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RPWL

RPWL

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01/20/2014

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Red Herring Prospectus
Please read Section 60B of the Companies Act, 1956100% Book Built OfferDated January 1, 2008
Reliance Power Limited
(We were originally incorporated as Bawana Power Private Limited on January 17, 1995. For details of the change in our name and registered office, see “Historyand Certain Corporate Matters” on page 126 of this Red Herring Prospectus.)
Registered and Corporate Office:
H Block, First Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai 400 710, Maharashtra
Company Secretary and Compliance Officer: Mr. Paresh Rathod
Tel: (91 22) 3038 6010; Fax: (91 22) 3037 6633; Email: reliancepower.ipo@relianceada.com; Website: www.reliancepower.co.in
PUBLIC ISSUE OF 260,000,000 EQUITY SHARES OF Rs. 10 EACH OF RELIANCE POWER LIMITED (“RELIANCE POWER” 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) AGGREGATING TO Rs.[
] MILLION (THE “ISSUE”). THE ISSUE COMPRISES A NET ISSUE TO THE PUBLIC OF 228,000,000 EQUITY SHARES AGGREGATING TO Rs. [
] MILLION("THE NET ISSUE") AND A PROMOTERS’ CONTRIBUTION OF 32,000,000 EQUITY SHARES AGGREGATING Rs. [
] MILLION. THE ISSUE WILLCONSTITUTE 11.5% OF THE POST ISSUE PAID-UP CAPITAL OF THE COMPANY AND THE NET ISSUE WILL CONSTITUTE 10.1% OF THE POST ISSUE PAID-UP CAPITAL OF THE COMPANY.PRICE BAND: Rs. 405 TO Rs. 450 PER EQUITY SHARE OF FACE VALUE Rs. 10 EACHTHE FLOOR PRICE IS 40.5 TIMES THE FACE VALUE AND THE CAP PRICE IS 45 TIMES THE FACE VALUE
 A discount of Rs. 20 to the Issue Price determined pursuant to completion of Book Building Process shall be offered to Retail Individual Bidders (“Retail Discount”).
In case of revision in the Price Band, the Bidding/Issue Period will be extended by three additional days after revision of the Price Band subject to the Bidding /Issue Period not exceeding10 working days. Any revision in the Price Band and the Bidding/Issue Period, if applicable, will be widely disseminated by notification to the National 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 the websites of the Book Running Lead Managers, Co-Book Running Lead Managers and at the terminals of the Syndicate.In accordance with 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 being madethrough the 100% Book Building Process wherein at least 60% of the Net Issue will be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”), out of 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 all QIBs, including MutualFunds, subject to valid bids being received from them at or above the Issue Price. If at least 60% of the Net Issue cannot be allocated to QIBs, then the entire application money will berefunded forthwith. Further, at least 10% of the Net Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and at least 30% of the Net Issue will beavailable for allocation on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at or above the Issue Price. A discount of Rs. 20 to the Issue Pricedetermined pursuant to completion of Book Building Process shall be offered to Retail Individual Bidders.
Payment Methods
 
Payment Method -1
@
Payment Method -2Retail Individual Bidders and Non-Institutional Bidders
 
Any CategoryAmount Payable per EquityShare (In Rs.)Face Value Premium Total Face Value Premium Total
On Application 2.5
 
