CONTENT:

1.

INTRODUCTION............................................................................................... 2
1.1

2.

PUBLIC OFFER AND PRIVATE PLACEMENT...............................................2

INITIAL PUBLIC OFFERING (IPO).....................................................................4

2.1 Key terms used in an IPO...................................................................................7
2.2 Types of IPO................................................................................................ 12
2.3 Intermediaries............................................................................................... 13
2.4 Types of Investors.......................................................................................... 14
2.5Entry Norms for an IPO...................................................................................... 15
2.6 Green shoe Option......................................................................................... 17
2.7 IPO Process................................................................................................. 20

3.

IPO PERFORMANCE...................................................................................... 23

4.

CRITICAL DISCLOSURE IN OFFER DOCUMENT..............................................26

4.1

ISSUE DETAILS........................................................................................ 27

REFERENCE......................................................................................................... 76

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1. INTRODUCTION
1.1 PUBLIC OFFER AND PRIVATE PLACEMENT
Issuers have two options for accessing funding, a public offering or a private placement.
Each of these options has distinct advantages or disadvantages that may affect funding costs
and/or the timing of a bond issue.
PUBLIC OFFERING
In a public offering, the issuer publicizes the upcoming bond issue, provides the timeframe
and platform for which bids will be accepted, and provides any additional guidelines or
details related to the bond issue. Generally, the winning bidder(s) is the one who has offered
the lowest total interest costs, including all costs of issuance and underwriter fees. The two
methods by which an issuer can sell bonds to the public are a negotiated sale and a
competitive sale.
Competitive Sale
In a competitive sale, the upcoming bond issue is advertised for sale. The advertisement, or
notice of sale, includes the terms of the sale and the terms of the bond issue. Any investor,
whether it is a broker-dealer, bank, or individual investor, may bid on the bonds at the
designated date and time.
Negotiated Sale
This method of sale is known as negotiate because the terms of the bonds and the terms of
the sale are negotiated by the issuer and the bond purchaser. If the issuer does not have the
knowledge or experience to effectively negotiate bond terms, an independent financial
advisor can serve as a third party negotiator.
In a negotiated sale, an issuer or financial advisor has preliminary discussions with one or
more underwriters to determine which underwriter will offer the best terms. Early on in this
process, an underwriter will typically talk to investors to get a measure of the level of interest
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before establishing the final bond pricing. Terms of the bonds are then tailored to meet
market demand for the bonds, as well as the needs of the issuer. Once these details have been
examined, the issuer selects an underwriter to purchase the bonds. The underwriter, in turn,
sells the bonds to investors.

PRIVATE PLACEMENT
Private placement provides funding through direct negotiation with one or a select number of
private financial institutions. The private financial institution is effectively providing a loan
to the issuer that must be repaid over time. In general, private placements do not have to be
registered with the Securities and Exchange Commission and do not require many of the
disclosure requirements found in public offerings. As such, private placement bonds are not
publicly issued or publicly traded and typically do not require a rating from a credit rating
agency.

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2. INITIAL PUBLIC OFFERING (IPO)

Initial public offering (IPO) or stock market launch is a type of public offering in which
shares of stock in a company usually are sold to institutional investors that in turn sell to the
general public, on a securities exchange, for the first time. Through this process, a private
company transforms into a public company. Initial public offerings are used by companies to
raise expansion capital, to possibly monetize the investments of early private investors, and
to become publicly traded enterprises. A company selling shares is never required to repay
the capital to its public investors. After the IPO, when shares trade freely in the open market,
money passes between public investors. Although IPO offers many advantages, there are also
significant disadvantages, chief among these are the costs associated with the process and the
requirement to disclose certain information that could prove helpful to competitors, or create
shaky bridge with the existing vendors. The IPO process is colloquially known as going
public.
Details of the proposed offering are disclosed to potential purchasers in the form of a lengthy
document known as a prospectus. Most companies undertake an IPO with the assistance of
an investment banking firm acting in the capacity of an underwriter. Underwriters provide
several services, including help with correctly assessing the value of shares (share price) and
establishing a public market for shares (initial sale).

REASONS FOR IPO

For funding needs

Funding Capital Requirements for Organic Growth

Expansion through Projects

Diversification

Funding Global Requirements

Funding Joint Venture and Collaborations needs

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Funding Infrastructure Requirements, Marketing Initiatives

Distribution Channels

Financing Working Capital Requirements

Funding General Corporate Purposes

Investing in businesses through other companies

Repaying debt to strengthen the Balance Sheet

Meeting Issue Expenses

For Non-funding Needs

Enhancing Corporate Stature

Retention and incentive for Employees through stock options

Provide liquidity to the shareholders

ADVANTAGES
When a company lists its securities on a public exchange, the money paid by the investing
public for the newly issued shares goes directly to the company (primary offering) as well as
to any early private investors who opt to sell all or a portion of their holdings (secondary
offering) as part of the larger IPO. An IPO, therefore, allows a company to tap into a wide
pool of potential investors to provide itself with capital for future growth, repayment of debt,
or working capital. A company selling common shares is never required to repay the capital
to its public investors. Those investors must endure the unpredictable nature of the open
market to price and trade their shares. After the IPO, when shares trade freely in the open
market, money passes between public investors. For early private investors who choose to
sell shares as part of the IPO process, the IPO represents an opportunity to monetize their
investment. After the IPO, once shares trade in the open market, investors holding large
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blocks of shares can either sell those shares piecemeal in the open market, or sell a large
block of shares directly to the public, at a fixed price, through a secondary market offering.
This type of offering is not dilutive, since no new shares are being created.
Once a company is listed, it is able to issue additional common shares in a number of
different ways, one of which is the follow-on offering. This method provides capital for
various corporate purposes through the issuance of equity without incurring any debt. This
ability to quickly raise potentially large amounts of capital from the marketplace is a key
reason many companies seek to go public.
An IPO accords several benefits to the previously private company:

Enlarging and diversifying equity base

Enabling cheaper access to capital

Increasing exposure, prestige, and public image

Attracting and retaining better management and employees through liquid equity
participation

Facilitating acquisitions (potentially in return for shares of stock)

Creating multiple financing opportunities: equity, convertible debt, cheaper bank

loans, etc.

DISADVANTAGES
There are several disadvantages to completing an initial public offering:

Significant legal, accounting and marketing costs, many of which are ongoing

Requirement to disclose financial and business information

Meaningful time, effort and attention required of senior management

Risk that required funding will not be raised

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Public dissemination of information which may be useful to competitors, suppliers

and customers.

Loss of control and stronger agency problems due to new shareholders

Increased risk of litigation, including private securities class actions and shareholder
derivative actions

2.1 Key terms used in an IPO

1. IPO: IPO stands for Initial Public Offer. An IPO is the first sale of shares of a company to
the general public. The promoters of the company, after complying with the various
guidelines of SEBI (Securities and Exchange Board of India) and the companies Act, ask the
public at large to subscribe to their shares so that they can generate capital and utilize the
same for expanding their business. A successful IPO can raise a substantially huge amount of
capital.
2. FPO: FPO stands for Follow-on Public Offer. Once a company comes with an IPO, it gets
listed on the stock exchanges. After a certain period of time, if the company again intends to
raise capital from the general public, then it again comes with a public issue which is called
an FPO (Follow-on Public Offer). It is a supplementary issue made by a company once it is
listed and established on the stock exchange. In short, the first public issue of a company is
an IPO, and any further public issue of the same company is called an FPO. For example,
Shipping Corporation of India (SCI), a listed company, is again coming up with a public
issue which will be its FPO (i.e. a second public issue)
3. Listing: Once the issue gets subscribed and the shares are allotted, they are listed on a
recognized stock exchange e.g. BSE, NSE etc. Listing means that company has adhered to
the terms and conditions of the stock exchange and its shares are now a part of the list of

