SHYAM METALICS AND ENERGY LIMITEDShyam Metalics and Energy Limited “Company”) was originally...
Transcript of SHYAM METALICS AND ENERGY LIMITEDShyam Metalics and Energy Limited “Company”) was originally...
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DRAFT RED HERRING PROSPECTUS
Dated: August 6, 2018 (The Draft Red Herring Prospectus will be updated upon filing with the RoC)
(Please read Section 32 of the Companies Act, 2013)
100% Book Built Issue
SHYAM METALICS AND ENERGY LIMITED
Shyam Metalics and Energy Limited (“Company”) was originally incorporated as Shyam DRI Power Limited on December 10, 2002 at Kolkata, West Bengal, India as a public limited company under the Companies
Act, 1956 and received the certificate for commencement of business from the Registrar of Companies, West Bengal at Kolkata (“RoC”) on December 11, 2002. Subsequently, the name of our Company was changed
to Shyam Metalics and Energy Limited vide a special resolution passed by our Shareholders on November 23, 2009, and a fresh certificate of incorporation consequent upon change of name was issued by the RoC on
January 5, 2010. For details of the change in the name and registered office of our Company, see “History and Certain Corporate Matters” on page 168.
Registered and Corporate Office: Trinity Tower, 7th Floor, 83, Topsia Road, Kolkata – 700046, West Bengal, India Contact Person: Birendra Kumar Jain, Company Secretary and Compliance Officer; Tel: +91 33 4016 4000; Fax: +91 33 4016 4025
E-mail: [email protected]; Website: www.shyammetalics.com
Corporate Identity Number: U40101WB2002PLC095491
OUR PROMOTERS: MAHABIR PRASAD AGARWAL, BRIJ BHUSHAN AGARWAL, SANJAY KUMAR AGARWAL, SUBHAM CAPITAL PRIVATE LIMITED, SUBHAM BUILDWELL
PRIVATE LIMITED, NARANTAK DEALCOMM LIMITED, KALPATARU HOUSEFIN & TRADING PRIVATE LIMITED, DORITE TRACON PRIVATE LIMITED AND TOPLIGHT
MERCANTILES PRIVATE LIMITED
INITIAL PUBLIC OFFER OF UP TO [] EQUITY SHARES OF FACE VALUE OF `10 EACH (“EQUITY SHARES”) OF SHYAM METALICS AND ENERGY LIMITED (“COMPANY” OR “ISSUER”)
FOR CASH AT A PRICE* OF `[●] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF `[●] PER EQUITY SHARE) (“ISSUE PRICE”) AGGREGATING UP TO `9,090 MILLION (“ISSUE”).
THE ISSUE SHALL CONSTITUTE [●]% OF THE POST-ISSUE PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY. THE ISSUE INCLUDES A RESERVATION OF UP TO [●] EQUITY
SHARES, AGGREGATING UP TO `90 MILLION, FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED HEREIN) NOT EXCEEDING 5% OF OUR POST-ISSUE PAID-UP EQUITY
SHARE CAPITAL (THE “EMPLOYEE RESERVATION PORTION”). THE ISSUE LESS THE EMPLOYEE RESERVATION PORTION IS HEREINAFTER REFERRED TO AS THE “NET ISSUE”.
THE ISSUE AND THE NET ISSUE SHALL CONSTITUTE [●]% AND [●]%, RESPECTIVELY, OF THE POST-ISSUE PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.
THE FACE VALUE OF THE EQUITY SHARES IS `10 EACH. THE PRICE BAND, THE RETAIL DISCOUNT, THE EMPLOYEE DISCOUNT AS APPLICABLE, AND THE MINIMUM BID LOT WILL
BE DECIDED BY OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS (“BRLMS”) AND WILL BE ADVERTISED IN ALL EDITIONS OF [●], AN ENGLISH
NATIONAL NEWSPAPER, ALL EDITIONS OF [●], A HINDI NATIONAL NEWSPAPER AND KOLKATA EDITION OF [●], A BENGALI NEWSPAPER (WHICH ARE WIDELY CIRCULATED
ENGLISH, HINDI AND BENGALI NEWSPAPERS, RESPECTIVELY, BENGALI BEING THE REGIONAL LANGUAGE OF WEST BENGAL, WHERE OUR REGISTERED AND CORPORATE
OFFICE IS LOCATED), AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/ISSUE OPENING DATE AND SHALL BE MADE AVAILABLE TO THE BSE LIMITED (“BSE”) AND THE
NATIONAL STOCK EXCHANGE OF INDIA LIMITED (“NSE”, AND TOGETHER WITH BSE, THE “STOCK EXCHANGES”) FOR THE PURPOSE OF UPLOADING ON THEIR WEBSITES.
*A discount of up to [●]% on the Issue Price may be offered to Retail Individual Bidders (“Retail Discount”) equivalent to `[●] per Equity Share and to Eligible Employees Bidding in the Employee Reservation Portion
(“Employee Discount”) equivalent to `[●] per Equity Share.
In case of any revision to the Price Band, the Bid/Issue Period will be extended by at least three additional Working Days after such revision of the Price Band, subject to the Bid/Issue Period not exceeding 10
Working Days. Any revision in the Price Band and the revised Bid/Issue Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a press release, and also by indicating
the change on the websites of the BRLMs and at the terminals of the Syndicate Members and by intimation to the Designated Intermediaries.
The Issue is being made in terms of Rule 19(2)(b)(ii) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”), read with Regulation 41 of the SEBI ICDR Regulations. The Issue is being made
in accordance with Regulation 26(1) of the SEBI ICDR Regulations, through the Book Building Process wherein not more than 50% of the Net Issue shall be allocated on a proportionate basis to Qualified Institutional
Buyers (“QIBs”) (“QIB Portion”), provided that our Company in consultation with the BRLMs may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI
ICDR Regulations, out of which one-third shall be reserved for domestic Mutual Funds only, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Issue Price, in
accordance with the SEBI ICDR Regulations. 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 Issue Price.
Further, not less than 15% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue shall be available for allocation to Retail
Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Issue Price. All potential investors, 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”). For details, see
“Issue Procedure” on page 514.
RISK IN RELATION TO THE FIRST ISSUE
This being the first public issue 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 and the Floor Price is [●] times the face value and
the Cap Price is [●] times the face value. The Issue Price (determined and justified by our Company, in consultation with the BRLMs as stated under “Basis for Issue Price” on page [●]) should not be taken to be
indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity
Shares will be traded after listing.
GENERAL RISKS
Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk of losing their entire investment. Investors are
advised to read the risk factors carefully before taking an investment decision in the Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue, including
the risks involved. The Equity Shares in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents
of this Draft Red Herring Prospectus. Specific attention of the investors is invited to “Risk Factors” on page 14.
COMPANY’S ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company and the Issue, which is
material in the context of the Issue, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and
intentions expressed herein are honestly held and that there are no other facts, the omission or inclusion of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of
any such opinions or intentions, misleading in any material respect.
LISTING
The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on the Stock Exchanges. Our Company has received an ‘in-principle’ approval from the BSE and the NSE for the listing of
the Equity Shares pursuant to letters dated [●] and [●], respectively. For the purposes of the Issue, the Designated Stock Exchange shall be [●]. A signed copy of the Red Herring Prospectus and the Prospectus shall
be delivered for registration to the RoC in accordance with Sections 26(4) and 32 of the Companies Act, 2013. For details of the material contracts and documents, which will be made available for inspection from
the date of the Red Herring Prospectus up to Bid/Issue Closing Date, see “Material Contracts and Documents for Inspection” on page 599.
BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE
ICICI Securities Limited
ICICI Center
H.T. Parekh Marg
Churchgate
Mumbai 400 020
Maharashtra, India
Tel: +91 22 2288 2460
Fax: +91 22 2282 6580
E-mail:
Investor grievance email:
Website: www.icicisecurities.com
Contact Person: Suyash Jain /
Rupesh Khant
SEBI Registration No.:
INM000011179
Edelweiss Financial Services Limited
14th Floor, Edelweiss House
Off C.S.T. Road, Kalina
Mumbai 400 098
Maharashtra, India
Tel: +91 22 4009 4400
Fax: +91 22 4086 3610
E-mail:
Investor grievance e-mail:
Website: www.edelweissfin.com
Contact Person: Disha Doshi/ Milap
Maru
SEBI Registration No.: INM0000010650
IIFL Holdings Limited
10th Floor, IIFL Centre, Kamala City,
Senapati Bapat Marg, Lower Parel
(West),
Mumbai 400 013
Maharashtra, India
Tel: +91 22 4646 4600
Fax: +91 22 2493 1073
E-mail: [email protected]
Investor Grievance E-mail:
Website: www.iiflcap.com
Contact Person: Pinak Bhattacharyya/
Nishita Mody
SEBI Registration No.:
INM000010940
JM Financial Limited
7th Floor Cnergy
Appasaheb Marathe Marg
Prabhadevi, Mumbai 400 025
Maharashtra, India
Tel: +91 22 6630 3030
Fax: +91 22 6630 3330
E-mail: [email protected]
Investor Grievance E-mail:
Website: www.jmfl.com
Contact Person: Prachee Dhuri
SEBI Registration No.: INM000010361
Karvy Computershare Private
Limited
Karvy Selenium, Tower B
Plot 31-32, Gachibowli
Financial District, Nanakramguda
Hyderabad 500 032
Tel: +91 40 6716 2222
Fax: +91 40 2343 1551
E-mail: [email protected]
Investor grievance email:
Website: http://karisma.karvy.com
Contact Person: M. Murali Krishna
SEBI Registration No.:
INR000000221
BID/ISSUE PROGRAMME
BID/ISSUE OPENS ON [●](1)
BID/ISSUE CLOSES ON [●](2)
(1) Our Company may, in consultation with the BRLMs, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor Investor Bid/Issue Period shall be one Working Day
prior to the Bid/Issue Opening Date.
(2) Our Company may, in consultation with the BRLMs, consider closing the Bid/Issue Period for QIBs one Working Day prior to the Bid/issue Closing Date in accordance with the SEBI ICDR Regulations
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TABLE OF CONTENTS
SECTION I: GENERAL ........................................................................................................................................................ 2
DEFINITIONS AND ABBREVIATIONS ........................................................................................................................... 2 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ..................................................................... 11 FORWARD-LOOKING STATEMENTS .......................................................................................................................... 13
SECTION II: RISK FACTORS .......................................................................................................................................... 14
SECTION III: INTRODUCTION ....................................................................................................................................... 38
SUMMARY OF INDUSTRY ............................................................................................................................................ 38 SUMMARY OF OUR BUSINESS .................................................................................................................................... 43 SUMMARY OF FINANCIAL INFORMATION .............................................................................................................. 49 THE ISSUE ........................................................................................................................................................................ 62 GENERAL INFORMATION ............................................................................................................................................ 64 CAPITAL STRUCTURE ................................................................................................................................................... 71 OBJECTS OF THE ISSUE................................................................................................................................................. 87 BASIS FOR ISSUE PRICE .............................................................................................................................................. 102 STATEMENT OF TAX BENEFITS ................................................................................................................................ 105
SECTION IV: ABOUT OUR COMPANY ....................................................................................................................... 108
INDUSTRY OVERVIEW ............................................................................................................................................... 108 OUR BUSINESS .............................................................................................................................................................. 148 REGULATIONS AND POLICIES .................................................................................................................................. 164 HISTORY AND CERTAIN CORPORATE MATTERS ................................................................................................. 168 OUR MANAGEMENT .................................................................................................................................................... 184 OUR PROMOTERS AND PROMOTER GROUP .......................................................................................................... 202 OUR GROUP COMPANIES ........................................................................................................................................... 211 RELATED PARTY TRANSACTIONS ........................................................................................................................... 221 DIVIDEND POLICY ....................................................................................................................................................... 222
SECTION V: FINANCIAL INFORMATION ................................................................................................................. 223
FINANCIAL STATEMENTS.......................................................................................................................................... 223 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS ................................................................................................................................................................. 452 FINANCIAL INDEBTEDNESS ...................................................................................................................................... 479
SECTION VI: LEGAL AND OTHER INFORMATION ............................................................................................... 482
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS....................................................................... 482 GOVERNMENT APPROVALS ...................................................................................................................................... 491 OTHER REGULATORY AND STATUTORY DISCLOSURES ................................................................................... 493
SECTION VII: ISSUE INFORMATION ......................................................................................................................... 508
TERMS OF THE ISSUE .................................................................................................................................................. 508 ISSUE STRUCTURE....................................................................................................................................................... 512 ISSUE PROCEDURE ...................................................................................................................................................... 514 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ................................................................. 555
SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION .............................................................. 556
SECTION IX: OTHER INFORMATION ........................................................................................................................ 599
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ......................................................................... 599 DECLARATION ............................................................................................................................................................. 601
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SECTION I: GENERAL
DEFINITIONS AND ABBREVIATIONS
This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates or
implies, shall have the meaning as provided below. References to any legislation, act, regulation, rules, guidelines or policies
shall be to such legislation, act, regulation, rules, guidelines or policies as amended from time to time. In case of any inconsistency
between the definitions given below and the definitions contained in the General Information Document (as defined below), the
definitions given below shall prevail.
General Terms
Term Description
“our Company”, “the Company”, “the
Issuer”
Shyam Metalics and Energy Limited, a company incorporated under the Companies Act, 1956 and
having its Registered and Corporate Office at Trinity Tower, 7th Floor, 83, Topsia Road, Kolkata –
700046, West Bengal, India
“we”, “us” or “our” Unless the context otherwise indicates or implies, refers to our Company together with our Subsidiaries
and Associate Companies
Company Related Terms
Term Description
Articles of Association/ AoA Articles of Association of our Company, as amended
Associate Companies Associate companies of our Company, namely: (i) Kecons Tradecare Private Limited; and (ii) Meghana Vyapaar Private Limited
Audit Committee Audit Committee of our Company as described in “Our Management” on page 184
Auditors/Statutory Auditors Statutory auditors of our Company, namely, S.K. Agrawal & Co., Chartered Accountants
Average cost of Power from Captive
power Plant
Average cost of Power from Captive Power Plant = Total cost of power from all Captive Power Plants
Total production units
Board/Board of Directors Board of directors of our Company, as constituted from time to time, including a duly constituted
committee thereof
Corporate Social Responsibility
Committee/CSR Committee
The Corporate Social Responsibility Committee of our Company as described in “Our Management”
on page 184
CRISIL CRISIL Limited
CRISIL Report Report titled “Market Assessment and outlook across Steel Industry value chain” dated July 2018
issued by CRISIL
DAPL Damodar Aluminium Private Limited
Director(s) Director(s) of our Company
Dorite Tracon Dorite Tracon Private Limited
EBITDA EBITDA = Profit/(loss) before tax + interest cost + depreciation and amortization expense – non-
operating other income
Employees Stock Option Growth
Plan 2018
Shyam Metalics Employees Stock Option Growth Plan 2018
Employees Stock Option Loyalty
Plan 2018
Shyam Metalics Employees Stock Option Loyalty Plan 2018
Equity Shares Equity shares of our Company of face value of `10 each
Executive Directors Executive Directors of our Company
Gross Debt to EBITDA Gross Debt EBITDA = Gross debt
EBITDA
Gross debt = long term borrowings + short term borrowings + current maturities of long term borrowing
Gross Debt to Equity Gross Debt to Equity = Gross debt
Total equity
Gross debt = long term borrowings + short term borrowings + current maturities of long term
borrowings
Total equity = Equity Share capital + other equity, i.e, reserves and surplus
Group Companies The companies that are covered under the applicable accounting standards and any other company considered material by the Board of Directors, pursuant to a policy on materiality of group companies
approved by the Board, as disclosed in “Our Group Companies” on page 211
Independent Director Independent Director(s) on our Board
Interest Coverage Interest coverage = EBIT
Interest cost
EBIT = Profit/(loss) before tax + interest – non-operating other income
IPO Committee The IPO Committee of our Company as described in “Our Management” on page 184
Kalpataru Housefin Kalpataru Housefin and Trading Private Limited
KCPL Kolhan Complex Private Limited
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Term Description
Key Management Personnel Key management personnel of our Company in terms of the Companies Act, 2013 and the SEBI ICDR
Regulations and disclosed in “Our Management – Key Management Personnel” on page 199
KTPL Kecons Tradecare Private Limited
Memorandum of Association/ MoA Memorandum of Association of our Company, as amended
MHPL Meadow Housing Private Limited
MVPL Meghana Vyapaar Private Limited
Narantak Dealcomm Narantak Dealcomm Limited
Nomination and Remuneration
Committee
The Nomination and Remuneration Committee of our Company as described in “Our Management”
on page 184
Promoter Group Persons and entities constituting the promoter group of our Company in terms of Regulation 2(1)(zb)
of the SEBI ICDR Regulations. For details, see “Our Promoters and Promoter Group” on page 202
Promoters Promoters of our Company namely, Mahabir Prasad Agarwal, Brij Bhushan Agarwal, Sanjay Kumar
Agarwal, Subham Capital Private Limited, Subham Buildwell Private Limited, Narantak Dealcomm
Limited, Kalpataru Housefin & Trading Private Limited, Dorite Tracon Private Limited and Toplight
Mercantiles Private Limited.
