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RED HERRING PROSPECTUS
Dated October 18, 2016
Please read Section 32 of the Companies Act, 2013
Book Built Offer
(a PepsiCo franchisee)
VARUN BEVERAGES LIMITED Our Company was incorporated as Varun Beverages Limited on June 16, 1995 as a public limited company under the Companies Act, 1956, with the Registrar of Companies, NCT of Delhi and Haryana. Our
Company obtained a certificate for commencement of business on July 4, 1995. For further details of change in registered office of our Company, see History and Certain Corporate Matters on page 162.
Registered Office: F-2/7, Okhla Industrial Area, Phase I, New Delhi 110 020; Tel: +91 11 41706720
Corporate Office: Plot No. 31, Institutional Area, Sector 44, Gurgaon 122 002; Tel: +91 124 4643100, Fax: +91 124 4643303
Contact Person: Mahavir Prasad Garg, Company Secretary and Compliance Officer; Tel: +91 124 4643100; Fax: +91 124 4643303
E-mail: [email protected]; Website: www.varunpepsi.com
Corporate Identity Number: U74899DL1995PLC069839
OUR PROMOTERS: RJ CORP LIMITED, RAVI KANT JAIPURIA, VARUN JAIPURIA AND RAVI KANT JAIPURIA & SONS (HUF)
PUBLIC OFFER OF UP TO 25,000,000 EQUITY SHARES OF FACE VALUE OF 10 EACH (EQUITY SHARES) OF VARUN BEVERAGES LIMITED (OUR COMPANY OR THE
ISSUER) FOR CASH AT A PRICE OF [] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF [] PER EQUITY SHARE) AGGREGATING UP TO [] MILLION (THE
OFFER) CONSISTING OF A FRESH ISSUE OF UP TO 15,000,000 EQUITY SHARES AGGREGATING UP TO [] MILLION (THE FRESH ISSUE) AND AN OFFER FOR SALE OF UP
TO 5,000,000 EQUITY SHARES BY VARUN JAIPURIA (PROMOTER) AGGREGATING UP TO [] MILLION AND UP TO 5,000,000 EQUITY SHARES BY RAVI KANT JAIPURIA &
SONS (HUF) (PROMOTER) AGGREGATING UP TO [] MILLION (OFFER FOR SALE, AND VARUN JAIPURIA AND RAVI KANT JAIPURIA & SONS (HUF) COLLECTIVELY,
THE SELLING SHAREHOLDERS). THE OFFER COMPRISES A NET OFFER TO THE PUBLIC OF UP TO 24,500,000 EQUITY SHARES (THE NET OFFER) AND A RESERVATION
OF 500,000 EQUITY SHARES AGGREGATING UP TO [] MILLION FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED HEREIN), NOT EXCEEDING 5% OF OUR POST
OFFER PAID UP EQUITY SHARE CAPITAL (THE EMPLOYEE RESERVATION PORTION). THE OFFER WILL CONSTITUTE 13.74 % OF OUR POST OFFER PAID-UP EQUITY
SHARE CAPITAL AND THE NET OFFER WILL CONSTITUTE 13.47 % OF OUR POST OFFER PAID-UP EQUITY SHARE CAPITAL.
THE FACE VALUE OF EQUITY SHARES IS 10 EACH. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY IN CONSULTATION WITH THE
SELLING SHAREHOLDERS, THE GCBRLMS AND THE BRLM AND WILL BE ADVERTISED IN FINANCIAL EXPRESS (A WIDELY CIRCULATED ENGLISH NATIONAL DAILY
NEWSPAPER) AND JANSATTA (A WIDELY CIRCULATED HINDI NATIONAL DAILY NEWSPAPER WITH WIDE CIRCULATION IN NEW DELHI) AT LEAST FIVE WORKING DAYS
PRIOR TO THE BID/OFFER OPENING DATE AND SHALL BE MADE AVAILABLE TO THE BSE LIMITED (BSE) AND THE NATIONAL STOCK EXCHANGE LIMITED (NSE, AND
TOGETHER WITH BSE, THE STOCK EXCHANGES) FOR UPLOADING ON THEIR RESPECTIVE WEBSITES.
In case of any revision to the Price Band, the Bid/Offer Period will be extended by three additional Working Days after such revision of the Price Band, subject to the total Bid/Offer Period not exceeding 10
Working Days. Any revision in the Price Band and the revised Bid/Offer 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 website of the Book Running Lead Managers and at the terminals of the other members of the Syndicate.
In terms of Rule 19(2)(b)(iii) of the Securities Contracts (Regulation) Rules, 1957, as amended (SCRR), this is an Offer for at least 10% of the post-Offer paid-up Equity Share capital of our Company. In
accordance with Regulation 26(1) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (the SEBI ICDR Regulations), the Offer is
being made through the Book Building Process wherein not more than 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (QIBs) (the QIB
Portion), provided that our Company, in consultation with the Selling Shareholders, the GCBRLMs and the BRLM, may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis.
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. 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 Offer Price. Further, not less than 15% of the Net Offer shall
be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Offer 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 Offer Price. All potential Bidders, other than Anchor Investors, shall mandatorily participate in the Offer through an Application
Supported by Blocked Amount (ASBA) process by providing details of their respective bank account which will be blocked by the Self Certified Syndicate Banks (SCSBs). Anchor Investors are not
permitted to participate in the Anchor Investor Portion through ASBA process. For details, please see Offer Procedure on page 491.
RISKS IN RELATION TO THE FIRST OFFER
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 Offer Price (determined and justified by our Company in consultation with the Selling Shareholders, the GCBRLMs and the BRLM as stated under the
section Basis for Offer Price on page 110) 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 Offer 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 Offer. For taking an investment decision, investors must rely on their own examination of our Company and the Offer,
including the risks involved. The Equity Shares in the Offer 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 Red Herring Prospectus. Specific attention of the investors is invited to the section Risk Factors on page 22.
ISSUERS AND SELLING SHAREHOLDERS ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Red Herring Prospectus contains all information with regard to our Company and the Offer, which is
material in the context of the Offer, that the information contained in this 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 of which makes the 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. Further, the Selling Shareholders severally accept responsibility that this Red Herring Prospectus contains all information about themselves as the
Selling Shareholders in context of the Offer for Sale and severally accept responsibility for statements in relation to themselves included in this Red Herring Prospectus.
LISTING
The Equity Shares offered through this Red Herring Prospectus are proposed to be listed on the BSE and the NSE. 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 June 29, 2016 and July 5, 2016 respectively. For the purposes of the Offer, the Designated Stock Exchange shall be NSE. A copy of this Red Herring Prospectus has
been delivered for registration to the RoC and a copy of the Prospectus shall be delivered for registration to the RoC in accordance with Section 26(4) of the Companies Act, 2013. For details of the material
contracts and documents available for inspection from the date of the Red Herring Prospectus up to the Bid/Offer Closing Date, see Material Contracts and Documents for Inspection on page 543.
