PROSPECTUSDated April 27, 2015
Please read section 32 of the Companies Act, 2013Book Built Issue
MEP INFRASTRUCTURE DEVELOPERS LIMITED Our Company was incorporated as MEP Toll Road Private Limited on August 8, 2002, at Mumbai, Maharashtra as a private limited company under the Companies Act, 1956. The name of our Company was changed from MEP Toll Road Private Limited to MEP Infrastructure Developers Private Limited and a fresh certificate of incorporation consequent upon change of name was issued by the Registrar of Companies, Mumbai, to our Company on November 28, 2011. Thereafter, our Company was converted into a public limited company pursuant to approval of the shareholders in an extraordinary general meeting held on August 19, 2014 and consequently, the name of our Company was changed to MEP Infrastructure Developers Limited and a fresh certificate of incorporation consequent upon conversion to public limited company was granted on September 8, 2014. For details of changes in the name and the registered office of our Company, see the section “History and Certain Corporate Matters” on page 217.
Registered Office and Corporate Office: A 412, boomerang, Chandivali Farm Road, Near Chandivali Studio, Andheri (East), Mumbai 400 072 Contact Person: Shridhar Phadke, Company Secretary and Compliance Officer
Tel: (91 22) 6120 4800; Fax: (91 22) 6120 4804 Email: [email protected] Website: www.mepinfra.comCorporate Identity Number: U45200MH2002PLC136779
Promoters of our Company: Dattatray P. Mhaiskar, Jayant D. Mhaiskar and Ideal Toll & Infrastructure Private LimitedPUBLIC ISSUE OF 51,074,941 EQUITY SHARES OF FACE VALUE OF ̀ 10 EACH (THE “EQUITY SHARES”) OF MEP INFRASTRUCTURE DEVELOPERS LIMITED (OUR “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF ` 63* PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ` 53 PER EQUITY SHARE) AGGREGATING UP TO ` 3,240 MILLION** (THE “ISSUE”). THE ISSUE WILL CONSTITUTE 31.42% OF THE POST-ISSUE PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY. THE FACE VALUE OF THE EQUITY SHARES IS ` 10 EACH. THE ISSUE PRICE IS ` 63 PER EQUITY SHARE AND IS 6.3 TIMES THE FACE VALUE OF THE EQUITY SHARES.* Anchor Investor Issue Price is ` 65 per Equity Share.** Subject to finalization of Basis of Allotment.In case of any revisions in the Price Band, the Bid/Issue Period will be extended by at least three additional Working Days after such revision of the Price Band, subject to the Bid/Issue Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Issue Period, if applicable, will be widely disseminated by notification to the BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”, and together with the BSE referred to as the “Stock Exchanges”), by issuing a press release, and also by indicating the change on the website of the BRLMs and the terminals of the Syndicate Members.In terms of Rule 19(2)(b)(i) of the Securities Contracts (Regulation) Rules, 1957, as amended (the “SCRR”), this is an Issue for at least 25% of the post-Issue capital of our Company. The Issue is being made through the Book Building Process wherein at least 75% of the Issue shall be Allotted on a proportionate basis to Qualified Institutional Buyers (“QIBs”), provided that our Company may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis. 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Issue Price. If at least 75% of the Issue cannot be Allotted to QIBs, then the entire application money shall be refunded forthwith. Further, not more than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not more than 10% of the Issue shall be available for allocation to Retail Individual Bidders in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (the “SEBI Regulations”), subject to valid Bids being received at or above the Issue Price. All potential investors, other than Anchor Investors, may participate in this Issue through an Application Supported by Blocked Amount (“ASBA”) process providing details of the bank account which will be blocked by the Self Certified Syndicate Banks (“SCSBs”). QIBs (except Anchor Investors) and Non-Institutional Bidders are mandatorily required to utilise the ASBA process to participate in this Issue. For details, see the section ‘Issue Procedure’ on page 583.
RISKS IN RELATION TO THE FIRST ISSUEThis being the first public issue of our Company, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares is ` 10 each. The Issue Price is 6.3 times the face value of the Equity Shares. The Issue Price (determined and justified by our Company, in consultation with the BRLMs as stated under the section “Basis for Issue Price” on page 111) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISKSInvestments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their entire investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue, including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents of this Prospectus. Specific attention of the investors is invited to the section “Risk Factors” on page 17.
ISSUER’S ABSOLUTE RESPONSIBILITYOur Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to our Company and the Issue, which is material in the context of the Issue, that the information contained in this Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.
LISTINGThe Equity Shares offered through this Prospectus are proposed to be listed on the BSE and the NSE. We have received an ‘in-principle’ approval from each of BSE and NSE for the listing of the Equity Shares pursuant to the letters dated November 19, 2014 and November 5, 2014, respectively. For the purposes of the Issue, the Designated Stock Exchange shall be the NSE. A copy of the Red Herring Prospectus has been registered with, and a copy of the Prospectus has been delivered for registration to, the Registrar of Companies, Mumbai (“RoC”) in accordance with Section 26(4) of the Companies Act, 2013. For details of the material contracts and documents available for inspection from the date of the Red Herring Prospectus up to the Bid/Issue Closing Date, see the section “Material Contracts and Documents for Inspection” on page 644.
BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE
IDFC Securities LimitedNaman ChambersC-32, G BlockBandra Kurla ComplexBandra (East)Mumbai 400 051Tel : (91 22) 6622 2500Fax : (91 22) 6622 2501Email : [email protected] Investor Grievance Email: [email protected] Website: www.idfccapital.comContact Person: Akshay BhandariSEBI Registration No.: MB/INM000011336
Inga Capital Private LimitedNaman Midtown, ‘A’ Wing21st FloorSenapati Bapat MargElphistone (West)Mumbai 400 012Tel: (91 22) 4031 3489 Fax: (91 22) 4031 3379Email: [email protected] Grievance Email: [email protected] Website: www.ingacapital.comContact Person: Ashwani TandonSEBI Registration Number: INM000010924
IDBI Capital Market Services Limited3rd Floor, Mafatlal CentreNariman PointMumbai 400 021Tel: (91 22) 4322 1212Fax: (91 22) 2285 0785Email: [email protected] Grievance Email: [email protected]: www.idbicapital.comContact Person: Sumit Singh/ Gaurav KumarSEBI Registration Number: INM000010866
Link Intime India Private LimitedC-13 Pannalal Silk Mills CompoundL.B.S. Marg Bhandup (West) Mumbai 400 078Maharashtra, IndiaTel: (91 22) 6171 5400Fax: (91 22) 2596 0329E-mail: [email protected]: www.linkintime.co.inContact Person: Sachin AcharSEBI Registration No.: INR000004058
BID/ ISSUE PROGRAMME(1)
BID/ISSUE OPENED ON: APRIL 21, 2015 (TUESDAY) BID/ISSUE CLOSED ON: APRIL 23, 2015 (THURSDAY)(1) The Anchor Investor Bid/ Issue Period was one Working Day prior to the Bid/ Issue Opening Date, i.e. April 20, 2015.