For details, see “Our Promoters and Promoter Group” on page 202
Registered Office / Registered and
Corporate Office
Registered and corporate office of our Company located at Trinity Tower, 7th Floor, 83, Topsia Road,
Kolkata – 700046, West Bengal, India
Registrar of Companies/RoC Registrar of Companies, West Bengal, situated at Kolkata
Restated Consolidated Financial
Statements
Restated consolidated financial statements of our Company as at and for the Fiscals 2018, 2017 and
2016 prepared in accordance with Ind AS and for Fiscals 2015 and 2014 prepared in accordance with
Indian GAAP and examined by the Auditor in accordance with the requirements of the Companies Act
and restated in accordance with the provisions of the SEBI ICDR Regulations
Restated Financial Statements Collectively, the Restated Consolidated Financial Statements and the Restated Standalone Financial
Statements
Restated Standalone Financial Statements
Restated standalone financial statements of our Company as at and for the Fiscals 2018, 2017 and 2016 prepared in accordance with Ind AS and for Fiscals 2015 and 2014 prepared in accordance with Indian
GAAP and examined by the Auditor in accordance with the requirements of the Companies Act and
restated in accordance with the provisions of the SEBI ICDR Regulations
RHPPL Renaissance Hydro Power Private Limited
RoCE RoCE (Return on Capital Employed) = EBIT
Total capital employed
EBIT = Profit/(loss) before tax + interest cost – non-operating other income
Total capital employed = Total assets – current liabilities*
*Current maturities on long term debt has been excluded from current liabilities
SBSPL Shyam Business Solutions Private Limited
Senior Management Personnel The persons listed as senior management personnel in “Our Management” on page 184
SFAL Shyam Ferro Alloys Limited
SAL Sundaram Alloys Limited
Shareholders Shareholders of our Company from time to time
SOJPL Shyam Ores (Jharkhand) Private Limited
SSPL Shyam SEL and Power Limited
SSPPL Singhbhum Steel and Power Private Limited
Stakeholders Relationship
Committee
The Stakeholders Relationship Committee of our Company as described in “Our Management” on
page 184
Subham Buildwell Subham Buildwell Private Limited
Subham Capital Subham Capital Private Limited
Subsidiaries or individually known as
Subsidiary
Subsidiaries of our Company, namely:
(i) Shyam SEL and Power Limited; (ii) Damodar Aluminium Private Limited; (iii) Singhbhum Steel and Power Private Limited; (iv) Shyam Business Solutions Private Limited; (v) Shyam Ores (Jharkhand) Private Limited; (vi) Renaissance Hydro Power Private Limited; (vii) Hrashva Storage and Warehousing Private Limited; (viii) Meadow Housing Private Limited; (ix) Shyam Energy Limited; (x) Taurus Estates Private Limited; and (xi) Whispering Developers Private Limited;
Toplight Mercantiles Toplight Mercantiles Private Limited
HSWPL Hrashva Storage and Warehousing Private Limited
SEL Shyam Energy Limited
WDPL Whispering Developers Private Limited
TEPL Taurus Estates Private Limited
Sonata Retails Sonata Retails Private Limited
Sonata Traders Sonata Traders Private Limited
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Term Description
Sonata Dealtrade Sonata Dealtrade Private Limited
Issue 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 cum Application Form
Allot/Allotment/Allotted Allotment of the Equity Shares pursuant to the Issue and to the Allottees
Allotment Advice Note or advice or intimation of Allotment sent to the Bidders who have been or are to be Allotted the
Equity Shares after the Basis of Allotment has been approved 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
SEBI ICDR Regulations
Anchor Investor Allocation Price The price at which Equity Shares will be allocated to Anchor Investors at the end of the Anchor
Investor Bid/Issue Period, in terms of the Red Herring Prospectus and Prospectus
Anchor Investor Application Form The form used by an Anchor Investor to make a Bid in the Anchor Investor Portion and which will be
considered as an application for Allotment in terms of the Red Herring Prospectus and the Prospectus
Anchor Investor Bid/Issue Period The day, one Working Day prior to the Bid/Issue Opening Date, on which Bids by Anchor Investors
shall be submitted and allocation to Anchor Investors shall be completed
Anchor Investor Issue Price Final price at which the Equity Shares will be Allotted to Anchor Investors in terms of the Red Herring
Prospectus and the Prospectus, which price will be equal to or higher than the Issue Price but not
higher than the Cap Price
The Anchor Investor Issue Price will be decided by our Company, in consultation with the BRLMs
Anchor Investor Portion Up to 60% of the QIB Portion, which may be allocated by our Company, in consultation with the
BRLMs to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations
One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid
Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price
which shall be determined by the Company, in consultation with the BRLMs
Application Supported by Blocked
Amount or ASBA
An application, whether physical or electronic, used by ASBA Bidders to make a Bid and authorizing
an SCSB to block the Bid Amount in the ASBA Account
ASBA Account A bank account maintained with an SCSB and specified in the ASBA Form submitted by ASBA
Bidders for blocking the Bid Amount mentioned in the ASBA Form
ASBA Bidders 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 the Prospectus
Banker(s) to the Issue/Escrow
Collection Bank(s)
Banks which are clearing members and registered with SEBI as bankers to an issue and with whom
the Escrow Account will be opened, in this case being [●]
Basis of Allotment Basis on which Allotment will be made as described in “Issue Procedure – Part B – General
Information Document for Investing in Public Issues – Allotment Procedure and Basis of Allotment”
on page 545
Bid An indication to make an offer during the Bid/Issue Period by an ASBA Bidder pursuant to submission
of the ASBA Form, or during the Anchor Investor Bid/Issue Period by an Anchor Investor pursuant
to submission of the Anchor Investor Application Form, to subscribe to or purchase the Equity Shares
at a price within the Price Band, including all revisions and modifications thereto as permitted under
the SEBI ICDR Regulations as per the terms of the Red Herring Prospectus and the Bid Cum
Application Form
The term “Bidding” shall be construed accordingly
Bid Amount The highest value of optional amounts indicated in the Bid cum Application Form (less Retail
Discount and Employee Discount as applicable) and, in the case of Retail Individual Bidders Bidding
at the Cut Off Price, the Cap Price multiplied by the number of Equity Shares Bid for by such Retail
Individual Bidder and mentioned in the Bid cum Application Form and payable by the Bidder or
blocked in the ASBA Account of the Bidder, as the case may be, upon submission of the Bid in the
Issue.
