Mail Stop 3561
August 2, 2005
Mr. Ram Mukunda, President and CEO
India Globalization Capital, Inc.
4336 Montgomery Ave
Bethesda, Maryland 20814
Re: India Globalization Capital, Inc.
Registration Statement on Form S-1
Amendments No. 1 and 2 filed July 11 and 19, 2005
File No. 333-124942
Dear Mr. Mukunda:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter. Please note that the page numbers
referred to below refer to the numbering of the non-EDGAR marked
copy.
General
1. We note your response to our previous comment three. Please
further disclose, wherever appropriate, that the existing
stockholders will not be eligible to exercise their conversion
rights
as to any shares held by them as a result of their undertaking to
vote all of their shares in accordance with the majority of the
shares of common stock in favor of the business combination.
Please
revise accordingly the disclosure in the "Conflicts of Interest"
section on page 48.
2. We note your response to our previous comment four and we
reissue
the comment. We note that you disclose reimbursements and fees to
be
paid to the existing stockholders and/or officers and directors
prior
to the consummation of a business combination. Please also
include
all various fees, reimbursements and other cash flows being paid
or
eligible to be paid to the existing stockholders and/or officers
and
directors in this offering that are subsequent to a business
combination. Such cash flows should be identified by type or
source
of cash flow, as well as the amount, if known. We may have
further
comment.
3. We note your response to our previous comment eight. Please
explain the basis for your disclosure that the securities will be
listed on the American Stock Exchange. Please explain how the
company will satisfy each criterion for at least one of the
listing
standards on the exchange. Please include a discussion of all of
the
quantitative standards, e.g., number of public shareholders.
4. We note your response to our previous comment nine and we
reissue
the comment. Discuss in an appropriate place the company`s
expectation as to whether the current management will remain
associated with the company after the consummation of the business
combination and any plan to implement. Detail how the company
intends to accomplish this, referencing the necessary transaction
structure, valuation determinations, exchange ratios, and other
contingencies which must be addressed and structured so as to
ensure
that the company`s management will be able to maintain its
position
with the company post-business combination.
Prospectus Summary, page 1
5. We note your response to our previous comment fourteen and the
additional disclosure regarding Mega Ace Consultancy. Please
include
the publication(s) where the information provided by them can be
found. Also disclose in the prospectus, the qualifications of
Mega
Ace Consultancy as an expert.
6. In the summary section, we note that you make the following
assertion regarding market conditions: "The Indian economy has
posted a growth rate of approximately 6.8% since 1994." Please
provide us with reasonable support for the assertion and summarize
the support in the prospectus.
Risk Factors, page 10
7. Please update the information provided in risk factor nineteen
to
provide more current information as to the number of blank check
companies who are in registration and who have completed initial
public offerings; and the amount of funds currently in trust for
each
such category of transaction.
Risks associated with companies with primary operations in India,
page 19
8. We note that you have deleted the first risk factor from this
subsection. It appears that the risk regarding political,
economic,
social and other factors affecting the company`s ability to
achieve
its business objectives would be important information to
investors.
Please advise why the company has removed this risk in its
entirety.
Use of Proceeds, page 23
9. In the use of proceeds table, in the use of net proceeds not
held
in trust, we note the line item of $400,000 for "[l]egal,
accounting,
and other expenses attendant to the due diligence investigations,
structuring and negotiations of a business combination." We also
note another line item of $300,000 allocated to due diligence.
Please explain why there are two separate amounts for due
diligence.
Also explain these expenses and reconcile these expenses with the
disclosure on page 33 that "Ferris, Baker Watts Inc. will perform
certain advisory services . . . assisting us in the negotiation .
..
.. and preparing a due diligence package." We note that the fee
allocated to Ferris, Baker Watts Inc. is from the proceeds held in
trust. Please also reconcile theses expenses with the disclosure
on
page 29 in the MD&A section.
10. In this section and the MD&A section, please explain in
greater
detail the allocation of $870,000 for working capital.
11. In this section on page 23, we note the statement that "[a]ny
amount not paid as consideration to the sellers of the target
business may be used to finance operations of the target
business."
Please reconcile this statement with the added disclosure in the
MD&A
section and your response to our previous comment 30 that
"proceeds
of the offering held in the trust will be used for the following:
.. .
..(2) to pay the fees and costs due to Ferris, Baker Watts, Inc. as
financial advisor to the Company, (3) to pay any finder`s or other
professional fees and costs, and (4) to pay fees and costs the
Company may incur in connection with any debt or equity financing
relating the business combination."
Management`s Discussion and Analysis of Financial Condition and
Results of Operations, page 28
12. We note your response to our previous comment 30 and your
added
disclosure on page 29. Please explain in greater detail the "the
payment of finder`s fees or professional fees and costs." Is
there a
maximum amount for any of these fees or costs? Please also
explain
in greater detail the nature of the "[p]ayment of any fees and
costs
the Company may incur in connection with any equity or debt
financing
relating to the business combination."
Proposed Business, page 30
Effecting a Business Combination, page 32
13. On page 33, under the subheading "We have not identified a
target
business," please disclose whether the finder`s fee and the
advisory
fee will be paid from the funds held in trust.
* * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Maureen Bauer at (202) 551-3237 or Terence
O`Brien at (202) 551-3355 if you have questions regarding comments
on
the financial statements and related matters. Please contact
Thomas
Kluck at (202) 551-3233 or Mike Karney, who supervised the review
of
your filing, at (202) 551-3847 with any other questions.
Sincerely,
John Reynolds
Assistant Director
cc: Michael Blount, Esq.
Fax: (312) 269-8869
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Mr. Ram Mukunda
India Globalization Capital, Inc.
August 2, 2005
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