varun beverages limited · 2018-08-16 · varun beverages limited our company was incorporated as...

DRAFT RED HERRING PROSPECTUS

Dated June 21, 2016

(The Draft Red Herring Prospectus will be updated upon filing with the RoC)

Please read Section 32 of the Companies Act, 2013

Book Built Issue

(a PepsiCo franchisee)

VARUN BEVERAGES LIMITED Our Company was incorporated as Varun Beverages Limited on June 16, 1995 as a public limited company under the Companies Act, 1956, with the Registrar of Companies, NCT of Delhi and Haryana. Our

Company obtained a certificate for commencement of business on July 4, 1995. For further details of change in registered office of our Company, see “History and Certain Corporate Matters” on page 154.

Registered Office: F-2/7, Okhla Industrial Area, Phase I, New Delhi 110 020; Tel: +91 11 41706720

Corporate Office: Plot No. 31, Institutional Area, Sector – 44, Gurgaon 122 002; Tel: +91 124 4643100, Fax: +91 124 4643303

Contact Person: Mahavir Prasad Garg, Company Secretary and Compliance Officer; Tel: +91 124 4643100; Fax: +91 124 4643303

E-mail: [email protected]; Website: www.varunpepsi.com

Corporate Identity Number: U74899DL1995PLC069839

OUR PROMOTERS: RJ CORP LIMITED, RAVI KANT JAIPURIA, VARUN JAIPURIA AND RAVI KANT JAIPURIA & SONS (HUF)

PUBLIC OFFER OF UP TO 25,000,000 EQUITY SHARES OF FACE VALUE OF ₹ 10 EACH (“EQUITY SHARES”) OF VARUN BEVERAGES LIMITED (“OUR COMPANY” OR THE

“ISSUER”) FOR CASH AT A PRICE* OF ₹ [●] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ₹ [●] PER EQUITY SHARE) AGGREGATING UP TO ₹ [●] MILLION

(THE “OFFER”) CONSISTING OF A FRESH ISSUE OF UP TO 15,000,000 EQUITY SHARES AGGREGATING UP TO ₹ [●] MILLION (THE “FRESH ISSUE”) AND AN OFFER FOR

SALE OF UP TO 5,000,000 EQUITY SHARES BY VARUN JAIPURIA AGGREGATING UP TO ₹ [●] MILLION AND UP TO 5,000,000 EQUITY SHARES BY RAVI KANT JAIPURIA & SONS (HUF) AGGREGATING UP TO ₹ [●] MILLION (“OFFER FOR SALE”, AND VARUN JAIPURIA AND RAVI KANT JAIPURIA & SONS (HUF) COLLECTIVELY, “THE SELLING SHAREHOLDERS”). THE OFFER COMPRISES A NET OFFER TO THE PUBLIC OF [●] EQUITY SHARES (THE “NET OFFER”) AND A RESERVATION OF [●] EQUITY SHARES

AGGREGATING UP TO ₹ [●] MILLION FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED HEREIN), NOT EXCEEDING 5% OF OUR POST OFFER PAID UP EQUITY SHARE CAPITAL (THE “EMPLOYEE RESERVATION PORTION”). THE OFFER WILL CONSTITUTE [●] % OF OUR POST OFFER PAID-UP EQUITY SHARE CAPITAL AND THE

NET OFFER WILL CONSTITUTE [●] % OF OUR POST OFFER PAID-UP EQUITY SHARE CAPITAL.

THE FACE VALUE OF EQUITY SHARES IS ₹ 10 EACH. THE PRICE BAND, RUPEE AMOUNT OF THE DISCOUNT, IF ANY, TO THE RETAIL INDIVIDUAL BIDDERS AND THE ELIGIBLE EMPLOYEES BIDDING IN THE EMPLOYEE RESERVATION PORTION (THE “RETAIL DISCOUNT”) AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR

COMPANY IN CONSULTATION WITH THE SELLING SHAREHOLDERS, THE GCBRLMS AND THE BRLM AND WILL BE ADVERTISED IN [●] (A WIDELY CIRCULATED

ENGLISH NATIONAL DAILY NEWSPAPER) AND [●] (A WIDELY CIRCULATED HINDI NATIONAL DAILY NEWSPAPER WITH WIDE CIRCULATION IN NEW DELHI) AT LEAST

FIVE WORKING DAYS PRIOR TO THE BID/OFFER OPENING DATE AND SHALL BE MADE AVAILABLE TO THE BSE LIMITED (“BSE”) AND THE NATIONAL STOCK

EXCHANGE LIMITED (“NSE”, AND TOGETHER WITH BSE, THE “STOCK EXCHANGES”) FOR UPLOADING ON THEIR RESPECTIVE WEBSITES.

*Retail Discount of ₹ [●] to the Offer Price may be offered to the Retail Individual Bidders and the Eligible Employees Bidding in the Employee Reservation Portion. In case of any revision to the Price Band, the Bid/Offer Period will be extended by three additional Working Days after such revision of the Price Band, subject to the total Bid/Offer Period not exceeding 10

Working Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a press release, and also by

indicating the change on the website of the Book Running Lead Managers and at the terminals of the other members of the Syndicate.

In terms of Rule 19(2)(b)(iii) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”), this is an Offer for at least 10% of the post-Offer paid-up Equity Share capital of our Company. In

accordance with Regulation 26(1) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (the “SEBI ICDR Regulations”), the Offer

is being made through the Book Building Process wherein not more than 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”) (the “QIB

Portion”), provided that our Company, in consultation with the Selling Shareholders, the GCBRLMs and the BRLM, may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis.

One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. 5%

of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for

allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not less than 15% of

the Net Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Offer shall be available for allocation to Retail Individual Bidders in

accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. All potential Bidders, other than Anchor Investors, shall mandatorily participate in the Offer

through an Application Supported by Blocked Amount (“ASBA”) process by providing details of their respective bank account which will be blocked by the Self Certified Syndicate Banks (“SCSBs”).

Anchor Investors are not permitted to participate in the Anchor Investor Portion through ASBA process. For details, please see “Offer Procedure” on page 434.

RISKS IN RELATION TO THE FIRST OFFER

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 ₹ 10 and the Floor Price is [●] times the face value and the Cap Price is [●] times the face value. The Offer Price (determined and justified by our Company in consultation with the Selling Shareholders, the GCBRLMs and the BRLM as stated under

the section “Basis for Offer Price” on page 104) 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

or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.

GENERAL RISKS

Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Offer 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 the Offer. For taking an investment decision, investors must rely on their own examination of our Company and

the Offer, including the risks involved. The Equity Shares in the Offer 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 Draft Red Herring Prospectus. Specific attention of the investors is invited to the section “Risk Factors” on page 20.

ISSUER’S AND SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY

Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company and the Offer, which

is material in the context of the Offer, that the information contained in this Draft Red Herring 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 the Draft Red Herring Prospectus as a whole or any of such information or the

expression of any such opinions or intentions misleading in any material respect. Further, the Selling Shareholders severally accept responsibility that this Draft Red Herring Prospectus contains all

information about themselves as the Selling Shareholders in context of the Offer for Sale and severally accept responsibility for statements in relation to themselves included in this Draft Red Herring

Prospectus.

LISTING

The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the BSE and the NSE. Our Company has received an ‘in-principle’ approval from the BSE and the NSE for

the listing of the Equity Shares pursuant to letters dated [●] and [●], respectively. For the purposes of the Offer, the Designated Stock Exchange shall be [●]. A copy of the Red Herring Prospectus and the

Prospectus shall be delivered for registration to the RoC in accordance with Section 26(4) of the Companies Act, 2013. For details of the material contracts and documents available for inspection from the

date of the Red Herring Prospectus up to the Bid/Offer Closing Date, see “Material Contracts and Documents for Inspection” on page 488.

