The document is a report presented by students of Mumbai Education Trust on critical disclosures in offer documents of IPOs. It includes an analysis of the IPO process, guidelines on disclosures as per SEBI, and case studies of recent IPOs of Bharti Infratel Limited and V Mart Retail Limited. The report evaluates the offer documents of these companies on various parameters like company introduction, risk factors, capital structure, object of issue, and basis of issue price. It points out some inconsistencies in the deployment timelines and store expansion plans of V Mart Retail Limited.

1. Mumbai Education Trust (MET)
The MET League of Colleges
A Report on Critical
Disclosure in Offer Document
Case Studies of Bharti Infratel Limited and
Presented by:
V Mart Retail Limited
Nitin Agarwal (61)
Amit Chauhan(63)
Shanmukh Dave (65)
Laxmi Dodeja (69)
Rupesh Gajare (71)
Veena Jirafe (77)
Yashashree Kokate (79)
Bonnie Lobo (81)
March 2013

2. Content
1.
Objective & Our Approach to study
2.
What is IPO and its purpose
3.
IPO process - What process to be followed for floating an IPO of the company
4.
Disclosures in Offer Document – what are the Guidelines of SEBI
5.
Case Studies – analysis of 2 case studies
6.
Recommendation and Conclusion – opportunities our opinion of these 2 case studies
Questions & Answers - Discussion

3. Objective & our approach to study
● To make aware the intending investors about the procedure what has to be followed in the issue of
securities for public subscription.
● To provide them the guidelines which are to be followed by companies in an IPO.
● To know the key terms and various stages in an IPO process.
● About the various parties involved along with the company for making an IPO.
● to look into the aspects of different companies which have come for an IPO recently along with their
respective strengths and weakness.
● To know how the share are valued and the different methods of pricing them in an IPO.
● To know the various parties involved in an IPO and their respective formalities to be completed.
● To know the factors which can lead to success or failure of an IPO

4. What is an IPO and its purpose?
Initial Public Offering, IPO, is when an unlisted company makes either a fresh issue of
securities or an offer for sale of its existing securities or both for the first time to the public
Purpose
● Raising funds to finance capex programs like expansion, diversification, modernization
● Financing of increased working capital requirements
● Debt refinancing
● Financing acquisitions like a manufacturing unit, brand acquisition
● Exit route for existing investors

5. an IPO
Governing Laws
● Before 1992, Public issues were governed by Chief Controller of Capital Issues (CCCI).
● In 1992, CCCI has been abolished and SEBI has been formed.
● Now IPO is governed by Followings:
1.
The Companies Act 1956
2.
SEBI (Disclosure & Investor Protection) Guidelines, 2000
3.
Securities Contracts (Regulation) Act, 1956
4.
Listing norms/Guidelines of NSE/BSE

6. Different Kinds of Issues
Issues
Public
Rights
Initial Public
Offering
Fresh Issue
Offer For Sale
Preferential
Further Public
Offering
Fresh Issue
Offer For Sale

7. IPO Process
Flow chart of floating an IPO
Listing and
trading
Pre-IPO
Structuring
Kick Off Meeting
Due Diligence and
Documentation
Filing with SEBI and
SE
Final
Phase
Preparatory
Phase of
Issue
Closing and
Allotment
RoC filing of final
Prospectus
Marketing Phase of Issue
Pre-Marketing
SEBI Approval
&
RoC Filing
Roadshows &
Price Band
Discovery
Book building and
Pricing

8. Latest IPOs issued since September 2012
* AS on date: Thursday, March 14, 2013
CARE is most expensive
5 IPOs has negative gain as on date

9. Year wise amount raised through IPOs
* AS on date: Jan 31, 2013
IPOs of worth Rs. 238 crore has been floated in the first month of year 2013. In last 5 years,
maximum amount of IPOs has been floated in years 2010. In year 2011 least amount of IPOs
has been floated.

