endurance technologies limited...offer, including the risks involved. the equity shares offered in...
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PROMOTER OF OUR COMPANY: MR. ANURANG JAIN
INITIAL PUBLIC OFFERING OF UP TO 24,613,024 EQUITY SHARES^ OF FACE VALUE ` 10 EACH (“EQUITY SHARES”) OF ENDURANCE TECHNOLOGIES LIMITED (“COMPANY” OR “ISSUER”) FOR CASH AT A PRICE OF ` 472 PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF ` 462 PER EQUITY SHARE, AGGREGATING UP TO ` 11,617.35 MILLION^, CONSISTING OF AN OFFER FOR SALE OF UP TO 19,295,968 EQUITY SHARES^ BY ACTIS COMPONENTS AND SYSTEM INVESTMENTS LIMITED (“ACTIS”) AND UP TO 5,317,056 EQUITY SHARES^ BY MR. ANURANG JAIN (“PROMOTER SELLING SHAREHOLDER”) (COLLECTIVELY, THE “SELLING SHAREHOLDERS”) (THE “OFFER FOR SALE” OR THE “OFFER”). THE OFFER SHALL CONSTITUTE UP TO 17.50%^ OF THE FULLY DILUTED POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY. THE ANCHOR INVESTOR OFFER PRICE IS ` 472.^ Subject to the finalization of the Basis of Allotment.THE FACE VALUE OF THE EQUITY SHARES IS ` 10 EACH. THE OFFER PRICE IS ` 472 PER EQUITY SHARE AND IS 47.2 TIMES THE FACE VALUE OF THE EQUITY SHARES.In terms of Rule 19(2)(b)(iii) of the Securities Contracts Regulations Rules, 1957, as amended (“SCRR”) read with Regulation 41 of the ICDR Regulations, this is an Offer for at least 10% of the post-Offer capital. The Offer is being made through the Book Building Process, in reliance on Regulation 26(1) of the ICDR Regulations, wherein not more than 50% of the Offer shall be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”). Provided that our Company and the Selling Shareholders, in consultation with the Lead Managers, have allocated up to 60% of the QIB Portion to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion was reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not less than 15% of the Offer shall be available for allocation on a proportionate basis to Non-Institutional Investors and not less than 35% of the Offer shall be available for allocation to Retail Individual Investors, in accordance with the ICDR Regulations, subject to valid Bids being received at or above the Offer Price. All Bidders, other than Anchor Investors, are required to mandatorily utilise the Application Supported by Blocked Amount (“ASBA”) process providing details of their respective bank accounts which will be blocked by the Self Certified Syndicate Banks (“SCSBs”), to participate in the Offer. Anchor Investors are not permitted to participate in the Offer through the ASBA process. For details, please see “Offer Procedure” on page 546 of this Prospectus.
RISKS IN RELATION TO FIRST OFFER
This being the first public offer 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 ` 10 each. The Floor Price is 46.70 times the face value of the Equity Shares and the Cap Price is 47.20 times the face value of the Equity Shares. The Offer Price is 47.20 times the face value of the Equity Shares. The Offer Price (as has been determined by our Company and the Selling Shareholders in consultation with the Lead Managers, and justified as stated in the section “Basis for Offer Price” on page 108 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 active and / or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISKS
Investment in equity and equity-related securities involve a degree of risk and Bidders should not invest any funds in the Offer unless they can afford to take the risk of losing their investment. Bidders are advised to read the Risk Factors carefully before taking an investment decision in the Offer. For taking an investment decision, Bidders must rely on their own examination of our Company and the Offer, including the risks involved. The Equity Shares offered 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 this Prospectus. Specific attention of the Bidders is invited to the section “Risk Factors” on page 17 of this Prospectus.
COMPANY’S AND THE SELLING SHAREHOLDER’S ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to our Company and the Offer, which is material in the context of the Offer, 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. The Promoter Selling Shareholder and Actis severally and not jointly accept responsibility only for the statements made by each of them in this Prospectus and confirm that this Prospectus contains all information about each of them as a selling shareholder and the Equity Shares offered by each of them in the Offer and that such statements are true and correct in all material respects and are not misleading in any material respect.
LISTING
The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on BSE and NSE. Our Company has received “in-principle” approvals from BSE and NSE for the listing of the Equity Shares pursuant to their letters dated July 14, 2016 and July 22, 2016, respectively. For the purposes of the Offer, the Designated Stock Exchange shall be BSE. A copy of the Red Herring Prospectus has been and a copy of this Prospectus shall be delivered to the RoC for registration in accordance with the Companies Act, 2013. For details of the material contracts and documents that were available for inspection from the date of the Red Herring Prospectus up to the Offer Closing Date, please see “Material Contracts and Documents for Inspection” on page 629 of this Prospectus.
BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE OFFER
Axis Capital Limited1st Floor, Axis HouseC-2, Wadia International Centre, P.B. Marg WorliMumbai 400 025Telephone: + 91 (22) 4325 2183Facsimile : +91 (22) 4325 3000Email: [email protected] grievance Email: [email protected]: www.axiscapital.co.inContact Person: Mr. Ankit BhatiaSEBI registration number: INM000012029
Citigroup Global Markets India Private Limited 1202, 12th Floor,First International Financial Center, G-BlockBandra Kurla Complex, Bandra East, Mumbai 400 051Telephone: +91 (22) 6175 9999Facsimile: +91 (22) 6175 9898Email: [email protected] Grievance Email: [email protected]:www.online.citibank.co.in/rhtm/citigroupglobalscreen1.htmContact Person: Mr. Gursartaj Singh NijjarSEBI Registration No.: INM000010718
Link Intime India Private LimitedC-13, Pannalal Silk Mills Compound,L.B.S. Marg, Bhandup (West)Mumbai 400 078, Maharashtra, IndiaTelephone: +91 (22) 6171 5400Facsimile: +91 (22) 2596 0329Email: [email protected] Grievance Email: [email protected]: www.linkintime.co.inContact Person: Shanti GopalkrishnanSEBI Registration No.: INR000004058
OFFER PROGRAMMEFOR ALL BIDDERS OFFER OPENED ON: Wednesday, October 5, 2016* FOR ALL BIDDERS OFFER CLOSED ON: Friday, October 7, 2016
* The Anchor Investor Bidding Date was Tuesday, October 4, 2016.
ENDURANCE TECHNOLOGIES LIMITEDOur Company was originally incorporated as a private limited company at Mumbai under the name of “Endurance Suspension Systems (India) Private Limited” under the Companies Act, 1956 and received a certificate of incorporation dated December 27, 1999. As of the date of this Prospectus, the name of our Company is Endurance Technologies Limited, which was pursuant to a fresh certificate of incorporation dated May 31, 2016.
Registered Office: K-228, MIDC Industrial Area, Waluj, Aurangabad 431 136, Maharashtra, India; Telephone: +91 (240) 255 6686; Facsimile: +91 (240) 255 6685Corporate Office: E-92, MIDC Industrial Area, Waluj, Aurangabad 431 136, Maharashtra, India; Telephone: +91 (240) 256 9737; Facsimile: +91 (240) 255 1700
For details of changes to the name of our Company, status and address of the registered office of our Company,please see “History and Certain Corporate Matters” on page 186 of this Prospectus.
