JAGRAN PRAKASHAN LIMITED (Incorporated Under the Companies Act, 1956 on July 18, 1975 As “Jagran Prakashan Private Limited”
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PROSPECTUS Dated February 3, 2006 100% Book Building Issue JAGRAN PRAKASHAN LIMITED (Incorporated under the Companies Act, 1956 on July 18, 1975 as “Jagran Prakashan Private Limited”. The name of the Company has been changed from time to time to reflect its status as a private limited company or a public limited company, as the case may be. For details of the changes in name, see the section titled “History and Certain Corporate Matters” beginning on page 92). Registered Office: Jagran Building, 2 Sarvodaya Nagar, Kanpur 208 005, India.Tel: +91 512 221 6161; Fax: +91 512 223 0625. Contact Person: Mr. Amit Jaiswal; Tel: +91 512 221 6161 E-mail: [email protected]; Website: www.jagran.com Public Issue of 10,039,020 Equity Shares of Rs. 10 each for cash at a price of Rs. 320 per Equity Share aggregating Rs. 3,212.49 million (“Issue”). There will also be a Green Shoe Option of up to 1,505,853 Equity Shares, for cash at a price of Rs. 320 per Equity Share aggregating Rs. 481.87 million. The Issue and the Green Shoe Option, if exercised in full, will aggregate 11,544,873 Equity Shares amounting to Rs. 3,694.36 million. The Issue will constitute 20% of the fully diluted post- Issue Equity Share capital of our Company assuming that the Green Shoe Option is not exercised and 22.33% assuming that the Green Shoe Option is exercised in full. THE ISSUE PRICE OF RS. 320 PER EQUITY SHARE OF FACE VALUE OF RS. 10. ISSUE PRICE IS 32 TIMES THE FACE VALUE OF EQUITY SHARES In terms of Rule 19(2)(b) of the SCRR, this being an Issue for less than 25% of the post–Issue capital, the Issue is being made through the 100% Book Building Process wherein at least 60% of the Issue shall be allocated on a proportionate basis to QIB Bidders, out of which 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above Issue price. If at least 60% of the Issue cannot be allocated to QIB Bidders, then the entire application money will be refunded forthwith. Further, up to 10% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and up to 30% of the 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. 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 (Rupees Ten Only) and the Issue Price is 32.0 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 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 Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page ix. COMPANY’S ABSOLUTE RESPONSIBILITY The Company having made all reasonable inquiries, accept responsibility for and confirm that this 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 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 Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”). We have received in-principle approval from the BSE and the NSE for the listing of our Equity Shares pursuant to letters dated December 20, 2005 and December 22, 2005, respectively. The BSE shall be the Designated Stock Exchange. BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE DSP MERRILL LYNCH LIMITED ICICI SECURITIES LIMITED KARVY COMPUTERSHARE PRIVATE LIMITED Western Press Pvt. Ltd., 10th Floor, Mafatlal Centre ICICI Centre, H.T. Parekh Marg, Karvy House, 46, Avenue 4, Street No.1, Nariman Point, Mumbai 400 021, India Churchgate, Mumbai 400 020, India. Banjara Hills, Hyderabad 500 034, India. Tel: +91 22 2262 1071, Fax: +91 22 2262 1187 Tel: +91 22 2288 2460, Fax: +91 22 2283 7045 Tel: +91 40 2331 2454, Fax: +91 40 2331 1968 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: www.dspml.com Website: www.iseconline.com Website: www.karvy.com BID/ISSUE PROGRAMME Designed & Printed by : Mumbai 400 013. Phone : 2493 9382 / 83 84 BID/ISSUE OPENED ON: JANUARY 25, 2006, WEDNESDAY BID/ISSUE CLOSED ON: JANUARY 31, 2006, TUESDAY TABLE OF CONTENTS Item Page No. SECTION I - GENERAL DEFINITIONS AND ABBREVIATIONS ....................................................................................................... i PRESENTATION OF FINANCIAL AND MARKET DATA .......................................................................... vii FORWARD-LOOKING STATEMENTS ....................................................................................................... viii SECTION II - RISK FACTORS .................................................................................................................... ix SECTION III - INTRODUCTION SUMMARY.................................................................................................................................................... 1 THE ISSUE ................................................................................................................................................... 7 GREEN SHOE OPTION ............................................................................................................................... 8 SUMMARY FINANCIAL AND OPERATING INFORMATION ..................................................................... 11 GENERAL INFORMATION .......................................................................................................................... 14 CAPITAL STRUCTURE ............................................................................................................................... 21 OBJECTS OF THE ISSUE ........................................................................................................................... 31 TERMS OF THE ISSUE ............................................................................................................................... 35 BASIS FOR ISSUE PRICE .......................................................................................................................... 37 STATEMENT OF TAX BENEFITS ............................................................................................................... 39 SECTION IV - ABOUT US INDUSTRY .................................................................................................................................................... 43 OUR BUSINESS ........................................................................................................................................... 51 FINANCIAL INDEBTEDNESS ..................................................................................................................... 85 REGULATIONS AND POLICIES ................................................................................................................. 88 HISTORY AND CERTAIN CORPORATE MATTERS ................................................................................. 92 OUR MANAGEMENT ................................................................................................................................... 104 OUR PROMOTERS AND PROMOTER GROUP......................................................................................... 115 DIVIDEND POLICY ...................................................................................................................................... 123 SECTION V - FINANCIAL INFORMATION FINANCIAL STATEMENTS ......................................................................................................................... 124 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ........................................................................................ 155 SECTION VI - LEGAL AND OTHER INFORMATION