Mr. Gyanendra Kumar Agarwal, Mr. Alok Kumar, Mr. Shalabh Agarwal and Ms. Tripti Gupta THE ...

521 Pages·2017·9.78 MB·English

Prospectus
Dated: July 03, 2017
Please read Section 26 of Companies Act, 2013
100% Fixed Price Issue

SALASAR TECHNO ENGINEERING LIMITED
Initially our Company was incorporated as “Salasar Petrochemicals Private Limited” under the provisions of the Companies Act, 1956 vide certificate of
incorporation dated October 24, 2001 in Jaipur, Rajasthan. Thereafter Company was taken over by our Promoters in March, 2005. Further the name of the Company
changed from “Salasar Petrochemicals Private Limited” to “Salasar Techno Engineering Private Limited” vide fresh certificate of incorporation dated June 13, 2006.
Due to change in registered office from one state (Registrar of Companies, Rajasthan) to another state (Registrar of Companies NCT of Delhi & Haryana) the
Corporate Identification Number (CIN) of the Company was also changed from U23201RJ2001PLC17253 to U23201DL2001PLC174076 dated December 26, 2007.
Subsequently, our Company was converted into public limited company pursuant to a special resolution of our shareholders dated August 02, 2016 and the name of
our Company was changed to “Salasar Techno Engineering Limited” to reflect the legal status of our Company pursuant to a fresh certificate of incorporation granted
by the RoC dated August 16, 2016. The Corporate Identification Number of Our Company is U23201DL2001PLC174076. For details of change in registered office
of our Company please refer to chapter titled “Our History and Certain Other Corporate Matters” beginning on page 148 of this Prospectus.
Registered Office: E-20, South Extension I, New Delhi-110049, India
Tel No.: [phone]/8577; E-mail: [email protected]; Website: www.salasartechno.com
Contact Person: Mr. Kamlesh Kumar Sharma, Chief Financial Officer
Promoters of our Company: Mr. Gyanendra Kumar Agarwal, Mr. Alok Kumar, Mr. Shalabh Agarwal and Ms. Tripti Gupta
THE ISSUE
PUBLIC ISSUE OF 3,321,000 EQUITY SHARES OF FACE VALUE OF Rs. 10/- EACH (“EQUITY SHARES”) OF SALASAR TECHNO
ENGINEERING LIMITED (“SALASAR” OR “OUR COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF Rs. 108/- PER
EQUITY SHARE (THE “ISSUE PRICE”) (INCLUDING SHARE PREMIUM OF Rs. 98/- PER EQUITY SHARE) AGGREGATING Rs.
358.67 MILLION (THE “ISSUE”). A NET ISSUE TO THE PUBLIC OF 3,321,000 EQUITY SHARES HEREINAFTER REFERRED TO AS
THE “NET ISSUE”. THE NET ISSUE WILL CONSTITUTE 25.01% OF THE POST ISSUE PAID UP EQUITY SHARE CAPITAL OF THE
COMPANY.
THE FACE VALUE OF THE EQUITY SHARES IS Rs. 10/- EACH. THE ISSUE PRICE IS RS. 108/-. THE ISSUE PRICE IS 10.80 TIMES
THE FACE VALUE.
THIS ISSUE IS BEING MADE THROUGH FIXED PRICE PROCESS IN ACCORDANCE WITH REGULATION 26(1) OF CHAPTER III OF
THE SEBI (ICDR) REGULATIONS, 2009 (AS AMENDED FROM TIME TO TIME).
For further details please refer to “Section VII - Issue Information” beginning on Page 383 of this Prospectus.
All potential investors shall participate in the Issue through Application Supported by Blocked Amount (“ASBA”) process providing details about the
bank account which will be blocked by the Self Certified Syndicate Banks (“SCSBs”) for the same. For details in this regard, specific attention is invited
to “Issue Procedure” on page 389 of this Prospectus.
RISK IN RELATION TO THE FIRST ISSUE
This 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 Rs. 10/- and the Issue Price is 10.80 times of the face value. The Issue Price (as determined and justified by our Company in consultation with
the Lead Manager as stated under chapter titled “Basis for Issue Price” beginning on page 95 of this Prospectus) 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 and/or sustained trading in the
Equity Shares or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISKS
Investment 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 titled “Risk Factors” on
page 18 of this Prospectus.
COMPANY’S ABSOLUTE RESPONSIBILITY
Our 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 this 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.
LISTING
The Equity Shares offered through this Prospectus are proposed to be listed on the NSE and BSE. Our Company has received an “in-principle” approval
from the NSE and the BSE for the listing of the Equity Shares pursuant to letters dated April 05, 2017 and April 26, 2017 respectively. For the purpose
of this Issue, the Designated Stock Exchange will be the NSE.
LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE
SARTHI CAPITAL ADVISORS PRIVATE LIMITED BIGSHARE SERVICES PRIVATE LIMITED
Unit No. 411, 4th Floor, Pratap Bhawan, E2 Ansa Industrial Estate, Sakivihar Road,
5, Bahadurshah Zafar Marg, Sakinaka, Andheri East,
New Delhi – 110002 Mumbai- 400072
Tel: [phone] Tel: [phone]
Fax: [phone] Fax: [phone]
Investor Grievance Email: [email protected] Email: [email protected]
Website: www.sarthi.in Website: www.bigshareonline.com
Contact Person: Mr. Anand Lakhotia Contact Person: Mr. Ashok Shetty
SEBI Registration No.: INM000012011 SEBI Registration No: INR000001385