GLOBAL COORDINATORS AND BOOK RUNNING LEAD MANAGERS BOOK RUNNING LEAD
MANAGER
REGISTRAR TO THE OFFER
Kotak Mahindra Capital Company
Limited
1st Floor, 27 BKC, Plot No. 27
G Block, Bandra Kurla Complex
Bandra (East)
Mumbai 400 051
Tel: +91 22 4336 0000
Fax: +91 22 6713 2447
E-mail: [email protected]
Investor grievance E-mail:
Website:
www.investmentbank.kotak.com
Contact Person: Ganesh Rane
SEBI Registration No.: INM000008704
Axis Capital Limited
1st Floor, Axis House
C-2, Wadia International Centre
P.B. Marg, Worli
Mumbai 400 025
Tel: + 91 22 4325 2183
Fax : +91 22 4325 3000
E-mail: [email protected]
Investor grievance E-mail:
Website: www.axiscapital.co.in
Contact person: Lohit Sharma
SEBI Registration No.: INM000012029
CLSA India Private Limited
(formerly CLSA India Limited)
8/F, Dalamal House
Nariman Point
Mumbai 400 021
Tel: +91 22 6650 5050
Fax: +91 22 2284 0271
E-mail: [email protected]
Investor grievance E-mail:
Website: www.india.clsa.com
Contact person: Sarfaraz Agboatwala
SEBI Registration No: INM000010619
YES Securities (India) Limited
IFC 1 & 2, Unit no. 602 A
6th Floor, Senapati Bapat Marg
Elphinstone (W)
Mumbai 400 013
Telephone: +91 22 3347 9688
Fax: +91 22 2421 4511
E-mail: [email protected]
Investor Grievance E-mail:
Website: www.yesinvest.in
Contact Person: Aditya Vora
SEBI Registration No:
INM000012227
Karvy Computershare Private
Limited
Karvy Selenium Tower B
Plot 31 and 32, Gachibowli
Financial District, Nanakramguda
Hyderabad 500 032
Tel: +91 40 6716 2222
Fax: +91 40 2343 1551
Email:[email protected]
Investor Grievance e-mail: varun-
Website: www.karisma.karvy.com
Contact Person: M Murali Krishna
SEBI Registration No. INR000000221
BID/OFFER PROGRAMME
BID/OFFER OPENS ON OCTOBER 26, 2016 (Wednesday) (1)
BID/OFFER CLOSES ON OCTOBER 28, 2016 (Friday) (1) Our Company may, in consultation with the Selling Shareholders, the GCBRLMs and the BRLM, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor
Investor Bid/Offer Period shall be one Working Day prior to the Bid/Offer Opening Date.
(i)
TABLE OF CONTENTS
SECTION I: GENERAL ........................................................................................................................................................ 1 DEFINITIONS AND ABBREVIATIONS ............................................................................................................................. 1 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ........................................................................ 17 FORWARD-LOOKING STATEMENTS ............................................................................................................................ 20
SECTION: II RISK FACTORS .......................................................................................................................................... 22
SECTION III: INTRODUCTION ....................................................................................................................................... 53 SUMMARY OF INDUSTRY ............................................................................................................................................... 53 SUMMARY OF BUSINESS ................................................................................................................................................ 57 SUMMARY FINANCIAL INFORMATION ....................................................................................................................... 64 THE OFFER ......................................................................................................................................................................... 73 GENERAL INFORMATION ............................................................................................................................................... 74 CAPITAL STRUCTURE...................................................................................................................................................... 83 OBJECTS OF THE OFFER ................................................................................................................................................ 101 BASIS FOR OFFER PRICE ............................................................................................................................................... 110 STATEMENT OF TAX BENEFITS................................................................................................................................... 114
SECTION IV: ABOUT THE COMPANY ....................................................................................................................... 116 INDUSTRY OVERVIEW .................................................................................................................................................. 116 OUR BUSINESS ................................................................................................................................................................ 130 REGULATIONS AND POLICIES ..................................................................................................................................... 157 HISTORY AND CERTAIN CORPORATE MATTERS .................................................................................................... 162 OUR SUBSIDIARIES ........................................................................................................................................................ 170 OUR MANAGEMENT ...................................................................................................................................................... 174 OUR PROMOTERS AND PROMOTER GROUP ............................................................................................................. 189 OUR GROUP COMPANIES .............................................................................................................................................. 194 RELATED PARTY TRANSACTIONS ............................................................................................................................. 208 DIVIDEND POLICY .......................................................................................................................................................... 209
SECTION V: FINANCIAL INFORMATION ................................................................................................................. 210 RESTATED CONSOLIDATED FINANCIAL STATEMENTS ........................................................................................ 210 RESTATED STANDALONE FINANCIAL STATEMENTS ............................................................................................ 310 FINANCIAL INDEBTEDNESS......................................................................................................................................... 404 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IND AS ........................................ 406 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.................................................................................................................................................................... 413
SECTION VI: LEGAL AND OTHER INFORMATION ............................................................................................... 457 OUTSTANDING LITIGATION AND OTHER MATERIAL DEVELOPMENTS ........................................................... 457 GOVERNMENT AND OTHER APPROVALS ................................................................................................................. 467 OTHER REGULATORY AND STATUTORY DISCLOSURES ...................................................................................... 471
SECTION VII: OFFER INFORMATION ....................................................................................................................... 485 TERMS OF THE OFFER ................................................................................................................................................... 485 OFFER STRUCTURE ........................................................................................................................................................ 489 OFFER PROCEDURE ....................................................................................................................................................... 491 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES .................................................................... 531
SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION .............................................................. 532
SECTION IX: OTHER INFORMATION ........................................................................................................................ 543 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ............................................................................ 543 DECLARATION ................................................................................................................................................................ 545
1
SECTION I: GENERAL
DEFINITIONS AND ABBREVIATIONS
This 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, rule, guideline or policy
shall be to such legislation, act, regulation, rule, guideline or policy, as amended, supplemented or re-enacted from time to
time.
The words and expressions used in this Red Herring Prospectus but not defined herein, shall have, to the extent applicable,
the meaning ascribed to such terms under the Companies Act, the SEBI ICDR Regulations, the SCRA, the Depositories Act or
the rules and regulations made there under.
Notwithstanding the foregoing, terms used in of the sections Statement of Tax Benefits, Restated Consolidated Financial
Statements, Restated Standalone Financial Statements and Main Provisions of Articles of Association on pages 114,
210, 310 and 532, respectively, shall have the meaning ascribed to such terms in such sections.
General Terms
Term Description
our Company, the Company,
or the Issuer
Varun Beverages Limited, a company incorporated under the Companies Act, 1956,
having its registered office at F-2/7, Okhla Industrial Area, Phase I, New Delhi 110 020
we/us/our Unless the context otherwise indicates or implies, our Company, its Subsidiaries and its
associate, on a consolidated basis
Company Related Terms
Term Description
2015 Existing India Sub-Territories Delhi, Rajasthan, West Bengal, Goa, Arunachal Pradesh, Assam, Meghalaya, Manipur,
Mizoram, Nagaland, Tripura as well as certain designated parts of the following sub-
territories: Madhya Pradesh, Uttar Pradesh, Uttarakhand, Haryana and Maharashtra.
2015 New India Sub-Territories Punjab, Himachal Pradesh, Chandigarh UT, as well as the remaining parts of the
following sub-territories: Haryana, Uttarakhand and Uttar Pradesh.
ADBL Aradhana Drinks and Beverages Private Limited
AION AION Investments II Singapore Pte. Ltd.
