P. 1
Mahindra Holidays IPO Prospectus

Mahindra Holidays IPO Prospectus

Ratings: (0)|Views: 2,004 |Likes:
Mahindra Holidays and Resorts is the first major IPO in 4 months.
Mahindra Holidays and Resorts is the first major IPO in 4 months.

More info:

Published by: Venkata Krishna Nalamothu on Jun 22, 2009
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

03/21/2013

pdf

text

original

 
RED HERRING PROSPECTUSDated June 12, 2009
 
Please read section 60B of the Companies Act, 1956 
100% Book Built Issue
 
MAHINDRA HOLIDAYS & RESORTS INDIA LIMITED
(Our Company was incorporated as a private limited company called ‘Mahindra Holidays & Resorts India Private Limited’ on September 20, 1996. The status of ourCompany was changed to a public limited company by a special resolution of the members passed at the annual general meeting held on January 29, 1998. The freshcertificate of incorporation consequent upon conversion was issued to our Company on April 17, 1998, by the Registrar of Companies, Tamil Nadu at Chennai.)
Registered Office: Mahindra Towers, 2
nd
Floor, No. 17/18, Patullos Road, Chennai – 600 002, Tamil NaduCompany Secretary and Compliance Officer: Mr. Rajiv BalakrishnanTel: (91 44) 3988 1000, Fax: (91 44) 3027 7778, Email: investors@clubmahindra.com, Website: www.clubmahindra.com
 
PUBLIC ISSUE OF 92,65,275 EQUITY SHARES OF Rs. 10 EACH OF MAHINDRA HOLIDAYS & RESORTS INDIA LIMITED (“MAHINDRA HOLIDAYS”OR THE “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF Rs. [
] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF Rs. [
]
 
PER EQUITY SHARE), CONSISTING OF A FRESH ISSUE OF 58,96,084 EQUITY SHARES AND AN OFFER FOR SALE OF 33,69,191 EQUITY SHARESBY MAHINDRA & MAHINDRA LIMITED (THE “SELLING SHAREHOLDER”), AGGREGATING Rs. [
] CRORE (THE “ISSUE”). THE ISSUE WOULDCONSTITUTE 11.0 % OF THE FULLY DILUTED POST ISSUE PAID-UP CAPITAL OF THE COMPANY.THE FACE VALUE OF THE EQUITY SHARES IS RS. 10THE PRICE BAND AND THE MINIMUM BID LOT SIZE WILL BE DECIDED BY US AND THE SELLING SHAREHOLDER IN CONSULTATION WITHTHE GCBRLM AND THE BRLMs AND ADVERTISED ATLEAST TWO DAYS PRIOR TO BID/ISSUE OPENING DATE
In case of revision in the Price Band, the Bidding Period will be extended for three additional days after revision of the Price Band subject to the Bidding Period/IssuePeriod not exceeding 10 working days. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to theNational Stock Exchange of India Limited (“NSE”) and the Bombay Stock Exchange Limited (“BSE”), by issuing a press release, and also by indicating the change on thewebsites of the Global Co-ordinator and Book Running Lead Manager and the Book Running Lead Manager and at the terminals of the Syndicate.
 
In terms of Rule 19(2)(b) of the Securities Contract Regulation Rules, 1957 (“SCRR”), this being an Issue for less than 25% of the post–Issue capital, the Issue is beingmade through the 100% Book Building Process wherein at least 60% of the Issue will be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”), outof which 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to QIBsand Mutual Funds, subject to valid bids being received from them at or above the Issue Price. If at least 60% of the Issue cannot be allocated to QIBs, then the entireapplication money will be refunded forthwith. Further, not less than 10% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Biddersand not less than 30% of the Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at or above theIssue Price.
IPO GRADING
The Issue has been graded as 4/5 by Fitch Ratings India Private Limited pursuant to the Securities and Exchange Board of India (Disclosure and Investor Protection)Guidelines, 2000, (“SEBI Guidelines”), indicating that the fundamentals of Issue are above average relative to other listed securities in India. The IPO Grading is assignedon a five-point scale from 5, with an IPO Grade of 5/5 indicating strong fundamentals and 1/5 indicating poor fundamentals. For details, see the section titled “GeneralInformation” on page
 
ii.
 
