Idea Cellular Limited

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Idea Cellular Limited RED HERRING PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated January 25, 2007 100% BOOK BUILDING ISSUE IDEA CELLULAR LIMITED an Aditya Birla Group Company (Incorporated as Birla Communications Limited on March 14, 1995 under the Companies Act, 1956 and granted a certificate of commencement of business dated August 11, 1995. The name of the Company was subsequently changed to Birla AT&T Communications Limited pursuant to a fresh certificate of incorporation dated May 30, 1996. The name was subsequently changed to Birla Tata AT&T Limited pursuant to a fresh certificate of incorporation dated November 6, 2001. The name of the Company was further changed to Idea Cellular Limited pursuant to a fresh certificate of incorporation dated May 1, 2002.) Pursuant to a certificate of registration dated October 22, 1996 our registered office was transferred from Mumbai to Gandhinagar. (For further details see “Our History and Corporate Structure” on page 137 of this Red Herring Prospectus). Registered Office: Suman Tower, Plot No. 18, Sector-11, Gandhinagar – 382011 Tel: +91 79 6671 4000 Fax: + 91 79 2323 2251 Corporate Office: 11/1 Sharada Center, Off Karve Road, Erandwane, Pune – 411004 Tel: +91 98500 03222 Fax: +91 98500 03999 Contact person: A.J.S. Jhala Email: [email protected] Website: www.ideacellular.com PUBLIC ISSUE OF [●] EQUITY SHARES OF Rs. 10 EACH FOR CASH AT A PRICE OF Rs. [●] AGGREGATING Rs. 21,250 MILLION (HEREINAFTER REFERRED TO AS THE “ISSUE”). THERE IS A RESERVATION OF [●] EQUITY SHARES OF Rs. 10 EACH AGGREGATING Rs. 500 MILLION FOR THE ELIGIBLE EMPLOYEES OF THE COMPANY (“EMPLOYEE RESERVATION PORTION”). THE NET ISSUE TO THE PUBLIC OF [●] EQUITY SHARES OF Rs. 10 AGGREGATING Rs. 20,750 MILLION (HEREINAFTER REFERRED TO AS THE “NET ISSUE”). THERE SHALL ALSO BE A GREEN SHOE OPTION FOR ALLOCATING UP TO [●] EQUITY SHARES OF Rs. 10 EACH NOT EXCEEDING Rs. 3,187.50 MILLION, IN EXCESS OF THE EQUITY SHARES THAT ARE INCLUDED IN THE ISSUE. THE ISSUE WITH THE GREEN SHOE OPTION AGGREGATES Rs. 24,437.50 MILLION. THE ISSUE WOULD CONSTITUTE [●]% OF THE FULLY DILUTED POST ISSUE PAID-UP EQUITY CAPITAL OF THE COMPANY ASSUMING NO EXERCISE OF THE GREEN SHOE OPTION AND [●]% ASSUMING THE GREEN SHOE OPTION IS EXERCISED IN FULL. PRICE BAND: Rs. 65 TO Rs. 75 PER EQUITY SHARE OF FACE VALUE Rs. 10 EACH. THE ISSUE PRICE IS 6.5 TIMES THE FACE VALUE PER EQUITY SHARE AT THE LOWER END OF THE PRICE BAND AND 7.5 TIMES THE FACE VALUE PER EQUITY SHARE AT THE HIGHER END OF THE PRICE BAND. In case of revision in the Price Band, the Bidding/Issue Period shall be extended for three 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 (“BSE”) and the National Stock Exchange of India Limited (“NSE”) and by issuing a press release and also by indicating the change on the websites of the Book Running Lead Managers and the terminals of the Syndicate. In terms of Rule 19(2)(b) of the Securities Contracts Regulation Rules, 1957, as amended from time to time (“SCRR”), with respect to the issue being less than 25% of post Issue capital, the Issue is being made through the 100% Book Building Process wherein at least 60% of the Net Issue to the public shall be allocated 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, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 10% of the Net Issue to the public shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 30% of the Net Issue to the 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. Further, [●] 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. RISK IN RELATION TO FIRST ISSUE This being the first public issue of Equity Shares, there has been no formal market for our Equity Shares. The face value of our Equity Shares is Rs. 10 per Equity Share and the Floor Price is 6.5 times of the Face value and the Cap Price is 7.5 times of the Face value. The Issue Price (as determined by the Company, in consultation with the Book Running Lead Managers, on the basis of assessment of market demand for our Equity Shares issued by way of book building) should not be taken to be indicative of the market price of our Equity Shares after our Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in our Equity Shares or regarding the price at which our Equity Shares will be traded after listing. The Company has not opted for IPO grading for this Issue. 