Sun TV Limited (Our Company Was Incorporated As Sumangali Publications Private Limited on December 18, 1985
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RED HERRING PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated March 22, 2006 100% Book Built Issue Sun TV Limited (Our Company was incorporated as Sumangali Publications Private Limited on December 18, 1985. The word ‘private’ in the name of our Company was deleted with effect from July 1, 1996 pursuant to Section 43A(1A) of the Companies Act, 1956. The name of our Company was changed to Sun TV Limited by a special resolution of the members passed at an extraordinary general meeting held on March 23, 2000. The fresh certificate of incorporation consequent to the change of name was granted to our Company on March 27, 2000, by the Registrar of Companies, Tamil Nadu. The word ‘private’ was reinserted in the name of the Company by the provisions of Section 43A(2A) of the Companies Act, 1956 on October 9, 2001. The status of our Company was subsequently changed to a public limited company by a special resolution of the members passed at an extraordinary general meeting held on December 15, 2005. The fresh certificate of incorporation consequent on change of name was granted to our Company on December 27, 2005, by the Registrar of Companies, Tamil Nadu.) Registered Office and Corporate Office: 367/369, Anna Salai, Teynampet, Chennai 600 018, India Tel: (91 44) 2431 8181; Fax: (91 44) 2434 2729 (Our registered office was shifted from 182, Kodambakkam High Road, Chennai 600 034, India to 367/369, Anna Salai, Teynampet, Chennai 600 018, India by a resolution of our Board dated December 5, 2005.) Email: [email protected]; Website: http://www.sunnetwork.in; Contact Person : R. Ravi (Company Secretary and Compliance Officer) PUBLIC ISSUE OF 6,889,000 EQUITY SHARES OF RS. 10 EACH FOR CASH AT A PRICE OF RS [●] PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF RS. [●] PER EQUITY SHARE, AGGREGATING RS. [●] MILLION (THE “ISSUE”). THE ISSUE WOULD CONSTITUTE 10% OF THE FULLY DILUTED POST ISSUE PAID-UP CAPITAL OF THE COMPANY. PRICE BAND: RS. 730/- TO RS. 875/- PER EQUITY SHARE OF FACE VALUE RS. 10. THE FACE VALUE OF THE EQUITY SHARES IS RS. 10 AND THE FLOOR PRICE IS 73 TIMES OF THE FACE VALUE AND THE CAP PRICE IS 87.5 TIMES OF THE FACE VALUE In case of revision in the Price Band, the Bidding Period will be extended for three additional days after revision of the Price Band subject to the Bidding Period/Issue Period not exceeding 10 working days. Any revision in the Price Band and the revised Bidding Period, if applicable, will be widely disseminated by notification to the Bombay Stock Exchange Limited (“BSE”), and theNational Stock Exchange of India Limited (“NSE”), by issuing a press release, and also by indicating the change on the websites of the Book Running Lead Manager, Senior Co-Book Running Lead Manager and at the terminals of the Syndicate. In terms of Rule 19 (2)(b) of the Securities Contract Regulation Rules, 1957 (“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 will be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”), out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to QIBs and Mutual Funds, subject to valid bids being received from them at or above the Issue Price. If at least 60% of the Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Further, up to 10% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and up to 30% of the Issue will 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 THE FIRST ISSUE This being the first public 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 [●] times of the face value. The Issue Price (as determined by the Company, in consultation with the Book Running Lead Manager and Senior Co-Book Running Lead Manger, 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.We have not opted for a grading of this Issue from a credit rating agency. 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 Issuer 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 Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” on page xi. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer having made all reasonable inquiries, accepts responsibility for and confirms that this Red Herring 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 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 ARRANGEMENT The Equity Shares offered through this Red Herring Prospectus are proposed to be listed on the BSE and the NSE . We have received in-principle approval from BSE and NSE for the listing of our Equity Shares pursuant to letters dated February 21, 2006 and February 22, 2006, respectively. For purposes of this Issue, the Designated Stock Exchange is BSE. BOOK RUNNING LEAD MANAGER SENIOR CO – BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUE Kotak Mahindra Capital Company Limited DSP Merrill Lynch Limited Karvy Computershare Private Limited 3rd Floor, Bakthawar Mafatlal Centre, 10th Floor “Karvy House”, 46, Avenue 4 229, Nariman Point Nariman Point Street No.1, Banjara Hills Mumbai 400 021, India Mumbai 400 021, India Hyderabad 500 034, India Tel: (91 22) 5634 1100 Tel: (91 22) 2262 1071 Tel: (91 40) 2331 2454 Fax: (91 22) 2284 0492 Fax: (91 22) 2262 1182 Fax: (91 40) 2331 1968 Email: [email protected] Email: [email protected] Email: [email protected] Website: www.kotak.com Website: www.dspml.com Website: www.karvy.com Contact Person: Mr.Sunil Amin Contact Person: Mr. N.S.Shekhar Contact Person: Mr. Murali Krishna BID/ ISSUE PROGRAMME BID/ ISSUE OPENS ON : MONDAY, APRIL 03, 2006 BID/ ISSUE CLOSES ON : FRIDAY, APRIL 07, 2006 TABLE OF CONTENTS Page SECTION I- GENERAL .............................................................................................................................. i DEFINITIONS AND ABBREVIATIONS ........................................................................................... i CERTAIN CONVENTIONS; USE OF INDUSTRY AND MARKET DATA ........................................ ix FORWARD-LOOKING STATEMENTS ............................................................................................ x SECTION II- RISK FACTORS .................................................................................................................... xi SECTION III – INTRODUCTION ................................................................................................................ 1 SUMMARY OF OUR BUSINESS, STRENGTHS AND STRATEGY ............................................... 1 SUMMARY FINANCIAL INFORMATION ....................................................................................... 4 THE ISSUE ..................................................................................................................................... 7 GENERAL INFORMATION .............................................................................................................8 CAPITAL STRUCTURE ................................................................................................................... 16 OBJECTS OF THE ISSUE ............................................................................................................... 21 TERMS OF THE ISSUE ................................................................................................................... 27 BASIS FOR ISSUE PRICE ............................................................................................................... 30 STATEMENT OF TAX BENEFITS .................................................................................................... 32 SECTION IV: ABOUT THE COMPANY ..................................................................................................... 40 INDUSTRY ....................................................................................................................................