10. Year wise amount raised through IPOs
* AS on date: Jan 31, 2013
310 nos. of IPOs issued since 2007, out of which 15 IPOs failed. In year 2007, maximum nos. of
Issues has been floated and only 4 nos. of IPOs has failed. In year 2007, 104 nos. of Issues
raised approx. Rs. 34,000 Crore, compared to year 2010, only 68 issues offered an amount of
worth Rs. 36,000 Crore.

11. Content of Offer document
COMPANY BASED INFORMATION
ISSUE RELATED INFORMATION
•
Industry Overview
• Objects of the issue
•
Business Overview & Strategies
• Basis of issue price
•
Risk factors
• Terms of issue
•
Promoter and Group company disclosures
• Issue process
•
Capital Structure
• IPO Grading
•
Management & Managerial Persons
FINANCIAL INFORMATION
OTHER INFORMATION
• Financial performance statement for last five years
• Government Approvals
(recast as per SEBI (ICDR) Regulations, 2009
• Management discussion and analysis of the Financial
Statements
• Statement of tax benefits
• Legal & Litigations
• Related Party Transactions
• Legal and Secretarial matters

12. Critical Disclosure

13. Issue Details
1.
Company Introduction
9.
Dividend Policy
2.
Risk factors
10. Financial Details
3.
Capital Structure
11. Litigations
4.
Object of issue
12. Government Approvals
5.
Basis of issue price
13. IPO Grading
6.
Promoter’s Contribution
14. Eligibility for the Issue
7.
Lock-in requirement
15. Allotment of shares
8.
Management

14. Case Study
Company 1: Bharti Infratel Limited
And
Company 2: V-Mart Retail Limited

15. Issue Details
Bharti Infratel Limited
V Mart Retail Limited
Issue Size
Dec 11, 2012 - Dec 14, 2012
100% Book Built Issue IPO
188,900,000 Equity Shares of
Rs. 10
Rs. 4,155.80 Crore
Feb 01, 2013 - Feb 05, 2013
100% Book Built Issue IPO
4,496,000 Equity Shares of
Rs. 10
Rs. 94.42 Crore
Face Value
Rs. 10 Per Equity Share
Rs. 10 Per Equity Share
Issue Price
Rs. 210 - Rs. 240 Per Equity
Share
50 Shares
Rs. 195 - Rs. 215 Per Equity
Share
66 Shares
Issue Open
Issue Type
Issue Size
Market Lot
Minimum Order 50 Shares
Quantity
Listing At
BSE, NSE
66 Shares
BSE, NSE

16. Disclosure 1: Company Introduction

17. Company Introduction
SEBI Requirements
In case the issuer company has not come out with any issue in the past ten years or more, a
brief statement about the history and corporate structure of the issuer company, the main
objects of the issuer company and major events in the past.
Bharti Infratel Limited
V Mart Retail Limited
● Incorporated in 2006
● Incorporated in 2002,
● provider of tower and related
infrastructure.
● medium-sized hypermarket format
retail chain based in New Delhi.
● telecom tower infrastructure providers
● multi-brand family store offers
apparels, general merchandise and
kirana bazar.
● The business is to acquire, build, own
and operate tower and related
infrastructure
● In India, Infratel has over 34,000+
towers, across 18 states
● more than 62 stores across 53
cities
● concept of "value retailing"

18. Disclosure 2: Risk Factors

19. Risk Factors
SEBI Requirements
Risk factors and management perception of those risk factors, if any are
required to appear on the first inner page and shall continue to other
subsequent pages, if required, of the offer document.
1. Forward-looking Statements and Market Data, if any (to be disclosed on
voluntary basis).
2. Risk Factors
● Risks envisaged by Management.
● Proposals, if any, to address the risks.
● Notes to the risk factors.