GLOBAL COORDINATORS AND BOOK RUNNING LEAD MANAGERS BOOK RUNNING LEAD

MANAGER REGISTRAR TO THE ISSUE

Kotak Mahindra Capital Company

Limited

1st Floor, 27 BKC, Plot No. 27

“G” Block, Bandra Kurla Complex

Bandra (East)

Mumbai 400 051

Tel: +91 22 4336 0000

Fax: +91 22 6713 2447

E-mail: [email protected]

Investor grievance E-mail:

[email protected]

Website:

www.investmentbank.kotak.com

Contact Person: Ganesh Rane

SEBI Registration No.:

INM000008704

Axis Capital Limited

1st Floor, Axis House

C-2, Wadia International Centre

P.B. Marg, Worli

Mumbai 400 025

Tel: + 91 22 4325 2183

Fax : +91 22 4325 3000



[email protected]

Website: www.axiscapital.co.in

Contact person: Lohit Sharma

SEBI Registration No.:

INM000012029

CLSA India Private Limited

(formerly CLSA India Limited)

8/F, Dalamal House

Nariman Point

Mumbai 400 021

Tel: +91 22 6650 5050

Fax: +91 22 2284 0271



[email protected]

Website: www.india.clsa.com

Contact person: Sarfaraz Agboatwala

SEBI Registration No:

INM000010619

YES Securities (India) Limited

IFC 1 & 2, Unit no. 602 A

6th Floor, Senapati Bapat Marg

Elphinstone (W)

Mumbai 400 013

Telephone: +91 22 3347 9688

Fax: +91 22 2421 4511

E-mail:

[email protected]

Investor Grievance E-mail:

[email protected]

Website: www.yesinvest.in

Contact Person: Aditya Vora

SEBI Registration No:

INM000012227

Karvy Computershare Private

Limited

Karvy Selenium Tower B

Plot 31 and 32, Gachibowli

Financial District, Nanakramguda

Hyderabad 500 032

Tel: +91 40 6716 2222

Fax: +91 40 2343 1551

Email:[email protected]

Investor Grievance e-mail: varun-

[email protected]

Website: www.karisma.karvy.com

Contact Person: M Murali Krishna

SEBI Registration No.

INR000000221

BID/OFFER PROGRAMME

BID/OFFER OPENS ON [●](1)

BID/OFFER CLOSES ON [●](2) (1) Our Company may, in consultation with the Selling Shareholders, the GCBRLMs and the BRLM, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor

Investor Bid/Offer Period shall be one Working Day prior to the Bid/Offer Opening Date. (2) Our Company may, in consultation with the Selling Shareholders, the GCBRLMs and the BRLM, consider closing the Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer Closing Date in

accordance with the SEBI ICDR Regulations.

TABLE OF CONTENTS

SECTION I: GENERAL ........................................................................................................................................................ 1 DEFINITIONS AND ABBREVIATIONS ............................................................................................................................. 1 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ........................................................................ 15 FORWARD-LOOKING STATEMENTS ............................................................................................................................ 18

SECTION: II RISK FACTORS .......................................................................................................................................... 20

SECTION III: INTRODUCTION ....................................................................................................................................... 51 SUMMARY OF INDUSTRY ............................................................................................................................................... 51 SUMMARY OF BUSINESS ................................................................................................................................................ 55 SUMMARY FINANCIAL INFORMATION ....................................................................................................................... 62 THE OFFER ......................................................................................................................................................................... 70 GENERAL INFORMATION ............................................................................................................................................... 71 CAPITAL STRUCTURE ...................................................................................................................................................... 79 OBJECTS OF THE OFFER .................................................................................................................................................. 97 BASIS FOR OFFER PRICE ............................................................................................................................................... 104

STATEMENT OF TAX BENEFITS ................................................................................................................................. 107

SECTION IV: ABOUT THE COMPANY........................................................................................................................ 110 INDUSTRY OVERVIEW .................................................................................................................................................. 110 OUR BUSINESS ................................................................................................................................................................ 124 REGULATIONS AND POLICIES ..................................................................................................................................... 149 HISTORY AND CERTAIN CORPORATE MATTERS .................................................................................................... 154 OUR SUBSIDIARIES ........................................................................................................................................................ 161 OUR MANAGEMENT ...................................................................................................................................................... 165 OUR PROMOTERS AND PROMOTER GROUP ............................................................................................................. 179 OUR GROUP COMPANIES .............................................................................................................................................. 184 RELATED PARTY TRANSACTIONS ............................................................................................................................. 197 DIVIDEND POLICY .......................................................................................................................................................... 198

SECTION V: FINANCIAL INFORMATION ................................................................................................................. 199 RESTATED CONSOLIDATED FINANCIAL STATEMENTS ........................................................................................ 199 RESTATED STANDALONE FINANCIAL STATEMENTS ............................................................................................ 280 FINANCIAL INDEBTEDNESS ......................................................................................................................................... 364 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS .................................................................................................................................................................... 366

SECTION VI: LEGAL AND OTHER INFORMATION ............................................................................................... 400 OUTSTANDING LITIGATION AND OTHER MATERIAL DEVELOPMENTS ........................................................... 400 GOVERNMENT AND OTHER APPROVALS ................................................................................................................. 410 OTHER REGULATORY AND STATUTORY DISCLOSURES ...................................................................................... 413

SECTION VII: OFFER INFORMATION ....................................................................................................................... 425 TERMS OF THE OFFER.................................................................................................................................................... 425 OFFER STRUCTURE ........................................................................................................................................................ 429 OFFER PROCEDURE........................................................................................................................................................ 432 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES .................................................................... 472

SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION .............................................................. 473

SECTION IX: OTHER INFORMATION ........................................................................................................................ 484 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ............................................................................ 484 DECLARATION ................................................................................................................................................................ 486

1

SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates or

implies, shall have the meaning as provided below. References to any legislation, act, regulation, rule, guideline or policy

shall be to such legislation, act, regulation, rule, guideline or policy, as amended, supplemented or re-enacted from time to

time.

The words and expressions used in this Draft Red Herring Prospectus but not defined herein, shall have, to the extent

applicable, the meaning ascribed to such terms under the Companies Act, the SEBI ICDR Regulations, the SCRA, the

Depositories Act or the rules and regulations made there under.

Notwithstanding the foregoing, terms used in of the sections “Statement of Tax Benefits”, “Restated Consolidated Financial

Statements”, “Restated Standalone Financial Statements” and “Main Provisions of Articles of Association” on pages 107,

199, 280 and 473, respectively, shall have the meaning ascribed to such terms in such sections.

General Terms

Term Description

“our Company”, the “Company”,

or the “Issuer”

Varun Beverages Limited, a company incorporated under the Companies Act, 1956,

having its registered office at F-2/7, Okhla Industrial Area, Phase I, New Delhi 110 020

we/us/our Unless the context otherwise indicates or implies, our Company, its Subsidiaries and its

associate, on a consolidated basis

Company Related Terms

Term Description

2015 Existing India Sub-Territories Delhi, Rajasthan, West Bengal, Goa, Arunachal Pradesh, Assam, Meghalaya, Manipur,

Mizoram, Nagaland, Tripura as well as certain designated parts of the following sub-

territories: Madhya Pradesh, Uttar Pradesh, Uttarakhand, Haryana and Maharashtra.

2015 New India Sub-Territories Punjab, Himachal Pradesh, Chandigarh UT, as well as the remaining parts of the

following sub-territories: Haryana, Uttarakhand and Uttar Pradesh.

ADBL Aradhana Drinks and Beverages Private Limited

AION AION Investments II Singapore Pte. Ltd.

AION Investment Agreement Securities purchase cum investment agreement dated September 18, 2015 between our

Company, AION Investments II Singapore Pte. Ltd. and Standard Chartered Private

Equity Mauritius II Limited

Articles of Association/AoA The articles of association of our Company, as amended

Audit Committee The audit committee of the Board of Director described in the section “Our

Management” on page 165

Board/Board of Directors The board of directors of our Company or a duly constituted committee thereof

Compulsorily Convertible

Debentures or CCDs Compulsorily convertible debentures issued by our Company of face value of ₹ 1,000 each

CMCI Concentrate Manufacturing Company of Ireland

Compulsorily Convertible

Preference Shares or CCPSs Compulsorily convertible preference shares of our Company of a face value of ₹ 100 each

Corporate Office Plot No. 31, Institutional Area, Sector – 44, Gurgaon 122 002

DBL Devyani Beverages Limited

DASMPL Devyani Airport Services (Mumbai) Private Limited

DEPL Devyani Enterprises Private Limited

DexPL Devyani Exim Private Limited (formerly Rajputana Stores (Jaipur) Private Limited)

DHRPL Devyani Hotels and Resorts Private Limited

DIL Devyani International Limited

2

Term Description

DHRPL CCPSs 25,000,000 CCPSs issued to DHRPL at par pursuant the DHRPL Investment

Agreement

DHRPL Investment Agreement Investment agreement dated February 16, 2015 between our Company and DHRPL

Director(s) The director(s) of our Company

Equity Shares The equity shares of our Company of face value of ₹ 10 each

ESOS 2013 Employee Stock Option Scheme 2013

ESOS 2016 Employee Stock Option Scheme 2016

Group Companies Companies which are covered under the applicable accounting standards and other

companies as considered material by our Board. For details, please see “Our Group

Companies” on page 184

Investment Agreement Investment agreement dated July 18, 2011 between VBIL, SCPE, RJ Corp, Ravi Kant

