Vishwanath Sugar and Steel Industries Limited

DRAFT RED HERRING PROSPECTUS Dated December 29, 2011 Please read Section 60B of the Companies Act, 1956 (This Draft Red Herring Prospectus will be updated upon filing with the RoC) Book Building Issue VISHWANATH SUGAR AND STEEL INDUSTRIES LIMITED Our Company was originally incorporated as a public limited company under the Companies Act, 1956 in the name of Vishwanath Sugars Limited at Bengaluru, Karnataka vide a Certificate of Incorporation dated May 2, 1995 now bearing CIN U85110KA1995PLC017730. Our Company was granted the Certificate of Commencement of Business by the RoC, Karnataka on December 21, 1999. The name of our Company was subsequently changed to Vishwanath Sugar and Steel Industries Limited and a Fresh Certificate of Incorporation dated December 28, 2010 was issued by the RoC, Karnataka. Registered Office: Bellad Bagewadi, Taluka Hukkeri, Bellad Bagewadi 591 305, Karnataka, India. For details of changes in the registered office, please refer to the section titled “History and Certain Corporate matters” beginning on page 140 of this Draft Red Herring Prospectus. Telephone: + 91 08333 267243 Facsimile: +91 08333 267211 Contact Person: Mr. Mukesh Kumar, Executive Director & Compliance Officer; E-mail: [email protected]; Website: www.vssil.co.in PROMOTERS OF OUR COMPANY: MR. UMESH VISHWANATH KATTI; MR. RAMESH VISHWANATH KATTI; MR. NIKHIL UMESH KATTI; MS. SHEELA U. KATTI; MS. JAYASHREE R. KATTI; MR. LAVA R. KATTI; MR. KUSH R. KATTI; MR. PRAKASH S. KATTI AND MR. RAMAPPA B. KHEMLAPURE PUBLIC ISSUE OF [] EQUITY SHARES OF ` 10 EACH FOR CASH AT A PRICE OF ` [] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ` [] PER EQUITY SHARE) AGGREGATING UPTO ` 37,400 LAKHS (THE “ISSUE”) BY [] (“OUR COMPANY” OR THE “ISSUER”). THE ISSUE WILL CONSTITUTE []% OF THE POST ISSUE PAID-UP EQUITY CAPITAL OF OUR COMPANY. THE FACE VALUE OF THE EQUITY SHARES IS ` 10 EACH. THE PRICE BAND AND THE MINIMUM BID LOT SIZE WILL BE DECIDED BY OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGER AND WILL BE ADVERTISED AT LEAST TWO WORKING DAYS PRIOR TO THE BID/ ISSUE OPENING DATE. In case of revision in the Price Band, the Bidding/Issue Period shall be extended for atleast three (3) additional Working Days after such revision, subject to the Bidding/Issue Period not exceeding ten (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 BSE Limited (the “BSE”) and the National Stock Exchange of India Limited (the “NSE”), SCSBs, by issuing a press release and also by indicating the change on the website of the Book Running Lead Manager (“BRLM”) and at the terminals of the Syndicate Members. This Issue is being made under Regulation 26(1) of the SEBI (ICDR) Regulations through a Book Building Process wherein upto 50% of the Issue to the Public shall be available for allocation on a proportionate basis to QIBs, out of which 5% (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remaining 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 Issue Price. Upto 30% of the QIB Portion shall be available for allocation to Anchor Investors at the Anchor Investor Issue Price on a discretionary basis and one-third of the Anchor Investor Portion shall be available for allocation to domestic Mutual Funds. Further not less than 15% of the Issue to the Public shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the 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. Any Bidder (other than Anchor Investor) may participate in this Issue through the Application Supported by Blocked Amount (“ASBA”) process by providing the details of their ASBA Accounts in which the corresponding Bid amounts will be blocked by Self Certified Syndicate Banks (“SCSBs”). It is mandatory for Non-Retail Investors i.e. QIBs and Non Institutional Investors to make an application through this process. For details in this regard, please refer to section