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1.
INTRODUCTION............................................................................................... 2
1.1
2.
3.
IPO PERFORMANCE...................................................................................... 23
4.
ISSUE DETAILS........................................................................................ 27
REFERENCE......................................................................................................... 76
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1. INTRODUCTION
1.1 PUBLIC OFFER AND PRIVATE PLACEMENT
Issuers have two options for accessing funding, a public offering or a private placement.
Each of these options has distinct advantages or disadvantages that may affect funding costs
and/or the timing of a bond issue.
PUBLIC OFFERING
In a public offering, the issuer publicizes the upcoming bond issue, provides the timeframe
and platform for which bids will be accepted, and provides any additional guidelines or
details related to the bond issue. Generally, the winning bidder(s) is the one who has offered
the lowest total interest costs, including all costs of issuance and underwriter fees. The two
methods by which an issuer can sell bonds to the public are a negotiated sale and a
competitive sale.
Competitive Sale
In a competitive sale, the upcoming bond issue is advertised for sale. The advertisement, or
notice of sale, includes the terms of the sale and the terms of the bond issue. Any investor,
whether it is a broker-dealer, bank, or individual investor, may bid on the bonds at the
designated date and time.
Negotiated Sale
This method of sale is known as negotiate because the terms of the bonds and the terms of
the sale are negotiated by the issuer and the bond purchaser. If the issuer does not have the
knowledge or experience to effectively negotiate bond terms, an independent financial
advisor can serve as a third party negotiator.
In a negotiated sale, an issuer or financial advisor has preliminary discussions with one or
more underwriters to determine which underwriter will offer the best terms. Early on in this
process, an underwriter will typically talk to investors to get a measure of the level of interest
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before establishing the final bond pricing. Terms of the bonds are then tailored to meet
market demand for the bonds, as well as the needs of the issuer. Once these details have been
examined, the issuer selects an underwriter to purchase the bonds. The underwriter, in turn,
sells the bonds to investors.
PRIVATE PLACEMENT
Private placement provides funding through direct negotiation with one or a select number of
private financial institutions. The private financial institution is effectively providing a loan
to the issuer that must be repaid over time. In general, private placements do not have to be
registered with the Securities and Exchange Commission and do not require many of the
disclosure requirements found in public offerings. As such, private placement bonds are not
publicly issued or publicly traded and typically do not require a rating from a credit rating
agency.
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Diversification
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Distribution Channels
ADVANTAGES
When a company lists its securities on a public exchange, the money paid by the investing
public for the newly issued shares goes directly to the company (primary offering) as well as
to any early private investors who opt to sell all or a portion of their holdings (secondary
offering) as part of the larger IPO. An IPO, therefore, allows a company to tap into a wide
pool of potential investors to provide itself with capital for future growth, repayment of debt,
or working capital. A company selling common shares is never required to repay the capital
to its public investors. Those investors must endure the unpredictable nature of the open
market to price and trade their shares. After the IPO, when shares trade freely in the open
market, money passes between public investors. For early private investors who choose to
sell shares as part of the IPO process, the IPO represents an opportunity to monetize their
investment. After the IPO, once shares trade in the open market, investors holding large
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blocks of shares can either sell those shares piecemeal in the open market, or sell a large
block of shares directly to the public, at a fixed price, through a secondary market offering.
This type of offering is not dilutive, since no new shares are being created.
Once a company is listed, it is able to issue additional common shares in a number of
different ways, one of which is the follow-on offering. This method provides capital for
various corporate purposes through the issuance of equity without incurring any debt. This
ability to quickly raise potentially large amounts of capital from the marketplace is a key
reason many companies seek to go public.
An IPO accords several benefits to the previously private company:
Attracting and retaining better management and employees through liquid equity
participation
DISADVANTAGES
There are several disadvantages to completing an initial public offering:
Significant legal, accounting and marketing costs, many of which are ongoing
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and customers.
Increased risk of litigation, including private securities class actions and shareholder
derivative actions
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shares which can be traded on the stock exchange. Post listing, any investor can sell the
shares, allotted at the time of the issue, in the secondary market.
4. Bid-cum-Application Form: For applying in any public issue, each investor must fill a
standard form providing all the relevant details like Name, PAN, Demat id, Bank account
details, Bid price, Number of shares applied etc. Such a form is called a Bid-cum-Application
form. It can be submitted through the offline or online mode. An investor must ensure that all
the relevant details are filled correctly to avoid rejection of application and to ensure smooth
allotment of securities.
5. Price Band: A price band is the range of price within which an investor can place his bid
for the securities. The price mentioned by the investor in the bid-cum-application form can
neither be less than the lower limit of the price band nor can it exceed the upper limit of the
price band. For example, IPO of Coal India, the price band was Rs. 225-245 per share, which
means that an investor can bid only within the range of Rs. 225 to Rs. 245
6. Floor Price: In a price band, the lowest price is called the floor price, below which a bid
cannot be placed. In the above example Rs. 225 is the floor price of the Coal India IPO
7. Cap Price: Cap price is the upper ceiling limit in a price band beyond which a bid cannot
be placed. Again, taking the same example of Coal India, Rs. 245 is the Cap price, beyond
which you cannot place the bid.
8. Minimum order quantity: Minimum Order Quantity is the minimum number of shares
which the investor has to apply for in a public issue. For example, in the case of Coal Indias
IPO, the minimum order quantity was 25, i.e. an investor has to bid for at least 25 shares.
9. Market Lot: If an investor wants to bid for shares which are more than the minimum
order quantity, then he can do so by bidding in multiples of a certain number of shares which
is known as the Market Lot. By continuing the above example, if an investor wants to apply
for more than 25 shares of Coal India, then bids can be made in multiples of 25 shares, which
is the market lot size in case of the Coal India issue. Thus, applications can be made for 25,
50, 75 .number of shares until the maximum subscription limit is reached. In case of
Coal India, the minimum order quantity and market lot size, both were 25 shares.
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10. Maximum Subscription Limit for Retail Investors: Maximum Subscription Limit for
Retail Investors is the maximum amount of investment which can be made through a single
bid-cum-application form, or simply speaking, by a single individual, in a public issue.
11. Cut off Price: In book building issues, the issuer company specifies a price band within
which the bids are made. The actual issue price can be any price above the floor price and
within the price band. This issue price is called the Cut off Price. This price is determined
after considering the demand for the stock by the investors. Investors, in order to get
allotments in big ticket public issues, bid at the cut off price, conveying their intention that
they are willing to pay any price for the stock within the price band, at the end of the book
building process.
12. ASBA (Application Supported by Blocked Amounts): ASBA is an alternative mode of
making payments in public issues whereby the application money stays in the bank account
of the investor until the allotment is made. Only that much amount of funds are debited to the
investors bank account for which the allotment is made and the rest of the blocked amount is
released. In case the application is made using the ASBA facility, the need for refunds is
completely obviated.
For example : if an investor makes an application for Rs. 2,00,000 , then in the earlier
system, he was required to pay the entire sum of Rs. 2,00,000 upfront, either through a
cheque or net-banking and then if shares worth Rs. 1,50,000 are only allotted, then Rs.