Contact Person: Mr. Sunil Lalai, Company Secretary and Vice President – Legal and Compliance Officer; Email: [email protected]; Website: www.endurancegroup.com;Corporate Identity Number: U34102MH1999PLC123296
PROSPECTUSOctober 10, 2016
Please read Section 32 of the Companies Act, 2013Book Built Issue
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TABLE OF CONTENTS
SECTION I: GENERAL..................................................................................................................................... 1
DEFINITIONS AND ABBREVIATIONS .......................................................................................................1CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA 12 FORWARD-LOOKING STATEMENTS ......................................................................................................15
SECTION II: RISK FACTORS ....................................................................................................................... 17
SECTION III: INTRODUCTION ................................................................................................................... 56
SUMMARY OF OUR BUSINESS.................................................................................................................56
SUMMARY OF INDUSTRY.........................................................................................................................65 SUMMARY FINANCIAL INFORMATION.................................................................................................70 SELECTED FINANCIAL INFORMATION .................................................................................................79 THE OFFER ...................................................................................................................................................81 GENERAL INFORMATION .........................................................................................................................82CAPITAL STRUCTURE ...............................................................................................................................91 OBJECTS OF THE OFFER .........................................................................................................................106 BASIS FOR OFFER PRICE.........................................................................................................................108 STATEMENT OF TAX BENEFITS............................................................................................................112
SECTION IV: ABOUT THE COMPANY .................................................................................................... 116
INDUSTRY ..................................................................................................................................................116OUR BUSINESS ..........................................................................................................................................145 REGULATIONS AND POLICIES ..............................................................................................................171 HISTORY AND CERTAIN CORPORATE MATTERS .............................................................................186 OUR SUBSIDIARIES ..................................................................................................................................195 OUR MANAGEMENT ................................................................................................................................201OUR PROMOTER, PROMOTER GROUP AND GROUP COMPANIES .................................................217 DIVIDEND POLICY....................................................................................................................................221
SECTION V: FINANCIAL INFORMATION.............................................................................................. 222
FINANCIAL STATEMENTS ......................................................................................................................222 FINANCIAL INDEBTEDNESS ..................................................................................................................455MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..............................................................................................................................................460 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IND AS ................493
SECTION VI: LEGAL AND OTHER INFORMATION ............................................................................ 500
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS...................................................500
GOVERNMENT AND OTHER APPROVALS ..........................................................................................507 OTHER REGULATORY AND STATUTORY DISCLOSURES ...............................................................518
SECTION VII: OFFER INFORMATION.................................................................................................... 537
TERMS OF THE OFFER.............................................................................................................................537 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES.............................................542 OFFER STRUCTURE..................................................................................................................................543
OFFER PROCEDURE .................................................................................................................................546
SECTION VIII: MAIN PROVISIONS OF OUR ARTICLES OF ASSOCIATION................................. 591
SECTION IX: OTHER INFORMATION .................................................................................................... 629
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .....................................................629 DECLARATION ..........................................................................................................................................632
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SECTION I: GENERAL
DEFINITIONS AND ABBREVIATIONS
Unless the context otherwise implies or requires, the terms and abbreviations stated hereunder shall have the
meaning as assigned below. References to statutes, rules, regulations, guidelines and policies will, unless the
context otherwise requires, be deemed to include all amendments, modifications and replacements notified
thereto, as of the date of this Prospectus.
Company and Selling Shareholder related terms
Term Description
“Company”, “our
Company”, “ETL” or
“Issuer”
Endurance Technologies Limited, a public limited company incorporated under the Companies
Act, 1956 and having its registered office at K-228, MIDC Industrial Area, Waluj, Aurangabad
431 136, Maharashtra, India.
“we”, “us”, or “our” Unless the context otherwise requires or implies, Endurance Technologies Limited and its
Subsidiaries, on a consolidated basis.
“Actis” Actis Components and System Investments Limited, formerly Actis Investment Holdings No.
122 Limited prior to change of name on December 6, 2013.
“Actis Offered Shares” Up to 19,295,968^ Equity Shares being offered by Actis in the Offer.
^ Subject to finalisation of Basis of Allotment.
“AECPL” Erstwhile Anurang Engineering Company Private Limited.
“AECPL Scheme of
Amalgamation”
Scheme of amalgamation between our Company and AECPL, effective from August 11, 2006.
“Anurang Rohan Trust” A private trust settled by Mr. Anurang Jain pursuant to a deed of settlement dated June 11, 2016
and as amended by a deed of amendment dated June 23, 2016.
For further details, please see “Capital Structure” on page 91 of this Prospectus.
“Anurang Rhea Trust” A private trust settled by Mrs. Suman Jain pursuant to a deed of settlement dated June 15, 2016.
For further details, please see “Capital Structure” on page 91 of this Prospectus.
“Articles” or “Articles
of Association”
The articles of association of our Company, as amended.
“Auditors” or
“Statutory Auditor”
The statutory auditors of our Company, being Deloitte Haskins & Sells LLP, Chartered
Accountants.
“Audit Committee” The audit committee of our Board constituted in accordance with the Companies Act, 2013 and
the Listing Regulations.
“Board” or “Board of
Directors”
The board of directors of our Company, as constituted from time to time, including any
committees thereof.
“Chief Financial
Officer” or “Group
Chief Financial Officer”
The group chief financial officer of our Company.
“Chief Operating
Officer”
The chief operating officer of our Company.
“Compliance Officer” Mr. Sunil Lalai, Company Secretary and Vice President - Legal.
“Corporate Office” The corporate office of our Company, situated at E-92, MIDC Industrial Area, Waluj,
Aurangabad 431 136, Maharashtra, India.
“CSR Committee” The corporate social responsibility committee of our Board constituted in accordance with the
Companies Act, 2013.
“Director(s)” Director(s) on the Board of our Company, as appointed from time to time.
“Endurance Amann” Endurance Amann GmbH, a wholly owned subsidiary of our Company in Germany.
“Endurance
Engineering”
Endurance Engineering SrL, a step down subsidiary of our Company and a wholly owned
subsidiary of Endurance Overseas in Italy.
“Endurance FOA” Endurance FOA SpA, a step down subsidiary of our Company and a wholly owned subsidiary
of Endurance Overseas in Italy.
“Endurance
Fondalmec”
Endurance Fondalmec SpA, a step down subsidiary of our Company and a wholly owned
subsidiary of Endurance Overseas in Italy.
“Endurance Overseas” Endurance Overseas SrL, a wholly owned subsidiary of our Company in Italy.
“ESIPL” Endurance Systems (India) Private Limited, erstwhile wholly-owned subsidiary of our
Company.
“ESIPL Scheme of
Arrangement”
Scheme of arrangement between our Company and ESIPL, effective from December 1, 2009
and subsequently amended and approved by the High Court of Bombay by its order dated July
1, 2011 and the amended scheme being effective from July 29, 2011.
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Term Description
“Equity Shares” Unless the context otherwise requires, refers to Equity shares of our Company having a face
value of ` 10 each. “Executive Director” An executive Director.
“Group Companies” Such companies as covered under the applicable accounting standards and also other companies
as considered material by our Board pursuant to a policy on materiality of group companies
approved by our Board on June 10, 2016, excluding companies forming a part of the Varroc
Group. However, our Board has identified that there are no material group companies of our
Company.
For details, please see “Our Promoter, Promoter Group and Group Companies” on page 217 of
this Prospectus.
“HTTSPL” High Technology Transmission Systems (India) Private Limited, erstwhile wholly-owned
subsidiary of our Company.
“HTTSPL Scheme of
Amalgamation”
Scheme of amalgamation between our Company and HTTSPL, effective from February 10,
2014.
“Ind AS Financial
Statements”
Interim condensed consolidated and standalone financial information of our Company for the
three month period ended June 30, 2016 and June 30, 2015 prepared in accordance with the
requirements of Indian Accounting Standards 34 on Interim Financial Reporting (Ind AS 34)
specified under section 133 of the Companies Act 2013.
“Independent Director” A non-executive, independent Director as per the Companies Act, 2013 and the Listing
Regulations.
“IPO Committee” The committee of our Board constituted pursuant to a Board resolution dated June 10, 2016.
“KMP” or “Key
Management
Personnel”
Key management personnel of our Company in terms of the ICDR Regulations and as disclosed
in “Our Management” on page 201 of this Prospectus.
“Memorandum” or
“Memorandum of
Association”
The memorandum of association of our Company, as amended.
“Memorandum of
Agreement”
Agreement dated March 19, 2010 entered into between our Promoter, Mr. Tarang Jain, Mr.
Naresh Chandra and Mrs. Suman Jain.
“NC Trust” A private trust settled by Mr. Naresh Chandra pursuant to a deed of settlement dated June 15,
2016.
For further details, please see “Capital Structure” on page 91 of this Prospectus.
“Nomination and
Remuneration
Committee”
The nomination and remuneration committee of our Board constituted in accordance with the
Companies Act, 2013 and the Listing Regulations.
“Non-Executive
Director”
A Director not being an Executive Director or an Independent Director.
“Offered Shares” Collectively, the Actis Offered Shares and the Promoter Offered Shares.
“Promoter” The promoter of our Company, Mr. Anurang Jain. For details, please see “Our Promoter,
Promoter Group and Group Companies” on page 217 of this Prospectus.
“Promoter Group” Such persons and entities which constitute the promoter group of our Company pursuant to
Regulation 2 (1)(zb) of the ICDR Regulations, excluding (i) Mr. Tarang Jain, (ii) Varroc Group,
(iii) any body corporate in which 10% or more of the equity share capital is held by Mr. Tarang
Jain or any firm or trust in which Mr. Tarang Jain is a member, and (iv) any body corporate in
which a body corporate in (iii) above holds 10% or more of the equity share capital.
