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Milestone Capital Advisors Ltd.

Milestone Capital Advisors Ltd.

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Published by: adhavvikas on May 05, 2011
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Milestone Capital Advisors Limited
(The Company was originally incorporated as Skyzen Investment Advisors Private Limited on June 7, 2005 at Mumbai as a private limited company under the Companies Act, 1956. For details of 
changes in the name and registered ofce of the Company, please see the section “History and Certain Corporate Matters” on page 83.)
Registered and Corporate Ofce:
602, Hallmark Business Plaza, Sant Dyaneshwar Marg, Opp. Guru Nanak Hospital, Bandra (East), Mumbai 400 051
Tel:
+91 22 42357000;
Fa:
+91 22 42357077
Contact Person
: Ravindra Gupta, Company Secretary and Compliance Ofcer 
Tel:
+91 22 42357000;
Fa:
+91 22 42357077;
Email:
ipo.investor@milestonecapital.in;
Website:
www.milestonecapital.in
PROMOTERS OF THE COMPANY:
 
VED PRAKASH ARYA AND MILESTONE FINCAP SERVICES PRIVATE LIMITED
PUBLIC ISSUE OF 4,285,715 EQUITY SHARES OF FACE VALUE OF Rs. 10 EACH OF MILESTONE CAPITAL ADVISORS LIMITED (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 TORs. [●] MILLION (THE “ISSUE”). THE ISSUE WILL CONSTITUTE 30.00% OF THE POST ISSUE PAID UP CAPITAL OF THE COMPANY.
The Company is also considering a Pre-IPO Placement of up to714,200 Equity Shares and aggregating up to Rs.400.00 million with certain investors (“Pre-IPO Placement”). The Company will complete the issuance
of such Equity Shares, if any, prior to the ling of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the Issue size would be reduced by the extent of such Pre-IPO Placement, subject toa minimum Issue size of 25% of the post Issue paid-up equity capital being offered to the public.
THE FACE VALUE OF EQUITY SHARES IS Rs. 10 EACH. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY THE COMPANY IN CONSULTATIONWITH THE BOOK RUNNING LEAD MANAGERS AND ADVERTISED AT LEAST TWO WORKING DAYS PRIOR TO THE BID/ISSUE OPENING DATE.
In case of any revision in the Price Band, the Bid/Issue Period will be extended by three additional Working Days after revision of the Price Band, subject to the Bid/Issue Period notexceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Issue Period, if applicable, will be widely disseminated by notication to the Bombay Stock ExchangeLimited (“BSE”) and the National Stock Exchange of India Limited (“NSE”), by issuing a press release, and also by indicating the change on the websites of the Book Running LeadManagers (“BRLMs”) and at the terminals of the Syndicate Members.In terms of Rule 19(2) (b) (i) of the Securities Contracts Regulations Rules, 1957 (“SCRR”), as amended, this is an issue for more than 25% of the post-Issue capital.The Issue is beingmade through the 100% Book Building Process wherein at least 50% of the Issue shall be allocated on a proportionate basis to Qualied Institutional Buyers (“QIB”) Bidders. Providedthat the Company may allocate up to 30% of the QIB Portion to Anchor Investors on a discretionary basis out of which one-third shall be reserved for domestic Mutual Funds. 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 beavailable for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 15%of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. If at least 50% of the Issue cannot be allocated to QIBs, then the entire applicationmoney shall be refunded forthwith. Potential investors may participate in this Issue through an Application Supported by Blocked Amount (“ASBA”) process providing details aboutthe bank account which will be blocked by the Self Certied Syndicate Bank (“SCSB”) for the same. For details, see the section “Issue Procedure” on page 217.
RISK IN RELATION TO THE FIRST ISSUE
This being the rst public issue of the Equity Shares of the Company, there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares is
Rs.10 each.
 
The Floor Price is [●] times of the face value and the Cap Price is [●] times of the face value.
 