50,000 used to get refunded. Under the ASBA mechanism, the investor just need to keep Rs.
2,00,000 in his bank account and at the time of allotment only Rs. 1,50,000 would be debited
to his account thus releasing the left over blocked amount of Rs. 50,000 and also doing away
with the cumbersome task of issuing refunds.
13. Book Building Process: Book Building is one of the methods of carrying out a public
issue, the other being the Fixed Price method. Under the Book Building method, the price at
which securities will be offered is not known to the investor. The investor is allowed to bid in
a given price range called the price band, and then, after the bids are closed & looking at the
demand for the shares at various price levels within the price band, the final issue price is
decided by the Merchant Bankers or BRLMs. This process leads to a better price and demand
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discovery. It is called the Book Building Process because during the entire issue period, the
book for the offer remains open and keeps building up with the bids collected from
investors.
14. BRLM (Book Running Lead Manager): BRLM are those financial institutions whose
names you find at the bottom of the bid-cum-application form like Karvy Securities, Kotak
Mahindra, SBI Capital, Enam Securities etc. BRLMs or Merchant Bankers are those
financial intermediaries which are involved in the IPO process right from the very first stage
and play a vital role in preparation & submission of prospectus, price fixation, application
processing, allotment and listing.
15. Prospectus or Offer document:Offer document" means Prospectus in the case of a
public issue or offer for sale and Letter of Offer in the case of a rights issue which is filed
with Registrar of Companies (RoC) and Stock Exchanges. An offer document covers all the
relevant information to help an investor to make his/her investment decision.
Types of offer documents:
"Draft Offer document" means the offer document in draft stage. The draft offer
documents are filed with SEBI, at least 21 days prior to the filing of the Offer Document with
the RoC / SEs. SEBI may specify changes, if any, in the draft Offer Document and the issuer
or the lead merchant banker shall carry out such changes in the draft offer document before
filing the Offer Document with the RoC/ SEs. The Draft Offer document is available on the
SEBI Web site for public comments for a period of 21 days from the filing of the Draft Offer
Document with SEBI.
"Red Herring Prospectus" is a prospectus which does not have details of either price or
number of shares being offered or the amount of issue. This means that in case the price is
not disclosed, the number of shares and the upper and lower price bands are disclosed. On the
other hand, an issuer can state the issue size and the number of shares are determined later.
An RHP for and FPO can be filed with the RoC without the price band and the issuer, in such
a case will notify the floor price or a price band by way of an advertisement one day prior to
the opening of the issue. In the case of book-built issues, it is a process of price discovery and
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the price cannot be determined until the bidding process is completed. Hence, such details are
not shown in the Red Herring prospectus filed with the RoC in terms of the provisions of the
Companies Act. Only on completion of the bidding process, the details of the final price are
included in the offer document. The offer document filed thereafter with ROC is called a
prospectus.
"Abridged Prospectus" contains all the salient features of a prospectus. It accompanies the
application form of public issues.
Shelf prospectus Any class of company may file a shelf prospectus with the Registrar of
Companies at the stage of first offer of securities. Shelf prospectus means a prospectus in
respect of which the securities or class of securities included therein are issued for
subscription in one or more issues over a certain period without the issue of a further
prospectus. The shelf prospectus shall indicate that validate period of the shelf prospectus is a
period not exceeding one year from the date of first offer of securities under that prospectus.
Once, a shelf prospectus has been issued, there will be no requirement of any further
prospectus for any subsequent offer of these securities issued during this validity period
Matters to be stated in prospectus:
A prospectus may be issued by or behalf of a public company either with reference to its
formation or subsequently, or by or on behalf of any person who is or has been engaged or
interested in the formation of a public company.
Information in Prospectus:
Every prospectus shall state following information:
i.
Names and addresses of the registered office of the company, company secretary,
Chief Financial Officer, auditors, legal advisers, bankers, trustees, if any, underwriters
ii.
iii.
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monies including utilised and unutilised monies out of the previous issue in the
iv.
v.
prescribed manner;
Details about underwriting of the issue;
Consent of the directors, auditors, bankers to the issue, experts opinion, if any, and of
vi.
vii.
viii.
ix.
x.
may be prescribed;
Main objects and present business of the company and its location, schedule of
xi.
1.
2.
3.
4.
5.
xii.
xiii.
prescribed; and
Disclosures in such manner as may be prescribed about sources of promoters
contribution.
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Book Building Issue: Under book building, the company going public offers a 20% price
band on shares to investors. Investors then bid on the shares before the final price is settled
once the bidding has closed. Investors must specify the number of shares they want to buy
and how much they are willing to pay. Unlike fixed price, there is no fixed price per share.
The lowest share price is known as the floor price, while the highest share price is known as
the cap price. The final share price is determined using investor bids.
Issue Type
Fixed
Price
Issues
Book
Building
Issues
Offer Price
Demand
Payment
100 % advance
payment is required
to be made by the
investors at the
time of application.
Reservations
50 % of the shares
offered are reserved for
applications below Rs.
1 lakh and the balance
for higher amount
applications.
Demand for the
10 % advance
50 % of shares offered
securities offered, payment is required are reserved for QIBS,
and at various
to be made by the
35 % for small
prices, is
QIBs along with
investors and the
available on a
the application,
balance for all other
real time basis on while other
investors.
the BSE website categories of
during the
investors have to
bidding period.
pay 100 % advance
along with the
application.
2.3 Intermediaries
Intermediaries which are registered with SEBI are Merchant Bankers to the issue (known as
Book Running Lead Managers (BRLM) in case of book built public issues), Registrars to the
issue, Bankers to the issue & Underwriters to the issue who are associated with the issue for
different activities. Their addresses, telephone/fax numbers, registration number, and contact
person and email addresses are disclosed in the offer documents.
1. Merchant Banker: Merchant banker does the due diligence to prepare the offer document
which contains all the details about the company. They are also responsible for ensuring
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compliance with the legal formalities in the entire issue process and for marketing of the
issue.
2. Registrars to the Issue: They are involved in finalizing the basis of allotment in an issue
and for sending refunds, allotment etc.
3. Bankers to the Issue: The Bankers to the Issue enable the movement of funds in the issue
process and therefore enable the registrars to finalize the basis of allotment by making clear
funds status available to the Registrars.
4. Underwriters: Underwriters are intermediaries who undertake to subscribe to the
securities offered by the company in case these are not fully subscribed by the public, in case
of an underwritten issue.
2.4 Types of Investors
There are three kinds of investors in a book-building issue.
The retail individual investor (RII),
The non-institutional investor (NII) and
The Qualified Institutional Buyers (QIBs).
RII is an investor who applies for stocks for a value of not more than Rs 100,000. Any bid
exceeding this amount is considered in the NII category. NIIs are commonly referred to as
high net-worth individuals. On the other hand QIBs are institutional investors who possess
the expertise and the financial muscle to invest in the securities market.
Mutual funds, financial institutions, scheduled commercial banks, insurance companies,
provident funds, state industrial development corporations, et cetera fall under the definition
of being a QIB.