TABLE OF CONTENTS
SECTION I: GENERAL .................................................................................................................................... 3
DEFINITIONS AND ABBREVIATIONS ........................................................................................................ 3 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA .................................................. 14 FORWARD-LOOKING STATEMENTS ....................................................................................................... 16
SECTION II: RISK FACTORS ....................................................................................................................... 17
SECTION III: INTRODUCTION ................................................................................................................... 51
SUMMARY OF INDUSTRY ......................................................................................................................... 51 SUMMARY OF OUR BUSINESS.................................................................................................................. 58 SUMMARY FINANCIAL INFORMATION ................................................................................................. 65 THE ISSUE ..................................................................................................................................................... 75 GENERAL INFORMATION.......................................................................................................................... 76 CAPITAL STRUCTURE ................................................................................................................................ 87 OBJECTS OF THE ISSUE ............................................................................................................................ 104 BASIS FOR ISSUE PRICE ........................................................................................................................... 111 STATEMENT OF TAX BENEFITS ............................................................................................................. 114
SECTION IV: ABOUT OUR COMPANY ................................................................................................... 126
INDUSTRY OVERVIEW ............................................................................................................................. 126 OUR BUSINESS ........................................................................................................................................... 155 DESCRIPTION OF CERTAIN KEY CONTRACTS .................................................................................... 188 REGULATIONS AND POLICIES ............................................................................................................... 213 HISTORY AND CERTAIN CORPORATE MATTERS .............................................................................. 217 SUBSIDIARIES ............................................................................................................................................ 221 MANAGEMENT .......................................................................................................................................... 234 PROMOTERS AND PROMOTER GROUP ................................................................................................. 253 GROUP COMPANIES ................................................................................................................................. 259 RELATED PARTY TRANSACTIONS ........................................................................................................ 272 DIVIDEND POLICY .................................................................................................................................... 273
SECTION V: FINANCIAL INFORMATION.............................................................................................. 274
FINANCIAL STATEMENTS ....................................................................................................................... 274 FINANCIAL STATEMENTS OF MIPL....................................................................................................... 427 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS .............................................................................................................................................. 477 FINANCIAL INDEBTEDNESS ................................................................................................................... 508
SECTION VI: LEGAL AND OTHER INFORMATION ............................................................................ 538
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS .................................................... 538 GOVERNMENT AND OTHER APPROVALS ........................................................................................... 553 OTHER REGULATORY AND STATUTORY DISCLOSURES ................................................................ 561
SECTION VII: ISSUE INFORMATION ..................................................................................................... 574
TERMS OF THE ISSUE ............................................................................................................................... 574 ISSUE STRUCTURE .................................................................................................................................... 577 ISSUE PROCEDURE ................................................................................................................................... 583
SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ................................. 635
SECTION IX: OTHER INFORMATION .................................................................................................... 644
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ...................................................... 644 DECLARATION .......................................................................................................................................... 646
3
SECTION I: GENERAL
DEFINITIONS AND ABBREVIATIONS
This Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates or
implies, shall have the meaning as provided below. References to any legislation, act or regulation shall be to
such legislation, act or regulation as amended from time to time. In the section “Main Provisions of the Articles
of Association” on page 635, defined terms have the meaning given to such terms in the Articles of Association.
General Terms
Term Description
our “Company”, the
“Company” or the “Issuer”
MEP Infrastructure Developers Limited, a company incorporated under the
Companies Act, 1956 and having its Registered Office at A 412, boomerang,
Chandivali Farm Road, Near Chandivali Studio, Andheri (East), Mumbai 400
072
“We”, “our”, “us” or “Group” Unless the context otherwise indicates or implies, refers to our Company
together with its Subsidiaries
Company Related Terms
Term Description
Articles / Articles of
Association
Articles of association of our Company, as amended from time to time
Baramati Project The project for construction of the four lane Sakhali bridge on Karha River in
Baramati and maintenance of, and collection of toll for, the Ring Road and the
bridges in Baramati, Maharashtra awarded by MSRDC for a period of 19
years and four months from October 25, 2010 and operated by BTPL Board / Board of Directors Board of directors of our Company or a duly constituted committee thereof
BTPL Baramati Tollways Private Limited
Chennai Bypass Project The project for maintenance of, and collection of toll for, the Chennai Bypass
section in Tamil Nadu awarded by NHAI for a period of nine years from May
14, 2013 and operated by MEP CB
Corporate Promoter The corporate promoter of our Company, namely ITIPL. For details, see the
section “Promoters and Promoter Group” on page 253
Director(s) Director(s) on the Board of Directors of our Company
Equity Shares Equity shares of our Company of face value of ` 10 each fully paid-up
Group Companies Companies, firms and ventures promoted by our Promoters, irrespective of
whether such entities are covered under Section 370(1)(B) of the Companies
Act, 1956 or not and includes those companies, firms and ventures disclosed
in the section “Group Companies” beginning on page 259
Hyderabad-Bangalore Project The project for maintenance of, and collection of toll, for the Hyderabad–
Bangalore section of the National Highway No. 7 in Andhra Pradesh awarded
by NHAI for a period of nine years from May 16, 2013 and operated by MEP
HB
IEPL Ideal Energy Projects Limited
IRDP Solapur Project The project for collection of toll at four toll plazas located at Solapur – Hotgi
Road, Solapur – Barshi Road, Solapur – Degaon Mangalweda Road and
Solapur – Akkalkot Road together with maintenance of toll plazas and
maintenance of property and equipment provided by MSRDC in Solapur,
Maharashtra awarded by MSRDC for a period of 156 weeks from January 2,
2013 and operated by MEP Solapur
ITIPL Ideal Toll & Infrastructure Private Limited
Joint Statutory Auditors Joint statutory auditors of our Company, namely B S R and Co., Chartered
Accountants and Parikh Joshi & Kothare, Chartered Accountants
Kalyan Shilphata Project The project for collection of toll at two toll plazas located at Katai and Gove
4
Term Description
on the Bhiwandi – Kalyan – Shilphata section of State Highway No. 40 in
Maharashtra awarded by MSRDC for a period of 156 weeks from September
27, 2013 and operated by our Company
Key Management Personnel /
KMPs
Key management personnel disclosed in the section “Management” on page
250
Kini Tasawade Project The project for collection of toll at two toll plazas located near Kini and
Tasawade on the National Highway No. 4 in Maharashtra awarded by
MSRDC for a period of 104 weeks from May 29, 2014 and operated by
RTIPL
Long Term Project A project operated by our Company or any of its Subsidiaries with an initial
contractual term in excess of one year. A project with an initial contractual
period of one year or less will not be considered a long term project even if its
term has subsequently been extended to more than one year. See also “Short
Term Project”.
Madurai-Kanyakumari Project The project for maintenance of, and collection of toll for, the Madurai-
Tirunelveli-Panagudi-Kanyakumari section of the National Highway No. 7 in
Tamil Nadu awarded by NHAI for a period of nine years from September 22,
2013 and operated by RTRPL MICPL MEP Infra Constructions Private Limited
Memorandum of Association Memorandum of association of our Company, as amended from time to time
MEP CB MEP Chennai Bypass Toll Road Private Limited
MEP Hamirpur MEP Hamirpur Bus Terminal Private Limited
MEP HB MEP Hyderabad Bangalore Toll Road Private Limited
MEP HS MEP Highway Solutions Private Limited
MEP Infraprojects MEP Infraprojects Private Limited
MEP Nagzari MEP Nagzari Toll Road Private Limited
MEP RBPL MEP Roads & Bridges Private Limited
MEP RGSL MEP RGSL Toll Bridge Private Limited
MEP Solapur MEP IRDP Solapur Toll Road Private Limited
MEP Una MEP Una Bus Terminal Private Limited
MEPIDPL MEP Infrastructure Developers Private Limited
MIPL MEP Infrastructure Private Limited
MTIPL MEP Toll & Infrastructure Private Limited
MTPL MEP Tormato Private Limited
MTRPL Mhaiskar Toll Road Private Limited
Mumbai Entry Points The five entry points to Mumbai located at (i) Vashi on the Sion–Panvel
Highway; (ii) Dahisar on the Western Express Highway corridor; (iii) Mulund
on the Eastern Express Highway corridor; (iv) Mulund on the Lal Bahadur
Shashtri Marg corridor; and (v) Airoli on the Airoli Bridge corridor
Mumbai Entry Points Contract The contract dated November 19, 2010 entered into between our Company,
ITIPL, MIPL and MSRDC in respect of the Mumbai Entry Points Project
Mumbai Entry Points Project The project for operation and maintenance of, and collection of toll at, the
Mumbai Entry Points along with 27 flyovers and certain allied structures on
the Sion–Panvel Highway, the Western Express Highway corridor, the
Eastern Express Highway corridor, the Lal Bahadur Shashtri Marg corridor
and the Airoli Bridge corridor in Mumbai, Maharashtra awarded by MSRDC
for a period of 16 years from November 20, 2010 and operated by MIPL
Phalodi-Ramji Project The project for collection of toll at four toll plazas in the Phalodi – Pachpadra
– Ramji Ki Gol road corridor located at Kolu Pabuji village, Kelan Kot
village, Bhooka Bhagat Singh village and Naya Nagar village together with
maintenance of toll plazas and infrastructure facilities provided by RIDCOR
in Rajasthan, awarded by RIDCOR for a period of five years from September
17, 2010 and operated by RVPL
Promoters Promoters of our Company, namely Dattatray P. Mhaiskar, Jayant D.
5
Term Description
Mhaiskar and ITIPL. For details, see the section “Promoters and Promoter
Group” on page 253
Promoter Group Persons and entities constituting the promoter group of our Company in terms
of Regulation 2(1)(zb) of the SEBI Regulations and as disclosed in the section
“Promoters and Promoter Group” on page 253
The Promoter Group of our Company does not include Virendra D. Mhaiskar;
son of Dattatray P. Mhaiskar and brother of Jayant D. Mhaiskar, our
individual Promoters, or any entity in which Virendra D. Mhaiskar may have
an interest; since Virendra D. Mhaiskar has refused to provide any
information pertaining to himself or such entities.