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 Issue. For taking an investment decision, investors must rely on their own examination of the Company and the Issue including the risks involved. The Equity Shares issued/offered 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 Red Herring Prospectus. Specific attention of the investors is invited to the summarized and detailed statements in “Risk Factors” beginning on page 15 of this Red Herring Prospectus. COMPANY’S ABSOLUTE RESPONSIBILITY We, having made all reasonable inquiries, accept responsibility for and confirm that this Red Herring Prospectus contains all information with regard to us and the Issue, which is material in the context of the Issue, that the information contained in this 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 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. LISTING The Equity Shares offered through this Red Herring Prospectus are proposed to be listed on the NSE and BSE. We have received in-principle approvals from NSE and BSE for the listing of our Equity Shares pursuant to letters dated December 20, 2006 and December 22, 2006, respectively. For the purposes of the Issue, the Designated Stock Exchange is NSE. BOOK RUNNING LEAD MANAGERS SENIOR CO-BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE JM MORGAN STANLEY DSP MERRILL CITIGROUP GLOBAL UBS SECURITIES INDIA BIGSHARE SERVICES PRIVATE LIMITED LYNCH LIMITED MARKETS INDIA PRIVATE LIMITED PRIVATE LIMITED 141, Maker Chambers III, Mafatlal Center, PRIVATE LIMITED 2/F, Hoechst House E/2 Ansa Industrial Estate, Nariman Point, 10th Floor, Bakhtawar, 12th Floor, Nariman Point, Sakivihar Road, Mumbai 400 021, India Nariman Point Nariman Point Mumbai 400 021, India. Saki Naka, Tel.: +91 22 6630 3030 Mumbai 400 021, India Mumbai 400 021, India Tel: + 91 22 2286 2005 Andheri (East), Fax.: +91 22 2204 7185 Tel: +91 22 2262 1071 Tel: + 91 22 5631 9999 Fax: +91 22 2281 4676 Mumbai 400 072 Email: Fax: +91 22 2262 1187 Fax: +91 22 5631 9803 Email: [email protected] Tel: + 91 22 2847 0652 [email protected] Email: [email protected] Email: Website: Fax: +91 22 2847 5207 Website: Website: www.dspml.com [email protected] www.ibb.ubs.com/ Email: [email protected] www.jmmorganstanley.com Contact person: N S Website:www.citibank.co.in Corporates/indianipo/ Website: www.bigshareonline.com Contact person: Mayank Jain Shekhar Contact person: Pankaj Contact person: Avi Contact person: Prakash Khare Jain Mehta ISSUE PROGRAMME BID/ISSUE OPENS ON : MONDAY, FEBRUARY 12, 2007 BID/ISSUE CLOSES ON : THURSDAY, FEBRUARY 15, 2007 TABLE OF CONTENTS TITLE PAGE NUMBER DEFINITIONS AND ABBREVIATIONS ........................................................................................................... 1 CERTAIN CONVENTIONS; USE OF MARKET DATA .................................................................................... 13 FORWARD-LOOKING STATEMENTS ........................................................................................................... 14 RISK FACTORS .............................................................................................................................................. 15 SUMMARY - OUR BUSINESS ....................................................................................................................... 36 SUMMARY CONSOLIDATED FINANCIAL INFORMATION .......................................................................... 38 SELECTED UNAUDITED OPERATING DATA ................................................................................................ 41 THE ISSUE ....................................................................................................................................................
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