Each of these categories is allocated a certain percentage of the total issue. The total
allotment to the RII category has to be at least 35% of the total issue. RIIs also have an
option of applying at the cut-off price. This option is not available to other classes of
investors. NIIs are to be given at least 15% of the total issue.
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And the QIBs are to be issued not more than 50% of the total issue. Allotment to RIIs and
NIIs is made through a proportionate allotment system. The allotment to the QIBs is at the
discretion of the BRLM.
Lately there have been some complaints by the QIBs of BRLMs resorting to favouritism
while allocating shares. The Securities and Exchange Board of India (Sebi) is in the process
of reviewing this mechanism.
Let's suppose, A Ltd, makes an offer for 200,000 shares. The issue is oversubscribed -- i.e.
there is demand for more shares than the issuer plans to issue. Further, a minimum allotment
of 100 shares is to be made for every investor.The cut-off price has been decided and now the
allotments are to be made. In the RII category, 1,500 applicants have applied for 100 shares
each, i.e. there is a demand for 150,000 shares.
A Ltd plans to issue 35% of the total issue to this category, i.e. 70,000 shares. In the NII
category, 200 applicants have applied for 500 shares each, i.e. 100,000 shares. A Ltd plans to
issue 15% of the total issue to this category, i.e. 30,000 shares.The cut-off price has already
been decided, so adjusting the quantity remains the only way of reaching the equilibrium.
Applying the proportionate allotment system each investor in the RII category will get 46.67
shares [(70,000/ 150,000) x 100)]. But the minimum allotment has to be 100 shares.
So through a lottery, 700 investors are chosen and allotted 100 shares each, making a total of
70,000 shares. In the NII category every investor will get 150 shares [(30,000/100,000) x
500)]. And that is how equilibrium is reached.
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SEBI approved norms for companies to launch their initial public offerings (IPOs) in
an electronic form.
Will reduce the time taken between the share sale and the listing, enhance the reach of
IPO.
Time period for listing: T+6 compared to T+12 currently
These will come into effect on 1 January 2016.
Depository participants and RTAs (registrar and transfer agents) will also be able to
accept IPO applications.
The green shoe option allows companies to intervene in the market to stabilise share prices
during the 30-day stabilisation period immediately after listing. This involves purchase of
equity shares from the market by the company-appointed agent in case the shares fall below
issue price.
The green shoe option is exercised by a company making a public issue. The issuer company
uses green shoe option during IPO to ensure that the shares price on the stock exchanges does
successful and find the buyers for companys shares. They are paid a certain amount of
for the shares exceeds expectations and the stock trades above its offering price.
From an investor's perspective, an issue with green shoe option provides more probability of
getting shares and also that post listing price may show relatively more stability as compared
to market.
Origin of the Green shoe
The term "green shoe" came from the Green Shoe Manufacturing Company (now called
Stride Rite Corporation), founded in 1919. It was the first company to implement the green
shoe clause into their underwriting agreement.
Green shoe option in India
Green shoe options or over-allotment options were introduced by the Securities and
Exchange Board of India (SEBI) in 2003 to stabilise the aftermarket price of shares issued in
IPOs.
Guidelines for exercising green shoe option
The guidelines require the promoter to lend his shares (not more than 15% of issue size)
which is to be used for price stabilisation to be carried out by a stabilising agent (normally
merchant banker or book runner) on behalf of the company.
The stabilisation period can be up to 30 days from the date of allotment of shares to bring
stability in post listing pricing of shares.
After making the decision to go public, the company appoints underwriters to find the buyers
for their issue. Sometimes, these underwriters also help the corporate in determining the issue
price and the kind of equity dilution i.e. how many shares will be made available for the
public.
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But with the turbulent times prevailing in the market place, it is however quite possible that
the IPO undersubscribed and trades below its issue price.
This is where these underwriters invoke the green shoe option to stabilise the issue.
How green shoe option works
The entire process of a green shoe option works on over-allotment of shares. For instance, a
company plans to issue 1 lakh shares, but to use the green shoe option; it actually issues 1.15
lakh shares, in which case the over-allotment would be 15,000 shares. Please note, the
company does not issue any new shares for the over-allotment.
The 15,000 shares used for the over-allotment are actually borrowed from the promoters with
whom the stabilising agent signs a separate agreement. For the subscribers of a public issue,
it makes no difference whether the company is allotting shares out of the freshly issued 1
lakh shares or from the 15,000 shares borrowed from the promoters.
Once allotted, a share is just a share for an investor. For the company, however, the situation
is totally different. The money received from the over-allotment is required to be kept in a
separate bank account (i.e. escrow account)
Role of the stabilising agent
The stabilising agent starts its process only after trading in the share starts at the stock
exchanges.
In case the shares are trading at a price lower than the offer price, the stabilising agent starts
buying the shares by using the money lying in the separate bank account. In this manner, by
buying the shares when others are selling, the stabilising agent tries to put the brakes on
falling prices. The shares so bought from the market are handed over to the promoters from
whom they were borrowed.
In case the newly listed shares start trading at a price higher than the offer price, the
stabilising agent does not buy any shares.
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financial records for intensive fiscal health scrutiny that SEBI would perform. Some
companies may also opt to directly sell their shares through the stock market, but most prefer
going through the underwriters.
Step 1: Preparation of Registration Statement
To begin an IPO process, the company involved must submit a registration statement to the
SEBI, which includes a detailed report of its fiscal health and business plans. SEBI
scrutinizes this report and does its own background check of the company. It must also see
that registration statement fulfils all the mandatory requirements and satisfies all rules and
regulations.
Step 2: Getting the Prospectus Ready
While awaiting the approval, the company, with assistance from the underwriters, must
create a preliminary 'Red Herring' prospectus. It includes detailed financial records, future
plans and the specification of expected share price range. This prospectus is meant for
prospective investors who would be interested in buying the stock. It also has a legal warning
about the IPO pending SEBI approval.
Step 3: The Roadshow
Once the prospectus is ready, underwriters and company officials go on countrywide
'roadshows', visiting the major trade hubs and promote the company's IPO among select few
private buyers (Usually corporates or HNIs). They are fed with detailed information
regarding company's future plans and growth potential. They get a feel of investor response
through these tours and try to woo big investors.
Step 4: SEBI Approval & Go Ahead
Once SEBI is satisfied with the registration statement, it declares the statement to be
effective, giving a go ahead for the IPO to happen and a date to be fixed for the same.
Sometimes it asks for amendments to be made before giving its approval.
The prospectus cannot be given to the public without the amendments suggested by SEBI.
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The company needs to select a stock exchange where it intends to sell its shares and get
listed.
Step 5: Deciding On Price Band & Share Number
After the SEBI approval, the company, with assistance from the underwriters decide on the
final price band of the shares and also decide the number of shares to be sold.
Step 6: Available to Public for Purchase
On the dates mentioned in the prospectus, the shares are available to public. Investors can fill
out the IPO form and specify the price at which they wish to make the purchase and
submit the application. This open period usually lasts for 5 working days which is a SEBI
requirement.
