Initial public offer analysis for varun breverages
- 1. 1 INITIAL PUBLIC OFFER ANALYSIS VARUN BEVERAGES LIMITED
- 2. 2 Table of contents About Founder Chairman............................................................................................................... 3 About Our Board of Directors........................................................................................................ 4 1.1 Company profile: .............................................................................................................. 5 2.1 Industry profile ................................................................................................................. 7 3.1 Type of Issue...................................................................................................................... 8 3.2 Size of issue........................................................................................................................ 8 3.3 Objective of the issue ........................................................................................................ 9 4.1 Important parties to the issue, and Dates of the Issue................................................. 10 5.1 Issue Price with details ................................................................................................... 12 6.1 Paid up capital before the issue and after the issue ..................................................... 12 7.1 Listing Price and the premium or price fall on listing ................................................ 13 8.1 Market Capitalization of the company ......................................................................... 13 9.1 Financial track record of the company......................................................................... 14 9.1Current market price of the company and all other relevant aspects which are important to the issue are to be included............................................................................ 19
- 3. 3 VARUN BEVERAGES LIMITED Our Mission Being a Global, Growth Oriented and Profitable Organization by Offering best quality & refreshing product to every customer & consumer. Being a preferred employer providing consistent growth path, respect & empowerment. Creating value for our stakeholders by driving excellence in our operations. Being responsible towards environment & society. Our Values We hold strong values in business and fully respect our customers, associates and community. Our diversity and unity brings creativity to our relationships within our group, and to our associates. We continuously excel to achieve and maintain leadership position in the chosen businesses; and delight all stakeholders by making economic value additions in all About Founder Chairman
- 4. 4 Mr. Ravi Kant Jaipuria is the promoter and founding Chairman of Varun beverages Limited. Mr. Jaipuria has three decades of hands-on experience in conceptualizing, executing, developing and expanding the Food, Beverages and Dairy business in South Asia & Africa. He is the only Indian bottler to be awarded the PepsiCo “International Bottler of the Year” award in the year 1997. It was presented at PepsiCo’s centennial year and the award was presented by Mr. Donald M. Kendall, founder of PepsiCo Inc. in presence of Mr. George Bush, the 41st President of USA. He is hands on, well connected and respected entrepreneur of the business community in South Asia and Africa. About Our Board of Directors Name Age Since Current Position Ravi Jaipuria 61 ----- Chairman of the Board, Promoter Kapil Agarwal 52 2016 Whole-time Director and Chief Executive Officer Kamlesh Jain 54 2013 Whole-time Director and Chief Financial Officer Mahavir Garg 51 2013 Compliance officer, company secretary Raj Gandhi 59 2013 Whole-time Director Varun Jaipuria 28 2016 Whole-time Director Girish Ahuja 70 2016 Independent director Ravindra Dhariwal 64 2016 Independent director
- 5. 5 1.1 Company profile: VARUN BEVERAGES LIMITED is the one of the largest franchisee in the world (outside US) of carbonated soft drinks (“CSDs”) and non-carbonated beverages (“NCBs”) sold under trademarks owned by PepsiCo. We produce and distribute a wide range of CSDs, as well as a large selection of NCBs, including packaged drinking water. PepsiCo CSD brands produced and sold by us include Pepsi, Diet Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon, Mountain Dew, Seven-Up Nimbooz Masala Soda, Seven-Up Revive, Evervess Soda. PepsiCo NCB brands produced and sold by us include Tropicana Slice, Tropicana Frutz (Lychee, Apple and Mango), Seven-Up Nimbooz as well as packaged drinking water under the brand Aquafina. In addition, we have also been granted the franchise for Ole brand of PepsiCo products in Sri Lanka. VARUN BEVERAGES LIMITED is have been associated with PepsiCo since the 1990s and have over two and half decades consolidated our business association with PepsiCo, increasing the number of PepsiCo licensed territories and sub-territories covered by us, producing and distributing a wider range of PepsiCo beverages, introducing various SKUs in our portfolio, and expanding our distribution network. As of March 31, 2016, we have been granted franchises for various PepsiCo products spread across 17 States and two Union Territories in India. Our share of PepsiCo beverages volume sales ,based on sales to end customers, increased from 26.46% in Fiscal 2011 to 44.12% in Fiscal 2015, computed on basis of our Sales Volume and Euromonitor Report data on PepsiCo sales volumes in India. Although, India is our largest market, we have also been granted the franchise for various PepsiCo products for the territories