AION Investment Agreement Securities purchase cum investment agreement dated September 18, 2015 between our
Company, AION Investments II Singapore Pte. Ltd. and Standard Chartered Private
Equity Mauritius II Limited
Articles of Association/AoA The articles of association of our Company, as amended
Audit Committee The audit committee of the Board of Director described in the section Our
Management on page 174
Board/Board of Directors The board of directors of our Company or a duly constituted committee thereof
Compulsorily Convertible
Debentures or CCDs
Compulsorily convertible debentures issued by our Company of face value of 1,000
each
CMCI Concentrate Manufacturing Company of Ireland
Compulsorily Convertible
Preference Shares or CCPSs
Compulsorily convertible preference shares of our Company of a face value of 100
each
Corporate Office Plot No. 31, Institutional Area, Sector 44, Gurgaon 122 002
DBL Devyani Beverages Limited
2
Term Description
DASMPL Devyani Airport Services (Mumbai) Private Limited
DEPL Devyani Enterprises Private Limited
DexPL Devyani Exim Private Limited (formerly Rajputana Stores (Jaipur) Private Limited)
DHRPL Devyani Hotels and Resorts Private Limited
DIL Devyani International Limited
DHRPL CCPSs 25,000,000 CCPSs issued to DHRPL at par pursuant to the DHRPL Investment
Agreement and converted into 5,681,818 Equity Shares on October 7, 2016
DHRPL Investment Agreement Investment agreement dated February 16, 2015 between our Company and DHRPL
Director(s) The director(s) of our Company
Equity Shares The equity shares of our Company of face value of 10 each
ESOS 2013 Employee Stock Option Scheme 2013
ESOS 2016 Employee Stock Option Scheme 2016
Group Companies Companies which are covered under the applicable accounting standards and other
companies as considered material by our Board. For details, please see Our Group
Companies on page 194
Investment Agreement Investment agreement dated July 18, 2011 between VBIL, SCPE, RJ Corp, Ravi Kant
Jaipuria & Sons (HUF) and Varun Jaipuria as amended by an amendment and
supplemental agreement dated September 29, 2012 and an amendment agreement dated
June 13, 2016
Key Management Personnel Key management personnel of our Company in terms of section 2(51) the Companies
Act, 2013, the SEBI ICDR Regulations and as disclosed in the section Our
Management on page 174
Memorandum of Association/MoA The memorandum of association of our Company, as amended
Non-Convertible Debentures or
NCDs
Unsecured redeemable non-convertible debentures of our Company (denominated in
rupees) of a face value of 10,000,000 listed on the wholesale debt market segment of
NSE
OSBPL Ole Spring Bottlers (Private) Limited
PepsiCo Refers to PepsiCo Inc., PepsiCo India, Seven-Up International, a division of CMCI,
Tropicana Products Inc. and/ or their affiliates, as applicable
PepsiCo India PepsiCo India Holding Private Limited (formerly known as PepsiCo India Holding
Limited)
PepsiCo India Agreements Refers collectively to the four bottling appointment and trademark license agreements,
two dated October 3, 2012 executed between our Company and PepsiCo Inc., one dated
October 3, 2012 between our Company and PepsiCo India and another effective from
June 13, 2016 between Tropicana Products Inc. and our Company, as amended from
time to time, as applicable
PepsiCo International Agreements Refers collectively, to the 12 bottling agreements entered into by our Company in
relation to our international operations and specifically, the (i) exclusive bottling
appointment agreement dated November 7, 2013 between PepsiCo Inc. and VBL
Lanka; (ii) exclusive bottling appointment agreement dated August 1, 2011 between
PepsiCo Inc. and VBL Lanka; (iii) exclusive bottling appointment agreement dated
August 1, 2011 between Seven-Up International, a division of CMCI and VBL Lanka;
(iv) bottling appointment and trademark license agreement dated October 30, 2013
3
Term Description
between Tropicana Products Inc and VBL Lanka; (v) exclusive bottling appointment
agreement dated December 1, 2011 between PepsiCo Inc. and VBNPL, (vi) exclusive
bottling appointment agreement dated December 1, 2011 between Seven-Up
International, a division of CMCI and VBNPL; (vii) exclusive bottling appointment
agreement dated September 1, 2010 between Seven-Up International, a division of
CMCI and VBZL; (viii) exclusive bottling appointment agreement dated September 1,
2010 between PepsiCo Inc. and VBZL; (ix) exclusive bottling appointment agreement
dated February 1, 2011 between PepsiCo Inc. and VBM; (x) exclusive bottling
appointment agreement dated February 1, 2011 between Seven-Up International, a
division of CMCI and VBM; (xi) exclusive bottling appointment agreement dated
December 18, 2008 between PepsiCo Inc. and VBML effective from January 25, 2009;
and (xii) exclusive bottling appointment agreement dated December 18, 2008 between
Seven-Up International, a division of CMCI and VBML effective from January 25,
2009, as amended from time to time, as applicable
PepsiCo International Entities Refers to PepsiCo Inc., Seven-Up International, a division of CMCI, Tropicana
Products Inc. and/ or their affiliates, as applicable, with whom our Company through its
Subsidiaries has entered into the PepsiCo International Agreements
Promoter Group Persons and entities constituting the promoter group of our Company in terms of
Regulation 2(1)(zb) of the SEBI ICDR Regulations, but excluding any persons and
entities apart from the following: (i) Accor Developers (Private) Limited, (ii) Accor
Industries (Private) Limited, (iii) Accor Solar Energy Private Limited, (iv) Africare
Limited, (v) Agarwal Cold Drinks Private Limited, (vi) Alisha Retail Private Limited,
(vii) Angelica Technologies Private Limited, (viii) Anuj Traders Private Limited, (ix)
Arctic International Private Limited, (x) Arctic Overseas Pte. Limited, (xi) Capital
Infracon Private Limited, (xii) Capital Towers Private Limited, (xiii) Cryoviva
International Pte. Ltd., (xiv) Cryoviva Singapore Pte. Ltd., (xv) D.J. Agri Industries
Private Limited, (xvi) Devyani Enterprises Private Limited, (xvii) Devyani Food
Industries Limited, (xviii) Devyani Hotels & Resorts Private Limited, (xix) Devyani
International Limited, (xx) Devyani Overseas Private Limited, (xxi) Diagno Labs
Private Limited, (xxii) Empire Stocks Private Limited, (xxiii) Farm2Plate Dairy
Produce Private Limited (formerly known as ABInbev India Private Limited), (xxiv)
Lineage Healthcare Limited, (xxv) Lunarmech Technologies Private Limited, (xxvi)
Modern Montessori International (India) Private Limited, (xxvii) Mumbai Rockets
Sports Private Limited, (xxviii) Parkview City Limited, (xxix) Pinnacle Constructions
Private Limited, (xxx) Pinnacle Infracon Limited, (xxxi) Pinnacle Town Planners
Private Limited, (xxxii) Pinnacle Township Private Limited, (xxxiii) Rajasthan
Beverages Private Limited, (xxxiv) Ratnaker Foods & Beverages Private Limited,
(xxxv) S V S India Private Limited, (xxxvi) Sellwell Foods and Beverages Private
Limited, (xxxvii) Shabnam Properties Private Limited, (xxxviii)Universal Dairy
Products Private Limited, (xil) Wellness Holdings Limited, (xl) Mr. Ravi Kant Jaipuria,
(xli) Ms. Dhara Jaipuria, (xlii) Mr. Varun Jaipuria, (xliii) Ms. Devyani Jaipuria, (xliv)
RJ Corp Limited, (xlv) Ravi Kant Jaipuria & Sons (HUF), (xlvi) Mr. Vivek Gupta,
(xlvii) Ms. Bela Jyoti Kumar Saha, (xlviii) Ms. Madhu Rajendra Prasad Jindal, (xlix)
Alaknanda Traders Private Limited, (l) Avni Securities Private Limited, (li) Chanda
Exports Private Limited, (lii) Gee Kay Builder & Development Services Private
Limited, (liii) Manog Securities Private Limited, (liv) Ragini Advisors Private Limited,
(lv) Stallion Advisors Private Limited, (lvi) Geld Consultancy Services Private Limited,
(lvii) Saha Sprague Limited, (lviii) Sara Ferrous Private Limited, (lix) SFT Syscon
Private Limited, (lx) SFT Technologies Private Limited, (lxi) Sankalp Lifespaces
Private Limited, (lxii) Dr. Naresh Trehan and Associates Health Services Private
Limited; and (lxiii) Lemon Tree Hotels Limited. For details, please see Our Promoters
and Promoter Group on page 189
Promoters The promoters of our Company namely, RJ Corp Limited, Ravi Kant Jaipuria, Varun
Jaipuria and Ravi Kant Jaipuria & Sons (HUF). For details, please see Our Promoters
and Promoter Group on page 189
Registered Office F-2/7, Okhla Industrial Area, Phase I, New Delhi 110 020
4
Term Description
Restated Consolidated Financial
Statements
The consolidated financial statements of our Companys assets and liabilities as at June
30, 2016, June 30, 2015, December 31, 2015, 2014, 2013 and 2012 and the consolidated
statements of profit and loss and cash flows for the six months periods ended June 30,
2016 and June 30, 2015 and for the years ended December 31, 2015, 2014, 2013 and
2012 of our Company prepared in accordance with Indian GAAP and the Companies
Act and restated in accordance with the SEBI ICDR Regulations and the Revised
Guidance Note on Reports in Company Prospectuses (Revised) issued by the ICAI,
together with the schedules, notes and annexures thereto
Restated Financial Statements Collectively, the Restated Consolidated Financial Statements and the Restated
Standalone Financial Statements
Restated Standalone Financial
Statements
The standalone financial statements of our Companys assets and liabilities as at June
30, 2016 and June 30, 2015, December 31, 2015, 2014, 2013, 2012 and 2011 and the
standalone statements of profit and loss and cash flows for the six months periods ended
June 30, 2016 and June 30, 2015 and for the years ended December 31, 2015, 2014,
2013, 2012 and 2011 of our Company prepared in accordance with Indian GAAP and
the Companies Act and restated in accordance with the SEBI ICDR Regulations and the
Revised Guidance Note on Reports in Company Prospectuses (Revised) issued by the
ICAI, together with the schedules, notes and annexures thereto
RJCL CCPSs 20,000,000 CCPSs issued to RJCL at par pursuant to the RJCL Investment Agreement
and converted into 4,545,455 Equity Shares on October 7, 2016
RJCL Investment Agreement Investment agreement dated October 20, 2014 between our Company and RJ Corp
RJ Corp RJ Corp Limited (formerly Arctic Drinks Private Limited)
RoC Registrar of Companies, NCT of Delhi and Haryana at 4th
Floor, IFCI Tower; 61, Nehru
Place, New Delhi 110 019
Sales Volume(s) Represents sales volume (in million litres and / or million unit cases) of our PepsiCo
products to our customers but does not include any sales to PepsiCo and/or any other
franchisees of PepsiCo.