Step 7: Issue Price Determination & Share Allotment
Once the subscription period is over, members of the underwriting banks, share issuing
company etc. will meet and determine the price at which shares are to be allotted to the
prospective investors. The price would be directly determined by the demand and the bid
price quoted by investors. Once the price is finalized, shares are allotted to investors based on
the bid amounts and the shares available.
Note: In case of oversubscribed issues, shares are not allotted to all applicants.
Step 8: Listing & Refund
The last step is the listing in the stock exchange. Investors to whom shares were allotted
would get the shares credited to their DEMAT accounts and for the remaining the money
would be refunded.
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3. IPO PERFORMANCE
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In the current year (2015) 28 IPOs were issued using fixed price method, Universal
Autofoundry Limited IPO was the last FP IPO floated in the month of august and Prabhat
Dairy Limited IPO is of book building issue type.
The above table shows the amount raised through IPO since 2010, Amount raised in 2015(till
30 Aug 2015) is 5885.38 crore as compare to 2010 which is 36,362.18, the number of IPOs a
42 and 66 in 2015 and 2010 respectively.
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1. Company Introduction
2. Industry analysis
3. Risk factors
4. Capital Structure
5. Object of issue
6. Means of finance
7. Basis of issue price
8. Promoters Contribution
9. Lock-in requirement
10. Management
11. Financial Details
12. Litigations
13. IPO Grading
14. Eligibility for the Issue
15. Allotment of shares
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4.1ISSUE DETAILS
Issue open
Issue type
Issue size
Face value
Issue price
Market lot
Minimum order
quantity
Listing at
65 Shares
75 Shares
65 Shares
75 Shares
BSE, NSE
BSE, NSE
Listing date
Issue price
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SEBI REQUIREMENTS
In case the issuer company has not come out with any issue in the past ten years or more, a
brief statement about the history and corporate structure of the issuer company, the main
objects of the issuer company and major events in the past.
ADLABS ENTERTAINMENT LTD
Adlabs Entertainment Limited is mainly engaged in the business of
theme park and entertainment industry. AEL own and operates
Adlabs Imagica which is India's first and only international standard
theme park. It offers entertainment, dining, shopping and
accommodation under one roof. The Rs 1,650-crore theme park
spread over 300 acres opened in April 2013. It can accommodate as
many as 20,000 visitors.
The Theme Park, is a part of Adlabs Mumbai, a 'one-stop' entertainment destination that they
offer at this location. Adlabs Mumbai also includes Aquamagica, a water park, which became
fully operational on October 1, 2014, and a family hotel, Novotel Imagica Khopoli, the first
phase of which is expected to be completed by March 2015.
Currently they have 25 rides and five themed restaurants which include a ride based on the
Bollywood film Mr. India, India's biggest floor-less roller coaster, and a 300-room hotel and
water park. They also offer entertainment through live performances by acrobats, magicians,
dancers, musicians and other artists throughout the day in various parts of theme park.
speed broadband services & Voice over Internet Protocol ("VoIP") services. Company has
well presence in the Indian states of Odisha, Chhattisgarh, Andhra Pradesh and West Bengal.
They have built a two-way communication network for 'Triple Play' services (video, data and
voice capabilities). Ortel provides its services under the brand names "Ortel Home Cable",
"Ortel Digital" and "Ortel Broadband".
Ortel Communications Ltd is among the ten major Multi System Operators in India
("MSOs"). Their business is broadly divided into:
1. Cable television services comprising of (a) analog cable television services; (b) digital
cable television services including other value added services such as HD services, NVoD,
gaming and local content;
2. Broadband services;
3. Leasing of fibre infrastructure; and
4. Signal uplinking services.
Ortel Communications currently offer services in 48 towns and certain adjacent semi urban
and rural areas with over 21,600 kilometers of cables supported by 34 analog head-ends and
five digital head-ends. They use HFC (combination of optic fibre in the backbone and coaxial
cable in the downstream) to build their network. They provide their service to both retail and
corporate customers.
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Experienced Management
ADLABS:
Media & Entertainment industry India:
Third largest television market with US$ 15.7 billion revenue in 2014.
Government initiatives:
- Digitising the cable distribution sector to attract greater institutional
funding,
- increasing FDI limit from 74 per cent to 100 per cent in cable
- DTH satellite platforms
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2. Our Promoter, Manmohan Shetty has been subjected to inquiries by SEBI in the past.
SEBI initiated two separate proceedings against our Promoter, Manmohan Shetty, under the
SEBI (Prohibition of Insider Trading) Regulations, 1992 and the SEBI (Substantial
Acquisition of Shares and Takeovers), Regulations, 1997, respectively. These proceedings
were settled after the payment of a fine of 2.5 million and 50,000 by Manmohan Shetty.
Further, two compounding orders were passed by the RoC between February 1, 2006 and
May 31, 2006 involving Manmohan Shetty in relation to his erstwhile directorship in Adlabs
Films Limited, now Reliance MediaWorks Limited. For details, see the section Outstanding
Litigation and Material Developments on page 203.
Our Company, our Promoters or Group Companies may be subjected to such inquiries or
regulatory proceedings in the future and we cannot assure you that such proceedings will be
settled or decided in our favour. An adverse outcome in any of these proceedings may have
an adverse effect on our Directors or on our business, results of operations and reputation.
3. Our business and results of operations could be adversely affected by changes in
public and consumer tastes or a decline in discretionary consumer spending,
consumer confidence and general economic conditions.
The success of our parks depends substantially on consumer tastes and preferences that can
change in often unpredictable ways. We must adapt to these changes to meet consumer tastes
32 | P a g e
and preferences. We carry out research and analysis before opening new rides and attractions
and often invest substantial time and resources to gauge the extent to which these new rides
and attractions will earn consumer acceptance. If attendance at our parks were to decline
significantly, or if new rides and attractions at our park do not achieve sufficient consumer
acceptance, our revenues may decline. Accordingly, we may not be able to recoup our capital
expenditure in the rides and attractions and guest loyalty may be adversely affected, any of
which could adversely affect our business and results of operations.
Further, our success depends to a significant extent on discretionary consumer spending,
which is heavily influenced by general economic conditions and the availability of disposable
income. The recent economic slowdown and increase in inflation in India, coupled with high
volatility and uncertainty as to the future global economic landscape, has had and continues
to have an adverse effect on consumers disposable income and Indian consumer confidence.
Actual or perceived difficult economic conditions and inflationary periods may adversely
impact park attendance figures, the frequency with which guests choose to visit our parks and
guest spending patterns at our parks. Both attendance and total per capita spending at our
parks are key drivers of our revenue and profitability, and reductions in either can adversely
affect our business and results of operations.
4. Our business is seasonal in nature, and may be affected by weather conditions, school
vacations, public holidays and weekends. Therefore, a sequential quarter-to-quarter
comparison of our results of operations may not be a good indicator of our
performance.
The theme and water park industry is seasonal in nature. Our parks could experience
volatility in attendance as a result of school vacations, public holidays, weekends and adverse
weather conditions such as excessive heat and monsoons. We believe that attendance at the
theme and water park and revenues from F&B and retail and merchandise operations is, and
will continue to be, higher during school vacations, public holidays and weekends. In
addition, the water park is expected to generate higher revenues in the summer months.
