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SMS Paryavaran Limited

IPO Perspective

August 2007

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eContents

Sections₪ Snapshot ₪ Business Profile ₪ Positioning₪ Valuation₪ Funding requirements₪ Funding proposal₪ IPO Process & conditions

Annexures₪ About Corporate Professionals

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Section 1 Snapshot

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Incorporated in the year 1992.

An ISO 9001:2000 Certified Company.

Business of Infrastructure development with focus on water

supply & sewage systems.

Awarded more than 80 projects in last 15 years.

Executed various projects for Prestigious Government of

India Undertakings

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ePresent & Future

Expertise in creation of facilities

Professionally Managed Company

Acquired domain knowledge pre- qualification in infrastructure

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ePROMOTERS

M. SenguptaHe is a Graduate Engineer from Jadavpur University of 1967 batch and carried the responsibility on his shoulder for design and executing the electrical and instrumentation for all the jobs undertaken by the company Mr. S.N. Modak He is a First class first graduate engineer in Civil Engineering from one of the premier Institute of India, Birla Institute of Technology and Science at Pilani, of 1975 batch. Over the last 30 years he has been responsible for procurement of all types of projects for the company out of which last 9 years he was responsible for implementing the projects to the satisfaction of clients and within the planned budget.

Mr. M.K. Singh

He is a Post Graduate in Environmental Engineering from IIT Bombay (1980 batch) & B.E. also in Environmental from IIT Roorkee (formally known as University of Roorkee, 1978 batch), and has the experience of working with M/s. HGE (Batliboi group) and M/s. Jog Consultants, Pune before stabilizing his career with M/s. BAPL.

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eIndia: Yarn production of various types

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ePresent capabilities

Internal Company already having premium product recognition with the customers.

Supplies not limited to Ludhiana market, also supplying to Bhilwara & Mumbai

Direct supplies to reputed customers like Raymonds

ERP based systems

External Removal of Quota Restrictions (QRs)

India positioning to become world’s Textile BPO

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eFuture possibilities

Internal To position in cotton yarn market with expansion in production

Installing dyeing unit to cater to high value export markets

To start garment production along with retailing, a value addition proposition

External Readymade garment & retailing are the future revolutions in Indian economy, with increasing purchasing power

Existing players may turn into full level production houses using life cycle production of finished products

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Section 2 Valuation

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eIndia: Resource mobilisation from primary markets

Month-wise Resource Mobilisation from the primary Market

0

10002000

30004000

5000

60007000

80009000

10000

Period

Rs.

Cro

re

2005-06

2006-07

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eIndia: Resource mobilisation through public & rights issue

PARTICULARS2006-07 (April)

 2005-06 (April)

 

  No. Amount No. Amount

Public issues, of which 6 8923.28 7 2625.5

IPOs 5 8791.28 5 355.5

FPOs 1 132 2 2270

Right issues 3 66.57 1 11.75

Total 9 8989.85 8 2637.25

Amount in Rs. crores

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eTextile scrips: Position & returns

Scrip Share price as on

31 Dec ‘04

31 Dec ’05

Var.(%) 13 Apr ‘06 Var.(%)

Century Enka 159.40 229.90 44 170.20 -26

Indo Rama Synth. 76.20 75.60 -1 60.50 -20

Suryalak. Cott. 54.48 234.20 330 200.50 -14

Zodiac Clothing Co 307.68 294.95 -4 270.05 -8

Ambika Cotton 168.45 261.55 55 245.75 -6

Super Spinning 156.40 410.50 162 406.90 -1

Arvind Mills 132.30 95.60 -28 99.00 4

Rajas. Spinning 87.35 123.90 42 128.60 4

Gokaldas Exports * 584.45 N.A. 677.35 16

Alok Inds. 71.15 68.30 -4 79.60 17

Raymond 317.00 403.95 27 510.15 26

Sensex 6602.69 9397.33 42 11237.23 20

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eTextile companies: Funding the growth

Company Total Expansion

Debt Equity/ Internal Accruals

Alok Industries 1100 900 200

Sangam India 541 403 138

Banswara Syntex 88.5 65.6 22.9

Rajasthan Spinning 400 330 70

Amount in Rs. crores

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eTextile companies: Peer comparison

Name of the Company

EPS (Rs.)