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shares which can be traded on the stock exchange. Post listing, any investor can sell the
shares, allotted at the time of the issue, in the secondary market.
4. Bid-cum-Application Form: For applying in any public issue, each investor must fill a
standard form providing all the relevant details like Name, PAN, Demat id, Bank account
details, Bid price, Number of shares applied etc. Such a form is called a Bid-cum-Application
form. It can be submitted through the offline or online mode. An investor must ensure that all
the relevant details are filled correctly to avoid rejection of application and to ensure smooth
allotment of securities.
5. Price Band: A price band is the range of price within which an investor can place his bid
for the securities. The price mentioned by the investor in the bid-cum-application form can
neither be less than the lower limit of the price band nor can it exceed the upper limit of the
price band. For example, IPO of Coal India, the price band was Rs. 225-245 per share, which
means that an investor can bid only within the range of Rs. 225 to Rs. 245
6. Floor Price: In a price band, the lowest price is called the floor price, below which a bid
cannot be placed. In the above example Rs. 225 is the floor price of the Coal India IPO
7. Cap Price: Cap price is the upper ceiling limit in a price band beyond which a bid cannot
be placed. Again, taking the same example of Coal India, Rs. 245 is the Cap price, beyond
which you cannot place the bid.
8. Minimum order quantity: Minimum Order Quantity is the minimum number of shares
which the investor has to apply for in a public issue. For example, in the case of Coal Indias
IPO, the minimum order quantity was 25, i.e. an investor has to bid for at least 25 shares.
9. Market Lot: If an investor wants to bid for shares which are more than the minimum
order quantity, then he can do so by bidding in multiples of a certain number of shares which
is known as the Market Lot. By continuing the above example, if an investor wants to apply
for more than 25 shares of Coal India, then bids can be made in multiples of 25 shares, which
is the market lot size in case of the Coal India issue. Thus, applications can be made for 25,
50, 75 .number of shares until the maximum subscription limit is reached. In case of
Coal India, the minimum order quantity and market lot size, both were 25 shares.
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10. Maximum Subscription Limit for Retail Investors: Maximum Subscription Limit for
Retail Investors is the maximum amount of investment which can be made through a single
bid-cum-application form, or simply speaking, by a single individual, in a public issue.
11. Cut off Price: In book building issues, the issuer company specifies a price band within
which the bids are made. The actual issue price can be any price above the floor price and
within the price band. This issue price is called the Cut off Price. This price is determined
after considering the demand for the stock by the investors. Investors, in order to get
allotments in big ticket public issues, bid at the cut off price, conveying their intention that
they are willing to pay any price for the stock within the price band, at the end of the book
building process.
12. ASBA (Application Supported by Blocked Amounts): ASBA is an alternative mode of
making payments in public issues whereby the application money stays in the bank account
of the investor until the allotment is made. Only that much amount of funds are debited to the
investors bank account for which the allotment is made and the rest of the blocked amount is
released. In case the application is made using the ASBA facility, the need for refunds is
completely obviated.
For example : if an investor makes an application for Rs. 2,00,000 , then in the earlier
system, he was required to pay the entire sum of Rs. 2,00,000 upfront, either through a
cheque or net-banking and then if shares worth Rs. 1,50,000 are only allotted, then Rs.
50,000 used to get refunded. Under the ASBA mechanism, the investor just need to keep Rs.
2,00,000 in his bank account and at the time of allotment only Rs. 1,50,000 would be debited
to his account thus releasing the left over blocked amount of Rs. 50,000 and also doing away
with the cumbersome task of issuing refunds.
13. Book Building Process: Book Building is one of the methods of carrying out a public
issue, the other being the Fixed Price method. Under the Book Building method, the price at
which securities will be offered is not known to the investor. The investor is allowed to bid in
a given price range called the price band, and then, after the bids are closed & looking at the
demand for the shares at various price levels within the price band, the final issue price is
decided by the Merchant Bankers or BRLMs. This process leads to a better price and demand
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discovery. It is called the Book Building Process because during the entire issue period, the
book for the offer remains open and keeps building up with the bids collected from
investors.
14. BRLM (Book Running Lead Manager): BRLM are those financial institutions whose
names you find at the bottom of the bid-cum-application form like Karvy Securities, Kotak
Mahindra, SBI Capital, Enam Securities etc. BRLMs or Merchant Bankers are those
financial intermediaries which are involved in the IPO process right from the very first stage
and play a vital role in preparation & submission of prospectus, price fixation, application
processing, allotment and listing.
15. Prospectus or Offer document:Offer document" means Prospectus in the case of a
public issue or offer for sale and Letter of Offer in the case of a rights issue which is filed
with Registrar of Companies (RoC) and Stock Exchanges. An offer document covers all the
relevant information to help an investor to make his/her investment decision.
Types of offer documents:
"Draft Offer document" means the offer document in draft stage. The draft offer
documents are filed with SEBI, at least 21 days prior to the filing of the Offer Document with
the RoC / SEs. SEBI may specify changes, if any, in the draft Offer Document and the issuer
or the lead merchant banker shall carry out such changes in the draft offer document before
filing the Offer Document with the RoC/ SEs. The Draft Offer document is available on the
SEBI Web site for public comments for a period of 21 days from the filing of the Draft Offer
Document with SEBI.
"Red Herring Prospectus" is a prospectus which does not have details of either price or
number of shares being offered or the amount of issue. This means that in case the price is
not disclosed, the number of shares and the upper and lower price bands are disclosed. On the
other hand, an issuer can state the issue size and the number of shares are determined later.
An RHP for and FPO can be filed with the RoC without the price band and the issuer, in such
a case will notify the floor price or a price band by way of an advertisement one day prior to
the opening of the issue. In the case of book-built issues, it is a process of price discovery and
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the price cannot be determined until the bidding process is completed. Hence, such details are
not shown in the Red Herring prospectus filed with the RoC in terms of the provisions of the
Companies Act. Only on completion of the bidding process, the details of the final price are
included in the offer document. The offer document filed thereafter with ROC is called a
prospectus.
"Abridged Prospectus" contains all the salient features of a prospectus. It accompanies the
application form of public issues.
Shelf prospectus Any class of company may file a shelf prospectus with the Registrar of
Companies at the stage of first offer of securities. Shelf prospectus means a prospectus in
respect of which the securities or class of securities included therein are issued for
subscription in one or more issues over a certain period without the issue of a further
prospectus. The shelf prospectus shall indicate that validate period of the shelf prospectus is a
period not exceeding one year from the date of first offer of securities under that prospectus.
Once, a shelf prospectus has been issued, there will be no requirement of any further
prospectus for any subsequent offer of these securities issued during this validity period
Matters to be stated in prospectus:
A prospectus may be issued by or behalf of a public company either with reference to its
formation or subsequently, or by or on behalf of any person who is or has been engaged or
interested in the formation of a public company.
Information in Prospectus:
Every prospectus shall state following information:
i.

Names and addresses of the registered office of the company, company secretary,
Chief Financial Officer, auditors, legal advisers, bankers, trustees, if any, underwriters

ii.

and such other persons as may be prescribed

Dates of the opening and closing of the issue, and declaration about the issue of

iii.

allotment letters and refunds within the prescribed time;

A statement by the Board of Directors about the separate bank account where all
monies received out of the issue are to be transferred and disclosure of details of all

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monies including utilised and unutilised monies out of the previous issue in the
iv.
v.

prescribed manner;
Details about underwriting of the issue;
Consent of the directors, auditors, bankers to the issue, experts opinion, if any, and of

vi.
vii.
viii.
ix.

such other persons, as may be prescribed;

The authority for the issue and the details of the resolution passed there for;
Procedure and time schedule for allotment and issue of securities;
Capital structure of the company in the prescribed manner;
Main objects of public offer, terms of the present issue and such other particulars as

x.

may be prescribed;
Main objects and present business of the company and its location, schedule of

xi.
1.
2.
3.
4.
5.

implementation of the project;

Particulars relating to
Management perception of risk factors specific to the project;
Gestation period of the project;
Extent of progress made in the project;
Deadlines for completion of the project; and
Any litigation or legal action pending or taken by a government department or a
statutory body during the last five years immediately preceding the year of the issue
of prospectus against the promoter of the company; minimum subscription, amount
payable by way of premium, issue of shares otherwise than on cash;

xii.

Details of directors including their appointments and remuneration, and such

particulars of the nature and extent of their interests in the company as may be

xiii.

prescribed; and
Disclosures in such manner as may be prescribed about sources of promoters
contribution.

2.2 Types of IPO

There are 2 types of IPO issues namely the Fixed Price Issue and the Book Building Issue
Fixed Price Issue: Under fixed price, the company going public determines a fixed price at
which its shares are offered to investors. The investors know the share price before the
company goes public. Demand from the markets is only known once the issue is closed. To
partake in this IPO, the investor must pay the full share price when making the application.

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Book Building Issue: Under book building, the company going public offers a 20% price
band on shares to investors. Investors then bid on the shares before the final price is settled
once the bidding has closed. Investors must specify the number of shares they want to buy
and how much they are willing to pay. Unlike fixed price, there is no fixed price per share.
The lowest share price is known as the floor price, while the highest share price is known as
the cap price. The final share price is determined using investor bids.

Issue Type
Fixed
Price
Issues

Book
Building
Issues

Offer Price

Demand

Payment

Price at which the

securities are offered
and would be allotted
is made known in
advance to the
investors
A 20 % price band is
offered by the issuer
within which
investors are allowed
to bid and the final
price is determined
by the issuer only
after closure of the
bidding.

Demand for the

securities offered
is known only
after the closure
of the issue

100 % advance
payment is required
to be made by the
investors at the
time of application.

Reservations

50 % of the shares
offered are reserved for
applications below Rs.
1 lakh and the balance
for higher amount
applications.
Demand for the
10 % advance
50 % of shares offered
securities offered, payment is required are reserved for QIBS,
and at various
to be made by the
35 % for small
prices, is
QIBs along with
investors and the
available on a
the application,
balance for all other
real time basis on while other
investors.
the BSE website categories of
during the
investors have to
bidding period.
pay 100 % advance
along with the
application.

2.3 Intermediaries
Intermediaries which are registered with SEBI are Merchant Bankers to the issue (known as
Book Running Lead Managers (BRLM) in case of book built public issues), Registrars to the
issue, Bankers to the issue & Underwriters to the issue who are associated with the issue for
different activities. Their addresses, telephone/fax numbers, registration number, and contact
person and email addresses are disclosed in the offer documents.
1. Merchant Banker: Merchant banker does the due diligence to prepare the offer document
which contains all the details about the company. They are also responsible for ensuring

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compliance with the legal formalities in the entire issue process and for marketing of the
issue.
2. Registrars to the Issue: They are involved in finalizing the basis of allotment in an issue
and for sending refunds, allotment etc.
3. Bankers to the Issue: The Bankers to the Issue enable the movement of funds in the issue
process and therefore enable the registrars to finalize the basis of allotment by making clear
funds status available to the Registrars.
4. Underwriters: Underwriters are intermediaries who undertake to subscribe to the
securities offered by the company in case these are not fully subscribed by the public, in case
of an underwritten issue.
2.4 Types of Investors
There are three kinds of investors in a book-building issue.
The retail individual investor (RII),
The non-institutional investor (NII) and
The Qualified Institutional Buyers (QIBs).
RII is an investor who applies for stocks for a value of not more than Rs 100,000. Any bid
exceeding this amount is considered in the NII category. NIIs are commonly referred to as
high net-worth individuals. On the other hand QIBs are institutional investors who possess
the expertise and the financial muscle to invest in the securities market.
Mutual funds, financial institutions, scheduled commercial banks, insurance companies,
provident funds, state industrial development corporations, et cetera fall under the definition
of being a QIB.
Each of these categories is allocated a certain percentage of the total issue. The total
allotment to the RII category has to be at least 35% of the total issue. RIIs also have an
option of applying at the cut-off price. This option is not available to other classes of
investors. NIIs are to be given at least 15% of the total issue.
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And the QIBs are to be issued not more than 50% of the total issue. Allotment to RIIs and
NIIs is made through a proportionate allotment system. The allotment to the QIBs is at the
discretion of the BRLM.
Lately there have been some complaints by the QIBs of BRLMs resorting to favouritism
while allocating shares. The Securities and Exchange Board of India (Sebi) is in the process
of reviewing this mechanism.
Let's suppose, A Ltd, makes an offer for 200,000 shares. The issue is oversubscribed -- i.e.
there is demand for more shares than the issuer plans to issue. Further, a minimum allotment
of 100 shares is to be made for every investor.The cut-off price has been decided and now the
allotments are to be made. In the RII category, 1,500 applicants have applied for 100 shares
each, i.e. there is a demand for 150,000 shares.
A Ltd plans to issue 35% of the total issue to this category, i.e. 70,000 shares. In the NII
category, 200 applicants have applied for 500 shares each, i.e. 100,000 shares. A Ltd plans to
issue 15% of the total issue to this category, i.e. 30,000 shares.The cut-off price has already
been decided, so adjusting the quantity remains the only way of reaching the equilibrium.
Applying the proportionate allotment system each investor in the RII category will get 46.67
shares [(70,000/ 150,000) x 100)]. But the minimum allotment has to be 100 shares.
So through a lottery, 700 investors are chosen and allotted 100 shares each, making a total of
70,000 shares. In the NII category every investor will get 150 shares [(30,000/100,000) x
500)]. And that is how equilibrium is reached.

