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NIRAJ CEMENT STRUCTURALS · PDF file NIRAJ CEMENT STRUCTURALS LIMITED (Company Identification Number: U26940MH1998PTC114307) (Originally incorporated in India as Niraj Cement Structurals

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  • xxvii

    NIRAJ CEMENT STRUCTURALS LIMITED

    Crisp.Clear.Connected

    RED HERRING PROSPECTUS

    Dated May 15,2008

    Please read Section 60B of the Companies Act, 1956

    (100 % Book Built Issue)

    NIRAJ CEMENT STRUCTURALS LIMITED (Company Identification Number: U26940MH1998PTC114307)

    (Originally incorporated in India as Niraj Cement Structurals Private Limited on April 1, 1998 under the Companies Act, 1956 and converted to Public Limited Company w.e.f. January 12, 2006.)

    Registered Office: Niraj House, Sunder Baug, Opp. Deonar Depot, Chembur, Mumbai - 400 088

    Tel. No.: +91-22-2551 3750/ 3541; Fax No.: +91-22-2551 8736; Website: http://www.niraj.co.in; E-mail: info@niraj.co.in

    Contact Person & Compliance Officer : Mr. Soni Agarwal, General Manager - Finance

    PUBLIC ISSUE OF 32,50,000 EQUITY SHARES OF RS. 10/- EACH FOR CASH AT A PRICE OF RS. [●] PER EQUITY SHARE AGGREGATING RS. [●] LAKHS (HEREINAFTER REFERRED TO AS “THE ISSUE”) BY NIRAJ CEMENT STRUCTURALS LIMITED (HEREINAFTER REFERRED TO AS “NCSL”

    OR THE “COMPANY” OR THE “ISSUER”). THE ISSUE COMPRISES OF RESERVATION FOR ELIGIBLE EMPLOYEES OF 3,25,000 EQUITY SHARES OF

    RS. 10/- EACH, AT THE ISSUE PRICE AND NET ISSUE TO THE PUBLIC OF 29,25,000 EQUITY SHARES OF RS. 10/- EACH (HEREINAFTER REFERRED

    TO AS THE “NET ISSUE”). THE ISSUE WOULD CONSTITUTE 31.42% OF THE TOTAL POST ISSUE PAID-UP EQUITY CAPITAL OF THE COMPANY*

    PRICE BAND: RS. 175/- TO RS. 190/-PER EQUITY SHARE OF RS. 10/- EACH

    THE FACE VALUE OF THE EQUITY SHARES IS RS. 10/- EACH. THE ISSUE PRICE IS 17.5 TIMES THE FACE VALUE AT THE LOWER END OF THE PRICE

    BAND AND 19.0 TIMES THE FACE VALUE AT THE HIGHER END OF THE PRICE BAND

    In case of revision in the Price Band, the Bidding/Issue Period will be extended for 3 additional working days after such revision, subject to the Bidding/ Issue

    Period not exceeding 10 working days. Any revision of Price Band and the revised Bid/Issue Period, if applicable will be widely disseminated by notification to

    Bombay Stock Exchange Limited (BSE) and The National Stock Exchange of India Limited (NSE), by issuing a press release, and also by indicating the change

    on the website of the Book Running Lead Manager (BRLM) and at the terminals of the Syndicate.

    The Issue is being made through the 100% book building process wherein upto 50% of the Net Issue to the public shall be offered on a proportionate basis to

    Qualified Institutional Buyers (QIBs). 5% of the QIB portion shall be available for allocation in a proportionate basis to Mutual Funds only. Further, not less than

    15% of the net issue to the public shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the net Issue to

    the public 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.

    RISKS IN RELATION TO THE FIRST ISSUE

    This being the first issue of Niraj Cement Structurals Limited, there has been no formal market for the shares of the Company. The face value of the shares is Rs.

    10/- and the Issue Price is [●] times of the face value. The Price band (has been determined by the Company in consultation with the Book Running Lead Manager

    on the basis of assessment of market demand for the Equity Shares offered by Book Building) 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 in the Equity Shares of the Company or

    regarding the price at which the Equity Shares will be traded after listing.

    GENERAL RISK

    Investment 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 offering. For taking an investment

    decision, investors must rely on their own examination of the Issuer and the Issue including the risk involved. The Equity Shares offered in the Issue have not been

    recommended or approved by the Securities and Exchange Board of India (SEBI) nor does the SEBI guarantee the accuracy or adequacy of this document.

    Specific attention of the investors is invited to the statement of “Risk Factors” beginning on page xii of the Red Herring Prospectus.