Jaipuria & Sons (HUF) and Varun Jaipuria as amended by an amendment and

supplemental agreement dated September 29, 2012 and an amendment agreement dated

June 13, 2016

Key Management Personnel Key management personnel of our Company in terms of section 2(51) the Companies

Act, 2013, the SEBI ICDR Regulations and as disclosed in the section “Our

Management” on page 165

Memorandum of Association/MoA The memorandum of association of our Company, as amended

Non-Convertible Debentures or

NCDs

Unsecured redeemable non-convertible debentures of our Company (denominated in

rupees) of a face value of ₹ 10,000,000 listed on the wholesale debt market segment of

NSE

OSBPL Ole Spring Bottlers (Private) Limited

PepsiCo Refers to PepsiCo Inc., PepsiCo India, Seven-Up International, a division of CMCI,

Tropicana Products Inc. and/ or their affiliates, as applicable

PepsiCo India PepsiCo India Holding Private Limited (formerly known as PepsiCo India Holding

Limited)

PepsiCo India Agreements Refers collectively to the three bottling appointment and trademark license agreements,

two dated October 3, 2012 executed between our Company and PepsiCo Inc. and

another dated October 3, 2012 between our Company and PepsiCo India, as amended

from time to time, as applicable

PepsiCo International Agreements Refers collectively, to the 12 bottling agreements entered into by our Company in

relation to our international operations and specifically, the (i) exclusive bottling

appointment agreement dated November 7, 2013 between PepsiCo Inc. and VBL Lanka;

(ii) exclusive bottling appointment agreement dated August 1, 2011 between PepsiCo

Inc. and VBL Lanka; (iii) exclusive bottling appointment agreement dated August 1,

2011 between Seven-Up International, a division of CMCI and VBL Lanka; (iv)

bottling appointment and trademark license agreement dated October 30, 2013 between

Tropicana Products Inc and VBL Lanka; (v) exclusive bottling appointment agreement

dated December 1, 2011 between PepsiCo Inc. and VBNPL, (vi) exclusive bottling

appointment agreement dated December 1, 2011 between Seven-Up International, a

division of CMCI and VBNPL; (vii) exclusive bottling appointment agreement dated

September 1, 2010 between Seven-Up International, a division of CMCI and VBZL;

(viii) exclusive bottling appointment agreement dated September 1, 2010 between

PepsiCo Inc. and VBZL; (ix) exclusive bottling appointment agreement dated February

1, 2011 between PepsiCo Inc. and VBM; (x) exclusive bottling appointment agreement

dated February 1, 2011 between Seven-Up International, a division of CMCI and VBM;

(xi) exclusive bottling appointment agreement dated December 18, 2008 between

PepsiCo Inc. and VBML effective from January 25, 2009; and (xii) exclusive bottling

appointment agreement dated December 18, 2008 between Seven-Up International, a

division of CMCI and VBML effective from January 25, 2009, as amended from time to

time, as applicable

PepsiCo International Entities Refers to PepsiCo Inc., Seven-Up International, a division of CMCI, Tropicana

Products Inc. and/ or their affiliates, as applicable, with whom our Company through its

Subsidiaries has entered into the PepsiCo International Agreements

3

Term Description

Promoter Group Persons and entities constituting the promoter group of our Company in terms of

Regulation 2(1)(zb) of the SEBI ICDR Regulations, but excluding any persons and

entities apart from the following: (i) Accor Developers (Private) Limited, (ii) Accor

Industries (Private) Limited, (iii) Accor Solar Energy Private Limited, (iv) Africare

Limited, (v) Agarwal Cold Drinks Private Limited, (vi) Alisha Retail Private Limited,

(vii) Angelica Technologies Private Limited, (viii) Anuj Traders Private Limited, (ix)

Aqua Stemlife International Private Limited, (x) Arctic International Private Limited,

(xi) Arctic Overseas Pte. Limited, (xii) Capital Infracon Private Limited, (xiii) Capital

Towers Private Limited, (xiv) Cryoviva International Pte. Ltd., (xv) Cryoviva Singapore

Pte. Ltd., (xvi) D.J. Agri Industries Private Limited, (xvii) Devyani Enterprises Private

Limited, (xviii) Devyani Food Industries Limited, (xix) Devyani Hotels & Resorts

Private Limited, (xx) Devyani International Limited, (xxi) Devyani Overseas Private

Limited, (xxii) Diagno Labs Private Limited, (xxiii) Empire Stocks Private Limited,

(xxiv) Farm2Plate Dairy Produce Private Limited (formerly known as ABInbev India

Private Limited), (xxv) Lineage Healthcare Limited, (xxvi) Lunarmech Technologies

Private Limited, (xxvii) Modern Montessori International (India) Private Limited,

(xxviii) Mumbai Rockets Sports Private Limited, (xxix) Parkview City Limited, (xxx)

Pinnacle Constructions Private Limited, (xxxi) Pinnacle Infracon Limited, (xxxii)

Pinnacle Town Planners Private Limited, (xxxiii) Pinnacle Township Private Limited,

(xxxiv) Rajasthan Beverages Private Limited, (xxxv) Ratnaker Foods & Beverages

Private Limited, (xxxvi) S V S India Private Limited, (xxxvii) Sellwell Foods and

Beverages Private Limited, (xxxviii) Shabnam Properties Private Limited,

(xxxix)Universal Dairy Products Private Limited, (xl) Wellness Holdings Limited, (xli)

Mr. Ravi Kant Jaipuria, (xlii) Ms. Dhara Jaipuria, (xliii) Ms. Champa Devi Jaipuria,

(xliv) Mr. Varun Jaipuria, (xlv) Ms. Devyani Jaipuria, (xlvi) RJ Corp Limited, (xlvii)

Ravi Kant Jaipuria & Sons (HUF), (xlviii) Mr. Vivek Gupta, (xlix) Ms. Bela Jyoti

Kumar Saha, (l) Ms. Madhu Rajendra Prasad Jindal, (li) Alaknanda Traders Private

Limited, (lii) Avni Securities Private Limited, (liii) Chanda Exports Private Limited,

(liv) Gee Kay Builder & Development Services Private Limited, (lv) Manog Securities

Private Limited, (lvi) Ragini Advisors Private Limited, (lvii) Stallion Advisors Private

Limited, (lviii) Geld Consultancy Services Private Limited, (lix) Saha Sprague Limited,

(lx) Sara Ferrous Private Limited, (lxi) SFT Syscon Private Limited, (lxii) SFT

Technologies Private Limited, (lxiii) Sankalp Lifespaces Private Limited, (lxiv) Dr.

Naresh Trehan and Associates Health Services Private Limited; and (lxv) Lemon Tree

Hotels Limited. For details, please see “Our Promoters and Promoter Group” on page

179

Promoters The promoters of our Company namely, RJ Corp Limited, Ravi Kant Jaipuria, Varun

Jaipuria and Ravi Kant Jaipuria & Sons (HUF). For details, please see “Our Promoters

and Promoter Group” on page 179

Registered Office F-2/7, Okhla Industrial Area, Phase I, New Delhi 110 020

Restated Consolidated Financial

Statements

The consolidated financial statements of our Company’s assets and liabilities as at

December 31, 2015, 2014, 2013 and 2012 and the consolidated statements of profit and

loss and cash flows for the years ended December 31, 2015, 2014, 2013 and 2012 of our

Company prepared in accordance with Indian GAAP and the Companies Act and

restated in accordance with the SEBI ICDR Regulations and the Revised Guidance Note

on Reports in Company Prospectuses (Revised) issued by the ICAI, together with the

schedules, notes and annexures thereto

Restated Financial Statements Collectively, the Restated Consolidated Financial Statements and the Restated

Standalone Financial Statements

Restated Standalone Financial

Statements

The standalone financial statements of our Company’s assets and liabilities as at

December 31, 2015, 2014, 2013, 2012 and 2011 and the standalone statements of profit

and loss and cash flows for the years ended December 31, 2015, 2014, 2013, 2012 and

2011 of our Company prepared in accordance with Indian GAAP and the Companies

Act and restated in accordance with the SEBI ICDR Regulations and the Revised

Guidance Note on Reports in Company Prospectuses (Revised) issued by the ICAI,

together with the schedules, notes and annexures thereto

RJCL CCPSs 20,000,000 CCPSs issued to RJCL at par pursuant the RJCL Investment Agreement

RJCL Investment Agreement Investment agreement dated October 20, 2014 between our Company and RJ Corp

4

Term Description

RJ Corp RJ Corp Limited (formerly Arctic Drinks Private Limited)

RoC Registrar of Companies, NCT of Delhi and Haryana at 4th

Floor, IFCI Tower; 61, Nehru

Place, New Delhi 110 019

Sales Volume(s) Represents sales volume (in million litres and / or million unit cases) of our PepsiCo

products to our customers but does not include any sales to PepsiCo and/or any other

franchisees of PepsiCo.

