Cp outside knowledge ipo presentation


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Cp outside knowledge ipo presentation

  1. 1. <ul><li>SMS Paryavaran Limited </li></ul><ul><li>IPO Perspective </li></ul><ul><li>August 2007 </li></ul>
  2. 2. Contents <ul><li>Sections </li></ul><ul><li>Snapshot </li></ul><ul><li>Business Profile </li></ul><ul><li>Positioning </li></ul><ul><li>Valuation </li></ul><ul><li>Funding requirements </li></ul><ul><li>Funding proposal </li></ul><ul><li>IPO Process & conditions </li></ul><ul><li>Annexures </li></ul><ul><li>About Corporate Professionals </li></ul>
  3. 3. <ul><li>Section 1 </li></ul><ul><li>Snapshot </li></ul>
  4. 4. <ul><li>Incorporated in the year 1992. </li></ul><ul><li>An ISO 9001:2000 Certified Company. </li></ul><ul><li>Business of Infrastructure development with focus on water </li></ul><ul><li>supply & sewage systems. </li></ul><ul><li>Awarded more than 80 projects in last 15 years. </li></ul><ul><li>Executed various projects for Prestigious Government of </li></ul><ul><li>India Undertakings </li></ul>
  5. 6. Present & Future Expertise in creation of facilities Professionally Managed Company Acquired domain knowledge pre- qualification in infrastructure sector SMS
  6. 7. PROMOTERS M. Sengupta He is a Graduate Engineer from Jadavpur University of 1967 batch and carried the responsibility on his shoulder for design and executing the electrical and instrumentation for all the jobs undertaken by the company Mr. S.N. Modak He is a First class first graduate engineer in Civil Engineering from one of the premier Institute of India, Birla Institute of Technology and Science at Pilani, of 1975 batch. Over the last 30 years he has been responsible for procurement of all types of projects for the company out of which last 9 years he was responsible for implementing the projects to the satisfaction of clients and within the planned budget. Mr. M.K. Singh He is a Post Graduate in Environmental Engineering from IIT Bombay (1980 batch) & B.E. also in Environmental from IIT Roorkee (formally known as University of Roorkee, 1978 batch), and has the experience of working with M/s. HGE (Batliboi group) and M/s. Jog Consultants, Pune before stabilizing his career with M/s. BAPL.
  7. 8. India: Yarn production of various types
  8. 9. Present capabilities <ul><li>Removal of Quota Restrictions (QRs) </li></ul><ul><li>India positioning to become world’s Textile BPO </li></ul>External <ul><li>Company already having premium product recognition with the customers. </li></ul><ul><li>Supplies not limited to Ludhiana market, also supplying to Bhilwara & Mumbai </li></ul><ul><li>Direct supplies to reputed customers like Raymonds </li></ul><ul><li>ERP based systems </li></ul>Internal
  9. 10. Future possibilities <ul><li>Readymade garment & retailing are the future revolutions in Indian economy, with increasing purchasing power </li></ul><ul><li>Existing players may turn into full level production houses using life cycle production of finished products </li></ul>External <ul><li>To position in cotton yarn market with expansion in production </li></ul><ul><li>Installing dyeing unit to cater to high value export markets </li></ul><ul><li>To start garment production along with retailing, a value addition proposition </li></ul>Internal
  10. 11. <ul><li>Section 2 </li></ul><ul><li>Valuation </li></ul>
  11. 12. India: Resource mobilisation from primary markets