- 6. 6 of Nepal, Sri Lanka, Morocco, Mozambique and Zambia. In addition, we are in the process of setting up greenfield facility in Zimbabwe in anticipation of franchise rights being granted by PepsiCo Inc. for such territory. As of June 30, 2016, VBL operated 16 production facilities across India and five production facilities in its international licensed territories. These 16 production facilities also include the Satharia – 2 production facility which it recently acquired from its co-packer in September 2016. As of June 30, 2016, it had an estimated aggregate annual production capacity of 3,438.38 million litres (equivalent to 605.56 million unit cases) in India and an estimated aggregate annual production capacity of 991.57 million litres (equivalent to 174.63 million unit cases) in its international production facilities. In addition, it has set up backward integration facilities for production of preforms, crowns, corrugated boxes and pads, plastic crates and shrink-wrap films in certain of its production facilities to ensure operational efficiencies and quality standards. Additionally, VBL has two facilities dedicated to backward integration located at Jaipur and Alwar which manufacture crowns, plastic shells, corrugated boxes and pads and shrink wrap film. Its distribution network covers urban, semi-urban and rural markets, targeting a wide range of consumers. It has also developed an extensive distribution network in its international markets which as of June 30, 2016 included 20 depots and 518 delivery vehicles. As of June 30, 2016, VBL had 562 primary distributors (i.e., distributors that recorded sales in excess of 0.5 million litres of its PepsiCo beverages in the 12 months ended June 30, 2016) in India and 415 distributors in its international operations. The 562 primary distributors in India accounted for 74.36% of its aggregate Sales Volumes in India in the 12 months ended June 30, 2016.
- 7. 7 2.1 INDUSTRY PROFILE The soft drink market majorly comprises of bottled water, carbonates, packaged juices, ready to drink tea and coffee. The world soft drink market grew from 564,993 million litres in 2010 to 667,963 million litres in 2015, at a CAGR of 3.4% by volume. In terms of value, the soft drink market grew from US$ 732,766 million in 2010 to US$ 782,224 million in 2015, at a CAGR of 1.3%. In 2015, the per capita consumption of global soft drink market was 91.9 litres. It is expected to reach 103.0 litres in 2020. (Source: Euromonitor Report) In terms of per capita consumption of soft drinks, Asian and African economies are well behind mature markets like US and Germany. India, Sri Lanka, Zambia, Morocco, Mozambique and Nepal are forecasted to grow at a much faster rate than the world average of 2.3%, with markets like India and Nepal forecasted to grow in high double digits. (Source: Euromonitor Report) Soft Drinks in India – Industry Overview The soft drinks market in India is underdeveloped in terms of total per capita consumption of 9.4 litres in 2015, compared to the more mature markets such as U.S. and Germany, with per capita consumption of 347.3 liters and 291.9 liters, respectively, in such period. It is expected to almost double and reach 18.4 liters in 2020. In 2015, the total off-trade and on-trade sales of soft drinks in India was 12,081 million liters. During the period of 2010-2015, the total off- trade and on-trade sales by volume grew at a CAGR of 17.9% and by value grew at a CAGR of 18.7%. As a trend, the sale of soft drinks is higher during the summer months of April to June. According to Euro monitor International, with the end of winter and the resultant rising temperatures during summer months, soft drinks manufacturers, especially carbonates players, record strong sales. The Euro monitor Report, while noting that the growth in 2015 was slightly slower than 2014 due to untimely monsoons, estimates that the soft drinks industry in India will witness further growth in the next few years. The food processing industry in India has a total turnover of around USD 65 billion which includes value added products of around USD 20.6 billion. Coca cola, Pepsi, and Nestle are the leading beverage brands that have been ruling the Indian beverage market since past few decades. Among all the beverages, tea and coffee are manufactured as well as exported heavily in the international markets succumbing to the individual demands around the world. The beverage industry in India constitutes of around USD 230 million among the USD 65 billion food processing industry. The major sectors in beverage industry in India are tea and coffee which are not only sold heavily in the domestic market but are also exported to a range of leading overseas markets. The supply of tea and coffee is insurmountable in the Indian beverage industry. The Southern India also prefers coffee a lot. The production capacity of the total packaged coffee market is 19,600 tones which is approximately a USD 87 million market. The soft drink market such as carbonated beverages and juices constitutes around USD 1 billion producing 284 million crates per year. In the peak season, the consumption capacity reaches 25 million creates per month and during off season the same goes down to 15 million crates in a month. Pepsi and Coca cola are the two leading brands in the Indian market.
