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DRAFT RED HERRING PROSPECTUS
Dated: October 30, 2014
(This Draft Red Herring Prospectus will be updated upon filing with the RoC)
(Please read Section 32 of the Companies Act, 2013)
100% Book Built Issue
POWER MECH PROJECTS LIMITED
Our Company was originally incorporated on July 22, 1999 as a private limited company under the Companies Act, 1956, by the name Power Mech-Projects Private
Limited. On September 28, 2007, our Company was converted into a public limited company pursuant to which the name was changed to Power Mech-Projects Limited
and a fresh certificate of incorporation was issued on October 16, 2007. Further, on September 15, 2010, our name was changed from Power Mech-Projects Limited to
Power Mech Projects Limited and a fresh certificate of incorporation was issued pursuant to change of name on November 1, 2010. For details of change in name and the
registered office of our Company, see History and Corporate Structure on Page 154.
Registered Office: Plot No. 77, Jubilee Enclave, Opposite Hitex, Madhapur, Hyderabad 500 081, Telangana, India
Company Secretary and Compliance Officer: Mohit Gurjar; Tel: +91 40 3044 4418; Fax: +91 40 3044 4400 Email: [email protected]; Website: www.powermechprojects.in
Corporate Identity Number: U74140TG1999PLC032156
OUR PROMOTERS: S. KISHORE BABU, S. LAKSHMI, S. ROHIT, S. VIGNATHA AND S. KISHORE BABU (HUF)
PUBLIC ISSUE OF 4,269,000 EQUITY SHARES OF FACE VALUE OF 10 EACH (THE EQUITY SHARES) OF POWER MECH PROJECTS LIMITED, (THE COMPANY OR THE ISSUER) FOR CASH AT A PRICE OF [] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF [] PER EQUITY SHARE) AGGREGATING TO [] MILLION CONSISTING OF A FRESH ISSUE OF 2,128,000 EQUITY SHARES AGGREGATING UP TO [] MILLION BY OUR COMPANY (THE FRESH ISSUE) AND AN OFFER FOR SALE OF UP TO 2,141,000 EQUITY SHARES BY THE SELLING SHAREHOLDERS (AS DEFINED IN DEFINITIONS AND ABBREVIATIONS ON PAGE 7) AGGREGATING UP TO [] MILLION (THEOFFER FOR SALEAND THE FRESH ISSUE ARE TOGETHER REFERRED TO AS, THE ISSUE). THE ISSUE WILL CONSTITUTE 29.02%
OF THE FULLY DILUTED POST ISSUE PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.
THE FACE VALUE OF THE EQUITY SHARES IS 10 EACH AND THE ISSUE PRICE IS [] TIMES THE FACE VALUE OF THE EQUITY SHARES. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDERS IN
CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS AND WILL BE ADVERTISED AT LEAST 5 (FIVE) WORKING DAYS PRIOR TO
THE BID/ISSUE OPENING DATE.
In case of revision in the Price Band, the Bid/Issue Period will be extended by at least 3 (three) additional Working Days after such revision of the Price Band, subject to the Bid/Issue
Period not exceeding 10 (ten) Working Days. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to the
BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE together with the BSE, the Stock Exchanges), by issuing a press release, and also by indicating
the change on the website of the Book Running Lead Managers (BRLMs), the Syndicate Members and the Self Certified Syndicate Banks (SCSBs).
In terms of Rule 19(2)(b)(i) of the Securities Contracts (Regulation) Rules, 1957, as amended, (the SCRR) this Issue is being made for at least 25.00% of the post Issue paid-up
Equity Share capital of our Company. The Issue is being made through the Book Building Process, in compliance with Regulation 26(1) of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (SEBI ICDR Regulations) where 50.00% of the Issue will be available for allocation on a
proportionate basis to Qualified Institutional Buyers (QIBs) (the QIB Category), provided that our Company and the Selling Shareholders may, in consultation with the Book
Running Lead Managers, allocate up to 60.00% of the QIB Category to Anchor Investors, on a discretionary basis (the Anchor Investor Portion), of which one-third shall be
reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. Further, 5.00% of the QIB
Category (excluding the Anchor Investor Portion) 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. Further, not less than 15.00% of the Issue will be available
for allocation on a proportionate basis to Non-Institutional Investors and not less than 35.00% of the Issue will be available for allocation to Retail Individual Investors, in accordance
with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Issue Price. Retail Individual Investors may participate in this Issue through the ASBA process
by providing details of the ASBA Accounts in which the corresponding Bid Amounts will be blocked by the SCSBs. QIBs (excluding Anchor Investors) and Non-Institutional
Investors can participate in the Issue only through the ASBA process. Anchor Investors are not permitted to participate in the Anchor Investor Portion through the ASBA process. For
details, see Issue Procedure on Page 442.
RISK IN RELATION TO THE FIRST ISSUE
This being the first public issue of Equity Shares of our Company, there is no formal market for the Equity Shares of our Company. The face value of the Equity Shares is 10 each. The Floor Price is [] times of the face value and the Cap Price is [] times of the face value. The Issue Price (determined and justified by our Company in consultation with the
BRLMs as stated under Basis for Issue Price on Page 106) 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 or sustained trading in the Equity Shares of our 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
entire 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 our 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 the contents of this Draft Red Herring Prospectus. Specific attention of the investors is
invited to see Risk Factors on Page 16.
ISSUERS AND SELLING SHAREHOLDERS ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our
Company and the Issue, which is material in the context of the Issue, that the information contained in this Draft 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 Draft
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. Further, each Selling
Shareholder accepts that this Draft Red Herring Prospectus contains all information about it as the Selling Shareholder in the context of the Offer for Sale and assumes responsibility
only for statements in relation to such Selling Shareholder included in this Draft Red Herring Prospectus.
LISTING
The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on the BSE and the NSE. We have received an in-principle approval from each of BSE and
NSE for the listing of the Equity Shares pursuant to the letters dated [] and [], respectively. For the purposes of the Issue, the Designated Stock Exchange shall be [].
BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE
KOTAK MAHINDRA CAPITAL
COMPANY LIMITED
27 BKC, 1st Floor, Plot No. C-27
G Block, Bandra Kurla Complex
Bandra (East)
Mumbai 400 051
Maharashtra, India
Tel: +91 22 4336 0000
Fax: +91 22 6713 2447
Email: [email protected]
Investor grievance email:
Website: http://investmentbank.kotak.com
Contact Person: Ganesh Rane
SEBI Registration No.: INM000008704
INDIA INFOLINE LIMITED
8th Floor, IIFL Centre
Kamala City
Senapati Bapat Marg
Lower Parel (West)
Mumbai 400 013
Maharashtra, India
Tel: +91 22 46464600
Fax: +91 22 24931073
Email: [email protected]
Investor grievance email: [email protected]
Website: www.iiflcap.com
Contact Person: Pinak Bhattacharyya/
Pinkesh Soni
SEBI Registration No.: INM000010940
MOTILAL OSWAL INVESTMENT
ADVISORS PRIVATE LIMITED*
Motilal Oswal Tower
Rahimtullah Sayani Road
Opposite Parel ST Depot, Prabhadevi
Mumbai 400 025
Maharashtra, India
Tel: +91 22 3980 4380
Fax: +91 22 3980 4315
Email: [email protected]