2.5 Entry Norms for an IPO

Not all companies can issue shares to the public. SEBI has provided a list of requirements
that need to be met by a company if they wish to go public. A company that wishes to go
public needs to meet all of the below mentioned criteria.
Entry Norms I or EN I (Profitability Route)

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1. Net Tangible assets of at least Rs. 3 crores for 3 full years

2. Distributable profits in at least 3 of the immediately preceding five years
3. Net worth of at least 1 crore e in each of the preceding three full years.
4. If the company has changed its name within the last one year, at least 50% revenue for the
preceding 1 year should be from the activity suggested by the new name.
5. The issue size does not exceed 5 times the pre issue net worth as per the audited balance
sheet of the last financial year
To provide sufficient flexibility and also to ensure that genuine companies do not suffer on
account of rigidity of the above mentioned rules, SEBI has provided 2 alternate routes to
companies that do not satisfy the criteria for accessing the primary market as under
Entry Norms II or EN II (Commonly known as QIB Route)
1. Issue shall be only through the book building route with at least 50% allotted mandatorily
to Qualified Institutional Buyers (QIBs)
2. The minimum post issue face value capital shall be Rs. 10 crores or there shall be a
compulsory market-making for at least 2 years
Or
Entry Norms III or EN III (commonly known as Appraisal Route)
1. The Project is appraised and participated to the extent of 15% by FIs/Scheduled
Commercial Banks of which at least 10% comes from the appraiser(s).
2. The minimum post issue face value capital shall be Rs. 10 crores or there shall be a
compulsory market-making for at least 2 years
3. In addition to the above mentioned 2 points, the company shall also satisfy the criteria of
having at least 1000 prospective allotees in future
SEBIS NEW E-IPO RULES
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SEBI approved norms for companies to launch their initial public offerings (IPOs) in

an electronic form.
Will reduce the time taken between the share sale and the listing, enhance the reach of

retail investors in the share sale, and reduce costs.

ASBA will be made mandatory for all categories of investors while applying for an

IPO.
Time period for listing: T+6 compared to T+12 currently
These will come into effect on 1 January 2016.
Depository participants and RTAs (registrar and transfer agents) will also be able to
accept IPO applications.

2.6 Green shoe Option

Green shoe option allows companies to intervene in the market to stabilize share prices
during the 30-day stabilization period immediately after listing
Before investing in an IPO, we go through the offer document of the company to know more
about it. A listed company is legally bound to abide by commitments made in the document.
Besides providing information about the company's competitive strengths, industry
regulation, corporate structure, main objects, subsidiary details, risk factors, etc, the offer
document also mentions a technical word called Green shoe option.
Over-allotment option

The green shoe option allows companies to intervene in the market to stabilise share prices
during the 30-day stabilisation period immediately after listing. This involves purchase of
equity shares from the market by the company-appointed agent in case the shares fall below

issue price.
The green shoe option is exercised by a company making a public issue. The issuer company
uses green shoe option during IPO to ensure that the shares price on the stock exchanges does

not fall below the issue price after issue of shares.

Green shoe is a kind of option which is primarily used at the time of IPO or listing of any
stock to ensure a successful opening price. Any company when decides to go public
generally prefers the IPO route, which it does with the help of big investment bankers also
called underwriters. These underwriters are responsible for making the public issue
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successful and find the buyers for companys shares. They are paid a certain amount of

commission to do this work.

Green shoe option is a clause contained in the underwriting agreement of an IPO. The green
shoe option is also often referred to as an over-allotment provision. It allows the underwriting
syndicate to buy up to an additional 15% of the shares at the offering price if public demand

for the shares exceeds expectations and the stock trades above its offering price.
From an investor's perspective, an issue with green shoe option provides more probability of
getting shares and also that post listing price may show relatively more stability as compared
to market.
Origin of the Green shoe
The term "green shoe" came from the Green Shoe Manufacturing Company (now called
Stride Rite Corporation), founded in 1919. It was the first company to implement the green
shoe clause into their underwriting agreement.
Green shoe option in India
Green shoe options or over-allotment options were introduced by the Securities and
Exchange Board of India (SEBI) in 2003 to stabilise the aftermarket price of shares issued in
IPOs.
Guidelines for exercising green shoe option
The guidelines require the promoter to lend his shares (not more than 15% of issue size)
which is to be used for price stabilisation to be carried out by a stabilising agent (normally
merchant banker or book runner) on behalf of the company.
The stabilisation period can be up to 30 days from the date of allotment of shares to bring
stability in post listing pricing of shares.
After making the decision to go public, the company appoints underwriters to find the buyers
for their issue. Sometimes, these underwriters also help the corporate in determining the issue
price and the kind of equity dilution i.e. how many shares will be made available for the
public.

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But with the turbulent times prevailing in the market place, it is however quite possible that
the IPO undersubscribed and trades below its issue price.
This is where these underwriters invoke the green shoe option to stabilise the issue.
How green shoe option works
The entire process of a green shoe option works on over-allotment of shares. For instance, a
company plans to issue 1 lakh shares, but to use the green shoe option; it actually issues 1.15
lakh shares, in which case the over-allotment would be 15,000 shares. Please note, the
company does not issue any new shares for the over-allotment.
The 15,000 shares used for the over-allotment are actually borrowed from the promoters with
whom the stabilising agent signs a separate agreement. For the subscribers of a public issue,
it makes no difference whether the company is allotting shares out of the freshly issued 1
lakh shares or from the 15,000 shares borrowed from the promoters.
Once allotted, a share is just a share for an investor. For the company, however, the situation
is totally different. The money received from the over-allotment is required to be kept in a
separate bank account (i.e. escrow account)
Role of the stabilising agent
The stabilising agent starts its process only after trading in the share starts at the stock
exchanges.
In case the shares are trading at a price lower than the offer price, the stabilising agent starts
buying the shares by using the money lying in the separate bank account. In this manner, by
buying the shares when others are selling, the stabilising agent tries to put the brakes on
falling prices. The shares so bought from the market are handed over to the promoters from
whom they were borrowed.
In case the newly listed shares start trading at a price higher than the offer price, the
stabilising agent does not buy any shares.

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Green shoe option in action

It is very common for companies to offer the green shoe option in their underwriting
agreement. In 2009, most realty companies in India, who were planning to raise funds from
the primary market, had opted for green shoe option in their IPOs to stem volatility in share
prices following their listing on the exchanges.
Companies such as Sahara Prime City, DB Realty, Lodha Developers and Ambience had
opted for the green shoe option, which helped them stabilise share prices in the event of
extreme volatility or prices moving below offer price.
2.7 IPO Process

Selection of Investment Bank

The first thing that company management must do when they have taken a unanimous
decision to go public is to find an investment bank or a conglomerate of investment banks
that will act as underwriters on behalf of the company. Underwriter's buy the shares of the
company and resell them to the general public. The company must also hire lawyers that can
guide them through the legal maze that an IPO setup can be. It must be ready with detailed
20 | P a g e

financial records for intensive fiscal health scrutiny that SEBI would perform. Some
companies may also opt to directly sell their shares through the stock market, but most prefer
going through the underwriters.
Step 1: Preparation of Registration Statement
To begin an IPO process, the company involved must submit a registration statement to the
SEBI, which includes a detailed report of its fiscal health and business plans. SEBI
scrutinizes this report and does its own background check of the company. It must also see
that registration statement fulfils all the mandatory requirements and satisfies all rules and
regulations.
Step 2: Getting the Prospectus Ready
While awaiting the approval, the company, with assistance from the underwriters, must
create a preliminary 'Red Herring' prospectus. It includes detailed financial records, future
plans and the specification of expected share price range. This prospectus is meant for
prospective investors who would be interested in buying the stock. It also has a legal warning
about the IPO pending SEBI approval.
Step 3: The Roadshow
Once the prospectus is ready, underwriters and company officials go on countrywide
'roadshows', visiting the major trade hubs and promote the company's IPO among select few
private buyers (Usually corporates or HNIs). They are fed with detailed information
regarding company's future plans and growth potential. They get a feel of investor response
through these tours and try to woo big investors.
Step 4: SEBI Approval & Go Ahead
Once SEBI is satisfied with the registration statement, it declares the statement to be
effective, giving a go ahead for the IPO to happen and a date to be fixed for the same.
Sometimes it asks for amendments to be made before giving its approval.
The prospectus cannot be given to the public without the amendments suggested by SEBI.

21 | P a g e

The company needs to select a stock exchange where it intends to sell its shares and get
listed.
Step 5: Deciding On Price Band & Share Number
After the SEBI approval, the company, with assistance from the underwriters decide on the
final price band of the shares and also decide the number of shares to be sold.
Step 6: Available to Public for Purchase
On the dates mentioned in the prospectus, the shares are available to public. Investors can fill
out the IPO form and specify the price at which they wish to make the purchase and
submit the application. This open period usually lasts for 5 working days which is a SEBI
requirement.
Step 7: Issue Price Determination & Share Allotment
Once the subscription period is over, members of the underwriting banks, share issuing
company etc. will meet and determine the price at which shares are to be allotted to the
prospective investors. The price would be directly determined by the demand and the bid
price quoted by investors. Once the price is finalized, shares are allotted to investors based on
the bid amounts and the shares available.
Note: In case of oversubscribed issues, shares are not allotted to all applicants.
Step 8: Listing & Refund
The last step is the listing in the stock exchange. Investors to whom shares were allotted
would get the shares credited to their DEMAT accounts and for the remaining the money
would be refunded.

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3. IPO PERFORMANCE

* Partial Data (As on 30th Aug 2015)

IPO performance since 2010 is as above, total 261 IPOs are issued out of which 11 IPOs
are failed. In year 2010 maximum number of issues has been floated and only 2 IPOs
failed. The breakup of IPO types (Book building and fixed price IPO) is as shown below.

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24 | P a g e

In the current year (2015) 28 IPOs were issued using fixed price method, Universal
Autofoundry Limited IPO was the last FP IPO floated in the month of august and Prabhat
Dairy Limited IPO is of book building issue type.

The above table shows the amount raised through IPO since 2010, Amount raised in 2015(till
30 Aug 2015) is 5885.38 crore as compare to 2010 which is 36,362.18, the number of IPOs a
42 and 66 in 2015 and 2010 respectively.