For details, please see “Our Promoter, Promoter Group and Group Companies” on page 217 of
this Prospectus.
“Promoter Offered
Shares”
Up to 5,317,056 Equity Shares^ being offered by the Promoter Selling Shareholder in the Offer.
^ Subject to finalisation of Basis of Allotment
“Promoter Selling
Shareholder”
Mr. Anurang Jain.
“Registered Office” The registered office of our Company situated at K-228, MIDC Industrial Area, Waluj,
Aurangabad 431 136, Maharashtra, India.
“Registrar of
Companies” or “RoC”
Registrar of Companies, Maharashtra situated at Everest, 5th Floor, 100, Marine Drive,
Mumbai 400 002.
“Restated Consolidated
Financial Information”
The consolidated financial information of our Company, its Subsidiaries and joint venture as of
and for each of the financial years ended March 31, 2016, 2015, 2014, 2013 and 2012 and for
the three month period ended June 30, 2016 together with the related notes, schedules and
annexures thereto included in this Prospectus, which have been prepared in accordance with the
requirements of the Companies Act, 2013 and Indian GAAP and restated in accordance with the
ICDR Regulations.
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Term Description
“Restated
Unconsolidated
Financial Information”
The unconsolidated financial information of our Company as of and for each of the financial
years ended March 31, 2016, 2015, 2014, 2013 and 2012, and for the three month period ended
June 30, 2016 together with the related notes, schedules and annexures thereto included in this
Prospectus, which have been prepared in accordance with the requirements of the Companies
Act, 2013 and Indian GAAP, and restated in accordance with the ICDR Regulations.
“Restated Financial
Information”
Restated Consolidated Financial Information and Restated Unconsolidated Financial
Information collectively.
“SCPEML” Standard Chartered Private Equity (Mauritius) II Limited.
“Selling Shareholders” Actis and Promoter Selling Shareholder, collectively.
“Shareholder(s)” Equity shareholders of our Company, from time to time.
“Shareholders’
Agreement”
Shareholders’ agreement entered into between our Company, our Promoter, other Shareholders
namely Mr. Naresh Chandra, Mrs. Suman Jain, Naresh Chandra HUF, Anurang Jain HUF and
Mrs. Varsha Jain and Actis dated December 19, 2011 and subsequently amended by way of the
Waiver Letter.
“Stakeholders’
Relationship
Committee”
The stakeholders’ relationship committee of our Board constituted in accordance with the
Companies Act, 2013 and the Listing Regulations.
“Subsidiary” or
“Subsidiaries”
A subsidiary of our Company as of the date of this Prospectus, in accordance with the
Companies Act, 2013, and as set out in “Our Subsidiaries” on page 195 of this Prospectus.
“Varroc Group” All companies promoted, owned or controlled by Mr. Tarang Jain, including Varroc
Engineering Private Limited and its subsidiaries.
“Waiver Letter” Waiver letter dated June 30, 2016, executed under the Shareholders’ Agreement dated
December 19, 2011, between our Company, our Promoter, other Shareholders namely Mr.
Naresh Chandra, Mrs. Suman Jain, Anurang Jain HUF, Mr. Rohan Jain, Mrs. Varsha Jain and
Actis.
Offer Related Terms
Term Description
“Acknowledgement
Slip”
The slip or document issued by the Designated Intermediary to a Bidder as proof of registration of
the Bid.
“Allotment”, “Allot”
or “Allotted”
Unless the context otherwise requires, the transfer of Equity Shares to successful Bidders by the
Selling Shareholders pursuant to the Offer.
“Allotment Advice” The note or advice or intimation of Allotment, sent to each successful Bidder who has been or is
to be Allotted the Equity Shares after approval of the Basis of Allotment by the Designated Stock
Exchange.
“Allottee” A successful Bidder to whom the Equity Shares are Allotted.
“Anchor Investor” A Qualified Institutional Buyer, applying under the Anchor Investor Portion in accordance with
the ICDR Regulations.
“Anchor Investor
Allocation Price” ` 472 per Equity Share.
“Anchor Investor
Bidding Date”
October 4, 2016.
“Anchor Investor
Form”
Form used by an Anchor Investor to Bid in the Anchor Investor Portion and which was considered
as an application for Allotment in terms of the Red Herring Prospectus and this Prospectus.
“Anchor Investor
Offer Price” ` 472 per Equity Share. The Anchor Investor Offer Price was decided by our Company and the Selling Shareholders in consultation with the Lead Managers.
“Anchor Investor
Portion”
Up to 60% of the QIB Portion, which has been allocated by our Company, in consultation with
the Lead Managers, to Anchor Investors on a discretionary basis in accordance with the ICDR
Regulations, out of which one third was reserved for domestic Mutual Funds, subject to valid Bids
being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price.
“Applications
Supported by
Blocked Amount” or
“ASBA”
An application, whether physical or electronic, used by ASBA Bidders to make a Bid authorising
an SCSB to block the Bid Amount in the ASBA Accounts.
“ASBA Account” An account maintained with an SCSB and specified in the ASBA Form submitted by an ASBA
Bidder, which has been blocked by such SCSB to the extent of the Bid Amount specified by a
Bidder.
“ASBA Bidder” All bidders except Anchor Investors.
“ASBA Form” An application form, whether physical or electronic, used by ASBA Bidders which will be
considered as the application for Allotment in terms of the Red Herring Prospectus and this
Prospectus.
“Axis” Axis Capital Limited.
“Basis of Allotment” The basis on which the Equity Shares will be Allotted, as described in “Offer Procedure –
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Term Description
Allotment Procedure and Basis of Allotment” on page 581 of this Prospectus.
“Bid” An indication to make an offer during the Offer Period by an ASBA Bidder, or on the Anchor
Investor Bidding Date by an Anchor Investor, pursuant to the submission of a Bid cum
Application Form, to purchase, the Equity Shares at a price within the Price Band, including all
revisions thereto as permitted under the ICDR Regulations and in terms of the Red Herring
Prospectus and the Bid cum Application Form, and the term “Bidding” shall be construed
accordingly.
“Bid Amount” In relation to each Bid shall mean the highest value of the Bid indicated in the Bid cum
Application Form and payable by the Bidder, or blocked in the ASBA Account of the ASBA
Bidders, upon submission of the Bid in the Offer.
“Bid cum Application
Form”
Anchor Investor Form or the ASBA Form, as the context requires.
“Bid Lot” 30 Equity Shares.
“Bidder” Any prospective investor who makes a Bid pursuant to the terms of the Red Herring Prospectus
and the Bid cum Application Form and unless otherwise stated or implied, includes an Anchor
Investor.
“Bidding Centres” Centres at which the Designated Intermediaries shall accept the ASBA Forms, i.e., Designated
Branches for SCSBs, Specified Locations for the Syndicate, Broker Centres for Registered
Brokers, Designated RTA Locations for RTAs and Designated CDP Locations for CDPs.
“Book Building
Process”
The book building process as described in Part A, Schedule XI of the ICDR Regulations, in terms
of which the Offer is being made.
“Broker Centre” Broker centres notified by the Stock Exchanges where ASBA Bidders can submit the ASBA
Forms to a Registered Broker and details of which are available on the websites of the respective
Stock Exchanges as below:
http://www.bseindia.com/Markets/PublicIssues/brokercentres_new.aspx?expandable=3 and
http://www.nseindia.com/products/content/equities/ipos/ipo_mem_terminal.htm.
“CAN” or
“Confirmation of
Allocation Note”
The note or advice or intimation of allocation sent to Anchor Investors who have been allocated
Equity Shares after the Anchor Investor Bidding Dates.
“Cap Price” ` 472. Citi Citigroup Global Markets India Private Limited.
Client ID Client identification number maintained with one of the Depositories in relation to the demat
account.
“Collecting
Depository
Participant” or
“CDP”
A depository participant as defined under the Depositories Act, 1996, registered with SEBI and
who is eligible to procure Bids at the Designated CDP Locations in terms of circular no.
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI.
“Cut off Price” The Offer Price, as finalised by our Company and the Selling Shareholders in consultation with
the Lead Managers. Only Retail Individual Investors were entitled to Bid at the Cut off Price.
“Demographic
Details”
The demographic details of the Bidders such as their respective addresses, occupation, PAN,
MICR Code and bank account details.