SCPE Standard Chartered Private Equity (Mauritius) II Limited
Shareholders Shareholders of our Company
Statutory Auditors The statutory auditors of our Company, Walker Chandiok & Associates and O.P. Bagla
& Co.
Subsidiaries Subsidiaries of our Company (including any step-down subsidiary) set out in the section
Our Subsidiaries on page 170
VBIL Varun Beverages (International) Limited
VBL Lanka Varun Beverages Lanka (Private) Limited
VBM Varun Beverages Morocco SA
VBML Varun Beverages Mozambique, Limitada
VBNPL Varun Beverages (Nepal) Pvt. Ltd.
VBZL Varun Beverages (Zambia) Limited
VBZPL Varun Beverages (Zimbabwe) (Private) Limited
5
Offer 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 Unless the context otherwise requires, allotment of the Equity Shares pursuant to the
Fresh Issue and transfer of Equity Shares offered by the Selling Shareholders pursuant
to the Offer for Sale, to the successful Bidders
Allottee A successful Bidder to whom the Equity Shares are Allotted
Allotment Advice Note, 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
Anchor Investor A Qualified Institutional Buyer, applying under the Anchor Investor Portion in
accordance with the requirements specified in the SEBI ICDR Regulations and the Red
Herring Prospectus
Anchor Investor Allocation Price The price at which the Equity Shares will be allocated to Anchor Investors in terms of
the Red Herring Prospectus and the Prospectus which will be decided by our Company
in consultation with the Selling Shareholders, the GCBRLMs and the BRLM
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 Prospectus
Anchor Investor Bid/Offer Period The day which is one Working Day prior to the Bid/Offer Opening Date, on which Bids
by Anchor Investors shall be submitted and allocation to the Anchor Investors shall be
completed
Anchor Investor Offer 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 Offer Price but not higher than the Cap Price
The Anchor Investor Offer Price will be decided by our Company in consultation with
the Selling Shareholders, the GCBRLMs and the BRLM
Anchor Investor Portion Up to 60% of the QIB Portion consisting of up to 7,350,000 Equity Shares which may
be allocated by our Company in consultation with the Selling Shareholders, the
GCBRLMs and the BRLM to Anchor Investors on a discretionary basis
One-third of the Anchor Investor Portion shall be reserved for Mutual Funds, subject to
valid Bids being received from Mutual Funds at or above the Anchor Investors
Allocation Price
Application Supported by Blocked
Amount or ASBA
An application, whether physical or electronic, used by an ASBA Bidder, to make a Bid
and authorize a SCSB to block the Bid Amount in the ASBA Account
ASBA Account A bank account maintained with a SCSB and specified in the ASBA Form submitted by
Bidders for blocking the Bid Amount mentioned in the ASBA Form
ASBA Bid A Bid made by an ASBA Bidder including all revisions and modifications thereto as
permitted under the SEBI ICDR Regulations
ASBA Bidder All Bidders other than Anchor Investors
ASBA Forms An application form, whether physical or electronic, used by an ASBA Bidder and
which will be considered as an application for Allotment in terms of the Red Herring
Prospectus and the Prospectus
Axis Capital Axis Capital Limited
6
Term Description
Banker to the Offer/Escrow
Collection Bank
Bank which is a clearing member and registered with SEBI as banker to an issue and
with whom the Escrow Account will be opened, in this case being HDFC Bank Limited
Basis of Allotment The basis on which the Equity Shares will be Allotted to successful Bidders under the
Offer and which is described in the section Offer Procedure on page 491
Bid An indication to make an offer during the Bid/Offer Period by an ASBA Bidder
pursuant to submission of the ASBA Form, or during the Anchor Investor Bid/Offer
Period by the Anchor Investors pursuant to submission of Anchor Investor Application
Form, to subscribe to or purchase the Equity Shares of our Company at a price within
the Price Band, including all revisions and modifications thereto as permitted under the
SEBI ICDR Regulations
The term Bidding shall be construed accordingly
Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form and
payable by the Bidder or as blocked in the ASBA Account of the Bidder, as the case
may be, upon submission of the Bid
Bid cum Application Form The Anchor Investor Application Form or ASBA Form, as the context requires
Bid/Offer 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 Financial Express (a widely circulated English national daily newspaper) and
all editions of Jansatta (a widely circulated Hindi national daily newspaper with wide
circulation in Delhi)
Our Company may, in consultation with the Selling Shareholders, the GCBRLMs and
the BRLM, consider closing the Bid/Offer Period for QIBs one Working Day prior to
the Bid/Offer Closing Date in accordance with the SEBI ICDR Regulations
Bid/Offer 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 Financial Express (a widely circulated English national daily newspaper) and
all editions of Jansatta (a widely circulated Hindi national daily newspaper with wide
circulation in Delhi)
Bid/Offer Period Except in relation to Anchor Investors, the period between the Bid/Offer Opening Date
and the Bid/Offer Closing Date, inclusive of both days, during which prospective
Bidders can submit their Bids, including any revisions thereof
Bid Lot [] Equity Shares
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,
includes an Anchor Investor
Bidding Centers Centers at which the Designated Intermediaries shall accept the Bid cum Application
Forms, i.e, Designated SCSB Branch 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 Offer is being made
Broker Centres Broker centres 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)
7
Term Description
BRLM/Book Running Lead
Manager
YES Securities (India) Limited
CAN/Confirmation of Allocation
Note
Notice or intimation of allocation of the Equity Shares sent to Anchor Investors, who
have been allocated the Equity Shares, after the Anchor Investor Bid/Offer Period
Cap Price The higher end of the Price Band, above which the Offer Price and the Anchor Investor
Offer Price will not be finalised and above which no Bids will be accepted
Client ID Client identification number maintained with one of the Depositories in relation to the
demat account
CLSA CLSA India Private Limited
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
Cut-off Price Offer Price, finalised by our Company in consultation with the Selling Shareholders, the
GCBRLMs and the BRLM, which shall be any price within the Price Band
Only Retail Individual Bidders and the Eligible Employees Bidding in the Employee
Reservation Portion are entitled to Bid at the Cut-off Price. QIBs and Non-Institutional
Bidders are not entitled to Bid at the Cut-off Price
Demographic Details Details of the Bidders including the Bidders address, name of the Bidders
father/husband, investor status, occupation and bank account details
Designated CDP Locations Such locations of the CDPs where Bidders can submit the ASBA Forms to Collecting
Depository Participants
The details of such Designated CDP Locations, along with names and contact details of
the Collecting Depository Participants eligible to accept Bid cum Application Forms are
available on the respective websites of the Stock Exchanges (www.bseindia.com and
www.nseindia.com)
Designated Intermediaries/
Collecting Agent
Syndicate Member, sub-syndicate/agents, SCSBs, Registered Brokers, Brokers, the
CDPs and RTAs, who are authorized to collect Bid cum Application Forms from the
Bidders, in relation to the Offer
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/home
/list/5/33/0/0/Recognised-Intermediaries or at such other website as may be prescribed
by SEBI from time to time
Designated Date The date on which funds are transferred by the Escrow Collection Bank from the
Escrow Accounts 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, following which
the Board of Directors may Allot Equity Shares to successful Bidders in the Offer
Designated RTA Locations Such locations of the RTAs where Bidders can submit the ASBA Forms to RTAs
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).