Eligible Employees applying in the Employee Reservation Portion, subject to the Bid Amount being
up to ₹200,000, can apply at the Cut-Off Price and the Bid amount shall be Cap Price net of Employee
Discount,multiplied by the number of Equity Shares Bid for by such Eligible Employee and mentioned
in the Bid cum Application Form. The maximum Bid Amount under the Employee Reservation
Portion by an Eligible Employee shall not exceed ₹500,000 on a net basis. However, the initial
Allotment to an Eligible Employee in the Employee Reservation Portion shall not exceed ₹200,000.
Only in the event of an under-subscription in the Employee Reservation Portion post the initial
allotment, such unsubscribed portion may be Allotted on a proportionate basis to Eligible Employees
Bidding in the Employee Reservation Portion, for a value in excess of ₹200,000, subject to the total
Allotment to an Eligible Employee not exceeding ₹500,000
Bid cum Application Form The Anchor Investor Application Form or the ASBA Form, as the context requires
Bid Lot [●]
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Term Description
Bid/Issue Closing Date Except in relation to any Bids received from the Anchor Investors, the date after which the Designated
Intermediaries will not accept any Bids, which shall be published in all editions of [●], an English
national newspaper, all editions of [●], a Hindi national newspaper and Kolkata edition of [●], a
Bengali daily newspaper (Bengali being the regional language of West Bengal, where our Registered
and Corporate Office is located) each with wide circulation. In case of any revision, the extended Bid/
Issue Closing shall also be notified on the websites and terminals of the Members of the Syndicate as
required under the SEBI ICDR Regulations and also intimated to the SCSBs, Registered Brokers,
RTAs and Designated CDPs
Our Company may, in consultation with the BRLMs, consider closing the Bid/Issue Period for the
QIB Category one Working Day prior to the Bid/Issue Closing Date, in accordance with the SEBI
ICDR Regulations
Bid/Issue Opening Date Except in relation to any Bids received from the Anchor Investors, the date on which the Designated
Intermediaries shall start accepting Bids, which shall be published in all editions of [●], an English
national newspaper, all editions of [●], a Hindi national newspaper and Kolkata edition of [●], a
Bengali daily newspaper (Bengali being the regional language of West Bengal where our Registered
and Corporate Office is located) each with wide circulation
Bid/Issue Period Except in relation to Anchor Investors, the period between the Bid/Issue Opening Date and the
Bid/Issue Closing Date, inclusive of both days, during which prospective Bidders can submit their
Bids, including any revisions thereof
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, and includes an ASBA Bidder
and an Anchor Investor
Bidding Centers Centers at which at the Designated Intermediaries shall accept the ASBA Forms, i.e, Designated
Branches for SCSBs, Specified Locations for Syndicate, Broker Centres for Registered Brokers,
Designated RTA Locations for RTAs and Designated CDP Locations for CDPs
Book Building Process Book building process, as provided in Schedule XI of the SEBI ICDR Regulations, in terms of which
the Issue is being made
BRLM or Book Running Lead
Manager
The book running lead managers to the Issue namely, ICICI Securities Limited, Edelwiss Financial
Services Limited, IIFL Holdings Limited and JM Financial Limited
Broker Centres Broker centres of the Registered Brokers notified by the Stock Exchanges where Bidders can submit
the ASBA Forms to a Registered Broker
The details of such Broker Centres, along with the names and contact details of the Registered Brokers
are available on the respective websites of the Stock Exchanges, www.bseindia.com and
www.nseindia.com, as updated from time to time
CAN/Confirmation of Allocation
Note
Notice or intimation of allocation of the Equity Shares to be sent to Successful Anchor Investors, who
have been allocated the Equity Shares, after the Anchor Investor Bid/Issue Period
Cap Price The higher end of the Price Band, above which the Issue Price and the Anchor Investor Issue Price
will not be finalised and above which no Bids will be accepted, including any revision thereof
Client ID Client identification number of the Bidder’s beneficiary account 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, as per the list available
on the websites of the Stock Exchanges, www.bseindia.com and www.nseindia.com, as updated from
time to time
Cut-off Price Issue Price, finalised by our Company, in consultation with the BRLMs which shall be any price
within the Price Band
Only Retail Individual Bidders Bidding under the Retail Portion and Eligible Employees Bidding
under the Employe Reservation Portion (subject to the Bid Amount being up to `200,000) are entitled
to Bid at the Cut-off Price. QIBs, Non-Institutional Bidders and Eligible Employees Bidding under
the Employe Reservation Portion (subject to the Bid Amount above `200,000) are not entitled to Bid
at the Cut-off Price
Demographic Details Details of the Bidders including the Bidder’s address, name of the Bidder’s father/husband, investor
status, occupation and bank account details
Designated CDP Locations Such locations of the CDPs where ASBA Bidders can submit the ASBA Forms
The details of such Designated CDP Locations, along with names and contact details of the CDPs
eligible to accept ASBA Forms are available on the respective websites of the Stock Exchanges
(www.bseindia.com and www.nseindia.com) and updated from time to time
Designated Date The date on which funds are transferred from the Escrow Account and the amounts blocked by the
SCSBs are transferred from the ASBA Accounts, as the case may be, to the Public Issue Account or
the Refund Account, as appropriate, after filing of the Prospectus with the RoC Designated Intermediaries Collectively, Syndicate, sub-syndicate members/agents, SCSBs, Registered Brokers, CDPs and
RTAs, who are authorized to collect ASBA Forms from the ASBA Bidders, in relation to the Issue
Designated RTA Locations Such locations of the RTAs where Bidders can submit the ASBA Forms to RTAs
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6
Term Description
The details of such Designated RTA Locations, 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) and updated from time to time
Designated SCSB Branches Such branches of the SCSBs which shall collect the ASBA Forms, a list of which is available on the
website of SEBI at http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes or at
such other website as may be prescribed by SEBI from time to time
Designated Stock Exchange []
Draft Red Herring Prospectus or
DRHP
This Draft Red Herring Prospectus dated August 6, 2018, issued in accordance with the SEBI ICDR
Regulations, which does not contain complete particulars, including of the Issue Price and the size of
the Issue, including any addendum and corrigendum thereto
Edelweiss Edelweiss Financial Services Limited
Eligible Employees All or any of the following:
(a) a permanent and full time employee of our Company and our Subsidiaries (excluding such employees not eligible to invest in the Issue under applicable laws, rules, regulations and
guidelines) as of the date of filing of the Red Herring Prospectus with the RoC and who continues
to be an employee of our Company until the submission of the Bid cum Application Form, and
is based, working and present in India as on the date of submission of the Bid cum Application
Form; and
(b) a Director of our Company, whether a whole time Director, part time Director or otherwise, (excluding such Directors not eligible to invest in the Issue under applicable laws, rules,
regulations and guidelines and any Promoter) as of the date of filing the Red Herring Prospectus
with the RoC and who continues to be a Director of our Company until the submission of the Bid
cum Application Form and is based and present in India as on the date of submission of the Bid
cum Application Form.
An employee of our Company or our Subsidiaries, who is recruited against a regular vacancy but is
on probation as on the date of submission of the Bid cum Application Form will also be deemed a
‘permanent and a full time employee’.
