C M K PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated May 3, 2005 100% Book Building Issue India Infoline Limited (Incorporated on October 18, 1995 as Probity Research & Services Private Limited at Mumbai under the Companies Act, 1956 with Registration No. 11 – 93797. It was converted into a Public Limited Company on April 28, 2000 and the name of the Company was changed to Probity Research & Services Limited. The name of the company was changed to India Infoline.com Limited on May 23, 2000. The name of the company was further changed to India Infoline Limited on March 23, 2001.) Registered office: 24, Nirlon Complex, Off Western Express Highway, Goregaon (East), Mumbai - 400 063. Tel: +91-22-5677 5900; Fax: +91-22-2685 0451; E-mail: [email protected]; Website: www.indiainfoline.com PUBLIC ISSUE OF EQUITY SHARES COMPRISING 11,878,138 EQUITY SHARES OF FACE VALUE RS. 10/- EACH AT A PRICE OF RS. 76 FOR CASH AT A PREMIUM AGGREGATING RS. 902.74 MILLION (HEREINAFTER REFERRED TO AS THE “ISSUE”), INCLUDING EMPLOYEE RESERVATION OF 878,138 EQUITY SHARES OF FACE VALUE OF RS. 10/- EACH AT A PRICE OF RS. 76 FOR CASH AGGREGATING RS. 66.74 MILLION AND NET ISSUE TO THE PUBLIC OF 11,000,000 EQUITY SHARES OF FACE VALUE OF RS. 10/- EACH AT A PRICE OF RS. 76 FOR CASH AGGREGATING RS. 836.00 MILLION (HEREINAFTER REFERRED TO AS THE “NET ISSUE”) AND THE ISSUE WOULD CONSTITUTE 27.31% OF THE POST ISSUE PAID-UP CAPITAL OF INDIA INFOLINE LIMITED PRICE BAND: Rs. 70 TO Rs. 80 PER EQUITY SHARE ISSUE PRICE IS 7.6 TIMES OF THE FACE VALUE This Issue is being made through a 100% Book Building Process wherein at least 50% of the Net Issue shall be allocated on a discretionary basis to Qualified Institutional Buyers. Further, not less than 25% of the Net Issue shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 25% 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. 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 shares is Rs. 10/- and the Issue Price is ‘7.6 times’ of the face value. This Issue Price (as determined by the Company, in consultation with the Book Running Lead Manager (“BRLM”), 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 of the Company 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 this Issue including the risks involved. The Equity Shares issued in this 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 statements in Risk Factors beginning on page no. viii of this Prospectus. COMPANY’S ABSOLUTE RESPONSIBILITY India Infoline Limited having made all reasonable inquiries, accept responsibility for and confirms that this Prospectus contains all information with regard to India Infoline Limited and this Issue, which is material in the context of this 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 issued through this Prospectus are proposed to be listed on The National Stock Exchange of India Limited and The Stock Exchange, Mumbai. We have received in-principle approval from these Stock Exchanges for the listing of our Equity Shares pursuant to letters dated March 29, 2005 and March 10, 2005 respectively. The National Stock Exchange of India Limited is the Designated Stock Exchange. BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUE ENAM FINANCIAL CONSULTANTS PRIVATE LIMITED INTIME SPECTRUM REGISTRY LIMITED 801/ 802, Dalamal Towers C-13, Pannalal Silk Mills Compound, LBS Marg Nariman Point, Mumbai, India 400 021 Bhandup (West), Mumbai, India 400 078 Tel. : +91- 22- 5638 1800 Tel: +91-22-5555 5491 / 92 / 93 / 94 Fax. : +91- 22- 2284 6824 Fax: +91-22-5555 5495 Email: [email protected] Email: [email protected] ISSUE PROGRAMME BID / ISSUE OPENED ON : APRIL 21, 2005 BID / ISSUE CLOSED ON : APRIL 27, 2005 C M K TABLE OF CONTENTS PAGE DEFINITIONS AND ABBREVIATIONS ...................................................................................................................... i SECTION I: ................................................................................................................................................................. RISK FACTORS .......................................................................................................................................................... viii CERTAIN CONVENTIONS: USE OF MARKET DATA............................................................................................... viii FORWARD-LOOKING STATEMENTS ....................................................................................................................... ix RISK FACTORS .......................................................................................................................................................... x SECTION II: ................................................................................................................................................................ INTRODUCTION ........................................................................................................................................................ 1 SUMMARY .................................................................................................................................................................. 1 OUR STRATEGY ........................................................................................................................................................ 2 SUMMARY FINANCIAL DATA ................................................................................................................................... 3 THE ISSUE ................................................................................................................................................................. 9 GENERAL INFORMATION ........................................................................................................................................ 10 CAPITAL STRUCTURE ............................................................................................................................................. 18 OBJECTS OF THE ISSUE .......................................................................................................................................... 28 SECTION III: ............................................................................................................................................................... ABOUT US .................................................................................................................................................................. 32 INDUSTRY .................................................................................................................................................................. 32 BUSINESS .................................................................................................................................................................. 38 HISTORY AND OTHER CORPORATE MATTERS ................................................................................................... 47 OUR MANAGEMENT ................................................................................................................................................. 51 OUR PROMOTERS .................................................................................................................................................... 60 PROMOTER GROUP COMPANIES .......................................................................................................................... 61 OUR SUBSIDIARIES .................................................................................................................................................. 63 RELATED PARTY TRANSACTIONS ......................................................................................................................... 67 SECTION IV: ............................................................................................................................................................... MANAGEMENT’S DISCUSSION AND ANALYSIS ..................................................................................................