BID/OFFER PROGRAMME* FOR ALL BIDDERS: FOR QIBS: FOR RETAIL AND NON-INSTITUTIONAL BIDDERS

Transcription

1 RED HERRING PROSPECTUS June, 2016 Please see section 32 of the Companies Act, 2013 Book Built Offer MAHANAGAR GAS LIMITED Our Company was incorporated on May 8, 1995 at Mumbai as Mahanagar Gas Limited, a public limited company under the Companies Act, Our Company obtained a certificate of commencement of business on July 4, Corporate Identification Number: U40200MH1995PLC Registered Office and Corporate Office: MGL House, G33 Block, BandraKurla Complex, Bandra (East), Mumbai For details of change in registered office of our Company, see the section History and Certain Corporate Matters on page 131. Contact Person: Mr. Alok Mishra, Company Secretary and Compliance Officer; Tel: +91 (22) , Fax: +91 (22) mgl.ipo@mahanagargas.com; Website: PROMOTERS OF OUR COMPANY: GAIL (INDIA) LIMITED AND BG ASIA PACIFIC HOLDINGS PTE LIMITED INITIAL PUBLIC OFFER OF UP TO 24,694,500 EQUITY SHARES OF FACE VALUE OF ` EACH ( EQUITY SHARES ) OF MAHANAGAR GAS LIMITED ( COMPANY OR ISSUER ) FOR CASH AT A PRICE OF ` PER EQUITY SHARE ( OFFER PRICE ) THROUGH AN OFFER FOR SALE OF UP TO 12,347,250 EQUITY SHARES BY GAIL (INDIA) LIMITED AND UP TO 12,347,250 EQUITY SnHARES BY BG ASIA PACIFIC HOLDINGS PTE LIMITED ( SELLING SHAREHOLDERS ) AGGREGATING UP TO ` MILLION ( OFFER ). THE OFFER INCLUDES A RESERVATION OF UP TO 200,000 EQUITY SHARES, AGGREGATING UP TO ` MILLION, FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED HEREINAFTER) ON A COMPETITIVE BASIS ( EMPLOYEE RESERVATION PORTION ). THE OFFER LESS THE EMPLOYEE RESERVATION PORTION IS HEREINAFTER REFERRED TO AS THE NET OFFER. THE OFFER AND THE NET OFFER WILL CONSTITUTE % AND %, RESPECTIVELY, OF THE POSTOFFER PAIDUP EQUITY SHARE CAPITAL OF OUR COMPANY. OUR COMPANY AND THE SELLING SHAREHOLDERS MAY, IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS, OFFER A DISCOUNT OF ` PER EQUITY SHARE ON THE OFFER PRICE TO ELIGIBLE EMPLOYEE ( EMPLOYEE DISCOUNT ). THE FACE VALUE OF THE EQUITY SHARES IS ` EACH. THE PRICE BAND, THE EMPLOYEE DISCOUNT, IF ANY, AND THE MINIMUM BID LOT SIZE WILL BE DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDERS, IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS, AND WILL BE ADVERTISED IN MUMBAI EDITION OF FINANCIAL EXPRESS (AN ENGLISH NATIONAL DAILY NEWSPAPER), MUMBAI EDITION OF JANSATTA (A HINDI NATIONAL DAILY NEWSPAPER) AND MUMBAI EDITION OF NAVSHAKTI (A MARATHI NATIONAL DAILY NEWSPAPER) EACH WITH WIDE CIRCULATION AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/OFFER OPENING DATE AND SHALL BE MADE AVAILABLE TO BSE LIMITED ( BSE ) AND NATIONAL STOCK EXCHANGE OF INDIA LIMITED ( NSE, AND TOGETHER WITH BSE, THE STOCK EXCHANGES ) FOR UPLOADING ON THEIR RESPECTIVE WEBSITES. In case of revision in the Price Band, the Bid/ Offer Period shall be extended by at least three additional Working Days after such revision of the Price Band, subject to the Bid/ Offer Period not exceeding 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 websites of the Book Running Lead Managers, at the terminals of the Syndicate Members and by intimation to Self Certified Syndicate Banks ( SCSBs ), Registered Brokers, Collecting Depository Participants and Registrar and Share Transfer Agents. Pursuant to Rule 19(2)(b) of the Securities Contracts Regulation Rules, 1957, as amended ( SCRR ) read with Regulation 41 of the SEBI ICDR Regulations, the Offer is being made for at least % of the postoffer paidup Share capital of our Company. This Offer is being made through the Book Building Process where 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers ( QIBs ) ( QIB Portion ). Our Company and the Selling Shareholders may, in consultation with the Book Running Lead Managers, allocate up to 60% of the QIB Portion to Anchor Investors, on a discretionary basis, ( Anchor Investor Portion ) at the Anchor Investor Allocation Price, out of which at least one third will be available for allocation to domestic Mutual Funds only subject to valid Bids received from Domestic Mutual Funds at or above the Anchor Investor Allocation Price. In event of undersubscription, or nonallocation in the Anchor Investor Portion, the balance shall be added to the QIB Portion. representing 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder of the QIB Portion shall be available for allocation on a proportionate basis to QIBs (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received from them 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 NonInstitutional Bidders and not less than 35% of the Net Offer shall be available for allocation to Retail Individual Bidders, subject to valid Bids being received from them at or above the Offer Price. All Investors, other than Anchor Investors, shall participate in the Offer mandatorily through the Application Supported by Blocked Amount ( ASBA ) process by providing the details of their respective ASBA Account, which will be blocked by the SCSBs, to participate in this Offer. For details, see the section Offer Procedure on page 295. RISK IN RELATION TO THE FIRST OFFER This being the first public offer of our Company, there has been no formal market for the of our Company. The face value of the is `. The Floor Price is times the face value and the Cap Price is times the face value. The Offer Price (as determined by our Company and the Selling Shareholders, in consultation with Book Running Lead Managers, on the basis of the assessment of market demand for the by way of the Book Building Process and as stated in the section Basis for Offer Price on page 80, should not be taken to be indicative of the market price of the after the are listed. No assurance can be given regarding an active or sustained trading in the of our Company or regarding the price at which the will be traded after listing. GENERAL RISKS Investment in equity and equity related securities involves a degree of risk and investors should not invest any funds in this Offer unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Offer. For taking an investment decision, investors must rely on their own examination of our Company and the Offer including the risks involved. The offered 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 Red Herring Prospectus. Specific attention of the investors is invited to the section Risk Factors on page 18. THE COMPANY AND THE SELLING SHAREHOLDERS ASBSOLUTE RESPONSIBILITY Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Red Herring Prospectus contains all information with regard to our Company and the Offer, which is material in the context of this Offer; that the information contained in this 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 this 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. Each of the Selling Shareholders, having made reasonable enquiries, accepts responsibility for and confirms that this Red Herring Prospectus contains all statements in relation to itself and the offered by it in the Offer which are material in the context of the Offer and that all such statements are true and correct and in all material aspects, and are not misleading in any material respect. LISTING The offered through the Red Herring Prospectus are proposed to be listed on BSE and NSE. The inprinciple approvals of BSE and NSE for listing the have been received pursuant to letter bearing number DCS/IPO/NP/IP/805/ dated November 26, 2015 and letter bearing number NSE/LIST/52638 dated December 2, 2015, respectively. For the purpose of this Offer, BSE shall be the Designated Stock Exchange. A copy of the Red Herring Prospectus and the Prospectus shall be delivered for registration to the Registrar of Companies, Mumbai, in accordance with Section 26(4) of the Companies Act, The have not been and will not be registered under the Securities Act or any state securities laws in the United States, and unless so registered, may not be offered or sold within the United States except pursuant to an exemption from or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Accordingly, the are being offered and sold only outside the United States in offshore transactions in reliance on Regulation S and the applicable laws of each jurisdiction where such offers and sales occur. BOOK RUNNING LEAD MANAGERS Kotak Mahindra Capital Company Limited 1st Floor, 27 BKC, Plot No. 27, G Block Bandra Kurla Complex, Bandra (East) Mumbai Tel: +91 (22) Fax: +91 (22) mgl.ipo@kotak.com Investor grievance kmccredressal@kotak.com Contact Person: Ganesh Rane Website: SEBI Registration No.: INM REGISTRAR TO THE OFFER Citigroup Global Markets India Private Limited 1202, 12th Floor, First International Financial Centre, GBlock C54 & 55, Bandra Kurla Complex, Bandra (East) Mumbai Tel: +91 (22) Fax: +91 (22) mgl.ipo@citi.com Investor grievance investors.cgmib@citi.com Contact Person: Aditi Jain Website: SEBI Registration No.: INM Link Intime India Private Limited C 13, Pannalal Silk Mills Compound LBS Marg, Bhandup (West) Mumbai Tel: +91 (22) Fax.: +91 (22) Investor grievance mgl.ipo@linkintime.co.in Contact Person: Shanti Gopalkrishnan Website: SEBI Registration No.: INR BID/OFFER PROGRAMME* FOR ALL BIDDERS: FOR QIBS: FOR RETAIL AND NONINSTITUTIONAL BIDDERS ISSUE OPENS ON*: JUNE 21, 2016 ISSUE CLOSES ON: JUNE 23, 2016 ISSUE CLOSES ON: JUNE 23, 2016 *Our Company and the Selling Shareholders, may, in consultation with the Book Running Lead Managers, consider participation by Anchor Investors. The Anchor Investor Bid/ Offer Period shall be one Working Day prior to the Bid/ Offer Opening Date. Modified Date: 13Jun2016