Designated Stock Exchange NSE
Draft Red Herring Prospectus or
DRHP
The draft red herring prospectus dated June 21, 2016, issued in accordance with the
SEBI ICDR Regulations, which does not contain complete particulars of the price at
http://www.nseindia.com/
8
Term Description
which the Equity Shares will be Allotted and the size of the Offer
EBITDA Earnings before interest, taxes, depreciation, and amortisation
Eligible Employee All or any of the following:
(a) a permanent and full time employee of our Company (excluding such employees who are not eligible to invest in the Offer under applicable laws and
our Promoters and their immediate relatives) or any of our Subsidiaries as of
the date of filing of the Red Herring Prospectus with the RoC and who
continues to be an employee of our Company or any of our Subsidiaries, until
the submission of the Bid cum Application Form; and
(b) a Director of our Company (excluding Promoters who are Directors of our Company) who is eligible to apply under the Employee Reservation Portion
under applicable law and is resident in India
The maximum Bid Amount under the Employee Reservation Portion by an Eligible
Employee shall not exceed 200,000
Eligible NRI(s) NRI(s) from jurisdictions outside India where it is not unlawful to make an offer or
invitation under the Offer and in relation to whom the Bid cum Application Form and
the Red Herring Prospectus will constitute an invitation to subscribe or to purchase the
Equity Shares
Employee Reservation Portion The portion of the Offer being 500,000 Equity Shares aggregating up to [] million
available for allocation to Eligible Employees, on a proportionate basis
Escrow Account An account opened with the Escrow Collection Bank and in whose favour the Anchor
Investors will transfer money through direct credit/NEFT/RTGS in respect of the Bid
Amount when submitting a Bid
Escrow Agreement The agreement dated October 13, 2016 entered into between our Company, the Selling
Shareholders, the Registrar to the Offer, the GCBRLMs, the BRLM, the Escrow
Collection Bank, the public issue account bank (being HDFC Bank Limited) and the
Refund Bank for collection of the Bid Amounts from Anchor Investors transfer of funds
to Public Issue Account and where applicable, refunds of the amounts collected from
Anchor Investors, on the terms and conditions thereof
First Bidder Bidder whose name shall be mentioned 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
Offer Price and the Anchor Investor Offer Price will be finalised and below which no
Bids will be accepted
Fresh Issue The fresh issue of up to 15,000,000 Equity Shares of face value of 10 each for cash at
a price of [] each, aggregating up to [] million by our Company
General Information
Document/GID
The General Information Document prepared and issued in accordance with the circular
(CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by SEBI and updated
pursuant to the circulars (CIR/CFD/POLICYCELL/III/2015) dated November 10, 2015
and (SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016, suitably modified and
included in Offer Procedure on page 491
Global Coordinators and Book
Running Lead Managers or
GCBRLMs
Kotak Mahindra Capital Company Limited, Axis Capital Limited, and CLSA India
Private Limited
Kotak Kotak Mahindra Capital Company Limited
9
Term Description
Maximum RIB Allottees The maximum number of Retail Individual Bidders who can be allotted the minimum
Bid Lot. This is computed by dividing the total number of Equity Shares available for
Allotment to Retail Individual Bidders by the minimum Bid Lot
Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor Investor Portion), or 245,000 Equity
Shares which shall be available for allocation to Mutual Funds only
Mutual Funds Mutual funds registered with SEBI under the Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996
Net Offer The Offer less the Employee Reservation Portion, being up to 24,500,000 Equity Shares
aggregating up to [] million
Net Proceeds Proceeds of the Fresh Issue less our Companys share of the Offer expenses. For further
information about use of the Offer Proceeds and the Offer expenses, please see Objects
of the Offer on page 101
Non-Institutional Bidders All Bidders that are not QIBs or Retail Individual Bidders or Eligible Employees
Bidding in the Employee Reservation Portion and who have Bid for the Equity Shares
for an amount more than 200,000 (but not including NRIs other than Eligible NRIs)
Non-Institutional Portion The portion of the Offer being not less than 15% of the Net Offer comprising of
3,675,000 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 Offer
Price
Non-Resident A person resident outside India as defined under FEMA and includes a Non Resident
Indian, FVCIs, FIIs and FPIs
Offer The public issue of up to 25,000,000 Equity Shares of face value of 10 each for cash at
a price of [] each, aggregating up to [] million comprising the Fresh Issue and the Offer for Sale. The Offer comprises of Net Offer and Employee Reservation Portion.
Offer Agreement The agreement dated June 21, 2016 entered into between our Company, the Selling
Shareholders, the GCBRLMs and the BRLM, pursuant to which certain arrangements
are agreed to in relation to the Offer
Offer for Sale Offer for sale of up to 10,000,000 Equity Shares by the Selling Shareholders at the Offer
Price aggregating up to [] million comprising up to 5,000,000 Equity Shares by
Varun Jaipuria (Promoter) aggregating up to [] million and up to 5,000,000 Equity
Shares by Ravi Kant Jaipuria & Sons (HUF) (Promoter) aggregating up to [] million
Offer Price The final price at which the Equity Shares will be Allotted to Bidders other than Anchor
Investors. Equity Shares will be Allotted to Anchor Investors at the Anchor Investor
Offer Price in terms of the Red Herring Prospectus
The Offer Price will be decided by our Company in consultation with the Selling
Shareholders, the GCBRLMs and the BRLM on the Pricing Date
Offer Proceeds The proceeds of the Fresh Issue and the Offer for Sale that are available to our Company
and the Selling Shareholders, respectively
Price Band Price band of a minimum price of [] per Equity Share (Floor Price) and the maximum
price of [] per Equity Share (Cap Price) including any revisions thereof
The Price Band and the minimum Bid Lot size for the Offer will be decided by our
Company in consultation with the Selling Shareholders, the GCBRLMs and the BRLM
and will be advertised, at least five Working Days prior to the Bid/Offer Opening Date,
in all editions of Financial Express (a widely circulated English national daily
newspaper) and all editions of Jansatta (a widely circulated Hindi national daily
newspaper with wide circulation in Delhi)
10
Term Description
Pricing Date The date on which our Company in consultation with the Selling Shareholders, the
GCBRLMs and the BRLM, will finalise the Offer Price
Prospectus The Prospectus to be filed with the RoC after the Pricing Date in accordance with
Section 26 of the Companies Act, 2013, and the provisions of the SEBI ICDR
Regulations containing, inter alia, the Offer Price that is determined at the end of the
Book Building Process, the size of the Offer and certain other information including any
addenda or corrigenda thereto
Public Issue Account A bank account opened with the Bankers to the Offer by our Company under Section
40(3) of the Companies Act, 2013 to receive monies from the Escrow Account(s) and
from the ASBA Accounts on the Designated Date
QIB Category/QIB Portion The portion of the Net Offer (including the Anchor Investor Portion) being not more
than 50% of the Net Offer comprising of 12,250,000 Equity Shares which shall be
Allotted to QIBs including Anchor Investors
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 This red herring prospectus dated October 18, 2016 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
offered and the size of the Offer, including any addenda or corrigenda thereto
This Red Herring Prospectus has been registered with the ROC at least three Working
Days before Bid Offer Opening Date and will become the Prospectus upon filing with
the RoC after the Pricing Date
Refund Account The account opened with the Refund Bank, from which refunds, if any, of the whole or
part of the Bid Amount to Anchor Investors shall be made
Refund Bank HDFC Bank Limited
Registered Brokers Stock brokers registered with the stock exchanges having nationwide terminals, other
than the Members of the Syndicate, eligible to procure Bids in terms of circular no.
CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI
Registrar to the Offer or Registrar Karvy Computershare Private Limited
Registrar and Share Transfer
Agents or RTAs
Registrar 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 Agreement The agreement dated May 31, 2016 entered into between our Company, the Selling
Shareholders and the Registrar to the Offer in relation to the responsibilities and
obligations of the Registrar to the Offer pertaining to the Offer
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 Offer (including HUFs applying through their
Karta and Eligible NRIs)
Retail Portion The portion of the Net Offer being not less than 35% of the Net Offer consisting of
8,575,000 Equity Shares which shall be available for allocation to Retail Individual
Bidder(s) in accordance with the SEBI ICDR Regulations subject to valid Bids being
received at or above the Offer 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 Forms or any previous Revision form(s).
QIB Bidders and Non-Institutional Bidders are not allowed to withdraw or lower their
Bids (in terms of quantity and of Equity Shares or the Bid Amount) at any stage. Retail
11
Term Description
Individual Bidders cannot revise their Bids after the Bid/Offer Closing Date
Self Certified Syndicate Bank(s) or
SCSB(s)
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/home/list/5/33/0/0/Recognised-Intermediaries and
updated from time to time
Selling Shareholders Varun Jaipuria and Ravi Kant Jaipuria & Sons (HUF)
Share Escrow Agent Share escrow agent appointed pursuant to the Share Escrow Agreement namely Karvy
Computershare Private Limited
Share Escrow Agreement The agreement dated October 13, 2016 entered into between the Selling Shareholders,
our Company and the Share Escrow Agent in connection with the transfer of the
respective portion of Offered Shares by each of the Selling Shareholders and credit of
such Equity Shares to the demat account of the Allottees
Specified Locations Bidding centres where the Syndicate shall accept ASBA Forms, a list of which is
available on the website of SEBI at
www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries and updated
from time to time
Stock Exchanges BSE Limited and the National Stock Exchange of India Limited
Syndicate Agreement The agreement dated October 13, 2016 entered into between, the GCBRLMs, the
BRLM, the Syndicate Member, our Company, the Selling Shareholders and Registrar to
the Offer in relation to the collection of Bid cum Application Forms by the Syndicate
Member
Syndicate Member Intermediary registered with SEBI who is permitted to carry out activities as an
underwriter, in this case, Kotak Securities Limited
Syndicate or Members of the
Syndicate
The GCBRLMs, the BRLM and the Syndicate Member
Underwriters []
Underwriting Agreement The agreement dated [] to be entered into among the Underwriters, our Company and
the Selling Shareholders on or after the Pricing Date
Working Day Working Day, with reference to (a) announcement of Price Band; and (b) Bid/Offer
Period, shall mean all days, excluding Saturdays, Sundays and public holidays, on
which commercial banks in Mumbai are open for business; and (c) the time period
between the Bid/Offer Closing Date and the listing of the Equity Shares on the Stock
Exchanges, 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
YES Securities YES Securities (India) Limited
Technical/Industry Related Terms/Abbreviations
Term Description
CSD Carbonated Soft Drinks
CSO Central Statistics Office
CSR Corporate and social responsibility
F&B Food and Beverages
12
Term Description
GBO Global Brand Owner
GPRS General Packet Radio Services
IMF International Monetary Fund
LBN Local Brand Network
NBO National Brand Owner
NCB Non-Carbonated Beverages
Off-trade sales Sales that take place at retail outlets such as grocery stores, hypermarkets, super markets
etc.
On-trade sales Sales through consumer foodservice outlets that serve the general public in a non-
captive environment.
PET Polyethylene terephthalate
RGB Returnable Glass Bottles
RTD Ready-to-drink
SAMNA Sales Automation Management for the New Age
SKU Stock Keeping Unit
Conventional and General Terms or Abbreviations
Term Description
/Rs./Rupees/INR Indian Rupees
AGM Annual General Meeting
AIF Alternative Investment Fund as defined in and registered with SEBI under the Securities
and Exchange Board of India (Alternative Investments Funds) Regulations, 2012
AS/Accounting Standards Accounting Standards issued by the Institute of Chartered Accountants of India
BIS Act The Bureau of Indian Standards Act, 2016
Bn/bn Billion
Boilers Act Indian Boilers Act, 1923
BSE BSE Limited
C.P.C Civil Procedure Code, 1908
CAGR Compounded Annual Growth Rate
Category I Foreign Portfolio
Investors
FPIs who are registered with SEBI as Category I foreign portfolio investors under the
SEBI FPI Regulations
Category II Foreign Portfolio
Investors
FPIs who are registered with SEBI as Category II foreign portfolio investors under the
SEBI FPI Regulations
Category III Foreign Portfolio
Investors
FPIs who are registered with SEBI as Category III foreign portfolio investors under the
SEBI FPI Regulations
13
Term Description
CCI Competition Commission of India
CDSL Central Depository Services (India) Limited
CENVAT Central Value Added Tax
CESTAT Customs, Excise and Service Tax Appellate Tribunal
CGWA Central Ground Water Authority
CIN Corporate Identity Number
CIT Commissioner of Income Tax
Client ID Client identification number of the Bidders beneficiary account
CLRA Contract Labour (Regulation and Abolition) Act,1979
Companies Act Companies Act, 1956 and/or the Companies Act, 2013, as applicable
Companies Act, 1956 Companies Act, 1956, as amended (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, to the extent in force pursuant to the notification of the
Notified Sections
COPRA Consumer Protection Act, 1986
Cr.P.C Criminal Procedure Code, 1973
Depositories NSDL and CDSL
Depositories Act The 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 Participants Identification
DP/Depository Participant A depository participant as defined under the Depositories Act
DTC Direct Taxes Code
EC Act Essential Commodities Act, 1955
ECB External commercial borrowing
EGM Extraordinary General Meeting
Environment Act Environment Protection Act, 1986
EPS Earnings Per Share
Equity Listing Agreement Listing Agreement to be entered into with the Stock Exchanges on which the Equity
Shares of our Company are to be listed
ESI Act Employees State Insurance Act, 1948
FCNR Foreign Currency Non-Resident
FDI Foreign Direct Investment
14
Term Description
FDI Policy Consolidated Foreign Direct Investment Policy notified by DIPP by notification D/o IPP
F. No. 5(1)/2016-FC-1 dated June 7, 2016 effective from June 7, 2016
FEMA Foreign Exchange Management Act, 1999, read with rules and regulations thereunder
FEMA Regulations Foreign Exchange Management (Transfer or Issue of Security by a Person Resident
Outside India) Regulations, 2000, as amended
FII(s) Foreign Institutional Investors as defined under the SEBI FPI Regulations
Financial Year/FY/Fiscal Unless stated otherwise, the period of 12 months ending December 31 of that particular
year
FIPB Foreign Investment Promotion Board
FIR First Information Report
FPI(s) A foreign portfolio investor as defined under the SEBI FPI Regulations
FSSA Food Safety and Standards Act, 2006
FSSAI Food Safety and Standards Authority of India
FSSR Food Safety and Standards Rules, 2011
FVCI Foreign venture capital investors as defined and registered under the SEBI FVCI
Regulations
GAAR General Anti Avoidance Rules
GDP Gross Domestic Product
GIR General Index Register
GoI or Government Government of India
GST Goods and services tax
HUF Hindu Undivided Family
ICAI The Institute of Chartered Accountants of India
ICDS Income Computation and Disclosure Standards
IFRS International Financial Reporting Standards
Income Tax Act The Income Tax Act, 1961
Ind AS Indian Accounting Standards
Ind AS Rules Companies (Indian Accounting Standards) Rules, 2015
India Republic of India
Indian GAAP Generally Accepted Accounting Principles in India
IPC Indian Penal Code, 1860
IPO Initial Public Offering
IRDAI Insurance Regulatory and Development Authority of India
IST Indian Standard Time
