RAJ TELEVISION NETWORK LIMITED (Registration No

RED HERRING PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated: 29th January 2007 (The Red Herring Prospectus will be updated upon filing with the ROC) 100% Book Building Issue RAJ TELEVISION NETWORK LIMITED (Registration No. 18-27709) (Incorporated on June 3, 1994 under the Companies Act, 1956 as a public limited company) Registered Office: 32, Poes Road, Second Street, Teynampet, Chennai 600 018 (The registered office of the company was shifted from 12-B, Poes Road, Third Street, Tenyampet, Chennai 600 018 to the above address w.e.f. September 5, 1999.) Tel: 91 44 2433 4149; Fax: 91 44 2434 1260;, E-mail: [email protected]; Website: www.rajtvnet.in, Compliance Officer: Mr. B. Sathya Prakash PUBLIC ISSUE OF 35,68,250 EQUITY SHARES OF FACE VALUE OF Rs.10/- EACH AT A PRICE OF Rs. [z ] FOR CASH (INCLUDING PREMIUM OF Rs. [z] PER SHARE) AGGREGATING RS. [z] LAKHS (HEREINAFTER REFERRED TO AS THE "ISSUE") CONSISTING OF A FRESH ISSUE OF 22,70,700 EQUITY SHARES BY RAJ TELEVISION NETWORK LIMITED ('COMPANY' OR 'ISSUER') AND AN OFFER FOR SALE OF 12,97,550 EQUITY SHARES BY SELLING SHAREHOLDERS. THE ISSUE COMPRISES A NET ISSUE TO THE PUBLIC OF UP TO 32,43,866 EQUITY SHARES OF RS. 10 EACH (THE "NET ISSUE") AND A RESERVATION OF UP TO 3,24,384 EQUITY SHARES OF RS. 10 EACH, FOR THE ELIGIBLE EMPLOYEES OF THE COMPANY("EMPLOYEE RESERVATION PORTION"). THE ISSUE CONSTITUTES 27.50% OF FULLY DILUTED POST ISSUE PAID-UP CAPITAL OF THE COMPANY. PRICE BAND: Rs. 221 TO Rs. 257 PER EQUITY SHARE OF FACE VALUE Rs 10/- EACH THE OFFER PRICE IS 22.1 TIMES THE FACE VALUE AT THE LOWER END OF THE PRICE BAND AND 25.7 TIMES THE FACE VALUE AT THE HIGHER END OF THE PRICE BAND The Issue is being made through a 100% Book Building Process wherein not more than 50% of the Net offer to the public shall be allocated on proportionate basis to Qualified Institutional Buyers (including 5% for Mutual Funds). Further, not less than 15% of the Net offer to the public shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 35% of the Net offer to the public shall be available for allocation on a proportionate basis to Retail Bidders, subject to valid bids being received at or above the Issue Price. RISK IN RELATION TO THE FIRST ISSUE This being the first issue of Equity Shares of the Company, there has been no formal market for its Equity Shares. The face value of the shares is Rs 10/- and the issue price is [z] times of the face value. The Issue Price (as determined by the Company, in consultation with the Book Running Lead Manager ("BRLM"), 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 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 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 the contents of this Red Herring Prospectus. Specific attention of the investors is invited to the summarized and detailed statements in Risk Factors beginning on page 8 of this Red Herring Prospectus. ISSUER'S AND SELLING SHAREHOLDERS' ABSOLUTE RESPONSIBILITY The Company and the Selling Shareholders', having made all reasonable inquiries, 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 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 National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE). We have received in-principle approval from the NSE and BSE for the listing of our Equity Shares pursuant to letters dated January 3, 2007 and November 28, 2006, respectively. BSE shall be the Designated Stock Exchange. BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUE VIVRO FINANCIAL SERVICES PRIVATE LIMITED CAMEO CORPORATE SERVICES LIMITED SEBI Regn. No.: INM000010122 SEBI Regn. No.: INR 000003753"Subramaniam 1st Floor, Manu Mansion 16/18, Shahid Bhagatsingh Road ” Building, No. 1, Club House Road, Opp. Old Custom House, Fort, Mumbai - 400 023 Chennai – 600 002 Tel.: 022-2265 7364, Fax: 022-2265 8406 Tel No. 044-2846 0390, Fax: 044 – 2846 0129 Contact Person : Keval Gandhi Contact Person: R. D. Ramasamy Website: www.vivro.net, Website: www.cameoindia.com E-mail: [email protected] E- Mail: [email protected] ISSUE SCHEDULE BID/ ISSUE OPENS ON 14th February 2007 BID/ ISSUE CLOSES ON 23rd February 2007 TABLE OF CONTENTS PARTICULARS PAGE NO. A. DEFINITIONS AND ABBREVIATIONS CONVENTIONAL/ GENERAL TERMS .............................................................................................................. 1 OFFERING RELATED TERMS .......................................................................................................................... 1 COMPANY/INDUSTRY RELATED TERMS ...................................................................................................... 4 ABBREVIATIONS ............................................................................................................................................... 6 B. RISK FACTORS FORWARD LOOKING STATEMENT AND MARKET DATA .............................................................................. 7 RISK FACTORS ................................................................................................................................................ 8 C. INTRODUCTION SUMMARY ......................................................................................................................................................... 15 THE ISSUE / OFFER .......................................................................................................................................... 17 FINANCIAL SUMMARY .................................................................................................................................... 18 GENERAL INFORMATION ............................................................................................................................... 20 CAPITAL STRUCTURE OF THE COMPANY ................................................................................................... 26 OBJECTS OF THE ISSUE ................................................................................................................................. 32 BASIC TERMS OF THE ISSUE ......................................................................................................................... 40 BASIS FOR ISSUE PRICE ................................................................................................................................ 41 TAX BENEFITS .................................................................................................................................................. 44 D. ABOUT THE ISSUER INDUSTRY OVERVIEW .................................................................................................................................... 51 BUSINESS OVERVIEW .................................................................................................................................... 60 KEY INDUSTRY REGULATIONS AND POLICIES ..........................................................................................67 HISTORY AND CORPORATE STRUCTURE ................................................................................................... 73 MANAGEMENT .................................................................................................................................................. 76 PROMOTERS ..................................................................................................................................................... 87 E. FINANCIAL INFORMATION FINANCIAL INFORMATION OF THE COMPANY ............................................................................................. 89 FINANCIAL INFORMATION OF GROUP COMPANIES .................................................................................... 109 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS .............................................................. 111 F. LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS ..............................................................

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