Rajiv Gandhi Salai Project /
ITEL Project
Project for appointment as service agency for collection of toll at five toll
plazas located at the Rajiv Gandhi Salai in Chennai, Tamil Nadu awarded by
ITEL for a period of three years from March 8, 2014 and operated by our
Company
Registered Office / Corporate
Office
The registered and corporate office of our Company, which is located at A
412, boomerang, Chandivali Farm Road, Near Chandivali Studio, Andheri
(East), Mumbai 400 072
Registrar of Companies/RoC Registrar of Companies, Maharashtra at Mumbai
Restated Consolidated
Financial Information
Restated consolidated financial information of assets and liabilities as at
March 31, 2014, 2013, 2012, 2011 and 2010 and seven months ended October
31, 2014 and statement of profit and loss and cash flows for each of the years
ended March 31, 2014, 2013, 2012, 2011 and 2010 and seven months ended
October 31, 2014 for our Company and its Subsidiaries read alongwith all the
notes thereto and beginning on page 274
Restated Financial
Information
Collectively, the Restated Consolidated Financial Information and the
Restated Standalone Financial Information
Restated Standalone Financial
Information
Restated standalone financial Information of assets and liabilities as at March
31, 2014, 2013, 2012, 2011 and 2010 and seven months ended October 31,
2014 and statement of profit and loss and cash flows for each of the years
ended March 31, 2014, 2013, 2012, 2011 and 2010 and seven months ended
October 31, 2014 for our Company read alongwith all the notes thereto and
beginning on page 348
RGSL Project The project for maintenance of, and collection of toll at the toll plaza at
Bandra for, the Rajiv Gandhi Sea Link in Mumbai, Maharashtra awarded by
MSRDC for a period of 156 weeks commencing from February 6, 2014 and
operated by MEP RGSL
RTBPL Rideema Toll Bridge Private Limited
RTIPL Raima Toll & Infrastructure Private Limited
RTPL Rideema Toll Private Limited
RTRPL Raima Toll Road Private Limited
RVPL Raima Ventures Private Limited
Shareholders Shareholders of our Company
Short Term Project A project operated by our Company or any of its Subsidiaries with an initial
contractual term of one year or less. A project with an initial contractual term
of one year or less is considered to be a Short Term Project even if its term
has subsequently been extended to more than one year. See also “Long Term
Project”.
Subsidiaries Subsidiaries of our Company namely, MIPL, RVPL, RTPL, BTPL, RTBPL,
MEP Nagzari, MEP Solapur, RTRPL, MEP HB, MEP CB, MEP HS, MEP
RGSL, RTIPL, MICPL, MEP Infraprojects, MEP RBPL, MTRPL, MTIPL
and MTPL. For details, see the section “Subsidiaries” on page 221
Vidyasagar Setu Project The project for collection of toll at the toll plaza located at the Vidyasagar
Setu in West Bengal awarded by HRBC for a period of five years from
6
Term Description
September 1, 2013 and operated by RTBPL
Issue Related Terms
Term Description
Allot/Allotment/ Allotted Unless the context otherwise requires, the allotment of the Equity Shares
pursuant to the Issue to successful Bidders
Allottee A successful Bidder to whom the Equity Shares are Allotted
Allotment Advice Note or advice or intimation of Allotment sent to each successful Bidder after
the Basis of Allotment has been approved by the Designated Stock Exchange
Anchor Investor A Qualified Institutional Buyer, applying under the Anchor Investor Portion,
with a minimum Bid of ` 100 million
Anchor Investor Bid/ Issue
Period
The day, one Working Day prior to the Bid/Issue Opening Date, on which
Bids by Anchor Investors shall be submitted and allocation to Anchor Investor
shall be completed
Anchor Investor Issue Price ` 65 per Equity Share, being the final price at which the Equity Shares will be
issued and Allotted to Anchor Investors in terms of the Red Herring
Prospectus and this Prospectus
Anchor Investor Portion Up to 60% of the QIB Portion, which may be allocated by our Company, in
consultation with the BRLMs, to Anchor Investors on a discretionary basis.
One-third of the Anchor Investor Portion shall be reserved for domestic
Mutual Funds, subject to valid Bids being received from domestic Mutual
Funds at or above the Anchor Investors Issue Price.
Our Company has allocated 11,139,346 Equity Shares to Anchor Investors at `
65 per Equity Share in accordance with SEBI Regulations.
Application Supported by
Blocked Amount/ASBA
The process of submitting the Bid cum Application Form, whether physical or
electronic, used by Bidders, other than Anchor Investors, to make a Bid
authorising a SCSB to block the Bid Amount in the ASBA Account. ASBA is
mandatory for QIBs (other than Anchor Investors) and the Non-Institutional
Bidders participating in the Issue
ASBA Account An account maintained with an SCSB and specified in the Bid cum
Application Form submitted by ASBA Bidders for blocking the Bid Amount
mentioned in the Bid cum Application Form
ASBA Bid A Bid made by an ASBA Bidder
ASBA Bidder Any Bidder (other than Anchor Investors) in this Issue who intends to submit a
Bid through the ASBA process
Bankers to the Issue/Escrow
Collection Banks
Banks which are clearing members and registered with SEBI as bankers to an
issue and with whom the Escrow Account will be opened, in this case being
HDFC Bank Limited, IndusInd Bank Limited and Kotak Mahindra Bank
Limited Basis of Allotment Basis on which the Equity Shares will be Allotted to successful Bidders under
the Issue and which is described in the section “Issue Procedure” on page 583
Bid An indication to make an offer during the Bid/Issue Period by a Bidder (other
than Anchor Investor) pursuant to submission of the Bid cum Application
Form, or during the Anchor Investor Bid/Issue Period by Anchor Investors, to
subscribe to the Equity Shares of our Company at a price within the Price
Band, including all revisions and modifications thereto as permitted under the
SEBI Regulations in terms of the Red Herring Prospectus and the Bid cum
Application Form
Bid Amount The highest value of the optional Bids indicated in the Bid cum Application
Form and payable by the Bidder/blocked in the ASBA Account on submission
of a Bid in the Issue.
Bid cum Application Form The form used by a Bidder, including an ASBA Bidder, to make a Bid and
7
Term Description
which will be considered as an application for Allotment in terms of the Red
Herring Prospectus and this Prospectus
Bid/ Issue Closing Date Except in relation to Bids received from Anchor Investors, the date after which
the Syndicate, the Designated Branches and the Registered Brokers will not
accept any Bids for the Issue, which shall be notified in two national daily
newspapers, one each in English and Hindi and in one regional language, each
with wide circulation
Bid/ Issue Opening Date Except in relation to Bids received from the Anchor Investors, the date on
which the Syndicate, the Designated Branches and the Registered Brokers
shall start accepting Bids for the Issue, which shall be notified in two national
daily newspapers, one each in English and Hindi and in one regional language,
each with wide circulation
Bid/ Issue Period Except in relation to Anchor Investors, the period between the Bid/Issue
Opening Date and the Bid/Issue Closing Date, inclusive of both days, during
which prospective Bidders can submit their Bids, including any revisions
thereof
Bid Lot 225
Bidder(s) Any prospective investor who makes a Bid pursuant to the terms of the Red
Herring Prospectus and the Bid cum Application Form
Book Building Process The book building process, as provided in Schedule XI of the SEBI
Regulations, in terms of which this Issue is being made
Broker Centres Broker centres notified by the Stock Exchanges where Bidders can submit the
Bid cum Application Forms to a Registered Broker. The details of such Broker
Centres, along with the names and contact details of the Registered Broker are
available on the respective website of the Stock Exchanges.