Conversely, we may face a reduction in revenues during the monsoon months. Further,
unfavourable weather conditions such as forecasts of excessive rainfalls or heat may reduce
the attendance at our parks. For these reasons, there may be quarterly fluctuations in results
of operations.
In addition, any disruption to our operations because of adverse weather conditions, or
otherwise, during the high attendance periods such as school holidays, may have an adverse
effect on our business and results of operations.
External Factors
1. Various factors beyond our control could adversely affect attendance and guest
spending patterns at our parks.
33 | P a g e
Our growth strategy depends significantly on our ability to increase attendance at our parks.
Attendance at our parks is affected by various factors beyond our control, including factors
that indirectly affect us due to their impact on our suppliers, vendors, insurance carriers or
other contractual counterparties. These factors include:
war, terrorist activities or threats and heightened travel security measures
instituted in response to these events;
outbreaks of pandemic or contagious diseases or consumers concerns relating
to potential exposure to contagious diseases;
natural disasters, such as hurricanes, fires, earthquakes, tsunamis, tornados
and floods and man-made disasters;
bad weather and forecasts of bad weather, including abnormally hot, cold
and/or wet weather, particularly during weekends, holidays or other peak
periods;
changes in the desirability of particular locations or travel patterns of our
guests; and
oil prices and travel costs and the financial condition of the airline, automotive
and other transportation-related industries, any travel-related disruptions or
incidents, and the development and maintenance of traveland particularly
road trafficinfrastructure.
2. We are subject to risks arising from exchange rate fluctuations. Depreciation of
the Rupee against foreign currencies may have an adverse effect on our results
of operations.
While our revenues are denominated in Rupees, we import rides and attractions related
equipment and procure services from overseas, the costs and fees of which are denominated
in foreign currencies. We currently do not have any hedging arrangement for our foreign risk
exposure. Details of our unhedged foreign currency exposures are set out below:
3. Political, economic or other factors that are beyond our control may have an
adverse effect on our business and results of operations.
34 | P a g e
The following external risks may have an adverse impact on our business and results of
operations should any of them materialise:
o a change in the central or Maharashtra state government or a change in the
economic and deregulation policies could adversely affect economic
conditions prevalent in the areas in which we operate in general and our
business in particular;
o high rates of inflation in India could increase our costs without
proportionately increasing our revenues, and as such decrease our operating
margins; and
o a slowdown in economic growth or financial instability in India could
adversely affect our business and results of operations.
category, i.e. MSO/ HITS operator or DTH Operator), the term control defined as direct or
indirect holding of at least 20% share capital or the power to control more than 50% voting
rights, or to appoint more than 50% of the members of the board of directors, or the power to
control the management and business decisions of an entity; (iv) the entity controlling a
vertically integrated DPO or the DPO itself shall not be allow to control any other DPO (of
any category); (v) in the event a vertically integrated DPO attains more than 33% market
share in the relevant market (being the relevant State, for MSOs/ HITS operators and the
country, for DTH operators), then the vertically integrated entities (ie, either the Broadcaster
or the DPO) will need to restructure itself in a manner that it and the broadcaster are no
longer vertically integrated; (vi) a vertically integrated broadcaster can only have nondiscriminatory charge-per-subscriber agreements with DPOs; and (vii) any entity controlling
a DPO, or the DPO itself should not have any other DPO (of any category), except for
permitted crossholdings between MSOs and HITS operators. While this report is currently a
recommendation to the MIB, in the event that such recommendations are written into law, we
may be prohibited from controlling multiple DPOs, and our Promoters may be prohibited
from acquiring control over multiple DPOs, or our Promoters may be required to restructure
their control in either our Company or our Group Companies which could adversely affect
our expansion plans, results of operation and financial condition.
2. A slowdown in economic growth in India could cause our business to suffer
Our performance and the growth of our business are necessarily dependent on the health of
the overall Indian economy. As a result, a slowdown in the Indian economy could adversely
affect our business. Indias economy could be adversely affected by a general rise in interest
rates, inflation, natural calamities, such as earthquakes, tsunamis, floods and drought,
increases in commodity and energy prices, and protectionist efforts in other countries or
various other factors. In addition, the Indian economy is in a state of transition. It is difficult
to gauge the impact of these fundamental economic changes on our business. Any slowdown
in the Indian economy or future volatility in global commodity prices could adversely affect
our business.
OUR OPINION
Internal and External Risks involved in both the Businesses should be carefully reviewed
before investing.
The two companies being in a completely different space cant be directly compared as their
risks and levels of risk and operations are different
Since their listing the share price of Adlabs has fallen to Rs 125 from Rs 163 and
Ortels price has appreciated to Rs 204 from Rs 160.
36 | P a g e
Paid-up Capital:
ORTEL:
ADLABS:
37 | P a g e
38 | P a g e
39 | P a g e
In addition, the Company expects to receive the benefits of listing the Equity Shares on the
Stock Exchanges.
The main objects as set out in their Memorandum of Association enables the company to
undertake their existing activities and the activities for which funds are being raised by them
through this Issue. The activities which have been carried out until now by the Company are
valid in terms of the objects clause of their Memorandum of Association.
DISCLOSURE 6: PROMOTERS CONTRIBUTION
SEBI Requirements:
In a public issue by an unlisted company, the promoters shall contribute not less
than 20% of the post issue capital.
The promoters shareholding after offer for sale shall not be less than 20% of the
post issue capital.
ORTEL:
SHAREHOLDERS
64.03
51.38
Others
35.97
Public
48.62
Total
100 %
100 %
PRE ISSUE %
POST ISSUE %
ADLABS:
SHAREHOLDERS
40 | P a g e
100
53.20
Others
Public
48.6
Total
100 %
100 %
NO. OF SHARES
% SHARE HOLDING
PROMOTERS INDIVIDUALS
1,134,770
4.66
BODIES CORPORATE
14,360,701
58.94
UNDER TRUST
105,878
0.43
50,000
0.21
BODIES CORPORATE
275,067
1.13
NON-INSTITUTIONAL
256,450
1.05
8,182,598
33.58
INDIVIDUALS
FOREIGN BODIES
NO. OF SHARES
% SHARE HOLDING
PROMOTERS INDIVIDUALS
2,843,927
5.9
41 | P a g e
BODIES CORPORATE
45,616,795
94.1
OUR OPINION:
Ortels contribution in Post-Issue Capital is 51.38% which is only 13% less than preIssue Capital .Whereas Adlabs Promoters contribution in Post-Issue Capital is
52.30% which is 48% less than pre- Issue Capital.
Both companies promoters contribution after post-issue is more than 20% therefore
both the companies are complying with the requirements of SEBI guideline.
Not use the funds for any investments in the equity markets.
ADLABS : Issue proceeds utilization
42 | P a g e
OUR OPINION:
Ortel is utilizing its net proceeds towards investments in capital
equipment's and financial instruments
Adlabs is utilizing its net proceeds to repay its loans and improve the
company's D:E ratio.