“Designated
Branches”
Such branches of the SCSBs which shall collect ASBA Forms, a list of which is available on the
website of the SEBI at (www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognized-Intermediaries)
and updated from time to time, and at such other websites as may be prescribed by SEBI from
time to time.
“Designated CDP
Locations”
Such locations of the CDPs where ASBA Bidders can submit the ASBA Forms, a list of which,
along with names and contact details of the Collecting Depository Participants eligible to accept
ASBA Forms are available on the websites of the respective Stock Exchanges
(www.bseindia.com and www.nseindia.com).
“Designated Date” The date on which funds are transferred from the Escrow Account to the Public Offer Account or
the Refund Account, as appropriate, or the funds blocked by the SCSBs are transferred from the
ASBA Accounts to the Public Offer Account, as the case may be, after the Prospectus is filed with
the RoC.
“Designated
Intermediaries”
Syndicate, Sub-Syndicate/ Agents, SCSBs, Registered Brokers, the CDPs and RTAs, who are
authorised to collect ASBA Forms from the ASBA Bidders, in relation to the Offer.
“Designated RTA
Locations”
Such locations of the RTAs where ASBA Bidders can submit the ASBA Forms to RTAs, a list of
which, along with names and contact details of the RTAs eligible to accept ASBA Forms are
available on the respective websites of the Stock Exchanges (www.bseindia.com and
www.nseindia.com).
“Designated Stock
Exchange”
BSE Limited.
“Draft Red Herring
Prospectus”
The draft red herring prospectus dated July 5, 2016, issued in accordance with the ICDR
Regulations, which did not contain complete particulars of the Offer, including the price at which
the Equity Shares will be Allotted and the size of the Offer.
“Eligible FPIs” FPIs from such jurisdictions outside India where it is not unlawful to make an offer/ invitation
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Term Description
under the Offer and in relation to whom the Red Herring Prospectus constitutes an invitation to
purchase the Equity Shares offered thereby.
“Eligible NRIs” NRIs from jurisdictions outside India where it is not unlawful to make an offer or invitation under
the Offer and in relation to whom the Red Herring Prospectus constitutes an invitation to purchase
the Equity Shares offered thereby.
“Escrow Account(s)” Accounts opened with the Escrow Collection Bank in whose favour Anchor Investors transferred
money through direct credit/ NEFT/ RTGS in respect of Bid Amounts when submitting a Bid.
“Escrow Agreement” The agreement dated September 21, 2016 amongst our Company, the Registrar to the Offer, the
Lead Managers, the Selling Shareholders, the Escrow Collection Bank, the Public Offer Account
Bank, and the Refund Bank for, among other things, collection of the Bid Amounts from Anchor
Investors and where applicable, refunds of the amounts collected on the terms and conditions
thereof.
“Escrow Agent” Link Intime India Private Limited appointed pursuant to the Share Escrow Agreement dated
September 20, 2016.
“Escrow Collection
Bank”
The bank which is a clearing member and registered with SEBI under the BTI Regulations, with
whom the Escrow Account has been opened, being Axis Bank Limited.
“First Bidder” The Bidder whose name appears first in the Bid cum Application Form or the Revision Form and
in case of joint Bids, whose name shall also appear as the first holder of the beneficiary account
held in joint names.
“Floor Price” ` 467. “General Information
Document”
The General Information Document for investing in public issues prepared and issued in
accordance with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013, notified by SEBI,
suitably modified and included in “Offer Procedure” on page 558 of this Prospectus.
“Lead Managers”,
“Manager”, “Book
Running Lead
Managers”, “BRLM”
or “LM”
The Lead Managers, being Axis Capital Limited and Citigroup Global Markets India Private
Limited.
“Maximum RII
Allottees”
Maximum number of Retail Individual Investors who can be Allotted the minimum Bid Lot. This
is computed by dividing the total number of Equity Shares available for Allotment to RIIs by the
minimum Bid Lot.
“Mutual Fund
Portion”
5% of the QIB Portion (other than Anchor Investor Portion) available for allocation to Mutual
Funds only, on a proportionate basis, subject to valid Bids being received at or above the Offer
Price.
“Non-Institutional
Investors”
All Bidders, including Category III FPIs, that are not QIBs or Retail Individual Investors who
have Bid for Equity Shares for an amount of more than ` 200,000 (but not including NRIs other than Eligible NRIs).
“Non-Institutional
Portion”
The portion of the Offer being not less than 15% of the Offer available for allocation to
Non-Institutional Investors on a proportionate basis, subject to valid Bids being received at or
above the Offer Price.
“Offer” or “Offer for
Sale” Initial public offering of up to 24,613,024^ Equity Shares of face value ` 10 each of our Company for cash at a price of ` 472 per Equity Share (including a share premium of ` 462 per Equity Share aggregating up to ` 11,617.35 million^, consisting of an offer for sale of up to 19,295,968^ Equity Shares by Actis and up to 5,317,056^ Equity Shares by Mr. Anurang Jain. The Offer shall
constitute up to 17.50%^ of the fully diluted post-offer paid-up equity share capital of our
Company.
^ Subject to finalisation of Basis of Allotment
“Offer Agreement” The agreement entered into on July 5, 2016 amongst our Company, the Selling Shareholders and
the Lead Managers, pursuant to the ICDR Regulations, based on which certain arrangements are
agreed to in relation to the Offer.
“Offer Closing Date” Except in relation to Bids received from the Anchor Investors, October 7, 2016.
“Offer Opening Date” Except in relation to Bids received from the Anchor Investors, October 5, 2016.
“Offer Period” Except in relation to Bids received from Anchor Investors, October 5, 2016 to October 7, 2016.
“Offer Price” ` 472, being the final price at which the Equity Shares will be Allotted to Bidders other than Anchor Investors in terms of the Red Herring Prospectus. The Offer Price was decided by our
Company and the Selling Shareholders in consultation with the Lead Managers, on the Pricing
Date.
“Offer Proceeds” Gross proceeds of the Offer.
“Price Band” ` 467 to ` 472. “Pricing Date” October 10, 2016, the date on which our Company and the Selling Shareholders in consultation
with the Lead Managers, finalised the Offer Price.
“Prospectus” This prospectus dated October 10, 2016 issued in accordance with the Companies Act, 2013,
containing, inter-alia, the Offer Price that is determined at the end of the Book Building Process,
the size of the Offer and certain other information, including any addenda or corrigenda thereto.
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Term Description
“Public Offer
Account”
An account opened in accordance with the provisions of the Companies Act, 2013, with the
Public Offer Account Bank to receive money from the Escrow Accounts and from the ASBA
Accounts on the Designated Date.
“Public Offer
Account Bank”
The bank which is a clearing member and registered with SEBI under the BTI Regulations, with
whom the Public Offer Account has been opened, being Axis Bank Limited.
“Qualified
Institutional Buyers”
or “QIBs”
A qualified institutional buyer, as defined under Regulation 2(1)(zd) of the ICDR Regulations.
“QIB Portion” The portion of the Offer (including the Anchor Investor Portion) being not more than 50% of the
Offer which shall be allocated to QIBs, including the Anchor Investors (which allocation shall be
on a discretionary basis, as determined by our Company and the Selling Shareholders, in
consultation with the Lead Managers) subject to valid Bids being received at or above the Offer
Price.
“Red Herring
Prospectus”
The red herring prospectus dated September 26, 2016, issued in accordance with the Companies
Act, 2013, and the ICDR Regulations, which did not have complete particulars of the price at
which the Equity Shares were offered and the size of the Offer including any addenda or
corrigenda thereto.
“Refund Account” The account opened with the Refund Bank(s), from which refunds to unsuccessful Anchor
Investors, if any, of the whole or part of the Bid Amount shall be made.
“Refund Bank” The bank which is a clearing member and registered with SEBI under the BTI Regulations with
whom the Refund Account has been opened and in this case being Axis Bank Limited.
“Registered Broker” Stock brokers registered with the stock exchanges having nationwide terminals other than the
Syndicate, and eligible to procure Bids from ASBA Bidders in terms of the circular No.
CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI.
“Registrar” or
“Registrar to the
Offer”
Link Intime India Private Limited.
“Registrar and Share
Transfer Agents” or
“RTAs”
Registrar and share transfer agents registered with SEBI and eligible to procure Bids from ASBA
Bidders at the Designated RTA Locations in terms of circular no.
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI.
