Month: May 2007

Spice Communication Limited is entering Indian primary market with a Public issue of 137,985,000 equity shares of Rs.10 each. The issue is a 100% Book Built. Below are the salient features of this issue:
 

Business of the Company

Spice Communications Ltd. is in the business of providing mobile telephony services. It started its operations in 1997. It is the second largest cellular service provider in Punjab and the sixth largest in Karnataka. Company till the date of 31^st March, 2006 has a subscriber base of about 2.45 million in these states. Out of this, about 1.92 million were pre paid and about 0.53 million were post paid customers.
 

Promoters

The company is promoted by the Mr. Dilip Modi. He is also promoter of other companies in the Modi family.
 
Financials

Spice Communication Ltd. is a loss making company. For the FY ended June 30, 2006, the company clocked a turnover of Rs. 680 crores. The restated net loss for the same period was about Rs. 69 crores. For FY 2007, till September’2006, company had clocked a turnover of Rs.185 crores and a net loss of Rs.25 crores. For FY 2005 and FY 2004, the top line was Rs. 643 and Rs. 554 crores approximately. The net profit for FY 2005 was Rs. 7 crores and for FY 2004 net loss was Rs. 23 crores.
 

Particulars of the Issue

Spice Communication Ltd. IPO is a fresh 100% Book Building issue of 137,985,000 Equity Shares of Rs. 10 each. At least 135,985,000 Equity Shares of Rs. 10 each is reserved for the retail investors.
 

Basis for Issue price

Spice Communication Ltd. claims that it’s a strong player in its circle of operations. It claims it is the second largest operator in Punjab. Its strategic investor TM is considered as one of its strong point. It claims it has a vibrant brand name and strong management team.
 
Objects of the Issue

Primary objects of the issues are payment of long term debt, payment for NLD/ILD license fees and meet capital expenditure requirements. About Rs. 64 crores will be used for NLD and ILD fees and related expenses. Also another object of the issue is the obvious listing gains of its equity shares.
 

Risks

Following are the key risks which can impact company’s performance:
a.       Certain Persons forming part of Promoter Group are involved in     certain legal proceedings and regulatory matters, some of which may have a significant impact on business, financial condition and results of operations. Some of these are for defaulting on loan re-payments.
b.       Company is a regional player in the cellular services industry and significant competition from larger, national cellular service providers may have a material adverse effect on our profitability.
c.       Customer base is small.
d.       Company has made significant losses in current financial year and also in the past.

Magnum Ventures Limited is entering Indian primary market with a Public issue of 1, 76, 40,750 equity shares of Rs.10 each. The issue is a 100% Book Built. Below are the salient features of this issue:
 

Business of the Company

Magnum Ventures Limited is a company which has business interest in multiple fields. It is involved in trading and manufacturing of paper for more then 25 years. The existing manufacturing capacity includes writing and printing paper, and duplex boards with the total annual capacity at 85,000 MT. Company has 3 manufacturing units located at Sahibabad, UP.
 

Promoters

The company is promoted by the Jain family. The key promoters of the company are Mr. Praveen Kumar Jain, Mr. Pradeep Kumar Jain, Mr. Parmod Kumar Jain and Mr. Vinod Kumar Jain. There are more members of the Jain family in the promoter group. Rose Corner Trading Company LLC., Dubai; Delhi Paper Company (Partnership Firm) are the other group companies.
 
Financials

Magnum Ventures Ltd. has shown consistent profits in last 5 years. For the FY ended March 31, 2006, the company clocked a turnover of Rs. 74 crores. The restated net profit for the same period was about Rs. 8.10 crores. For FY 2007, till September’2006, company had already clocked a turnover of Rs.59 crores and a net profit of Rs.4.7 crores. For FY 2005 and FY 2004, the top line was Rs. 61.59 and Rs. 58.36 crores approximately. The net profit for FY 2005 was Rs.2.31 crores and for FY 2004 was Rs. 1.14 crores.
 

Particulars of the Issue

Magnum Ventures Ltd. IPO is a fresh 100% Book Building issue of 1,76,40,750 equity shares. Issued, Subscribed and Paid up Capital before the Issue is 1, 99, 60,700 Equity Shares of Rs.10/- each. Paid up Share Capital after the Issue will be 3,76,01,450 Equity shares of Rs.10/- each.
 