20. Risk Factors – Bharti Infratel
Internal Risk (37 Internal risks)
External Risks (6 external risks)
• Legal proceedings - 1275 Cases outstanding - 68 • Political instability or changes in the
Criminal cases
Indian central government
• decrease in demand for tower infrastructure in
India
• Inability to raise foreign capital may
be constrained by Indian law.
• Heavily dependent on growth of their key
customers.
• retrospective tax law changes by
the Indian government affecting
Bharti Infratel or the Group.
• Unable to collect termination fees from the
telecommunications service providers
• Increasing competition in the tower industry
• Licences and permits required in the tower
business

21. Risk Factors – V Mart Retail
Internal Risk
External Risks (6 external risks)
• Does not have definite agreement with vendors
• The retail sector is subject to
extensive foreign exchange
regulations
• Availed unsecured land – can be recalled
anytime
• Some of lease agreements may have certain
irregularities
• Natural calamities could have a
negative impact on the Indian
economy and cause Company's
business to suffer.
• strategy to expand into new geographic areas
exposes them to certain risks.
• Multiplicity of legislations, taxes
and levies
• Negative cash flows in certain years
• Company will not receive any proceeds from the
Offer for Sale by the Selling Shareholder.

22. Disclosure 3: Capital Structure

23. Capital Structure – Bharti Infratel Limited
Descriptions
A
B
Authorized share capital
3,500,000,000 Equity Shares
Aggregate value at
Issue Price (Rs.)
35,000,000,000
Issued, subscribed and paid-up capital before the issue
1,742,408,730 Equity Shares
C
Aggregate value at
face value (Rs.)
17,424,087,300
Present issue in terms of the Red Herring Prospectus
Issue of 188,900,000 Equity Shares
1,462,341,120
32,299,286,855
Offer for Sale of 42,665,888 Equity Shares
E
41,723,064,500
Of which:
Fresh Issue of 146,234,112 Equity Shares
D
1,889,000,000
426,658,880
9,423,777,644
Securities premium account
Before the Issue
After the Issue
Issued, subscribed and paid-up capital after the issue
35,968,912,700
66,805,858,435.88
1,888,642,842 Equity Shares
18,886,428,420

24. Capital Structure – V-Mart Retail Limited
Particulars
Nominal Value
(Rs.)
A
Authorised Capital
20,000,000 Equity Shares
Aggregate value at
Issue Price (Rs.)
-
-
-
151,980,000
-
-
-
Fresh Issue of 2,761,000 Equity Shares
27,610,000
579,810,000
Offer for Sale of 1,735,000 Equity Shares
17,350,000
364,350,000
Total Issue of 4,496,000 Equity Shares
B
200,000,000
44,960,000
944,160,000
-
-
179,590,000
-
392,360,000
1,291,560,000
-
Issued, Subscribed and Paid Up Share Capital before the Issue
15,197,778 Equity Shares
C
Present Issue in terms of the Prospectus
Which comprises
D
Issued, Subscribed and Paid Up Equity Share Capital after the
Issue
17,958,778 Equity Shares
E
Securities Premium Account
Before the Issue
After the Issue

25. Disclosure 4: Object of Issue
Why this IPO? Where my money will be invested? What I will get?

26. Object of Issue
SEBI Requirements
• The object of raising funds through the issue -- whether for
fixed asset creation and/ or for working capital or any other
purpose
• Activities proposed fall within the main objects -- listed in the
MoA or any other Charter or Instruments.

27. Object of Issue
Bharti Infratel Limited
V Mart Retail Limited
a) Installation of 4,813 new towers;
a) To open 60 new stores;
b) Upgradation and replacement on
existing towers;
b) Expansion of distribution
centres;
c) Green initiatives at tower sites;
c) Working capital requirements;
d) General corporate purposes
d) General Corporate Purposes;
e) To meet the Issue expenses.
….Apart from this, that listing will enhance their corporate image and brand
name.
V Mart Basic objects is for Working Capital Requirements…..

28. Issue Proceeds and Net Proceeds
Amount (Rs. in Million)
P
 articulars
Bharti Infratel
V Mart Retail
Gross Proceeds from the Issue
41,723.10
579.81
(Less) Issue related expenses
852.9
73.16
(Less) Offer for Sale portion
9,423.80
--
Net proceeds of the Fresh Issue
(“Net Proceeds”)
31,446.40
506.65
Bharti Infratel is allotting Rs. 9,423 Million offer for sale - exit/entry for
shareholders – to be checked????

