Bhatia Communications & Retail (India) Limited
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Prospectus Dated: February 2, 2018 Please read section 26, 28 & 32 of the Companies Act, 2013 Fixed Price Issue BHATIA COMMUNICATIONS & RETAIL (INDIA) LIMITED Our Company was incorporated as "Bhatia Communications & Retail (India) Private Limited" under the provision of the Companies Act, 1956 vide certificate of incorporation dated March 25, 2008 issued by the Assistant Registrar of Companies, Gujarat, Dadra and Nagar Haveli. Consequent upon the conversion of our Company to public limited company, the name of our Company was changed to “Bhatia Communications & Retail (India) Limited" and fresh certificate of incorporation dated January 17, 2018 was issued by the Assistant ROC, Registrar of Companies, Ahmedabad. The Corporate Identification Number of our Company is U32109GJ2008PLC053336. For further details, in relation to the change in the name and registered office of our Company, please refer to the section titled “History and Certain Corporate Matters” beginning on page 98 of this Prospectus. Registered office: 132, Dr. Ambedkar Shopping Centre, Ring Road, Surat, Gujarat -395 002. Tel: 0261-2349892,Website: www.bhatiamobile.com; E-Mail: [email protected]; Contact Person: Ms. Avani Chaudhari (Company Secretary and Compliance Officer) PROMOTERS OF THE COMPANY: MR. SANJEEV BHATIA, MR. NIKHIL BHATIA AND MR. HARBANSLAL BHATIA INITIAL PUBLIC OFFER OF 16,50,000 EQUITY SHARES OF FACE VALUE OF `10 EACH (“EQUITY SHARES”) OF BHATIA COMMUNICATIONS & RETAIL (INDIA) LIMITED (“COMPANY” OR “ISSUER”) FOR CASH AT A PRICE OF RS. 150 PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF RS. 140 PER EQUITY SHARE) (“ISSUE PRICE”) AGGREGATING TO RS. 2475.00 LAKHS (“ISSUE” ) CONSISTING OF A FRESH ISSUE OF 14,00,000 EQUITY SHARES OF FACE VALUE OF `10 EACH (“EQUITY SHARES”) FOR CASH AT A PRICE OF RS. 150 PER EQUITY SHARE AGGREGATING TO RS. 2100.00 LAKHS (“ISSUE”) AND 2,50,000 EQUITY SHARES OF FACE VALUE OF `10 EACH (“EQUITY SHARES”) FOR CASH AT A PRICE OF RS. 150 PER EQUITY SHARE AGGREGATING TO RS. 375.00 LAKHS THROUGH AN OFFER FOR SALE BY MR. SANJEEV BHATIA (REFERRED AS SELLING SHAREHOLDER) OF WHICH 84,000 EQUITY SHARES OF FACE VALUE OF `10.00 EACH FOR A CASH PRICE OF RS. 150 PER EQUITY SHARE, AGGREGATING TO RS. 126.00 LAKHS WILL BE RESERVED FOR SUBSCRIPTION BY MARKET MAKER (“MARKET MAKER RESERVATION PORTION”). THE ISSUE LESS THE MARKET MAKER RESERVATION PORTION I.E. ISSUE OF 15,66,000 EQUITY SHARES OF FACE VALUE OF ` 10.00 EACH AT AN ISSUE PRICE OF RS. 150 PER EQUITY SHARE AGGREGATING TO RS. 2349.00 LAKHS (IS HEREINAFTER REFERRED TO AS THE “NET ISSUE”). THE ISSUE AND THE NET ISSUE WILL CONSTITUTE 26.37% AND 25.03%, RESPECTIVELY OF THE POST ISSUE PAID UP EQUITY SHARE CAPITAL OF OUR COMPANY. FOR FURTHER DETAILS, PLEASE REFER TO SECTION TITLED "TERMS OF THE ISSUE" BEGINNING ON PAGE 198 OF THIS PROSPECTUS. THIS ISSUE IS BEING IN TERMS OF CHAPTER XB OF THE SEBI (ICDR) REGULATIONS, 2009 AS AMENDED FROM TIME TO TIME. For further details see “Terms of the Issue” beginning on page 198 of this Prospectus. All the investors applying in a public issue shall use only Application Supported by Blocked Amount (ASBA) facility for making payment providing details about the bank account which will be blocked by the Self Certified Syndicate Banks ("SCSBs") as per the SEBI circular CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015. For further details, please refer to section titled "Issue Procedure" beginning on page 206 of this Prospectus. In case of delay, if any in refund, our Company shall pay interest on the application money at the rate of 15 % per annum for the period of delay. THE FACE VALUE OF THE EQUITY SHARES IS ` 10 EACH AND THE ISSUE PRICE IS `150 EACH. THE ISSUE PRICE IS 15 TIMES OF THE FACE VALUE. RISK IN RELATION TO THE FIRST ISSUE This being the first Public Issue of our Company, there has been no formal market for the securities of our Company. The face value of the shares is ` 10 per Equity Shares and the Issue price is 15 times of the face value. The Issue Price (as determined by our Company in consultation with the Lead Manager) as stated in the chapter titled on “Basis for Issue Price” beginning on page 54 of this Prospectus 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 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 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 offering. 