The maximum Bid Amount under the Employee Reservation Portion by an Eligible Employee shall
not exceed `500,000 (net of Employee Discount). However, the initial Allotment to an Eligible
Employee in the Employee Reservation Portion shall not exceed `200,000 (net of Employee
Discount). Only in the event of an under-subscription in the Employee Reservation Portion, post the
initial allotment, such unsubscribed portion may be Allotted on a proportionate basis to Eligible
Employees Bidding in the Employee Reservation Portion, for a value in excess of `200,000 (net of
Employee Discount), subject to the total Allotment to an Eligible Employee not exceeding `500,000
(net of Employee Discount)
Eligible NRI(s) NRI(s) from jurisdictions outside India where it is not unlawful to make an offer or invitation under
the Issue and in relation to whom the ASBA Form and the Red Herring Prospectus will constitute an
invitation to subscribe for or purchase the Equity Shares
Employee Discount Discount of `[●] per Equity Share to the Issue Price given to Eligible Employees Bidding in the
Employee Reservation Portion
Employee Reservation Portion The portion of the Issue being up to [●] Equity Shares aggregating to `90 million, available for
allocation to Eligible Employees, on a proportionate basis
Escrow Account Account opened with the Escrow Collection Bank(s) and in whose favour the Anchor Investors will
transfer money through direct credit/NEFT/RTGS in respect of the Bid Amount when submitting an
Anchor Investor Application Form
Escrow Agreement The agreement to be entered into by our Company, the Registrar to the Issue, the BRLMs, the Escrow
Collection Bank(s) and the Refund Bank(s) for, inter alia, collection of the Bid Amounts from Anchor
Investors, transfer of funds to the Public Issue Account and where applicable, refunds of the amounts
collected from the Anchor Investors, on the terms and conditions thereof
First Bidder 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 The lower end of the Price Band, subject to any revision thereto, at or above which the Issue Price and
the Anchor Investor Issue Price will be finalised and below which no Bids will be accepted and which
shall not be less than the face value of the Equity Shares
General Information Document/GID 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 updated pursuant to the circular (CIR/CFD/POLICYCELL/11/2015) dated November 10, 2015
and (SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016 notified by the SEBI and included
in “Issue Procedure” on page 514
IIFL IIFL Holdings Limited
I-Sec ICICI Securities Limited
Issue The initial public offering of up to [●] Equity Shares of face value of `10 each for cash at a price of
`[●] each, aggregating up to `9,090 million
The Issue comprises of the Net Issue and the Employee Reservation Portion
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7
Term Description
Issue Agreement The agreement dated August 6, 2018 entered into amongst our Company and the BRLMs, pursuant to
which certain arrangements are agreed to in relation to the Issue
Issue Price The final price at which Equity Shares will be Allotted to Bidders other than Anchor Investors. Equity
Shares will be Allotted to Anchor Investors at the Anchor Investor Issue Price in terms of the Red
Herring Prospectus
The Issue Price will be determined by our Company, in consultation with the BRLMs in terms of the
RHP on the Pricing Date in accordance with the Book Building Process
Issue Proceeds The proceeds of this Issue that will be available to our Company
JM JM Financial Limited
Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor Investor Portion), or [] Equity Shares which shall be
available for allocation to Mutual Funds only on a proportionate basis, subject to valid Bids being
received at or above the Issue Price
Mutual Funds Mutual funds registered with SEBI under the Securities and Exchange Board of India (Mutual Funds)
Regulations, 1996
Net Issue The Issue less the Employee Reservation Portion
Net Proceeds Gross Proceeds less Issue expenses
For further information about use of the Issue Proceeds and the Issue expenses, see “Objects of the
Issue” on page 87
Non-Institutional Bidders/NIBs All Bidders including Category III FPIs that are not QIBs, Retail Individual Bidders and who have
Bid for Equity Shares for an amount more than `200,000 (but not including NRIs other than Eligible
NRIs)
Non-Institutional Portion The portion of the Net Issue being not less than 15% of the Net Issue consisting of [] Equity Shares
which shall be available for allocation on a proportionate basis to Non-Institutional Bidders, subject
to valid Bids being received at or above the Issue Price
Non-Resident A person resident outside India, as defined under FEMA and includes a non resident Indian, FPIs and
FVCIs
Price Band Price Band of the Floor Price and the Cap Price including any revisions thereof
The Price Band and the minimum Bid Lot size for the Issue will be decided by our Company, in
consultation with the BRLMs and will be advertised, at least five Working Days prior to the Bid/Issue
Opening Date, in all editions of [●], an English national newspaper, all editions of [●], a Hindi national
newspaper, and Kolkata edition of [●], a Bengali newspaper (Bengali being the regional language of
West Bengal, where our Registered and Corporate Office is located), each with wide circulation. It
shall also be made available to the Stock Exchanges for the purpose of uploading on their websites
Pricing Date The date on which our Company, in consultation with the BRLMs, will finalise the Issue Price
Prospectus The Prospectus of our Company to be filed with the RoC for this Issue after the Pricing Date, in
accordance with Section 26 of the Companies Act, 2013 and the SEBI ICDR Regulations, containing,
inter-alia, the Issue Price that is determined at the end of the Book Building Process, the size of the
Issue and certain other information including any addenda or corrigenda thereto
Public Issue Account Bank The bank with which the Public Issue Account(s) shall be opened and maintained, in this case being
[●]
Public Issue Account(s) Bank account(s) opened under Section 40(3) of the Companies Act, 2013 to receive monies from the
Escrow Account and ASBA Accounts on the Designated Date
QIB Category/QIB Portion The portion of the Issue (including the Anchor Investor Portion) being upto 50% of the Net Issue
consisting of [] Equity Shares which shall be allocated to QIBs (including Anchor Investors) as
determined by our Company in consultation with the BRLMs, subject to valid Bids being received at
or above the Issue Price
Qualified Institutional Buyers or
QIBs or QIB Bidders
Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI ICDR Regulations
Red Herring Prospectus or RHP The Red Herring Prospectus of our Company to be issued in accordance with Section 32 of the
Companies Act, 2013 and the provisions of the SEBI ICDR Regulations, which will not have complete
particulars of the price at which the Equity Shares will be issued and the size of the Issue including
any addenda or corrigenda thereto
The Red Herring Prospectus will be registered with the RoC at least three days before the Bid/Issue
Opening Date and will become the Prospectus upon filing with the RoC after the Pricing Date
Refund Account(s) The account opened with the Refund Bank, from which refunds, if any, of the whole or part of the Bid
Amount to the Anchor Investors shall be made
Refund Bank(s) The Bankers to the Issue with whom the Refund Account(s) will be opened, in this case being [●]
Registered Brokers Stock brokers registered with SEBI and the Stock Exchanges having nationwide terminals, other than
the BRLMs and the Syndicate Members and eligible to procure Bids in terms of Circular No.
CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI
Registrar and Share Transfer Agents
or RTAs
Registrars to an issue and share transfer agents registered with SEBI and eligible to procure Bids at
the Designated RTA Locations in terms of circular no. CIR/CFD/POLICYCELL/11/2015 dated
November 10, 2015 issued by SEBI
Registrar to the Issue or Registrar Karvy Computershare Private Limited
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8
Term Description
Retail Discount Discount of `[●] per Equity Share to the Issue Price given to Retail Individual Bidders Bidding in the
Retail Portion
Retail Individual Bidder(s)/RIB(s) Individual Bidders, other than Eligible Employees bidding in the Employee Reservation Portion, who
have Bid for the Equity Shares for an amount not more than `200,000 in any of the bidding options in
the Net Issue (including HUFs applying through their Karta and Eligible NRIs and does not include
NRIs other than Eligible NRIs)
Retail Portion The portion of the Issue being not less than 35% of the Net Issue consisting of [] Equity Shares which
shall be available for allocation to Retail Individual Bidder(s) in accordance with the SEBI ICDR
Regulations which shall not be less than the Minimum Bid Lot, subject to valid Bids being received
at or above the Issue Price
Revision Form Form used by the Bidders to modify the quantity of the Equity Shares or the Bid Amount in any of
their ASBA Form(s) or any previous Revision Form(s), as applicable
QIB Bidders and Non-Institutional Bidders are not allowed to withdraw or lower their Bids (in terms
of quantity of Equity Shares or the Bid Amount) at any stage. Retail Individual Bidders can revise
their Bids during the Bid/Issue Period and withdraw their Bids until Bid/Issue Closing Date
Self Certified Syndicate Bank(s) or
SCSB(s)
The banks registered with SEBI, offering services in relation to ASBA, a list of which is available on
the website of SEBI at http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes and
updated from time to time and at such other websites as may be prescribed by SEBI from time to time
Specified Locations Bidding Centres where the Syndicate shall accept Bid cum Application Form, a list of which is
included in the Bid cum Application Form
Stock Exchanges Collectively, the NSE and the BSE
Syndicate Collectively, the BRLMs and the Syndicate Members
Syndicate Agreement Agreement dated [] to be entered into amongst the BRLMs, the Syndicate Members, our Company
in relation to collection of Bid cum Application Forms by the Syndicate
Syndicate Members Intermediaries registered with SEBI who are permitted to carry out activities as an underwriter,
namely, [●]
Underwriters []
Underwriting Agreement The agreement among the Underwriters, our Company to be entered into on or after the Pricing Date,
but prior to the filing of the Prospectus
Working Day All days, other than second and fourth Saturday of the month, Sunday or a public holiday, on which
commercial banks in Mumbai are open for business; provided however, with reference to (a)
announcement of Price Band; and (b) Bid/Issue Period, “Working Day” shall mean all days, excluding
all Saturdays, Sundays or a public holiday, on which commercial banks in Mumbai are open for
business; and with reference to the time period between the Bid/Issue Closing Date and the listing of
the Equity Shares on the Stock Exchanges, “Working Day” 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
Technical/Industry Related Terms/Abbreviations
Term Description
Kwh Kilowatt hour
MTPA Million tonnes per annum
MVA Mega Volt Ampere
MW Mega watt
TMT Thermo mechanically treated
TPA Tonnes per annum
TPD Tonnes per day
TPH Tonne per heat
Conventional and General Terms or Abbreviations
Term Description
`/Rs./Rupees/INR Indian Rupees
AIF(s) Alternative Investment Fund(s) as defined in and registered with SEBI under the SEBI AIF
Regulations
Air Act Air (Prevention and Control of Pollution) Act, 1981
AS/Accounting Standards Accounting Standards issued by the ICAI
BSE BSE Limited
CAGR Compounded Annual Growth Rate
Category I Foreign Portfolio
Investors FPIs who are registered as “Category I foreign portfolio investors” under the SEBI FPI Regulations
Category II Foreign Portfolio
Investors FPIs who are registered as “Category II foreign portfolio investors” under the SEBI FPI Regulations
Category III Foreign Portfolio
Investors
FPIs who are registered as “Category III foreign portfolio investors” under the SEBI FPI Regulations
which shall include investors who are not eligible under Category I and II foreign portfolio investors
such as endowments, charitable societies, charitable trusts, foundations, corporate bodies, trusts,
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9
Term Description
individuals and family offices
CDSL Central Depository Services (India) Limited
CIN Corporate Identity Number
Companies Act Companies Act, 1956 and/or the Companies Act, 2013, as applicable
Companies Act, 1956 Companies Act, 1956, and the rules thereunder (without reference to the provisions thereof that have
ceased to have effect upon the notification of the Notified Sections)
Companies Act, 2013 The Companies Act, 2013, and the rules and clarifications issued thereunder to the extent in force
pursuant to the notification of the Notified Sections Consolidated FDI Policy The Consolidated FDI Policy Circular 2017, issued by the Department of Industrial Policy and
Promotion, Ministry of Commerce and Industry, Government of India
Depositories NSDL and CDSL
Depositories Act Depositories Act, 1996
DIN Director Identification Number
DIPP Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of
India
DP ID Depository Participant’s Identification
DP/ Depository Participant A depository participant as defined under the Depositories Act
EGM Extraordinary General Meeting
EPF Act Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
EPS Earnings Per Share
FCNR Foreign Currency Non-Resident
FDI Foreign Direct Investment
FEMA Foreign Exchange Management Act, 1999, and the rules and regulations thereunder
FEMA Regulations FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017
Financial Year/Fiscal/fiscal/ /FY Unless stated otherwise, the period of 12 months ending March 31 of that particular year
FPI(s) Foreign portfolio investor(s) as defined under the SEBI FPI Regulations
FVCI(s) Foreign venture capital investor(s) as defined and registered under the SEBI FVCI Regulations
GoI/Government Government of India
GST Goods and Services Tax
HUF Hindu Undivided Family
ICAI The Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards as adopted by the International Accounting Standards
Board
Income Tax Act, IT Act The Income Tax Act, 1961
Ind AS Indian Accounting Standards
India Republic of India
Indian GAAP Generally Accepted Accounting Principles in India
IPO Initial public offering
IST Indian Standard Time
LIBOR London Interbank Offered Rate
MCLR Marginal Cost of funds based Lending Rate
Mutual Fund(s) Mutual funds registered under the SEBI (Mutual Funds) Regulations, 1996
N.A./ NA Not Applicable
NAV Net Asset Value
NACH National Automated Clearing House
NEFT National Electronic Fund Transfer
Non-Resident A person resident outside India, as defined under FEMA and includes a Non Resident Indian and FPIs
Notified Sections The sections of the Companies Act, 2013 that have been notified by the Ministry of Corporate Affairs,
Government of India, and are currently in effect
NR Non-resident
NRE Account Non Resident External Account
NRI An individual resident outside India who is a citizen of India 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
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
OCB/ 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 beneficial interest is
irrevocably held by NRIs directly or indirectly and which was in existence on October 3, 2003 and
immediately before such date had taken benefits under the general permission granted to OCBs under
FEMA. OCBs are not allowed to invest in the Issue
OCI Other Comprehensive Income
p.a. Per annum
P/E Ratio Price/Earnings Ratio
PAN Permanent Account Number
PAT Profit After Tax
RBI The Reserve Bank of India
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10
Term Description
Regulation S Regulation S under the Securities Act
RoNW Return on Net Worth
RTGS Real Time Gross Settlement
SCRA Securities Contracts (Regulation) Act, 1956
SCRR Securities Contracts (Regulation) Rules, 1957
SEBI The Securities and Exchange Board of India constituted under the SEBI Act
SEBI Act Securities and Exchange Board of India Act, 1992
SEBI AIF Regulations Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012
SEBI ESOP Regulations Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014
SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014
SEBI FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000
SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,
2009
SEBI Listing Regulations Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015
SEBI VCF Regulations Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996
Securities Act U.S. Securities Act of 1933, as amended
SICA Sick Industrial Companies (Special Provisions) Act, 1985
STT Securities Transaction Tax
Systemically Important NBFCs Systemically important non-banking financial company registered with the RBI and having a net
worth of more than `5,000 million as per the last audited financial statements
Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011
U.S./USA/United States United States of America
UK United Kingdom
US GAAP Generally Accepted Accounting Principles in the United States of America
USD/US$ United States Dollars
VAT Value Added Tax
VCFs Venture Capital Funds as defined in and registered with SEBI under the SEBI VCF Regulations or the
SEBI AIF Regulations, as the case may be
The words and expressions used in this Draft Red Herring Prospectus but not defined herein shall have, to the extent applicable, the
same meaning as is assigned to such terms under the SEBI Act, SEBI ICDR Regulations, SEBI Listing Regulations, the Companies
Act, the SCRA, the Depositories Act and the rules and regulations made thereunder.
Notwithstanding the foregoing, terms not defined but used in “Statement of Tax Benefits”, “Financial Statements” “Industry
Overview”, “Regulations and Policies”, “Outstanding Litigation and Material Developments”, “Government Approvals”, “Issue
Procedure – Part B” and “Main Provisions of Articles of Association” on pages 105, 223, 108, 164, 482, 491, 523 and 556, respectively, shall have the meaning given to such terms in such sections.
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11
PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
Certain Conventions
All references in this Draft Red Herring Prospectus to “India” are to the Republic of India and all references to the “US”, “USA” or
“United States” are to the United States of America, together with its territories and possessions.
Unless otherwise specified, any time mentioned in this Draft Red Herring Prospectus is in Indian Standard Time. Unless indicated
otherwise, all references to a year in this Draft Red Herring Prospectus are to a calendar year.