BRLMs/Book Running Lead
Managers
The book running lead managers to the Issue, being IDFC Securities, Inga and
IDBI Capital
CAN / Confirmation of
Allocation Note
Notice or intimation of allocation of the Equity Shares sent to Anchor
Investors, who have been allocated the Equity Shares, after the Anchor
Investor Bid/Issue Period
Cap Price The higher end of the Price Band, in this case being ` 65 per Equity Share,
subject to any revision thereto, above which the Issue Price will not be
finalised and above which no Bids will be accepted
Compliance Officer The company secretary who has been appointed as compliance officer of our
Company
Controlling Branches Such branches of SCSBs which coordinate Bids under the Issue with the
BRLMs, the Registrar and the Stock Exchanges, a list of which is available on
the website of SEBI at http://www.sebi.gov.in
Cut-off Price The Issue Price, finalised by our Company in consultation with BRLMs. Only
Retail Individual Bidders are entitled to Bid at the Cut-off Price. QIBs
(including Anchor Investors) and Non-Institutional Bidders are not entitled to
Bid at the Cut-off Price
Designated Branches Such branches of the SCSBs which shall collect Bid cum Application Forms
used by ASBA Bidders, a list of which is available on the website of SEBI at
http://www.sebi.gov.in
Designated Date The date on which the Escrow Collection Banks transfer funds from the
Escrow Accounts and instructions are issued to the SCSBs for tranfer of funds
from the ASBA Accounts, to the Public Issue Account(s) or the Refund
Account, as the case may be, after the Prospectus is filed with the RoC
Designated Stock Exchange NSE
Draft Red Herring Prospectus
or DRHP
The draft red herring prospectus dated September 29, 2014 issued in
accordance with the SEBI Regulations, which does not contain complete
particulars of the price at which the Equity Shares will be Allotted
Eligible NRI(s) NRI(s) from jurisdictions outside India where it is not unlawful to make an
8
Term Description
offer or invitation under the Issue and in relation to whom the Bid cum
Application Form and the Red Herring Prospectus constitutes an invitation to
subscribe to the Equity Shares
Engagement Letters The engagement letters dated August 22, 2014 between our Company, IDFC
Securities and Inga, and dated May 2, 2014 between our Company and IDBI
Capital
Escrow Account Account opened with the Escrow Collection Banks and in whose favour the
Bidders (excluding the ASBA Bidders) will issue cheques or demand drafts in
respect of the Bid Amount when submitting a Bid
Escrow Agreement Agreement dated March 25, 2015 entered into between our Company, the
Registrar to the Issue, the BRLMs, the Syndicate Members, the Escrow
Collection Banks for collection of the Bid Amounts and where applicable,
refunds of the amounts collected to the Bidders (excluding the ASBA Bidders)
on the terms and conditions thereof
Equity Listing Agreement Listing agreement to be entered into by our Company with the Stock
Exchanges
First Bidder The Bidder whose name appears first in the Bid cum Application Form or
Revision Form
Floor Price The lower end of the Price Band, in this case being ` 63 per Equity Share,
subject to any revision thereto, at or above which the Issue Price will be
finalised and below which no Bids will be accepted
IDBI Capital IDBI Capital Market Services Limited
IDFC Securities IDFC Securities Limited
Inga Inga Capital Private Limited
Issue Public issue of 51,074,941 Equity Shares for cash at a price of ` 63* each,
aggregating up to ` 3,240 million**, pursuant to the terms of the Red Herring
Prospectus.
* Anchor Investor Issue Price is ` 65 per Equity Share.
** Subject to finalization of Basis of Allotment.
Issue Agreement The agreement dated September 29, 2014 between our Company and the
BRLMs, pursuant to which certain arrangements are agreed to in relation to
the Issue Issue Price ` 63 per Equity Share, being the final price at which the Equity Shares will be
Allotted in terms of the Red Herring Prospectus
Issue Proceeds The proceeds of the Issue available to our Company. For further information
about use of Issue Proceeds, see the section “Objects of the Issue” on page 104
Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor Investor Portion), or 1,358,343
Equity Shares which shall be available for allocation to Mutual Funds only
Net Proceeds Proceeds of the Issue less the Issue expenses. For further information about the
Issue expenses, see the section “Objects of the Issue” on page 104
Non-Institutional Bidders All Bidders that are not QIBs or Retail Individual Bidders and who have Bid
for Equity Shares for an amount more than ` 200,000 (but not including NRIs
other than Eligible NRIs)
Non-Institutional Portion The portion of the Issue being not more than 15% of the Issue, or 7,661,241
Equity Shares which shall be available for allocation on a proportionate basis
to Non-Institutional Bidders, subject to valid Bids being received at or above
the Issue Price
Price Band Price Band of a minimum price of ` 63 per Equity Share (Floor Price) and the
maximum price of ` 65 per Equity Share (Cap Price), including any revisions
thereof. The Price Band and the minimum Bid Lot size for the Issue was
decided by our Company in consultation with the BRLMs and advertised, at
least five Working Days prior to the Bid/Issue Opening Date, in all editions of
English national newspaper Financial Express, all editions of Hindi national
9
Term Description
newspaper Jansatta, and Mumbai edition of regional language newspaper
Navshakti, each with wide circulation.
Pricing Date The date on which our Company, in consultation with the BRLMs, will
finalise the Issue Price
Prospectus This Prospectus, dated April 27, 2015 to be filed with the RoC in accordance
with section 26 of the Companies Act, 2013 containing, inter alia, the Issue
Price that is determined at the end of the Book Building Process, the size of
the Issue and certain other information
Public Issue Account(s) Account(s) opened with the Bankers to the Issue to receive monies from the
Escrow Account(s) and to which funds shall be tranferred by the SCSBs from
the ASBA Account, on or after the Designated Date
QIB Category / QIB Portion The portion of the Issue (including the Anchor Investor Portion) amounting to
at least 75% of the Issue consisting of 38,306,206 Equity Shares which shall
be Allotted to QIBs (including Anchor Investors) on a proportionate basis
Qualified Institutional Buyers
or QIBs
Qualified institutional buyers as defined under Regulation 2(1)(zd) of the
SEBI Regulations
Red Herring Prospectus or
RHP
The red herring prospectus dated April 9, 2015 issued by our Company in
accordance with section 32 of the Companies Act, 2013 and the provisions of
the SEBI Regulations, as supplemented by addendum dated April 17, 2015,
which does not have complete particulars of the price at which the Equity
Shares are offered. The Red Herring Prospectus will become the Prospectus
upon filing with the RoC after the Pricing Date.
Refund Account The account opened with the Refund Bank, from which refunds, if any, of the
whole or part of the Bid Amount (excluding refunds to ASBA Bidders) shall
be made
Refund Bank HDFC Bank Limited
Refunds through electronic
transfer of funds
Refunds through NECS, Direct Credit, RTGS or NEFT, as applicable
Registered Brokers Stock brokers registered with the stock exchanges having nationwide
terminals, other than the members of the Syndicate
Registrar to the
Issue/Registrar
Registrar to the Issue, in this case being Link Intime India Private Limited
Retail Individual Bidder(s) Individual Bidders who have Bid for Equity Shares for an amount not more
than ` 200,000 in any of the bidding options in the Issue (including HUFs
applying through their Karta and Eligible NRIs)
Retail Portion The portion of the Issue being not more than 10% of the Issue, or 5,107,494
Equity Shares which shall be available for allocation to Retail Individual
Bidder(s) in accordance with SEBI Regulations subject to valid Bids being
received at or above the Issue Price
Revision Form Form used by the Bidders, including ASBA Bidders, to modify the quantity of
the Equity Shares or the Bid Amount in any of their Bid cum Application
Forms or any previous Revision Form(s). Kindly note that QIB Bidders and
Non-Institutional Bidders are not allowed to withdraw or lower their Bid (in
terms of number of Equity Shares or the Bid Amount) at any stage
Self Certified Syndicate
Banks or SCSBs
The banks registered with SEBI, offering services in relation to ASBA, a list
of which is available on the website of SEBI at http://www.sebi.gov.in
Specified Locations Bidding centres where the Syndicate shall accept Bid cum Application Forms
from ASBA Bidders, a list of which is available at the website of the SEBI
(www.sebi.gov.in) and updated from time to time
Stock Exchanges BSE and NSE
Syndicate Agreement Agreement dated March 25, 2015 entered into amongst the BRLMs, the
Syndicate Members, the Registrar to the Issue and our Company in relation to
the collection of Bids in this Issue (excluding Bids from Bidders applying
through the ASBA process or Bids submitted to the Registered Brokers at the
10
Term Description
Broking Centres)
Syndicate Members Hem Securities Limited, Intime Equities Limited, Sharekhan Limited and
Sunidhi Securities and Finance Limited
Syndicate/ members of the
Syndicate
BRLMs and Syndicate Members
TRS/Transaction Registration
Slip
The slip or document issued by the Syndicate, or the SCSB (only on demand),
as the case may be, to the Bidder as proof of registration of the Bid
Underwriters BRLMs and Syndicate Members
Underwriting Agreement The agreement dated April 27, 2015 amongst the Underwriters and our
Company
Working Days Any day, other than Saturdays and Sundays, on which commercial banks in
Mumbai are open for business, provided however, for the purpose of the time
period between the Bid/Issue Closing Date and listing of the Equity Shares on
the Stock Exchanges, “Working Days” shall mean all days excluding Sundays
and bank holidays in Mumbai in accordance with the SEBI circular no.