    ISSUER’S ABSOLUTE RESPONSIBILITY

    The Company, having made all reasonable inquiries, accepts responsibility for, and confirms that the Red Herring Prospectus contains all information with regard

    to the Company and the Issue, which is material in the context of the Issue; that the information contained in the Red Herring Prospectus is true and correct in all

    material respects 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 of which makes this document 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 this Prospectus are proposed to be listed on the BSE We have received in-principle approval from the BSE for the listing of our

    Equity Shares pursuant to letter dated DCS/IPO/SI/IPO-IP/1483/2007-08 dated December 17,2007. BSE shall be the Designated Stock Exchange.

    IPO GRADING

    TheIssue has been graded by CARE and has been assigned the ‘CARE IPO GRADE 1’ [Grade One] indicating poor fundamentals vide letter dated April 27,2007

    and revalidated vide letter dated April 02,2008 . For more information on IPO grading please refer to page 11 of this Red Herring Prospectus.

    ISSUE OPENS ON: MAY 26, 2008 (MONDAY)

    BOOK RUNNING LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

    Allbank Finance Limited (Wholly owned Subsidiary of Allahabad Bank)

    SEBI Registration No.: INM00006609

    2nd Floor, Allahabad Bank Building,

    37, Mumbai Samachar Marg, Fort,

    Mumbai - 400023

    Tel Fax No: 022-22677552

    E-mail: niraj_ ipo@allbankfinance.com

    Website: www.allbankfinance.com

    Contact Person: Mr. K.Shiv Shankar

    Intime Spectrum Registry Limited SEBI Registration No.: INR000003761

    C-13, Pannalal Silk Mills Compound

    LBS Marg, Bhandup (West)

    Mumbai - 400 078

    Tel: +91-22-2596 0320; Fax: +91-22-2596 0329

    Email: ncsl@intimespectrum.com

    Website: http://www.intimespectrum.com

    Contact Person: Mr. Sachin Achar

    ISSUE PROGRAMME

    ISSUE CLOSES ON: MAY 30, 2008 (FRIDAY)

  • i

    NIRAJ CEMENT STRUCTURALS LIMITED

    TABLE OF CONTENTS

    Section I - Definitions, Abbreviations and Technical Terms Page No.

    Definitions and Abbreviations ii

    Conventional /General Terms ii

    Issue Related Terms iii

    Glossary of Technical and Industry Related Terms vii

    Abbreviations of General Terms viii

    Section II - General

    Certain Conventions; Use of Market Data x

    Forward Looking Statements xi

    Section III - Risk Factors xii

    Section IV - Introduction

    Summary 1

    The Issue 4

    Summary of Financial Information and operating data 5

    General Information 7

    Capital Structure 14

    Section V - Objects of the Issue

    Objects of the Issue 23

    Basic Terms of the Issue 27

    Basis for Issue Price 29

    Statement of Tax Benefits 31

    Section VI - About Us

    Industry Overview 40

    Our Business 60

    Key Industry Regulations and Policies 75

    Our Corporate Structure 81

    Our Management 83

    Promoters and their Background 90

    Currency of Presentation 95

    Dividend Policy 96

    Section VII - Financial Information

    Financial Statements 97

    Management’s Discussion and Analysis of Financial Condition and Results of Operations 109

    as Reflected in the Financial Statements

    Section VIII - Legal and other Regulatory Information

    Outstanding Litigations involving company 123

    Statutory Approvals and Licenses 127

    Other Regulatory and Statutory Disclosures 131

    Section IX -Issue Related Information

    Issue Structure 139

    Issue Procedure 141

    Restrictions on Foreign Ownership of Indian Securities 169

    Section X - Description of Equity Shares and Terms of the Articles of Association

    Main Provisions of Articles of Association of the company 170

    Section XI -Other Information

    Material Contracts and Documents for Inspection 182

    Section XII -Declaration 184

  • ii

    NIRAJ CEMENT STRUCTURALS LIMITED

    SECTION I - GENERAL

    DEFINITIONS, ABBREVIATIONS AND TECHNICAL TERMS

    Definitions and Abbreviations

    Term Description

    “NCSL”, “the Company” and “our Unless the context otherwise require, refers to Niraj Cement

    Company”, “We” or “us” and “our” Structurals Limited, a Public limited company incorporated under

    the Companies Act, 1956 having its registered office at Niraj

    House, Sunder Baug, Opp. Deonar Depot, Chembur, Mumbai -

    400 088

    Conventional / General Terms

    Terms Description

    Articles / Articles of Association Articles of Association of Niraj Cement Structurals Limited

    Au

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