Unless stated otherwise, all references to page numbers in this Draft Red Herring Prospectus are to the page numbers of this Draft
Red Herring Prospectus.
Financial Data
Unless stated otherwise or the context otherwise requires, the financial data in this Draft Red Herring Prospectus is derived from
the Restated Standalone Financial Statements and the Restated Consolidated Financial Statements prepared in accordance with the
Companies Act, 2013, Ind AS, Indian GAAP, as applicable and restated in accordance with the SEBI ICDR Regulations.
Our Company’s financial year commences on April 1 and ends on March 31 of the next 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.
Our Restated Financial Statements have been prepared in accordance with Ind AS for Financial Years ended March 2018, 2017
and 2016, and Indian GAAP for Financial Years ended March 2015 and 2014. There are significant differences between Ind AS
and US GAAP and IFRS. Our Company does not provide reconciliation of its financial information to IFRS or US GAAP. Our
Company has not attempted to explain those differences or quantify their impact on the financial data included in this Draft Red
Herring Prospectus and it is urged that you consult your own advisors regarding such differences and their impact on our Company's
financial data. For details in connection with risks involving differences between Ind AS, US GAAP and IFRS see “Risk Factors”
on page 14. Accordingly, the degree to which the financial information included in this Draft Red Herring Prospectus will provide
meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting policies and practices, the
Companies Act and the SEBI ICDR Regulations. Any reliance by persons not familiar with Indian accounting policies and practices
on the financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited.
EBITDA presented in this Draft Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not
required by, or presented in accordance with, Ind AS, IFRS or US GAAP. Furthermore, EBITDA is not a measurement of our
financial performance or liquidity under Ind AS, IFRS or US GAAP and should not be considered as an alternative to net profit/loss,
revenue from operations or any other performance measures derived in accordance with Ind AS, IFRS or US GAAP or as an
alternative to cash flow from operations or as a measure of our liquidity. In addition, EBITDA is not a standardised term, hence a
direct comparison of EBITDA between companies may not be possible. Other companies may calculate EBITDA differently from
us, limiting its usefulness as a comparative measure.
Unless the context otherwise indicates, any percentage amounts, as set forth in “Risk Factors”, “Our Business” and “Management’s
Discussion and Analysis of Financial Conditional and Results of Operations” on pages 14, 148 and 452 respectively, and elsewhere
in this Draft Red Herring Prospectus have been calculated on the basis of the Restated Financial Statements of our Company, on
standalone or consolidated basis, as the case may be, prepared in accordance with Ind AS for Financial Years ended March 2018,
2017 and 2016, and Indian GAAP for Financial Years ended March 2015 and 2014, and the Companies Act and restated in
accordance with the SEBI ICDR Regulations.
In this Draft Red Herring Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due to
rounding off. All figures in decimals have been rounded off to the second decimal and all the percentage figures have been rounded
off to two decimal places including percentage figures in “Risk Factors”, “Industry Overview” and “Our Business” on pages 14,
108 and 148 respectively.
Currency and Units of Presentation
All references to:
“Rupees” or “`” or “INR” or “Rs.” are to Indian Rupee, the official currency of the Republic of India; and
“USD” or “US$” or “$” are to United States Dollar, the official currency of the United States of America
Our Company has presented all numerical information in this Draft Red Herring Prospectus in “million” units or in whole numbers
where the numbers have been too small to represent in millions. One million represents 1,000,000 and one billion represents
1,000,000,000.
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12
Exchange Rates
This Draft Red Herring Prospectus contains conversion of certain other currency amounts into Indian Rupees that have been
presented solely to comply with the SEBI ICDR Regulations. These conversions should not be construed as a representation that
these currency amounts could have been, or can be converted into Indian Rupees, at any particular rate or at all.
The following table sets forth, for the periods indicated, information with respect to the exchange rate between the Rupee and the
USD (in Rupees per USD):
Currency As on March 31, 2018
(`)
As on March 31, 2017
(`)
As on March 31, 2016
(`)
As on March 31, 2015
(`)
As on March 31, 2014
(`)
1 USD 65.04 64.84 66.33 62.59 60.09 Source: RBI Reference Rate Note: In the event that March 31 of any of the respective years is a public holiday, the previous calendar day not being a public holiday has been considered
Industry and Market Data
Unless stated otherwise, industry and market data used in this Draft Red Herring 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 such publications has been obtained from publicly available
documents from various sources believed to be reliable but their accuracy and completeness are not guaranteed and their reliability
cannot be assured. Although we believe the industry and market data used in this Draft Red Herring Prospectus is reliable, it has
not been independently verified by us, the BRLMs 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. Such data involves
risks, uncertainties and numerous assumptions and is subject to change based on various factors, including those discussed in “Risk
Factors” on page 14. Accordingly, investment decisions should not be based solely on such information.
Certain information in “Summary of Industry”, “Summary of our Business”, “Industry Overview” and “Our Business” on pages 38,
43, 108 and 148, respectively of this Draft Red Herring Prospectus has been obtained from the report titled “Market Assessment
and outlook across Steel Industry value chain” dated July 2018 prepared by CRISIL Limited which has issued the following
disclaimer:
“CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing this report (Report) based
on the Information obtained by CRISIL from sources which it considers reliable (Data). 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. This Report is not a recommendation to invest / disinvest in any entity covered in the Report
and no part of this Report should be construed as an expert advice or investment advice or any form of investment banking within
the meaning of any law or regulation. CRISIL especially states that it has no liability whatsoever to the subscribers / users /
transmitters/ distributors of this Report. Without limiting the generality of the foregoing, nothing in the Report is to be construed as
CRISIL providing or intending to provide any services in jurisdictions where CRISIL does not have the necessary permission and/or
registration to carry out its business activities in this regard. Shyam Metalics and Energy Limited will be responsible for ensuring
compliances and consequences of non-complainces for use of the Report or part thereof outside India. CRISIL Research operates
independently of, and does not have access to information obtained by CRISIL’s Ratings Division / CRISIL Risk and Infrastructure
Solutions Ltd (CRIS), which may, in their regular operations, obtain information of a confidential nature. The views expressed in
this Report are that of CRISIL Research and not of CRISIL’s Ratings Division / CRIS. No part of this Report may be
published/reproduced in any form without CRISIL’s prior written approval.”
In accordance with the SEBI ICDR Regulations, “Basis for the Issue Price” on page 102 includes information relating to our peer
group companies. Such information has been derived from publicly available sources, and neither we, nor the BRLMs have
independently verified such information.
The extent to which the market and industry data used in this Draft Red Herring 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 the business of our Company is conducted, and methodologies and assumptions may vary
widely among different industry sources.
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FORWARD-LOOKING STATEMENTS
This Draft Red Herring Prospectus contains certain “forward-looking statements”. All statements contained in this Draft Red
Herring Prospectus that are not statements of historical fact constitute “forward-looking statements”. All statements regarding our
expected financial condition and results of operations, business, plans and prospects are “forward-looking statements”. These
forward-looking statements generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”,
“estimate”, “intend”, “likely to”, “seek to”, “shall”, “objective”, “plan”, “project”, “will”, “will continue”, “will pursue” or other
words or phrases of similar import. Similarly, statements that describe our Company’s strategies, objectives, plans or goals are also
forward-looking statements. All forward-looking statements whether made by us or any third parties in this Draft Red Herring
Prospectus are based on our current plans, estimates, presumptions and expectations 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, including but not limited to, regulatory changes pertaining to the industry in which our Company has 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 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 and changes in competition in its industry. Important factors that could cause actual results to differ materially
from our Company’s expectations include, but are not limited to, the following:
Loss of any of our suppliers or a failure by our suppliers to deliver some of our primary raw materials;
Dependance on stable and reliable logistics and transportation infrastructure;
Volatility in the demand and pricing in the steel industry and the cyclical nature of the industries it serves;
Volatility in the prices of raw materials and energy;
Unexpected loss, shutdown or slowdown of operations at any of our facilities;
Our inability to successfully implement our expansion programmes;
Our inability to expand or effectively manage our distributors or brokers, or any disruptions in our distribution network; and
Developments in the competitive environment in the steel industry, such as consolidation among our competitors.