“Retail Portion” The portion of the Offer being not less than 35% of the Offer available for allocation to Retail
Individual Investor(s) in accordance with the ICDR Regulations, subject to valid Bids being
received at or above the Offer Price.
“Retail Individual
Investors”/ “RII(s)”
Individual Bidders (including HUFs applying through their karta and Eligible NRIs) who have not
submitted a Bid for Equity Shares for a Bid Amount of more than ` 200,000 in any of the Bidding options in the Offer.
“Revision Form” The form used by the Bidders to modify the quantity of Equity Shares or the Bid Amount in their
Bid cum Application Forms or any prior Revision Form(s), as applicable. QIBs and Non-
Institutional Investors are not allowed to withdraw or lower their Bids (in terms of quantity of
Equity Shares or the Bid Amount) at any stage. RIIs can revise their Bids during the Offer Period
and withdraw their Bids until Offer Closing Date.
“Self Certified
Syndicate Bank(s)” or
“SCSB(s)”
Banks which are registered with SEBI under the BTI Regulations, which offer the facility of
ASBA, a list of which is available on the website of the SEBI at
(www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries) and updated from time
to time and at such other websites as may be prescribed by SEBI from time to time.
“Share Escrow
Agreement”
The agreement dated September 20, 2016 amongst our Company, the Selling Shareholders and
the Escrow Agent for deposit of such Selling Shareholders respective offered Equity Shares in
escrow.
“Specified Cities” or
“Specified Locations”
Bidding centres where the Syndicate shall accept ASBA Forms from ASBA Bidders, a list of
which is available on the website of the SEBI
(http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries) and updated from
time to time and at such other websites as may be prescribed by SEBI from time to time.
“Stock Exchange(s)” NSE and BSE.
“Sub Syndicate” The sub-syndicate members, if any, appointed by the Lead Managers and the Syndicate Members,
to collect Bid cum Application Forms.
“Syndicate” or
“member of the
Syndicate”
The Lead Managers and the Syndicate Members.
“Syndicate
Agreement”
The agreement dated September 22, 2016 amongst the Syndicate, our Company and the Selling
Shareholders in relation to collection of Bids by the Syndicate.
“Syndicate Bidding
Centres”
Syndicate and Sub Syndicate centres established for acceptance of the Bid cum Application Form
and Revision Forms.
“Syndicate Members” Intermediaries registered with SEBI who are permitted to carry out activities as an underwriter,
namely, Axis Capital Limited and Citigroup Global Markets India Private Limited.
“Underwriters” Axis and Citi.
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Term Description
“Underwriting
Agreement”
The agreement dated October 10, 2016 amongst the Underwriters, our Company and the Selling
Shareholders.
“Working Day” All days other than second and fourth Saturdays of the month, Sundays or public holidays, on
which commercial banks in Mumbai are open for business; provided however, with reference to
(a) announcement of Price Band; and (b) Offer Period, shall mean all days except Saturday,
Sunday and public holidays on which commercial banks in Mumbai are open for business and (c)
the time period between the Offer Closing Date and the listing of the Equity Shares on the Stock
Exchanges, shall mean all trading days of Stock Exchanges, excluding Sundays and bank
holidays, as per the SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21, 2016.
Conventional or general terms and abbreviations
Term Description
“A/c” Account.
“AGM” Annual general meeting.
“AIFs” Alternative investment funds as defined in and registered under the AIF Regulations.
“AIF Regulations” Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.
“AS” Accounting standards issued by the Institute of Chartered Accountants of India, as notified by
the Companies (Accounting Standards ) Rules, 2006.
“A.Y.” Assessment year.
“BPLR” Benchmark prime lending rate.
“BSE” BSE Limited.
“BTI Regulations” Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994.
“CAGR” Compounded Annual Growth Rate.
“Calendar Year” or
“year”
Unless the context otherwise requires, shall refer to the twelve month period ending December
31.
“Category III Foreign
Portfolio Investors” or
“Category III FPIs”
FPIs who are registered as “Category III foreign portfolio investors” under the FPI
Regulations.
“CCI” Competition Commission of India.
“CDSL” Central Depository Services (India) Limited.
“CFO” Chief Financial Officer.
“Combination
Regulations”
Provisions under the Competition Act in relation to combinations.
“Companies Act, 1956” Companies Act, 1956, and the rules, regulations, modifications and clarifications made
thereunder, as the context requires.
“Companies Act, 2013” Companies Act, 2013 and the rules, regulations, modifications and clarifications thereunder, to
the extent notified.
“Companies Act” Companies Act, 1956 and the rules thereunder, to the extent not repealed, and/ or the
Companies Act, 2013.
“Competition Act” Competition Act, 2002.
“CRISIL” CRISIL Research, a division of CRISIL Limited.
“CSR” Corporate social responsibility.
“Depositories Act” Depositories Act, 1996.
“Depository” or
“Depositories”
NSDL and CDSL.
“DIN” Director Identification Number.
“DP” or “Depository
Participant”
A depository participant as defined under the Depositories Act.
“DP ID” Depository Participant’s identity number.
“DTC” Draft Direct Taxes Code, 2013.
“ECB” External commercial borrowing.
“EBITDA” Earnings before interest, tax, depreciation and amortisation.
“EGM” Extraordinary general meeting.
“EPS” Earnings per share (as calculated in accordance with AS-20).
“ERP” Enterprise Resource Planning.
“EU” European Union.
“Euro” or “€” Euro.
“Euribor” Euro Interbank Offered Rate
“FDI” Foreign direct investment.
“FEMA” Foreign Exchange Management Act, 1999, including the rules and regulations thereunder.
“FEMA Regulations” Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside
India) Regulations, 2000.
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Term Description
“Financial Year”,
“Fiscal”, “FY” or “F.Y.”
Period of twelve months ending on March 31 of that particular year, unless stated otherwise.
“FII(s)” Foreign Institutional Investor, as defined under the erstwhile Securities and Exchange Board of
India (Foreign Institutional Investors) Regulations, 1995.
“FII Regulations” Erstwhile Securities and Exchange Board of India (Foreign Institutional Investors)
Regulations, 1995.
“FPI(s)” Foreign Portfolio Investor, as defined under the SEBI (Foreign Portfolio Investors)
Regulations, 2014, including FIIs and QFIs, which are deemed to be foreign portfolio
investors.
“FPI Regulations” Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014.
“Finance Act” Finance Act, 1994.
“FIPB” Foreign Investment Promotion Board.
“FVCI” Foreign venture capital investors, as defined and registered with SEBI under the FVCI
Regulations.
“FVCI Regulations” Securities and Exchange Board of India (Foreign Venture Capital Investor) Regulations, 2000.
“GDP” Gross domestic product.
“GIR Number” General index registration number.
“GoI” Government of India.
“Government of
Maharashtra Incentive
Scheme”
Sales tax incentive scheme of 1998 formulated by the Maharashtra government under the
erstwhile Maharashtra Sales Tax Act, 1959 currently monitored by the Directorate of
Industries, Government of Maharashtra.
“GST” Goods and services tax.
“HUF” Hindu undivided family.
“ICAI” The Institute of Chartered Accountants of India.
“ICDS” Income Computation and Disclosure Standards.
“IFRS” International Financial Reporting Standards.
“Ind AS” Indian Accounting Standards.
“Intermediaries
Regulations”
Securities and Exchange Board of India (Intermediaries) Regulations, 2008.
“I.T. Act” The Income Tax Act, 1961.
“IT” Information technology.
“ITAT” Income Tax Appellate Tribunal.
“ICDR Regulations” Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009.
“Indian GAAP” Accounting principles generally accepted in India.
“Insider Trading
Regulations”
Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.
“IPR” Intellectual property rights.
“IPO” Initial public offer.
“LIBOR” London Interbank Offered Rate
“Listing Agreement” The equity listing agreement to be entered into by our Company with each of the Stock
Exchanges.
“Listing Regulations” Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
“MAT” Minimum alternate tax.
“MCA” Ministry of Corporate Affairs, Government of India.
“MICR” Magnetic ink character recognition.
“Mn” or “mn” Million.
“MOEF” Ministry of Environment and Forests.
“MPCB” Maharashtra Pollution Control Board.
“Mutual Funds” A mutual fund registered with SEBI under the Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996.
“N.A.” Not applicable.
“NAV” Net asset value per share being Net Worth at the end of period/ year excluding preference share
capital and cumulative preference dividend divided by total number of equity shares
outstanding at the end of the period/ year.