In case of any issue of capital to the public the minimum promoters contribution
Pursuant to the SEBI ICDR Regulations, an aggregate of 20% of the fully diluted
post-issue Equity Share capital of our Company held by the Promoters shall be locked
in for a period of three years from the date of Allotment and the Promoters
shareholding in excess of 20% shall be locked in for a period of one year.
In addition to the 20% of the fully diluted post-Issue shareholding of the Company
held by their Promoters and locked in for three years as specified above, the entire
43 | P a g e
pre-Issue equity share capital of the Company, except the Equity Shares subscribed to
and Allotted pursuant to the Offer for Sale, will be locked-in for a period of one year
from the date of Allotment.
Their Promoter, Thrill Park has pledged 23,394,782 Equity Shares of the Company
with the Consortium Lenders as collateral security under the Common Loan
Agreement. Pursuant to Regulation 36 of the SEBI ICDR Regulations, the entire preIssue shareholding of the Promoters in excess of the minimum promoters
contribution is required to be locked-in for a period of one year from the date of the
Allotment. Subject to consent of all the Consortium Lenders, the pledge over the
Equity Shares will be released prior to the Allotment for the purpose of compliance
with such lock-in requirement.
The Equity Shares held by their Promoters which are locked-in for a period of one
year from the date of Allotment may be pledged only with scheduled commercial
banks or public financial institutions as collateral security for loans granted by such
banks or public financial institutions, provided that such pledge of the Equity Shares
is one of the terms of the sanction of such loans. Accordingly, the Equity Shares
required to be pledged with the Consortium Lenders under the Common Loan
Agreement will be re-pledged after the Allotment
The Equity Shares held by their Promoters which are locked-in may be transferred to
and among the Promoter Group or to any new promoter or persons in control of the
Company, subject to continuation of the lock-in in the hands of the transferees for the
Any Equity Shares allotted to Anchor Investor Portion shall be locked-in for a period
of 30 days from the date of Allotment.
44 | P a g e
In addition to the lock-in of the Promoters Contribution, the entire pre-Issue equity share
capital of the Company (including those Equity Shares held by our Promoters) other than the
Equity Shares sold through the Offer for Sale and Equity Shares allotted to current
employees of our Company under ESOS 2010, shall be locked in for a period of one year
from the date of Allotment. The Equity Shares subject to lock-in will be transferable subject
to compliance with the SEBI Regulations, as amended from time to time.
45 | P a g e
Equity Shares allotted to Anchor Investors under the Anchor Investor Portion shall be lockedin for a period of 30 days from the date of Allotment of Equity Shares in the Issue.
o The Equity Shares held by the Promoters may be transferred to and amongst the
Promoter Group or to a new promoter or persons in control of our Company, subject
to continuation of the applicable lock-in in the hands of the transferees for the
remaining period and compliance with the provisions of the Takeover Regulations, as
applicable.
o The Equity Shares held by persons other than the Promoters prior to the Issue may be
transferred to any other person holding Equity Shares which are locked-in along with
the Equity Shares proposed to be transferred, subject to continuation of the lock-in in
the hands of the transferees for the remaining period and compliance with the
Takeover Regulations, as applicable.
o The Equity Shares held by the Promoters which are locked-in for a period of three
years from the date of Allotment in the Issue can be pledged with any scheduled
commercial bank or public financial institution as collateral security for loans granted
by such banks or institution, provided the loan has been granted by such bank or
financial institution for financing one or more of the objects of the Issue and pledge
of Equity Shares is one of the terms of sanction of the loan.
o The Equity Shares, if any, held by the Promoters which are locked-in for a period of
one year from the date of Allotment in the Issue can be pledged with any scheduled
commercial bank or public financial institution as collateral security for loans granted
by such bank or financial institution, provided that the pledge of the Equity Shares is
one of the terms of sanction of the loan.
OUR OPINION
46 | P a g e
DISCLOSURE 9: MANAGEMENT
SEBI Requirements:
Name, age, qualifications, Director Identification Number, experience, address,
occupation and date of expiration of the current term of office of manager,
managing director, and other directors giving their directorships in other companies.
The nature of any family relationship between any of the directors.
Any arrangement or understanding with major shareholders, customers, suppliers or
others, pursuant to which of the directors was selected as a director or member of
senior management.
Details of service contracts entered into by the directors with the issuer company
providing for benefits upon termination of employment and a distinct negative
statement in the absence of any such contract
47 | P a g e
Sr.
Name,
designation,
No.
1.
Designation:
occupation, Age
(yrs)
66
Chairman
Other
directorships/
partnerships/
trusteeships/ memberships
Other Directorships*
Centrum Capital Limited;
and
Managing Director
Occupation: Business
Nationality: Indian
Limited;
Thrill Park;
DIN: 00013961
Limited.
Whistling
Woods
Private
International
Partnerships
M/s Dream Estates
Memberships
Film & Television Producers Guild
of India
Kapil Bagla
2.
45
Other Directorships
Thrill Park;
Occupation: Service
Limited;
Nationality: Indian
Limited;
appointed
Director
as
and
the
Chief
Whole-time
Executive
Idea
Count
Education
Partnerships
DIN: 00387814
48 | P a g e
Private
Prashant Purker
3.
Designation:
Nominee
51
Other Directorships
Blue Sky International Mauritius;
Director
(Non-Executive Director)
Occupation: Service
Nationality: Indian
rotation
Company Limited
DIN: 00082481
Anjali Seth
4.
55
Nil
66
Other Directorships
5.
Independent Director
Occupation: Business
Nationality: Indian
Partnership
49 | P a g e
GG Advisory.
DIN: 00591038
Steven A. Pinto
6.
68
Other Directorships
Independent Director
Limited;
Nationality: Indian
Name and
other
particulars
50 | P a g e
Age (years)
DIN
Nationality
Other
Directorships
Mr. Baijayant
51
00297862
Indian
Panda
1. Indian Metals
S/o Dr.
& Carbide
Banshidhar
Limited
Panda
2. B. Panda and
Company
Nagar, Unit-8
Private Limited
Bhubaneswar-
3. Madhuban
751 012,
Investments
Odisha, India.
Private Limited
Designation:
4. K B
Non Executive
Investments
Director cum
Private Limited
Chairman
5. Paramita
Occupation:
Investment &
Industrialist
Trading
Term: Liable to
Company
retire by
Private Limited
rotation
6. Barabati
Investment and
Trading
Company
Private Limited
7. Indian Metals
& Ferro Alloys
Limited
8. Panda
Investments
Private Limited
9. Metro Skynet
Limited
51 | P a g e
10. KEDA
Enterprises
Private Limited
Ms. Jagi
48
00304690
Indian
Mangat Panda
1. Odisha
D/o Mr.
Television
Randhir Singh
Limited
Mangat
2. Panda
Investments
Nagar, Unit-8
Private Limited
Bhubaneswar-
3. Metro Skynet
751 012,
Limited
Odisha, India.