2 THE OFFER The following table summarizes the Offer details: Initial Public Offer of comprising(1) (i) Offer for Sale by GAIL (ii) Offer for Sale by BGAPH of which: Employee Reservation Portion(2) Therefore, Net Offer Of which: A) QIB Portion(4)(5) Of which: Up to 24,694,500, aggregating up to ` million Up to 12,347,250, aggregating up to ` million Up to 12,347,250, aggregating up to ` million Up to 200,000 24,494,500 12,247,250 Anchor Investor Portion(3) Net QIB Portion (assuming Anchor Investor Portion is fully subscribed) Of which Available for allocation to Mutual Funds only (5% of the QIB Portion excluding the Anchor Investor Portion) Balance for all QIBs including Mutual Funds 7,348,350 4,898,900 B) NonInstitutional Portion(4) Not less than 3,674,175 C) Retail Portion(4) Not less than 8,573,075 Pre and postoffer outstanding prior to the Offer outstanding after the Offer 98,777,778 98,777, ,945 4,653,955 Use of proceeds of this Offer See Objects of the Offer on page 78. Our Company will not receive any proceeds from the Offer. (1) The Offer has been authorised by a resolution dated February 3, 2015 of our Board. BGAPH has authorised the Offer pursuant to a board resolution dated May 21, 2015 and GAIL has authorized the Offer pursuant to a board resolution dated March 20, The Selling Shareholders confirm that the being offered as part of the Offer have been held by them for such periods as required by Regulation 26(6) of the SEBI ICDR Regulations. (2) Any undersubscription in the Employee Reservation Portion will be added to the Net Offer. In the event of undersubscription in the Net Offer, spill over to the extent of undersubscription will be allowed from the Employee Reservation Portion. (3) Our Company and the Selling Shareholders may, in consultation with the BRLMs, allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis. Onethird of the Anchor Investor Portion shall be reserved for allocation to domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Offer Price at which allocation is being done to other Anchor Investors. For further details, see Offer Procedure on page 295. (4) Undersubscription, if any, in any category, except in the QIB Portion, would be allowed to be met with spill over from any other category or combination of categories at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs and the Designated Stock Exchange. Our Company and the Selling Shareholders may, in consultation with the BRLMs, offer a discount of ` per Share to the Offer Price to Eligible Employees Allocation to all categories, except Anchor Investors, if any, and Retail Individual Investors, shall be made on a proportionate basis. Allocation to each Retail Individual Bidder shall not be less than the Minimum Bid Amount, 51 Modified Date: 13Jun2016

