Vascon Engineers Limited IPO opens on January 27, 2010
Price Band fixed between Rs. 165 and Rs. 185 per equity share
Tweet-- Vascon Engineers Limited ("Vascon" or the "Company"), an Engineering, Procurement and Construction ("EPC") services and real estate development company, is entering the capital market on January 27, 2010, with an Initial Public Offering ("IPO") of 10,800,000 equity shares of Rs. 10 each for cash at a price to be decided through a 100% book-building process (the "Issue"). The Price Band has been fixed between Rs. 165 and Rs. 185 per Equity Share. Bids can be made for a minimum of 35 equity shares and in multiples of 35 equity shares thereafter. The Issue closes on January 29, 2010.
The Issue comprises a net issue to the public of 10,700,000 equity shares of Rs. 10 each (the "Net Issue") and a reservation of up to 100,000 equity shares of Rs. 10 each for eligible employees (the "Employee Reservation Portion"). The Issue would constitute 11.95% of the fully diluted post issue paid-up capital of the Company and the Net Issue would constitute 11.84% of the fully diluted post issue paid-up capital of the Company. This Issue has been graded by CRISIL as 3/5, indicating average fundamentals.
At least 60% of the Net Issue will be allocated on a proportionate basis to Qualified Institutional Buyers ("QIBs"), out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The Company may allocate up to 30% of the QIB Portion to Anchor Investors at the Anchor Investor Issue Price on a discretionary basis, out of which at least one-third will be available for allocation to Mutual Funds only. The Anchor Investor Bid/Issue Period shall be one day prior to the Bid/Issue Opening Date. Further, not less than 10% of the Net Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Net Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at or above the Issue Price.
The Equity Shares are proposed to be listed on National Stock Exchange of India Limited ("NSE") and Bombay Stock Exchange Limited ("BSE").
The Book Running Lead Managers ("BRLMs") are Kotak Mahindra Capital Company Limited and Enam Securities Private Limited.
Vascon is an engineering, procurement and construction services and real estate development company with operations across states and union territories in India. Its operations span across all aspects of real estate development, from identification and acquisition of land to providing EPC services and sales and marketing of projects to operation of completed projects. It has 24 years of experience in providing EPC services, which includes, constructing factories, hospitals, hospitality properties, office and residential complexes, shopping malls, multiplexes, IT parks and other buildings. The Company provides EPC services for its own projects as well as to third parties. Its third party EPC clients include well-known Indian and multinational companies such as Cipla Limited, Kirloskar Brothers Limited and Symbiosis amongst others.
As of December 31, 2009, Vascon had completed an aggregate of 181 EPC contracts, with a total contract value of Rs. 8,888.70 million, out of which 157 EPC contracts were for third parties, with a total contract value of Rs. 6,562.81 million. And 24 EPC contracts were for projects developed by it or the Other Development Entities, with a total contract value of Rs. 2,325.89 million. As of December 31, 2009, it was engaged in 70 ongoing and forthcoming EPC contracts, with an estimated total contract value of Rs. 40,141.11 million with an order backlog of Rs. 32,270.79 million out of which 47 EPC contracts were for third parties with an order backlog of Rs. 12,147.36 million and 23 EPC contracts were for projects developed by it or the Other Development Entities with an order backlog of Rs. 20,123.43 million.
Vascon's real estate development business comprises the development of residential and office complexes, as well as shopping malls, multiplexes, hospitality properties, IT parks and other buildings directly or indirectly through Subsidiaries or the Other Development Entities. Its ongoing and forthcoming projects are spread over seven states in India. As of December 31, 2009, the Company and the Other Development Entities had completed an aggregate of 42 real estate development projects, with an aggregate saleable area of over 4.99 million square feet. In addition, it has sold land and land development rights aggregating 2.04 million square feet in saleable area. The Company and the Other Development Entities are in the process of developing an additional 51 ongoing and forthcoming real estate projects, with an aggregate saleable area of over 55.36 million square feet.
Notes to Editor
Vascon Engineers Limited ("Vascon" or the "Company") proposes, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its equity shares and has filed a Red Herring Prospectus ("RHP") with the Registrar of Companies ("ROC"), Maharashtra, at Mumbai. The RHP is available on the website of SEBI at www.sebi.gov.in as well as on the websites of the BRLMs at www.kotak.com and www.enam.com.
Any potential investor should note that investment in equity shares involves a high degree of risk. For details, potential investors should refer to the RHP, which has been filed with the ROC, Maharashtra at Mumbai, including the section titled "Risk Factors". Potential investors should not rely on the RHP filed with SEBI.
The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction.
The Equity Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Equity Shares are only being offered and sold (i) in the United States to "qualified institutional buyers, as defined in Rule 144A of the Securities Act in reliance on Rule 144A under the Securities Act, and (ii) outside the United States in compliance with Regulation S under the Securities Act.