Parsvnath Developers Limited (Incorporated on July 24, 1990 Under the Companies Act, 1956
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RED HERRING PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated October 20, 2006 100% Book Built Issue Parsvnath Developers Limited (Incorporated on July 24, 1990 under the Companies Act, 1956. The registered office of our Company was changed from G-2, Arunachal Building, 19, Barakhamba Road, New Delhi 110 001, India to the current registered office from March 1, 2004.) Registered and Corporate Office: 6th Floor, Arunachal Building, 19, Barakhamba Road, New Delhi 110 001, India. Tel: +91 11 2331 0198. Fax: +91 11 2331 5400. Contact Person: Mr. V. Mohan, Company Secretary and Compliance Officer. Tel: +91 11 2335 0120. E-mail: [email protected]. Website: www.parsvnath.com. PUBLIC ISSUE OF UP TO 33,238,000 EQUITY SHARES OF Rs. 10 EACH (“EQUITY SHARES”) FOR CASH AT A PREMIUM OF RS. [●] PER EQUITY SHARE AND AT A PRICE OF RS. [●] PER EQUITY SHARE AGGREGATING RS. [●] MILLION (THE “ISSUE”), BY PARSVNATH DEVELOPERS LIMITED (“PDL”, “THE COMPANY” OR “THE ISSUER”). THERE WILL ALSO BE A GREEN SHOE OPTION OF UP TO 30,87,800 EQUITY SHARES TO BE OFFERED BY PARASNATH AND ASSOCIATES PRIVATE LIMITED, ONE OF OUR PROMOTERS, FOR CASH AT A PREMIUM OF RS. [●] PER EQUITY SHARE AND AT A PRICE OF RS. [●] PER EQUITY SHARE AGGREGATING RS. [●] MILLION. THE ISSUE AND THE GREEN SHOE OPTION, IF EXERCISED IN FULL, WILL AGGREGATE 36,325,800 EQUITY SHARES AMOUNTING TO RS. [●] MILLION. THE ISSUE COMPRISES A NET ISSUE TO THE PUBLIC OF UP TO 33,038,000 EQUITY SHARES (“THE NET ISSUE”) AND A RESERVATION OF UP TO 200,000 EQUITY SHARES FOR SUBSCRIPTION BY EMPLOYEES (AS DEFINED HEREIN) (THE “EMPLOYEE RESERVATION PORTION”), AT THE ISSUE PRICE. THE ISSUE WILL CONSTITUTE 18.30% OF THE FULLY DILUTED POST-ISSUE EQUITY SHARE CAPITAL OF OUR COMPANY ASSUMING THAT THE GREEN SHOE OPTION IS NOT EXERCISED AND 19.67% ASSUMING THAT THE GREEN SHOE OPTION IS EXERCISED IN FULL. PRICE BAND: RS. 250 TO RS. 300 PER EQUITY SHARE OF FACE VALUE RS. 10 THE FACE VALUE OF EQUITY SHARE IS RS. 10 AND THE FLOOR PRICE IS 25 TIMES OF THE FACE VALUE AND THE CAP PRICE IS 30 TIMES OF THE FACE VALUE In case of revision in the Price Band, the Bidding/Issue Period will be extended for three additional working days after revision of the Price Band subject to the Bidding/Issue Period not exceeding 10 working days. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to Bombay Stock Exchange Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”), by issuing a press release, and also by indicating the change on the website of the Book Running Lead Managers and at the terminals of the Syndicate. 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 Net 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 Net Issue cannot be allocated to QIB Bidders, then the entire application money will be refunded forthwith. Further, up to 10% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and up to 30% of the Net 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. Further, up to 200,000 Equity Shares shall be available for allocation on a proportionate basis to the Employees, subject to valid Bids being received at or above the Issue Price. The Company has not opted for grading of the Issue. 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 Share is Rs. 10 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 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 Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page x of this Red Herring Prospectus. 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 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 the BSE and the NSE for the listing of our Equity Shares pursuant to letters dated September 14, 2006 and September 13, 2006 respectively. National Stock Exchange of India Limited shall be the Designated Stock Exchange. BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE ENAM FINANCIAL JM MORGAN STANLEY DSP MERRILL INTIME SPECTRUM CONSULTANTS PVT. LTD. PRIVATE LIMITED LYNCH LIMITED REGISTRY LIMITED 801/ 802, Dalamal Towers, 141, Maker Chambers III, Mafatlal Centre, 10th Floor, C-13, Pannalal Silk Mills Compound, Nariman Point, Nariman Point, Nariman Point L B S Marg, Bhandup (W), Mumbai - 400 021, India. Mumbai - 400 021, India. Mumbai 400 021, India Mumbai 400 078, India Tel : +91 22 6638 1800 Tel: + 91 22 6630 3030 Tel: +91 22 2262 1071 Tel: +91 22 2596 0320 Fax: +91 22 2284 6824 Fax: + 91 22 2204 7185 Fax: +91 22 2262 1187 Fax: +91 22 2596 0329 E-mail: [email protected] E-mail:[email protected] Email: [email protected] Email: [email protected] Website: www.enam.com Website: www.jmmorganstanley.com Website: www.dspml.com Website: www.intimespectrum.com ISSUE PROGRAMME BID/ISSUE OPENS ON : MONDAY, NOVEMBER 06, 2006 BID/ISSUE CLOSES ON :FRIDAY, NOVEMBER 10, 2006 TABLE OF CONTENTS INDEX PAGE NUMBER SECTION I – GENERAL .................................................................................................................................. i DEFINITIONS AND ABBREVIATIONS .................................................................................................... i PRESENTATION OF FINANCIAL AND MARKET DATA ......................................................................... viii FORWARD-LOOKING STATEMENTS .................................................................................................... ix SECTION II – RISK FACTORS ........................................................................................................................ x SECTION III – INTRODUCTION ...................................................................................................................... 1 SUMMARY ............................................................................................................................................. 1 THE ISSUE .............................................................................................................................................. 5 GREEN SHOE OPTION ........................................................................................................................... 6 SUMMARY FINANCIAL INFORMATION ............................................................................................... 9 GENERAL INFORMATION ...................................................................................................................... 11 CAPITAL STRUCTURE ............................................................................................................................ 21 OBJECTS OF THE ISSUE ....................................................................................................................... 30 TERMS OF THE ISSUE ........................................................................................................................... 37 BASIS FOR ISSUE PRICE ......................................................................................................................