35, Chittaranjan Avenue, 6Th Floor, Kolkata-700 012, India. Tel
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DRAFT PROSPECTUS VIKASH METAL & POWER LIMITED (Originally incorporated as Vikash Metal Private Limited on July 4th, 1996 with Registrar of Companies, West Bengal and subsequently converted into Public Limited Company on 13th December, 2002 and the name of the company was changed to Vikash Metal Limited. The name of the Company was further changed to Vikash Metal & Power Limited w.e.f 21st January, 2003) Registered Office: 35, Chittaranjan Avenue, 6th Floor, Kolkata-700 012, India. Tel.: (033) 2211-5115/2211-6114, Fax: (033) 2211-5390 E-mail: [email protected] Website:www.vikashmetalpower.com PRESENT ISSUE 2,47,60,400 equity shares of Rs. 10/-each for cash at a premium of Rs.10/- per equity share aggregating Rs. 4952.08 lacs. NET OFFER TO PUBLIC 1,25,00,000 equity shares of Rs. 10/- each for cash at a premium of Rs.10/- per equity share aggregating Rs. 2500 lacs of which 12,50,000 equity shares being 10% of the net offer to the public to be compulsorily allotted to QIB’s. The Project has a participation of Rs.7425/- Lacs as Term Loans from Consortium of Banks. RISK IN RELATION TO THE FIRST ISSUE This being the first issue of the company, there has been no formal market for the securities of the company. The face value of the shares is Rs.10 and the issue price is 2 times of the face value. The issue price (has been determined and justified by the Lead Merchant Banker and the Issuer Company as stated under Justification of Premium paragraph on page 23) 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 or sustained trading in the shares of the company nor 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 offer 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 the issuer and the offer 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. Attention of the investors is specifically invited to the Statement of Risk Factors mentioned on page nos. (viii) to (xiv) of the Draft Prospectus. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Prospectus 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 Draft 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 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. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE MICROSEC INDIA LTD MAHESHWARI DATAMATICS PVT. LTD Azimganj House, 2nd Floor 6,Mangoe Lane,2nd Floor, 7, Camac Street, Kolkata – 700 001 Kolkata 700 017 Tel: 91-33-2243-5029/5809,2248-2248 Ph: 91-33-2282 9330 Fax: 91-33-2248-4787 Fax: 91-33-2282 9335 E-mail: [email protected] Website : www.microsec.co.in E-Mail: [email protected] ISSUE PROGRAMME ISSUE OPENS ON ISSUE CLOSES ON LISTING The Equity Shares of the Company are proposed to be listed on The Stock Exchange, Mumbai (“BSE”) (The Designated Stock Exchange) and The National Stock Exchange of India Limited (NSE). The in-principle approvals have been received from BSE and NSE for listing of the Equity Shares vide their letters dated ______ and _______ respectively. TABLE OF CONTENTS TITLE PAGE NO. Definitions and Abbreviations i – v I. Risk Factors i. Forward-Looking Statements and Market Data vi ii. Risk Factors vii II. Introduction i. Summary 1 ii. General Information 2 iii. Capital Structure 5 iv. Objects Of The Issue 12 III. About Vikash Metal i. Industry Overview 29 ii. Business Overview 37 iii. History and Corporate Structure 66 iv. Management 68 v. Promoter 74 vi. Currency of Presentation 76 vii. Dividend Policy 76 IV. Financial Statements i. Auditors Report 77 ii. Financial Information of Group Companies 93 iii. Management Discussion and Analysis of Financial Condition and 99 Results of operations as reflected in the Financial Statements V. Legal and other Information i. Outstanding Litigation And Material Developments 103 ii. Government Approvals/Licensing Arrangements 104 VI. Other Regulatory and Statutory Disclosures 107 VII. Issue Information i. Terms of the Issue 117 ii. Issue Procedure 118 VIII. Description of Equity Shares and Terms of the Articles of Association 127 IX. Other Information i. List of Material Contracts and Documents for Inspection 135 ii. Declaration 137 VIKASH METAL & POWER LIMITED DEFINITIONS AND ABBREVIATIONS Conventional/General Terms Term Description “Vikash Metal & Unless the context otherwise requires, refers to, Vikash Metal & Power Power