PROSPECTUS Dated November 14, 2007 100% Book Building Issue MUNDRA PORT AND SPECIAL ECONOMIC ZONE LIMITED (Our Company was incorporated as Gujarat Adani Port Limited under the Companies Act, 1956 on May 26, 1998. The name of our Company was changed to Mundra Port and Special Economic Zone Limited on July 7, 2006.) Registered and Corporate Office: Adani House, Near Mithakhali Six Roads, Navrangpura, Ahmedabad 380 009 Company Secretary and Compliance Officer: Mrs. Dipti Shah Tel: (91 79) 2656 5555, Fax: (91 79) 2656 5500, Email: [email protected], Website: www.portofmundra.com PUBLIC ISSUE OF 40,250,000 EQUITY SHARES OF Rs. 10 EACH OF MUNDRA PORT AND SPECIAL ECONOMIC ZONE LIMITED (“MPSEZ” OR THE “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF Rs. 440 PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF Rs. 430 PER EQUITY SHARE) AGGREGATING TO Rs. 17,710 MILLION (THE “ISSUE”). THE ISSUE COMPRISES A NET ISSUE OF 40,100,000 EQUITY SHARES TO THE PUBLIC AND A RESERVATION OF 150,000 EQUITY SHARES FOR ELIGIBLE EMPLOYEES (THE “EMPLOYEE RESERVATION PORTION”). THE ISSUE AND THE NET ISSUE WILL CONSTITUTE 10.05% AND 10.01% RESPECTIVELY OF THE FULLY DILUTED POST ISSUE PAID-UP CAPITAL OF THE COMPANY. ISSUE PRICE RS. 440 PER EQUITY SHARE OF FACE VALUE RS. 10 EACH ISSUE PRICE IS 44.0 TIMES THE FACE VALUE In case of revision in the Price Band, the Bidding/Issue Period will be extended by three additional 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 Bidding/Issue Period, if applicable, will be widely disseminated by notification to the National Stock Exchange of India Limited (“NSE”) and the Bombay Stock Exchange Limited (“BSE”), by issuing a press release, and also by indicating the change on the websites of the Book Running Lead Managers and at the terminals of the Syndicate. In accordance with 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 Net 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 all QIBs, including Mutual Funds, subject to valid bids being received from them at or above the Issue Price. If at least 60% of the Net Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Further, up to 10% of the Net Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and up to 30% of the Net 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 our Company, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares is Rs.10 per Equity Share and the Issue Price is 44 times of the face value. The Issue Price (as determined by our Company in consultation with the Book Running Lead Managers on the basis of assessment of market demand for the Equity Shares offered by way of the Book Building Process and as stated in the section “Basis for Issue Price” on page 42 of this Prospectus) 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 our Company or regarding the price at which the Equity Shares will be traded after listing. Our Company has not opted for a grading of this Issue. 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 Prospectus. Specific attention of the investors is drawn to the section titled “Risk Factors” on page xv of this Prospectus. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to the Issuer and the Issue that is material in the context of the 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 information or the expression of any opinions or intentions, misleading in any material respect. LISTING ARRANGEMENT The Equity Shares offered through this Prospectus are proposed to be listed on the NSE and the BSE. We have received in-principle approval from NSE and BSE for the listing of our Equity Shares pursuant to letters dated October 12, 2007 and October 1, 2007, respectively. For purposes of the Issue, the Designated Stock Exchange is BSE. GLOBAL CO-ORDINATORS AND BOOK RUNNING LEAD MANAGERS DSP Merrill Lynch Limited JM Financial Consultants Private Limited SSKI Corporate Finance Private Limited Mafatlal Centre, 10th Floor 141, Maker Chambers III 803/4 Tulsiani Chambers Nariman Point, Nariman Point 8th Floor, Nariman Point Mumbai 400 021 Mumbai 400 021 Mumbai 400 021 Tel: (91 22) 6632 8000 Tel: (91 22) 6630 3030 Tel: (91 22) 6638 3333 Fax: (91 22) 2204 8518 Fax: (91 22) 2204 7185 Fax: (91 22) 2204 0282 Email: [email protected] Email: [email protected] Email: [email protected] Website: www.dspml.com Website: www.jmfinancial.in Website: www.sski.co.in Contact Person: N.S. Shekhar Contact Person: Poonam Karande Contact Person: Abhishek Jain BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUE Enam Securities Private Limited SBI Capital Markets Limited Intime Spectrum Registry Limited 801, Dalamal Towers 202, Maker Towers ‘E’, C-13, Pannalal Silk Mills Compound, Nariman Point Cuffe Parade, LBS Marg, Bhandup (West), Mumbai 400021 Mumbai 400 005 Mumbai 400 078 Tel: (91 22) 6638 1800 Tel: (91 22) 2218 9166 Tel. : (91 22) 2596 0320 Fax: (91 22) 2284 6824 Fax: (91 22) 2218 8332 Fax. : (91 22) 2596 0329 Email: [email protected] Email : [email protected] Email: [email protected] Website: www.enam.com Website : www.sbicaps.com Website: www.intimespectrum.com Contact Person: Sachin K. Chandiwal Contact Person : Subrat Panda Contact Person: Vishwas Attavar ISSUE PROGRAMME BID/ISSUE OPENED ON : THURSDAY, NOVEMBER 01, 2007 BID/ISSUE CLOSED ON : WEDNESDAY, NOVEMBER 07, 2007 TABLE OF CONTENTS PAGE NUMBER SECTION I: GENERAL ................................................................................................................................... i DEFINITIONS AND ABBREVIATIONS .................................................................................................... i PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ..................................................... xiii FORWARD-LOOKING STATEMENTS .................................................................................................... xiv SECTION II: RISK FACTORS .......................................................................................................................... xv SECTION III: INTRODUCTION ....................................................................................................................... 1 SUMMARY OF OUR BUSINESS, STRENGTHS AND STRATEGY ........................................................ 1 SUMMARY FINANCIAL INFORMATION ............................................................................................... 4 THE ISSUE .............................................................................................................................................. 10 GENERAL INFORMATION ...................................................................................................................... 11 CAPITAL STRUCTURE ............................................................................................................................ 21 OBJECTS OF THE ISSUE ....................................................................................................................... 31 BASIS FOR ISSUE PRICE ....................................................................................................................... 42 STATEMENT OF TAX BENEFITS ............................................................................................................ 44 SECTION IV: ABOUT THE COMPANY ........................................................................................................... 52 INDUSTRY OVERVIEW .......................................................................................................................... 52 OUR BUSINESS .....................................................................................................................................