CIR/CFD/DIL/3/2010 dated April 22, 2010
Technical/Industry Related Terms/Abbreviations
Term Description
AVECL Ahmedabad Vadodara Expressways Company Limited
BOOT Build, Own, Operate and Transfer
BOT Build, Operate and Transfer
BTLO Build-Transfer-Lease-Operate
BRO Border Roads Organisation
CRF Central Road Fund
DBFOT Design, Build, Finance, Operate and Transfer
DIPP Department of Industrial Policy and Promotion
EPC Engineering, Procurement and Construction
ETC Electronic Toll Collection
HPBSMDA Himachal Pradesh Bus Stand Management and Development Authority
HRBC Hooghly River Bridge Commissioners
IHMCL Indian Highways Management Company Limited
ITEL IT Expressway Limited
MJPRCL Mumbai – JNPT Port Road Company Limited
MoRTH Ministry of Road Transport and Highways
MSRDC Maharashtra State Road Development Corporation Limited
NHAI National Highways Authority of India
NHDP National Highway Development Programme
O&M Operation and Maintenance services
OMT Operate, Maintain and Transfer
PMGSY Pradhan Mantri Gram Sadak Yojna
POS Point of Sale
PPP Public Private Partnership
PWD Public Works Department
RFID Radio Frequency Identification
RIDCOR Road Infrastructure Development Company of Rajasthan Limited
RSRDC Rajasthan State Road Development & Construction Corporation Limited
VGF Viability Gap Funding
http://morth.nic.in/
11
Conventional Terms/ Abbreviations
Term Description
AGM Annual general meeting
AIF Alternative Investment Fund as defined in and registered with SEBI under the
Securities and Exchange Board of India (Alternative Investment Funds)
Regulations, 2012, as amended
AS/Accounting Standards Accounting Standards issued by the Institute of Chartered Accountants of
India
BSE BSE Limited
CAGR Compounded annual growth rate
Category I Foreign Portfolio
Investors
FPIs who are registered as “Category I foreign portfolio investors” under the
SEBI FPI Regulations
Category II Foreign Portfolio
Investors
FPIs who are registered as “Category II foreign portfolio investors” under the
SEBI FPI Regulations
Category III Foreign Portfolio
Investors
FPIs who are registered as “Category III foreign portfolio investors” under the
SEBI FPI Regulations
CBDT Central Board of Direct Taxes
CDSL Central Depository Services (India) Limited
CESTAT Central Excise & Service Tax Appellate Tribunal
CIN Corporate identity number
Client ID Client identification number of the Bidder’s beneficiary account
Companies Act Companies Act, 1956 (without reference to the provisions thereof that have
ceased to have effect upon notification of the Notified Sections) and the
Notified Sections
Depositories NSDL and CDSL
Depositories Act Depositories Act, 1996
DIN Director identification number
DP ID Depository participant’s identification
DP/Depository Participant A depository participant as defined under the Depositories Act
EBITDA Earnings before interest, tax, depreciation and amortisation
EGM Extraordinary general meeting
EPS Earnings per share
FCNR Foreign currency non-resident
FDI Foreign direct investment
FEMA
Foreign Exchange Management Act, 1999 read with rules and regulations
thereunder and amendments thereto
FEMA Regulations Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident Outside India) Regulations, 2000, as amended
FII(s) Foreign Institutional Investors as defined under the SEBI FPI Regulations
FPI(s) A foreign portfolio investor as defined under the SEBI FPI Regulations
Financial
Year/Fiscal/FY/Fiscal Year
The period of 12 months ending March 31 of that particular year
FIPB Foreign Investment Promotion Board
FVCI Foreign venture capital investors as defined and registered with SEBI under
the Securities and Exchange Board of India (Foreign Venture Capital
Investors) Regulations, 2000
GDP Gross domestic product
GIR General index register
GoI/Government Government of India
HUF Hindu undivided family
ICAI Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards
Income Tax Act/ I.T. Act The Income Tax Act, 1961
12
Term Description
Indian GAAP Generally Accepted Accounting Principles in India
Insurance Companies Insurance companies registered with the IRDA
IPO Initial public offering
IRDA Insurance Regulatory and Development Authority
LLP Act Limited Liability Partnership Act, 2008
MICR Magnetic ink character recognition
Mutual Funds A mutual fund registered with SEBI under the Securities and Exchange Board
of India (Mutual Funds) Regulations, 1996
National Investment Fund National Investment Fund set up by resolution F. No. 2/3/2005-DD-II dated
November 23, 2005 of the GoI, published in the Gazette of India
NAV Net asset value
NECS National Electronic Clearing Service
NEFT National Electronic Fund Transfer
Notified Sections The sections of the Companies Act, 2013 that have been notified as having
come into effect prior to the date of this Prospectus
NR / Non-Resident A person resident outside India, as defined under the FEMA and includes an
NRI, FIIs, FPIs and FVCIs
NRE Account Non resident external account
NRI A person resident outside India, who is a citizen of India or a person of Indian
origin, and shall have the meaning ascribed to such term in the Foreign
Exchange Management (Deposit) Regulations, 2000
NRO Account Non resident ordinary account
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
OCB / Overseas Corporate
Body
A company, partnership, society or other corporate body owned directly or
indirectly to the extent of at least 60% by NRIs including overseas trusts, in
which not less than 60% of beneficial interest is irrevocably held by NRIs
directly or indirectly and which was in existence on October 3, 2003 and
immediately before such date had taken benefits under the general permission
granted to OCBs under FEMA
p.a. Per annum
P/E Ratio Price/earnings ratio
PAN Permanent account number
PAT Profit after tax
RBI Reserve Bank of India
RoNW Return on net worth
`/Rs./Rupees Indian Rupees
RTGS Real time gross settlement
SCRA Securities Contracts (Regulation) Act, 1956
SCRR Securities Contracts (Regulation) Rules, 1957
SEBI The Securities and Exchange Board of India constituted under the SEBI Act
SEBI Act Securities and Exchange Board of India Act, 1992
SEBI AIF Regulations Securities and Exchange Board of India (Alternative Investment Funds)
Regulations, 2012
SEBI FII Regulations Securities and Exchange Board of India (Foreign Institutional Investors)
Regulations, 1995
SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors)
Regulations, 2014
SEBI FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investor)
Regulations, 2000
SEBI Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009
SEBI Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares
13
Term Description
and Takeovers) Regulations, 2011
SEBI VCF Regulations Securities and Exchange Board of India (Venture Capital Funds) Regulations,
1996
SICA Sick Industrial Companies (Special Provisions) Act, 1985
SPV Special Purpose Vehicle
State Government The government of a State in India
UK United Kingdom
ULIP Unit Linked Insurance Plan
U.S. / United States / USA United States of America
U.S. GAAP Generally Accepted Accounting Principles in the United States of America
USD / US$ United States Dollars
VCFs Venture capital funds as defined in and registered with SEBI under the SEBI
VCF Regulations or the SEBI AIF Regulations, as the case may be
14
PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
All references to “India” contained in this Prospectus are to the Republic of India and all references to the
“U.S.”, “USA” or the “United States” are to the United States of America.
Financial Data
Unless stated otherwise, financial data included in this Prospectus is derived from the restated standalone and
consolidated financial information of our Company as of and for the years ended March 31, 2010, 2011, 2012,
2013 and 2014 and seven months ended October 31, 2014 and the related notes, schedules and annexures
thereto included elsewhere in this Prospectus, prepared in accordance with Indian GAAP and the Companies
Act, 1956 and / or Companies Act, 2013 and restated in accordance with the SEBI Regulations. In this
Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due to
rounding off.
Our Company’s financial year commences on April 1 and ends on March 31 of the next year, so all references
to a particular financial year, unless stated otherwise, are to the 12 months period ended on March 31 of that
year.
