutory Disclosures ” and “Material Contracts and Documents for Inspection ” on pages 51, 306 and 386 respectively. LISTING ARRANGEMENT The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on the NSE and the BSE. Our Company has received in-principle approvals from the NSE and the BSE for listing of the Equity Shares pursuant to their letters dated [•] and [•], respectively.
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