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4. CRITICAL DISCLOSURE IN OFFER DOCUMENT

Following are the major Critical disclosures in an offer document (IPO)

1. Company Introduction
2. Industry analysis
3. Risk factors
4. Capital Structure
5. Object of issue
6. Means of finance
7. Basis of issue price
8. Promoters Contribution
9. Lock-in requirement
10. Management
11. Financial Details
12. Litigations
13. IPO Grading
14. Eligibility for the Issue
15. Allotment of shares

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4.1ISSUE DETAILS

Issue open

Mar 10, 2015 - Mar 12, 2015

Mar 3, 2015 - Mar 5, 2015

Issue type

100% Book Built Issue IPO

100% Book Built Issue IPO

Issue size

20,326,227 Equity Shares of Rs. 10

12,000,000 Equity Shares of Rs. 10

Face value

Rs 10 per equity share

Rs. 10 Per Equity Share

Issue price

Rs. 180 - Rs. 215 Per Equity Share

Rs. 181 - Rs. 200 Per Equity Share

Market lot
Minimum order
quantity
Listing at

65 Shares

75 Shares

65 Shares

75 Shares

BSE, NSE

BSE, NSE

Listing date

6th April 2015

March 19, 2015

Issue price

Rs 168 per equity share

Rs. 181.00 Per Equity Share

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DISCLOSURE 1: COMPANY INTRODUCTION

SEBI REQUIREMENTS
In case the issuer company has not come out with any issue in the past ten years or more, a
brief statement about the history and corporate structure of the issuer company, the main
objects of the issuer company and major events in the past.
ADLABS ENTERTAINMENT LTD
Adlabs Entertainment Limited is mainly engaged in the business of
theme park and entertainment industry. AEL own and operates
Adlabs Imagica which is India's first and only international standard
theme park. It offers entertainment, dining, shopping and
accommodation under one roof. The Rs 1,650-crore theme park
spread over 300 acres opened in April 2013. It can accommodate as
many as 20,000 visitors.
The Theme Park, is a part of Adlabs Mumbai, a 'one-stop' entertainment destination that they
offer at this location. Adlabs Mumbai also includes Aquamagica, a water park, which became
fully operational on October 1, 2014, and a family hotel, Novotel Imagica Khopoli, the first
phase of which is expected to be completed by March 2015.
Currently they have 25 rides and five themed restaurants which include a ride based on the
Bollywood film Mr. India, India's biggest floor-less roller coaster, and a 300-room hotel and
water park. They also offer entertainment through live performances by acrobats, magicians,
dancers, musicians and other artists throughout the day in various parts of theme park.

ORTEL COMMUNICATIONS LTD

Ortel Communications Ltd is a regional cable television and
high speed broadband services provider, mainly engaged in the
distribution of analog and digital cable television services, high
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speed broadband services & Voice over Internet Protocol ("VoIP") services. Company has
well presence in the Indian states of Odisha, Chhattisgarh, Andhra Pradesh and West Bengal.
They have built a two-way communication network for 'Triple Play' services (video, data and
voice capabilities). Ortel provides its services under the brand names "Ortel Home Cable",
"Ortel Digital" and "Ortel Broadband".
Ortel Communications Ltd is among the ten major Multi System Operators in India
("MSOs"). Their business is broadly divided into:
1. Cable television services comprising of (a) analog cable television services; (b) digital
cable television services including other value added services such as HD services, NVoD,
gaming and local content;
2. Broadband services;
3. Leasing of fibre infrastructure; and
4. Signal uplinking services.
Ortel Communications currently offer services in 48 towns and certain adjacent semi urban
and rural areas with over 21,600 kilometers of cables supported by 34 analog head-ends and
five digital head-ends. They use HFC (combination of optic fibre in the backbone and coaxial
cable in the downstream) to build their network. They provide their service to both retail and
corporate customers.

DISCLOSURE 1: INDUSTRY ANALYSIS

ORTEL:
Internet broadband industry India:
Broadband internet users were 104.96 million in May 2015.

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 Revenue from broadband services in India is likely to grow at 7.8%

annually for the next five years.
The broadband subscriber base growth at an average of 2 per cent per
month
Average Revenue Per User (ARPU) is declining in the industry.
Market size:
US 1,460 mn in 2012 projected to increase to US 2,189 mn
Government Initiatives:
The government has prepared a National Broadband Plan
Emphasis on getting broadband into the rural areas.
Competitive strength of Ortel
Well-Established Systems and Procedures

Experienced Management

Experience and Expertise in Local Markets

Efficient and Profitable Business Model

Advanced and Scalable Technology Platform

ADLABS:
Media & Entertainment industry India:
Third largest television market with US$ 15.7 billion revenue in 2014.

Market size: The sector is projected to grow at a CAGR of 14 percent to

reach US$28.1 billion by 2016

Government initiatives:
- Digitising the cable distribution sector to attract greater institutional
funding,
- increasing FDI limit from 74 per cent to 100 per cent in cable
- DTH satellite platforms
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Competitive strength of Adlabs:

Adlabs has diversified revenue stream

The management team of Adlabs has more than 15 years of experience

in the entertainment industry

Strategically located with rides and attraction of international standards

First mover advantage

Strong Brand Recognition

Multiple Platform Service on a Large Scale

DISCLOSURE 2: RISK FACTORS

SEBI Requirements:
Risk factors shall be determined on the basis of their materiality.
The Risk factors shall appear in the prospectus in the following manner:
Risks envisaged by Management.
Proposals, if any, to address the risks.

ADLABS ENTERTAINMENT LIMITED

Internal Factors
1. There are various proceedings pending against our Company and our Directors,
our Promoters and certain Group Companies, which if determined against them,
may have an adverse effect on our business.
There are outstanding legal proceedings involving our Company, our Directors, our
Promoters and certain Group Companies which are pending at different levels of adjudication
before various courts, tribunals and other authorities. The amounts claimed in these
proceedings have been disclosed to the extent ascertainable and quantifiable and include
amounts claimed jointly and severally from our Company and other parties. Any
unfavourable decision in connection with such proceedings, individually or in the aggregate,
could adversely affect our reputation, business and results of operations.

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2. Our Promoter, Manmohan Shetty has been subjected to inquiries by SEBI in the past.
SEBI initiated two separate proceedings against our Promoter, Manmohan Shetty, under the
SEBI (Prohibition of Insider Trading) Regulations, 1992 and the SEBI (Substantial
Acquisition of Shares and Takeovers), Regulations, 1997, respectively. These proceedings
were settled after the payment of a fine of 2.5 million and 50,000 by Manmohan Shetty.
Further, two compounding orders were passed by the RoC between February 1, 2006 and
May 31, 2006 involving Manmohan Shetty in relation to his erstwhile directorship in Adlabs
Films Limited, now Reliance MediaWorks Limited. For details, see the section Outstanding
Litigation and Material Developments on page 203.
Our Company, our Promoters or Group Companies may be subjected to such inquiries or
regulatory proceedings in the future and we cannot assure you that such proceedings will be
settled or decided in our favour. An adverse outcome in any of these proceedings may have
an adverse effect on our Directors or on our business, results of operations and reputation.
3. Our business and results of operations could be adversely affected by changes in
public and consumer tastes or a decline in discretionary consumer spending,
consumer confidence and general economic conditions.
The success of our parks depends substantially on consumer tastes and preferences that can
change in often unpredictable ways. We must adapt to these changes to meet consumer tastes
32 | P a g e

and preferences. We carry out research and analysis before opening new rides and attractions
and often invest substantial time and resources to gauge the extent to which these new rides
and attractions will earn consumer acceptance. If attendance at our parks were to decline
significantly, or if new rides and attractions at our park do not achieve sufficient consumer
acceptance, our revenues may decline. Accordingly, we may not be able to recoup our capital
expenditure in the rides and attractions and guest loyalty may be adversely affected, any of
which could adversely affect our business and results of operations.
Further, our success depends to a significant extent on discretionary consumer spending,
which is heavily influenced by general economic conditions and the availability of disposable
income. The recent economic slowdown and increase in inflation in India, coupled with high
volatility and uncertainty as to the future global economic landscape, has had and continues
to have an adverse effect on consumers disposable income and Indian consumer confidence.
Actual or perceived difficult economic conditions and inflationary periods may adversely
impact park attendance figures, the frequency with which guests choose to visit our parks and
guest spending patterns at our parks. Both attendance and total per capita spending at our
parks are key drivers of our revenue and profitability, and reductions in either can adversely
affect our business and results of operations.

4. Our business is seasonal in nature, and may be affected by weather conditions, school
vacations, public holidays and weekends. Therefore, a sequential quarter-to-quarter
comparison of our results of operations may not be a good indicator of our
performance.
The theme and water park industry is seasonal in nature. Our parks could experience
volatility in attendance as a result of school vacations, public holidays, weekends and adverse
weather conditions such as excessive heat and monsoons. We believe that attendance at the
theme and water park and revenues from F&B and retail and merchandise operations is, and
will continue to be, higher during school vacations, public holidays and weekends. In
addition, the water park is expected to generate higher revenues in the summer months.
Conversely, we may face a reduction in revenues during the monsoon months. Further,
unfavourable weather conditions such as forecasts of excessive rainfalls or heat may reduce
the attendance at our parks. For these reasons, there may be quarterly fluctuations in results
of operations.
In addition, any disruption to our operations because of adverse weather conditions, or
otherwise, during the high attendance periods such as school holidays, may have an adverse
effect on our business and results of operations.

External Factors
1. Various factors beyond our control could adversely affect attendance and guest
spending patterns at our parks.
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Our growth strategy depends significantly on our ability to increase attendance at our parks.
Attendance at our parks is affected by various factors beyond our control, including factors
that indirectly affect us due to their impact on our suppliers, vendors, insurance carriers or
other contractual counterparties. These factors include:
war, terrorist activities or threats and heightened travel security measures
instituted in response to these events;
outbreaks of pandemic or contagious diseases or consumers concerns relating
to potential exposure to contagious diseases;
natural disasters, such as hurricanes, fires, earthquakes, tsunamis, tornados
and floods and man-made disasters;
bad weather and forecasts of bad weather, including abnormally hot, cold
and/or wet weather, particularly during weekends, holidays or other peak
periods;
changes in the desirability of particular locations or travel patterns of our
guests; and
oil prices and travel costs and the financial condition of the airline, automotive
and other transportation-related industries, any travel-related disruptions or
incidents, and the development and maintenance of traveland particularly
road trafficinfrastructure.
2. We are subject to risks arising from exchange rate fluctuations. Depreciation of
the Rupee against foreign currencies may have an adverse effect on our results
of operations.
While our revenues are denominated in Rupees, we import rides and attractions related
equipment and procure services from overseas, the costs and fees of which are denominated
in foreign currencies. We currently do not have any hedging arrangement for our foreign risk
exposure. Details of our unhedged foreign currency exposures are set out below:

3. Political, economic or other factors that are beyond our control may have an
adverse effect on our business and results of operations.

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The following external risks may have an adverse impact on our business and results of
operations should any of them materialise:
o a change in the central or Maharashtra state government or a change in the
economic and deregulation policies could adversely affect economic
conditions prevalent in the areas in which we operate in general and our
business in particular;
o high rates of inflation in India could increase our costs without
proportionately increasing our revenues, and as such decrease our operating
margins; and
o a slowdown in economic growth or financial instability in India could
adversely affect our business and results of operations.