There are significant differences between Indian GAAP, U.S. GAAP and IFRS. The reconciliation of the
financial information to IFRS or U.S. GAAP financial information has not been provided. Our Company has
not attempted to explain those differences or quantify their impact on the financial data included in this
Prospectus, and it is urged that you consult your own advisors regarding such differences and their impact on
our Company’s financial data. Accordingly, the degree to which the financial information included in this
Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with
Indian accounting practices, Indian GAAP, the Companies Act, 1956 and / or Companies Act, 2013 and the
SEBI Regulations. Any reliance by persons not familiar with Indian accounting practices, Indian GAAP, the
Companies Act, the SEBI Regulations on the financial disclosures presented in this Prospectus should
accordingly be limited.
Unless otherwise indicated, any percentage amounts, as set forth in this Prospectus, including in the sections
“Risk Factors”, “Our Business”, “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” on pages 17, 155 and 477 respectively, have been calculated on the basis of the restated
consolidated and standalone financial information prepared in accordance with Indian GAAP and the
Companies Act, 1956 and restated in accordance with the SEBI Regulations.
Currency and Units of Presentation
All references to:
“`” or “Rupees” are to Indian Rupees, the official currency of the Republic of India; and
“US$” or “USD” are to United States Dollars, the official currency of the United States of America.
Our Company has presented certain numerical information in this Prospectus in “million” units. One million
represents 1,000,000 and one billion represents 1,000,000,000.
Industry and Market Data
Unless stated otherwise, industry and market data used in this Prospectus have been obtained or derived from
publicly available information as well as industry publications and sources. Further, information pertaining to
toll collection market and OMT market for road projects have been derived from a report titled “Assessment of
Operate-Maintain-Transfer (OMT) and Toll Collection Market for Road Projects in India” dated June 2014, by
CRISIL Limited (CRISIL Research) (the “CRISIL Report”).
Industry publications generally state that information contained in those publications has been obtained from
sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability
cannot be assured. Accordingly, no investment decision should be made on the basis of such information.
15
Although we believe that industry data used in this Prospectus is reliable, it has not been independently verified
by the BRLMs or our Company. Such data involves risks, uncertainties and numerous assumptions and is
subject to change based on various factors, including those discussed in the section “Risk Factors” on page 17.
Accordingly, investment decisions should not be based solely on such information.
CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing this
Report based on the information obtained by CRISIL from sources which it considers reliable (Data). However,
CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible
for any errors or omissions or for the results obtained from the use of Data / Report. This Report is not a
recommendation to invest / disinvest in any company covered in the Report. CRISIL especially states that it has
no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of this Report. CRISIL
Research operates independently of, and does not have access to information obtained by CRISIL’s Ratings
Division / CRISIL Risk and Infrastructure Solutions Limited (CRIS), which may, in their regular operations,
obtain information of a confidential nature. The views expressed in its Report are that of CRISIL Research and
not of CRISIL’s Ratings Division / CRIS. No part of this Report may be published / reproduced in any form
without CRISIL’s prior written approval.
The extent to which market and industry data used in this Prospectus is meaningful depends on the reader’s
familiarity with and understanding of methodologies used in compiling such data. There are no standard data
gathering methodologies in the industry in which business of our Company is conducted, and methodologies
and assumptions may vary widely among different industry sources.
Definitions
For definitions, see the section “Definitions and Abbreviations” on page 3. In the section “Main Provisions of
the Articles of Association” on page 635, defined terms have the meaning given to such terms in the Articles of
Association.
16
FORWARD-LOOKING STATEMENTS
This Prospectus contains certain “forward-looking statements”. These forward-looking statements generally can
be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”,
“objective”, “plan”, “project”, “will”, “will continue”, “will pursue” or other words or phrases of similar import.
Similarly, statements that describe our strategies, objectives, plans or goals are also forward-looking statements.
All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause
actual results to differ materially from those contemplated by the relevant forward-looking statement.
Certain important factors that could cause actual results to differ materially from our expectations include, but
are not limited to, the following:
ability to accurately forecast traffic volumes for our projects;
Dependence on road projects undertaken or awarded by government entities or other entities funded by the Government of India;
Dependence on Mumbai Entry Points Project;
Ability to obtain new contracts;
Ability to successfully implement new technologies in tolling as well as maintainence activities;
Ability to obtain third party debts for our projects; and
Ability to generate revenue to cover increase in interest rate and operating and maintainence costs.
For further discussion on factors that could cause actual results to differ from expectations, see the sections
“Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” on pages 17, 155 and 477, respectively. By their nature, certain market risk disclosures
are only estimates and could be materially different from what actually occurs in the future. As a result, actual
gains or losses could materially differ from those that have been estimated.
Forward-looking statements reflect current views as of the date of this Prospectus and are not a guarantee of
future performance. These statements are based on the management’s beliefs and assumptions, which in turn are
based on currently available information. Although we believe the assumptions upon which these forward-
looking statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the
forward-looking statements based on these assumptions could be incorrect. Neither our Company, the Directors,
the BRLMs nor any of their respective affiliates have any obligation to update or otherwise revise any
statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying
events, even if the underlying assumptions do not come to fruition. Our Company will ensure that the investors
in India are informed of material developments until the time of the grant of listing and trading permission by
the Stock Exchanges.
17
SECTION II: RISK FACTORS
An investment in the Equity Shares involves a high degree of risk. Investors should carefully consider all the
information in this Prospectus, including the risks and uncertainties described below, before making an
investment in the Equity Shares. The risks and uncertainties described in this section are not the only risks that
we currently face. Additional risks and uncertainties not currently known to us or that are currently believed to
be immaterial may also have an adverse impact on our business, results of operations and financial condition.
If any of the following risks, or other risks that are not currently known or are currently deemed immaterial,
actually occur, our business, results of operations and financial condition could be materially and adversely
affected and the price of our Equity Shares could decline, causing the investors to lose part or all of the value of
their investment in the Equity Shares. The financial and other related implications of the risk factors, wherever
quantifiable, have been disclosed in the risk factors mentioned below. However, there are certain risk factors
where the financial impact is not quantifiable and, therefore, cannot be disclosed in such risk factors.
This Prospectus also contains forward-looking statements that involve risks and uncertainties. Our Company’s
actual results could differ materially from those anticipated in these forward-looking statements as a result of
certain factors, including the considerations described below and elsewhere in this Prospectus. See the section
“Forward-Looking Statements” on page 16. To obtain a complete understanding, prospective investors should
read this section in conjunction with the sections “Our Business” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” on pages 155 and 477, respectively, as well as the other
financial and statistical information contained in this Prospectus. Unless otherwise stated, financial
information in this section is derived from our Restated Consolidated Financial Information included in section
“Financial Statements” on page 274. In making an investment decision, prospective investors must rely on their
own examination of our Company and the terms of the Issue including the merits and the risks involved.
Internal Risk Factors:
1. There are outstanding legal proceedings alleging criminal negligence against one of our Subsidiaries.
A public interest litigation has been filed in the High Court of Bombay by Ketan Tirodkar against
MSRDC and MEP RGSL as the project operator for the RGSL Project, in connection with a suicide
incident that took place at RGSL, alleging that the infrastructure and security measures at RGSL are
inadequate to prevent suicide incidents. The Petitioner has prayed, inter alia, that: (i) MEP RGSL be
directed to undertake efforts to remedy the same; (ii) MEP RGSL and MSRDC be directed to pay
compensation to the Government for failing to install sufficient security and surveillance infrastructure;
and (iii) the Ministry of Home Affairs, Government of Manaharashtra be directed to register a first
information report into the criminal negligence on the part of MEP RGSL and MSRDC that led threat to
the security and safety of the common man and the city of Mumbai. MEP RGSL has filed an application
before the High Court of Bombay seeking quashing of the public interest litigation so far as it relates to
MEP RGSL.
An adverse outcome in the abovementioned proceedings could have an adverse effect on our reputation
and may affect our future business, prospects, financial condition and results of operations. We cannot
assure you that these proceedings will be decided in favour of MEP RGSL. For further details, see the
section “Outstanding Litigation and Material Developments – Litigation involving our Subsidiaries –
MEP RGSL – Litigation against MEP RGSL – Public Interest Litigation” on page 546.
2. We derive a substantial portion of our revenue from the Mumbai Entry Points Project. Termination of, or reduction in revenue from, the Mumbai Entry Points Project could have a material adverse
effect on our business, results of operation and financial condition.