29. Utilisation of the Net Proceeds
Bharti Infratel
P
 articulars
Installation of 4,813 new towers
Upgradation and replacement on existing towers
Green initiatives at tower sites
General corporate purposes
Total Net Proceeds
Amount (Rs. in
Million)
10,865.60
12,140.80
6,393.60
2,046.40
31,446.40
• Only 35% for expansion (i. e. Rs. 10,865 Million)
• Rest for enhancement of existing facilities
• Green Initiatives – practice is not much developed in India – difficult to
measure the effect

30. Utilisation of the Net Proceeds
V Mart Retail
Particulars
To open 60 new stores
Expansion of distribution centres
Working Capital
General Corporate Purpose
Total
Total Estimated Cost (Rs. in
million)
697.04
43.87
100.00
840.91
V-Mart planned opening of 60 stores – avg. 12 stores in last 5 years --- seems
unrealistic

31. Deployment of Net Proceeds
Bharti Infratel
Amount (Rs. in Million)
A
 ctivity
Total
FY 2014
FY 2015 FY 2016
Installation of 4,813 new towers
10,866
5,071
4,253
1,541
Upgradation and replacement on
existing towers
12,141
5,049
5,307
1,785
Green initiatives at tower sites
6,394
2,991
2,768
634
General corporate purposes
2,046
1,023
1,023
-
• Installation planned for next 3 years – difficult to achieve – considering the
fact of land acquired process….

32. Deployment of Net Proceeds
Amount (Rs. in Million)
V Mart Retail
Particulars
To open 60 new stores
Expansion of distribution
centres
Working Capital
General Corporate Purpose
Total
Estimated
Cost
Estimated Amount to be utilized
Amount
deployed
Balance
Amount
697.04
2013
119.92
2014
285.53
2015
291.59
44.62
652.42
43.87
9.09
17.18
17.6
0.49
43.38
100.00
840.91
100
229.01
302.71
-
45.11
100.00
795.8
Particulars
Net Proceeds from the Fresh Issue
Pre-IPO Placement
Internal accruals
Total
309.19
Amount in Rs. million
506.65
262.50
71.76
840.91
• Maximum amount invested in 2015.
• Amount already deployed through internal accruals – “aggressive approach”

33. Disclosure 5: Basis of Price
How the price is determined?
“Qualitative” & “Quantitative”

34. Basis of Issue Price
SEBI Requirements
The basis for issue price/floor price/price band shall be disclosed and
justified on the basis of the following information, which shall be also
disclosed separately:
● Earnings Per Share,
● Comparison of all the accounting ratios of the issuer company
● The face value of shares

35. Basis of Issue Price
Bharti Infratel Limited
V-Mart Retail Limited
● Determined by the Company in
● Determined by Company and the
consultation with the JCBRLMs,
Selling Shareholder in consultation
BRLMs and CBRLMs
with the BRLM
● “Book building process”
● “Book building process”
● The Issue Price is 22 times
● The Issue Price is 21 times
● The Cap Price is 24 times and
● The Cap Price is 21.5 times and
● The Floor Price is 21 times
● The Floor Price is 19.5 times

36. Qualitative Factors - Bharti Infratel
● A leading telecommunications infrastructure operator
● Extensive presence
● Long term contracts with the leading wireless telecommunications service
providers
● Well-developed processes, systems and IT infrastructure
● Strong financial position and access to capital - Relationship with the
Bharti group
● Indus’ relationship with three wireless service providers – 45%
● Experienced management team – Managed by Bharti Group

37. Qualitative Factors - V Mart Retail
● Advantage in Tier-II and Tier-III cities
● Competitive lease rentals
● Strong and diversified procurement network
● Efficient supply chain management
● Pleasant ambience and a modern shopping environment
● One stop family shop - large & Customized variety of products
● Inverted hierarchy model – employees at bottom are “decision makers”