ORTEL COMMUNICATIONS LIMITED

Internal Factors
1.Our customer base is concentrated in Odisha. Inability to retain and grow our customer
base in Odisha may have an adverse effect on our revenues, business and results of
operations
2. We are currently operating as an MSO on the basis of a provisional license from the
Ministry of Information and Broadcasting and failure to receive the final registration or
cancellation of the provisional license could materially and adversely affect our business,
proposed objects of the Issue, growth strategy, financial condition and results of operations.
3. Our business model of last mile control is capital intensive and we may not be able to
arrange adequate funds for future capital expansion
4. Face competition from the DTH service providers for the cable television subscribers.
External Factors
1. Certain recent policy recommendations by the TRAI, if adopted as law, could
adversely affect the manner in which we conduct our business.
The TRAI has recently released two recommendation statements, which, if written into law,
could have an adverse impact on our business, profitability, results of operation and financial
condition.
The TRAI has, in August 2014, released a report titled Recommendations on Issues Relating
to Media Ownership wherein it has set out certain recommendations on the relationship
between broadcasters and distribution platform operators (DPOs), and inter-se
relationships between DPOs. The recommendations stipulate, inter alia, (i) Broadcasters and
DPOs should be separate legal entities; (ii) vertical integration between DPOs and
broadcasters would be rationalized and regulated, with greater regulation on vertically
integrated broadcasters/ DPOs than non-integrated ones; (iii) the entity controlling a
broadcaster or the broadcaster itself shall be allowed to control only one DPO (of any
35 | P a g e

category, i.e. MSO/ HITS operator or DTH Operator), the term control defined as direct or
indirect holding of at least 20% share capital or the power to control more than 50% voting
rights, or to appoint more than 50% of the members of the board of directors, or the power to
control the management and business decisions of an entity; (iv) the entity controlling a
vertically integrated DPO or the DPO itself shall not be allow to control any other DPO (of
any category); (v) in the event a vertically integrated DPO attains more than 33% market
share in the relevant market (being the relevant State, for MSOs/ HITS operators and the
country, for DTH operators), then the vertically integrated entities (ie, either the Broadcaster
or the DPO) will need to restructure itself in a manner that it and the broadcaster are no
longer vertically integrated; (vi) a vertically integrated broadcaster can only have nondiscriminatory charge-per-subscriber agreements with DPOs; and (vii) any entity controlling
a DPO, or the DPO itself should not have any other DPO (of any category), except for
permitted crossholdings between MSOs and HITS operators. While this report is currently a
recommendation to the MIB, in the event that such recommendations are written into law, we
may be prohibited from controlling multiple DPOs, and our Promoters may be prohibited
from acquiring control over multiple DPOs, or our Promoters may be required to restructure
their control in either our Company or our Group Companies which could adversely affect
our expansion plans, results of operation and financial condition.
2. A slowdown in economic growth in India could cause our business to suffer
Our performance and the growth of our business are necessarily dependent on the health of
the overall Indian economy. As a result, a slowdown in the Indian economy could adversely
affect our business. Indias economy could be adversely affected by a general rise in interest
rates, inflation, natural calamities, such as earthquakes, tsunamis, floods and drought,
increases in commodity and energy prices, and protectionist efforts in other countries or
various other factors. In addition, the Indian economy is in a state of transition. It is difficult
to gauge the impact of these fundamental economic changes on our business. Any slowdown
in the Indian economy or future volatility in global commodity prices could adversely affect
our business.

OUR OPINION
Internal and External Risks involved in both the Businesses should be carefully reviewed
before investing.
The two companies being in a completely different space cant be directly compared as their
risks and levels of risk and operations are different

Since their listing the share price of Adlabs has fallen to Rs 125 from Rs 163 and
Ortels price has appreciated to Rs 204 from Rs 160.

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DISCLOSURE 3: CAPITAL STRUCTURE

SEBI Requirements:
(a) Authorized, issued, subscribed and paid up capital (Number of
instruments, description and aggregate nominal value)
(b) Size of the present issue, giving separately promoters contribution, firm
allotment/ reservation for specified categories and net offer to public. Name(s) of
group companies to be given, in case reservation has been made for shareholders of
the group companies; Applicable percentages may be given in case of book built
issue.
(c)
(i)

Paid-up Capital:

After the issue.

(ii) After conversion of securities (if applicable)

(d)

ORTEL:

ADLABS:

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Share Premium Account (before and after the issue)

DISCLOSURE 4: OBJECT OF ISSUE

SEBI Requirements:
The object of raising funds through the issue, that is whether for fixed asset creation and/ or
for working capital or any other purpose, shall be disclosed clearly in the prospectus.

ADLABS ENTERTAINMENT LIMITED

The Issue comprises Fresh Issue and an Offer for Sale.
Offer for Sale
The Company will not receive any proceeds from the Offer for Sale.
Requirement of Funds
The Company proposes to utilise the Net Proceeds from the Fresh Issue towards funding the
following objects:
1. Partial repayment or pre-payment of the Consortium Loan

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2. General corporate purposes

(Collectively, referred to herein as the Objects).
In addition, the Company expects to receive the benefits of listing of the Equity Shares on the
Stock Exchanges.
The main objects clause as set out in the Memorandum of Association enables the Company
to undertake its existing activities and the activities for which funds are being raised by the
Company through the Fresh Issue.
The fund requirements for the Object are based on internal management estimates and have
not been appraised by any bank or financial institution.

ORTEL COMMUNICATIONS LIMITED

The Issue comprises a Fresh Issue and an Offer for Sale.
The proceeds of the Offer for Sale
The funds from the Offer for Sale (net of Issue related expenses for the Selling Shareholder)
shall be received by the Selling Shareholder and the Company shall not receive any proceeds
from the Offer for Sale.

Objects of the Fresh Issue

The activities for which funds are being raised by the Company through this Issue, after
deducting the proceeds from the Offer for Sale and Issue related expenses for the Company
are:
1. Expansion of our network for providing video, data and telephony services;
2. Capital expenditure on development of our digital cable services;
3. Capital expenditure on development of our broadband services; and
4. General corporate purposes.
(Collectively referred to herein as the Objects).

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In addition, the Company expects to receive the benefits of listing the Equity Shares on the
Stock Exchanges.
The main objects as set out in their Memorandum of Association enables the company to
undertake their existing activities and the activities for which funds are being raised by them
through this Issue. The activities which have been carried out until now by the Company are
valid in terms of the objects clause of their Memorandum of Association.
DISCLOSURE 6: PROMOTERS CONTRIBUTION
SEBI Requirements:
In a public issue by an unlisted company, the promoters shall contribute not less
than 20% of the post issue capital.
The promoters shareholding after offer for sale shall not be less than 20% of the
post issue capital.

ORTEL:
SHAREHOLDERS

PRE ISSUE (%)

POST ISSUE (%)

Promoter & promoter group

64.03

51.38

Others

35.97

Public

48.62

Total

100 %

100 %

PRE ISSUE %

POST ISSUE %

ADLABS:
SHAREHOLDERS
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Promoter & promoter group

100

53.20

Others

Public

48.6

Total

100 %

100 %

ORTEL CURRENT SHAREHOLDING PATTERN:

HOLDERS NAME

NO. OF SHARES

% SHARE HOLDING

PROMOTERS INDIVIDUALS

1,134,770

4.66

BODIES CORPORATE

14,360,701

58.94

UNDER TRUST

105,878

0.43

CENTRAL GOVT/ STATE GOVT.

50,000

0.21

BODIES CORPORATE

275,067

1.13

NON-INSTITUTIONAL

256,450

1.05

8,182,598

33.58

INDIVIDUALS
FOREIGN BODIES

ADLABS CURRENT SHAREHOLDING PATTERN:

HOLDERS NAME

NO. OF SHARES

% SHARE HOLDING

PROMOTERS INDIVIDUALS

2,843,927

5.9

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BODIES CORPORATE

45,616,795

94.1

OUR OPINION:

Ortels contribution in Post-Issue Capital is 51.38% which is only 13% less than preIssue Capital .Whereas Adlabs Promoters contribution in Post-Issue Capital is
52.30% which is 48% less than pre- Issue Capital.

Both companies promoters contribution after post-issue is more than 20% therefore
both the companies are complying with the requirements of SEBI guideline.

However Ortel is reducing promoters contribution by only 13% compare to 48% of

Adlabs., which influences an investors confidence.

More the promoter contribution more is the dividend

DISCLOSURE 7- MEANS OF FINANCE:

ORTEL: Issue proceeds utilization

Investment in capital equipment

General corporate purposes

Temporarily invest the Net Proceeds in interest-bearing liquid

instruments including deposits

Not use the funds for any investments in the equity markets.
ADLABS : Issue proceeds utilization

Rs 4,000.00 mn towards partial repayment of loan (consortium)

General corporate purposes

To meet any other expenditure or fund any exigencies arising out of

competitive environment, business conditions, economic conditions

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OUR OPINION:
Ortel is utilizing its net proceeds towards investments in capital
equipment's and financial instruments

Adlabs is utilizing its net proceeds to repay its loans and improve the
company's D:E ratio.

Ortel is therefore using its proceeds more effectively & is a better

investment from an investors perspective as compared to Adlabs

Adlabs is comparatively more riskier

DISCLOSURE 8: LOCK-IN REQUIREMENTS

SEBI Requirements:

In case of any issue of capital to the public the minimum promoters contribution

shall be locked in for a period of 3 years.

In case of a public issue by unlisted company, if the promoters contribution in the
proposed issue exceeds the required minimum contribution, such excess contribution

shall also be locked in for a period of (one year).

The entire pre-issue capital, other than that locked-in as minimum promoters
contribution, shall be locked-in for a period of one year from the date of allotment (in
the proposed public issue).

ADLABS ENTERTAINMENT LIMITED

Pursuant to the SEBI ICDR Regulations, an aggregate of 20% of the fully diluted
post-issue Equity Share capital of our Company held by the Promoters shall be locked
in for a period of three years from the date of Allotment and the Promoters
shareholding in excess of 20% shall be locked in for a period of one year.

In addition to the 20% of the fully diluted post-Issue shareholding of the Company
held by their Promoters and locked in for three years as specified above, the entire

43 | P a g e

pre-Issue equity share capital of the Company, except the Equity Shares subscribed to
and Allotted pursuant to the Offer for Sale, will be locked-in for a period of one year
from the date of Allotment.

Their Promoter, Thrill Park has pledged 23,394,782 Equity Shares of the Company
with the Consortium Lenders as collateral security under the Common Loan
Agreement. Pursuant to Regulation 36 of the SEBI ICDR Regulations, the entire preIssue shareholding of the Promoters in excess of the minimum promoters
contribution is required to be locked-in for a period of one year from the date of the
Allotment. Subject to consent of all the Consortium Lenders, the pledge over the
Equity Shares will be released prior to the Allotment for the purpose of compliance
with such lock-in requirement.

The Equity Shares held by their Promoters which are locked-in for a period of one
year from the date of Allotment may be pledged only with scheduled commercial
banks or public financial institutions as collateral security for loans granted by such
banks or public financial institutions, provided that such pledge of the Equity Shares
is one of the terms of the sanction of such loans. Accordingly, the Equity Shares
required to be pledged with the Consortium Lenders under the Common Loan
Agreement will be re-pledged after the Allotment

The Equity Shares held by their Promoters which are locked-in may be transferred to
and among the Promoter Group or to any new promoter or persons in control of the
Company, subject to continuation of the lock-in in the hands of the transferees for the

remaining period and compliance with the Takeover Regulations, as applicable.