- 8. 8 Details of market share Company Share (%) Aradhana 34 Varun Beverages 15 Devyani Beverages 9 Kandhari Beverages 7 LudhianaBeverages 7 SriSarvaryaSugars 6 PearlDrinks 5 Pearl Beverages 6 3.1 Type of Issue Book Built Offer: Bidders should only use the specified ASBA Form (or in case of Anchor Investors, the Anchor Investor Application Form) bearing the stamp of a Designated Intermediary, as available or downloaded from the websites of the Stock Exchanges. Bid complication Forms are available with the book running lead managers, the Designated Intermediaries at the Bidding Centers and at the registered office of the Issuer. Electronic Bid cum Application Forms will be available on the websites of the Stock Exchanges at least one day prior to the Bid/Offer Opening Date. For further details, regarding availability of Bid cum Application Forms, Bidders may refer to therapy/Prospectus. 3.2 Size of issue 25,000,000 Equity Shares of Rs 10 aggregating up to Rs 1,112.50 Cr Fresh Issue of 15,000,000 and offer for sale 10,000,000Equity Shares of Rs 10 aggregating up to Rs 1,112.50 Cr
- 9. 9 Route No of shares in cr. Total value OFS 1 `440cr* - `445cr** Fresh issue 1.5 `660cr* - `667cr** Total 2.5 `1,110cr* - `1,112cr** The Offer comprises a Net Offer to the public of up to 24,500,000 Equity Shares and a reservation of 500,000 Equity Shares for subscription by Eligible Employees, not exceeding 5% of our post Offer paid up Equity Share capital. The Offer will constitute 13.74% of the post -Offer paid-up Equity Share capital of our Company and the Net Offer will constitute 13.47% of the post-Offer paid-up Equity Share capital of our Company. 3.3 Objective of the issue The Offer comprises a Fresh Issue and an Offer for Sale. Offer for Sale The Selling Shareholders will be entitled to their respective portion of the proceeds of the Offer for Sale. Our Company will not receive any proceeds from the Offer for Sale. Fresh Issue Our Company intends to utilize the Net Proceeds towards the following: 1. Prepayment or scheduled repayment of a portion of outstanding indebtedness availed by our Company; and 2. General corporate purposes. The main objects clause of our Memorandum of Association enables our Company to undertake our existing business activities and the activities for which funds are being raised by us through the Offer and for which the loans proposed to be repaid from the Net Proceeds were utilized. In addition, we expect to achieve the benefit of listing of our Equity Shares on the Stock Exchanges. The company, through a business transfer agreement with PepsiCo India in November 2014 acquired PepsiCo India’s business of manufacturing, marketing, selling and distributing soft drink beverages and syrup mix in Uttar Pradesh, Uttarakhand, Himachal Pradesh, Haryana and the Union Territory of Chandigarh for `1,158cr. With that, VBL also acquired PepsiCo’s four factories located in Uttarakhand, UP and Haryana. The company has been permitted by PepsiCo to pay this amount in equal installments and as of June 2016, an amount of `623.5cr is left in form of deferred payments to PepsiCo India. We believe that the company will use
- 10. 10 the IPO proceeds after debt repayment to repay some, if not most of the deferred payment to PepsiCo India. The company however has not explicitly mentioned this in the RHP. Particulars Amount (In ₹ million) Prepayment or scheduled repayment of a portion of outstanding indebtedness availed by this Company is 5,400.00 (In ₹ million) 4.1 Important parties to the issue, and Dates of the Issue Important parties to the issue, and Dates of the Issue Number of Times Issue is Subscribed (BSE + NSE) QIB NII RII Employee Total Shares Offered / Reserved 4,900,000 3,675,000 8,575,000 500,000 17,650,000 Day 1 - Oct 26, 2016 17:00 IST 0.8800 0.1800 0.1100 0.0000 0.3400 Day 2 - Oct 27, 2016 17:00 IST 2.9500 0.2100 0.3100 0.0200 1.0100 Day 3 - Oct 28, 2016 17:00 IST 4.9400 0.4200 0.8200 0.0500 1.8600