The Issue Price (as has been determined and justied by the Company and theBRLMs as stated in the section “Basis for Issue Price” on page 39) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. Noassurance can be given regarding an active and/or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.
IPO GRADING
This Issue has been graded by [●] as [●], indicating [●].The IPO grade is assigned on a ve -point scale from 1 to 5, with IPO grade 5/5 indicating strong fundamentals and IPO grade1/5 indicating poor fundamentals. For details, please see the section “General Information” on page 15.
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 Company and the Issue, including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities andExchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents of this Draft Red Herring Prospectus. Specic attention of the investors is invitedto “Risk Factors” on page xii.
ISSUER’S ABSOLUTE RESPONSIBILITY
The Company, having made all reasonable inquiries, accepts responsibility for and conrms that this Draft Red Herring Prospectus contains all information with regard to the Companyand 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 notmisleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this Draft RedHerring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.
LISTING ARRANGEMENT
The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the BSE and the NSE. We have received an ‘in-principle’ approval from the BSE andthe 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 the [●].
BOOK RUNNING LEAD MANAGERSREGISTRAR TO THE ISSUE
IDFC CAPITAL LIMITED
 Naman Chambers, C-32G-Block, Bandra Kurla ComplexBandra (East)Mumbai 400 051
Tel: +91 22 6622 2600
Fax: +91 22 6622 2501Email: milestone.ipo@idfc.com
Investor grievance email: complaints@idfc.com
Website: www.idfccapital.comContact Person: Hiren RaipancholiaSEBI Registration No.: INM000011336
EDELWEISS CAPITAL LIMITED
14th Floor, Express Towers Nariman PointMumbai 400 021Tel: +91 22 4086 3535Fax: +91 22 4086 3610Email: milestone.ipo@edelcap.comInvestor Grievance Email:
customerservice.mb@edelcap.com
Website: www.edelcap.comContact Person: Sumeet Lath/Jibi JacobSEBI Registration No.: INM0000010650
ICICI SECURITIES LIMITED
ICICI Centre, H.T. Parekh Marg,Churchgate, Mumbai 400 020Tel: +91 22 2288 2460Fax: +91 22 2282 6580Email: milestone.ipo@icicisecurities.comInvestor Grievance Email: customercare@
icicisecurities.com
Website: www.icicisecurities.comContact Person: Vishal KanjaniSEBI Registration No.: INM000011179
KARVY COMPUTERSHAREPRIVATE LIMITED
Plot No. 17-24, Vittal Rao Nagar Madhapur, Hyderabad – 500 081Tel: +91 40 2342 0815Fax: +91 40 2343 1551Email: milestone@karvy.comWebsite: http://karisma.karvy.comContact Person: Murali KrishnaSEBI Registration No.: INR000000221
BID/ISSUE PROGRAMME*BID/ISSUE OPENS ON
[●]
 
BID/ISSUE CLOSES ON
[●]
 
*
The Company may consider participation by Anchor Investors. The Anchor Investor Bid/ Issue Period shall be one Working Day prior to the Bid/ Issue Opening Date.
DRAFT RED HERRING PROSPECTUS
 Dated June 23, 2010 Please read Section 60B of the Companies Act, 1956 
100% Book Building Issue
The Draft Red Herring Prospectus shall be updated upon ling with the RoC 
 
TABLE OF CONTENTS
SECTION I: GENERAL
...........................................................................................................................
I
DEFINITIONS AND ABBREVIATIONS ...................................................................................................
I
PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ................................................
Ix
FORWARD LOOKING STATEMENTS .....................................................................................................
xI
SECTION II: RISK FACTORS
 ................................................................................................................
xIISECTION III: INTRODUCTION
............................................................................................................
1
SUMMARY OF INDUSTRY ...................................................................................................................... 1SUMMARY OF BUSINESS ....................................................................................................................... 3SUMMARY FINANCIAL INFORMATION .............................................................................................. 9THE ISSUE .................................................................................................................................................. 14GENERAL INFORMATION ...................................................................................................................... 15CAPITAL STRUCTURE ............................................................................................................................. 24OBJECTS OF THE ISSUE .......................................................................................................................... 34BASIS FOR ISSUE PRICE ......................................................................................................................... 39STATEMENT OF TAx BENEFITS ............................................................................................................ 41
SECTION IV: ABOUT THE COMPANY
...............................................................................................
49
INDUSTRY OVERVIEW ............................................................................................................................ 49BUSINESS ................................................................................................................................................... 61REGULATIONS AND POLICIES .............................................................................................................. 80HISTORY AND CERTAIN CORPORATE MATTERS .............................................................................. 83MANAGEMENT ......................................................................................................................................... 92SUBSIDIARIES AND JOINT VENTURES ............................................................................................... 108PROMOTERS AND PROMOTER GROUP ............................................................................................... 117GROUP COMPANIES ................................................................................................................................ 120RELATED PARTY TRANSACTIONS ....................................................................................................... 125DIVIDEND POLICY ................................................................................................................................... 126
SECTION V: FINANCIAL INFORMATION
.........................................................................................
127
FINANCIAL STATEMENTS ...................................................................................................................... 127MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATION ......................................................................................................................................... 180
SECTION VI: LEGAL AND OTHER INFORMATION
.......................................................................
194
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS .................................................. 194GOVERNMENT APPROVALS .................................................................................................................. 198OTHER REGULATORY AND STATUTORY DISCLOSURES ................................................................ 200
SECTION VII: ISSUE INFORMATION
................................................................................................
210
TERMS OF THE ISSUE ............................................................................................................................. 210ISSUE STRUCTURE .................................................................................................................................. 213ISSUE PROCEDURE .................................................................................................................................. 217RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ........................................... 246
SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION
............................
247SECTION Ix: OTHER INFORMATION
...............................................................................................
259
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .................................................... 259DECLARATION.......................................................................................................................................... 261
 