112.5
 
115.0
 
10.0
 
[
]
#
 
[
]
#
 
By Due Date for BalanceAmount Payable7.5
 
[
]
#
 
[
]
#
 
- - -
Total
10.0
 
[
]
#
 
[
]
#
 
10.0
 
[
]
#
 
[
]
#
 
@ Non-Residents require the approval of RBI for subscribing to partly paid up Equity Shares and copy of such approval should be submitted along with the Bid-cum-ApplicationForm. See page xxxi for risks associated with Payment Method – 1# Net of Retail Discount.
RISK IN RELATION TO THE FIRST ISSUE
This being the first public issue of Equity Shares of our Company, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares is Rs. 10per Equity Share and the Floor Price is 40.5 times the face value and Cap Price is 45 times the face value. The Issue Price (as determined by our Company in consultation with the Book Running Lead Managers and the Co-Book Running Lead Managers on the basis of assessment of market demand for the Equity Shares offered by way of the Book Building Process)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 and/or sustained trading inthe Equity Shares of our Company or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISKS
Investments in equity and equity-elated 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 theirinvestment. 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 ownexamination of the Issuer and the Issue, including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and ExchangeBoard of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Red Herring Prospectus. Specific attention of the investors is drawn to the section titled “Risk Factors”on page xiii of this Red Herring Prospectus.
IPO GRADING
This Issue has been graded by CRISIL Limited as CRISIL IPO GRADE 4/5, indicating that the fundamentals of the issue are above average, in relation to other listed equity securitiesin India and by ICRA Limited as ICRA IPO Grade 4, indicating above average fundamentals. For details, see “General Information” beginning on page 15 of this Red HerringProspectus.
 ISSUER’S ABSOLUTE RESPONSIBILITY
The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Red Herring Prospectus contains all information with regard to the Issuer and the Issuethat is material in the context of the Issue, that the information contained in this Red Herring Prospectus is true and correct in all material aspects and is not misleading in any materialrespect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Red Herring Prospectus as a whole, or anyof such information or the expression of any such opinions or intentions, misleading in any material respect.
LISTING ARRANGEMENT
The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on the BSE and the NSE. We have received an in-principle approval from BSE and NSE for thelisting of our Equity Shares pursuant to their letters dated October 15, 2007 and October 31, 2007, respectively. For the purposes of this Issue, the Designated Stock Exchange shall be theBombay Stock Exchange Limited.
BOOK RUNNING LEAD MANAGERS
Kotak Mahindra Capital Company Limited
3
rd
Floor, Bakhtawar229 Nariman PointMumbai400 021Tel: (91 22) 6634 1100Fax:(91 22) 2283 7517Email:reliancepower.ipo@kotak.comInvestor Grievance Id:kmccredressal@kotak.comWebsite:www.kotak.com Contact Person:Mr. Kaushal Shah
UBS Securities India Private Limited
2/F, Hoechst HouseNariman PointMumbai 400 021Tel: (91 22) 2286 2000/ 6630 9000Fax:(91 22) 2281 4676e-mail:reliancepower@ubs.com Investor Grievance Id:customercare@ubs.com Website:www.ibb.ubs.com/Corporates/indianipoContact Person:Ms. ChhaviMoodgal
ABN AMRO Securities (India) Private Limited
 81 Sakhar Bhavan,Nariman Point,Mumbai400 021Tel: (91 22) 6632 5535Fax:(91 22) 6632 5541Email:reliancepower.ipo@in.abnamro.comInvestor Grievance Id:Customercare.ipo@in.abnamro.comWebsite:www.abnamroindia.comContact person:Mr. Deepak Chokhani
Deutsche Equities India Private Limited
DBHouse, Hazarimal SomaniMarg,Fort, Mumbai 400 001Tel: (91 22) 6658 4600Fax:(91 22) 2200 6765Email:reliancepower.ipo@db.comInvestor Grievance Id:db.redressal@db.comwebsite: www.db.com/IndiaContact person: Mr. Sameer Taimni
Enam Securities Private Limited
801/ 802, Dalamal Towers,Nariman Point, Mumbai400 021,Tel: (91 22) 6638 1800Fax:(91 22) 2284 6824Email:reliancepower.ipo@enam.comInvestor Grievance Id:complaints@enam.comWebsite:www.enam.comContact Person:Ms. KinjalPalan
 