SCPE Standard Chartered Private Equity (Mauritius) II Limited

Shareholders Shareholders of our Company

Statutory Auditors The statutory auditors of our Company, Walker Chandiok & Associates and O.P. Bagla

& Co.

Subsidiaries Subsidiaries of our Company (including any step-down subsidiary) set out in the section

“Our Subsidiaries” on page 161

VBIL Varun Beverages (International) Limited

VBL Lanka Varun Beverages Lanka (Private) Limited

VBM Varun Beverages Morocco SA

VBML Varun Beverages Mozambique, Limitada

VBNPL Varun Beverages (Nepal) Pvt. Ltd.

VBZL Varun Beverages (Zambia) Limited

VBZPL Varun Beverages (Zimbabwe) (Private) Limited

Offer Related Terms

Term Description

Acknowledgement Slip The slip or document issued by the Designated Intermediary to a Bidder as proof of

registration of the Bid cum Application Form

Allot/Allotment/Allotted Unless the context otherwise requires, allotment of the Equity Shares pursuant to the

Fresh Issue and transfer of Equity Shares offered by the Selling Shareholders pursuant

to the Offer for Sale, to the successful Bidders

Allottee A successful Bidder to whom the Equity Shares are Allotted

Allotment Advice Note, advice or intimation of Allotment sent to the Bidders who have been or are to be

Allotted the Equity Shares after the Basis of Allotment has been approved by the

Designated Stock Exchange

Anchor Investor A Qualified Institutional Buyer, applying under the Anchor Investor Portion in

accordance with the requirements specified in the SEBI ICDR Regulations and the Red

Herring Prospectus

Anchor Investor Allocation Price The price at which the Equity Shares will be allocated to Anchor Investors in terms of

the Red Herring Prospectus and the Prospectus which will be decided by our Company

in consultation with the Selling Shareholders, the GCBRLMs and the BRLM

Anchor Investor Application Form The form used by an Anchor Investor to make a Bid in the Anchor Investor Portion and

which will be considered as an application for Allotment in terms of the Red Herring

Prospectus and Prospectus

Anchor Investor Bid/Offer Period The day which is one Working Day prior to the Bid/Offer Opening Date, on which Bids

by Anchor Investors shall be submitted and allocation to the Anchor Investors shall be

completed

Anchor Investor Offer Price Final price at which the Equity Shares will be Allotted to Anchor Investors in terms of

the Red Herring Prospectus and the Prospectus, which price will be equal to or higher

than the Offer Price but not higher than the Cap Price

The Anchor Investor Offer Price will be decided by our Company in consultation with

the Selling Shareholders, the GCBRLMs and the BRLM

Anchor Investor Portion Up to 60% of the QIB Portion consisting of up to [●] Equity Shares which may be

allocated by our Company in consultation with the Selling Shareholders, the GCBRLMs

5

Term Description

and the BRLM to Anchor Investors on a discretionary basis

One-third of the Anchor Investor Portion shall be reserved for Mutual Funds, subject to

valid Bids being received from Mutual Funds at or above the Anchor Investors

Allocation Price

Application Supported by Blocked

Amount or ASBA

An application, whether physical or electronic, used by an ASBA Bidder, to make a Bid

and authorize a SCSB to block the Bid Amount in the ASBA Account

ASBA Account A bank account maintained with a SCSB and specified in the ASBA Form submitted by

Bidders for blocking the Bid Amount mentioned in the ASBA Form

ASBA Bid A Bid made by an ASBA Bidder including all revisions and modifications thereto as

permitted under the SEBI ICDR Regulations

ASBA Bidder All Bidders other than Anchor Investors

ASBA Forms An application form, whether physical or electronic, used by an ASBA Bidder and

which will be considered as an application for Allotment in terms of the Red Herring

Prospectus and the Prospectus

Axis Capital Axis Capital Limited

Banker(s) to the Offer/Escrow

Collection Bank(s)

Banks which are clearing members and registered with SEBI as bankers to an issue and

with whom the Escrow Account will be opened, in this case being [●]

Basis of Allotment The basis on which the Equity Shares will be Allotted to successful Bidders under the

Offer and which is described in the section “Offer Procedure” on page 432

Bid An indication to make an offer during the Bid/Offer Period by an ASBA Bidder

pursuant to submission of the ASBA Form, or during the Anchor Investor Bid/Offer

Period by the Anchor Investors pursuant to submission of Anchor Investor Application

Form, to subscribe to or purchase the Equity Shares of our Company at a price within

the Price Band, including all revisions and modifications thereto as permitted under the

SEBI ICDR Regulations

The term Bidding shall be construed accordingly

Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form and

payable by the Bidder or as blocked in the ASBA Account of the Bidder, as the case

may be, upon submission of the Bid

Bid cum Application Form The Anchor Investor Application Form or ASBA Form, as the context requires

Bid/Offer Closing Date Except in relation to any Bids received from the Anchor Investors, the date after which

the Designated Intermediaries will not accept any Bids, which shall be published in all

editions of [●] (a widely circulated English national daily newspaper) and all editions of

[●] (a widely circulated Hindi national daily newspaper with wide circulation in Delhi)

Our Company may, in consultation with the Selling Shareholders, the GCBRLMs and

the BRLM, consider closing the Bid/Offer Period for QIBs one Working Day prior to

the Bid/Offer Closing Date in accordance with the SEBI ICDR Regulations

Bid/Offer Opening Date Except in relation to any Bids received from the Anchor Investors, the date on which the

Designated Intermediaries shall start accepting Bids, which shall be published in all

editions of [●] (a widely circulated English national daily newspaper) and all editions of

[●] (a widely circulated Hindi national daily newspaper with wide circulation in Delhi)

Bid/Offer Period Except in relation to Anchor Investors, the period between the Bid/Offer Opening Date

and the Bid/Offer Closing Date, inclusive of both days, during which prospective

Bidders can submit their Bids, including any revisions thereof

Bid Lot [●] Equity Shares

Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring

Prospectus and the Bid cum Application Form and unless otherwise stated or implied,

includes an Anchor Investor

Bidding Centers Centers at which the Designated Intermediaries shall accept the Bid cum Application

Forms, i.e, Designated SCSB Branch for SCSBs, Specified Locations for Syndicate,

Broker Centres for Registered Brokers, Designated RTA Locations for RTAs and

Designated CDP Locations for CDPs

Book Building Process Book building process, as provided in Schedule XI of the SEBI ICDR Regulations, in

6

Term Description

terms of which the Offer is being made

Broker Centres Broker centres notified by the Stock Exchanges where Bidders can submit the ASBA

Forms to a Registered Broker

The details of such Broker Centres, along with the names and contact details of the

Registered Brokers are available on the respective websites of the Stock Exchanges

(www.bseindia.com and www.nseindia.com)

BRLM/Book Running Lead

Manager

YES Securities (India) Limited

CAN/Confirmation of Allocation

Note

Notice or intimation of allocation of the Equity Shares sent to Anchor Investors, who

have been allocated the Equity Shares, after the Anchor Investor Bid/Offer Period

Cap Price The higher end of the Price Band, above which the Offer Price and the Anchor Investor

Offer Price will not be finalised and above which no Bids will be accepted

Client ID Client identification number maintained with one of the Depositories in relation to the

demat account

CLSA CLSA India Private Limited

Collecting Depository Participant

or CDP

A depository participant as defined under the Depositories Act, 1996, registered with

SEBI and who is eligible to procure Bids at the Designated CDP Locations in terms of

circular no. CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by

SEBI

Cut-off Price Offer Price, finalised by our Company in consultation with the Selling Shareholders, the

GCBRLMs and the BRLM, which shall be any price within the Price Band

Only Retail Individual Bidders and the Eligible Employees Bidding in the Employee

Reservation Portion are entitled to Bid at the Cut-off Price. QIBs and Non-Institutional

Bidders are not entitled to Bid at the Cut-off Price

Demographic Details Details of the Bidders including the Bidder’s address, name of the Bidder’s

father/husband, investor status, occupation and bank account details

Designated CDP Locations Such locations of the CDPs where Bidders can submit the ASBA Forms to Collecting

Depository Participants

The details of such Designated CDP Locations, along with names and contact details of

the Collecting Depository Participants eligible to accept Bid cum Application Forms are

available on the respective websites of the Stock Exchanges (www.bseindia.com and

www.nseindia.com)

Designated Intermediaries/

Collecting Agent

Syndicate Members, sub-syndicate/agents, SCSBs, Registered Brokers, Brokers, the

CDPs and RTAs, who are authorized to collect Bid cum Application Forms from the

Bidders, in relation to the Offer

Designated SCSB Branches Such branches of the SCSBs which shall collect the ASBA Forms, a list of which is

available on the website of SEBI at http://www.sebi.gov.in/sebiweb/home

/list/5/33/0/0/Recognised-Intermediaries or at such other website as may be prescribed

by SEBI from time to time

Designated Date The date on which funds are transferred by the Escrow Collection Bank(s) from the

Escrow Accounts and the amounts blocked by the SCSBs are transferred from the

ASBA Accounts, as the case may be, to the Public Issue Account or the Refund

Account, as appropriate, after filing of the Prospectus with the RoC, following which

the Board of Directors may Allot Equity Shares to successful Bidders in the Offer

Designated RTA Locations Such locations of the RTAs where Bidders can submit the ASBA Forms to RTAs

The details of such Designated RTA Locations, along with names and contact details of

the RTAs eligible to accept ASBA Forms are available on the respective websites of the

Stock Exchanges (www.bseindia.com and www.nseindia.com).