ISSUE PROGRAMME
ISSUE OPENS ON: JULY 12, 2017 ISSUE CLOSES ON: JULY 17, 2017
CONTENTS
SECTION I – GENERAL…………………………………………………………………………….......... 2
DEFINITIONS AND ABBREVIATIONS……………………………………………………………........... 2
PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA………………………………... 15
FORWARD - LOOKING STATEMENTS………………………………………………………………….. 17
SECTION II - RISK FACTORS…………………………………………………………………………... 18
SECTION III – INTRODUCTION………………………………………………………………………... 39
SUMMARY OF OUR INDUSTRY…………………………………………………………………………. 39
SUMMARY OF OUR BUSINESS…………………………………………………………………….......... 44
SUMMARY OF FINANCIAL STATEMENTS…………………………………………………………….. 46
THE ISSUE…………………………………………………………………………………………….......... 55
GENERAL INFORMATION………………………………………………………………………….......... 56
CAPITAL STRUCTURE……………………………………………………………………………………. 64
OBJECTS OF THE ISSUE……………………………………………………………………………........... 89
BASIS FOR ISSUE PRICE………………………………………………………………………………….. 95
STATEMENT OF TAX BENEFITS………………………………………………………………………… 98
SECTION IV – ABOUT THE COMPANY……………………………………………………………….. 100
OUR INDUSTRY…………………………………………………………………………………………… 100
OUR BUSINESS…………………………………………………………………………………………….. 120
KEY INDUSTRY REGULATION AND POLICIES……………………………………………………….. 143
OUR HISTORY AND CERTAIN OTHER CORPORATE MATTERS……………………………….......... 148
OUR MANAGEMENT……………………………………………………………………………………… 154
OUR PROMOTERS AND PROMOTER GROUP………………………………………………………….. 171
OUR SUBSIDIARY…………………………………………………………………………………………. 177
OUR GROUP ENTITIES………………………………………………………………………………......... 182
RELATED PARTY TRANSACTIONS……………………………………………………………………... 191
DIVIDEND POLICY………………………………………………………………………………………... 192
SECTION V – FINANCIAL INFORMATION………………………………………………………....... 193
FINANCIAL STATEMENT, AS RESTATED…………………………………………………………........ 193
SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IND AS……………………………… 322
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
326
OF OPERATIONS…………………………………………………………………………………………...
FINANCIAL INDEBTEDNESS…………………………………………………………………………….. 343
SECTION VI – LEGAL AND OTHER INFORMATION………………………………………….......... 349
OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS……………………………........ 349
GOVERNMENT AND OTHER STATUTORY APPROVALS…………………………………………….. 360
OTHER REGULATORY AND STATUTORY DISCLOSURES…………………………………………... 368
SECTION VII – ISSUE INFORMATION………………………………………………………………... 383
TERMS OF THE ISSUE…………………………………………………………………………………….. 383
ISSUE STRUCTURE………………………………………………………………………………………... 387
ISSUE PROCEDURE……………………………………………………………………………………….. 389
RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES………………………………... 442
SECTION VIII – MAIN PROVISION OF ARTICLES OF ASSOCIATION…………………………... 443
SECTION IX – OTHER INFORMATION……………………………………………………………….. 518
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION………………………………......... 518
DECLARATION……………………………………………………………………………………………. 520