The Equity Shares held by persons other than their Promoters and locked-in for a
period of one year from the date of Allotment in the Issue may be transferred to any
other person holding the Equity Shares which are locked-in, subject to the
continuation of the lock-in in the hands of transferees for the remaining period and
compliance with the Takeover Regulations.

Any Equity Shares allotted to Anchor Investor Portion shall be locked-in for a period
of 30 days from the date of Allotment.

44 | P a g e

ORTEL COMMUNICATIONS LIMITED

Promoters Contribution locked-in for three years
Pursuant to the SEBI Regulations, an aggregate of 20% of the post-Issue capital held by the
Promoters shall be considered as promoters contribution and locked-in for a period of three
years from the date of Allotment (Promoters Contribution). The lock-in of the
Promoters Contribution would be created as per applicable law and procedure and details of
the same shall also be provided to the Stock Exchanges before listing of the Equity Shares.
Their Promoters have, pursuant to their undertakings dated September 10, 2014 granted
consent to include upto 6,317,035 Equity Shares held by them, i.e., 352,005 Equity Shares
held by Mr. Baijayant Panda; 239,520 Equity Shares held by Ms. Jagi Mangat Panda;
4,416,510 Equity Shares held by Panda Investments Private Limited and 1,309,000 Equity
Shares held by UMSL Limited, aggregating to 25.93% of the pre-Issue share capital of our
Company as Equity Shares eligible for computation of Promoters Contribution and lock-in
under regulation 33 of the SEBI Regulations. The Promoters have agreed not to sell or
transfer or pledge or otherwise dispose of in any manner, the Promoters Contribution from
the date of filing of the Draft Red Herring Prospectus until the commencement of the lock-in
period specified above.

Share capital locked in for one year

In addition to the lock-in of the Promoters Contribution, the entire pre-Issue equity share
capital of the Company (including those Equity Shares held by our Promoters) other than the
Equity Shares sold through the Offer for Sale and Equity Shares allotted to current
employees of our Company under ESOS 2010, shall be locked in for a period of one year
from the date of Allotment. The Equity Shares subject to lock-in will be transferable subject
to compliance with the SEBI Regulations, as amended from time to time.

Lock in of Equity Shares to be Alloted, if any, to the Anchor Investors

45 | P a g e

Equity Shares allotted to Anchor Investors under the Anchor Investor Portion shall be lockedin for a period of 30 days from the date of Allotment of Equity Shares in the Issue.

Other requirements in respect of lock-in

o The Equity Shares held by the Promoters may be transferred to and amongst the
Promoter Group or to a new promoter or persons in control of our Company, subject
to continuation of the applicable lock-in in the hands of the transferees for the
remaining period and compliance with the provisions of the Takeover Regulations, as
applicable.
o The Equity Shares held by persons other than the Promoters prior to the Issue may be
transferred to any other person holding Equity Shares which are locked-in along with
the Equity Shares proposed to be transferred, subject to continuation of the lock-in in
the hands of the transferees for the remaining period and compliance with the
Takeover Regulations, as applicable.
o The Equity Shares held by the Promoters which are locked-in for a period of three
years from the date of Allotment in the Issue can be pledged with any scheduled
commercial bank or public financial institution as collateral security for loans granted
by such banks or institution, provided the loan has been granted by such bank or
financial institution for financing one or more of the objects of the Issue and pledge
of Equity Shares is one of the terms of sanction of the loan.
o The Equity Shares, if any, held by the Promoters which are locked-in for a period of
one year from the date of Allotment in the Issue can be pledged with any scheduled
commercial bank or public financial institution as collateral security for loans granted
by such bank or financial institution, provided that the pledge of the Equity Shares is
one of the terms of sanction of the loan.

OUR OPINION

Adlabs Entertainment Ltd locked in Equity Shares of 15,979,562 aggregating up to

20% of the post-Issue capital of the Company held by the Promoter, for a period of
three years from the date of Allotment in the Issue.

46 | P a g e

And Ortel Communications Ltd locked in Equity Shares of 6,317,035 aggregating up

to 20.06% of the post-Issue capital of the Company held by the Promoter, for a period
of three years from the date of Allotment in the Issue

DISCLOSURE 9: MANAGEMENT
SEBI Requirements:
Name, age, qualifications, Director Identification Number, experience, address,
occupation and date of expiration of the current term of office of manager,
managing director, and other directors giving their directorships in other companies.
The nature of any family relationship between any of the directors.
Any arrangement or understanding with major shareholders, customers, suppliers or
others, pursuant to which of the directors was selected as a director or member of
senior management.
Details of service contracts entered into by the directors with the issuer company
providing for benefits upon termination of employment and a distinct negative
statement in the absence of any such contract

ADLABS ENTERTAINMENT LIMITED

Board of Directors
In terms of the Articles of Association, the Company is required to have not less than three
Directors and not more than 10 Directors.
As on the date, the Companys Board comprises of six Directors.
The following table sets forth details regarding our Board of Directors:

47 | P a g e

Sr.

Name,

designation,

No.

term and DIN

Manmohan Shetty

1.

Designation:

occupation, Age
(yrs)
66

Chairman

Other

directorships/

partnerships/

trusteeships/ memberships
Other Directorships*
Centrum Capital Limited;

and

Managing Director

P & M Infrastructures Limited;

Occupation: Business

Nationality: Indian

Limited;

Term: Liable to retire by rotation;

Thrill Park;

appointed as the Chairman and

United Producers Forum;

Managing Director for a period of

Walkwater Media Limited; and

five years from September 2, 2013.

DIN: 00013961

Limited.

Royale Thrill Ventures

Whistling

Woods

Private

International

Partnerships
M/s Dream Estates
Memberships
Film & Television Producers Guild
of India
Kapil Bagla
2.

45

Other Directorships

Designation: Whole-time Director

Thrill Park;

and Chief Executive Officer

Blue Haven Entertainment Private

Occupation: Service

Limited;

Nationality: Indian

Term: Liable to retire by rotation;

Limited;

appointed

IRock Media Private Limited; and

Director

as
and

the
Chief

Whole-time
Executive

Idea

Count

Education

Swapnajyoti Trading Private Limited.

Officer for a period of three years

from July 6, 2011.

Partnerships

DIN: 00387814

M/s Dream Estates

48 | P a g e

Private

Prashant Purker
3.

Designation:

Nominee

51

Other Directorships
Blue Sky International Mauritius;

Director

(Non-Executive Director)

BTI Payments Private Limited;

Occupation: Service

Crest Gear Tech Private Limited;

Nationality: Indian

Devyani International Limited;

Term: Not liable to retire by

ICICI Venture Funds Management

rotation

Company Limited

DIN: 00082481

Mahindra Gears and Transmissions

Private Limited;
Mahindra Gears Global Limited;
Sainik Mining and Allied Services
Limited; and
Metalcastello S.p.A.

Anjali Seth
4.

55

Nil

66

Other Directorships

Designation: Non-Executive and

Independent Director
Occupation: Legal Counsel
Nationality: Indian
Term: Liable to retire by rotation.
For a period of five years from
April 4, 2014 to April 3, 2019
DIN: 05234352
Ghulam Mohammed

5.

Designation: Non-Executive and

Indo-IB Capital Partners Limited;

Independent Director

Oswal Industries Limited;

Tribune Corporate & Investment

Occupation: Business

Advisory Services Private Limited; and

Nationality: Indian

Tunip Agro Limited.

Term: Liable to retire by rotation.

For a period of five years from

Partnership

April 4, 2014 to April 3, 2019

D&G Emerging Industries; and

49 | P a g e

 GG Advisory.

DIN: 00591038

Steven A. Pinto
6.

68

Other Directorships

Designation: Non-Executive and

Automobile Corporation of Goa

Independent Director

Limited;

Occupation: Corporate advisor

Easy Access Finance Limited; and

Nationality: Indian

Redington Middle East - FTZE.

Term: Liable to retire by rotation.

For a period of five years from
April 4, 2014 to April 3, 2019
DIN: 00871062

ORTEL COMMUNICATIONS LIMITED

Under the Articles of Association, the Company is required to have not less than three
Directors and not more than 15 Directors.
The Company currently has 11 Directors on its Board.

Name and
other
particulars

50 | P a g e

Age (years)

DIN

Nationality

Other
Directorships

Mr. Baijayant

51

00297862

Indian

Panda

1. Indian Metals

S/o Dr.

& Carbide

Banshidhar

Limited

Panda

2. B. Panda and

Plot No-8, Bhoi

Company

Nagar, Unit-8

Private Limited

Bhubaneswar-

3. Madhuban

751 012,

Investments

Odisha, India.

Private Limited

Designation:

4. K B

Non Executive

Investments

Director cum

Private Limited

Chairman

5. Paramita

Occupation:

Investment &

Industrialist

Trading

Term: Liable to

Company

retire by

Private Limited

rotation

6. Barabati
Investment and
Trading
Company
Private Limited
7. Indian Metals
& Ferro Alloys
Limited
8. Panda
Investments
Private Limited
9. Metro Skynet
Limited

51 | P a g e

10. KEDA
Enterprises
Private Limited
Ms. Jagi

48

00304690

Indian

Mangat Panda

1. Odisha

D/o Mr.

Television

Randhir Singh

Limited

Mangat

2. Panda

Plot No-8, Bhoi

Investments

Nagar, Unit-8

Private Limited

Bhubaneswar-

3. Metro Skynet

751 012,

Limited

Odisha, India.

4. Kishangarh

Designation:

Environment

Executive

Development

Director and

Action Private

Managing

Limited

Director

5. KEDA

Occupation:

Enterprises

Service

Private Limited

Term: For a

6. Orissa

period of five

Telefilms

years

Private Limited

commencing

7. Tarang

from December

Broadcasting

22, 2012 to

Company

December 22,

Limited

2017.

8. Kahani
Unlimited
Private Limited

52 | P a g e

9. Ortel
Wireless
Services Private
Limited
10. News
Broadcasters
Association
11. VISHWASVision for
Health, Welfare
and Special
Needs
Mr.

44

00171845

Indian

Subhrakant

1. Indian Metals

Panda

& Ferro Alloys

S/o Dr.

Limited

Banshidhar

2. Utkal Coal

Panda

Limited

30, Green

3. Utkal Power

Avenue, Vasant

Limited

Kunj, New

4. Utkal Real

Delhi-110 070,

Estate Private

India.

Limited

Designation:

5. Indimet

Non Executive

Mining Pte.

Director

Limited,

Occupation:

Singapore

Business

6. Carolina

Term: Liable to

Consulting

retire by

Private Limited

53 | P a g e

rotation

Mr. Shantanu

44

02104220

Indian

Yeshwant

1. Destimoney

Nalavadi

India Services

S/o Mr.

Private Limited

Yeshwant

2. Destimoney

Fakirappa

Commodities

Nalavadi

Private Limited

RM 2903/4/5/6,

3. Destimoney

FL 29, C 107,

Securities

Ashok Towers,

Private Limited

63/74 Dr. S. S.