15
Term Description
IT Information Technology
Legal Metrology Act Legal Metrology Act, 2009
LIBOR London Interbank Offered Rate
MICR Magnetic Ink Character Recognition
Mn Million
MV Act Motor Vehicles Act, 1988
N.A./NA Not Applicable
NAV Net Asset Value
NECS National Electronic Clearing Services
NEFT National Electronic Fund Transfer
NI Act Negotiable Instruments Act, 1881
Notified Sections The sections of the Companies Act, 2013 that have been notified by the Ministry of
Corporate Affairs, Government of India
NRE Account Non Resident External Account
NRI A person resident outside India, who is a citizen of India or a person of Indian origin, and
shall have the meaning ascribed to such term in the Foreign Exchange Management
(Deposit) Regulations, 2000
NRO Account Non Resident Ordinary Account
NSDL National Securities Depository Limited
NSE The 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 Offer
p.a. Per annum
P/E Ratio Price/Earnings Ratio
Packaged Commodities Rules Legal Metrology (Packaged Commodities) Rules, 2011
PAN Permanent Account Number
PAT Profit After Tax
PFA Prevention of Food Adulteration Act, 1954
RBI The Reserve Bank of India
RoNW Return on Net Worth
RTGS Real Time Gross Settlement
SCRA Securities Contracts (Regulation) Act, 1956
16
Term Description
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 Investments Funds) Regulations,
2012
SEBI FII Regulations Securities and Exchange Board of India (Foreign Institutional Investors) Regulations,
1995
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 Investor) 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 United States Securities Act of 1933
SICA Sick Industrial Companies (Special Provisions) Act, 1985
Sq. ft. Square feet
State Government The government of a state in India
Stock Exchanges The BSE and the NSE
STT Securities Transaction Tax
Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011
U.K. United Kingdom
U.S./U.S.A/United States United States of America
US GAAP Generally Accepted Accounting Principles in the United States of America
USD/US$ United States Dollars
VAS Value Added Services
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
17
PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
Certain Conventions
All references in this Red Herring Prospectus to India are to the Republic of India and all references to the U.S., U.S.A
or United States are to the United States of America. Further, all references to following countries are:
S.N. Reference Country
1. Kenya Republic of Kenya
2. Morocco Kingdom of Morocco
3. Mozambique Republic of Mozambique
4. Nepal Federal Democratic Republic of Nepal
5. Singapore Republic of Singapore
6. Sri Lanka Democratic Socialist Republic of Sri Lanka
7. Zambia Republic of Zambia
8. Zimbabwe Republic of Zimbabwe
Unless stated otherwise, all references to page numbers in this Red Herring Prospectus are to the page numbers of this Red
Herring Prospectus.
Financial Data
Unless stated otherwise, the financial information in this Red Herring Prospectus is derived from our Restated Financial
Statements prepared in accordance with the Companies Act and Indian GAAP and restated in accordance with the SEBI
ICDR Regulations.
Our Company did not have a Subsidiary in Fiscal 2011 and hence financial information included herein is derived from our
Restated Standalone Financial Statements for Fiscal 2011. Following the consolidation of certain of our Subsidiaries from
Fiscal 2012 onwards, pursuant to the amalgamation of Varun Beverages International Limited into the Company with effect
from January 1, 2012, the financial information included herein is derived from our Restated Consolidated Financial
Statements for Fiscal 2012, 2013, 2014 and 2015.
In this 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 percentage figures have been
rounded off to two decimal places and accordingly, there may be consequential changes in this RHP.
Historically, under the Companies Act, 1956, companies had the freedom to fix any annual period as their Financial Year,
however, with the introduction of the Companies Act, 2013, the Financial Year of company is required to be from April 1 to
March 31 each year. Our Companys financial year commences on January 1 and ends on December 31; accordingly, all
references to a particular financial year, unless stated otherwise, are to the 12 month period ended on December 31 of that
year. Our Financial Year ending of December 31 was approved pursuant to an order dated December 15, 2015 issued by the
Company Law Board, New Delhi.
There are significant differences between Indian GAAP, U.S. GAAP and IFRS. Our Company does not provide reconciliation
of its financial information to IFRS or U.S. GAAP. Our Company has not attempted to explain those differences or quantify
their impact on the financial data included in this Red Herring Prospectus and it is urged that you consult your own advisors
regarding such differences and their impact on our financial data. Accordingly, the degree to which the financial information
included in this Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of
familiarity with Indian accounting policies and practices, the Companies Act, the Indian GAAP and the SEBI ICDR
Regulations. Any reliance by persons not familiar with Indian accounting policies and practices on the financial disclosures
presented in this Red Herring Prospectus should accordingly be limited.
Unless the context otherwise indicates, any percentage amounts, as set forth in the sections Risk Factors, Our Business,
Managements Discussion and Analysis of Financial Conditional and Results of Operations on pages 22, 130 and 413,
respectively, and elsewhere in this Red Herring Prospectus have been calculated on the basis of our Restated Financial
Statements prepared in accordance with Companies Act and Indian GAAP and restated in accordance with the SEBI ICDR
Regulations.
EBITDA presented in this Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not
required by, or presented in accordance with, Indian GAAP, IFRS or US GAAP. Furthermore, EBITDA is not a measurement
of our financial performance or liquidity under Indian GAAP, 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 Indian
GAAP, 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.
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Important Note on Sales Volume Information
The Sales Volume information presented in this Red Herring Prospectus represents sales to our customers in our licensed
territories but does not include any sales to PepsiCo or any other franchisees of PepsiCo. Sales to PepsiCo and / or other
PepsiCo franchisees are reflected in our revenues from operations. However, such sales have not been significant in the last
five Fiscals and in the six months ended June 30, 2016. We do not make any such sales other than in India. Sales Volume
information in any Fiscal period included in this Red Herring Prospectus cannot be directly correlated to our revenues from
operations in the respective Fiscal.
Important Note on Introduction of Ind AS and its Impact on Preparation and Presentation of our Historical and
Future Financial Statements
The Ministry of Corporate Affairs (MCA) has notified the Companies (Indian Accounting Standards) Rules, 2015 on
February 16, 2015 providing revised roadmap on implementation of Indian Accounting Standards (Ind AS) which
stipulates implementation of Ind AS in a phased manner beginning from accounting period 2016 2017 (MCA Roadmap).
Our Companys debt securities are listed and it had a net worth of less than 5,000 million as at December 31, 2014 and a net
worth of more than 5,000 million as at December 31, 2015.
Pursuant to the clarification provided by Bulletin 1 issued by the Ind AS Transition Facilitation Group (ITFG) if the net worth
of a company has or is expected to exceed 5,000 million after March 31, 2014, such company will be required to apply Ind
AS from the immediate next accounting year in the manner specified in sub-rule (1). Since the net worth of our Company
exceeded 5,000 million in the year ended December 31, 2015, Ind AS shall be applicable from the year ended December 31,
2017, with comparatives for the periods ended December 31, 2016. The transition date of convergence with Ind AS shall be
January 1, 2016.