A significant portion of our total revenue on a consolidated basis is generated from the Mumbai Entry
Points Project, in terms of which we undertake the maintenance of and collection of toll at, the five
Mumbai Entry Points, pursuant to a contract dated November 19, 2010 with MSRDC (the “Mumbai
Entry Points Contract”). The letter of award for the Mumbai Entry Points Project was issued by MSRDC
in favour of a consortium between our Company and ITIPL. MIPL, one of the Subsidiaries of our
18
Company, was incorporated as a special purpose vehicle to operate the Mumbai Entry Points Project and
subsequently, the Mumbai Entry Point Contract was executed between MSRDC, ITIPL, our Company
and MIPL, with MIPL as the contractor. The term of the Mumbai Entry Points Contract is for a period of
16 years from November 20, 2010. For seven months ended October 31, 2014, Fiscal 2014, Fiscal 2013
and Fiscal 2012, the Mumbai Entry Points Project contributed 18.88%, 28.46%, 26.14% and 29.46%,
respectively, of our total revenue on a consolidated basis.
We have made a non-refundable upfront payment of ` 21,000.00 million to MSRDC for the Mumbai
Entry Points Project in 2010. MIPL has availed a loan of ` 21,210.00 million from IDFC Limited, HDFC
Limited, Canara Bank and India Infrastructure Finance Company Limited (the “MIPL Lenders”) for
securitisation of and for carrying out maintenance activities in relation to the Mumbai Entry Points
Project. For further details, including details of liquidated damages, see the section “Our Business –
OMT Projects – Mumbai Entry Points Project”, “Description of Certain Key Contracts – OMT Projects –
Mumbai Entry Point Project” and “Financial Indebtedness” on pages 170, 188 and 508, respectively. In
terms of the Mumbai Entry Points Contract, MSRDC has the right to terminate the Mumbai Entry Points
Contract in the event of any material breach or default on our part in complying with the terms and
conditions of the Mumbai Entry Points Contract, including any default on our obligations under the
financing agreements for the loans availed for the Mumbai Entry Points Project. Further, MSRDC may
also terminate the Mumbai Entry Points Contract upon occurrence of any force majeure events in
accordance with the provisions of the Mumbai Entry Points Contract. Further, in terms of the
substitution agreement amongst MSRDC, MIPL and certain lenders of MIPL (the “MIPL Lenders”), the
MIPL Lenders have a right to substitute MIPL with another contractor for the Mumbai Entry Points
Project, with the approval of MSRDC, on the occurrence of any material breach on MIPL’s part to
comply with the terms of the Mumbai Entry Points Contract or any material default on MIPL’s part to
make payments under the financing documents for the Mumbai Entry Points Project.
Whilst we are entitled to receive compensation from MSRDC in the event of an early termination, there
is no assurance that we would be able to recover the amounts invested by us entirely. An early
termination of the Mumbai Entry Points Contract by MSRDC would materially adversely affect our
business, results of operations and financial condition. For details regarding the Mumbai Entry Points
Contract, see the section “Description of Certain Key Contracts” on page 188.
Further, the revenue that we generate from the Mumbai Entry Points Project may reduce on account of
different factors including fall in traffic volume. Any substantial reduction in the revenue from the
Mumbai Entry Points Project would have an adverse impact on our business, results of operation and
financial condition.
3. Most of our long-term projects are held through our Subsidiaries and are subject to restrictions (with respect to disposition of shares held by us in such Subsidiaries which are implementing the projects),
and we are liable for acts done by such Subsidiaries until such projects achieve their commercial
operation date.
Our Long Term projects; except the ITEL Project, Kalyan-Shilphata Project; are held through our
Subsidiaries. For details, see the section “Our Business” on page 155. Such Long Term projects held
through our Subsidiaries, which are also our material projects, contributed 53.86%, 57.36%, 29.79% and
33.29% of our total revenue on a consolidated basis for the seven months ended October 31, 2014, Fiscal
2014, Fiscal 2013 and Fiscal 2012, respectively. Under the terms of the contracts for our OMT projects
with NHAI, we are required to retain (along with other consortium members) 51% of the share capital of
the Subsidiary operating the project, for the contract period and any change of control over such
Subsidiary (which, under the OMT contracts with NHAI, includes transfer of legal/beneficial ownership
or control over 15% of the equity of such entity) requires the prior approval of the authority concerned.
Our Company has entered into a share purchase agreement dated November 29, 2013 with IEPL and
MEP HB for purchase of 4,890 equity shares, constituting 48.90% of MEP HB from IEPL. MEP HB has
made an application dated August 20, 2013 to NHAI for such transfer and NHAI, by its letter dated
January 7, 2015 has accorded its consent for such transfer. Under the Mumbai Entry Points Contract, our
Company is required to hold a minimum of 26% of the share capital of MIPL during the contract period.
19
Such restrictions may adversely affect our ability to raise funds, if necessary, by selling a substantial
stake or effecting change of control in any of our projects. Any delay or failure to obtain approval of the
authority may result in a delay in execution of our growth plans and may in turn have an adverse effect
on our business.
Further, under the terms of the OMT contracts with NHAI, our Company (as a member of the
consortium which was awarded the bid) is liable for all acts of such subsidiary until the commercial
operation date for that project is achieved. Furthermore, under the contract for the Solapur toll collection
project, while the rights and benefits accorded to our Company have been assigned to the relevant
Subsidiary undertaking the project, our Company continues to be responsible to MSRDC for all the
liabilities under the contract. In the event of insolvency and consequent winding up of any such
Subsidiary, our Company’s claims to the assets of such Subsidiary, as a shareholder, would remain
subordinated to claims of lenders or other creditors. Similarly, if any liability for any acts of our
Subsidiary crystallizes upon us, it could have a material adverse effect on our results of operations,
financial condition and cash flows.
4. We derive substantial portion of our total revenue on a consolidated basis from Short Term projects which are terminable unilaterally by the authorities without assigning any reason.
As on March 19, 2015, out of the 18 ongoing toll collection projects operated by us, 12 are Short Term
Projects. A substantial portion of our total revenue on a consolidated basis is derived from our Short
Term projects which accounted for 41.52%, 37.52%, 67.70% and 60.83% of our total revenue on a
consolidated basis for the seven months ended October 31, 2014, Fiscal 2014, 2013 and 2012,
respectively. All our Short Term Projects are terminable by the authorities without assigning any reason.
There is no assurance that we would receive any compensation on account of such early unilateral
termination of these short term contracts or that the compensation so received shall be sufficient to cover
the cost incurred or to fulfill any debt obligation for such project. Any such early termination may result
in us losing the cost incurred by us for operating such projects and may lead to losses or lower than
expected profits on such contracts.
Further, there is no assurance that we will be able to obtain re-award of these Short Term projects upon
expiry of the contract period. Failure to obtain re-award of the Short Term projects could adversely
affect our business and financial condition.
5. Our Company proposes to utilize majority of the Net Proceeds to repay/prepay certain loans availed by our Subsidiary, MIPL, and accordingly, the utilization of Net Proceeds will not result in creation of
any tangible assets.
Our Company intends to use approximately 80% of the Net Proceeds for the purposes of repayment/ pre-
payment, in full or part, of certain loans availed by our Subsidiary, MIPL. The details of the loans
identified to be repaid/prepaid using the Net Proceeds have been disclosed in the section “Objects of the
Issue” on page 104 (“Identified Loans”). However, the repayment/prepayment of the Identified Loans
are subject to various factors including, (i) any conditions attached to the loans restricting our ability to
prepay the loans and time taken to fulfill such requirements, and (ii) terms and conditions of such
consents and waivers.