RISK IN RELATION TO THE FIRST ISSUE
This being the first public issue of Equity Shares of the Company, there has been no formal market for the Equity Shares of the Company. The face value of the EquityShares is Rs. 10 per Equity Share and the Issue Price is [
] times of the face value. The Issue Price (as determined by the Company and the Selling Shareholder, inconsultation with the Global Co-ordinator and Book Running Lead Manager and the Book Running Lead Manager, on the basis of assessment of market demand for theEquity Shares offered by way of book building) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurancecan be given regarding an active and/or sustained trading in the Equity Shares of the Company 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 this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision,investors must rely on their own examination of the Issuer and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended orapproved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page xi.
ISSUER’S AND SELLING SHAREHOLDER’S ABSOLUTE RESPONSIBILITY
The Issuer and the Selling Shareholder, having made all reasonable inquiries, accept responsibility for and confirm that this Red Herring Prospectus contains allinformation with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Red Herring Prospectus is true andcorrect 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 otherfacts, the omission of which makes this Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading inany material respect.
LISTING ARRANGEMENT
The Equity Shares offered through this Red Herring Prospectus are proposed to be listed on the NSE and the BSE. We have received in-principle approval from NSE andBSE for the listing of our Equity Shares pursuant to letters dated January 23, 2009 and February 13, 2009, respectively. For purposes of this Issue, the Designated Stock Exchange is NSE.
GLOBAL CO-ORDINATOR AND BOOKRUNNING LEAD MANAGER
 
BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUE
 
Kotak Mahindra Capital Company Limited
3rd Floor, Bakthawar, 229, Nariman Point, Mumbai 400 021,IndiaTel: (91 22) 6634 1100Fax: (91 22) 2283 7517Email: mhril.ipo@kotak.comInvestor grievance id: kmccredressal@kotak.comWebsite: www.kotak.comContact Person: Mr. Chandrakant BholeSEBI Registration No.: INM000008704
HSBC Securities and Capital Markets (India) Private Limited
52/60 Mahatma Gandhi Road, Fort, Mumbai 400 001, IndiaTel: (91 22) 2268 1086Fax: (91 22) 2263 1984Email:mhrilipo@hsbc.co.in Investor grievance id: investorgrievance@hsbc.co.inWebsite: www.hsbc.co.inContact Person: Mr. Amit Gupta
 
SEBI Registration No.: INM000010353
Karvy Computershare Private Limited
Plot No. 17 to 24, Vithalrao Nagar, Madhapur,Hyderabad 500 081, IndiaTel: (91 40) 2342 0815-20Fax: (91 40) 2342 0814Email: einward.ris@karvy.comWebsite: www.karvy.comContact Person: Mr. M. Murali KrishnaSEBI Registration No.: INR000000221
BID/ISSUE PROGRAMMEBID/ISSUE OPENS ON JUNE 23, 2009 BID/ISSUE CLOSES ON JUNE 26, 2009
 
 
i
TABLE OF CONTENTS
SECTION 1- GENERAL…………………………………………………………………………………………..
ii
 
DEFINITIONS AND ABBREVIATIONS……………………………………………………………………….
ii
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA……
viii
FORWARD-LOOKING STATEMENTS………………………………………………………………………..
x
SECTION II- RISK FACTORS…………………………………………………………………………………..
xi
 
SECTION III- INTRODUCTION………………………………………………………………………………..
31
 
SUMMARY OF OUR BUSINESS STRENGTHS AND STRATEGY…….……………………………………
31
SUMMARY FINANCIAL INFORMATION…………………………………………………………………….
36
THE ISSUE……………………………………………………………………………………………………….
39
GENERAL INFORMATION…………………………………………………………………………………….
40
CAPITAL STRUCTURE…………………………………………………………………………………………
49
OBJECTS OF THE ISSUE……………………………………………………………………………………….
59
BASIS FOR ISSUE PRICE………………………………………………………………………………………
67
STATEMENT OF TAX BENEFITS……………………………………………………………………………..
69
SECTION IV- ABOUT THE COMPANY………………………………………………………………………..
79
 
OUR INDUSTRY………………………………………………………………………………………………...
79
OUR BUSINESS………………………………………………………………………………………………….
88
REGULATIONS AND POLICIES……………………………………………………………………………….
109
HISTORY AND CERTAIN CORPORATE MATTERS………………………………………………………...
113
OUR MANAGEMENT…………………………………………………………………………………………...
123
OUR PROMOTER………………………………………………………………………………………………..
137
RELATED PARTY TRANSACTIONS………………………………………………………………………….
172
DIVIDEND POLICY…………………………………….……………………………………………………….
175
SECTION V- FINANCIAL STATEMENTS……………………………………………………………………..
176
 