Designated Stock Exchange [●]

Draft Red Herring Prospectus or

DRHP

This draft red herring prospectus dated June 21, 2016, issued in accordance with the

SEBI ICDR Regulations, which does not contain complete particulars of the price at

which the Equity Shares will be Allotted and the size of the Offer

EBITDA Earnings before interest, taxes, depreciation, and amortisation.

http://www.nseindia.com/

7

Term Description

Eligible Employee All or any of the following:

(a) a permanent and full time employee of our Company (excluding such employees who are not eligible to invest in the Offer under applicable laws and our Promoters

and their immediate relatives) or any of our Subsidiaries as of the date of filing of

the Red Herring Prospectus with the RoC and who continues to be an employee of

our Company or any of our Subsidiaries, until the submission of the Bid cum

Application Form; and

(b) a Director of our Company (excluding Promoters who are Directors of our Company) who is eligible to apply under the Employee Reservation Portion under

applicable law and is resident in India

The maximum Bid Amount under the Employee Reservation Portion by an Eligible

Employee shall not exceed ₹ 200,000.

Eligible NRI(s) NRI(s) from jurisdictions outside India where it is not unlawful to make an offer or

invitation under the Offer and in relation to whom the Bid cum Application Form and

the Red Herring Prospectus will constitute an invitation to subscribe or to purchase the

Equity Shares

Employee Reservation Portion The portion of the Offer being up to [●] Equity Shares aggregating up to ₹ [●] million available for allocation to Eligible Employees, on a proportionate basis

Escrow Account An account opened with the Escrow Collection Bank(s) and in whose favour the Anchor

Investors will transfer money through direct credit/NEFT/RTGS in respect of the Bid

Amount when submitting a Bid

Escrow Agreement The agreement dated [●] entered into between our Company, the Selling Shareholders,

the Registrar to the Offer, the GCBRLMs, the BRLM, the Syndicate Members, the

Escrow Collection Bank(s) and the Refund Bank(s) for collection of the Bid Amounts

from Anchor Investors transfer of funds to Public Issue Account and where applicable,

refunds of the amounts collected from Anchor Investors, on the terms and conditions

thereof

First Bidder Bidder whose name shall be mentioned in the Bid cum Application Form or the

Revision Form and in case of joint Bids, whose name shall also appear as the first

holder of the beneficiary account held in joint names

Floor Price The lower end of the Price Band, subject to any revision thereto, at or above which the

Offer Price and the Anchor Investor Offer Price will be finalised and below which no

Bids will be accepted

Fresh Issue The fresh issue of up to 15,000,000 Equity Shares of face value of ₹ 10 each for cash at

a price of ₹ [●] each, aggregating up to ₹ [●] million by our Company

General Information

Document/GID

The General Information Document prepared and issued in accordance with the circular

(CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by SEBI and updated

pursuant to the circulars (CIR/CFD/POLICYCELL/III/2015) dated November 10, 2015

and (SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016, suitably modified and

included in “Offer Procedure” on page 432

Global Coordinators and Book

Running Lead Managers or

GCBRLMs

Kotak Mahindra Capital Company Limited, Axis Capital Limited, and CLSA India

Private Limited

Kotak Kotak Mahindra Capital Company Limited

Maximum RIB Allottees The maximum number of Retail Individual Bidders who can be allotted the minimum

Bid Lot. This is computed by dividing the total number of Equity Shares available for

Allotment to Retail Individual Bidders by the minimum Bid Lot

Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor Investor Portion), or [●] Equity Shares

which shall be available for allocation to Mutual Funds only

Mutual Funds Mutual funds registered with SEBI under the Securities and Exchange Board of India

(Mutual Funds) Regulations, 1996

Net Offer The Offer less the Employee Reservation Portion being up to [●] Equity Shares

aggregating up to ₹ [●] million

Net Proceeds Proceeds of the Fresh Issue less our Company’s share of the Offer expenses. For further

8

Term Description

information about use of the Offer Proceeds and the Offer expenses, please see “Objects

of the Offer” on page 97

Non-Institutional Bidders All Bidders that are not QIBs or Retail Individual Bidders or Eligible Employees

Bidding in the Employee Reservation Portion and who have Bid for the Equity Shares

for an amount more than ₹200,000 (but not including NRIs other than Eligible NRIs)

Non-Institutional Portion The portion of the Offer being not less than 15% of the Net Offer comprising of [●]

Equity Shares which shall be available for allocation on a proportionate basis to Non-

Institutional Bidders, subject to valid Bids being received at or above the Offer Price

Non-Resident A person resident outside India as defined under FEMA and includes a Non Resident

Indian, FVCIs, FIIs and FPIs

Offer The public issue of up to 25,000,000 Equity Shares of face value of ₹ 10 each for cash at

a price of ₹ [●] each, aggregating up to ₹ [●] million comprising the Fresh Issue and the Offer for Sale. The Offer comprises of Net Offer and Employee Reservation Portion.

Offer Agreement The agreement dated June 21, 2016 entered into between our Company, the Selling

Shareholders, the GCBRLMs and the BRLM, pursuant to which certain arrangements

are agreed to in relation to the Offer

Offer for Sale Offer for sale of up to 10,000,000 Equity Shares by the Selling Shareholders at the Offer

Price aggregating up to [●] million comprising up to 5,000,000 Equity Shares by Varun

Jaipuria aggregating up to ₹ [●] million and up to 5,000,000 Equity Shares by Ravi Kant

Jaipuria & Sons (HUF) aggregating up to ₹ [●] million

Offer Price The final price at which the Equity Shares will be Allotted to Bidders other than Anchor

Investors. Equity Shares will be Allotted to Anchor Investors at the Anchor Investor

Offer Price in terms of the Red Herring Prospectus

The Offer Price will be decided by our Company in consultation with the Selling

Shareholders, the GCBRLMs and the BRLM on the Pricing Date

Offer Proceeds The proceeds of the Fresh Issue and the Offer for Sale that are available to our Company

and the Selling Shareholders, respectively

Price Band Price band of a minimum price of ₹ [●] per Equity Share (Floor Price) and the

maximum price of ₹ [●] per Equity Share (Cap Price) including any revisions thereof

The Price Band, the Retail Discount and the minimum Bid Lot size for the Offer will be

decided by our Company in consultation with the Selling Shareholders, the GCBRLMs

and the BRLM and will be advertised, at least five Working Days prior to the Bid/Offer

Opening Date, in all editions of [●] (a widely circulated English national daily

newspaper) and all editions of [●] (a widely circulated Hindi national daily newspaper

with wide circulation in Delhi)

Pricing Date The date on which our Company in consultation with the Selling Shareholders, the

GCBRLMs and the BRLM, will finalise the Offer Price

Prospectus The Prospectus to be filed with the RoC after the Pricing Date in accordance with

Section 26 of the Companies Act, 2013, and the provisions of the SEBI ICDR

Regulations containing, inter alia, the Offer Price that is determined at the end of the

Book Building Process, the size of the Offer and certain other information including any

addenda or corrigenda thereto

Public Issue Account A bank account opened with the Bankers to the Offer by our Company under Section

40(3) of the Companies Act, 2013 to receive monies from the Escrow Account(s) and

from the ASBA Accounts on the Designated Date

QIB Category/QIB Portion The portion of the Net Offer (including the Anchor Investor Portion) being not more

than 50% of the Net Offer comprising of [●] Equity Shares which shall be Allotted to

QIBs including Anchor Investors

Qualified Institutional Buyers or

QIBs or QIB Bidders

Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI ICDR

Regulations

Red Herring Prospectus or RHP The Red Herring Prospectus dated [●] issued in accordance with Section 32 of the

Companies Act, 2013 and the provisions of the SEBI ICDR Regulations, which will not

have complete particulars of the price at which the Equity Shares will be offered and the

size of the Offer, including any addenda or corrigenda thereto

9

Term Description

The Red Herring Prospectus will be registered with the ROC at least three Working

Days before Bid Offer Opening Date and will become the Prospectus upon filing with

the RoC after the Pricing Date

Refund Account(s) The account opened with the Refund Bank(s), from which refunds, if any, of the whole

or part of the Bid Amount to Anchor Investors shall be made

Refund Bank(s) [●]

Registered Brokers Stock brokers registered with the stock exchanges having nationwide terminals, other

than the Members of the Syndicate, eligible to procure Bids in terms of circular no.

CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI

Registrar to the Offer or Registrar Karvy Computershare Private Limited

Registrar and Share Transfer

Agents or RTAs

Registrar and share transfer agents registered with SEBI and eligible to procure Bids at

the Designated RTA Locations in terms of circular no.

CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI

Registrar Agreement The agreement dated May 31, 2016 entered into between our Company, the Selling

Shareholders and the Registrar to the Offer in relation to the responsibilities and

obligations of the Registrar to the Offer pertaining to the Offer

Retail Discount Discount of [●]% (equivalent of ₹ [●]) to the Offer Price given to Retail Individual

Bidders and the Eligible Employees Bidding in the Employee Reservation Portion

Retail Individual Bidder(s)/RIB(s) Individual Bidders, other than Eligible Employees Bidding in the Employee Reservation

Portion who have Bid for the Equity Shares for an amount not more than ₹ 200,000 in

any of the bidding options in the Net Offer (including HUFs applying through their

Karta and Eligible NRIs)

Retail Portion The portion of the Net Offer being not less than 35% of the Net Offer consisting of [●]

Equity Shares which shall be available for allocation to Retail Individual Bidder(s) in

accordance with the SEBI ICDR Regulations subject to valid Bids being received at or

above the Offer Price

Revision Form Form used by the Bidders to modify the quantity of the Equity Shares or the Bid

Amount in any of their ASBA Forms or any previous Revision form(s).

QIB Bidders and Non-Institutional Bidders are not allowed to withdraw or lower their

Bids (in terms of quantity and of Equity Shares or the Bid Amount) at any stage. Retail

Individual Bidders cannot revise their Bids after the Bid/Offer Closing Date

Self Certified Syndicate Bank(s) or

SCSB(s)

Banks registered with SEBI, offering services in relation to ASBA, a list of which is

available on the website of SEBI at

http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries and

updated from time to time

Selling Shareholders Varun Jaipuria and Ravi Kant Jaipuria & Sons (HUF)

Share Escrow Agent Share escrow agent appointed pursuant to the Share Escrow Agreement namely [●]

Share Escrow Agreement Agreement to be entered into between the Selling Shareholders, our Company and the

Share Escrow Agent in connection with the transfer of the respective portion of Offered

Shares by each of the Selling Shareholders and credit of such Equity Shares to the

demat account of the Allottees

Specified Locations Bidding centres where the Syndicate shall accept ASBA Forms, a list of which is

available on the website of SEBI at

www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries and updated

from time to time

Stock Exchanges BSE Limited and the National Stock Exchange of India Limited

Syndicate Agreement The agreement dated [●], entered into between, the GCBRLMs, the BRLM, the

Syndicate Members, our Company, the Selling Shareholders and Registrar to the Offer

in relation to the collection of Bid cum Application Forms by Syndicate Members

Syndicate Members Intermediaries registered with SEBI who are permitted to carry out activities as an

underwriter, in this case, [●]

Syndicate or Members of the

Syndicate

The GCBRLMs, the BRLM and the Syndicate Members

10

Term Description

Underwriters [●]

Underwriting Agreement The agreement dated [●] to be entered into among the Underwriters, our Company and

the Selling Shareholders on or after the Pricing Date

Working Day “Working Day”, with reference to (a) announcement of Price Band; and (b) Bid/Offer

Period, shall mean all days, excluding Saturdays, Sundays and public holidays, on

which commercial banks in Mumbai are open for business; and (c) the time period

between the Bid/Offer Closing Date and the listing of the Equity Shares on the Stock

Exchanges, shall mean all trading days of Stock Exchanges, excluding Sundays and

bank holidays, as per the SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/26 dated

January 21, 2016

YES Securities YES Securities (India) Limited

Technical/Industry Related Terms/Abbreviations

Term Description

CSD Carbonated Soft Drinks

CSO Central Statistics Office

CSR Corporate and social responsibility

F&B Food and Beverages

GBO Global Brand Owner

GPRS General Packet Radio Services

IMF International Monetary Fund

LBN Local Brand Network

NBO National Brand Owner

NCB Non-Carbonated Beverages

Off-trade sales Sales that take place at retail outlets such as grocery stores, hypermarkets, super markets

etc.

On-trade sales Sales through consumer foodservice outlets that serve the general public in a non-

captive environment.

PET Polyethylene terephthalate

RGB Returnable Glass Bottles

RTD Ready-to-drink

SAMNA Sales Automation Management for the New Age

SKU Stock Keeping Unit

Conventional and General Terms or Abbreviations

Term Description

₹/Rs./Rupees/INR Indian Rupees

AGM Annual General Meeting

AIF Alternative Investment Fund as defined in and registered with SEBI under the Securities

and Exchange Board of India (Alternative Investments Funds) Regulations, 2012

AS/Accounting Standards Accounting Standards issued by the Institute of Chartered Accountants of India

BIS Act The Bureau of Indian Standards Act, 1986

Bn/bn Billion

Boilers Act Indian Boilers Act, 1923

BSE BSE Limited

C.P.C Civil Procedure Code, 1908

CAGR Compounded Annual Growth Rate

11

Term Description

Category I Foreign Portfolio

Investors

FPIs who are registered with SEBI as “Category I foreign portfolio investors” under the

SEBI FPI Regulations

Category II Foreign Portfolio

Investors

FPIs who are registered with SEBI as “Category II foreign portfolio investors” under the


Category III Foreign Portfolio

Investors

FPIs who are registered with SEBI as “Category III foreign portfolio investors” under the


CCI Competition Commission of India

CDSL Central Depository Services (India) Limited

CENVAT Central Value Added Tax

CESTAT Customs, Excise and Service Tax Appellate Tribunal

CGWA Central Ground Water Authority

CIN Corporate Identity Number

CIT Commissioner of Income Tax

Client ID Client identification number of the Bidders beneficiary account

CLRA Contract Labour (Regulation and Abolition) Act,1979

Companies Act Companies Act, 1956 and/or the Companies Act, 2013, as applicable

Companies Act, 1956 Companies Act, 1956, as amended (without reference to the provisions thereof that have

ceased to have effect upon the notification of the Notified Sections)

Companies Act, 2013 The Companies Act, 2013, to the extent in force pursuant to the notification of the

Notified Sections

COPRA Consumer Protection Act, 1986

Cr.P.C Criminal Procedure Code, 1973

Depositories NSDL and CDSL

Depositories Act The Depositories Act, 1996

DIN Director Identification Number

DIPP Department of Industrial Policy and Promotion, Ministry of Commerce and Industry,

Government of India

DP ID Depository Participant’s Identification

DP/Depository Participant A depository participant as defined under the Depositories Act

DTC Direct Taxes Code

EC Act Essential Commodities Act, 1955

ECB External commercial borrowing

EGM Extraordinary General Meeting

Environment Act Environment Protection Act, 1986

EPS Earnings Per Share

Equity Listing Agreement Listing Agreement to be entered into with the Stock Exchanges on which the Equity

Shares of our Company are to be listed

ESI Act Employees State Insurance Act, 1948

FCNR Foreign Currency Non-Resident

FDI Foreign Direct Investment

FDI Policy Consolidated Foreign Direct Investment Policy notified by DIPP by notification D/o IPP

F. No. 5(1)/2015-FC-1 dated May 12, 2015, effective from May 12, 2015

FEMA Foreign Exchange Management Act, 1999, read with rules and regulations thereunder

FEMA Regulations Foreign Exchange Management (Transfer or Issue of Security by a Person Resident

Outside India) Regulations, 2000, as amended

FII(s) Foreign Institutional Investors as defined under the SEBI FPI Regulations

12

Term Description

Financial Year/FY/Fiscal Unless stated otherwise, the period of 12 months ending December 31 of that particular

year

FIPB Foreign Investment Promotion Board

FIR First Information Report

FPI(s) A foreign portfolio investor as defined under the SEBI FPI Regulations

FSSA Food Safety and Standards Act, 2006

FSSAI Food Safety and Standards Authority of India

FSSR Food Safety and Standards Rules, 2011

FVCI Foreign venture capital investors as defined and registered under the SEBI FVCI