4. Kishangarh
Designation:
Environment
Executive
Development
Director and
Action Private
Managing
Limited
Director
5. KEDA
Occupation:
Enterprises
Service
Private Limited
Term: For a
6. Orissa
period of five
Telefilms
years
Private Limited
commencing
7. Tarang
from December
Broadcasting
22, 2012 to
Company
December 22,
Limited
2017.
8. Kahani
Unlimited
Private Limited
52 | P a g e
9. Ortel
Wireless
Services Private
Limited
10. News
Broadcasters
Association
11. VISHWASVision for
Health, Welfare
and Special
Needs
Mr.
44
00171845
Indian
Subhrakant
1. Indian Metals
Panda
S/o Dr.
Limited
Banshidhar
2. Utkal Coal
Panda
Limited
30, Green
3. Utkal Power
Avenue, Vasant
Limited
Kunj, New
4. Utkal Real
Delhi-110 070,
Estate Private
India.
Limited
Designation:
5. Indimet
Non Executive
Mining Pte.
Director
Limited,
Occupation:
Singapore
Business
6. Carolina
Term: Liable to
Consulting
retire by
Private Limited
53 | P a g e
rotation
Mr. Shantanu
44
02104220
Indian
Yeshwant
1. Destimoney
Nalavadi
India Services
S/o Mr.
Private Limited
Yeshwant
2. Destimoney
Fakirappa
Commodities
Nalavadi
Private Limited
RM 2903/4/5/6,
3. Destimoney
FL 29, C 107,
Securities
Ashok Towers,
Private Limited
63/74 Dr. S. S.
4. New Silk
Rao Road,
Route Advisors
Parel, Mumbai
Private Limited
- 400012,
5. 9X Media
India.
Private Limited
Designation:
6. Gastronomy
Non Executive
Management
Director/
Services Private
Investor
Limited
Nominee
7. Vasudev
Director
Adigas
Occupation:
Fastfood
Service
Private Limited
Term: Not
8. Paul
liable to retire
Entertainments
by rotation
Private Limited
9. Rolex Rings
Private Limited
54 | P a g e
10. Moshes
Fine Foods
Private Limited
Dr. Gautam
50
0034243
Indian
Sehgal
1. ADS
S/o Dr. A. D.
Diagnostic
Sehgal
Limited
B-29, Kailash
2. Cardiovas
Colony,
Medical Private
New Delhi-110
Limited
048, India.
3. Ved Med
Designation:
Software &
Non Executive
Trading Private
Director
Limited
Occupation:
Service
Term: Liable to
retire by
rotation
Mr. Jyoti
61
0020453
Indian
Bhusan Pany
1. Radiant
Telesystem
Bhusan Pany
Limited
212, Kharwel
2. Swosti
Nagar
Premium
Bhubaneswar-
Limited
751 001
3. inDNA
Odisha, India.
Lifesciences
Designation:
Private Limited
Non Executive
55 | P a g e
and
Independent
Director
Occupation:
Business
Term: For a
period of five
years with
effect from
August 14,
2014
Mr. K. V.
71
00659784
Indian
Seshasayee
1. Win
S/o Mr. K S
Broadband
Varadarajan
Services Private
2 B Century
Limited
Habitat No. 9,
2. Fuel
Automation
Gandhi Nagar,
Private Limited
Adyar
3. Indhan
Chennai - 600
Innovations
020, India
Private Limited
Designation:
4. Green Ark
Non Executive
Eversol Private
and
Limited
Independent
5. Echo Tele
Director
Services Private
Occupation:
Limited
Service
6. Echo Global
Term: For a
Enterprise
period of five
Private Limited
56 | P a g e
years with
effect from
August 14,
2014
Major (Retd.)
76
00146138
Indian
R.N. Misra
1. Indian Metals
& Ferro Alloys
Limited
03396028
Indian
NIL
Term: For a
period of five
years with
effect from
August 14,
2014
Mr. Debaraj
65
01318134
Indian
Biswal
1. Bhubaneswar
S/o Mr.
Stock Exchange
Gangadharbaraj
Limited
Biswal
2. The Odisha
Unit -9,
State Police
Sahidnagar,
Housing and
Bhubaneswar-
Welfare
751 022
Corporation
Odisha, India
Limited
Designation:
3. Industrial
Non Executive
Promotion and
and
Investment
Independent
Corporation of
Director
Odisha Limited
Occupation:
4. Odisha Agro
Service
Industries
Term: For a
Corporation
period of five
Limited
years with
effect from
August 14,
2014
58 | P a g e
Mr. Gautam
Buddha
Mukherji
S/o Mr. Subodh
Chandra
Mukherji
C-4/6,
Chandrama
Complex, Unit3,
Bhubaneswar751 001
Odisha, India
Designation:
Non Executive
and
Independent
Director
Occupation:
Retired from
Service as
Government
employee.
Term: For a
period of five
years with
effect from
August 14,
2014
59 | P a g e
64
06461981
Indian
NIL
1] All pending litigations in which the promoters are involved, defaults to the financial
institutions/ banks,, shall be listed in the prospectus together with the amounts involved and
the present status of such litigations/ defaults. The likely adverse effect of these litigations/
defaults, etc. on the financial performance of the issuer company shall also be mentioned.
2] Further, the cases of pending litigations, defaults, etc. in respect of companies/ firms/
ventures with which the promoters were associated in the past but are no longer associated
shall also be disclosed in case their name(s) continues to be associated with particular
litigation(s).
ORTEL:
Sr. Litigation
Details
No.
A
Litigation involving our Company
Outstanding
Litigation/
Proceedings filed
a against our Company
1
Breach of various
fixing of date of payment to the workers and
provisions of Payment
display of notice of date and time of payment
of Wages Act, 1936
at the workplace
Conclusion
Breach of Franchise
agreement and
subsequent partnership
agreement (2004)
Matter is still
pending in court
Matter is still
pending in court
Unauthorized
installation & use of
poles & cables (1997,
2007, 2006)
60 | P a g e
Matter is still
pending in court
Unauthorized use of
residential property as
commercial (2000)
Matter is still
pending in court
Compelled installation
of set top box
Matter is still
pending in court
Matter is still
pending in court
Consumer complaints
Taxation matter
b
c
1
61 | P a g e
Matter is still
pending in court
Matter is still
pending in court
Matter is still
pending in court
ADLABS:
Sr.
Litigation
Amount
No.
Involved
A
Litigation involving our Company
Outstanding Litigation/ Proceedings filed against our Company
a
Purchase of approximately 170 acres of land (2013)
Not
1
Ascertainable
Encroached upon land aggregating to 2.2 acres
Not
2
Ascertainable
Received a notice (the Notice) from the Divisional
2,19,40,000
Commissioner Office, Kokan Bhuvan (the Commissioner) on
3 December 21, 2013, directing our Company to furnish certain
details in relation to the acquisition of AEL Land and its
subsequent use
Issued summons on July 3, 2013 by the Department of Revenue,
10,41,00,000
Central Board of Excise and Customs (the Department) for
4 production of certain documents and information related to the
import of goods by our Company for use in our theme park
B
62 | P a g e
Company has issued a notice dated March 11, 2014 to I.E. Park,
s.r.l Soli Bumper Cars (IE Park) in relation to the breach of the
ride system procurement agreement (the Ride Agreement)
pertaining to the ride named Bandits of Robinhood
2,00,00,000
63 | P a g e
Not
Ascertainable
Summary:
Ortel
No. of outstanding cases
Amount
Sr. Nature of Cases
Involved
No.