titled “Issue Procedure” beginning on page 272 of this Draft Red Herring Prospectus. RISKS IN RELATION TO THE FIRST ISSUE This being the first public issue of Equity Shares 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 each. The Floor Price is [] times of the face value and the Cap Price is [] times of the face value. The Issue Price (as determined by our Company, in consultation with the BRLM, on the basis of the assessment of market demand for the Equity Shares by way of the Book Building Process) 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 our Company or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISK 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 our Company and the Issue, including the risks involved. The Equity Shares offered in the Issue have not been recom- mended 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 statements in the section “Risk Factors” beginning on page 12 of this Draft Red Herring Prospectus. COMPANY’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 the Issue that 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 omis- sion 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. IPO GRADING This Issue has been graded by [] and has been assigned the “IPO Grade []” indicating [], through its letter dated []. The IPO grading is assigned on a five point scale from 1 to 5 with an “IPO Grade 5” indicating strong fundamentals and an “IPO Grade 1” indicating poor fundamentals. For details regarding the grading of the Issue, see the section titled “General Information” beginning on page 41 of this Draft Red Herring Prospectus. LISTING The Equity Shares offered through the Draft Red Herring Prospectus are proposed to be listed on the BSE and the NSE. Our Company has received in-principle approvals 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, BSE shall be the Designated Stock Exchange. BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUE ASHIKA CAPITAL LIMITED LINK INTIME INDIA PRIVATE LIMITED 1008, Raheja Centre, 10th Floor C-13, Pannalal Silk Mills Compound 214, Nariman Point, L.B.S. Marg, Bhandup (West) Mumbai 400 021, India. Mumbai 400 078, India. Telephone: +91 22 6611 1700 Telephone: +91 22 2596 3838 Facsimile: +91 22 6611 1710 Facsimile: +91 22 2594 6969 Email: [email protected] Email: [email protected] Contact Person: Ms. Nimisha Joshi /Ms. Nupur Jain Contact Person: Mr. Sanjog Sud Website: www.ashikagroup.com Website: www.linkintime.co.in SEBI registration number: INM 000010536 SEBI registration number: INR000004058 BID/ISSUE PROGRAM BID/ISSUE OPENS ON* [ ] BID/ISSUE CLOSES ON** [ ] *Our Company in consultation with the BRLM may consider participation by Anchor Investors. The Anchor Investor Bid/Issue Period shall be one (1) Working Day prior to the Bid/Issue Opening Date. **Our Company in consultation with the BRLM, may consider closing the Bid/Issue Period for QIBs one (1) Working Day prior to the Bid/Issue Closing Date. TABLE OF CONTENTS PARTICULARS PAGE NO. SECTION I: GENERAL DEFINITIONS AND ABBREVIATIONS 1 CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION & MARKET DATA AND 9 CURRENCY OF PRESENTATION FORWARD LOOKING STATEMENTS 11 SECTION II: RISK FACTORS RISK FACTORS 12 SECTION III: INTRODUCTION SUMMARY OF INDUSTRY 29 SUMMARY OF OUR BUSINESS 31 SUMMARY OF FINANCIAL INFORMATION 36 THE ISSUE 40 GENERAL INFORMATION 41 CAPITAL STRUCTURE 49 OBJECTS OF THE ISSUE 70 BASIS FOR ISSUE PRICE 86 STATEMENT OF TAX BENEFITS 89 SECTION IV: ABOUT OUR COMPANY AND OUR INDUSTRY INDUSTRY OVERVIEW 97 OUR BUSINESS 112 REGULATIONS AND POLICIES 132 HISTORY AND CERTAIN CORPORATE MATTERS 140 OUR MANAGEMENT 144 OUR PROMOTERS AND PROMOTER GROUP 162 OUR GROUP ENTITIES 165 RELATED PARTY TRANSACTION 169 DIVIDEND POLICY 170 SECTION V: FINANCIAL INFORMATION FINANCIAL STATEMENTS 171 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND 209 RESULTS OF OPERATIONS

Load more