- 11. 11 Pre Post Shareholding Pattern issue % issue % Promoters & Promoter 86.35 73.73 Group Public (incl institutions 13.65 26.27 & employees) Total 100.0 100.0 An indicative timetable in respect of the Offer: Bid/Offer Opens On: October 26, 2016 Bid/Offer Closes On: October 28, 2016 Finalization of Basis of Allotment: On or about November 03, 2016 4,900,000 3,675,000 8,575,000 500,000 17,650,000 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000 QIB NII RII Employee Total NoofShares Shares Offered / Reserved
- 12. 12 Initiation of refunds: On or about November 04, 2016 Credit of Equity Shares to demat accounts: November 07, 2016 Commencement of trading of the Equity Shares: November 08, 2016 QIB- Qualified institutional buyers, NII- Non institutional investors, RII- Retail individual investor 5.1 Issue Price with details Face Value: Rs 10 Per Equity Share »» Issue Price: Rs. 440 - Rs. 445 Per Equity Share »» Market Lot: 33 Shares »» Minimum Order Quantity: 33 Shares »» Listing At: BSE, NSE 6.1 Paid up capital before the issue and after the issue ISSUED, SUBSCRIBED AND PAID-UP CAPITAL BEFORE THE OFFER Aggregate value at face value 166,951,525 Equity Shares (of face value ₹ 10 each) 1,669,515,250 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL AFTER THE OFFER 181,951,525 Equity Shares (of face value ₹ 10 each)* 1,819,515,250 *Assuming full subscription in the Offer. 1. The Fresh Issue has been authorized by the Board of Directors and the Shareholders, pursuant to their resolutions dated March 28, 2016 and April 27, 2016, respectively. 2. The Offer for Sale of up to 5,000,000 Equity Shares by Varun Jaipuria has been authorised through his consent letter dated May 26, 2016 and the Offer for Sale of up to 5,000,000 Equity Shares being offered by Ravi Kant Jaipuria & Sons (HUF) has been authorized pursuant to the consent letter dated May 26, 2016 by its karta, Ravi Kant Jaipuria.
- 13. 13 7.1 Listing Price and the premium or price fall on listing Listing Day Trading Information BSE Issue Price: Rs. 445.00 Open: Rs. 430.00 Low: Rs. 417.10 High: Rs. 471.00 Last Trade: Rs. 461.90 Volume: 5,215,325 NSE Rs. 445.00 Rs. 430.00 Rs. 416.85 Rs. 471.75 Rs. 459.50 18,118,170 8.1 Market Capitalization of the company Market cap (rs cr) 7,514.60(current) Book value (rs) 25.16 Industry p/e 50.94 Price/book 16.41 Face value (rs) 10.00 Post-issue implied mkt. cap: ` 8,005.9cr - 8,096.8cr Promoters holding Pre-Issue: 86.3% Promoters holding Post-Issue: 73.7%
- 14. 14 9.1 Financial track record of the company Profit &Loss: Rs in million Particulars 2016 CY15 CY14 CY13 CY12 Revenue from Operations 25296.6 33941.5 25024.1 21151.5 17999.9 Other Income 96.9 142.8 146.9 173.5 442.0 Total Income 25393.5 34084.3 25171.0 21325.0 18441.9 Total Expenditure 19254.8 27600.9 21178.7 18240.3 15719.6 Cost of materials consumed 12040.8 14253.1 13162.2 11502.7 9731.6 Purchases of traded goods 683.7 3201.5 597.0 573.9 513.1 Changes in Inventories -746.1 -289.9 1.9 -84.5 33.1 Employee benefits expense 2108.4 3237.5 2168.0 1829.9 1524.2 Other expenses 5168.1 7198.6 5249.6 4418.3 3917.5 PBIDT 6138.7 6483.4 3992.3 3084.8 2722.3 Interest 1112.3 1687.9 1854.0 1697.1 1156.0 PBDT 5026.4 4795.5 2138.3 1387.7 1566.4 Depreciation 1894.9 3174.1 2100.6 1843.6 1357.9 PBT 3131.5 1621.4 37.8 -455.9 208.5 Tax (incl. DT & FBT) 997.3 766.2 248.1 -52.2 -42.6 Tax 733.9 530.5 187.4 59.1 102.3 MAT credit -515.7 -468.2 -120.6 0.0 -88.9 Deferred Tax 779.1 704.0 181.3 -111.3 -56.0 Reported Profit After Tax 2134.2 855.2 -210.4 -403.7 251.1 Balance Sheet:
