Inox Leisure Limited
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PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated February 7, 2006 100% Book Building Issue INOX LEISURE LIMITED (Incorporated on November 9, 1999 under the Companies Act, 1956 as ‘Inox Leisure Limited’ with the Registrar of Companies, Ahmedabad, Gujarat and obtained its certificate of commencement of business on February 11, 2000) Registered Office: ABS Towers, Old Padra Road, Vadodara- 390007, Gujarat Corporate office: 21-A, Film Center, 2nd Floor, 68, Tardeo Road, Mumbai – 400034. Tel: +91 22 5662 7051; Fax: +91 22 5662 7081; e-mail: [email protected]; Website: www.inoxmovies.com; Contact Person: Mr. Rajesh Parte PUBLIC ISSUE OF 16,500,000 EQUITY SHARES OF RS. 10 EACH AT A PRICE OF RS. 120 FOR CASH AGGREGATING RS. 1980 MILLION (REFERRED TO AS THE “ISSUE”), BY INOX LEISURE LIMITED (“THE COMPANY” OR “ISSUER”) CONSISTING OF A FRESH ISSUE OF 12,000,000 EQUITY SHARES OF RS. 10 EACH, OF WHICH 200,000 EQUITY SHARES OF RS. 10/- EACH ARE RESERVED FOR SUBSCRIPTION BY PERMANENT EMPLOYEES IN INDIA AND AN OFFER FOR SALE OF 4,500,000 EQUITY SHARES OF RS. 10 EACH BY GUJARART FLUOROCHEMICALS LIMITED (“GFL” OR THE “SELLING SHAREHOLDER”) AND A NET ISSUE TO THE PUBLIC OF 16,300,000 EQUITY SHARES OF RS. 10/- EACH. THE ISSUE WILL CONSTITUTE 27.5% OF THE FULLY DILUTED POST ISSUE PAID-UP CAPITAL OF OUR COMPANY. NET ISSUE TO PUBLIC WILL CONSTITUTE 27.17% OF THE FULLY DILUTED POST ISSUE PAID-UP CAPITAL OF OUR COMPANY ISSUE PRICE : RS. 120 PER EQUITY SHARE OF FACE VALUE RS. 10 EACH. ISSUE PRICE IS 12 TIMES OF THE FACE VALUE. 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 Bombay Stock Exchange Limited (“BSE”) and The National Stock Exchange of India Limited (“NSE”), by issuing a press release and by indicating the change on the websites of the Book Running Lead Manager and the terminals of the Syndicate. The Issue is being made through the 100% Book Building Process wherein not more than 50% of the Net Issue shall be allocated to Qualified Institutional Buyers on a proportionate basis, out of which 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 Qualified Institutional Buyers, including Mutual Funds, subject to valid Bids being received at or above Issue price. Further, not less than 15% of the Net Issue would be available for allocation to Non-Institutional Bidders and not less than 35% of the Net Issue would be available for allocation to Retail Individual Bidders on a proportionate basis, subject to valid bids being received from them at or above the Issue Price. RISK IN RELATION TO FIRST ISSUE This being the first public issue of Equity Shares of the Company, there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares is Rs.10 per Equity Share and the Issue Price is 12 times of the face value. The Issue Price (as determined by the Company and the Selling Shareholder, in consultation with the Book Running Lead Manager, on the basis of assessment of market demand for the Equity Shares offered 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 or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investment 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 Issuer and the Issue including the risks involved. The securities have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of investors is invited to the section titled “Risk Factors” beginning on page xi of this Prospectus. COMPANY’S AND SELLING SHAREHOLDER’S ABSOLUTE RESPONSIBILITY The Issuer and the Selling Shareholder having made all reasonable inquiries, accepts responsibility for and confirms that this offer document 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 the offer document 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 make this document 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 Prospectus are proposed to be listed on Bombay Stock Exchange Limited (“BSE”) and The National Stock Exchange of India Limited (“NSE”). We have received in-principle approvals from BSE and NSE for the listing of our Equity Shares pursuant to letters dated December 28, 2005 and December 22, 2005, respectively. NSE shall be the Designated Stock Exchange. BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUE Enam Financial Consultants Private Limited Karvy Computershare Private Limited 801, Dalamal Towers, Karvy House, 21, Avenue 4, Nariman Point , Mumbai 400 021 Street No. 1, Banjara Hills, Tel: +91 22 5638 1800 Hyderabad - 500 034 Fax: +91 22 2284 6824 Tel: + 91 40 2331 2454 / 2332 0751-53 Email: [email protected] Fax: +91 40 2331 1968/ 2332 3049 Website: www.enam.com E-mail: [email protected] Website: www.karvy.com ISSUE PROGRAM BID/ISSUE OPENED ON : JANUARY 27, 2006 BID/ISSUE CLOSED ON : FEBRUARY 2, 2006 TABLE OF CONTENTS INDEX ............................................................................................................................................................ PAGE NUMBER SECTION I : DEFINITIONS & ABBREVIATIONS ............................................................................................ i CONVENTIONAL/GENERAL TERMS ..................................................................................................... i ISSUE RELATED TERMS ........................................................................................................................ ii INDUSTRY/COMPANY RELATED TERMS ............................................................................................. vi ABBREVIATIONS .................................................................................................................................... vii SECTION II : RISK FACTORS ......................................................................................................................... ix CERTAIN CONVENTIONS; USE OF MARKET DATA ............................................................................. ix FORWARD LOOKING STATEMENTS..................................................................................................... x RISK FACTORS ....................................................................................................................................... xi SECTION III: INTRODUCTION ....................................................................................................................... 1 SUMMARY ............................................................................................................................................. 1 THE ISSUE .............................................................................................................................................. 6 SELECTED FINANCIAL DATA OF OUR COMPANY ............................................................................... 7 GENERAL INFORMATION ...................................................................................................................... 9 CAPITAL STRUCTURE ............................................................................................................................ 15 OBJECTS OF THE ISSUE ....................................................................................................................... 22 ISSUE STRUCTURE ................................................................................................................................ 27 BASIS FOR ISSUE PRICE ....................................................................................................................... 30 STATEMENT OF TAX BENEFITS ............................................................................................................ 33 SECTION IV : ABOUT THE ISSUER COMPANY ............................................................................................ 38 INDUSTRY OVERVIEW .......................................................................................................................... 38 OUR BUSINESS ...................................................................................................................................... 59 REGULATIONS AND POLICIES .............................................................................................................