  12. 13. India: Resource mobilisation through public & rights issue Amount in Rs. crores 2637.25 8 8989.85 9 Total 11.75 1 66.57 3 Right issues 2270 2 132 1 FPOs 355.5 5 8791.28 5 IPOs 2625.5 7 8923.28 6 Public issues, of which Amount No. Amount No.   2005-06 (April)   2006-07 (April)   PARTICULARS
  13. 14. Textile scrips: Position & returns 20 11237.23 42 9397.33 6602.69 Sensex 26 510.15 27 403.95 317.00 Raymond 17 79.60 -4 68.30 71.15 Alok Inds. 16 677.35 N.A. 584.45 * Gokaldas Exports 4 128.60 42 123.90 87.35 Rajas. Spinning 4 99.00 -28 95.60 132.30 Arvind Mills -1 406.90 162 410.50 156.40 Super Spinning -6 245.75 55 261.55 168.45 Ambika Cotton -8 270.05 -4 294.95 307.68 Zodiac Clothing Co -14 200.50 330 234.20 54.48 Suryalak. Cott. -20 60.50 -1 75.60 76.20 Indo Rama Synth. -26 170.20 44 229.90 159.40 Century Enka Var.(%) 13 Apr ‘06 Var.(%) 31 Dec ’05 31 Dec ‘04 Share price as on Scrip
  14. 15. Textile companies: Funding the growth Amount in Rs. crores 70 330 400 Rajasthan Spinning 22.9 65.6 88.5 Banswara Syntex 138 403 541 Sangam India 200 900 1100 Alok Industries Equity/ Internal Accruals Debt Total Expansion Company
  15. 16. Textile companies: Peer comparison 17.49 20.25 - 3.54 Jindal Cotex 72.09 7.24 11.96 4.77 Eurotex Industries 89.60 9.00 23.3 3.2 GTN textiles 59.90 25.20 22.9 6.80 Gangotri Textiles 95.1 28.2 9.6 10.00 Bannari Amman Spinning 137.20 26.10 12.2 21.60 Ambika Cotton Book value (Rs.) RONW (%) P/E Ratio EPS (Rs.) Name of the Company
  16. 17. <ul><li>Section 3 </li></ul><ul><li>Funding requirement </li></ul>
  17. 18. Proposed Project <ul><li>Multi-dimensional expansion envisaged: </li></ul><ul><li>Expansion in capacities by addition of 50,400 spindles for cotton yarn production </li></ul><ul><li>Setting up dyeing unit for premium export markets </li></ul><ul><li>Setting up garment manufacturing unit with a capacity fo 300 pieces per day </li></ul>
  18. 19. Proposed Project 14214.41 Total Project Cost 9100.00 Term Loan 714.41 Internal Accruals 400.00 Fresh contributions 4000.00 IPO funding Amount (in Rs. lacs) Particulars
  19. 20. Proposed Cost for Project
  20. 21. <ul><li>Section 4 </li></ul><ul><li>Funding proposal </li></ul>
  21. 22. Expected Pricing of issue Rs 35 10 3.5 Expected market Price Conservative industry P/E Company’s EPS Considering present scenario of Market Rs 48-60 12 4-5 Expected market Price Conservative industry P/E Company’s EPS After 4 months (Expecting stabilization in Market)
  22. 23. Structuring the IPO Dilution between 80 lakhs to 100 lakhs shares in the IPO is required 51:49 1.20 31,73,92,500 20,50,37,500 Dilution in public issue (100 lakh shares @ 40/- per share) Total funding : Rs. 40 cr. 100:0 2.36 1,73,92,500 10,50,37,500 Bonus issues (2:1) 100:0 3.54 5,24,05,000 7,00,25,000 Existing capital Promoters vs. Public EPS Reserves (cumulative) Paid-up capital (cumulative)
  23. 24. <ul><li>Section 5 </li></ul><ul><li>IPO Process & conditions </li></ul>
  24. 25. IPO Process Overview <ul><li>Constitution of deal team </li></ul><ul><li>Capital structuring </li></ul><ul><li>Initiate research coverage process </li></ul><ul><li>Restatement of financial accounts </li></ul>1. Preparation <ul><li>Business due diligence </li></ul><ul><li>Data room for legal due diligence </li></ul><ul><li>Auditors comfort letter </li></ul><ul><li>Legal opinions </li></ul>2. Due diligence <ul><li>Issue structure </li></ul><ul><li>Use of proceeds </li></ul><ul><li>Industry landscape </li></ul><ul><li>Business overview </li></ul><ul><li>Risk factors </li></ul><ul><li>Financial Statements </li></ul><ul><li>Statutory disclosures </li></ul>3.Offer Document <ul><li>Meeting with institutional investor </li></ul><ul><li>Research Briefings </li></ul><ul><li>Corporate publicity </li></ul>4. Pre-marketing <ul><li>Dispatch of research reports </li></ul><ul><li>SEBI filing </li></ul><ul><li>Stock Exchange Listing applications </li></ul><ul><li>Appointment of Registrars and Bankers </li></ul>5. SEBI filing <ul><li>Price band finalization </li></ul><ul><li>Issue advertising </li></ul><ul><li>Management road show </li></ul>6. Road shows <ul><li>Price discovery </li></ul><ul><li>Issue pricing </li></ul>7. Book Building <ul><li>Allotment & Settlement </li></ul><ul><li>Listing & trading </li></ul>8. Listing & Trading
  25. 26. <ul><li>Net Tangible Assets of a least Rs. 30mn in each of the preceding 3 full years (of 12 </li></ul><ul><li>months each), of which not more than 50% is held in monetary assets. </li></ul><ul><li>Track record of distributable profits for 3 out of preceding 5 years </li></ul><ul><li>Net worth of at least Rs 10mn in each of the preceding 3 full years (of 12 months each) </li></ul><ul><li>Issue size + previous issue in current FY is lesser than 5 times pre-issue net worth. </li></ul>Yes No Fixed Price or Bookbuilding (no minimum allocation to QIBs) Bookbuilding Eligibility norms and Offering structure Key regulatory requirements <ul><li>25% & above dilution </li></ul><ul><li>Up to 50% allocation </li></ul><ul><li>to QIBs; up to 35% to </li></ul><ul><li>retail & up to 15% to non- institutional </li></ul><ul><li>10 – 24.99% dilution </li></ul><ul><li>Minimum issue size </li></ul><ul><li>Rs. 100mn </li></ul><ul><li>Upto 60% allocation to </li></ul><ul><li>QIBs; up to 30% to </li></ul><ul><li>retail and up to 10% </li></ul><ul><li>to non-institutional </li></ul><ul><li>25% & above dilution </li></ul><ul><li>Up to 50% allocation </li></ul><ul><li>to QIBs; up to 35% to </li></ul><ul><li>retail & up to 15% to </li></ul><ul><li>non- institutional </li></ul><ul><li>10 – 24.99% dilution </li></ul><ul><li>Minimum issue size </li></ul><ul><li>Rs. 100mn </li></ul><ul><li>Upto 60% allocation </li></ul><ul><li>to QIBs; up to 30% </li></ul><ul><li>to retail and up to </li></ul><ul><li>10% to non-institutional </li></ul>
  26. 27. Due Diligence and financial disclosures <ul><li>Corporate governance norms to be strictly enforced per stx exchange listing requirements </li></ul><ul><li>Book runners to conduct due diligence on company and submit certificate to SEBI </li></ul><ul><li>Recast audited statement contained in the offer document should not be more than 6 mths </li></ul><ul><li>old from he SEBI filing date and the issue opening date and to be prepared for last 5 years </li></ul><ul><li>Adequate disclosure of litigations and legal proceedings required </li></ul><ul><li>Mandatory sections on MD&A, risk factors </li></ul>Promoter Lock - in <ul><li>Promoters to contribute – hold at least 20% of total post issue capital </li></ul><ul><li>20% of post issue capital , lock in for 3 years </li></ul><ul><li>– Balance pre-IPO capital, excluding holdings of Venture Capital Funds locked in for 1 year. </li></ul><ul><li>No outstanding convertible instruments/ securities, party paid shares at time of </li></ul><ul><li>filing draft prospectus. </li></ul><ul><li>Draft Prospectus publicly filed with SEBI </li></ul><ul><li>- Review period of 21 days </li></ul><ul><li>- SEBI observations to be incorporated in Red Hearing Prospectus </li></ul><ul><li>- Issue to open within 3 months from date of Issuance of observations </li></ul><ul><li>ROC approval mandatory & Stock Exchange listing approvals </li></ul>SEBI and Stock Exchange Filings Key regulatory requirements