- 15. 15 Rs in million Particulars H1CY16 CY15 CY14 CY13 CY12 Equity & Liabilities Shareholders’ Funds 9114.8 6723.0 3430.8 2153.6 1716.1 Share Capital 5856.7 5837.7 3337.7 1337.7 267.5 Share Application Money 0 0 0 400.0 0 Reserves and surplus 3258.1 885.3 93.1 415.9 1448.6 Minority Interest 0.1 0 0 0.1 0.1 Non-Current Liabilities 24350.6 24109.6 17484.1 18080.3 14843.4 Long-term borrowings 18375.2 15795.2 16302.4 16951.9 13628.1 Deferred tax liabilities 2291.7 1511.5 811.8 638.2 724.7 Other long-term liabilities 3151.2 6362.8 110.7 314.2 352.1 Long-term provisions 532.6 440.0 259.1 176.0 138.4 Current Liabilities 19489.8 13542.0 12035.2 9659.7 8988.5 Short-term borrowings 3004.2 2524.1 5085.2 3376.5 3384.4 Total outstanding dues to micro enterprises and small enterprises 6.7 1.4 0.6 4.1 3.7 Total outstanding dues of creditors other than micro enterprises & small Enterprises 3290.5 1844.1 1805.7 1387.8 902.9 Other current liabilities 12407.1 8797.9 4967.5 4828.5 4632.6 Short term provisions 781.3 374.4 176.3 62.9 64.9 Total Equity & Liabilities 52955.4 44374.5 32950.1 29893.7 25548.0 Assets Non-Current Assets 42547.1 36670.1 24361.2 24457.3 19703.6 Tangible assets 34405.1 31056.7 22132.5 22157.4 16837.9 Intangible assets 3608.5 3839.3 1320.8 1493.4 194.2
- 16. 16 Capital work in progress 191.9 379.1 247.5 274.3 1893.5 Goodwill on consolidation 2366.7 95.4 95.4 95.4 95.4 Non-current investments 48.1 32.7 17.6 8.8 0.1 Deferred tax assets 28.4 27.1 33.7 38.0 13.4 Long-term loans and advances 1845.8 1189.6 446.0 369.3 644.2 Other non-current assets 52.6 50.1 67.7 20.7 24.9 Current Assets 10408.3 7704.4 8588.9 5436.4 5844.4 Current Investments 0.2 0.0 3019.8 0.0 0.0 Inventories 5591.6 4246.6 2892.5 2464.1 2305.8 Trade receivables 1478.8 979.1 972.9 652.1 906.5 Cash and bank balances 1155.3 580.7 344.1 509.0 383.8 Short-term loans and advances 2023.7 1803.8 1251.3 1709.4 2198.2 Other current assets 158.7 94.2 108.4 101.9 50.1 Total Assets 52955.4 44374.5 32950.1 29893.7 25548.0
- 17. 17 Capital intensive business with low asset turnover: VBL is operating a capital intensive model without showing significant economies of scale. While it is true that high capital investments act as an entry barrier, it is equally offset by its nearly non-existent pricing power. For PepsiCo, it is difficult to replace VBL due to the capital intensive nature of the business and VBL’s experience and strong distribution abilities would score if PepsiCo decides to look for a new partner. Companies which create significant entry barriers in their industry also enjoy superior return ratios. However this is not a case with VBL. Due to its partnership with PepsiCo, VBL cannot produce any other competitive beverages. This means despite
- 18. 18 acquisition / addition of new capacity, VBL is not allowed to leverage on its additional capacities and industry experience. This is reflected in its gross asset turnover ratio which has remained well below 1x showing lower turnover of its fixed assets. The company has also aggressively added new capacities in last few years which have also led to decline in its asset turnover. Inconsistent profitability: VBL's financial performance has been inconsistent with losses reported in CY2013 and CY2014. Overall its top line has witnessed a CAGR of 25% from CY2011 to CY2015. The CAGR works out to be 51% at the bottom-line, this has only improved in CY2015 thanks to the acquisition of PepsiCo India's additional territories which helped it improve its profitability. VBL’s has decent performance at EBITDA level with margins increasing from ~13% in 2011 to ~19% in CY2015. The same however is not reflected in its EBT which has shown drastic decline due to the high depreciation costs which represents more than 50% of its EBITDA. Owing to its high leverage, VBL’s profitability eroded significantly in CY2013 and CY2014 as it interest costs took away decent profitability at EBITDA level. The company has also seen poor set of return ratios. Return on Equity in CY2015 was at 12.5% vs. 14.6% in CY2011. VBL has also seen poor cash generation in all years despite having strong cash flow from operations. By end of H1CY2016, VBL has `2,138cr in debt (excluding PepsiCo's debt of `623cr) Due to its high leverage and lower profitability, debt to equity ratios went up to as high as 11.6x in CY2013. With reduction in debt and improved profitability in last 18 months, debt to equity ratio has come down to 2.3x.