ICICI Securities Limited
ICICI Centre, H.T. Parekh Marg,Churchgate, Mumbai400 020Tel: (91 22) 2288 2460Fax:(91 22)2282 6580Email:relpower_ipo@isecltd.comInvestor Grievance Id:customercare@isecltd.com Website:www.icicisecurities.comContact Person:Mr. Rajiv Poddar
 JM Financial Consultants Private Limited
141 Maker Chamber III, Nariman Point,Mumbai400 021Tel: (91 22) 6630 3030Fax:(91 22) 2204 7185Email:reliancepower.ipo@jmfinancial.inInvestor Grievance Id:grievance.ibd@jmfinancial.inWebsite:www.jmfinancial.comContact person:Mr. Mayank Jain
J.P. Morgan India Private Limited
9th Floor, MafatlalCentre,Nariman Point, Mumbai400 021Tel: 91 (22) 2285 5666Fax:91 (22) 6639 3091Investor Grievance Id:Customercare_India@jpmorgan.comEmail:reliancepower_ipo@jpmorgan.comWebsite:www.jpmipl.com Contact Person:Mr. Abhishek Goenka
 
CO-BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE
Macquarie India Advisory Services Private Limited
Level3, MafatlalCenterNariman Point Mumbai 400 021Tel: (91 22) 6653 3000Fax:(91 22) 6653 3198Email:reliancepower.ipo@macquarie.comInvestor Grievance Id:customercare.indiaipo@macquarie.comWebsite:www.macquarie.com/inContact Person:Mr. HariKishan Movva
SBI Capital Markets Limited
202, Maker Towers ‘E’,Cuffe Parade,Mumbai400 005Tel: (91 22) 2218 9166Fax:(91 22) 2218 8332Email:reliancepower.ipo@sbicaps.comInvestor Grievance Id:investor.relations@sbicaps.com Website :www.sbicaps.comContact Person :Mr. Subrat Panda
 Karvy Computershare Private
 
Limited
Plot No. 17-24, Vittal Rao NagarMadhapurHyderabad 500 081Tel: (91 40) 2342 0815/ 2342 0816Fax:(91 40) 2342 0859Email:reliancepower.ipo@karvy.comWebsite:www.karvy.comContact Person:Mr. M. MuraliKrishna
BID/ISSUE PROGRAMME
 
BID/ISSUE OPENS ON January 15, 2008 BID/ISSUE CLOSES ON January 18, 2008
 
 TABLE OF CONTENTS
SECTION I: GENERAL
..............................................................................................................................I
 
DEFINITIONS
 
AND
 
ABBREVIATIONS.....................................................................................................
I
 
PRESENTATION
 
OF
 
FINANCIAL,
 
INDUSTRY
 
AND
 
MARKET
 
DATA................................................
XI
 
FORWARD-LOOKING
 
STATEMENTS...................................................................................................
XII
 
SECTION II: RISK FACTORS
............................................................................................................XIII
 
SECTION III: INTRODUCTION
..............................................................................................................1
 
SUMMARY
 
OF
 
OUR
 
BUSINESS,
 
STRENGTHS
 
AND
 
STRATEGY........................................................1
 
SUMMARY
 
FINANCIAL
 
INFORMATION................................................................................................6
 
THE
 
ISSUE..................................................................................................................................................10
 
GENERAL
 
INFORMATION......................................................................................................................15
 
CAPITAL
 
STRUCTURE............................................................................................................................25
 
OBJECTS
 
OF
 
THE
 
ISSUE..........................................................................................................................35
 
BASIS
 
FOR
 
ISSUE
 
PRICE.........................................................................................................................44
 
STATEMENT
 
OF
 
TAX
 
BENEFITS...........................................................................................................47
 
SECTION IV: ABOUT THE COMPANY
...............................................................................................53
 
INDUSTRY
 
OVERVIEW...........................................................................................................................53
 
OUR
 
BUSINESS.........................................................................................................................................65
 
DESCRIPTION
 
OF
 
CERTAIN
 
KEY
 
CONTRACTS..................................................................................97
 
REGULATIONS
 
AND
 
POLICIES............................................................................................................119
 
HISTORY
 
AND
 
CERTAIN
 
CORPORATE
 
MATTERS...........................................................................126
 
OUR
 
SUBSIDIARIES...............................................................................................................................131
 