4. New Silk

Rao Road,

Route Advisors

Parel, Mumbai

Private Limited

- 400012,

5. 9X Media

India.

Private Limited

Designation:

6. Gastronomy

Non Executive

Management

Director/

Services Private

Investor

Limited

Nominee

7. Vasudev

Director

Adigas

Occupation:

Fastfood

Service

Private Limited

Term: Not

8. Paul

liable to retire

Entertainments

by rotation

Private Limited
9. Rolex Rings
Private Limited

54 | P a g e

10. Moshes
Fine Foods
Private Limited

Dr. Gautam

50

0034243

Indian

Sehgal

1. ADS

S/o Dr. A. D.

Diagnostic

Sehgal

Limited

B-29, Kailash

2. Cardiovas

Colony,

Medical Private

New Delhi-110

Limited

048, India.

3. Ved Med

Designation:

Software &

Non Executive

Trading Private

Director

Limited

Occupation:
Service
Term: Liable to
retire by
rotation
Mr. Jyoti

61

0020453

Indian

Bhusan Pany

1. Radiant

S/o Mr. Rajani

Telesystem

Bhusan Pany

Limited

212, Kharwel

2. Swosti

Nagar

Premium

Bhubaneswar-

Limited

751 001

3. inDNA

Odisha, India.

Lifesciences

Designation:

Private Limited

Non Executive
55 | P a g e

and
Independent
Director
Occupation:
Business
Term: For a
period of five
years with
effect from
August 14,
2014
Mr. K. V.

71

00659784

Indian

Seshasayee

1. Win

S/o Mr. K S

Broadband

Varadarajan

Services Private

2 B Century

Limited

Habitat No. 9,

2. Fuel

4th Main Road,

Automation

Gandhi Nagar,

Private Limited

Adyar

3. Indhan

Chennai - 600

Innovations

020, India

Private Limited

Designation:

4. Green Ark

Non Executive

Eversol Private

and

Limited

Independent

5. Echo Tele

Director

Services Private

Occupation:

Limited

Service

6. Echo Global

Term: For a

Enterprise

period of five

Private Limited

56 | P a g e

years with
effect from
August 14,
2014
Major (Retd.)

76

00146138

Indian

R.N. Misra

1. Indian Metals
& Ferro Alloys
Limited

S/o Mr. Lingaraj Mishra

2. Utkal Coal Limited

6-D, Regency Park, Endenwood, Pokhran

2, Thane (West) - 400 601, India
Designation: Non Executive and
Independent Director
Occupation: Retired from service
Term: For a period of five years with effect
from August 14, 2014
Dr. P.T. Joseph 62
S/o Mr.
Puliparambil
Thomas
6-XLRI, PB
222,
C H Area (East)
Jamshedpur831 001, India
Designation:
Non Executive
and
Independent
Director
Occupation:
Service
57 | P a g e

03396028

Indian

NIL

Term: For a
period of five
years with
effect from
August 14,
2014
Mr. Debaraj

65

01318134

Indian

Biswal

1. Bhubaneswar

S/o Mr.

Stock Exchange

Gangadharbaraj

Limited

Biswal

2. The Odisha

Unit -9,

State Police

Sahidnagar,

Housing and

Bhubaneswar-

Welfare

751 022

Corporation

Odisha, India

Limited

Designation:

3. Industrial

Non Executive

Promotion and

and

Investment

Independent

Corporation of

Director

Odisha Limited

Occupation:

4. Odisha Agro

Service

Industries

Term: For a

Corporation

period of five

Limited

years with
effect from
August 14,
2014

58 | P a g e

Mr. Gautam
Buddha
Mukherji
S/o Mr. Subodh
Chandra
Mukherji
C-4/6,
Chandrama
Complex, Unit3,
Bhubaneswar751 001
Odisha, India
Designation:
Non Executive
and
Independent
Director
Occupation:
Retired from
Service as
Government
employee.
Term: For a
period of five
years with
effect from
August 14,
2014

59 | P a g e

64

06461981

Indian

NIL

DISCLOSURE 10: LITIGATIONS

SEBI Requirements

Outstanding litigations involving the promoter and group companies

1] All pending litigations in which the promoters are involved, defaults to the financial
institutions/ banks,, shall be listed in the prospectus together with the amounts involved and
the present status of such litigations/ defaults. The likely adverse effect of these litigations/
defaults, etc. on the financial performance of the issuer company shall also be mentioned.
2] Further, the cases of pending litigations, defaults, etc. in respect of companies/ firms/
ventures with which the promoters were associated in the past but are no longer associated
shall also be disclosed in case their name(s) continues to be associated with particular
litigation(s).

ORTEL:
Sr. Litigation
Details
No.
A
Litigation involving our Company
Outstanding
Litigation/
Proceedings filed
a against our Company
1
Breach of various
fixing of date of payment to the workers and
provisions of Payment
display of notice of date and time of payment
of Wages Act, 1936
at the workplace

Conclusion

Breach of Franchise
agreement and
subsequent partnership
agreement (2004)

Accounts were not being rendered by the

Defendants a permanent injunction against
the said Defendants restraining them from
collecting monthly subscription charges from
subscribers

Matter is still
pending in court

Unreasonable price hike

(2001)

unreasonable price hike made by our

Company in relation to the cable television
services provided by our Company

Matter is still
pending in court

Unauthorized
installation & use of
poles & cables (1997,
2007, 2006)

Without authorization and in collusion with

electrical distribution companies & CESU of
orissa & NESCO

Matters are still

pending in court

60 | P a g e

Matter is still
pending in court

Unauthorized use of
residential property as
commercial (2000)

Antennas, adding and expanding cable

equipments and other equipment in the
premises of Nirupama Apartments

Matter is still
pending in court

Compelled installation
of set top box

Company had compelled its consumers to

install the set top box for viewing ETV Oriya
by carrying it in digital mode

Matter is still
pending in court

suddenly stopped the

transmission of a
channel

Matter is still
pending in court

Consumer complaints

Company is not telecasting DD Oriya in

prime band as per section 8 of Cable
Television Networks (Regulation) Act, 1995
and on the contrary it is telecasting its own
channels including OTV Chamatkar, Radio
TV in prime band.
28 Cases are there against company

Taxation matter

b
c
1

1. Entry tax on the purchase of goods from

Matter is still
outside the Odisha state(2009)
pending in court
2. Company to pay for the non-deduction of
TDS required under section 201(1) of the
Income Tax Act along with interest for
default(2006-07, 2007-08)
3. Default in payment of tax amounting to
4.07 million (2011)
4. default in payment of tax amounting to
0.29 million (2008-09)
5. Suppressing the value of the taxable service
amounting to 28.36 million
Proceedings initiated against our Company for economic offences
There are no proceedings initiated against our Company for any economic offences
Potential Litigation
against our Company
1. Inflated/ irregular bills, in respect of internet service
2. Arrear dues of 1.85 million on account of subscription
3. Notice from the Department of Telecommunications, Government - nnual license fee for
the ISP license of company
4. Certain unpaid invoices and non-repayment of part of the earnest money deposit USD
16,17,300 - MAP Equipments
Litigation involving the Directors of our Company
a Outstanding Litigation and Material Developments/Proceedings against our Directors

61 | P a g e

Mr. Baijayant Panda

1. Allotment of her share of property

transferred
2. Wealth tax assessment order and demand
notice dated March 19, 2013 for 2,53,040Rs.

Matter is still
pending in court

Ms. Jagi Mangat Panda

1. assessment order and demand notice dated

December 30, 2010 for 1,17,500Rs.

Matter is still
pending in court

Mr. Subhrakant Panda

1. Alleged violation of the Environmental

Impact Assessment Notification, 1994 by
producing chrome ore in contravention of the
terms and conditions of an environmental
clearance
2. Allotment of her share of property
transferred

Matter is still
pending in court

ADLABS:
Sr.
Litigation
Amount
No.
Involved
A
Litigation involving our Company
Outstanding Litigation/ Proceedings filed against our Company
a
Purchase of approximately 170 acres of land (2013)
Not
1
Ascertainable
Encroached upon land aggregating to 2.2 acres
Not
2
Ascertainable
Received a notice (the Notice) from the Divisional
2,19,40,000
Commissioner Office, Kokan Bhuvan (the Commissioner) on
3 December 21, 2013, directing our Company to furnish certain
details in relation to the acquisition of AEL Land and its
subsequent use
Issued summons on July 3, 2013 by the Department of Revenue,
10,41,00,000
Central Board of Excise and Customs (the Department) for
4 production of certain documents and information related to the
import of goods by our Company for use in our theme park
B

Outstanding Litigation/ Proceedings filed by our Company

62 | P a g e

Company has issued a notice dated March 11, 2014 to I.E. Park,
s.r.l Soli Bumper Cars (IE Park) in relation to the breach of the
ride system procurement agreement (the Ride Agreement)
pertaining to the ride named Bandits of Robinhood

2,00,00,000

Litigation involving the Directors of our Company

Outstanding Litigation and Material Developments/Proceedings against our
a Directors
Mr. Kapil Bagla
Not
Global Trade Finance Limited (presently known as SBI Global
Ascertainable
Factors Limited, SGFC) has filed a criminal complaint against
1 BBIPL Infrastructure Limited (BBIPL), its promoters and its
directors, including Kapil Bagla (collectively, the Accused),
under section 138 of the Negotiable Instruments Act, 1881

Outstanding Litigation and Material Developments/Proceedings involving our

Promoters
Manmohan Shetty
Not
He has received four summons from the Directorate of
Ascertainable
Enforcement, Department of Revenue, Ministry of Finance,
Government of India (ED) on January 29, 2013, March 13, 2013,
October 14, 2013 and February 28, 2014 (collectively, the
Summons), in relation to the issuance of foreign currency
convertible bonds by Reliance MediaWorks Limited
Litigation involving our Group Companies
Walkwater Media Limited
60,00,000
The Plaintiff had sublet some premises in Andheri, Mumbai (the
Premises) to Walkwater. In terms of the agreement between the
Plaintiff and Walkwater, the Plaintiff was required to obtain all
permissions required by Walkwater to use the Premises
commercially and make requisite payments for the same.
Walkwater had made certain payments for certain permissions and
accordingly, a notice of demand in respect of such payments was
sent to the Plaintiff. The Plaintiff refused to make such payment
and Walkwater terminated the agreement. The Plaintiff filed a suit
along with an unregistered notice of motion for ad interim relief
alleging that Walkwater had not made certain payments for utilities
during the term
P & M Infrastructures Limited
P & M Infrastructures Limited (P&M) and others (collectively,
the Petitioners) have filed writ petitions before the High Court of
Jharkhand at Ranchi (Jharkhand HC), against the State of
Jharkhand (the State Government), Tata Steel Limited (TSL)
and others, against certain orders issued by the State Government
(the Impugned Orders)