3 subject to availability of in the Retail Portion, and the remaining available, if any, shall be Allotted on a proportionate basis. For details, including in relation to grounds for rejection of Bids, see Offer Procedure on page 295. For details of the terms of the Offer, see Terms of the Offer on page Modified Date: 13Jun2016

4 GENERAL INFORMATION Our Company was incorporated in Mumbai on May 8, 1995 as a public limited company under the Companies Act, Our Company obtained a certificate of commencement of business on July 4, Our Company is engaged in the business of distribution of natural gas viz., compressed natural gas and piped natural gas. For further details regarding the business undertaken by our Company, see Our Business on page 7. Registered and Corporate Office of our Company Mahanagar Gas Limited MGL House G33 Block BandraKurla Complex Bandra (East) Mumbai Tel: +91 (22) Fax: +91 (22) Website: mgl.ipo@mahanagargas.com Corporate Identity Number: U40200MH1995PLC Registration Number: For details in changes in our registered office, see, History and Other Corporate Matters on page 131. Address of the Registrar of Companies Our Company is registered with the RoC, Mumbai situated at the following address: Registrar of Companies 0, Everest, Marine Drive Mumbai Tel: +91 (22) Fax: +91 (22) Board of Directors The following table sets out the composition of our Board as on the date of this Red Herring Prospectus: Name and Designation Dr. Ashutosh Karnatak Chairman Mr. Rajeev Kumar Mathur Managing Director Ms. Susmita Sengupta Wholetime Director Mr. Akhil Mehrotra NonExecutive Director Mr. Apurva Chandra NonExecutive Director Dr. Basudeb Sen Independent Director Mr. Jainendar Kumar Jain Independent Director Mr. Santosh Kumar Independent Director Mr. Arun Balakrishnan Independent Director Mr. Raj Kishore Tewari Independent Director DIN Address , New Delhi Apartments, Vasundhra Enclave, New Delhi Flat No 2335, III Floor, Sector D, Pocket II, Vasant Kunj, New Delhi Flat no 2301, Glen Ridge, Hiranandani Gardens, Powai, Mumbai Flat 303/4, A Wing, Lake Lucrne Phase III, Lake Homes, Powai, Mumbai , Amber Building, 9th Floor, Malabar Hills, Mumbai Rashtraguru Avenue, Dum Dum, Kolkata C018, GAIL Employees Cooperative Group Housing Society, Plot No. GH9, Sector56, Gurgaon House No. E, Sector 55, Gautam Budh Nagar, Noida Flat 2012, Sobha Petunia Veerana Palaya, Opp. Lumbini Gardens, Bangalore , Devika Apartment, Vaishali, Ghaziabad Modified Date: 13Jun2016

5 For further details of our Board of Directors, see Our Management on page 141. Company Secretary and Compliance Officer Mr. Alok Mishra is the Company Secretary and the Compliance Officer of our Company. His contact details are as follows: Mr. Alok Mishra MGL House G33 Block BandraKurla Complex Bandra (East) Mumbai Tel: +91 (22) Fax: +91 (22) (Company Secretary); (Compliance Officer) Chief Financial Officer Mr. Sunil M. Ranade is the Chief Financial Officer of our Company. His contact details are as follows: Mr. Sunil M. Ranade MGL House G33 Block BandraKurla Complex Bandra (East) Mumbai Tel: +91 (22) Fax: +91 (22) Investors can contact the Company Secretary and Compliance Officer, the BRLMs, the Registrar to the Offer, in case of any preoffer or postoffer related problems, such as nonreceipt of Allotment Advice, credit of Allotted in the respective beneficiary account or refund orders. All grievances may be addressed to the Registrar to the Offer with a copy to the relevant Designated Intermediary with whom the Bid cum Application Form was submitted. The Bidder should give full details such as name of the sole or first Bidder, Bid cum Application Form number, Bidder DP ID, Client ID, PAN, date of the Bid cum Application Form, address of the Bidder, number of the applied for and the name and address of the Designated Intermediary where the Bid cum Application Form was submitted by the Bidder. Further, the Bidder shall also enclose the Acknowledgement Slip from the Designated Intermediaries in addition to the documents/information mentioned hereinabove. Book Running Lead Managers Kotak Mahindra Capital Company Limited 1st Floor, 27 BKC Plot No. 27 G Block Bandra Kurla Complex Bandra (East), Mumbai Tel: +91 (22) Fax: +91 (22) mgl.ipo@kotak.com Investor grievance kmccredressal@kotak.com Contact Person: Ganesh Rane Website: 54 Modified Date: 13Jun2016