38. Quantities Factors - Ratio
Earning Per Share

39. Quantities Factors – Debt Equity Ratio
Return on Net Worth (RoNW)

40. Quantities Factors – Debt Equity Ratio

41. Disclosure 6: Promoter’s Contribution
How much the Owner is Contributing?

42. Promoter’s Contribution
SEBI Requirements
Type of Issue
Public Issue by Unlisted
Companies
Offers for Sale
Public Issues by Listed
Companies
Promoter's Contribution
not less than 20% of the post issue
Composite Issues
at the option of the promoter(s) be
either 20% of the proposed public
issue or 20% of the post-issue
capital.
not less than 20% of the post issue
either to the extent of 20% of the
proposed issue or ensure postissue shareholding to the extent of
20% of the post-issue capital

43. Promoter’s Contribution
Bharti Infratel
• 7% less
• Public – 10%
Pre-Issue
Post-Issue
V Mart Retail
• 15% less
• Public – 25%
Pre-Issue
Post-Issue

44. Disclosure 7: Lock-in requirements

45. Lock-in period
SEBI Requirements
Type
Lock-in period
Minimum Specified Promoters contribution in 3 years
Public Issue
Excess Promoter's Contribution
Pre-Issue share capital of an unlisted
company
Securities issued on firm allotment basis
1 year
1 year
1 year

46. Lock-in period
Bharti Infratel
Date of
Transaction
Nature of
Transaction
No. of Equity
Shares
November 30, 2006 Allotment
50,000
pursuant to
subscription to the
MoA
August 21, 2008
Bonus issue
379,534,800
Total
379,584,800
10
Issue/acquisition
price per Equity
Share (Rs)
10
Percentage of
post-Issue paidup capital (%)
Negligible
10
-
20.00
20.00
Face Value
(in Rs)
V Mart Retail
Date of allotment / acquisition
Lalit Agarwal
Hemant Agarwal
Madan Agarwal
Madan Gopal Agarwal (HUF)
Lalit M. Agarwal (HUF)
Hemant Agarwal HUF
Total
No. of Equity shares locked in
1,016,180
268,400
410,463
729,173
894,093
296,790
3,615,099
Percentage of post-Issue paid up
capital (%)
5.66
1.49
2.29
4.06
4.98
1.65
20.13

47. Disclosure 8: Management
Who is managing the Company?

48. Management
SEBI Requirements
● Name, age, qualifications, Director Identification Number, experience,
address, occupation and date of expiration of the current term of office of
manager, managing director, and other directors (including nominee
directors, whole-time directors), giving their directorships in other
companies.

49. Management
Bharti Infratel Limited
● Under the Articles of Association - not less than three Directors.
● The Board comprises of ten Directors.
Sr. No.
Name
1. Rakesh Bharti Mittal
2.
Akhil Kumar Gupta
Designation
Chairman, non-independent and non-executive
Director
Vice Chairman and Managing Director
3.
4.
5.
Sarvjit Singh Dhillon
Sanjay Nayar
Narayanan Kumar
Non-independent and non- executive Director
Non-independent and non- executive Director
Independent and non- executive Director
6.
7.
8.
Vinod Dhall
Jitender Balakrishnan
Bharat Sumant Raut
Independent and non- executive Director
Independent and non- executive Director
Independent and non- executive director
9.
Leena Srivastava
Independent and non- executive Director
10.
Murray Philip King
Non-independent and non- executive Director

50. Management
V-Mart Retail Limited
● Articles of Association - not less than three directors and not more
than twelve directors.
● Company currently has six Directors on its Board, of which three are
Executive Directors and three are Non–Executive Directors.
1. Madan Agarwal; Whole Time Director
2. Lalit Agarwal, Chairman and Managing Director
3. Hemant Agarwal; Whole Time Director
4. Krishan Kumar Gupta, Director (Non-Executive, Independent)
5. Aakash Moondhra, Director, (Non-Executive, Independent)
6. Kamal Kumar Gupta, Director, (Non-Executive, Independent)