Basis for Issue price

Magnum Ventures Limited is a 26-year-old Company engaged in the Paper industry. The Company is strategically located in close proximity to the source of raw materials and main customers for supply of finished products. Company has captive power plant and a de-inking plant to manufacture better quality paper. The proposed hotel is near to Delhi. Plus, the promoters believe that they have more then 2 decades of experience.
 
Objects of the Issue

The primary purpose is to modernize its production facilities of its Paper Unit II and III by technological upgradation including replacement of plant and machinery with regard to manufacturing of duplex board, writing and printing paper, and allied sections such as chemicals and Fibre Recovery Section, Recycling of Backward System etc., at a project cost of Rs. 50 crores. The other main purpose is to venture into hospitality industry by setting up a 4 Star Business Hotel with 212 rooms, conference halls, food & beverages and other facilities, at a project cost of Rs. 102.63 crores.

Risks

Following are the key risks which can impact company’s performance:
a.       Paper industry is a cyclical and labor intensive industry.
b.       Both paper and hotel industry are highly competitive sectors.
c.       Government tax benefits changes, economic growth changes, foreign exchange rates are some other external risk factors to be considered before applying for this IPO.
d.       Company is fighting various tax related cases. Disputed tax amount totals up to around Rs.3.30 crores.
e.       License agreement between the company and Country Inn & Suites by Carlson is non-exclusive.

Indowind Energy Limited is entering Indian primary market with a Public issue of 1,25,00,000 equity shares of Rs.10 each. The issue is a 100% Book Built. Below are the salient features of this issue:
 

Business of the Company

Indowind started developing wind farms in a small way by installing a 225 KW Wind Electric Generator, in September 1995. Since then, the Company has been expanding wind farm capacity every year to reach the present capacity of 16.825MW and 17.915 MW for clients & group companies whose O&M is with the Company. The Company is currently in the process of implementing additional capacity of 9MW capacity in Karnataka.
The current scope of operations of Company includes:
A) Wind Power Generation
B) Operations & Maintenance of WEG’s
C) Turnkey operations for windmill projects

Promoters

The company is promoted by the entrepreneur Mr. K V Bala. Subuthi Finance Limited and Loyal Credit and Investments Limited are the other promoters of the company.
 
Financials

Indowind Energy Ltd. has shown consistent profits in last 5 years. For the FY ended June 30, 2006, the company clocked a turnover of Rs. 26 crores. The restated net profit for the same period was about Rs. 5.20 crores. For FY 2007, till September’2006, company had clocked a turnover of Rs.4.66 crores and a net profit of Rs.2.15 crores. From past 2 years, nearly 50% of sales come from Project Income. However, for the 3 months of FY 2007, no Project Income is shown in the financial results. For FY 2005 and FY 2004, the top line was Rs. 19.83 and Rs. 8.66 crores approximately. The net profit for FY 2005 was Rs. 4.14 crores and for FY 2004 was Rs. 3.08 crores.
 

Particulars of the Issue

Indowind Energy Ltd. IPO is a fresh 100% Book Building issue of 1,25,00,000 Equity Shares of face value of Rs. 10/- each constituting 25.53% of the fully diluted post issue paid up capital of the Company. At least 42,84,000 Equity Shares of face value of Rs.10/- each constituting at least 35% of the Net Issue is reserved for the retail investors.
 

Basis for Issue price

Indowind Energy Ltd. claims that it’s a consistently profit making company. It generates power without using any raw materials. Company has become the first Wind Energy company from India to get the Carbon Credits (Certified Emission Reductions) issued by UNFCCC for its recently commissioned 12.3 MW projects in Tamilnadu under the Clean Development Mechanism of Kyoto Protocol.
 
Objects of the Issue

The Setting up 9 MW Wind Farm Project in at Chitradurga, Karnataka is one of the main objects of issue. Then purchase of Hydraulic cranes and acquisition of second hand Wind Energy Generators (WEG) from Banks are other key objects. Company intends to foreclose lease with ICICI Bank and UTI Bank with issue proceeds.

Risks

Following are the key risks which can impact company’s performance:
a.       Project has not been appraised by any financial institution.
b.       There is risk related to purchase of second hand windmill machinery and no definitive agreement to do so have been entered so far by the company.
c.       Company has not yet signed a Power Purchase Agreement with Karnataka State government.
d.       Company is fighting various tax related cases.
e.       Company enjoys various government incentives like Section 80-IA. If this is withdrawn, it can adversely impact the company performance.