6 SEBI Registration No.: INM Citigroup Global Markets India Private Limited 1202, 12th Floor, First International Financial Centre GBlock C54 & 55, Bandra Kurla Complex Bandra (East) Mumbai Tel: +91 (22) Fax: +91 (22) Investor grievance Website: Contact Person: Aditi Jain SEBI Registration No.: INM Syndicate Members Registrar to the Offer Link Intime India Private Limited C 13, Pannalal Silk Mills Compound LBS Marg, Bhandup (West) Mumbai Tel: +91 (22) Fax: +91 (22) Investor grievance mgl.ipo@linkintime.co.in Website: Contact Person: Shanti Gopalkrishnan SEBI Registration No.: INR Domestic Legal Counsel to our Company and the Selling Shareholders Khaitan & Co One Indiabulls Centre Tower 1, 13th Floor 841 Senapati Bapat Marg Elphinstone Road Mumbai Tel: +91 (22) Fax: +91 (22) International Legal Counsel to our Company and the Selling Shareholders Jones Day 138 Market Street, Level 28 CapitaGreen Singapore Tel: Fax: Domestic Legal Counsel to the BRLMs Cyril Amarchand Mangaldas V Floor, Peninsula Chambers Peninsula Corporate Park Ganpatrao Kadam Marg Lower Parel 55 Modified Date: 13Jun2016

7 Mumbai Tel: +91 (22) Fax: +91 (22) International Legal Counsel to the BRLMs Herbert Smith Freehills LLP 50 Raffles Place #2401 Singapore Land Tower Singapore Tel: Fax: Statutory Auditors of our Company Deloitte Haskins & Sells, Chartered Accountants Indiabulls Finance Centre, Tower 3, 32nd Floor Elphistone Mill Compound, Senapati Bapat Marg Elphistone (West) Mumbai Tel: +91 (22) Fax: +91 (22) /9421 Firm Registration No: W Escrow Collection Banks Refund Bank Designated Intermediaries Self Certified Syndicate Banks The list of banks that have been notified by SEBI to act as the SCSBs for the ASBA process is provided on the website of SEBI at For list of branches of the SCSBs named by the respective SCSBs to collect the ASBA Forms please refer to the abovementioned link. Registered Broker The list of the Registered Brokers eligible to accept ASBA forms, including details such as postal address, telephone number and address, is provided on the websites of the BSE and the NSE at respectively, as updated from time to time. RTAs The list of the RTAs eligible to accept ASBA Forms at the Designated RTA Locations, including details such as address, telephone number and address, is provided on the websites of Stock Exchanges at and respectively, as updated from time to time. 56 Modified Date: 13Jun2016

8 Collecting Depository Participants The list of the CDPs eligible to accept ASBA Forms at the Designated CDP Locations, including details such as name and contact details, is provided on the websites of the Stock Exchanges at and respectively, as updated from time to time. Bankers to our Company Hongkong & Shanghai Banking Corporation Limited 52/60 M.G Road, Fort Mumbai Tel.: +91 (22) /4322 Fax: +91 (22) Website: Contact Person: Zakir Halde Kotak Mahindra Bank Limited 2nd and 3rd Floor, Navsari Building D.N.Road, Fort Mumbai Tel.: +91 (22) Fax: +91 (22) Website: Contact Person: Anuj Patni United Bank of India C14, C15, MMRDA Building, Bandra Kurla Complex Mumbai Tel.: +91 (22) Fax: +91 (22) Website: Contact Person: Rajeshri Jadhav HDFC Bank Limited Manekji Wadia Building, 2nd Floor Nanik Motwani Marg, Fort Mumbai Tel.: +91 (22) Fax: +91 (22) Website: Contact Person: Jatin Shah Axis Bank Ltd Ground & 1st Floor, Harbhajan Building C. S. T. Road, Opp. Raheja Centre, Kalina Santacruz (E) Mumbai Tel.: +91 (22) Fax: +91 (22) Website: Contact Person: Mamta Ajwani ICICI Bank Limited ICICI Bank Tower Bandra Kurla Complex Mumbai Tel.: +91 (22) Fax: +91 (22) Website: Contact Person: Devesh Sharma IPO grading No credit rating agency, registered with SEBI has been appointed in respect of obtaining grading for the Offer. 57 Modified Date: 13Jun2016