- 19. 19 9.1Current market price of the company and all other relevant aspects which are important to the issue are to be included Current market price: 414.00INR Date Open Price High Price Low Price Last Traded Price Close Price Total Traded Quantity Turnover (in Lakhs) 18-Jan- 17 415.05 415.55 406.6 408.75 408.45 75452 310.83 17-Jan- 17 417.5 417.5 410.1 414 411.9 10424 43.17 16-Jan- 17 412 418.35 412 412.5 414.1 11740 48.79 13-Jan- 17 410.75 419.95 410.75 419.8 417.4 26793 111.7 12-Jan- 17 413.05 417 413.05 413.4 414.4 13627 56.66
- 20. 20 In case of any revision to the Price Band, the Bid/Offer Period will be extended by three additional Working Days after such revision of the Price Band, subject to the total Bid/Offer Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, 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 other members of the Syndicate. Risk in first Offer: This being the first public issue of our Company, there has been no formal market for the Equity Shares of our Company. The Offer Price 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 or regarding the price at which the Equity Shares will be traded after listing. General Risk: Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Offer 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 the Offer. For taking an investment decision, investors must rely on their own examination of our Company and the Offer, including the risks involved. The Equity Shares in the Offer 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 Red Herring Prospectus. Specific attention of the investors is invited to the section “Risk Factors”. Issuer’s and selling shareholders’ absolute responsibility : our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Red Herring Prospectus contains all information with regard to our Company and the
- 21. 21 Offer, which is material in the context of the Offer, 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 the 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, the Selling Shareholders severally accept responsibility that this Red Herring Prospectus contains all information about themselves as the Selling Shareholders in context of the Offer for Sale and severally accept responsibility for statements in relation to themselves included in this Red Herring Prospectus. As of June 30, 2016, the Company’s net worth was ₹ 13,264.80 million as per the Company’s Restated Consolidated Financial Statements and ₹ 15,330.62 million as per the Restated Standalone Financial Statements. As of June 30, 2016, the net asset value per Equity Share was ₹ 97.77 as per the Company’s Restated Consolidated Financial Statements and ₹ 113.00 as per the Restated Standalone Financial Statements. As of June 30, 2016, the net asset value per Equity Share (post conversion) was ₹79.45 on a restated consolidated basis and ₹91.83 on a restated standalone basis. The average cost of acquisition of Equity Shares currently held by each of our Promoters is as follows: S. N. Name of Promoter Average cost of acquisition (in ₹) 1. RJ Corp 43.32 2. Ravi Kant Jaipuria Not applicable 3. Varun Jaipuria 5.66* 4. Ravi Kant Jaipuria & Sons (HUF) 5.66* The average cost of acquisition per Equity Share currently held by our Promoters has been calculated by taking the average of the amounts paid in cash by each of our Promoters to acquire the Equity Shares and where such Equity Shares were allotted/transferred pursuant to any merger schemes, (i) the cost incurred in acquiring
- 22. 22 the equity shares of such merged entities; or (ii) the cost incurred by such merged entity in acquiring the Equity Shares, as the case may be The Equity Shares being issued and transferred pursuant to this Offer shall be subject to the provisions of the Companies Act, SEBI ICDR Regulations, SCRA, SCRR, the Memorandum and Articles of Association, the terms of the Red Herring Prospectus, the Prospectus, the Abridged Prospectus, Bid cum Application Form, the Revision Form, the CAN/Allotment Advice and other terms and conditions as may be incorporated in the Allotment Advices and other documents/certificates that may be executed in respect of the Offer. The Equity Shares shall also be subject to laws as applicable, guidelines, rules, notifications and regulations relating to the issue of capital and listing and trading of securities issued from time to time by SEBI, the Government of India, the Stock Exchange, the