P/E Ratio RONW (%)

Book value (Rs.)

Ambika Cotton 21.60 12.2 26.10 137.20

Bannari Amman Spinning

10.00 9.6 28.2 95.1

Gangotri Textiles 6.80 22.9 25.20 59.90

GTN textiles 3.2 23.3 9.00 89.60

Eurotex Industries 4.77 11.96 7.24 72.09

Jindal Cotex 3.54 - 20.25 17.49

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Section 3 Funding requirement

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eProposed Project

Multi-dimensional expansion envisaged:

Expansion in capacities by addition of 50,400 spindles for cotton yarn production

Setting up dyeing unit for premium export markets

Setting up garment manufacturing unit with a capacity fo 300 pieces per day

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eProposed Project

Particulars Amount(in Rs. lacs)

IPO funding 4000.00

Fresh contributions 400.00

Internal Accruals 714.41

Term Loan 9100.00

Total Project Cost 14214.41

Funding Pattern

IPO28%

Term Loan 64%

Fresh Contribution

3%Internal

Accruals5%

IPO Fresh Conribution Internal Accruals Term Loan

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eProposed Cost for Project

Cost of Project (Amount in lacs)

1800.16

8300.1

1119.56 623.56

688.7

1682.33

Land & building

Plant & Machinery Cost

Misc Fixed Assets

Pre-operative Exps

Margin for Working Capital

Provisions for Contigencies

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Section 4 Funding proposal

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eExpected Pricing of issue

Considering present

scenario of Market Company

’s EPS Conservative industry

P/E

Expected market Price

3.5 10 Rs 35

After 4 months (Expecting stabilization in Market)

Company’s EPS

Conservative industry

P/E

Expected market Price

4-5 12 Rs 48-60

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eStructuring the IPO

Paid-up capital(cumulative)

Reserves(cumulative)

EPS Promoters vs.

Public

Existing capital 7,00,25,000 5,24,05,000 3.54 100:0

Bonus issues (2:1) 10,50,37,500 1,73,92,500 2.36 100:0

Dilution in public issue(100 lakh shares

@ 40/- per share)Total funding : Rs.

40 cr.

20,50,37,500 31,73,92,500 1.20 51:49

Dilution between 80 lakhs to 100 lakhs shares in the IPO is required

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Section 5 IPO Process & conditions

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eIPO Process Overview

1. Preparation

Constitution of deal teamCapital structuring Initiate research coverage processRestatement of financial accounts

2. Due diligence

Business due diligenceData room for legal due diligenceAuditors comfort letterLegal opinions

3.Offer Document

Issue structureUse of proceedsIndustry landscapeBusiness overviewRisk factorsFinancial StatementsStatutory disclosures

4. Pre-marketing

Meeting with institutional investorResearch BriefingsCorporate publicity

5. SEBI filing

Dispatch of research reportsSEBI filingStock Exchange Listing applicationsAppointment of Registrars and Bankers

6. Road shows

Price band finalizationIssue advertisingManagement road show

7. Book Building

Price discovery Issue pricing

8. Listing & Trading

Allotment & SettlementListing & trading

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•Net Tangible Assets of a least Rs. 30mn in each of the preceding 3 full years (of 12 months each), of which not more than 50% is held in monetary assets. •Track record of distributable profits for 3 out of preceding 5 years•Net worth of at least Rs 10mn in each of the preceding 3 full years (of 12 months each)•Issue size + previous issue in current FY is lesser than 5 times pre-issue net worth.