“NCT” National Capital Territory.
“NECS” National electronic clearing service.
“NEFT” National electronic fund transfer.
“Negotiable Instruments
Act”
Negotiable Instruments Act, 1881.
“Net Worth” Equity share capital plus preference share capital and reserves and surplus.
“NGT” National Green Tribunal.
“NOC” No objection certificate.
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Term Description
“Non-Resident” A person resident outside India, as defined under FEMA.
“NRE Account” Non resident external account established in accordance with the Foreign Exchange
Management (Deposit) Regulations, 2016.
“NRI” or “Non-Resident
Indian”
A person resident outside India who is a citizen of India as defined under the Foreign
Exchange Management (Deposit) Regulations, 2016 or is an ‘Overseas Citizen of India’
cardholder within the meaning of section 7(A) of the Citizenship Act, 1955.
“NRO Account” Non resident ordinary account established in accordance with the Foreign Exchange
Management (Deposit) Regulations, 2016.
“NSDL” National Securities Depository Limited.
“NSE” National Stock Exchange of India Limited.
“OCB” or “Overseas
Corporate Body”
A company, partnership, society or other corporate body owned directly or indirectly to the
extent of at least 60% by NRIs including overseas trusts in which not less than 60% of the
beneficial interest is irrevocably held by NRIs directly or indirectly and which was in existence
on October 3, 2003 and immediately before such date was eligible to undertake transactions
pursuant to the general permission granted to OCBs under the FEMA. OCBs are not allowed to
invest in the Offer.
“P/E Ratio” Price/earnings ratio.
“PAN” Permanent account number allotted under the I.T. Act.
“PLR” Prime lending rate.
“PSUs” Public Sector Undertakings (government-owned corporations).
“R&D” Research and development.
“RBI” Reserve Bank of India.
“RONW” Return on net worth.
“Rs.”, “Rupees”, “`” or “INR”
Indian Rupees.
“RTGS” Real time gross settlement.
“SCRA” Securities Contracts (Regulation) Act, 1956.
“SCRR” Securities Contracts (Regulation) Rules, 1957.
“SEBI” Securities and Exchange Board of India constituted under the SEBI Act.
“SEBI Act” Securities and Exchange Board of India Act, 1992.
“Securities Act” U.S. Securities Act of 1933.
“SICA” Sick Industrial Companies (Special Provisions) Act, 1985.
“STT” Securities Transaction Tax.
“State Government” Government of a State of India.
“Takeover Regulations” Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011.
“U.S.” United States of America.
“U.S.D” or “$” or “U.S.
$”
United States Dollar.
“U.S. GAAP” Generally accepted accounting principles in the U.S.
“U.S. QIBs” Qualified institutional buyers, as defined in Rule 144A under the Securities Act.
“VAT” Value added tax.
“VCFs” Venture capital funds as defined in, and registered with SEBI under, the VCF Regulations.
“VCF Regulations” The erstwhile Securities and Exchange Board of India (Venture Capital Fund) Regulations,
1996.
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10
Industry related terms
Term Description
“ABS” Anti-lock Braking System.
“ACMA” Automotive Components Manufacturing Association of India.
“Adler” Adler SpA.
“Bajaj” Bajaj Auto Limited.
“CBS” Combined Brake System.
“CNC” Computer Numerically Controlled.
“CNG” Compressed Natural Gas.
“CVT” Continuous Variable Transmission Assemblies.
“Daimler” Daimler AG.
“DIC” Directorate of Industries, Government of Maharashtra.
“DSIR” Government of India’s Department of Scientific and Industrial Research.
“EPCG Scheme” Export Promotion Capital Goods Scheme.
“EVTC” Endurance Variable Torque Clutch.
“FCA Italy S.p.a” FCA Italy S.p.a and its group companies.
“FSDS” Front fork with Separate Damping and Spring.
“GDC” Gravity die casting.
“HCV” Heavy commercial vehicle.
“Hero” Hero Motorcorp Limited.
“HMC” Horizontal machining centre.
“Honda” Honda Motorcycle and Scooter India Private Limited.
“HPDC” High Pressure Die casting.
“IDC” Industrial Development Corporation.
“IIP” Index of Industrial Production.
“IMF” International Monetary Fund.
“LCV” Light commercial vehicle.
“LPDC” Low Pressure Die casting.
“Mahindra” Mahindra & Mahindra Limited.
“MEIS” Merchandise Exports from India Scheme.
“MERS” Middle East Respiratory Syndrome.
“Mordor Report” Mordor Intelligence, Europe Automotive Parts Die Casting Market (2016-2021), May
2016.
“MUV” Multi Utility Vehicle.
“MW” Mega Watt.
“OE” Original Equipment.
“OEM” Original equipment manufacturer.
“PMGSY” Pradhan Mantri Grameen Sadak Yojana.
“PTFE” Poly tetra fluoro ethylene.
“QCD” Quality, Cost And Delivery.
“R&D” Research and Development.
“Royal Enfield” A unit of Enfield Motors Limited.
“RoCE” Return on capital employment.
“SIAM” Society of Indian Automobile Manufacturers.
“SICOM” SICOM India Limited.
“SCV” Small Commercial Vehicles.
“SUV” Sports Utility Vehicle.
“Tier One Company” A company that supplies components directly to an OEM.
“TPM” Total Productive Maintenance.
“WP Performance” WP Performance Systems GmbH.
“Yamaha” India Yamaha Motor Private Limited.
“VDA” Verband der Automobilindustrie.
“VMC” Vertical machining centre.
“VW” Volkswagen Group.
Unless the content otherwise requires, the words and expressions used but not defined in this Prospectus will
have the same meaning as assigned to such terms under the Companies Act, ICDR Regulations, the SEBI Act,
the SCRA, the Depositories Act and the rules and regulations made thereunder.
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Notwithstanding the foregoing, terms specifically defined in this Prospectus, shall have the meanings given to
such terms in the sections where specifically defined.
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12
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
All references to “India” contained in this Prospectus are to the Republic of India, all references to the “U.S.” or
“United States” are to the United States of America, all references to “Germany” are to the Federal Republic of
Germany and all references to “Italy” are to the Italian Republic.
Unless stated otherwise, all references to page numbers in this Prospectus are to the page numbers of this
Prospectus.
Financial Data
Unless the context requires otherwise, the financial data in this Prospectus is derived from our Restated
Financial Information. Our Restated Financial Information has been prepared in accordance with the Companies
Act, 2013 and Indian GAAP and restated in accordance with the ICDR Regulations. Further, with effect from
April 1, 2016, we are required to prepare our financial statements in accordance with Ind AS and our Ind AS
Financial Statements have been included in this Prospectus.
Our Company’s Financial Year commences on April 1, and ends on March 31 of the following year
accordingly, all references to a particular financial year, unless stated otherwise, are to the 12 month period
ended on March 31 of that year. Unless the context otherwise requires, all references to a year in this Prospectus
are to a calendar year and references to a Fiscal Year are to March 31 of that calendar year.
Certain figures contained in this Prospectus, including financial information, have been subject to rounding
adjustments. All decimals have been rounded off to two decimal places. In certain instances, (i) the sum or
percentage change of such numbers may not conform exactly to the total figure given; and (ii) the sum of the
numbers in a column or row in certain tables may not conform exactly to the total figure given for that column
or row.
There are significant differences between Indian GAAP and Ind AS and accounting principles and auditing
standards with which prospective investors may be familiar in other countries, including IFRS and U.S. GAAP.
We have not attempted to explain those differences or quantify their impact on the financial data included
herein, and we urge you to consult your own advisors regarding such differences and their impact on our
financial data. Accordingly, the degree to which the Restated Financial Information included in this Prospectus
will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian
accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial
disclosures presented in this Prospectus should accordingly be limited. Our Company does not provide a
reconciliation of its financial statements to IFRS or U.S. GAAP financial statements. Further, given that Ind AS
is different in many respects from Indian GAAP under which our restated financial statements are currently
prepared, our Ind AS financial statements for the period commencing from April 1, 2016 may not be
comparable to our historical financial statements. For details in connection with risks involving differences
between Indian GAAP and Ind AS and other accounting principles and accounting standards and risks in
relation to Ind AS, please see “Risk Factors – The transition to Ind-AS in India is very recent and there is no
clarity on the impact of such transition on our Company. All income tax assessments in India will also be
required to follow the Income Computation Disclosure Standards”, “Risk Factors - Significant differences exist
between Indian GAAP and other accounting principles, such as US GAAP and IFRS, which may be material to
investors' assessments of our financial condition.” and “Risk Factors - The transition to Ind-AS and in India is
very recent and we may be negatively affected by such transition.” on pages 48 and 49 of this Prospectus,
respectively. For further details, please see “Summary of significant differences between Indian GAAP and Ind
AS” on page 493 of this Prospectus.