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 neither been recommended nor approved by Securities and Exchange Board of India nor does Securities and Exchange Board of India guarantee the accuracy or adequacy of this Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page 9 of this Prospectus. ISSUER’s & SELLING SHAREHOLDER ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to our Company and the Issue, which is material in the context of the Issue, that the information contained in this 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 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 Prospectus are proposed to be listed on the BSE SME Platform of Bombay Stock Exchange Limited ("BSE "). In terms of the Chapter XB of the SEBI (ICDR) Regulations, 2009, as amended from time to time, our company has received an in principle approval letter dated February 2, 2018 from BSE for using its name in this offer document for listing our shares on the SME Platform of BSE. For the purpose of this Issue, the designated Stock Exchange will be the Bombay Stock Exchange Limited ("BSE "). LEAD MANAGER REGISTRAR TO THE ISSUE GUINESS CORPORATE ADVISORS PRIVATE LIMITED PURVA SHAREGISTRY (INDIA) PRIVATE LIMITED 18 Deshapriya Park Road, Kolkata - 700 026, West Bengal, India Address: Unit no. 9, Shiv Shakti Ind. Est. J.R. BorichaMarg, Lower Parel, (E), Tel: +91 - 33 - 3001 5555; Fax: +91 - 33 - 3001 5531 Mumbai – 400011 Email:[email protected] Tel No: +91-022-23016761/8261 Fax No: +91-022-2301 2517 Investor Grievance Email: [email protected] SEBI Registration NO: INR000001112 Website:www.guinessonline.net Email Id: [email protected] / [email protected] Contact Person: Mr. Devendra Shah / Ms. Alka Mishra Website: www.purvashare.com SEBI Registration No.: INM 000011930 Contact Person: Mr. V.B. Shah / Ms. Purva Shah ISSUE PROGRAMME ISSUE OPENS ON: February 8, 2018 (Thursday) ISSUE CLOSES ON: February 12, 2018 (Monday) CONTENTS PAGE NO. SECTION I – GENERAL DEFINITIONS AND ABBREVIATIONS 1 COMPANY RELATED TERMS 1 ISSUE RELATED TERMS 1 TECHNICAL AND INDUSTRY RELATED TERMS 3 CONVENTIONAL AND GENERAL TERMS /ABBREVIATIONS 4 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA 7 FORWARD LOOKING STATEMENTS 8 SECTION II – RISK FACTOR 9 SECTION III – INTRODUCTION SUMMARY OF INDUSTRY OVERVIEW 21 SUMMARY OF BUSINESS OVERVIEW 23 SUMMARY OF OUR FINANCIAL INFORMATION 25 THE ISSUE 28 GENERAL INFORMATION 29 CAPITAL STRUCTURE 34 SECTION IV – PARTICULARS OF THE ISSUE OBJECTS OF THE ISSUE 49 BASIS FOR ISSUE PRICE 54 STATEMENT OF POSSIBLE TAX BENEFITS 57 SECTION V – ABOUT US INDUSTRY OVERVIEW 59 BUSINESS OVERVIEW 65 KEY INDUSTRY REGULATIONS AND POLICIES 93 HISTORY AND CERTAIN CORPORATE MATTERS 98 OUR MANAGEMENT 101 OUR PROMOTERS AND PROMOTER GROUP 111 FINANCIAL INFORMATION OF OUR GROUP COMPANIES 115 RELATED PARY TRANSACTIONS 122 DIVIDEND POLICY 123 SECTION VI – FINANCIAL INFORMATION AUDITORS‘ REPORT ON RESTATED FINANCIAL INFORMATION 124 MANAGEMENT‘S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 167 RESULTS OF OPERATIONS SECTION VII – LEGAL AND OTHER INFORMATION OUTSTANDINGS LITIGATIONS AND MATERIAL DEVELOPMENTS 174 GOVERNMENT AND OTHER STATUTORY APPROVALS 178 OTHER REGULATORY AND STATUTORY DISCLOSURES 184 SECTION VIII – ISSUE RELATED INFORMATION TERMS OF THE ISSUE 198 ISSUE STRUCTURE 203 ISSUE PROCEDURE 206 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES 226 SECTION IX – DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES OF ASSOCIATION MAIN PROVISIONS OF ARTICLES OF ASSOCIATION 227 SECTION X – OTHER INFORMATION MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 265 SECTION XI – DECLARATION 267 SECTION I – GENERAL DEFINITIONS AND ABBREVIATIONS Term Description ―BCRIL‖, ―our Company‖, Bhatia Communications & Retail (India) Limited, a Public Limited company ―we‖, ―us‖, ―our‖, ―the incorporated under the Companies Act, 1956 and having Registered Office at Company‖, ―the Issuer 132, Dr. Ambedkar Shopping Centre, Ring Road, Surat - 395002, Gujarat Company‖ or ―the Issuer‖ Promoters Mr. Sanjeev Bhatia, Mr. Nikhil Bhatia and Mr. Harbanslal Bhatia Promoter Group Companies, individuals and entities (other than companies) as defined under Regulation 2 sub-regulation (zb) of the SEBI ICDR Regulations. COMPANY RELATED TERMS Term Description Articles / Articles of Articles of Association of our Company Association/AOA Auditors and Peer Review The Statutory auditors of our Company, being M/s. R Kejriwal & Co., Chartered Auditors Accountants Board of Directors / Board The Board of Directors of our Company or a committee constituted thereof Companies Act Companies Act, 1956 and/ or the Companies Act, 2013, as amended from time to time.