51. Disclosure 9: Dividend Policy
How much cash dividend company is giving?

52. Dividend
SEBI Requirements
● Dividend policy of the Company
● Rate of Dividend and Amount of Dividend paid for the last five financial
years
● Regulatory framework in the Country of Incorporation/share listed
concerning Dividends
● Details of Arrangement with the Depositories for payment of Dividend to
the IDR holders
● Information about changes, if any, in dividends announced and dividends
paid and time gap between the dividends announced and dividends paid.
● Information about Dividend Yield.
● Taxation aspects of dividend distribution.

53. Dividend
Bharti Infratel
Face value per Equity Share:
Rs. 10
Dividend declared per Equity Share:
Rs. 2.5
Rate of dividend:
25%
V Mart Retail
Particulars
Equity Share Capital
Face value of the Equity
Shares (in Rs.)
Amount of Dividend
Dividend Tax
Rate of Dividend (%)
Fiscal
2008
55.60
10.00
Fiscal
2009
68.53
10.00
Fiscal
2010
68.53
10.00
Fiscal
2011
73.41
10.00
Fiscal
2012
73.41
10.00
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
2.94
0.49
4.00%
2.94
0.49
4.00%

54. Disclosure 10: Financial Details
How company is doing financially?

55. Financial Details
SEBI Requirements:
Stand-alone and consolidated financial statements of the
issuer company in respect of the last completed accounting year:
(indicating changes in accounting policies, if any)
• profit or loss and assets and liabilities.
• limited review of the profit or loss and assets and liabilities as
at a date not earlier than six months prior to the date of the
opening of the issue.
• Accounting and other ratios

56. Assets of the Firm
Bharti Infratel
● 2009, Increase in the Fixed Assets –
Investment in Tangible assets
● 2007 – 2008 more current assets investments in mutual funds
● 2008-2009 increase in the short term loan
and advances - loans to its subsidiaries.
V Mart Retail
● Purchased tangible assets and taken Long
term loans and advances to meet its
expansion plans.
● Increasing trend indicates that the
company is efficiently & effectively using
its funds to meet the debts over the years.

57. Liability of the Firm
Bharti Infratel
● Noncurrent liabilities were more because of
the Long Term Borrowings - They were paid
off over subsequent years
● year 2008 – 2009 the other current liabilities
were more however in the subsequent years
the companies have meet its liabilities.
V Mart Retail
● Noncurrent Liabilities are long term Loan -company has paid off in subsequent years.
● Current Liabilities have an increasing trend
-- taken short term borrowings, the trade
payables are not paid off and the other
current liabilities are not meet.

58. Net Worth of the Firm
Bharti Infratel
● Company is growing -- has a
sound position to meet its
financial obligation.
V Mart Retail
● Consistent increase in the net worth
- the company is in good financial
health.
● Shareholder equity is in the good
state over the years

59. Reserves and Surplus
Bharti Infratel
The Total of Reserves and Surplus has
an increasing trend
V Mart Retail
● We can see company has maintained net
profits during the year of recession
● Mar - Nov the reserves and surplus has
significantly gone up - Good positions to
pay out dividends to its shareholders

60. Income Statement
Bharti Infratel
● Increase in Sale from 2008 – 2009.
● In the subsequent years the change in
Income is proportionate with the change in
Expenses.
V Mart Retail
● The change in income is proportionate with
the change in expense over a period of
years.