RBI, RoC and/or other authorities, as in force on the date of the Offer and to the extent applicable or such other conditions as may be prescribed by the SEBI, the RBI, the Government of India, the Stock Exchanges, the RoC and/or any other authorities while granting its approval for the Offer. SEBI has notified the SEBI Listing Regulations which governs the obligations which were prescribed under the Equity Listing Agreement Ranking of the Equity Shares The Equity Shares being issued and transferred pursuant to the Offer shall be subject to the provisions of the Companies Act, the MoA and AoA and shall rank pari-passu in all respects with the existing Equity Shares including in respect of the right to receive dividend. The Allotter upon Allotment of Equity Shares under the Offer, will b entitled to dividend and other corporate benefits, if any, declared by our Company after the date of Allotment. Withdrawal of the Offer Our Company in consultation with the Selling Shareholders, the GCBRLMs and the BRLM, reserves the right to not to proceed with the Offer after the Bid/Offer Opening Date but before the Allotment. In such an event, our Company would issue a public notice in the newspapers in which the pre-Offer advertisements were published, within two days of the Bid/Offer Closing Date or such other time as may be prescribed by
- 23. 23 SEBI, providing reasons for not proceeding with the Offer. The Registrar to the Offer, shall notify the SCSBs to unblock the bank accounts of the ASBA Bidders within one 487 Working Day from the date of receipt of such notification. Our Company shall also inform the same to the Stock Exchanges on which Equity Shares are proposed to be listed. Restrictions, if any on Transfer and Transmission of Equity Shares Except for the lock-in of the pre-Offer capital of our Company, Promoters minimum contribution and the Anchor Investor lock-in as provided in “Capital Structure” on page 83 and except as provided in the Articles of Association there are no restrictions on transfer of Equity Shares. Further, there are no restrictions on the transmission of shares/debentures and on their consolidation/splitting, except as provided in the Articles of Association. Lead Managers Details TERM DESCRIPTION BRLM/Book Running Lead Manager YES Securities (India) Limited Global Coordinators and Book Running Lead Managers or GCBRLMs Kotak Mahindra Capital Company Limited, Axis Capital Limited, and CLSA India Private Limited BRLM(s)/Book Running Lead Manager(s)/Lead Manager/LM The Book Running Lead Manager to the Offer as disclosed in the RHP/Prospectus and the Bid cum Application Form of the Issuer. In case of issues undertaken through the fixed price process, all references to the Book Running Lead Manager should be construed to mean the Lead Manager or LM The book running lead managers are expected to exercise due diligence to ensure that the company and the selling Shareholders discharge their respective responsibility adequately in this behalf and towards this purpose, the book running lead managers have furnished to sebi, a due diligence certificate dated june 21, 2016.
- 24. 24 Minimum Application Value and Bid Lot: The Issuer in consultation with the Lead Manager may decide the minimum number of Equity Shares for each Bid to ensure that the minimum application value is within the range of ₹ 10,000 to ₹ 15,000. The minimum Lot size is accordingly determined by an Issuer on basis of such minimum application value. Applications by RIBs, Employees and Retail Individual Shareholders, must be for such number of shares so to ensure that the application amount payable does not exceed ₹ 200,000. Applications by other investors must be for such minimum number of shares such that the application amount exceeds ₹ 200,000 and in multiples of such number of Equity Shares thereafter, as may be disclosed in the application form and the Prospectus, or as advertised by the Issuer. Shareholding of Directors in our Company The shareholding of our Directors as of the date of this Red Herring Prospectus is set forth below: S. N. Name of Director Number of Equity Shares held Percentage Shareholding 1. Ravi Kant Jaipuria - - 2. Varun Jaipuria 44,175,500 32.56 3. Raj Pal Gandhi 440,000 0.32 4. Kapil Agarwal 440,000 0.32 5. Kamlesh Kumar Jain 46,000 0.03 6. Udai Dhawan - - 7. Ravindra Dhariwal - - 8. Girish Ahuja - - 9. Naresh Kumar Trehan - - 10. Pradeep Sardana - -