Yes No

Fixed Price or Bookbuilding (no minimum allocation to QIBs)

Bookbuilding

Eligibility norms and Offering structure

Key regulatory requirements

25% & above dilution

•Up to 50% allocation to QIBs; up to 35% toretail & up to 15% tonon- institutional

10 – 24.99% dilution

•Minimum issue size Rs. 100mn•Upto 60% allocation to QIBs; up to 30% to retail and up to 10% to non-institutional

25% & above dilution

•Up to 50% allocation to QIBs; up to 35% to retail & up to 15% to non- institutional

10 – 24.99% dilution

•Minimum issue size Rs. 100mn•Upto 60% allocation to QIBs; up to 30% to retail and up to 10% to non-institutional

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Due Diligence and financial disclosures

•Corporate governance norms to be strictly enforced per stx exchange listing requirements• Book runners to conduct due diligence on company and submit certificate to SEBI•Recast audited statement contained in the offer document should not be more than 6 mths old from he SEBI filing date and the issue opening date and to be prepared for last 5 years •Adequate disclosure of litigations and legal proceedings required•Mandatory sections on MD&A, risk factors

Promoter Lock - in

•Promoters to contribute – hold at least 20% of total post issue capital•20% of post issue capital , lock in for 3 years – Balance pre-IPO capital, excluding holdings of Venture Capital Funds locked in for 1 year.

•No outstanding convertible instruments/ securities, party paid shares at time of filing draft prospectus.•Draft Prospectus publicly filed with SEBI- Review period of 21 days- SEBI observations to be incorporated in Red Hearing Prospectus- Issue to open within 3 months from date of Issuance of observations•ROC approval mandatory & Stock Exchange listing approvals

SEBI and Stock Exchange Filings

Key regulatory requirements

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e Marketing and Publicity

•Corporate Advertisements post SEBI filing to contain reference to Risk Factors•No forward looking statements from issuer/issue team post filing•Statutory Advertisements to be issued by the issuers pertaining to abridged prospectus, issue open /close dates, issue pricing and allocation details.

Book Building and Pricing

•Book building to be carried within a maximum price band of 20% - Price band to be declared in red herring prospectus. - Bidding on BSE and/or NSE - Bid period to range between 3-7 days - QIBs to provide at least 10% of bid amount on application•Issue successful if subscribed to extent of at least 90% of issue amount at a price level - Issue to be priced at a price where issue is subscribed fully, failing which at a price where 90% subscription is obtained

Allocation, Listing and Trading

•Proportionate allocation to all categories of Investors•Listing and Trading to commence within 15 days of issue closure.

Key regulatory requirements

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Annexure 1 About

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Set up in 2003

Online Connected Network of Professionals & Associates spread over 45 cities across India & abroad

Team of Professionals to advise on Financial Products

Gamut of Experts in all the Streams

Complete Corporate Planning & Management Services

Established Credentials for Corporate Advisory Services

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Management and Key Personnel

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Mr. Pavan Kumar Vijay – Managing Director

M. Com, LL.B, FCS, Past President of the Institute of Company Secretaries of India (ICSI) for the year 2003. Founder and Managing Director of Corporate Professionals. He has more than 15 years of professional Experience in Capital Market and financial service.

Dr. Sanjiv Agarwal – Director

Ph.D., FCA, FCS, Postgraduate in Accountancy and Business Statistics from the University of Rajasthan, Jaipur. He has more than 20 years of professional experience as a Chartered Accountant with exposure in accounting, auditing, taxation, service tax matters, capital market and financial services.

Dr. R. K. Agarwal – Director

Ph.D., M.Com. FCA, FCS, ICWA. He has more than 25 years of professionals experience in financial services and tax management.

Management and Key Personnel

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Privileged Clientele

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eCorporate Advisory clients

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eCorporate Advisory clients

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eClients for Public Issue related services

Surya Vinayak Industries Public Issue

Proposed Issue Size : 350 crores

OCL India Limited Right Issue

Issue Size : 85 CroreNature : Book

Building

Rana Polycot LimitedPublic Issue

Issue Size : 30 CroreNature : Book Building

Industrial Organics Ltd

Follow on Public Offer

Issue Size : 40 crore

JHS Svendgaard Laboratories Ltd.

Public IssueIssue Size : 90 crores

Insecticides India Ltd.

Public IssueIssue Size: 80 crores

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For further information Please contact…

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Corporate Professionals (India) Pvt. Ltd.7/9, Sarvpriya Vihar,New Delhi 1100016

Tel: +91.11.26966100,Fax: +91.11.26967100

Email: info@indiacp.com

Visit us at:www.corporateprofessionals.com

Thanks a lot