Regulations

GAAR General Anti Avoidance Rules

GDP Gross Domestic Product

GIR General Index Register

GoI or Government Government of India

GST Goods and services tax

HUF Hindu Undivided Family

ICAI The Institute of Chartered Accountants of India

ICDS Income Computation and Disclosure Standards

IFRS International Financial Reporting Standards

Income Tax Act The Income Tax Act, 1961

Ind-AS Indian Accounting Standards

Ind-AS Rules Companies (Indian Accounting Standards) Rules, 2015

India Republic of India

Indian GAAP Generally Accepted Accounting Principles in India

IPC Indian Penal Code, 1860

IPO Initial Public Offering

IRDAI Insurance Regulatory and Development Authority of India

IST Indian Standard Time

IT Information Technology

Legal Metrology Act Legal Metrology Act, 2009

LIBOR London Interbank Offered Rate

MICR Magnetic Ink Character Recognition

Mn Million

MV Act Motor Vehicles Act, 1988

N.A./NA Not Applicable

NAV Net Asset Value

NECS National Electronic Clearing Services

NEFT National Electronic Fund Transfer

NI Act Negotiable Instruments Act, 1881

Notified Sections The sections of the Companies Act, 2013 that have been notified by the Ministry of

Corporate Affairs, Government of India

NRE Account Non Resident External Account

NRI A person resident outside India, who is a citizen of India or a person of Indian origin, and

shall have the meaning ascribed to such term in the Foreign Exchange Management

(Deposit) Regulations, 2000

13

Term Description

NRO Account Non Resident Ordinary Account

NSDL National Securities Depository Limited

NSE The National Stock Exchange of India Limited

OCB/Overseas Corporate Body 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 not less than 60%

of beneficial interest is irrevocably held by NRIs directly or indirectly and which was in

existence on October 3, 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 Offer

p.a. Per annum

P/E Ratio Price/Earnings Ratio

Packaged Commodities Rules Legal Metrology (Packaged Commodities) Rules, 2011

PAN Permanent Account Number

PAT Profit After Tax

PFA Prevention of Food Adulteration Act, 1954

RBI The Reserve Bank of India

RoNW Return on Net Worth

RTGS Real Time Gross Settlement

SCRA Securities Contracts (Regulation) Act, 1956

SCRR Securities Contracts (Regulation) Rules, 1957

SEBI The Securities and Exchange Board of India constituted under the SEBI Act

SEBI Act Securities and Exchange Board of India Act, 1992

SEBI AIF Regulations Securities and Exchange Board of India (Alternative Investments Funds) Regulations,

2012

SEBI FII Regulations Securities and Exchange Board of India (Foreign Institutional Investors) Regulations,

1995

SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014

SEBI FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investor) Regulations,

2000

SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)

Regulations, 2009

SEBI Listing Regulations Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015

SEBI VCF Regulations Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996

Securities Act United States Securities Act of 1933

SICA Sick Industrial Companies (Special Provisions) Act, 1985

Sq. ft. Square feet

State Government The government of a state in India

Stock Exchanges The BSE and the NSE

STT Securities Transaction Tax

Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011

U.K. United Kingdom

U.S./U.S.A/United States United States of America

US GAAP Generally Accepted Accounting Principles in the United States of America

USD/US$ United States Dollars

VAS Value Added Services

14

Term Description

VAT Value Added Tax

VCFs Venture Capital Funds as defined in and registered with SEBI under the SEBI VCF

Regulations or the SEBI AIF Regulations, as the case may be

15

PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Certain Conventions

All references in this Draft Red Herring Prospectus to “India” are to the Republic of India and all references to the “U.S.”,

“U.S.A” or “United States” are to the United States of America. Further, all references to following countries are:

S.N. Reference Country

1. Kenya Republic of Kenya

2. Morocco Kingdom of Morocco

3. Mozambique Republic of Mozambique

4. Nepal Federal Democratic Republic of Nepal

5. Singapore Republic of Singapore

6. Sri Lanka Democratic Socialist Republic of Sri Lanka

7. Zambia Republic of Zambia

8. Zimbabwe Republic of Zimbabwe

Unless stated otherwise, all references to page numbers in this Draft Red Herring Prospectus are to the page numbers of this

Draft Red Herring Prospectus.

Financial Data

Unless stated otherwise, the financial information in this Draft Red Herring Prospectus is derived from our Restated Financial

Statements prepared in accordance with the Companies Act and Indian GAAP and restated in accordance with the SEBI

ICDR Regulations.

In this Draft Red Herring Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are

due to rounding off. All figures in decimals have been rounded off to the second decimal and all percentage figures have been

rounded off to two decimal places and accordingly, there may be consequential changes in this DRHP.

Historically, under the Companies Act, 1956, companies had the freedom to fix any annual period as their Financial Year,

however, with the introduction of the Companies Act, 2013, the Financial Year of company is required to be from April 1 to

March 31 each year. Our Company’s financial year commences on January 1 and ends on December 31; accordingly, all

references to a particular financial year, unless stated otherwise, are to the 12 month period ended on December 31 of that

year. Our Financial Year ending of December 31 was approved pursuant to an order dated December 15, 2015 issued by the

Company Law Board, New Delhi.

There are significant differences between Indian GAAP, U.S. GAAP and IFRS. Our Company does not provide reconciliation

of its financial information to IFRS or U.S. GAAP. Our Company has not attempted to explain those differences or quantify

their impact on the financial data included in this Draft Red Herring Prospectus and it is urged that you consult your own

advisors regarding such differences and their impact on our financial data. Accordingly, the degree to which the financial

information included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the

reader’s level of familiarity with Indian accounting policies and practices, the Companies Act, the Indian GAAP and the SEBI

ICDR Regulations. Any reliance by persons not familiar with Indian accounting policies and practices on the financial

disclosures presented in this Draft Red Herring Prospectus should accordingly be limited.

Unless the context otherwise indicates, any percentage amounts, as set forth in the sections “Risk Factors”, “Our Business”,

“Management’s Discussion and Analysis of Financial Conditional and Results of Operations” on pages 20, 124 and 366,

respectively, and elsewhere in this Draft Red Herring Prospectus have been calculated on the basis of our Restated Financial

Statements prepared in accordance with Companies Act and Indian GAAP and restated in accordance with the SEBI ICDR

Regulations.

EBITDA presented in this Draft Red Herring Prospectus is a supplemental measure of our performance and liquidity that is

not required by, or presented in accordance with, Indian GAAP, IFRS or US GAAP. Furthermore, EBITDA is not a

measurement of our financial performance or liquidity under Indian GAAP, IFRS or US GAAP and should not be considered

as an alternative to net profit/loss, revenue from operations or any other performance measures derived in accordance with

Indian GAAP, IFRS or US GAAP or as an alternative to cash flow from operations or as a measure of our liquidity. In

addition, EBITDA is not a standardised term, hence a direct comparison of EBITDA between companies may not be possible.

Other companies may calculate EBITDA differently from us, limiting its usefulness as a comparative measure.

Important Note on Sales Volume Information

The Sales Volume information presented in this Draft Red Herring Prospectus represents sales to our customers in our

licensed territories but does not include any sales to PepsiCo or any other franchisees of PepsiCo. Sales to PepsiCo and / or

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other PepsiCo franchisees are reflected in our revenues from operations. However, such sales have not been significant in the

last five Fiscals. We do not make any such sales other than in India. Sales Volume information in any Fiscal period included

in this Draft Red Herring Prospectus cannot be directly correlated to our revenues from operations in the respective Fiscal.

Currency and Units of Presentation

All references to:

“KES” are to Kenyan Shilling, the official currency of Kenya;

“LKR” are to Sri Lankan Rupees, the official currency of Sri Lanka;

“MAD” are to Moroccan dirham, the official currency of Morocco;

“MZN” are to Metical, the official currency of Mozambique;

“NPR” are to Nepalese Rupee, the official currency of Nepal;

“Rupees” or “₹” or “INR” or “Rs.” are to Indian Rupee, the official currency of the Republic of India;

“SGD” are to Singapore Dollar, the official currency of Singapore;

“USD” or “US$” are to United States Dollar, the official currency of the United States; and

“ZMK/ZMW” are to Zambian kwacha, the official currency of Zambia.

Our Company has presented certain numerical information in this Draft Red Herring Prospectus in “million” units. One

million represents 1,000,000 and one billion represents 1,000,000,000.