1
SECTION I – GENERAL
DEFINITIONS AND ABBREVIATIONS
In this Prospectus, unless the context otherwise requires, the terms and abbreviations stated hereunder shall have
the meanings as assigned therewith.
Company Related Terms
Term Description
Articles or Articles of Association or The articles of association of our Company, as amended from time to
AOA time
The Statutory Auditor of our Company, being VAPS & Co., Chartered
Auditor or Statutory Auditor Accountants having their office at C-42, South Extension Part-II, New
Delhi-110049.
Audit Committee The audit committee of our Board.
Bankers to our Company Bank of India and HDFC Bank Limited
Banker to our Wholly owned
Subsidairy Company i.e. Salasar Punjab National Bank
Stainless Ltd.
“Board” or “Board of Directors” or The Board of Directors of our Company, as duly constituted from time
“our Board” to time, or committee(s) thereof.
Company Secretary and Compliance
Ms. Bavneet Kaur
Officer
CSR Committee The corporate social responsibility committee of our Board.
The Director(s) of our Company, unless otherwise specified. For
Director(s) further details in relation to our Directors please refer chapter titled
“Our Management” beginning on page 154 of this Prospectus.
Equity Shares Equity Shares of our Company of face value of Rs. 10/- each.
Equity Shareholders Persons holding equity shares of our Company.
Companies which are covered under the applicable accounting
standards and other companies as considered material by our Board,
Group Companies
and disclosed in the chapter titled “Our Group Entities” beginning on
page 182 of this Prospectus.
IPO Committee The committee constituted by our Board for the Initial Public Offer
Key management personnel of our Company in terms of regulation
2(1)(s) of the SEBI Regulations and section 2(51) of the Companies
Key Management Personnel
Act, 2013 and as disclosed in the section titled “Our Management” on
page 154 of this Prospectus.
2
“Salasar Techno Engineering
Salasar Techno Engineering Limited, a public limited company
Limited”, or “Salasar”, or “the
incorporated under the provisions of the Companies Act, 1956.
Company”, or “our Company” or
“we”, “us”, or “our” and the “Issuer
Company”
Memorandum of Association or The memorandum of association of our Company, as amended from
Memorandum or MOA time to time.
Nomination and Remuneration
The nomination and remuneration committee of our Board.
Committee
The Peer Review Auditor of our Company, being Arun Naresh & Co.,
Peer Review Auditor Chartered Accountants having their office at KP-1, Pritampura, New
Delhi-110034.
Promoters of our company being Mr. Gyanendra Kumar Agarwal, Mr.
“Promoters” or “Our Promoters” Alok Kumar, Mr. Shalabh Agarwal and Ms. Tripti Gupta.
Includes such persons and entities constituting our promoter group in
terms of Regulation 2(1)(zb) of the SEBI (ICDR) Regulations and a list
Promoter Group
of which is provided in the chapter titled “Our Promoters and Promoter
Group” beginning on page 171 of this Prospectus.
The Registered Office of our Company is located at E-20, South
Registered Office
Extension I, New Delhi-110049.
Registrar of Companies/RoC Registrar of Companies, National capital Territory of Delhi & Haryana.
The audited standalone financial statements of our Company for the
years ended March 31, 2013, March 31, 2014, March 31, 2015, March
Restated Standalone Financial 31, 2016 and March 31, 2017 together with the related schedules and
Statements annexures thereto, prepared in accordance with applicable provisions
of the Companies Act, 1956, the Companies Act, 2013 and Indian
GAAP, and restated in accordance with the SEBI Regulations.
The audited consolidated financial statements of our Company and its
subsidiary for the years ended March 31, 2013, March 31, 2014, March
Restated Consolidated Financial 31, 2015, March 31, 2016 and March 31, 2017 together with the related
Statements schedules and annexures thereto, prepared in accordance with
applicable provisions of the Companies Act and Indian GAAP, and
restated in accordance with the SEBI Regulations.
Collectively, the Restated Consolidated Financial Statements and the
Restated Financial Statements
Restated Standalone Financial Statements.
Stakeholder’s Relationship Committee The stakeholder’s relationship committee of our Board.
Wholly Owned Subsidiary/ Subsidiary Salasar Stainless Limited

