CINEMAX INDIA LIMITED (Originally Incorporated on May 22, 2002 As Cineline Entertainment (India) Private Limited Under the Companies Act, 1956
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C M Y B RED HERRING PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated January 4, 2007 (The Red Herring Prospectus will be updated upon RoC filing) 100% Book Built Issue CINEMAX INDIA LIMITED (Originally incorporated on May 22, 2002 as Cineline Entertainment (India) Private Limited under the Companies Act, 1956. The name of our Company was changed to Cinemax Cinemas (India) Private Limited on December 23, 2005. Our Company was subsequently converted to a public limited company and the name was changed to Cinemax India Limited, pursuant to resolutions of the shareholders passed in the extra ordinary general meeting held on June 12, 2006. The Registrar of Companies, Mumbai issued a fresh certificate of incorporation consequent to the conversion on July 27, 2006.) Our corporate and registered office is presently located at 805, 8th Floor, 349 Business Point, Western Express Highway, Andheri (East), Mumbai 400 069. Tel: +91 22 6710 1991-95 Fax: +91 22 2684 5337/6677 8321. For details in changes of our registered office, see the section titled "General Information" beginning on page 13 of this Red Herring Prospectus Contact Person & Compliance Officer: Mr. Amit Shah, Company Secretary. Tel: +91 22 6710 1991-95 Fax: +91 22 2684 5337/6677 8321 E-mail: [email protected], Website: www.cinemax.co.in PUBLIC ISSUE OF 8,920,000 EQUITY SHARES OF Rs. 10 EACH (“EQUITY SHARES”) FOR CASH AT A PRICE OF RS. [z] PER EQUITY SHARE AGGREGATING RS. [z] MILLION, COMPRISING OF A FRESH ISSUE OF 7,000,000 EQUITY SHARES BY CINEMAX INDIA LIMITED (“CIL”, “COMPANY” OR “ISSUER”) AND AN OFFER FOR SALE OF 1,920,000 EQUITY SHARES BY THE SELLING SHAREHOLDERS. THE FRESH ISSUE AND THE OFFER FOR SALE ARE JOINTLY REFERRED TO AS THE “ISSUE”. 60,000 EQUITY SHARES OF RS. 10 EACH WILL BE RESERVED IN THE ISSUE FOR SUBSCRIPTION BY EMPLOYEES (AS DEFINED HEREIN), (THE “EMPLOYEE RESERVATION PORTION”). THE OFFER OF EQUITY SHARES OTHER THAN THE EMPLOYEE RESERVATION PORTION SHALL BE CALLED THE “NET ISSUE”. THE ISSUE WILL CONSTITUTE 31.86% OF THE FULLY DILUTED EQUITY SHARE CAPITAL OF OUR COMPANY. THE NET ISSUE WILL CONSTITUTE 31.64% OF THE FULLY DILUTED EQUITY SHARE CAPITAL OF OUR COMPANY. PRICE BAND: RS. 135 TO RS. 155 PER EQUITY SHARE OF FACE VALUE RS. 10 THE FACE VALUE OF EQUITY SHARE IS RS. 10 AND THE FLOOR PRICE IS 13.5 TIMES OF THE FACE VALUE AND THE CAP PRICE IS 15.5 TIMES OF THE FACE VALUE In case of revision in the Price Band, the Bidding/Issue Period will be extended for three additional working days after revision of the Price Band subject to the Bidding/Issue Period not exceeding ten working days. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to the Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”), by issuing a press release, and also by indicating the change on the website of the Book Running Lead Managers and at the terminals of the Syndicate. The Issue is being made through the 100% Book Building Process wherein atleast 50% of the Net Issue shall be allotted on a proportionate basis to Qualified Institutional Buyers (“QIBs”). 5% of the QIB Portion shall be available for allocation to Mutual Funds only and the remaining QIB Portion shall be available for allocation to the QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. If at least 50% of the Net Issue cannot be allotted to QIBs, then the entire application money will be refunded. Further, upto 15% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and upto 35% of the Net Issue 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, up to 60,000 Equity Shares shall be available for allocation on a proportionate basis to the Employees, subject to valid Bids being received at or above the Issue Price. The Company has not opted for grading of the Issue. RISK IN RELATION TO FIRST ISSUE This being the first issue of the 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 and the Issue Price is [z] times of the face value. The Issue Price (as determined by the Company and the Selling Shareholders 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 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 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 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 this Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page ix of this Red Herring Prospectus. COMPANY’S AND SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY The Company and the Selling Shareholders having made all reasonable inquiries, accept responsibility for and confirm that this Red Herring Prospectus contains all information with regard to the Company 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 BSE and the NSE. We have received in-principle approval from the BSE and the NSE for the listing of our Equity Shares pursuant to letters dated November 16, 2006 and October 23, 2006, respectively. The National Stock Exchange of India Limited shall be the Designated Stock Exchange. BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE Enam Financial Consultants JM Morgan Stanley Private Limited Edelweiss Capital Limited Ambit Corporate Finance Intime Spectrum Registry Limited Private Limited 141, Maker Chambers III, 14th Floor, Express Towers, Private Limited C-13, Pannalal Silk Mills Compound, 801, Dalamal Tower Nariman Point, Nariman Point, Ambit RSM House, L.B.S Marg, Bhandup West, Nariman Point, Mumbai - 400 021 Mumbai - 400 021 449, Senapati Bapat Marg, Mumbai 400 078 Mumbai 400 021 Tel: +91 22 6630 3030 Tel: +91 22 2286 4400 Lower Parel, Tel: + 91 22 2596 0320 Tel: +91 22 6638 1800 Fax: +91 22 2204 7185 Fax: +91 22 2288 2119. Mumbai - 400 013 Fax: + 91 22 2596 0329 Fax: +91 22 2284 6824 Website: www.jmmorganstanley.com Website: www.edelcap.com Tel: +91 22 3982 1819 Email: [email protected] Website: www.enam.com Contact Person: Mr. Virendra Pandey Contact Person: Fax: +91 22 3982 3020 Website: www.intimespectrum.com Contact Person: Email: [email protected] Mr. Shailendra Sabhnani Website: www.ambitpte.com Contact Person: Mr. Salim Shaikh Ms. Aishwarya Mehra Email: [email protected] Contact Person: Mr. Kashyap Choksi Email: [email protected] Email: [email protected] BID / ISSUE OPENS ON January 18, 2007 BID / ISSUE CLOSES ON January 24, 2007 TABLE OF CONTENTS SECTION I - DEFINITIONS AND ABBREVIATIONS ............................................................................................ i CONVENTIONAL/GENERAL TERMS ..................................................................................................... ii ISSUE RELATED TERMS ....................................................................................................................... iii INDUSTRY/COMPANY RELATED TERMS ............................................................................................ vii ABBREVIATIONS ..................................................................................................................................... viii SECTION II - RISK FACTORS ............................................................................................................................... ix PRESENTATION OF FINANCIAL AND MARKET DATA ........................................................................ ix FORWARD-LOOKING STATEMENTS .................................................................................................... x RISK FACTORS ....................................................................................................................................... xi SECTION III - INTRODUCTION ............................................................................................................................. 1 SUMMARY ..............................................................................................................................................