Offer Document Dated March 13, 2006 (Comprising Letter of Offer for The Rights Issue Component and Red Herring Prospectus for The Public Issue Component to be updated upon filing with the ROC) Please read Section 60B of the Companies Act, 1956 (Public Issue through 100% Book Built Route) D. S. KULKARNI DEVELOPERS LIMITED (Incorporated on September 20, 1991 under the Companies Act, 1956) Registered & Head Office: DSK House, 1187/60, J. M. Road, Shivajinagar, Pune - 411 005 Tel: (020) 5604 7100, Fax: (020) 2553 5772; Contact Person: Shri Ashish Boradkar (Compliance Officer) E-mail: [email protected]; Website: www.dskdl.com Composite Issue of 1,10,00,000 Equity Shares of Rs. 10/- each aggregating Rs. [z] (the "Issue") comprising: 1. Rights Issue of 55,00,000 Equity Shares of Rs. 10/- each for cash at a premium of Rs. 100 per Equity Share (i.e., at a price of Rs. 110 per share) aggregating Rs. 60,50,00,000 (Rupees Sixty crores and Fifty lacs only) to the existing Equity Shareholders of the Company in the ratio of One (1) Equity Share for every Two (2) Equity Shares held as on March 21, 2006 (Record Date). 2. Public Issue of 55,00,000 Equity Shares of Rs. 10/- each for cash at a price of Rs. [z] per Equity Share aggregating Rs. [z]. The Issue comprises Promoters Contribution of 6,40,155 Equity Shares, a reservation for Employees of 1,10,000 Equity Shares of Rs. 10/- each and a net offer to the public of 47,49,845 Equity Shares of Rs. 10/- each (the "Net Offer"). PRICE BAND: RS. [z] TO RS. [z] PER EQUITY SHARE OF FACE VALUE RS. 10/- The Issue will constitute 50% of the fully diluted post-Issue paid up capital of the Company. THE FACE VALUE OF THE EQUITY SHARES IS RS. 10/- PER EQUITY SHARE AND THE RIGHTS ISSUE PRICE OF RS. 110 IS 11 TIMES OF THE FACE VALUE AND THE PUBLIC ISSUE PRICE OF RS. [z] AT LOWER BAND AND RS. [z] AT HIGHER BAND PER EQUITY SHARE IS [z] TIMES THE FACE VALUE AT THE LOWER END OF THE PRICE BAND AND [z] TIMES THE FACE VALUE AT THE HIGHER END OF THE PRICE BAND. In case of revision in the Price Band of Public Issue, 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 The Bombay Stock Exchange Ltd. ("BSE") and the National Stock Exchange of India Ltd. ("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. The Public Issue is made through the 100% Book Building Process wherein upto 50% of the Net Issue to the public shall be allocated on a proportionate basis to Qualified Institutional Buyers, out of which 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remaining QIB Portion shall be available for allocation on a proportionate basis to all Qualified Institutional Buyers, including Mutual Funds, subject to valid Bids being received at or above Issue Price. Further, at least 15% of the Net Issue to the public shall be available for allocation on proportionate basis to Non-Institutional Bidders and at least 35% of the Net Issue to the public shall be available for allocation on a proportionate basis to Retail Institutional Bidders, subject to valid Bids being received at or above the Issue Price. Further, upto 1,10,000 Equity Shares shall be available for allocation to the Employees, subject to valid Bids being received at or above the Issue Price. GENERAL RISK Investment 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 risk 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. The attention of the investors is drawn to the statement of Risk Factors beginning on page no. x of this Offer Document. ISSUER'S ABSOLUTE RESPONSIBILITY The Issuer, 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 this Offer Document is true and correct in all material respects 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 document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE A. K. Capital Services Ltd. Indian Overseas Bank Sharepro Services (India) Pvt. Ltd. 135-136, Free Press House, Merchant Banking Division Satam Estate, 3rd Floor, Cardinal Gracious 13th Floor, Free Press Journal Marg, 763, Anna Salai, Road, Chakala, Andheri (E), 215, Nariman Point, Mumbai - 400 021 Chennai - 600 002 Mumbai - 400 099 Tel: (022) 5634 9300; Tel: (044) 2851 9448; 2851 9548 Tel: (022) 2821 5168; Fax: (022) 5636 0977 Fax: (044) 2852 2747 Fax: (022) 2837 5646 E-mail: [email protected] E-mail: [email protected] Email: [email protected] Website: www.akcapindia.com Website: www.iob.com Website: www.shareproservices.com BID / ISSUE SCHEDULE RIGHTS ISSUE PUBLIC ISSUE OFFER OPENS ON: March 30, 2006 BID / ISSUE OPENS ON: April 25, 2006 LAST DATE FOR RECEIVING REQUEST FOR SPLIT FORMS: April 15, 2006 BID / ISSUE CLOSES ON: May 3, 2006 OFFER CLOSES ON: April 29, 2006 LISTING The Equity Shares of the Company are listed on Bombay Stock Exchange Ltd. ("BSE") and the National Stock Exchange of India Ltd. ("NSE"). The Equity Shares to be issued through this Issue would also be listed on the Stock Exchanges mentioned above. The Company has received in-principle approval for the listing of the Equity Shares pursuant to letters dated February 15, 2006 for the Public Issue and February 17, 2006 for the Rights Issue from BSE and letter dated February 22, 2006 for the Composite Issue from NSE. BSE shall be the Designated Stock Exchange. TABLE OF CONTENTS TITLE Page No. SECTION I: DEFINITIONS & ABBREVIATIONS .......................................................................................... ii SECTION II: RISK FACTORS ........................................................................................................................ x 1. FORWARD-LOOKING STATEMENTS ................................................................................................. x 2. RISK FACTORS .................................................................................................................................... x SECTION III: INTRODUCTION ...................................................................................................................... 1 1. SUMMARY............................................................................................................................................. 1 2. GENERAL INFORMATION ................................................................................................................... 5 3. CAPITAL STRUCTURE ........................................................................................................................ 12 4. OBJECTS OF THE OFFERING ............................................................................................................ 20 5. BASIC TERMS OF THE ISSUE ............................................................................................................ 32 6. BASIS FOR ISSUE PRICE.................................................................................................................... 33 7. STATEMENT OF TAX BENEFITS ........................................................................................................ 35 SECTION IV: ABOUT D. S. KULKARNI DEVELOPERS LIMITED .............................................................. 38 1. INDUSTRY OVERVIEW ........................................................................................................................ 38 2. BUSINESS OVERVIEW ........................................................................................................................ 45 3. REGULATIONS AND POLICIES .......................................................................................................... 51 4. HISTORY OF THE COMPANY ............................................................................................................. 54 5. MANAGEMENT OF THE COMPANY ................................................................................................... 56 6. PROMOTERS OF THE COMPANY ......................................................................................................66 7. RELATED PARTY TRANSACTIONS....................................................................................................71 8. CURRENCY OF PRESENTATION ....................................................................................................... 74 9. DIVIDEND POLICY OF THE COMPANY.............................................................................................