Any percentage amounts, as set forth in “Risk Factors”, “Our Business” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” on pages 17, 145 and 460 of this Prospectus,
respectively, and elsewhere in this Prospectus, unless otherwise indicated, have been calculated on the basis of
our Restated Financial Information.
Currency and units of presentation
All references to:
“Rupees” or “Rs.” or “`” or “INR” are to Indian Rupees, the official currency of the Republic of India.
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13
“U.S. Dollars” or “U.S.$” or “U.S.D” are to United States Dollars, the official currency of the United States of America.
“Euro” or “€” are to Euro, the official currency of the member states of the European Union.
“GBP” or “£” are to British Pound, the official currency of the United Kingdom.
“Yen” are to Japanese Yen, the official currency of Japan.
In this Prospectus, our Company has presented certain numerical information in “million” units. One million
represents 1,000,000 and one billion represents 1,000,000,000.
Industry and Market Data
Unless stated otherwise, industry data used throughout this Prospectus has been obtained or derived from
publicly available information as well as industry publications and sources.
Industry publications generally state that the information contained in those publications has been obtained from
sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability
cannot be assured. Accordingly, no investment decision should be made on the basis of such information.
Although we believe that the industry data used in this Prospectus is reliable, it has not been independently
verified by our Company, the Selling Shareholders, the Lead Managers or any of their affiliates or advisors. The
data used in these sources may have been reclassified by us for the purposes of presentation. Data from these
sources may also not be comparable.
Information has been included in this Prospectus from the report titled “Market assessment of auto component
in 2W & 3W”, June 29, 2016 prepared by CRISIL (the “CRISIL Report”), which report has been
commissioned by the Company for the purposes of confirming its understanding of the industry in connection
with the Offer and which includes the following disclaimer:
CRISIL Research, a division of CRISIL Limited (CRISIL), has taken due care and caution in preparing the
Report based on the information obtained by CRISIL from sources which it considers reliable. However, CRISIL
does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any
errors or omissions or for the results obtained from the use of Data / Report. The Report is not a
recommendation to invest / disinvest in any company covered in the Report. CRISIL especially states that it has
no liability whatsoever to the subscribers / users / transmitters / distributors of the Report. CRISIL Research
operates independently of, and does not have access to information obtained by CRISIL’s Ratings Division /
CRISIL Risk and Infrastructure Solutions Limited (CRIS), which may, in their regular operations, obtain
information of a confidential nature. No third party whose information is referenced in this Report under credit
to it, assumes any liability towards the user with respect to its information. The views expressed in the Report
are that of CRISIL Research and not of CRISIL’s Ratings Division / CRIS. No part of the Report shall be quoted
out of context or in the manner that it distorts its context or meaning.
Further, the extent to which the industry and market data presented in this Prospectus is meaningful depends on
the reader’s familiarity with and understanding of the methodologies used in compiling such data. There are no
standard data gathering methodologies in the industry in which we conduct our business, and methodologies and
assumptions may vary widely among different industry sources.
Such data involves risks, uncertainties and numerous assumptions and is subject to change based on various
factors, including those disclosed in “Risk Factors” on page 17 of this Prospectus. Accordingly, investment
decisions should not be based solely on such information.
Exchange Rates
This Prospectus contains conversions of certain currency amounts into Indian Rupees that have been presented
solely to comply with the requirements of the ICDR Regulations. These conversions should not be construed as
a representation that such currency amounts could have been, or can be converted into Indian Rupees, at any
particular rate, or at all.
The exchange rates of the respective foreign currencies are provided below:
(in `) Currency June 30, 2016 March 31, 2016 March 31, 2015 March 31, 2014 March 31, 2013 March 31, 2012
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Currency June 30, 2016 March 31, 2016 March 31, 2015 March 31, 2014 March 31, 2013 March 31, 2012
U.S.D 67.6166 66.3329 62.5908 60.0998 54.3893 51.1565
GBP 90.5183 95.0882 92.4591 99.8498 82.3209 81.7992
Euro 75.0071 75.0955 67.5104 82.5765 69.5438 68.3403
100 Yen 65.9100 59.0600 52.1100 58.8300 57.7600 62.4300
Source: www.rbi.org.in
In case March 31 of any of the respective years is a public holiday, the previous calendar day not being a public holiday has been considered
`/U.S. dollar
Fiscal year ended 31 March Average High Low Period-end
2012** .............................................................................................. 47.9458 54.2355 43.9485 51.1565
2013* ................................................................................................ 54.4512 57.2165 50.5645 54.3893
2014^ ................................................................................................ 60.4962 68.3611 53.7355 60.0998
2015 ................................................................................................. 61.1471 63.7498 58.4260 62.5908
2016 ................................................................................................. 65.4611 68.7775 62.1580 66.3329
March 31, 2016 ................................................................................ 67.0219 68.1580 66.3329 66.4105
April 30, 2016# ................................................................................ 66.4695 66.7330 66.2406 66.5176
May 31, 2016 ................................................................................... 66.9067 67.7060 66.2698 67.2030
June 30, 2016 ................................................................................... 67.2969 68.0144 66.6250 67.6166
July 31, 2016## ................................................................................. 67.2076 67.4972 66.9136 67.0340
August 30, 2016 ............................................................................... 66.9396 67.1940 66.7407 66.9813
Source: www.rbi.org.in
Notes: ^ March 29, 2014 was a holiday and March 30, 2014 and March 31, 2014 were trading holidays; hence, the exchange rates
the last working day of March, 2014 i.e. March 28, 2014 has been used. *March 29, 2013 was a holiday and March 30, 2013 and March 31, 2013 were trading holidays; hence, the exchange rates
for the last working day of March, 2013 i.e. March 28, 2013 has been used. ** March 31, 2012 was a trading holiday; hence, the exchange rates for the last working day of March, 2012 i.e. March 30,
2012 has been used. # April 30, 2016 was a holiday; hence, the exchange rates for the last working day of April, 2016 i.e. April 29, 2016 has been
used.
## July 31, 2016 was a holiday; hence, exchange rates for last working day of July, 2016 i.e. July 29, 2016 have been used.
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FORWARD-LOOKING STATEMENTS
This Prospectus contains certain “forward-looking statements.” These forward-looking statements include
statements with respect to our business strategy, our plans, prospects, goals and our projects. Bidders can
generally identify forward-looking statements by words or phrases such as “aim”, “anticipate”, “believe”,
“expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will pursue” or
other words or phrases of similar import. All forward-looking statements (whether made by us or any third
party) are predictions and are subject to risks, uncertainties and assumptions about us that could cause actual
results to differ materially from those contemplated by the relevant forward-looking statement.
Forward looking statements reflect our current views with respect to future events as of the date of this
Prospectus and are not a guarantee of future performance. These statements are based on our management’s
beliefs and assumptions, which in turn are based on currently available information. Although we believe the
assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions
could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect.
Further, the actual results may differ materially from those suggested by the forward-looking statements due to
risks or uncertainties associated with our expectations with respect to, but not limited to, regulatory changes
pertaining to the industries in India in which we have our businesses and our ability to respond to them, our
ability to successfully implement our strategy, our growth and expansion, technological changes, our exposure
to market risks, general economic and political conditions in India, which have an impact on our business
activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence
in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial
markets in India and globally, changes in domestic laws, regulations and taxes, changes in competition in our
industry and incidence of any natural calamities and/or acts of violence. Important factors that could cause
actual results to differ materially from our expectations include, but are not limited to, the following:
1. Heavy dependence on the performance of the automotive sector in India, particularly the market for two-wheelers in India.