For further discussion of factors that could cause the actual results to differ from the expectations, see “Risk Factors”, “Our
Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 14, 148 and
452, respectively. By their nature, certain market risk disclosures are only estimates and could be materially different from what
actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated
and are not a guarantee of future performance.
These statements are based on our management’s belief and assumptions, which in turn are based on currently available information.
Although we believe the assumptions upon which these forward looking statements are based on are reasonable, any of these
assumptions could prove to be inaccurate and the forward looking statements based on these assumptions could be incorrect. Given
these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements and not to regard such
statements as a guarantee of future performance. Neither our Company, our Directors, the BRLMs nor any of their respective
affiliates have any obligation 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 SEBI
requirements, our Company shall ensure that investors in India are informed of material developments from the date of the Draft
Red Herring Prospectus in relation to the statements and undertakings made by them in this Draft Red Herring Prospectus until the
time of the grant of listing and trading permission by the Stock Exchanges for this Issue. Further, in accordance with Regulation
51A of the SEBI ICDR Regulations, our Company may be required to undertake an annual updation of the disclosures made in the
Draft Red Herring Prospectus and make it publicly available in the manner specified by SEBI.
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SECTION II: RISK FACTORS
An investment in Equity Shares involves a high degree of risk. Investors should carefully consider all the information in this Draft
Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in our Equity Shares.
The risks described below are not the only ones relevant to us or our Equity Shares, but also to the industry in which we operate or
to India. Additional risks and uncertainties, not currently known to us or that we currently do not deem material may also adversely
affect our business, results of operations, cash flows and financial condition. If any of the following risks, or other risks that are not
currently known or are not currently deemed material, actually occur, our business, results of operations, cash flows and financial
condition could be adversely affected, the price of our Equity Shares could decline, and investors may lose all or part of their
investment. In order to obtain a complete understanding of our Company and our business, prospective investors should read this
section in conjunction with “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” on pages 148 and 452, respectively, as well as the other financial and statistical information contained in this Draft
Red Herring Prospectus. In making an investment decision, prospective investors must rely on their own examination of us and our
business and the terms of the Issue including the merits and risks involved. Potential investors should consult their tax, financial
and legal advisors about the particular consequences of investing in the Issue. Unless specified or quantified in the relevant risk
factors below, we are unable to quantify the financial or other impact of any of the risks described in this section. Potential investors
should pay particular attention to the fact that our Company is incorporated under the laws of India and is subject to legal and
regulatory environment which may differ in certain respects from that of other countries.
This Draft Red Herring Prospectus also contains forward-looking statements that involve risks, assumptions, estimates and
uncertainties. Our actual results could differ from those anticipated in these forward-looking statements as a result of certain factors,
including the considerations described below and elsewhere in this Draft Red Herring Prospectus. See “Forward-Looking
Statements” on page 13.
In this section, any reference to the “Company” refers to Shyam Metalics and Energy Limited on an unconsolidated basis. In this
section, any reference to “we”, “us” or “our” refers to Shyam Metalics and Energy Limited and its Subsidiaries and Associates on
a consolidated basis. Unless the context requires otherwise, all financial information included herein is based on our Restated
Consolidated Financial Statements included in “Financial Statements” beginning on page 223.
Unless stated otherwise, industry and market data used in this section has been obtained or derived from publicly available
information as well as industry publications, other sources and the report titled “Market Assessment and outlook across Steel
Industry value chain” dated July 2018 issued by CRISIL Limited (the “CRISIL Report”). Unless otherwise indicated, all financial,
operational, industry and other related information derived from the CRISIL Report and included herein with respect to any
particular year refers to such information for the relevant calendar year.
Risks relating to our Business
1. Loss of any of our suppliers or a failure by our suppliers to deliver some of our primary raw materials such as iron ore, iron ore fines, coal, chrome ore and manganese ore may have an adverse impact on our ability to continue our
manufacturing process without interruption and our ability to manufacture and deliver the products to our customers
without any delay.
We procure some of our primary raw materials such as (i) iron ore, iron ore fines and manganese ore on a purchase order
basis; (ii) coal (with the exception of the fuel supply agreements we have entered into); and (iii) chrome ore (with the
exception of the supply agreements we have entered into) on a purchase order basis, auction through government approved
auctioneers and imports and have not entered into long term contracts for the supply of such raw materials. Accordingly, we
may encounter situations where we might be unable to manufacture and deliver our products due to, amongst other reasons,
our inability to predict the increased demand for our products. Additionally, our inability to predict the market conditions
may result in us placing supply orders for inadequate quantities of such raw materials. Further, any delay/failure to deliver
or delivery of wrong or sub-standard raw materials by our suppliers may have a material and adverse effect on our business,
results of operations and financial condition.
If any of our major suppliers ceases to have business dealings with us or materially reduces the quantity of raw materials
supplied to us and we are unable to secure new suppliers for such raw materials to meet the requirements at our manufacturing
plants, our production schedule may be delayed and our business, financial condition, results of operations and prospects
will be adversely affected.
2. We are required to pay liquidated damages to some of our suppliers of coal and chrome ore in the event we do not lift a specified percentage of the annual contracted capacity
Our manufacturing plants primarily acquire coal from Mahanadi Coalfields Limited and Central Coalfields Limited pursuant
to various fuel supply agreements. Under the fuel supply agreements, we are obligated to lift between 60% - 75% of the
annual contracted capacity failing which we are required to pay compensation or liquidated damages to Mahanadi Coalfields
Limited and Central Coalfields Limited (as the case maybe). Our Company has also entered into a sale agreement for chrome
ore with Odisha Mining Corporation Limited for the Sambalpur manufacturing plant wherein we are obligated to atleast 90%
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of the annual contracted capacity of the chrome ore, failing which we are required to pay damages equivalent to 5% of the
entire sale value of the allotted quantity. We have, in the past, faced instances where we were required to pay liquidated
damages to for non-compliances with such obligations. For example, in Fiscal 2018, liquidated damages aggregating to `5.46
million have been levied on our Company. Any payment of liquidated damages may have an effect on our business, results
of operations and financial condition.
3. Our Chairman and individual Promoter, Mahabir Prasad Agarwal, Vice Chairman and Managing Director and individual Promoter, Brij Bhushan Agarwal, Joint Managing Director and individual Promoter, Sanjay Kumar Agarwal,
whole-time Directors, Bhagwan Shaw and Dev Kumar Tiwari, and Independent Director, Venkata Krishna Nageswara
Rao Majji, are party to certain criminal proceedings.
Our Chairman and individual Promoter, Mahabir Prasad Agarwal, Vice Chairman and Managing Director and individual
Promoter, Brij Bhushan Agarwal, Joint Managing Director and our individual Promoter, Sanjay Kumar Agarwal, whole-
time Directors, Bhagwan Shaw and Dev Kumar Tiwari, and Independent Director, Venkata Krishna Nageswara Rao Majji,
are party to certain criminal proceedings. Further, our whole-time Director, Bhagwan Shaw, has been granted bail in all the
matters pending against him. For further details, see “Outstanding Litigation and Material Developments” on page 482. Any
conviction, penalties or other action against our Chairman and individual Promoter, Vice Chairman and Managing Director
and individual Promoter, Joint Managing Director and individual Promoter, whole-time Directors or Independent Director
for the offences alleged by the complainants may potentially cause negative publicity thereby affecting our reputation,
business, prospects, and financial condition.
4. Our success depends on stable and reliable logistics and transportation infrastructure. Disruption of logistics and transportation services could impair the ability of our suppliers to deliver raw materials or our ability to deliver products
to our customers which may adversely affect our operations.
Our Sambalpur and Jamuria manufacturing plants have captive railways sidings and we depend primarily on railways to
transport the raw materials for such manufacturing units. W