OUR
 
MANAGEMENT.............................................................................................................................139
 
OUR
 
PROMOTERS
 
AND
 
PROMOTER
 
GROUP....................................................................................149
 
SECTION V - FINANCIAL INFORMATION
.....................................................................................169
 
FINANCIAL
 
STATEMENTS...................................................................................................................169
 
MANAGEMENT’S
 
DISCUSSION
 
AND
 
ANALYSIS
 
OF
 
FINANCIAL
 
CONDITION
 
AND
 
RESULTS
 
OF
 
OPERATIONS..........................................................................................................................................204
 
FINANCIAL
 
INDEBTEDNESS...............................................................................................................218
 
SECTION VI: LEGAL AND OTHER INFORMATION
....................................................................221
 
OUTSTANDING
 
LITIGATION
 
AND
 
MATERIAL
 
DEVELOPMENTS................................................221
 
GOVERNMENT
 
APPROVALS...............................................................................................................236
 
OTHER
 
REGULATORY
 
AND
 
STATUTORY
 
DISCLOSURES.............................................................243
 
SECTION VII: ISSUE RELATED INFORMATION
..........................................................................253
 
TERMS
 
OF
 
THE
 
ISSUE............................................................................................................................253
 
ISSUE
 
STRUCTURE................................................................................................................................256
 
ISSUE
 
PROCEDURE................................................................................................................................259
 
RESTRICTIONS
 
ON
 
FOREIGN
 
OWNERSHIP
 
OF
 
INDIAN
 
SECURITIES...........................................286
 
SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION
..........................287
 
SECTION IX: OTHER INFORMATION
.............................................................................................314
 
MATERIAL
 
CONTRACTS
 
AND
 
DOCUMENTS
 
FOR
 
INSPECTION...................................................314
 
DECLARATION.......................................................................................................................................317
 
ANNEXURE.............................................................................................................................................318
 
 
 i
SECTION I: GENERAL
 DEFINITIONS AND ABBREVIATIONSTerm Description
“We”, “us”, “our”, the“Issuer”, the “Company”,“our Company”,“Reliance Power”Unless the context otherwise indicates or implies, refers to Reliance PowerLimited and its Subsidiaries on a consolidated basis.
Company Related TermsTerm Description
AAA Project AAA Project Ventures Private Limited, one of our PromotersADAV Anil Dhirubhai Ambani Ventures Private Limited.Adlabs Adlabs Films LimitedArticles Articles of Association of our CompanyAuditors The Joint Statutory Auditors of our Company, M/s Chaturvedi & Shah,Chartered Accountants and Price Waterhouse, Chartered AccountantsBoard/ Board of Directors Board of Directors of our CompanyCAPL Coastal Andhra Power LimitedDirectors Directors of Reliance Power Limited, unless otherwise specified
 
Identified Projects Being the projects enumerated in the section titled “Objects of the Issue” forwhich the Net Proceeds from the Issue shall be utilizedKPPL Kalai Power Private LimitedMEGL Maharashtra Energy Generation LimitedMPPGPL MP Power Generation Private LimitedMemorandum Memorandum of Association of our CompanyPromoters Mr. Anil Dhirubhai Ambani, Reliance Energy Limited, Reliance InnoventuresPrivate Limited and AAA Project Ventures Private LimitedPromoter Group Unless the context otherwise specifies, includes those entities mentioned in thesection “Our Promoters and Promoter Group” on page 149 of this Red HerringProspectusRegistered and CorporateOffice of our CompanyH Block, First Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai400710RCL Reliance Capital LimitedRCOM Reliance Communications LimitedREL Reliance Energy Limited, one of our PromotersReliance Energy Trading Reliance Energy Trading LimitedReliance EnergyTransmissionReliance Energy Transmission LimitedRINL Reliance Innoventures Private Limited, one of our PromotersRNRL Reliance Natural Resources LimitedRPUPL Reliance Public Utility Private Limited

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