A
Litigation against the Company
Criminal Cases
1
Not
a
Ascertainable
18
7,68,768
b Civil Matters
29
69,83,000
c Cionsumer Complaints
7
5,62,72,000
d Taxation Matter
Outstanding Litigation/ Proceedings filed by our Company
B
1
a Criminal Cases
6
5,24,00,000
b Civil Matters
3
24,50,000
c Telecom Matters
Potential Litigation against
12
24,97,00,00,00
C
our Company
Litigation involving the Directors of our Company
E
4
2,53,00,000
a Mr. Baijayant Panda
2
1,47,00,000
b Ms. Jagi Mangat Panda
6
23,000
c Mr. Subhrakant Panda
Mr. Shantanu Yeshwant
1
Not
d Nalavadi
Ascertainable
F
Outstanding Litigation and Material Developments/Proceedings involving our
Promoters
1
9,000
a Criminal Cases
15
15,00,000
b Civil Matters
Labour
Matters
3
c
Adlabs
No. of outstanding cases
Sr. Nature of Cases
No.
A
Litigation against the Company
64 | P a g e
Amount
Involved
3
1,05,40,000
1 Civil Cases
1
10,41,00,000
2 Taxation Matter
Outstanding Litigation/ Proceedings filed by our Company
B
1
2,00,00,000
1 IE
Litigation
involving
the
Directors
of
our
Company
C
Mr. Kapil Bagla
1
Not
1
Ascertainable
F
Outstanding Litigation and Material Developments/Proceedings involving our
Promoters
Nil
E
Litigation involving our Group Companies
2
60,00,000
1 Walkwater Media Limited
P & M Infrastructures
1
Not
2 Limited
Ascertainable
Adlabs Shringar Multiplex
1
33,00,000
3 Cinemas Private Limited
OUR OPINION
Adlabs Company, their Director & Promotors have less no of litigations against
them as compared to the Ortel.
The amount involved in Ortel is higher than the Adlabs.
Thus on comparison, based on the number of litigations & amount involved in it,
Adlabs holds a better stand than that of Ortel and hence be fair enough to invest into
Adlabs on these basis.
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Currently, 75% of the revenue comes from ticketing, 17-18% from F&B, and rest
from sale of merchandise.
So far about 1.7 million people have visited the theme park. Students account
for 20-25% of visitors.
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The total number of guests hosted at the theme park in the twelve months
ended December 2014 was 9.12 lakh.
ORTEL
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Of the total revenue, about 70% come from analog services, about 20%
from digital and about 11% from broad-band service. The companys
average revenue per user (ARPU) per month (net of tax) is about Rs 150
from analog, Rs 190 from digital and Rs 360 from broadband
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It is showing almost 100% growth in its topline & revenue is increasing Y-oY
Also they are paying off their debts much faster their debt to equity ratio
has improved from 3.68 to 1.63
Ortel
As of June 30, 2014, 89% of its customers are based in Odisha and its
revenue was primarily derived from sale of cable television and broadband
services in Odisha. Thus, it is more a of a single state dependent operator
The company has not been able to grow in the last few years due to lack
of funds as it is a capital intensive industry.
So in our opinion Adlabs is performing better than Ortel & is good for
investment.
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No unlisted company shall make an IPO of equity shares or any other security which
may be converted into or exchanged with equity shares at a later date.
(i) the unlisted company has obtained grading for the IPO from at least one credit rating
agency;
(ii) disclosures of all the grades obtained, along with the rationale/ description furnished by
the credit rating agency(ies) for each of the grades obtained, have been made in the
Prospectus (in case of fixed price issue) or Red Herring Prospectus (in case of book built
issue); and
(iii) the expenses incurred for grading IPO have been borne by the unlisted company
obtaining grading for IPO.)
This grade indicates that the fundamentals of the IPO are average relative to other
listed equity securities in India.
The company has built a two-way communication network for Triple Play services
(video, data and voice capabilities) with control over the last mile.
The grading reflects Ortels end connection which allows the company direct access
to the cable television subscribers thereby helping to capture the entire subscription
revenues paid by the cable television subscribers.
As on December 31, 2014, more than 87% of the companys cable subscriber base
was on its own last mile network.
OUR OPINION
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Rating is not a signal to buy or sell a company. It just gives the overview of the
business.
IPO grading itself becomes a factor in deciding whether or not to invest in a company.
We are an unlisted company not complying with the conditions specified in Regulation 26(1)
of the SEBI ICDR Regulations and are therefore required to meet the conditions detailed in
Regulation 26(2) of the SEBI ICDR Regulations.
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We are complying with Regulation 26(2) of the SEBI ICDR Regulations and at least 75%
of the Issue is proposed to be Allotted to QIBs and in the event we fail to do so, the full
application monies shall be refunded to the Bidders.
We are complying with Regulation 43(2) of the SEBI ICDR Regulations and NonInstitutional Bidders and Retail Individual Bidders will be allocated not more than 15% and
10% of the Issuer, respectively.
Hence, we are eligible for the Issue under Regulation 26(2) of the SEBI ICDR Regulations.
Further our Company shall ensure that the number of prospective Allottees to whom the
Equity Shares will be Allotted shall not be less than 1,000 failing which the entire application
monies shall be refunded forthwith.
Requirement
For book building process:
Qualified institutional buyers at most 50% of the net issue being allotted. However
upto 5% of the net QIB portion shall be available for allocation proportionately to
mutual funds only.
Non institutional bidders not less than 15% of the net issue or the net issue less
allocation to QIBs and retail institutional bidders.
Retail individual investors - Not less than 35% of the net issue or the net issue less
allocation QIBs and non-institutional bidders.
Adlabs
Ortel
Our analysis
Both Adlabs and Ortel communications had seen poor response to its offering
Investors were wary of the Adlabs offerings due to a lack of profitability track record,
high debt and expensive valuations compared to its peers
When an issue is oversubscribed shares are being allotted on proportionate basis and
lottery system is used.
SEBI Requirements:
Dividend Policy
SEBI Requirements the rates of dividends, if any, paid by the issuer company in respect of
each class of shares in the issuer company for each of the five financial years immediately
preceding the issue of the prospectus
Dividends
1) Dividend policy of the Company
2) Rate of Dividend and Amount of Dividend paid for the last five financial years
3) Regulatory framework in the Country of Incorporation/share listed concerning Dividends
4) Details of Arrangement with the Depositories for payment of Dividend to the IDR holders
5) Information about changes, if any, in dividends announced and dividends paid and time
gap between the dividends announced and dividends paid.
6) Information about Dividend Yield.
7) Taxation aspects of dividend distribution.
REFERENCE
http://www.chittorgarh.com/
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