61. Cash Flow - Bharti Infratel

62. Cash Flow - V Mart Retail

63. Disclosure 11: Litigation
Cases and Crimes company involved in?

64. Litigation
SEBI Requirements
● Litigation against the issuer company or against any other company whose
outcome could have a materially adverse effect of the position of the issuer
company
● Litigation in which the promoters are involved
● Litigation against the directors
● Proceeding initiated for economic offences against the issuer company,
promoters, companies and firms promoted by the promoter or its directors
● Outstanding litigations pertaining to matters likely to affect operation and
finances

65. Litigation
Bharti Infratel
Nature of the cases/ No. of
claims
cases
outstanding
Public Interest
82
Litigation and Writ
Petitions
Regulatory
109
Proceedings
Tax
42
Property
106
Environment
36
Labour
34
Consumer
6
Stamp Duty
716
Arbitration
3
Others
141
Total
1,275
V Mart Retail
Litigation Litigation Total
by our
against
company our
company
Civil Cases
1
3
4
Criminal cases
9
9
Tax Cases
7
5
12
Financial Implications 7.37
31.27
38.64
(Rs.in mil)
Potential Litigation
2
6
8
Financial Implications 10.17
0.67
10.84
(Rs. in mil)

66. Contingent Liability
Bharti Infratel
P
 articulars
Amount
(Rs.Million)
Guarantees issued by banks and financial institutions on behalf of Bharti Infratel, BIVL
87
and Bharti Infratel’s 42% equity interest in Indus
Claims against Bharti Infratel, BIVL and Bharti Infratel’s 42% equity interest in Indus
4,224.30
not acknowledged as debt (excluding cases where the possibility of any outflow in
settlement is remote)
V Mart Retail
Year (Rs. in Million)
Description
2008 2009 2010 2011
2012
Nov. 30, 2012
(Rs. in Mil)
Demand raised by the sales tax Authorities
Claims against the Company not acknowledged as debts -
9.05
0.03 0.04
21.06 12.00 2.41
2.95 -
Service tax on rent
Demand raised by electricity board
Demand raised by income tax authority
Total
0.62
0.65
3.03
27.04
0.14
0.14
3.03
12.12
3.03
2.76
0.31
18.10
3.03
2.47
0.31
8.22

67. Litigation Review
● Bharti Infratel IPO – complain for “Rejection of offer document”
● BIL has virtually no assets under its name - most of the schemes are pending
before courts -- may not get approvals
● Transfer of towers from Group Company Bharti Airtel to Bharti Infratel
Ventures Ltd has not reached finality - Objection for merger
● The passive infrastructure assets were transferred without any consideration
● PIL is filed against Bharti Infratel on radiation norms – no to use public money
– assurance for radiation-norms compliant.
● V Mart Retail Limited – has contingent Liability – may cause financial
implication – reduction in the Month on Nov 12.

68. Disclosure 12: Government Approvals
What approvals required?

69. Government Approvals
SEBI Requirements
1. Government Approvals/ Licensing Arrangements
2. Investment approvals (FIPB/ RBI, etc.).
3. All government and other approvals.
4. Technical approvals.
5. Letter of intent/ industrial license and declaration of the Central
Government/ RBI about non-responsibility for financial soundness or
correctness of statements.

70. Government Approvals - Bharti Infratel Limited
1. Certificate of incorporation dated November 30, 2006
2. Certificate of commencement of business dated April 10, 2007
3. Tax Related Approvals and Other Registration
•
Permanent Account Number - AADC B0274F
•
Service Tax Code – AADCB0274FST001
•
Tax Deduction Account Number – DELB09347C
•
Approval from local authorities,
4. Council, Gram Panchayat and Industrial Development Corporation
5. Permission from pollution control board wherever applicable for operation
of DG sets.
Few permissions and objection are pending

71. Government Approvals – V Mart Retail Limited
● Tax related approvals/licenses/registration
● Registration under The Employees‟ Provident Fund and Miscellaneous
Provisions Act, 1952 (the “EPF Act”)
● Registrations under the Employees State Insurance Act, 1948 (the “ESI
Act”)
● Registration under state shops and establishments acts
● Registration under Food Safety and Standards Act, 2006 (the “FSS Act”)
● Factory license under Factories Act, 1948 (the “Factories Act”)
● Certificate under Legal Metrology Act, 2009 (the “LMA”)
● License to trade from the local municipal authorities.