63 | P a g e

Not
Ascertainable

Adlabs Shringar Multiplex Cinemas Private Limited

33,00,000
Adlabs Shringar Multiplex Cinemas Private Limited (Adlabs
Shringar) received a demand notice for service tax payment in
relation to a multiplex owned by Adlabs Shringar for a period when
such multiplex was leased to Swanston Multiplex Cinemas Private
Limited (Swanston)

Summary:

Ortel
No. of outstanding cases
Amount
Sr. Nature of Cases
Involved
No.
A
Litigation against the Company
Criminal Cases
1
Not
a
Ascertainable
18
7,68,768
b Civil Matters
29
69,83,000
c Cionsumer Complaints
7
5,62,72,000
d Taxation Matter
Outstanding Litigation/ Proceedings filed by our Company
B
1
a Criminal Cases
6
5,24,00,000
b Civil Matters
3
24,50,000
c Telecom Matters
Potential Litigation against
12
24,97,00,00,00
C
our Company
Litigation involving the Directors of our Company
E
4
2,53,00,000
a Mr. Baijayant Panda
2
1,47,00,000
b Ms. Jagi Mangat Panda
6
23,000
c Mr. Subhrakant Panda
Mr. Shantanu Yeshwant
1
Not
d Nalavadi
Ascertainable
F
Outstanding Litigation and Material Developments/Proceedings involving our
Promoters
1
9,000
a Criminal Cases
15
15,00,000
b Civil Matters
Labour
Matters
3
c
Adlabs
No. of outstanding cases
Sr. Nature of Cases
No.
A
Litigation against the Company
64 | P a g e

Amount
Involved

3
1,05,40,000
1 Civil Cases
1
10,41,00,000
2 Taxation Matter
Outstanding Litigation/ Proceedings filed by our Company
B
1
2,00,00,000
1 IE
Litigation
involving
the
Directors
of
our
Company
C
Mr. Kapil Bagla
1
Not
1
Ascertainable
F
Outstanding Litigation and Material Developments/Proceedings involving our
Promoters
Nil
E
Litigation involving our Group Companies
2
60,00,000
1 Walkwater Media Limited
P & M Infrastructures
1
Not
2 Limited
Ascertainable
Adlabs Shringar Multiplex
1
33,00,000
3 Cinemas Private Limited

OUR OPINION

Adlabs Company, their Director & Promotors have less no of litigations against
them as compared to the Ortel.
The amount involved in Ortel is higher than the Adlabs.
Thus on comparison, based on the number of litigations & amount involved in it,
Adlabs holds a better stand than that of Ortel and hence be fair enough to invest into
Adlabs on these basis.

DISCLOSURE 11- FINANCIAL DETAILS

ADLABS

65 | P a g e

Currently, 75% of the revenue comes from ticketing, 17-18% from F&B, and rest
from sale of merchandise.
So far about 1.7 million people have visited the theme park. Students account
for 20-25% of visitors.

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In the period of six months ended September 2014, revenues stood at Rs

72.15 crore and net loss Rs 53.52 crore In the year ended March 2014,
revenues stood at Rs 103.69 crore and loss Rs 52.42 crore

It has paid of its debt of 250Cr previously it was 1100Cr

To be Ebidta positive, the company needs about nine lakh footfalls on an

average and to break even at the cash level about 14 lakh footfalls per
year.

The total number of guests hosted at the theme park in the twelve months
ended December 2014 was 9.12 lakh.

ORTEL

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Of the total revenue, about 70% come from analog services, about 20%
from digital and about 11% from broad-band service. The companys
average revenue per user (ARPU) per month (net of tax) is about Rs 150
from analog, Rs 190 from digital and Rs 360 from broadband

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As of December 2014, the company has an outstanding debt of Rs 143.70 crore

with respect to the secured facilities.
There have been delays in repayment and application for restructuring of the
companys debt.

The company has

incurred net losses for last 5 years or more and has had net worth erosion in the
past fiscals
Our Opinion:
Adlabs

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It is showing almost 100% growth in its topline & revenue is increasing Y-oY
Also they are paying off their debts much faster their debt to equity ratio
has improved from 3.68 to 1.63
Ortel
As of June 30, 2014, 89% of its customers are based in Odisha and its
revenue was primarily derived from sale of cable television and broadband
services in Odisha. Thus, it is more a of a single state dependent operator
The company has not been able to grow in the last few years due to lack
of funds as it is a capital intensive industry.
So in our opinion Adlabs is performing better than Ortel & is good for
investment.

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DISCLOSURE 12: IPO GRADING

SEBI Requirements

No unlisted company shall make an IPO of equity shares or any other security which
may be converted into or exchanged with equity shares at a later date.

(i) the unlisted company has obtained grading for the IPO from at least one credit rating
agency;
(ii) disclosures of all the grades obtained, along with the rationale/ description furnished by
the credit rating agency(ies) for each of the grades obtained, have been made in the
Prospectus (in case of fixed price issue) or Red Herring Prospectus (in case of book built
issue); and
(iii) the expenses incurred for grading IPO have been borne by the unlisted company
obtaining grading for IPO.)

ADLABS ENTERTAINMENT LIMITED

The company has not sought any grading of the IPO.

ORTEL COMMUNICATIONS LIMITED

CRISIL has assigned a CRISIL IPO Grade 4/5.

This grade indicates that the fundamentals of the IPO are average relative to other
listed equity securities in India.

The company has built a two-way communication network for Triple Play services
(video, data and voice capabilities) with control over the last mile.

The grading reflects Ortels end connection which allows the company direct access
to the cable television subscribers thereby helping to capture the entire subscription
revenues paid by the cable television subscribers.

As on December 31, 2014, more than 87% of the companys cable subscriber base
was on its own last mile network.

OUR OPINION

An IPO grade of 3/5 makes Ortel IPO a better investment.

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Rating is not a signal to buy or sell a company. It just gives the overview of the
business.

IPO grading itself becomes a factor in deciding whether or not to invest in a company.

So, under IPO Grading Ortel seems to be a better off company.

DISCLOSURE 13: ELIGIBILITY FOR THE ISSUE

SEBI Requirements :

An unlisted company needs to satisfy following criteria to be eligible for making a

public issue:

a) Net tangible assets of at least Rs 3 crore for three full years

b) Distributable profits in at least three years
c) Net worth of at least Rs 1 crore in three years
d) If change in name, at least 50 per cent of revenue for preceding one year should be
from the new activity
e) The issue size should not exceed five times the pre-issue net worth
f) SEBI also provides alternate routes to the companies not satisfying any of the above
parameters, for accessing the primary market.

ADLABS ENTERTAINMENT LIMITED

Our Company is eligible for the Issue in accordance with the Regulation 26(2) of the SEBI
ICDR Regulations, which states as follows:
An issuer not satisfying the condition stipulated in sub-regulation (1) may make an initial
public offer if the issue is made through the book-building process and the issuer undertakes
to allot, at least seventy five percent of the net offer to public, to qualified institutional buyers
and to refund full subscription money if it fails to make the said minimum allotment to
qualified institutional buyers.

We are an unlisted company not complying with the conditions specified in Regulation 26(1)
of the SEBI ICDR Regulations and are therefore required to meet the conditions detailed in
Regulation 26(2) of the SEBI ICDR Regulations.

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 We are complying with Regulation 26(2) of the SEBI ICDR Regulations and at least 75%
of the Issue is proposed to be Allotted to QIBs and in the event we fail to do so, the full
application monies shall be refunded to the Bidders.
We are complying with Regulation 43(2) of the SEBI ICDR Regulations and NonInstitutional Bidders and Retail Individual Bidders will be allocated not more than 15% and
10% of the Issuer, respectively.

Hence, we are eligible for the Issue under Regulation 26(2) of the SEBI ICDR Regulations.
Further our Company shall ensure that the number of prospective Allottees to whom the
Equity Shares will be Allotted shall not be less than 1,000 failing which the entire application
monies shall be refunded forthwith.

ORTEL COMMUNICATIONS LIMITED

The issuer has net tangible assets of at least ` 30.00 million in each of the preceding
three full years (of 12 months each), of which not more than 50.00% are held in
monetary assets. Provided that if more than 50.00% of the net tangible assets are held
in monetary assets, the issuer has made firm commitments to utilise such excess
monetary assets in its business or project.
The issuer has a minimum average pre-tax operating profit of ` 150 million,
calculated on a restated 354 basis, during the three most profitable years out of the
immediately preceding five years;
The issuer has a net worth of at least ` 10.00 million in each of the three preceding
full years (of 12 months each)
The aggregate of the proposed issue and all previous issues made in the same
financial years in terms of the issue size is not expected to exceed five times the preissue net worth of the issuer as per the audited balance sheet of the preceding
financial year;
The issuer has not changed its name in the last fiscal year

DISCLOSURE 14: ALLOTMENT OF SHARES

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Requirement
For book building process:

Qualified institutional buyers at most 50% of the net issue being allotted. However
upto 5% of the net QIB portion shall be available for allocation proportionately to
mutual funds only.

Non institutional bidders not less than 15% of the net issue or the net issue less
allocation to QIBs and retail institutional bidders.

Retail individual investors - Not less than 35% of the net issue or the net issue less
allocation QIBs and non-institutional bidders.

Adlabs

Ortel

Our analysis

Both Adlabs and Ortel communications had seen poor response to its offering

Adlabs IPO was fairly oversubscribed by 1.086% as it received 13,529 bid

applications as compared to 3,479 applications in Ortel communications

Investors were wary of the Adlabs offerings due to a lack of profitability track record,
high debt and expensive valuations compared to its peers

When an issue is oversubscribed shares are being allotted on proportionate basis and
lottery system is used.

DISCLOSURE 15: DIVIDEND POLICY

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SEBI Requirements:
Dividend Policy
SEBI Requirements the rates of dividends, if any, paid by the issuer company in respect of
each class of shares in the issuer company for each of the five financial years immediately
preceding the issue of the prospectus
Dividends
1) Dividend policy of the Company
2) Rate of Dividend and Amount of Dividend paid for the last five financial years
3) Regulatory framework in the Country of Incorporation/share listed concerning Dividends
4) Details of Arrangement with the Depositories for payment of Dividend to the IDR holders
5) Information about changes, if any, in dividends announced and dividends paid and time
gap between the dividends announced and dividends paid.
6) Information about Dividend Yield.
7) Taxation aspects of dividend distribution.

ADLABS AND ORTEL

DIVIDEND POLICY
The declaration and payment of dividend will be recommended by our Board and approved
by the shareholders of our Company at their discretion and will depend on a number of
factors, including the results of operations, earnings, capital requirements and surplus,
general financial conditions, contractual restrictions, applicable Indian legal restrictions and
other factors considered relevant by the Board. The Board may also from time to time pay
interim dividend. Our Company has not declared any dividends since its incorporation.

REFERENCE
http://www.chittorgarh.com/
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