3
Issue Related Terms
Term Description
Allocation / Allocation of The Allocation of Equity Shares of our Company pursuant to Fresh Issue of
Equity Shares Equity Shares to the successful Applicants.
Issue an allotment of Equity Shares of our Company pursuant to Fresh Issue of
Allotment/ Allot/ Allotted
the Equity Shares to the successful Applicants.
Allottee(s) Successful Applicants to whom Equity Shares of our Company shall be allotted.
Any prospective investor who makes an application for Equity Shares of our
Applicant
Company in terms of this Prospectus.
The amount at which the Applicant makes an application for Equity Shares of our
Application Amount
Company in terms of this Prospectus.
The Form in terms of which the prospective investors shall apply for our Equity
Application Form
Shares in the Issue.
Applications Supported by Blocked Amount (ASBA) means an application for
ASBA/ Application Supported
Subscribing to the Issue containing an authorization to block the application
by Blocked Amount.
money in a bank account maintained with SCSB.
Account maintained with SCSBs which will be blocked by such SCSBs to the
ASBA Account extent of the Application Amount specified in the Application form submitted by
ASBA applicant
ASBA Investor/ASBA Any prospective investor(s)/applicants(s) in this Issue who apply(ies) through the
applicant ASBA process.
The banks which are clearing members and registered with SEBI as Banker to an
Banker(s) to the Issue(s)/
Issue with whom the Public Issue Account will be opened and in this case being
Public Issue Bank.
Axis Bank Limited.
The basis on which Equity Shares will be Allotted to the successful Applicants
Basis of Allotment under the Issue and which is described under chapter titled “Issue Procedure”
beginning on page 389 of this Prospectus.
The demographic details of the Applicants such as their address, PAN, occupation
Demographic Details
and bank account details.
Depository Participant A Depository Participant as defined under the Depositories Act, 1996
Such branches of the SCSBs which shall collect the ASBA Forms from the ASBA
Designated SCSB Branches Applicants and a list of which is available at www.sebi.gov.in, or at such other
website as may be prescribed by SEBI from time to time.

4
Designated date means the date on which fund transfer instructions will to release
to the controlling branches of SCSB’s upon approval of basis of allotment by
Designated Date
designated Stock exchange, NSE, following which the Board of Directors shall
allot/credit the equity shares to successful applicants.
Designated Stock Exchange National Stock Exchange of India Limited (NSE).
The Draft Prospectus issued in accordance with Section 26 of the Companies Act,
Draft Prospectus 2013 and filed with SEBI under SEBI (ICDR) Regulations, 2009 as amended and
with NSE & BSE
NRIs from jurisdictions outside India where it is not unlawful to make an issue or
Eligible NRIs invitation under the Issue and in relation to whom this Prospectus constitutes an
invitation to subscribe to the Equity Shares offered herein.
First/ Sole Applicant The Applicant whose name appears first in the Application Form or Revision Form
Issue/ Issue Size/ Initial Public Issue of 3,321,000 Equity Shares of face value of Rs. 10/- each fully paid of
Public Issue/ Initial Public Salasar Techno Engineering Limited for cash at a price of Rs. 108/- per Equity
Offer/ Initial Public Offering/ Share (including a premium of Rs. 98/- per Equity Share) aggregating Rs. 358.67
IPO million.
The agreement dated January 09, 2017 between our Company and the Lead
Issue Agreement Manager, pursuant to which certain arrangements are agreed to in relation to the
Issue.
Issue Closing Date The date on which Issue closes for subscription
Issue Opening Date The date on which Issue opens for subscription
The period between the Issue Opening Date and the Issue Closing Date inclusive
Issue Period
of both the days during which prospective Investors may submit their application
The price at which the Equity Shares are being issued by our Company under this
Issue Price Prospectus being Rs. 108/- per Equity Share of face value of Rs.10/- each fully
paid.
Proceeds from the fresh Issue that will be available to our Company, being Rs.
Issue Proceeds
358.67 million.
Lead Manager to the Issue in this case being Sarthi Capital Advisors Private
Lead Manager/ LM
Limited, SEBI Registered Category I Merchant Banker.
A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations,
Mutual Fund(s)
1996, as amended from time to time.
The Issue of 3,321,000 Equity Shares of face value of Rs. 10/- each fully paid for
Net Issue cash at a price of Rs. 108/- Equity Share aggregating Rs. 358.67 million by our
Company.