Limited ” or Limited, a public limited company incorporated under the Companies Act the “Issuer” or the and having its registered office at 35, Chittaranjan Avenue, 6th Floor, “Company”, “we”, Kolkata-700 012. “us”, “our” and “VMPL” You Unless the context otherwise requires, refers to, investors. Issue Related Terms Term Description Allotment Issue or transfer, as the context requires, of Equity Shares pursuant to the Offer to the successful Bidders as the context requires. Allottee The successful applicant to whom the Equity Shares are being/have been issued. Articles/Articles of The Articles of Association of Vikash Metal & Power Limited Association Auditors The statutory auditors of the Company, viz. M/s S.Jaykishan, Chartered Accountants. Bankers to the HDFC Bank Limited Offer Board of The Board of Directors of Vikash Metal & Power Limited or a committee Directors/Board thereof BSE The Stock Exchange, Mumbai Captive Power Shall mean that part of the project pertaining to the setting up of the CPP. Project/CPP Project Companies Act / The Companies Act, 1956, as amended from time to time. the Act Depositories Act The Depositories Act, 1996, as amended. Depository A depository registered with SEBI under the SEBI (Depositories and Participants) Regulations, 1996, as amended from time to time. Depository A depository participant as defined under the Depositories Act. Participant Designated Stock The Stock Exchange Mumbai, (BSE) Exchange Directors Directors of Vikash Metal & Power Limited from time to time, unless otherwise specified. Equity Shares Equity shares of the Company of Rs.10/- each unless otherwise specified in the context thereof. Fiscal or FY or Twelve months ending March 31st of a particular year. Financial Year Fresh Issue or The issue of 2,47,60,400 Equity Shares at the Offer Price by the Company Primary Issue pursuant to this Draft Prospectus. Issue/Offer Initial Public Issue of 1,25,00,000 Equity Shares of Rs.10 each at a premium of Rs.10 per share of the Company. Memorandum/MoA/ The Memorandum of Association of Vikash Metal & Power Limited. Memorandum of Association i Term Description MIL Microsec India Limited, a public limited company incorporated under the provisions of the Companies Act and with its registered office at Azimganj House, 2nd Floor, 7, Camac Street, Kolkata-700 017. MS Billets/Ingots These are various forms of Mild Steel products depending on factors such as size, shape and weight. NSE National Stock Exchange of India Limited. OCB / Overseas A company, partnership, society or other corporate body owned directly or Corporate Body indirectly to the extent of at least 60% by NRIs, including overseas trusts in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as defined under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. OCBs are not allowed to invest in this Offer. Promoter(s) Shall mean jointly Shri Vimal Kumar Patni, Vikash Patni, Akash Patni, M/S Brahmand Udyog Private Limited and M/s Sahyogi Distributors Pvt Limited. QIB Portion The portion of the Net Offer being 12,50,000 Equity Shares available for compulsory allotment to QIBs. Qualified Public financial institutions as defined in Section 4A of the Companies Act, Institutional Buyers FIIs, scheduled commercial banks, mutual funds registered with SEBI, or QIBs venture capital funds registered with SEBI, foreign venture capital investors registered with SEBI, state industrial development corporations, insurance companies registered with the Insurance Regulatory and Development Authority, provident funds with minimum corpus of Rs. 2500 lacs, pension funds with minimum corpus of Rs. 2500 lacs, and multilateral and bilateral development financial institutions. Registrar of Registrar of Companies at Kolkata, West Bengal. Companies or RoC Registrar or Maheshwari Datamatics Pvt. Ltd, a company incorporated under the Companies Act, having its registered office at 6,Mangoe Lane,2nd Floor, Registrar to the Kolkata – 700 001. Offer Retail Individual “Retail Individual Investor” means an investor who applies or bids for securities of or for a value of not more than Rs.1,00,000/-.) Investors. Retail Portion The portion of the Net Offer being a minimum of 62,50,000 Equity Shares available for allocation to Retail Individual Investor(s). Rolling Mill Project Shall mean that part of the project relating to setting up of rolling mill.