  27. 28. Marketing and Publicity <ul><li>Corporate Advertisements post SEBI filing to contain reference to Risk Factors </li></ul><ul><li>No forward looking statements from issuer/issue team post filing </li></ul><ul><li>Statutory Advertisements to be issued by the issuers pertaining to abridged prospectus, issue </li></ul><ul><li>open /close dates, issue pricing and allocation details. </li></ul>Book Building and Pricing <ul><li>Book building to be carried within a maximum price band of 20% </li></ul><ul><li>- Price band to be declared in red herring prospectus. </li></ul><ul><li>- Bidding on BSE and/or NSE </li></ul><ul><li>- Bid period to range between 3-7 days </li></ul><ul><li>- QIBs to provide at least 10% of bid amount on application </li></ul><ul><li>Issue successful if subscribed to extent of at least 90% of issue amount at a price level </li></ul><ul><li>- Issue to be priced at a price where issue is subscribed fully, failing which at a price where </li></ul><ul><li>90% subscription is obtained </li></ul>Allocation, Listing and Trading <ul><li>Proportionate allocation to all categories of Investors </li></ul><ul><li>Listing and Trading to commence within 15 days of issue closure. </li></ul>Key regulatory requirements
  28. 29. <ul><li>Annexure 1 </li></ul><ul><li>About </li></ul>
  29. 30. <ul><li>Set up in 2003 </li></ul><ul><li>Online Connected Network of Professionals & Associates spread over 45 cities across India & abroad </li></ul><ul><li>Team of Professionals to advise on Financial Products </li></ul><ul><li>Gamut of Experts in all the Streams </li></ul><ul><li>Complete Corporate Planning & Management Services </li></ul><ul><li>Established Credentials for Corporate Advisory Services </li></ul>
  30. 31. Management and Key Personnel
  31. 32. Mr. Pavan Kumar Vijay – Managing Director M. Com, LL.B, FCS, Past President of the Institute of Company Secretaries of India (ICSI) for the year 2003. Founder and Managing Director of Corporate Professionals. He has more than 15 years of professional Experience in Capital Market and financial service. Dr. Sanjiv Agarwal – Director Ph.D., FCA, FCS, Postgraduate in Accountancy and Business Statistics from the University of Rajasthan, Jaipur. He has more than 20 years of professional experience as a Chartered Accountant with exposure in accounting, auditing, taxation, service tax matters, capital market and financial services. Dr. R. K. Agarwal – Director Ph.D., M.Com. FCA, FCS, ICWA. He has more than 25 years of professionals experience in financial services and tax management. Management and Key Personnel
  32. 33. Privileged Clientele
  33. 34. Corporate Advisory clients
  34. 35. Corporate Advisory clients
  35. 36. Clients for Public Issue related services Insecticides India Ltd. Public Issue Issue Size: 80 crores JHS Svendgaard Laboratories Ltd. Public Issue Issue Size : 90 crores Industrial Organics Ltd Follow on Public Offer Issue Size : 40 crore Rana Polycot Limited Public Issue Issue Size : 30 Crore Nature : Book Building OCL India Limited Right Issue Issue Size : 85 Crore Nature : Book Building Surya Vinayak Industries Public Issue Proposed Issue Size : 350 crores
  36. 37. For further information Please contact…
  37. 38. Corporate Professionals (India) Pvt. Ltd. 7/9, Sarvpriya Vihar, New Delhi 1100016 Tel: +91.11.26966100, Fax: +91.11.26967100 Email: info@indiacp.com Visit us at: www.corporateprofessionals.com Thanks a lot