5
The Issue Proceeds, less the Issue related expenses, received by the Company. For
further information about use of the Issue Proceeds and the Issue expenses, please
Net Proceeds
refer to the chapter titled “Objects of the Issue” beginning on page 89 of this
Prospectus.
All Applicants that are not Qualified Institutional Buyers or Retail Individual
Non-Institutional Investors Investors and who have Applied for Equity Shares for an amount more than Rs.
2,00,000.
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
OCB/Overseas Corporate not less than 60% of beneficial interest is irrevocably held by NRIs directly or
Body indirectly and which was in existence on October 03, 2003 and immediately before
such date had taken benefits under the general permission granted to OCBs under
FEMA. OCBs are not allowed to invest in the Issue.
Payment through electronic
Payment through NECS, NEFT or Direct Credit, as applicable.
transfer of funds
Any individual, sole proprietorship, unincorporated association, unincorporated
organization, body corporate, corporation, company, partnership, limited liability
Person/Persons company, joint venture, or trust or any other entity or organization validly
constituted and/or incorporated in the jurisdiction in which it exists and operates,
as the context requires.
The Prospectus to be filed with RoC containing, interalia, the issue opening and
Prospectus
closing dates and other information.
Public Issue Account means the accounts opened with the Banker(s) to the Issue
Public Issue Account i.e. Axis Bank Limited to receive monies from the SCSBs by the ASBA
Applicants, in each case on the Designated Date.
Public Issue Account Agreement entered into by our Company, the Registrar to the Issue, the Lead
Agreement Manager, and the Banker to the Issue for collection of the Application Amounts.
Qualified Institutional Buyers QIBs, as defined under Regulation 2(1)(zd) of SEBI (ICDR) Regulations, 2009 as
or QIBs amended.
Account(s) to which Application monies to be refunded to the Applicants shall be
Refund Account (s) transferred from the Public Issue Account in case listing of Equity Shares does not
occur.
Bank(s) which is / are clearing member(s) and registered with the SEBI as Bankers
Refund Bank(s) / Refund
to the Issue at which the Refund Accounts will be opened Account in case listing
Banker(s)
of Equity Shares does not occur, in this case being Axis Bank Limited.
Registrar to the Issue, in this case being Bigshare Services Private Limited having
Registrar /Registrar to the
registered office at E2, Ansa Industrial Estate, Saki Vihar Road, Sakinaka,
Issue
Mumbai– 400072.

6
Stock brokers registered with SEBI under the Securities and Exchange Board of
India (Stock Brokers and Sub Brokers) Regulations, 1992 and the stock exchanges
Registered Brokers
having nationwide terminals, other than the Members of the Syndicate having
terminals at any of the Broker Centres.
Individual Applicants, or minors applying through their natural guardians,
Retail Individual Investor including HUFs (applying through their Karta) and ASBA Applicants, who apply
for an amount less than or equal to Rs. 2,00,000.
The form used by the Applicants to modify the quantity of Equity Shares in any of
Revision Form
their Application Forms or any previous Revision Form(s).
The banks registered with SEBI, offering services in relation to ASBA, a list of
SCSB/ Self Certified which is available on
Syndicate Banker. www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34., and
updated from time to time.
Unless the context otherwise requires:
Working Days shall be all trading days of stock exchange excluding Sundays and
Working Day
bank holidays in accordance with the SEBI circular no.
SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21, 2016.

7
Technical and Industry Terms
Term Description
Continuous annealing and processing line, used for the production of cold rolled
CAPL
steel.
CR Cold Rolled
Dia Diameter
El Elongation
ERW Electrical resistance welding
GI Galvanised iron
HDG Hot dip galvanised
HR Hot Rolled
ID Inside Diameter
MT Metric Tonne
OD Outside Diameter
P&O Pickled & Oiled
P.E Plain Ended
P.E.U.C Plain Ended Uncoated
S&S Screwed & Socketed
T.S Tensile Strength
Y.S Yield Strength

8
Conventional and General Terms/ Abbreviations
Term Description
A/c Account
The Companies Act, 1956 and amendments thereto including provisions of
Act
Companies Act 2013, wherever notified.
AGM Annual General Meeting
AMC Annual Maintenance Contract
Articles of Association of the Company as originally framed or as altered from
Articles
time to time in pursuance of any previous companies’ law or of this Act.
Accounting Standards as issued by the Institute of Chartered Accountants of
AS
India.
A.Y. Assessment Year
ASBA Applications Supported by Blocked Amount
B.A Bachelor of Arts
B.Tech Bachelor of Technology
B.Com Bachelor’s Degree in Commerce
BIFR Board for Industrial and Financial Reconstruction
BL Block Level
BSE BSE Limited
NSE National Stock Exchange of India Limited
CAGR Compounded Annual Growth Rate
CDSL Central Depository Services (India) Limited
CESTAT Customs, Excise and Service Tax Appellate Tribunal
CENVAT Central Value Added Tax
CIN Corporate Identification Number
CMMI Capability Maturity Model Integration
Companies Act, 1956 as amended from time to time, including sections of
Companies Act
Companies Act, 2013 wherever notified by the Central Government.
CSO Central Statistical Organization
9