72. Disclosure 13: IPO Grading

73. IPO Grading
SEBI Requirements
● Mandatory for IPO (atleast one)
● Disclosures of all the grades obtained
● Descriptions furnished by credit agency(ies)

74. IPO Rating & IPO Grading
No.
1
2
3
4
5
IPO Rating
Provided by Financial institutions &
independent brokers.
Provide investors of various
financial products reliable and
consistent assessment
IPO Grading
Provided by SEBI approved rating
agencies
Provide investors an independent,
reliable and consistent assessment
of the fundamentals of IPO Issuer
Companies
Used for other financial products like Grading is a term that is used most
mutual funds, bonds besides IPOs
often in respect to IPOs
Rating between 1 – 100
1–5
Capital Market, Money Control, S P CRISIL, CARE and ICRA
Tulsian's IPO recommendations etc

75. IPO Grading
Bharti Infratel Limited V Mart Retail Limited
IPO Grading
4/5
3/5
Institution
CRISIL
CARE

76. Disclosure 14: Eligibility for the Issue

77. Eligibility Requirement
SEBI Requirement
Bharti Infratel Limited
V Mart Retail Limited
Net tangible assets of at least Rs 3 crore
(Rs. 30 mil) for three full years
2012 – 147,366 mil
2011 – 143,480 mil
2010 – 140,282 mil
2012 – 543 mil
2011 – 437 mil
2010 – 373 mil
Distributable profits of atleast 15 crore
(Rs. 150 Mil) in at least three years
2012 – 9,856 mil
2011 – 6,770 mil
2010 – 3,023 mil
2012 – 230.29 mil
2011 – 144.97 mil
2010 – 76.50 mil
Avg: 150 mil
Net worth of at least Rs 1 crore (Rs. 10
mil) in three years
2012 – 147,431 mil
2011 – 143,513 mil
2010 – 140,361 mil
2012 – 546 mil
2011 – 439 mil
2010 – 375 mil
If change in name, at least 50 per cent of
revenue for preceding one year should
be from the new activity
The Company has not
The Company has not
changed its name in the changed its name in
last fiscal year
the last fiscal year
The issue size should not exceed five
times the pre-issue net worth
not expected to exceed
five times the pre-Issue
net worth of Company
not expected to exceed
five times the pre-Issue
net worth of Company

78. Disclosure 15: Allotment of Shares
How much share I will get???

79. Allotment of Shares
SEBI Requirements
Percentage of issue size and number of equity shares which are available
for allotment to QIB’s, retail individual investors and non institutional
bidders
For book building process
1. Qualified Institutional Buyer (QIB) – at lease 50% of the Net Issue being
allotted. However upto 5% of the Net QIB Portion shall be available for
allocation proportionately to Mutual Funds only
2. Non Institutional Bidders – Not less than 15% of the Net Issue or the Net
Issue less allocation to QIBs and Retail Individual Bidders
3. Retail Individual Bidders – Not less than 35% of the Net Issue or the Net
Issue less allocation to QIB and Non- institutional Bidders.

80. Allotment of Shares

81. Allotment of Shares
Bharti Infratel
No. of Equity
Shares
V Mart Retail
%
No. of Equity Shares
%
Total
188,900,000
4,496,000
Qualified
Institutional
Bidders
Non-Institutional
Bidders
Retail Individual
Bidders
94,450,000
50%
2,248,000
50%
Not less than
28,335,000
Not less than
66,115,000
15%
Not less than 674,400
15%
35%
Not less than
1,573,600
35%

82. Conclusion
What we learned?

83. Conclusion…
● The draft offer document is required to contain all disclosures as
per SEBI guidelines --- required for Good Investment Decision
● Studying the Optimistic future earnings outlook --- reading the
projected accounting figures carefully.
● Prima facie, Bharti Infratel Limited and V-Mart Retail Limited comply
with SEBI guidelines
● To conclude, Bharti Infratel Limited is advisable for Long term gain
– V Mart Retail is advisable for short term gain.

84. Questions and Answers: Discussion
Have you understood? Get your doubt cleared?