CONSOLIDATED FINANCIAL STATEMENTS………………………...……………………………………..
176
UNCONSOLIDATED FINANCIAL STATEMENTS…………………………………………………………...
203
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS……………………………………………………………………………………………….
233
FINANCIAL INDEBTEDNESS………………………………………………………………………………….
253
SECTION VI- LEGAL AND OTHER INFORMATION……………………………………………………….
257
 
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS……………………………………
257
GOVERNMENT APPROVALS………………………………………………………………………………….
284
OTHER REGULATORY AND STATUTORY DISCLOSURES……………………………………………….
306
SECTION VII- ISSUE INFORMATION………………………………………………………………………...
317
 
TERMS OF THE ISSUE………………………………………………………………………………………….
317
ISSUE STRUCTURE…………………………………………………………………………………………….
320
ISSUE PROCEDURE…………………………………………………………………………………………….
323
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES…………………………………..
361
SECTION VIII- MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION…………………………..
363
 
SECTION IX- OTHER INFORMATION………………………………………………………………………..
410
 
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION………………………………………...
410
DECLARATION………………………………………………………………………………………………….
412
 
 
ii
SECTION I – GENERAL
 DEFINITIONS AND ABBREVIATIONSGeneral Terms
 
Term Description
“We”, “us” and “our” Unless the context otherwise requires, Mahindra Holidays & ResortsIndia Limited and our Subsidiaries on a consolidated basis“Issuer”, the “Company”,“our Company” and“Mahindra Resorts”Mahindra Holidays & Resorts India Limited on a stand alone basis
Company Related Terms
Term Description
Articles Articles of Association of our CompanyAuditors The statutory auditors of our Company, M/s. Deloitte Haskins & Sells, CharteredAccountantsBoard / Board of Directors Board of Directors of our CompanyDirectors Directors of Mahindra Holidays & Resorts India Limited, unless otherwise specifiedESOS 2006 Mahindra Holidays & Resorts India Limited Employee Stock Option Scheme 2006ESOS Trust Mahindra Holidays & Resorts India Limited Employees’ Stock Option TrustMemorandum Memorandum of Association of our CompanyPromoter Mahindra & Mahindra LimitedMHFL Mahindra Holdings and Finance LimitedRegistered Office of ourCompany/Registered OfficeMahindra Towers, 2
nd
Floor, No. 17/18, Patullos Road, Chennai – 600 002, TamilNadu, IndiaSubsidiaries Mahindra Hotels & Residences India Limited, MHR Hotel Management GmbH,Mahindra Holidays and Resorts USA Inc. and Heritage Bird (M) Sdn Bhd
Issue Related Terms
 
Term Description
Allotment/AllotUnless the context otherwise requires, the issue and allotment of Equity Shares,pursuant to the Issue and the transfer of Equity Shares pursuant to the Offer for SaleAllottee The successful Bidder to whom the Equity Shares are/ have been allottedApplication Supported byBlocked Amount/ ASBAThe application (whether physical or electronic) used by a Resident RetailIndividual Investors to make a Bid authorizing the SCSB to block the Bid Amountin their specified bank account maintained with the SCSBASBA Application Form The ASBA Bid cum Application Form, upon the allocation of Equity Shares,dispatch of the CAN, and filing of the Prospectus with the RoCASBA Bid cum ApplicationFormThe form, whether physical or electronic, used by an ASBA Bidder to make a Bid,which will be considered as the application for Allotment for the purposes of theRed Herring Prospectus and the ProspectusASBA Bidder Any Resident Retail Individual Investor who intends to apply through ASBA and (i)is bidding at Cut-off Price, with single option as to the number of shares; (ii) isapplying through blocking of funds in a bank account with the SCSB; (iii) hasagreed not to revise his/her bid; and (iv) is not bidding under any of the reservedcategoriesASBA Public Issue Account A bank account of the Company, under Section 73 of the Act where the funds shallbe transferred by the SCSBs from the bank accounts of the ASBA BiddersBanker(s) to the Issue The banks which are clearing members and registered with SEBI as Banker to theIssue with whom the Escrow Account will be opened and in this case being Kotak Mahindra Bank Limited, HongKong and Shanghai Banking Corporation Limited,State Bank of India, Yes Bank Limited and HDFC Bank LimitedBid An indication to make an offer during the Bidding Period by a prospective investorto subscribe to or purchase the Equity Shares of our Company at a price within thePrice Band, including all revisions and modifications thereto. For the purposes of 

Activity (21)

You've already reviewed this. Edit your review.
1 hundred reads
1 thousand reads
Gerald ChiCheng liked this
ashish23tyagi liked this
hitendrasenta liked this
varungopinath liked this
varungopinath liked this
varungopinath liked this
varungopinath liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->