2. Dependence on the performance of the automotive sector in Europe for the four-wheeler market. 3. Failure to identify and understand evolving industry trends and preferences and to develop new products to
meet our customers' demands;
4. Environmental and safety regulations that may adversely affect our business and we have been subject to environmental notices in respect of certain of our manufacturing facilities;
5. Failure in implementing our strategies, such as expanding our business in the passenger car, LCV and HCV segments of the automotive components market, outsourcing our non-critical processes to outside vendors
and expanding our presence in the after-market segment;
6. Strategic investments and alliances, acquisitions and mergers in the future, which may be difficult to integrate and manage;
7. Inability to sustain or manage our growth; 8. Failure to compete effectively in the highly competitive automotive components industry; 9. Risks associated with our overseas operations; 10. Dependence on third parties for the supply of raw materials and delivery of products and such providers
could fail to meet their obligations;
11. The cyclical and seasonal nature of automotive sales and production; 12. Changing laws, rules and regulations and legal uncertainties, including adverse application of tax laws and
regulations;
13. A slowdown in economic growth in India could cause our business to suffer. We are also subject to regulatory, economic, social and political uncertainties in India;
14. Terrorist attacks, communal disturbances, civil unrest and other acts of violence or war involving India and other countries;
15. The occurrence of natural or man-made disasters; and 16. Currency exchange rate fluctuations.
For further discussion on factors that could cause our actual results to differ, please see “Risk Factors”, “Our
Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on
pages 17, 145 and 460 of this Prospectus, respectively. By their nature, certain market risk related disclosures
are only estimates and could be materially different from what actually occurs in the future. As a result, actual
gains or losses could materially differ from those that have been estimated.
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We cannot assure Bidders that the expectation reflected in these forward-looking statements will prove to be
correct. Given these uncertainties, Bidders are cautioned not to place undue reliance on such forward-looking
statements and not to regard such statements as a guarantee of future performance.
Our Company, the Selling Shareholders, the Directors, the Syndicate and their respective affiliates or associates
do not have any obligation to, and do not intend to, update or otherwise revise any statements reflecting
circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the
underlying assumptions do not come to fruition. In accordance with the SEBI requirements, our Company will
ensure that Bidders in India are informed of material developments from the date of this Prospectus until such
time as the grant of listing and trading permissions by the Stock Exchanges. Each Selling Shareholder will
ensure that Bidders are informed of material developments in relation to the statements and undertakings
confirmed by each of them from the date of this Prospectus until such time as the grant of listing and trading
permissions by the Stock Exchanges.
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SECTION II: RISK FACTORS
An investment in Equity Shares involves a high degree of risk. You should carefully consider all the
information in this Prospectus, including the risks and uncertainties described below, before making an
investment in the Equity Shares. The risks and uncertainties described in this section are not the only
risks that we currently face. If any of the following risks, or other risks that are not currently known or
are now deemed immaterial, actually occur, our business, results of operations and financial condition
could suffer, the price of our Equity Shares could decline, and you may lose all or part of your
investment. The financial and other related implications of risks concerned, wherever quantifiable, have
been disclosed in the risk factors mentioned below. However, there are risks where the effect is not
quantifiable and hence has not been disclosed in the applicable risk factors.
This Prospectus also contains forward-looking statements that involve risks and uncertainties where
actual results could materially differ from those anticipated in these forward-looking statements. Please
see "Forward-Looking Statements" on page 15 of this Prospectus.
Unless otherwise stated, the financial information used in this section is derived from our restated
consolidated financial statements.
1. Internal Risk Factors
1. Pricing pressure from customers may adversely affect our gross margin, profitability and ability to increase our prices, which in turn may materially adversely affect our business,
results of operations and financial condition.
Pricing pressure from OEMs is characteristic of the industry in which we operate. Virtually all
automakers pursue aggressive but systematic price reduction initiatives and objectives each year
with their suppliers, and such actions are expected to continue in the near future. Pursuing cost-
cutting measures while maintaining rigorous quality standards may lead to an erosion of our
margins, which may have a material adverse effect on our business, results of operations and
financial condition.
In addition, estimating amounts of such price reductions is subject to risk and uncertainties, as
any price reduction is the result of negotiations and other factors. Accordingly, suppliers must be
able to reduce their operating costs in order to maintain profitability. Such price reductions may
affect our sales and profit margins. If we are unable to offset customer price reductions in the
future through improved operating efficiencies, new manufacturing processes, sourcing
alternatives and other cost reduction initiatives, our business, results of operations and financial
condition may be materially adversely affected.
Additionally, our business is very capital intensive, requiring us to maintain a large fixed cost
base. Therefore, our profitability is dependent, in part, on our ability to spread fixed production
costs over higher production volume. However, our customers generally negotiate for larger
discounts in price as the volume of their orders increase. If we are unable to generate sufficient
production cost savings in the future to offset price reductions or if there is any reduction in
consumer demand for vehicles, which will result in decreased sales, our gross margin and
profitability may be materially adversely affected.
2. Our business is dependent on certain principal customers, especially Bajaj Auto Limited ("Bajaj") in India and FCA Italy S.p.A and its group companies ("FCA Italy S.p.A") in
Europe, and the loss of such customers or a significant reduction in purchases by such
customers could adversely affect our business, results of operations and financial condition.
We are dependent on certain principal customers, especially Bajaj. Sales to our top three
customers (based on the net revenue from operations in FY 2016) represented 65.31%, 61.83%,
62.07% and 61.15% of our net revenue from operations (including intermediary sales) for
FY2014, FY2015, FY2016 and Q1 FY2017, respectively, and sales to our top eight customers
represented 83.57%, 80.81%, 81.28% and 82.69% of our net revenue from operations (including
intermediary sales) for FY2014, FY2015, FY2016 and Q1 FY 2017 respectively.
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Our two largest customers are Bajaj and FCA Italy S.p.A. In FY2015, FY2016 and Q1 FY 2017,
Bajaj represented 43.19%, 40.83% and 37.68% of our net revenue from operations (including
intermediary sales), respectively. FCA Italy S.p.A. represented 14.20%, 15.29% and 17.53% of
our net revenues from operations for FY2015, FY2016 and Q1 FY2017, respectively. Moreover,
many of our manufacturing facilities sell a significant portion of their annual production to small
groups of customers. Our sales to Bajaj (including intermediary sales) were ₹20,236.71 million,
₹21,237.85 million, ₹21,395.51 million and ₹5,436.10 million for FY2014, FY2015, FY2016
and Q1 FY2017, respectively. Our sales to FCA Italy S.p.A were ₹5,894.92 million, ₹6,981.27
million, ₹8,013.65 million and ₹2,529.14 million for FY2014, FY2015, FY2016 and Q1 FY2017, respectively. In addition, we have no long-term purchase agreement with Bajaj and
FCA Italy S.p.A, and instead rely on short-term purchase orders. Consequently, the loss of any
significant customer, especially Bajaj, could have an adverse effect on our business. In addition,
as a consequence of our reliance on Bajaj, any adverse change in the financial condition of Bajaj
may also have an adverse effect on our business.
It is common for large OEMs to source their parts from relatively small numbers of vendors, and
as a result, our customers often undertake vendor rationalisation to reduce costs related to
procurement from multiple vendors. Since we are significantly dependent on certain key
customers for a significant portion of our sales, the loss of any one of our key customers or a
significant reduction in demand from such customers could have an adverse effect on our
business, results of operations and financial condition.
3. We are heavily dependent on the performance of the automotive sector in India, particularly the market for two-wheelers in India. We are also dependent on the performance of the
automotive sector in Europe for the four-wheeler market. Any adverse changes in the
conditions affecting these markets can adversely impact our business, results of operations
and financial condition.
Our business is heavily dependent on the performance of the automotive sector in India,
particularly the two-wheeler market. While we have expanded our operations to three-wheelers,
passenger cars, LCVs and HCVs and to customers outside India, our products portfolio has been
and continues to be concentrated on providing components for two-wheelers manufacturers in
India. In Europe, we predominantly cater to the four-wheeler segment and intend to continue
focusing on manufacturing products in this region and segment as part of our growth strategy.
We will therefore be exposed to fluctuations in the performance of the automotive market in
India and Europe.
In the event of a decrease in demand for two-wheelers in India or four-wheelers in Europe, or any
developments that make the sale of components in the two-wheeler market in India or four-
wheeler market in Europe less economically beneficial, we may experience more pronounced
effects on our business, results of operations and financial condition than if we had further
diversified our portfolio across different segments of the automotive components market. For
instance, India has experienced two years of drought due to the failure of the monsoons. This has
negatively impacted farm income, the rural economy and, as a consequence, the affordability and
sales of two-wheelers, which many farmers use to get around. According to CRISIL, despite high
growth in initial years, two-wheeler production grew at a pace of 5.1% CAGR from FY2012 to
FY2016 mainly due to