Given that Ind AS differs in many respects from Indian GAAP, our financial statements relating to any period subsequent to
January 1, 2017 (and for any prior comparative periods) may not be comparable to our historical financial statements
prepared under Indian GAAP. There can be no assurance that the adoption of Ind AS will not materially affect the preparation
and presentation of our financial statements in the future. In addition, there can be no assurance that if Ind AS were to be
applied to our historical financial statements prepared under Indian GAAP, there will not be material differences in applicable
accounting policies and standards that will require material adjustments to our historical financial statements prepared under
Indian GAAP.
We have not completed the preparation of any of our financial statements in accordance with Ind AS, and are in the process
of evaluating the difference in accounting policies and practices under Ind AS and Indian GAAP that may be reasonably
expected to impact the preparation and presentation of our future financial statements, and, to the extent applicable, our
historical financial statements, in accordance with Ind AS. The preparation of our standalone and consolidated financial
statements in accordance with Ind AS may require our management to make judgments, estimates and assumptions based
upon managements evaluation of the relevant facts and circumstances as on the date of the relevant financial statements, and
such estimates and underlying assumptions may be reviewed in the future on an on-going basis. For further information, see
Risk Factors - Our Company, will be required to prepare financial statements under Ind AS (which is Indias convergence to
IFRS). Additionally, Ind AS requires Indian companies to compute Income Tax under the Income Computation and
Disclosure Standards (the ICDS). The transition to Ind AS in India is very recent and there is no clarity on the impact of
such transition on our Company. Ind AS also differs from IFRS and US GAAP. The introduction of Ind AS and other
regulatory developments affecting fiscal matters in India may significantly affect preparation and presentation of our financial
statements in the future and such financial statements prepared in accordance with Ind AS may differ from the Restated
Standalone Financial Statements and the Restated Consolidated Financial Statements included in this Red Herring Prospectus.
Please see Summary of Significant Differences between Indian GAAP and Ind AS and Managements Discussion and
Analysis of Financial Condition and Results of Operations Introduction of Ind AS and Impact on Preparation and
Presentation of our Historical and Future Financial Statements on pages 406 and 415, respectively.
Currency and Units of Presentation
All references to:
KES are to Kenyan Shilling, the official currency of Kenya;
LKR are to Sri Lankan Rupees, the official currency of Sri Lanka;
MAD are to Moroccan dirham, the official currency of Morocco;
MZN are to Metical, the official currency of Mozambique;
NPR are to Nepalese Rupee, the official currency of Nepal;
19
Rupees or or INR or Rs. are to Indian Rupee, the official currency of the Republic of India;
SGD are to Singapore Dollar, the official currency of Singapore;
USD or US$ are to United States Dollar, the official currency of the United States; and
ZMK/ZMW are to Zambian kwacha, the official currency of Zambia.
Our Company has presented certain numerical information in this Red Herring Prospectus in million units. One million
represents 1,000,000 and one billion represents 1,000,000,000.
Exchange Rates
This 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.
The following table sets forth, for the periods indicated, information with respect to the exchange rate between the Rupee and
other currencies:
(Amount in , unless otherwise specified)
Currency As on
December 31,
2011(2)
As on
December 31,
2012(2)
As on
December 31,
2013(2)
As on
December 31,
2014(2)
As on
December 31,
2015(2)
As on June 30,
2016(2)
1 KES 0.63 0.63 0.70 0.69 0.64 0.66
1 LKR 0.48 0.43 0.47 0.48 0.45 0.45
1 MAD 6.30 6.49 7.47 7.02 6.67 6.88
1 MZN 2.03 1.84 2.05 1.91 1.40 1.06
1 NPR 0.63 0.62 0.62 0.61 0.61 0.61
1 SGD 41.78 44.68 48.69 48.05 46.81 50.08
1 US$ 53.27(1)
54.78 61.90 63.33 66.33 67.62
1 ZMK/ZMW(3)
0.01 0.01 11.09 9.89 6.00 6.33
Source: RBI Reference Rate and www.oanda.com
1. Exchange rate as on December 30, 2011, as RBI Reference Rate is not available for December 31, 2011 being a Saturday
2. Exchange rate is rounded off to two decimal places
3. On January 1, 2013 the ZMK was rebased to the ZMW (1000 ZMK = 1 ZMW)
Industry and Market Data
Unless stated otherwise, industry and market data used in this Red Herring Prospectus has been obtained or derived from
publicly available information as well as industry publications, other sources and the report titled Soft Drinks in India dated
March 2016 issued by Euromonitor International Ltd which includes the following disclaimer:
Information in this RHP on the Soft Drinks markets is from independent market research carried out by Euromonitor
International Limited but should not be relied upon in making, or refraining from making, any investment decision.
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 Red Herring Prospectus is
reliable, it has not been independently verified by us or the GCBRLMs and the BRLM or any of their affiliates or advisors.
The data used in these sources may have been re-classified 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 22.
The extent to which the market and industry data used in this Red Herring Prospectus is meaningful depends on the readers
familiarity with and understanding of the methodologies used in compiling such data. There are no standard data gathering
methodologies in the industry in which business of our Company is conducted, and methodologies and assumptions may vary
widely among different industry sources.
In accordance with the SEBI ICDR Regulations, the section Basis for the Offer Price on page 110 includes information
relating to our peer group companies. Such information has been derived from publicly available sources, and neither we, nor
the GCBRLMs or the BRLM have independently verified such information.
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FORWARD-LOOKING STATEMENTS
This Red Herring Prospectus contains certain forward-looking statements. These forward-looking statements generally can
be identified by words or phrases such as aim, anticipate, believe, expect, estimate, intend, objective, plan,
project, will, will continue, will pursue or other words or phrases of similar import. Similarly, statements that
describe our strategies, objectives, plans, prospects or goals are also forward-looking statements. All forward-looking
statements 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.
Actual results may differ materially from those suggested by the forward-looking statements due to risks or uncertainties
associated with the expectations with respect to, but not limited to, regulatory changes pertaining to the industries in India in
which our Company operates 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 in
India which have an impact on its 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 the industries in which we operate. Important factors that could cause actual results to differ materially from
our Companys expectations include, but are not limited to, the following:
Termination or non-renewal of the our agreements with PepsiCo;
Inability to maintain our competitive position in India and in our other markets;
Failure to integrate businesses we have acquired with our existing operations;
Interruption in the supply or significant increase in the price of raw materials or packaging materials;
Adverse weather conditions during peak sales seasons;
Changes in consumer preferences leading to reduction in demand of our products;
Contamination or deterioration of our beverages resulting in legal liability;
Significant interruption in production at our production facilities;
An inability to repay our substantial indebtedness in a timely manner or comply with various financial and other covenants;
Scarcity or non-availability of quality water;
Any withdrawal, or termination of, or unavailability of tax benefits we currently avail;
Failure to maintain sufficient insurance coverage to cover all possible losses and liabilities associated with our business; and
General economic and business conditions in India and other countries.
For further discussion of factors that could cause the actual results to differ from the expectations, please see Risk Factors,
Our Business and Managements Discussion and Analysis of Financial Condition and Results of Operations on pages 22,
130 and 414, 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 gains or losses could materially differ from those that have been
estimated.
We cannot assure Bidders that the expectations reflected in these forward-looking statements will prove to be correct. Given
these uncertainties, Bidders are cautioned not to place undue reliance on such forward-looking statements and not to regard
such statements as a guarantee of future performance.
Forward-looking statements reflect the current views of our Company as of the date of this Red Herring Prospectus and are
not a guarantee of future performance. These statements are based on the managements beliefs and assumptions, which in
turn are based on currently available information. Although we believe the assumptions upon which these forward-looking
statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking
statements based on these assumptions could be incorrect. Neither our Company, our Directors, the GCBRLMs, the BRLM
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, the GCBRLMs and BRLM will ensure that the Bidders in
21
India are informed of materi