9 Inter se allocation of responsibilities The following table sets forth the inter se allocation of responsibilities for various activities among the BRLMs: Sr. No Activity Responsibility Coordinator Capital Structuring with relative components and formalities such as type of instruments, etc. Kotak, Citi Kotak Due diligence of Company's operations/ management/ business plans/ legal etc. Drafting and design of Red Herring Prospectus including memorandum containing salient features of the Prospectus. The BRLMs shall ensure compliance with stipulated requirements and completion of prescribed formalities with the Stock Exchanges, RoC and SEBI including finalization of Prospectus and RoC filing. Drafting and approval of all statutory advertisements. Drafting and approval of all publicity material other than statutory advertisements as mentioned in 3 above, including corporate advertisement, brochures. Appointment of intermediaries: advertising agency and printers; escrow banks and registrar; and IPO grading agency and monitoring agency. International institutional marketing strategy, including finalizing the list and allocation of investors for one to one meetings, in consultation with the Company, finalizing the International road show schedule & investor meeting schedules. Kotak, Citi Kotak Kotak, Citi Kotak, Citi Kotak Citi Kotak, Citi Citi Kotak, Citi Citi Preparation of road show presentation and frequently asked questions. Marketing strategy for domestic institutions including banks, mutual funds, etc., finalizing the list and division of investors for one to one meetings, in consultation with the Company, and finalizing the investor meeting schedules. NonInstitutional and retail marketing of the Issue, which will include inter alia, formulating marketing strategies, preparation of publicity budget, finalizing media and PR strategy, finalizing centers for holding conferences for press and brokers, deciding on the quantum of issue material and followingup on distribution of publicity and issue material including forms, prospectuses, etc. Coordination with Stock Exchanges for Book Building software, bidding terminals and mock trading. Finalization of pricing, in consultation with the Company and managing the book. The post bidding & post issue activities including management of escrow accounts, coordination of institutional and noninstitutional allocation, intimation of allocation and dispatch of refunds to bidders etc. The post Issue activities for the Issue involving essential follow up steps, which include the finalization of trading and dealing of instruments and demat of delivery of, with the various agencies connected with the work such as the Registrar to the Issue and bankers to the Offer, SCSBs and the bank(s) handling refund business. The merchant banker shall be responsible for ensuring that these agencies fulfill their functions and enable it to discharge this responsibility through suitable agreements with the Company. Kotak, Citi Citi Kotak, Citi Kotak Kotak, Citi Kotak Kotak, Citi Citi Kotak, Citi Citi Kotak, Citi Citi 58 Modified Date: 13Jun2016

10 Credit Rating As this is an Offer of, the requirement of credit rating is not applicable. Experts Except as stated below, our Company has not obtained any expert opinions: Our Company has received written consent from the Statutory Auditors, who holds a valid peer review certificate, to include its name as required under Section 26(1)(a)(v) of the Companies Act, 2013 in this Red Herring Prospectus and as an expert as defined under section 2(38) of the Companies Act, 2013 in respect of the examination report dated May 30, 2016 of the Statutory Auditors on the restated audited financial statements of our Company as of and for Fiscals ended March 31, 2016, 2015, 2014, 2013 and 2012 and the statement of tax benefits dated June 1, 2016, included in this Red Herring Prospectus and such consents have not been withdrawn as on the date of this Red Herring Prospectus. The term expert and consent thereof does not represent an expert or consent within the meaning under the Securities Act. Trustees As this is an Offer of, the requirement of appointment of trustees is not applicable. Appraising Agency As Offer is an offer for sale, our Company shall not receive any proceeds from the sale of. Consequently, the requirement of an appraising agency is not applicable. Monitoring Agency The Offer being an offer for sale, our Company will not receive any proceeds from the Offer and is not required to appoint a monitoring agency for the Offer. Book Building Process The book building, in context of the Offer, refers to the process of collection of Bids on the basis of this Red Herring Prospectus within the Price Band, which will be decided by our Company and the Selling Shareholders in consultation with the BRLMs, and advertised in Mumbai editions of Financial Express, Mumbai editions of Jansatta and Mumbai editions of Navshakti, which are widely circulated English, Hindi and Marathi newspapers (Marathi being the regional language of Maharashtra, where our Registered Office is located) at least five Working Days prior to the Bid/ Offer Opening Date and shall be made available to the Stock Exchanges for the purpose of upload on their respective websites. The Offer Price shall be determined by our Company and the Selling Shareholders, in consultation with the BRLMs, after the Bid/ Offer Closing Date. All Bidders, except Anchor Investors, can participate in the Offer only through the ASBA process. In accordance with the SEBI ICDR Regulations, QIBs bidding in the QIB Portion and NonInstitutional Bidders bidding in the NonInstitutional Portion are not allowed to withdraw or lower the size of their Bids (in terms of the quantity of the or the Bid Amount) at any stage. Retail Individual Bidders and Eligible Employees bidding in the Employee Reservation Portion can revise their Bids during the Bid/ Offer Period and withdraw their Bids until Bid/Offer Closing Date. Further, Anchor Investors cannot withdraw their Bids after the Anchor Investor Bid/ Offer Period. Allocation to the Anchor Investors will be on a discretionary basis. For further details, see the section Offer Procedure on page 286. For further details, see the section Offer Structure and Offer Procedure on pages 289 and 286. Illustration of Book Building Process and the Price Discovery Process For an illustration of the book building process and the price discovery process, see Offer Procedure Part B Basis of Allocation Illustration of the Book Building Process and Price Discovery Process on page Modified Date: 13Jun2016