Exchange Rates

This Draft Red Herring Prospectus contains conversion of certain other currency amounts into Indian Rupees that have been

presented solely to comply with the SEBI ICDR Regulations. These conversions should not be construed as a representation

that these currency amounts could have been, or can be converted into Indian Rupees, at any particular rate.

The following table sets forth, for the periods indicated, information with respect to the exchange rate between the Rupee and

other currencies:

(Amount in ₹, unless otherwise specified)

Currency As on December

31, 2011(2)

As on December

31, 2012(2)

As on December

31, 2013(2)

As on December

31, 2014(2)

As on December

31, 2015(2)

1 KES 0.63 0.63 0.70 0.69 0.64

1 LKR 0.48 0.43 0.47 0.48 0.45

1 MAD 6.30 6.49 7.47 7.02 6.67

1 MZN 2.03 1.84 2.05 1.91 1.40

1 NPR 0.63 0.62 0.62 0.61 0.61

1 SGD 41.78 44.68 48.69 48.05 46.81

1 US$ 53.27(1)

54.78 61.90 63.33 66.33

1 ZMK/ZMW(3)

0.01 0.01 11.09 9.89 6.00

Source: RBI Reference Rate and www.oanda.com

1. Exchange rate as on December 30, 2011, as RBI Reference Rate is not available for December 31, 2011 being a Saturday 2. Exchange rate is rounded off to two decimal places 3. On January 1, 2013 the ZMK was rebased to the ZMW (1000 ZMK = 1 ZMW)

Industry and Market Data

Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus has been obtained or derived

from publicly available information as well as industry publications, other sources and the report titled “Soft Drinks in India”

dated March 2016 issued by Euromonitor International Ltd which includes the following disclaimer:

“Information in this DRHP on the Soft Drinks markets is from independent market research carried out by Euromonitor

International Limited but should not be relied upon in making, or refraining from making, any investment decision.”

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Industry publications generally state that the information contained in such publications has been obtained from publicly

available documents from various sources believed to be reliable but their accuracy and completeness are not guaranteed and

their reliability cannot be assured. Although we believe the industry and market data used in this Draft Red Herring

Prospectus is reliable, it has not been independently verified by us or the GCBRLMs and the BRLM or any of their affiliates

or advisors. The data used in these sources may have been re-classified by us for the purposes of presentation. Data from

these sources may also not be comparable. Such data involves risks, uncertainties and numerous assumptions and is subject to

change based on various factors, including those discussed in “Risk Factors” on page 20.

The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful depends on the

reader’s familiarity with and understanding of the methodologies used in compiling such data. There are no standard data

gathering methodologies in the industry in which business of our Company is conducted, and methodologies and assumptions

may vary widely among different industry sources.

In accordance with the SEBI ICDR Regulations, the section “Basis for the Offer Price” on page 104 includes information

relating to our peer group companies. Such information has been derived from publicly available sources, and neither we, nor

the GCBRLMs or the BRLM have independently verified such information.

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FORWARD-LOOKING STATEMENTS

This Draft Red Herring Prospectus contains certain “forward-looking statements”. These forward-looking statements

generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”,

“objective”, “plan”, “project”, “will”, “will continue”, “will pursue” or other words or phrases of similar import. Similarly,

statements that describe our strategies, objectives, plans, prospects or goals are also forward-looking statements. All forward-

looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ

materially from those contemplated by the relevant forward-looking statement.

Actual results may differ materially from those suggested by the forward-looking statements due to risks or uncertainties

associated with the expectations with respect to, but not limited to, regulatory changes pertaining to the industries in India in

which our Company operates and our ability to respond to them, our ability to successfully implement our strategy, our

growth and expansion, technological changes, our exposure to market risks, general economic and political conditions in

India which have an impact on its business activities or investments, the monetary and fiscal policies of India, inflation,

deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the

performance of the financial markets in India and globally, changes in domestic laws, regulations and taxes and changes in

competition in the industries in which we operate. Important factors that could cause actual results to differ materially from

our Company’s expectations include, but are not limited to, the following:

Termination or non-renewal of the our agreements with PepsiCo;

Inability to maintain our competitive position in India and in our other markets;

Failure to integrate businesses we have acquired with our existing operations;

Interruption in the supply or significant increase in the price of raw materials or packaging materials;

Adverse weather conditions during peak sales seasons;

Changes in consumer preferences leading to reduction in demand of our products;

Contamination or deterioration of our beverages resulting in legal liability;

Significant interruption in production at our production facilities;

An inability to repay our substantial indebtedness in a timely manner or comply with various financial and other covenants;

Scarcity or non-availability of quality water;

Any withdrawal, or termination of, or unavailability of tax benefits we currently avail;

Failure to maintain sufficient insurance coverage to cover all possible losses and liabilities associated with our business; and

General economic and business conditions in India and other countries.

For further discussion of factors that could cause the actual results to differ from the expectations, please see the sections

“Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of

Operations” on pages 20, 124 and 366, respectively. By their nature, certain market risk disclosures are only estimates and

could be materially different from what actually occurs in the future. As a result, actual gains or losses could materially differ

from those that have been estimated.

We cannot assure Bidders that the expectations reflected in these forward-looking statements will prove to be correct. Given

these uncertainties, Bidders are cautioned not to place undue reliance on such forward-looking statements and not to regard

such statements as a guarantee of future performance.

Forward-looking statements reflect the current views of our Company as of the date of this Draft Red Herring Prospectus and

are not a guarantee of future performance. These statements are based on the management’s beliefs and assumptions, which in

turn are based on currently available information. Although we believe the assumptions upon which these forward-looking

statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking

statements based on these assumptions could be incorrect. Neither our Company, our Directors, the GCBRLMs, the BRLM

nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances

arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come

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to fruition. In accordance with SEBI requirements, our Company, the GCBRLMs and BRLM will ensure that the Bidders in

India are informed of material developments until the time of the grant of listing and trading permission by the Stock

Exchanges.

The Selling Shareholders will ensure that investors are informed of material developments in relation to statements and

undertakings made by the Selling Shareholders in this Draft Red Herring Prospectus, the Red Herring Prospectus and the

Prospectus until the time of the grant of listing and trading permission by the Stock Exchanges. Further, in accordance with

Regulation 51A of the SEBI ICDR Regulations, our Company may be required to undertake an annual updation of the

disclosures made in this Draft Red Herring Prospectus and make it publicly available in the manner specified by SEBI.

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SECTION: II RISK FACTORS

An investment in Equity Shares involves a high degree of risk. Investors should carefully consider all the information in this

Draft Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in our

Equity Shares. The risks described below are not the only ones relevant to us or our Equity Shares, but also to the industry in

which we operate or to India and other jurisdictions we operate in. Additional risks and uncertainties, not currently known to

us or that we currently do not deem material may also adversely affect our business, results of operations and financial

condition. If any of the following risks, or other risks that are not currently known or are not currently deemed material,

actually occur, our business, results of operations and financial condition could be adversely affected, the price of our Equity

Shares could decline, and investors may lose all or part of their investment. In order to obtain a complete understanding of

our Company and our business, prospective investors should read this section in conjunction with “Our Business” and

“Management’s Discussions and Analysis of Financial Condition and Results of Operations” on pages 124 and 366,

respectively, as well as the other financial and statistical information contained in this Draft Red Herring Prospectus. In

making an investment decision, prospective investors must rely on their own examination of us and our business and the

terms of the Offer including the merits and risks involved. Unless specified or quantified in the relevant risk factors below, we

are unable to quantify the financial or other impact of any of the risks described in this section.

This Draft Red Herring Prospectus also contains forward-looking statements that involve risks, assumptions, estimates and

uncertainties. Our actual results could differ from those anticipated in these forward-looking statements as a result of certain

factors, including the considerations described below and elsewhere in this Draft Red Herring Prospectus. See “Forward-

Looking Statements” on page 18.

Unless the context otherwise requires, in this section, references to “we”, “us” or “our” refers to Varun Beverages Limited

and its subsidiaries on a consolidated basis, and includes references to entities that have merged with, or that have been

acquired by, our Company, including Devyani Beverages Limited, Varun Beverages (Nepal) Private Limited, North East

Pure Drinks Private Limited, Varun Beverages (International) Limited, Varun Beverages (Zambia) Limited, Varun Beverages

Mozambique, Limitada and Varun Beverages (Zimbabwe) (Private) Limited. Unless the context otherwise requires,

references to our “Company” refers to Varun Beverages Limited on a standalone basis. Unless the context otherwise

requires, any financial information included herein have been derived from our Restated Standalone Financial Statements for

Fiscal 2011 and from our Restated Consolidated Financial Statements for Fiscal 2012, 2013, 201