POCHIRAJU INDUSTRIES LIMITED (Originally Incorporated As Pochiraju Flori-Tech Limited on May 04, 1995 with Registrar of Companies Tamil Nadu, Chennai
Total Page:16
File Type:pdf, Size:1020Kb
RED HERRING PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated 3rd January, 2007 (100% Book Building Issue) POCHIRAJU INDUSTRIES LIMITED (Originally incorporated as Pochiraju Flori-Tech Limited on May 04, 1995 with Registrar of Companies Tamil Nadu, Chennai. The certificate for commencement of business was received on June 05, 1995. The name of the company was changed to Pochiraju Industries Ltd. and fresh Certificate of incorporation was obtained on September 10, 2003 from Registrar of Companies, Coimbatore) Registered Office: 1/102, Sathya Mangalam Village, Bagalur - Berigai Road, Thummanapalli Post, Hosur Taluk, Krishnagiri District, Tamil Nadu Tel. No: 04344-254988 Fax No.: 04344-255044 Email: [email protected] Cor. Off: 130, Amarjyothi Layout, 2nd Main Road, Intermediate Ring Road, Domaluru, Bangalore - 560071 Phone No: 080-32518577; Telefax: 080-41118577 Contact Person: Mr.P. Sudhakar, Compliance Officer PUBLIC ISSUE OF (*) EQUITY SHARES THROUGH 100% BOOK BUILDING PROCESS OF FACE VALUE OF RS. 10 EACH FOR CASH AT A PRICE OF RS. [G], AGGREGATING RS. 3,757 LACS (HEREIN AFTER REFERRED TO AS “THE ISSUE”). THE ISSUE COMPRISES OF PROMOTERS CONTRIBUTION OF (*) EQUITY SHARES AGGREGATING RS. 300.00 LACS (HEREIN AFTER REFERRED TO AS “PROMOTERS CONTRIBUTION” AND THE NET ISSUE TO THE PUBLIC OF (*) EQUITY SHARES AGGREGATING RS. 3457.00 LACS (HEREIN AFTER REFERRED TO AS “THE NET ISSUE”). THE ISSUE WOULD CONSTITUTE [G] % OF THE FULLY DILUTED POST ISSUE PAID-UP CAPITAL OF POCHIRAJU INDUSTRIES LIMITED PRICE BAND: Rs.25/- TO Rs. 30/- PER EQUITY SHARE OF FACE VALUE OF Rs. 10 EACH. THE ISSUE PRICE IS 2.5 TIMES THE FACE VALUE AT THE LOWER END OF THE PRICE BAND AND 3.0 TIMES THE FACE VALUE AT THE HIGHER END OF THE PRICE BAND In case of revision in the Price Band, the Bidding Period / Issue Period will be extended for three additional days after revision of the Price Band subject to the Bidding Period / Issue Period not exceeding 10 working days. Any revision in the Price Band and the revised Bidding Period, if applicable, will be widely disseminated by notification to Bombay Stock Exchange Limited and the National Stock Exchange of India Ltd., 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 Syndicate. This Issue is being made through a 100% Book Building Process wherein up to 50% of the Net Issue to the Public will be allocated to Qualified Institutional Buyers (QIBs) on a proportionate basis, subject to valid bids being received at or above the Issue Price. Out of the portion available for allocation to the QIBs, 5% will be available for allocation to Mutual Funds. Mutual Fund applicants shall also be eligible for proportionate allocation under the balance available for the QIBs. 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 at or above the Issue Price. IPO GRADING: Issuer Company has not opted for the grading of this issue from any Credit Rating agency. RISK IN RELATION TO FIRST ISSUE This being the first issue of Pochiraju Industries Limited, there has been no formal market for the shares of the Company. The face value of shares is Rs.10/- and the Issue Price is 2.5 times of face value at the lower price band and 3.0 times of the value at the higher price band of the equity shares of the Company. The issue price (as has been determined and justified by the Book Running Lead Managers and Pochiraju Industries Limited as stated herein under the paragraph on ‘Basis for Issue Price’) should not be taken to be indicative of the market price of the equity shares after the shares are listed. No assurance can be given regarding an active and/or sustained trading in the shares of the 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 the Issuer and the Issue including the risk 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 the SEBI guarantee the accuracy or adequacy of this document. Specific attention of the investors is invited to the statement of Risk Factors beginning on Page No.xiii of this Red Herring Prospectus. ISSUER’S ABSOLUTE RESPONSIBILITY Our Company having made all reasonable enquiries, accepts responsibility for, and confirms 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 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 issued through this Red Herring Prospectus are proposed to be listed on the Bombay Stock Exchange Limited (BSE), also the Designated Stock Exchange and The National Stock Exchange of India Limited (NSE). The in-principle approval has been received from BSE and NSE for the listing of the Equity Shares vide its letter No: List/sdm/sm/ps/2006 dated August 9, 2006 & NSE/LIST/29355/-V dated September 14, 2006 respectively. BOOK RUNNING LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE Allbank Finance Limited Aarthi Consultants Private Limited (Wholly owned Subsidiary of Allahabad Bank) 1-2-285, Domalguda 3rd Floor, Allahabad Bank Building, Hyderabad - 500029 37, Mumbai Samachar Marg, Fort, Mumbai - 400023 Tel No.: 040-27634445/27638111 Tel No: 022-22677552 Fax No: 022-22677552 Fax No.: 040-27632184 E-mail: [email protected] E-Mail: [email protected] Website: www.allahabadbank.com Website: www.aarthiconsultants.com Contact Person: Mr. Shiv Shankar Contact Person: Mr. Bhaskar ISSUE PROGRAMME BID/ ISSUE OPENS ON: Monday, 15th January, 2007 BID/ ISSUE CLOSES ON: Thursday, 18th January, 2007 TABLE OF CONTENTS Section I - Definitions and Abbreviations Page No. Definitions ................................................................................................................................... ii Conventional /General Terms ...................................................................................................... ii Issue Related Terms ..................................................................................................................... ii Company / Industry Related Terms ............................................................................................. v Abbreviations .............................................................................................................................. vi Section II - General Certain Conventions; Use of Market Data .................................................................................. xi Forward Looking Statements ...................................................................................................... xii Section III - Risk Factors ................................................................................................................ xiii Section IV - Introduction Summary...................................................................................................................................... 1 The Issue ...................................................................................................................................... 3 Summary of Financial Information ............................................................................................. 4 General Information .................................................................................................................... 6 Capital Structure .......................................................................................................................... 14 Section V - Objects of the Issue Objects of the Issue ..................................................................................................................... 21 Basic Terms of the Issue .............................................................................................................. 36 Basis for Issue Price .................................................................................................................... 37 Statement of Tax Benefits ............................................................................................................ 40 Section VI - About Us Industry Overview ....................................................................................................................... 44 Our Business ................................................................................................................................ 66 Key Industry Regulations and Policies.......................................................................................