Further, the lenders while providing their consents for prepayment or repayment of the loans, have
imposed certain restrictions on our Company as well as MIPL. IDFC Limited, in its letter dated June 9,
2014, HDFC Limited in its letter dated June 20, 2014 and India Infrastructure Finance Company Limited
(“IIFCL”) in its letter dated July 22, 2014, while providing their consent for the Issue, have stated: (i) our
Company is required to hold at least 70% shareholding in MIPL even after the proposed Issue; (ii) MIPL
and our Company shall ensure utilisation of at least 75% of the total proceeds of the Issue, as an
investment/unsecured loan, to prepay debt of senior lenders of MIPL being IDFC Limited, IIFCL,
Canara Bank and HDFC Limited, on a proportionate basis; and (iii) other lenders of MIPL provide
similar approval. Further IIFCL, by its letter dated August 27, 2014 has stated that the balance 25% of
the total proceeds of the Issue may be utilized by our Company towards partial repayment/prepayment of
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subordinated debt sanctioned by L & T Infrastructure Finance Company Limited (“L&T Infrastructure”)
to MIPL, if being one of the objects of the Issue. Canara Bank, in its letter dated June 9, 2014, while
providing consent for investing the Issue Proceeds in MIPL for the purpose of prepayment of certain
loans availed by MIPL, have stated that such consent is subject to the following conditions: (i) other
lenders of MIPL provide similar approval; (ii) disclosure be included in the offer document that the
proceeds of the Issue, to the extent of 75%, would be used for investment in MIPL; and (iii) detailed
utilization plan of the proceeds of Issue to be submitted to Canara Bank. L&T Infrastructure, in its letter
dated September 23, 2014, while providing consent, has stated that such consent is subject to following
conditions: (i) the validity of the consent shall fall off in case the Draft Red Herring Prospectus is not
filed by December 31, 2014; (ii) one of the objects of the Issue shall be the partial prepayment of the
facility, which shall be made in proportion to the aggregate outstanding loan amount of the senior
lenders of MIPL being prepaid / repaid from the Issue proceeds; and (iii) L&T Infrastructure shall have
the right to review the clause pertaining to the use of proceeds disclosed in the Draft Red Herring
Prospectus prior to filing of the same with SEBI. Further, Canara Bank, in its letter dated February 21,
2015, while providing consent, for prepaying the loan availed by MIPL from Canara Bank which is
proposed to be prepaid by utilising the Net Proceeds, has stated that such consent is subject to following
conditions: (i) MIPL will meet commitments of interest and installments promptly in future; (ii) all other
lenders shall provide similar consent; (iii) all terms and conditions of the sanction letter dated February
3, 2011 to the extent not modified shall continue; and (iv) prepayment penalty as per sanction terms shall
be collected at the time of prepayment. Any failure on our part to comply with these conditions may
result in breach of the respective loan agreements. For further details, see the section “Objects of the
Issue” on page 104. The Net Proceeds will not result in creation of any tangible assets as they are
proposed to be utilized for repayment or pre-payment of certain loans availed by MIPL.
However, the actual mode of such deployment of Net Proceeds into MIPL, whether equity or debt or any
other instrument, has not been finalized as on the date of this Prospectus.
6. The Promoter Group of our Company does not include Virendra D. Mhaiskar, son of Dattatray P. Mhaiskar and brother of Jayant D. Mhaiskar, our individual Promoters, or any entity in which
Virendra D. Mhaiskar may have an interest.
The Promoter Group of our Company does not include Virendra D. Mhaiskar, son of Dattatray P.
Mhaiskar and brother of Jayant D. Mhaiskar, our individual Promoters, or any entity in which Virendra
D. Mhaiskar may have an interest. Our Promoter, Jayant D. Mhaiskar has disassociated from the
businesses of Virendra D. Mhaiskar. However, there are no formal disassociation arrangements between
Jayant D. Mhaiskar and Virendra D. Mhaiskar. Further to the disassociation, Virendra D. Mhaiskar and
any entity in which Virendra D. Mhaiskar may have an interest are not included in the Promoter Group
of our Company since Virendra D. Mhaiskar has refused to provide any information pertaining to
himself or any such entities. For details of details of shareholding of the Promoters in the entities in
which Virendra D. Mhaiskar has an interest, see “Promoter and Promoter Group – Promoter Group” on
page 256.
7. We had negative cash flow from investing activities and financing activities during Fiscal 2014 and the seven months ended October 31, 2014.
During the seven months ended October 31, 2014 and Fiscal 2014, our Company had a negative cash
flow from investing activities of ` (1,819.95) million and ` (567.40) million, respectively, on a
standalone basis. Further our Company also had a negative cash flow from financing activities of `
(235.26) million and ` (3,961.36) million, on a consolidated basis during the seven months ended
October 31, 2014 and Fiscal 2014, respectively. For details, see “Financial Statements” on page 274.
However, our Company generated cash from its operating activities of ` 5.19 million and ` 437.02
million on a standalone basis and of ` 87.61 million and ` 3,706.00 million, for the seven months ended
October 31, 2014 and Fiscal 2014, respectively, on a consolidated basis. We cannot assure you that our
Company would not experience negative cash flow from any of our activities in the future.
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8. Our net worth on a consolidated basis has decreased substantially and any further diminution of our net worth may adversely impact our growth and prospects.
There has been a decrease in our consolidated net worth in the recent past. As of October 31, 2014 and
March 31, 2014, our consolidated net worth was ` (2,245.04) million and ` (1,522.04) million,
respectively. For further details, see the section “Financial Statements” on page 274. Whilst the decrease
in our net worth is mainly on account of amortisation of upfront payments made to the authorities, there
is no assurance that our net worth will not erode further or that it will improve in the near future. Any
further diminution in our net worth may adversely impact our growth and future prospects. For further
details, see the sections “Financial Statements – Annexure XVIII- Restated Consolidated Statement of
Accounting Ratios” on page 331.
9. We are presently in breach of certain covenants in some of our financing agreements and any material adverse action taken by the lenders in connection with such breaches may have a material
adverse effect on our business, results of operation and financial condition.
We are presently in breach of certain covenants under some of our financing agreements such as
payment delays for amounts due, including delays in payment of interest delays or defaults in sending
information and reports to lenders, failure to maintain certain financial covenants, failure to create
security as per the financing documents, undertaking certain activities (such as investments, by way of
equity or debt, in our Subsidiaries and allotment of Equity Shares to our Corporate Promoter, ITIPL)
without the prior consent of the lenders and failure to undertake certain activities required under our
financing agreements (for instance, constitution of certain committees). The breach of such covenants, in
most instances (whether upon a service of notice by the lender or otherwise), constitutes an event of
default under the relevant facilities and entitles the respective lenders to enforce remedies under the
terms of the respective financing agreements which can include levy of penal interest on the outstanding
amounts under the facility, suspension of further drawdown under the financing agreements, terminate
the right to make any withdrawals, acceleration of loan and declaration that all outstanding amounts
under the facility be due and payable immediately, appointment of nominee directors on the board of
directors of our Company, right of the lender to review and restructure the management set-up, right to
convert the outstanding obligation under the respective facility into equity shares of the defaulting entity
and enforcement of security provided under the facility. For further details of loans availed by us, see the
section “Financial Indebtedness” on page 508.
We have not currently applied to our lenders for waivers in respect to these breaches. We cannot assure
you that such lenders will not seek to enforce their rights in respect of any breaches under the financing
agreements. Further, such breaches and relevant actions by the respective lenders could also trigger
enforcement action by other lenders pursuant to cross-default provisions under certain of our financing
agreements.
If the obligations under any of our financing agreements are accelerated, we may have to dedicate a
substantial portion of our cash flow from operations to make payments under the financing documents,
thereby reducing the availability of cash for our operations. In addition, the lenders and/or the security
trustees may enforce their respective security interest in certain of our assets. Further, during the period
in which we are in default, we may face difficulties in raising further loans. Any future inability to
comply with the covenants under our financing agreements or to obtain the necessary consents required
thereunder may lead to termination of our credit facilities, levy of penal interest, acceleration of all
amounts due under such financing agreements and enforcement of any security provided. Any of these
circumstances would have an adverse effect our business, results of operation and financial condition.
10. We may have to incur losses for the Baramati Project in the event the termination is not accepted by the authority.
Our Subsidiary BTPL has signed a concession agreement for the Baramati Project awarded by MSRDC
(the “BTPL Concession Agreement”). BTPL has issued notices to MSRDC terminating the Baramati
Project and demanding termination payment from MSRDC on account of delay caused by MSRDC in
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handing over possession of land for development amounting to failure to fulfil certain key conditions
precedent under the BTPL Concession Agreement. However, MSRDC has not yet accepted the
termination notices and accordingly the termination process has not been completed. MSRDC and the
Public Works Department, Maharashtra (the “PWD”), have sought an undertaking from BTPL to return
any amount paid to BTPL in excess of the amount determined by MSRDC and that neither the PWD nor
MSRDC shall be responsible for the repayment of any loan availed by BTPL on the basis of the land to
be transferred to BTPL for development in relation to the Baramati Project. BTPL is continuing to
operate the BTPL Project currently, pending completion of the termination process. Whilst BTPL has a
right to terminate the BTPL Concession Agreement in the event of non-fulfilment of obligations by
MSRDC, there is no assurance that BTPL will be able to enforce its rights under the BTPL Concession