11 Withdrawal of the Offer For details in relation to refund on withdrawal of the Offer, see Offer Structure Withdrawal of the Offer on page 293. Underwriting Agreement After the determination of the Offer Price and allocation of the, but prior to the filing of the Prospectus with the RoC, our Company and the Selling Shareholders may enter into an Underwriting Agreement with the Underwriters for the proposed to be offered through the Offer. It is proposed that pursuant to the terms of such Underwriting Agreement, if entered into, the BRLMs shall be responsible for bringing in the amount devolved in the event that the Syndicate Members do not fulfill their underwriting obligations. Pursuant to the terms of the Underwriting Agreement, the obligations of the Underwriters are several and are subject to certain conditions to closing, as specified there in. The Underwriters have indicated their intention to underwrite the following number of : (This portion has been intentionally left blank and will be filled in before filing of the Prospectus with the RoC) (` in million) Name, Address, Telephone, Fax, and Indicated number of Amount Underwritten of the Underwriters to be Underwritten The above mentioned is indicative underwriting and will be finalised after pricing and actual allocation and subject to the provisions of the SEBI ICDR Regulations. In the opinion of our Board and the board of directors of the Selling Shareholders (based on a certificate given by the Underwriters), the resources of the above mentioned Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. The Underwriters are registered with SEBI under Section 12 (1) of the SEBI Act or registered as brokers with the Stock Exchange(s). Allocation among the Underwriters may not necessarily be in proportion to their underwriting commitments set forth in the table above. Notwithstanding the above table, the BRLMs and Syndicate Member(s) shall only be responsible for ensuring completion of the subscription or purchase in respect of such Bids procured by them (or their respective subsyndicate members), and not for Bids procured by other Underwriters (or the respective subsyndicate members of such Underwriters) or for the ASBA Bidders who have submitted their Bids directly to the SCSBs, Registered Brokers, Registered RTAs or CDPs, including ensuring full payment of the Offer Price, in respect of the for which such Bids are made. Each BRLM and Syndicate Member, in respect of ASBA Bidders who have submitted their Bids to such BRLM or Syndicate Member, in the event that a Bidder submitting its Bid to such Underwriter, at any of the Specified Locations, (including Bids procured by its subsyndicate members), defaults in the performance of its obligations in respect of the Offer (other than defaults due to negligence, misconduct or default by the SCSBs of any nature), the BRLM or Syndicate Member that procures such Bid from the Bidder shall be responsible for ensuring payment of the Offer Price in respect of such to the Escrow Account as soon as reasonably practicable but prior to finalization of the Basis of Allotment, provided that the obligations of each BRLM or Syndicate Member shall first be set off against any over subscription in the same category in which the default occurs or from any other category in which there is over subscription subject to the provisions of the SEBI ICDR Regulations and this Red Herring Prospectus. 60 Modified Date: 13Jun2016

12 CAPITAL STRUCTURE The share capital of our Company as on the date of this Red Herring Prospectus is set forth below: Sr. No. (in ` except share data) Aggregate Aggregate Value at Face value at Nominal Value Offer Price Particulars A Authorised share capital 130,000,000 of ` each B 1,300,000,000 Issued, subscribed and paid up share capital before the Offer 98,777,778 of ` each C 987,777,780 Present Offer in terms of this Red Herring Prospectus Offer for Sale up to 24,694,500 by the Selling Shareholders(1) Of which: Employee Reservation Portion Up to 200,000 D E G 246,945,000 2,000,000 Net Offer to the Public Up to 24,494, ,945,000 Issued, subscribed and paid up share capital after the Offer 98,777, ,777,780 Securities premium account Before the Offer After the Offer Nil Nil (1) The Offer has been authorised by a resolution dated February 3, 2015 of our Board. The Offer has been authorized pursuant to the resolutions passed by the board of directors of GAIL on March 20, 2014 and by the board of directors of BGAPH on May 21, GAIL, by way of its letter dated November 12, 2015 and BGAPH, by way of its letter dated November 9, 2015 have given their consent to include up to 12,347,250 each, as part of the Offer for Sale. The being offered in the Offer have been held by the Selling Shareholders for a period of at least one year prior to the date of the Draft Red Herring Prospectus. Changes in the authorized capital of our Company There has been no change in the authorised capital of our Company since incorporation. Notes to Capital Structure 1. (a) Share Capital History Share Capital History of our Company Date of August 25, 1995 November 6, 1996 Number of allotted Face value (`) Issue price per Share (`) 80 39,039,970 Nature of consideration Nature of 19,519,985 and 1,388,654 were allotted to BGAPH and GAIL, Subscription to the Memorandum Cumulative number of Cumulative Paid up Share capital (`) ,040, ,400,500 Allottees and the number of allotted Note 1 19,519,985 allotted each to GAIL and BGAPH 61 Modified Date: 13Jun2016

13 Date of Number of allotted Face value (`) Issue price per Share (`) Nature of consideration Nature of Cumulative number of Cumulative Paid up Share capital (`) Allottees and the number of allotted 2,772,500 allotted each to GAIL and BGAPH 8,920,000 allotted each to GAIL and BGAPH 7,000,000 allotted each to GAIL and BGAPH 5,000 allotted each to GAIL and BGAPH 6,232,475 allotted each to GAIL and BGAPH 441,600 allotted to Government of Maharashtra 9,436,178 allotted to the Government of Maharashtra respectively, for cash. 18,131,331* were allotted to GAIL for consideration other than cash. February 21, ,545,000 44,585, ,850,500 March 6, ,840,000 62,425, ,250,500 June 30, ,000,000 76,425, ,250,500 December 18, 1998,000 76,435, ,350,500 February 23, ,464,950 88,900, ,000, ,600 89,341, ,416,000 9,436,178 Conversion of CCDs 98,777, ,777,780 98,777, ,777,780 September 2, 2002 June 7, 2016 * These shares were initially issued against land. However, the land could not be transferred to the Company s name due to nonreceipt of necessary approvals and the said land was surrendered back in Fiscal 2013 and an equivalent amount of ` 9,535,2.00 was paid by GAIL on February 22, Note 1: allotted each to Mr. Chittranjan Dua, Mr. Raghu Ram Raju, Mr. Munish Sharma, Mr. 62 Modified Date: 13Jun2016

