Gvk Power & Infrastructure Limited
Total Page:16
File Type:pdf, Size:1020Kb
CYAN MAGENTA YELLOW BLACK FINAL PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated February 10, 2006 100% Book Building Issue GVK POWER & INFRASTRUCTURE LIMITED (The Company was incorporated as Jegurupadu Operating & Maintenance Company, a private company with unlimited liability on December 2, 1994 under the Companies Act, 1956. It was converted into a private limited company on April 20, 2005 and was consequently renamed as Jegurupadu Operating & Maintenance Company Private Limited. On May 19, 2005 it was converted into a public limited company and was consequently renamed as Jegurupadu Operating & Maintenance Company Limited. On July 13, 2005 the company was renamed to GVK Power & Infrastructure Limited. The Company is the holding company of the power businesses of GVK and also provides operations and maintenance services to its power assets.) Registered Office: R 540, New Rajender Nagar, New Delhi, 110 060, Tel: +91 11 2874 3563; Fax: +91 11 2874 4391 Corporate Office: 'Paigah House', 156-159, Sardar Patel Road, Secunderabad 500 003, Tel: +91 40 2790 2663; Fax: +91 40 2790 2665 Contact person: P.V. Rama Seshu; Tel: +91 40 2790 2263; Web site: www.gvk.com; Email: [email protected] PUBLIC ISSUE OF 8,275,556 EQUITY SHARES OF RS. 10 EACH FOR CASH AT A PRICE OF RS. 310 PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF RS. 300 PER EQUITY SHARE AGGREGATING RS. 2565 MILLION (REFERRED TO AS THE "ISSUE"). THE ISSUE COMPRISES A NET ISSUE TO THE PUBLIC OF UP TO 7,861,778 EQUITY SHARES OF RS. 10 EACH (THE "NET ISSUE") AND A RESERVATION FOR EXISTING RETAIL PUBLIC SHAREHOLDERS OF GIL ("GIL RETAIL PUBLIC SHAREHOLDER PORTION") OF UP TO 5% OF THE ISSUE OR 413,778 EQUITY SHARES. THE ISSUE WILL CONSTITUTE 35% OF THE FULLY DILUTED POST ISSUE PAID-UP CAPITAL OF THE COMPANY. THE ISSUE PRICE OF RS. 310 PER EQUITY SHARE OF FACE VALUE OF RS. 10 EACH ISSUE PRICE IS 31 TIMES OF THE FACE VALUE The Issue is being made through the 100% Book Building Process wherein at least 50% of the Net Issue shall be allotted to Qualified Institutional Buyers on a proportionate basis out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allotment on a proportionate basis to QIBs and Mutual Funds, subject to valid bids being received from them at or above the Issue Price. Further, upto 15% of the Net Issue would be allocated to Non-Institutional Bidders and upto 35% of the Net Issue would be allocated to Retail Individual Bidders on a proportionate basis, subject to valid bids being received from them at or above the Issue Price. RISK IN RELATION TO FIRST ISSUE This being the first issue of 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/- per Equity Share and the Issue Price is 31 times of the face value. The Issue Price (as determined by the Company, in consultation with the Book Running Lead Managers, on the basis of assessment of market demand for the Equity Shares offered 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 issuer and the Issue including the risks involved. The securities have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of investors is invited to the section titled "Risk Factors" on page 11 of this Prospectus. COMPANY'S ABSOLUTE RESPONSIBILITY The Company having made all reasonable inquiries, accepts responsibility for and confirms that this Offer Document contains all information with regard to the issuer and the issue, which is material in the context of the issue, that the information contained in the Offer Document 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 make 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 are proposed to be listed on The Bombay Stock Exchange Limited ("BSE") and The National Stock Exchange of India Limited ("NSE") and the Company has received in-principle approvals from these Stock Exchanges for the listing of its Equity Shares pursuant to letters dated December 27, 2005 and December 16, 2005, respectively. For purposes of this Issue, the Designated Stock Exchange is NSE. BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE JM MORGAN STANLEY PRIVATE LIMITED KOTAK MAHINDRA CAPITAL KARVY COMPUTERSHARE PRIVATE LIMITED 141, Maker Chambers III, COMPANY LIMITED Karvy House, 46 Avenue 4, Nariman Point, Mumbai 400 021 3rd Floor, Bakhtawar, 229, Street No. 1, Banjara Hills, Tel : +91 22 5630 3030 Nariman Point, Mumbai 400 021 Hyderabad 500 034, India Fax : +91 22 5630 1924 Tel : +91 22 5634 1100 Tel: (91 40) 2331 2454, Email : [email protected] Fax : +91 22 2282 6632 Fax: (91 40) 2331 1968 Website: www.jmmorganstanley.com Email : [email protected] Email: [email protected] Contact Person: Purti Vijaywargia Website: www.kotak.com Website: www. Karvycomputershare.com Contact Person: Anup Agarwal Contact Person. Murali Krishna ISSUE PROGRAM BID/ISSUE OPENED ON : February 2, 2006 BID/ISSUE CLOSED ON : February 7, 2006 CYAN MAGENTA YELLOW BLACK TABLE OF CONTENTS Item Page No. SECTION I - GENERAL ............................................................................................................................... DEFINITIONS AND ABBREVIATIONS ........................................................................................................ 1 CERTAIN CONVENTIONS; USE OF MARKET DATA ................................................................................ 9 FORWARD-LOOKING STATEMENTS ........................................................................................................ 10 SECTION II - RISK FACTORS .................................................................................................................... 11 SECTION III - INTRODUCTION ................................................................................................................... 25 RECENT DEVELOPMENTS ........................................................................................................................ 25 SUMMARY .................................................................................................................................................... 26 SELECTED FINANCIAL INFORMATION .................................................................................................... 28 THE ISSUE ................................................................................................................................................... 33 GENERAL INFORMATION .......................................................................................................................... 34 CAPITAL STRUCTURE ................................................................................................................................ 41 OBJECTS OF THE ISSUE ........................................................................................................................... 47 BASIS FOR ISSUE PRICE ........................................................................................................................... 54 STATEMENT OF POSSIBLE TAX BENEFITS ............................................................................................ 56 SECTION IV: ABOUT THE ISSUER COMPANY ........................................................................................ 62 THE POWER INDUSTRY IN INDIA ............................................................................................................. 62 OUR BUSINESS ........................................................................................................................................... 71 REGULATIONS AND POLICIES .................................................................................................................. 89 HISTORY AND CORPORATE STRUCTURE .............................................................................................. 95 OUR MANAGEMENT ................................................................................................................................... 107 OUR PROMOTERS ...................................................................................................................................... 121 RELATED PARTY TRANSACTIONS ........................................................................................................... 186 EXCHANGE RATES AND CURRENCY OF PRESENTATION ................................................................... 187 DIVIDEND POLICY .....................................................................................................................................