 
i
SECTION I: GENERALDEFINITIONS AND ABBREVIATIONSTerm Description
“The Issuer”, “theCompany”, “our Company”
 Unless the context otherwise requires, refers to Milestone Capital Advisors Limited,a company incorporated under the Companies Act with its registered office at 602,Hallmark Business Plaza, Sant Dyaneshwar Marg, Opp. Guru Nanak Hospital,Bandra (East), Mumbai 400 051
“We”, “us”, “Our”
Unless the context otherwise requires, refers to Milestone Capital Advisors Limited,its Subsidiaries and Joint Ventures on a consolidated basis, as described herein
Company Related TermsTerm Description
Articles / Articles of AssociationThe Articles of Association of the CompanyAuditors The statutory auditors of the Company,
i.e.
G.M. Kapadia & Co., CharteredAccountantsBoard/ Board of Directors The board of directors of the Company or a duly constituted committee thereof Capstone Capital Capstone Capital Services Private LimitedDirector(s) The director(s) of the Company, unless otherwise specifiedEquity Shares Equity shares of the Company of face value of Rs. 10 each, unless otherwisespecifiedGroup Companies Companies, firms, ventures promoted by the Promoters, irrespective of whether suchentities are covered under Section 370(1B) of the Companies Act or not. For detailsof Group Companies of the Company, s
ee the section “Group Companies” on page
120IL&FS Milestone Realty IL&FS Milestone Realty Advisors Private LimitedJevir L&F Jevir Leasing and Finance LimitedJoint Ventures The joint ventures of the Company, namely, IL&FS Milestone Realty, MilestoneEcofirst, Milestone Religare and Capstone Capital and the joint venture of OmegaGlobal Mauritius Ltd., namely Milestone Religare Capital Management Ltd., asdefined hereinMemorandum/ Memorandum of AssociationThe memorandum of association of the CompanyMilestone Ecofirst Milestone Ecofirst Advisory Services (India) Private LimitedMilestone Fincap Milestone Fincap Services Private LimitedMilestone Investment Milestone Investment Advisory Services Private LimitedMilestone Religare Milestone Religare Investment Advisors Private LimitedMilestone PMS Milestone Portfolio Management Services Private LimitedMilestone Property Milestone Projects and Property Management Private LimitedMilestone Trusteeship Milestone Trusteeship Services Private LimitedOmega Global Omega Global Mauritius Ltd.Promoters Ved Prakash Arya and Milestone Fincap Services Private LimitedPromoter Group Unless the context otherwise requires, refers to such persons and entities whichconstitute the Promoter Group of the Company in terms of Regulation 2(zb) of theSEBI Regulations
and a list of which is provided in the section “Promoter 
s and
Promoter Group” on page
117Registered Office The registered office of the Company located at 602, Hallmark Business Plaza, SantDyaneshwar Marg, Opp. Guru Nanak Hospital, Bandra (East), Mumbai 400 051Subsidiaries The subsidiaries of the Company, namely, Milestone Property, Milestone PMS,Milestone Investment, Milestone Trusteeship, Jevir L&F and Omega Global asdefined herein. It also includes the subsidiaries of Omega Global, namely, Milestone

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