14 Deepak Adlakha, Mr. N.K. Nagpal, Mr. Ajay K. Garg, Mr. Ujjwal Kumar Dey and Mr. R.P. Sharma, the eight initial subscribers to the Memorandum. (b) allotted for consideration other than cash Date of of No. of issued Face value of Each share (`) November 6, ,131,331* Reasons for Issued against assets assigned/ transferred by GAIL to our Company pursuant to an asset transfer agreement dated April 2, 1996 entered into between GAIL and our Company Allottees GAIL Benefits accrued to our Company Assets including land and plant and machinery in relation to the Bombay city gas distribution project were transferred to our Company * These shares were initially issued against land. However, the land could not be transferred to the Company s name due to nonreceipt of necessary approvals and the said land was surrendered back in Fiscal 2013 and an equivalent amount of ` 9,535,2.00 was paid by GAIL on February 22, Build up of CCDs Date of of CCDs No. of CCDs issued Face value of each CCD (`) Reasons for Allottee January 5, ,436,178 Rights issue June 7, 2016 (9,436,178) Converted into 9,436,178, at par, in the ratio of 1:1 Government of Maharashtra 3. Our Company has not allotted any shares in terms of any scheme approved under Sections of the Companies Act, Our Company has not issued any out of its revaluation reserves. 5. Except for 9,436,178 allotted on June 7, 2016 consequent to conversion of the CCDs, our Company has not made any issue of specified securities at a price that may be lower than the Offer Price during the preceding one year from the date of this Red Herring Prospectus. 6. Buildup of Promoters shareholding, Promoters contribution and lockin Buildup of Share capital held by our Promoters 63 Modified Date: 13Jun2016

15 (a) The held by GAIL were acquired by/ allotted to GAIL in the following manner: Percentage of the preoffer capital (%) Percentage of the postoffer capital (%) Whether eligible to form part of the minimum Promoters contribution Yes Yes Date of / purchase/ transfer Nature of issue Number of Face value per Share (`) Issue/ purchase/ sale price per Share (`) November 6, ,519,985 February 21, 1997 March 6, ,772,500 1,388,654 were allotted cash and 18,131,33 1## were allotted for considerat ion other than cash. 8,920, Yes June 30, ,000, Yes December 18, , Yes February 23, ,232, Yes September 7, 2009 September 7, 2009 September 7, 2009 March 25, 2014 March 25, 2014 May 30, 2016 Transfer * No Transfer ** No Transfer *** No Transfer **** No Transfer ***** No Transfer# 30 No 44,449, Nature of considerat ion * Was jointly held by Mr. R.K. Goyal and GAIL ** Was jointly held by Mr. M. Ravindran and GAIL *** Was jointly held by Mr. R.C. Arora and GAIL **** Was jointly held by Mr. R.K. Goyal and GAIL **** These were transferred from the joint ownership of GAIL and Mr. R.K. Goyal to the joint ownership of GAIL and Mr. Mr. Satyabrata Bairagi # 30 jointly held by GAIL and Mr. R.C Arora, Mr. M. Ravindram and Mr. Satyabrata Bairagi were transferred to the sole ownership of GAIL 64 Modified Date: 13Jun2016

16 ## These shares were initially issued against land. However, the land could not be transferred to the Company s name due to nonreceipt of necessary approvals and the said land was surrendered back in Fiscal 2013 and an equivalent amount of ` 9,535,2.00 was paid by GAIL on February 22, (b) The held by BGAPH were acquired by/ allotted to BGAPH in the following manner: Percenta ge of the preoffer capital (%) Percentage of the postoffer capital (%) Whether eligible to form part of the minimum Promoters contribution Number of Face value per Share (`) Issue/ purchase/ sale price per Share (`) Allotment 19,519, Yes February 21, 1997 Allotment 2,772, Yes March 06, 1998 Allotment 8,920, Yes June 30, 1998 Allotment 7,000, Yes December 18, 1998 Allotment 5, Yes February 23, 1999 Allotment 6,232, Yes 44,449, Date of / purchase/ transfer Nature of issue November 06, 1996 Nature of considerat ion All the held by our Promoters were fully paidup at the time of their respective s. A. Details of Promoters contribution lockedin for three years The which are being lockedin are eligible for computation of Promoters contribution in accordance with the provisions of the SEBI ICDR Regulations. Pursuant to Regulation 36(a) of the SEBI ICDR Regulations, an aggregate of 20% of the fully diluted postoffer paid up Share capital of our Company held by our Promoters shall be considered as minimum Promoters contribution and shall be lockedin for a period of three years from the date of Allotment. GAIL and BGAPH, have, pursuant to letters dated November 12, 2015 and November 9, 2015, respectively, given consent to include such number of held by them as may constitute 20% of the fully diluted postoffer equity share capital of our Company as Promoters contribution and have agreed not to sell, transfer, charge, pledge or otherwise encumber in any manner the Promoters contribution from the date of the Draft Red Herring Prospectus, until the commencement of the lockin period specified above, or for such other time as required under SEBI ICDR Regulations. GAIL has confirmed to our Company and the BRLMs that the acquisition of (constituting the 20% of the fully diluted postoffer equity share capital of our Company) has been financed from their internal accruals and no loans or financial assistance from any bank or financial institution has been availed for such purpose. Further, BGAPH has confirmed to our Company and the BRLMs that the acquisition of the (constituting the 20% of the fully diluted postoffer equity share capital of our Company) has been financed by BG Asia Pacific Pte Limited (a subsidiary of BGAPH), a company incorporated under the Companies Act (Cap. 50), Singapore, with its principal place of business being at 8 Marina View, #1103, Asia Square Tower 1, , Singapore. Details of the held by our Promoters, which will be subject to lockin for three years from the date of Allotment are: 65 Modified Date: 13Jun2016

17 Sr. No. Name of the Promoter 1. GAIL 2. BGAPH Date of / transfer or when the were made fully paid up November 6, 1996 November 6, 1996 Percentage of Number of Face value (`) lockedin Issue/acquisition price per Share (`) 9,877,780 9,877,780 19,755,560 Nature of Nature of consideration PreOffer capital PostOffer capital The minimum Promoters Contribution has been brought in to the extent of not less than the specified minimum lot and from the persons defined as promoter under the SEBI ICDR Regulations. All offered as minimum Promoters contribution were fully paid up at the time of their issue. The that are being lockedin are not, and will not be, ineligible for computation of Promoters Contribution under Regulation 33 of the SEBI ICDR Regulations. In this computation, as per Regulation 33 of the SEBI ICDR Regulations, our Company confirms that the lockedin do not, and shall not, consist of: (i) The acquired during the preceding three years for consideration other than cash and revaluation of assets or capitalisation of intangible assets or bonus shares out of revaluations reserves or unrealised profits or bonus shares which are otherwise ineligible for computation of Promoters Contribution; (ii) acquired during the preceding one year, at a price lower than the price at which the are being offered to the public in the Offer; (iii) issued to the Promoters during the preceding one year upon conversion of a partnership firm; and (iv) held by the Promoters that are subject to any pledge. All the held by the Promoters are held in dematerialised form. B. Details of lockedin for one year In terms of Regulation 37 of SEBI ICDR Regulations and in addition to the above (forming part of the Promoters Contribution) that are lockedin for three years, the entire preoffer share capital of our Company, will be lockedin for a period of one year from the date of Allotment in this Offer, excluding the that are Allotted pursuant to the Offer. C. Lock in of allotted to Anchor Investors, if any Allotted to Anchor Investors in the Anchor Investor Portion shall be lockedin for a period of 30 days from the date of Allotment. D. Other requirements in respect of lockin held by our Promoters which are locked in for a period of one year may be pledged only with scheduled commercial banks or public financial institutions as collateral security for loans granted by such banks or financial institutions provided that the pledge of the is one of the terms of the sanction of the loan. Further, the constituting 20% of the fully diluted postoffer capital of our Company held by the Promoters that are lockedin for a period of three years from the date of Allotment of in the Offer, may be pledged only if, in addition to complying with the aforesaid conditions, the loan has been granted by the banks or financial institutions for the purpose of financing one or more Objects of the Offer. The held by persons other than the Promoters prior to the Offer and lockedin may be transferred to any other person holding the which are lockedin subject to continuation of the lockin in the hands of the transferees for the remaining period and compliance with the SEBI Takeover Regulations, as 66 Modified Date: 13Jun2016

18 applicable. Further, held by the Promoters may be transferred to and among the Promoter Group or to a new promoter or persons in control of our Company subject to continuation of the lockin in the hands of the transferees for the remaining period and compliance with the SEBI Takeover Regulations, as applicable. 67 Modified Date: 13Jun2016

19 7. Shareholding Pattern of our Company The table below represents the shareholding pattern of our Company as on the date of this Red Herring Prospectus: Table I Summary of Statement holding of specified securities (B) ('C) (C2) 1 4,44,49,990 4,44,49, ,44,49,960 4,44,49, ,877, ,777,778 No of shareho lders No of shares underlying Depository Receipts Promoter & Promoter group GAIL (India) Limited BG Asia Pacific Holdings Pte. Limited 1 4,44,49,990 4,44,49, ,44,49,960 4,44,49,960 Individuals Public Non Promoter Non Public Government of Maharashtra Individuals (C 1) As a % of total shares held (b) Number of equity shares held in dematerial ized form Number of Voting Rights held in each class of securities No. of Partly paid up equity shares held Category of shareholder (A) Shareholding as a % of total no. of shares (calculated as per SCRR, 1975) a % of (A+B+C2) No. of fully paid up equity shares held No of Voting Rights Class Class X Y as a % of (A+B+C) No (a) 1 9,877,778 9,877, C1) underlying DRs C2) held by Employee Trusts nos shares held Number of Locked in shares 8 98,777,778 98,777,778 8,88,99, Modified Date: 13Jun2016

20 1) a) b) c) d) 2) a) b) c) Indian Individuals/ Hindu undivided Family Central Government/ State Governments Financial Institutions/B anks Any other (specify) Body Corporate GAIL (INDIA) LIMITED Sub (A) (1) Foreign Individuals (Non Resident Individuals/ Foreign Individuals Government Institutions (XIII ) No of underlying outstanding convertible Shareholding securities as a % assuming (includingfull convertible Warrants ) (X) securities (as a percentage of Num diluted share No(a) capital) (XI)ber = (VII)+(X) as a of % As a % of Lock of A+B+C2 total ed in shares shar Num held (b) No(a) es ber (XII) of As a % of Lock total ed in shares shar held (b) es Shareholding calculate as per SCRR 1957 As a % of (A+B+C2) Class X VIII Class Y Number of Voting Rights held in each class of securities (IX) No of Voting Rights as a % of Voting rights (A+B+C) Partly paid up equity shares held (V) No of shares underlying Depository Receipts (VI) nos shares held (VII= IV+V+VI) No. of fully paid up equity shares held (IV) No of shareholders (III) Category of shareholder (I) PAN (II) Table II Statement showing shareholding pattern of the Promoter and Promoter group Number of equity shares held in dematerializ ed form (XIV) 1 4,44,49,990 4,44,49, ,44,49, ,44,49,990 4,44,49, ,44,49, Modified Date: 13Jun2016