CREDITACCESS GRAMEEN LIMITED - Kotak Investment...

DRAFT RED HERRING PROSPECTUS

Dated: January 24, 2018

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

Please read Section 32 of the Companies Act, 2013

100% Book Built Offer

CREDITACCESS GRAMEEN LIMITED

Our Company was incorporated as Sanni Collection Private Limited (“SCPL”) on June 12, 1991 at Calcutta, West Bengal, India as a private limited company under the Companies Act, 1956. In

February 2007, the entire shareholding of SCPL was acquired by certain trustees of T. Muniswamappa Trust (“TMT”), a public charitable trust engaged in the business of providing micro loans

in Karnataka. At the time of the acquisition, SCPL also held a certificate of registration as a non-deposit taking NBFC dated March 30, 1998. Subsequently, in October 2007, the microfinance

business being operated under TMT (including all associated assets, liabilities, goodwill, receivables, loan assets, intellectual property and the brand name “Grameen Koota”) was transferred to

SCPL. Subsequent to the acquisition of SCPL and the transfer of the microfinance business of TMT to SCPL, SCPL was rebranded under the “Grameen” name, and pursuant to a resolution of the

shareholders of SCPL, its name was changed from SCPL to Grameen Financial Services Private Limited (“GFSPL”). A fresh certificate of incorporation consequent upon change of name by the

Registrar of Companies, West Bengal on March 14, 2008, post which the Reserve Bank of India (“RBI”) granted a certificate of registration dated July 28, 2009 reflecting the change of name.

Subsequently, the RBI granted a fresh certificate of registration dated February 6, 2012 for registration as an NBFC under Section 45 IA of the Reserve Bank of India Act, 1934. Our Company

was granted NBFC-Microfinance Institution (“NBFC-MFI”) status by the RBI with effect from September 5, 2013. Subsequently, pursuant to a resolution passed by the shareholders of our

Company, the name of our Company was changed to Grameen Koota Financial Services Private Limited, and a fresh certificate of incorporation consequent upon change of name was issued by

the RoC on November 13, 2014. Further, a fresh certificate of registration consequent upon change of name was issued to our Company by the RBI on December 16, 2014. Subsequently, our

Company was converted into a public limited company pursuant to a special resolution passed by our Shareholders at the EGM held on November 27, 2017 and the name of our Company was

changed to Grameen Koota Financial Services Limited (“GFSL”). A fresh certificate of incorporation consequent upon conversion to a public limited company was issued by the RoC on December

18, 2017. Subsequently, pursuant to a resolution passed by the shareholders of our Company at the EGM held on January 2, 2018, the name of our Company was changed to CreditAccess Grameen

Limited, and a fresh certificate of incorporation consequent upon change of name was issued by the RoC on January 12, 2018. Subsequently, the RBI granted a fresh certificate of registration

dated January 19, 2018, bearing registration number B – 02.00252 for registration as an NBFC under Section 45 IA of the Reserve Bank of India Act, 1934 under the name “CreditAccess Grameen

Limited”. For further details, see “History and Certain Corporate Matters” on page 151.

Registered and Corporate Office: New No. 49 (Old No. 725), 46th Cross, 8th Block, Jayanagar, Next to Rajalakshmi Kalyan Mantap, Bangalore 560 071, Karnataka, India

Tel: +91 80 2263 7300; Fax: +91 80 2664 3433

Contact Person: Darshana Kothari, Company Secretary and Compliance Officer; E-mail: [email protected]; Website: www.grameenkoota.org

Corporate Identity Number: U51216KA1991PLC053425

OUR PROMOTER: CREDITACCESS ASIA N.V.

INITIAL PUBLIC OFFER OF UP TO [●] EQUITY SHARES OF FACE VALUE OF ₹ 10 EACH (“EQUITY SHARES”) OF CREDITACCESS GRAMEEN LIMITED (“COMPANY” OR “ISSUER”) FOR CASH AT A PRICE OF ₹ [●] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ₹ [●] PER EQUITY SHARE) AGGREGATING UP TO ₹ [●] MILLION (“OFFER”) COMPRISING A FRESH ISSUE OF UP TO [●] EQUITY SHARES AGGREGATING UP TO ₹ 9,000 MILLION BY OUR COMPANY (“FRESH ISSUE”) AND AN OFFER FOR SALE OF UP TO 10,281,317 EQUITY SHARES BY OUR PROMOTER, CREDITACCESS ASIA N.V. (“PROMOTER SELLING SHAREHOLDER” AND SUCH

OFFERED SHARES, THE “OFFERED SHARES”) AGGREGATING UP TO ₹ [●] MILLION (“OFFER FOR SALE”). THE OFFER SHALL CONSTITUTE [●] % OF OUR POST-OFFER PAID-UP EQUITY SHARE CAPITAL.

THE FACE VALUE OF EQUITY SHARES IS ₹ 10 EACH AND THE OFFER PRICE IS [●] TIMES THE FACE VALUE OF THE EQUITY SHARES. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY AND THE PROMOTER SELLING SHAREHOLDER IN CONSULTATION WITH THE BRLMS AND WILL BE

ADVERTISED IN [●] EDITIONS OF [●], [●] EDITIONS OF [●] AND [●] EDITIONS OF [●] (WHICH ARE WIDELY CIRCULATED ENGLISH, HINDI AND KANNADA DAILY

NEWSPAPERS RESPECTIVELY, KANNADA BEING THE REGIONAL LANGUAGE OF KARNATAKA, WHERE OUR REGISTERED OFFICE IS LOCATED) 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 THE PURPOSE OF UPLOADING ON THEIR RESPECTIVE WEBSITES.

In case of any revision in the Price Band, the Bid/ Offer Period will be extended by at least three additional Working Days after such revision in the Price Band, subject to the 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 BRLMs and at the terminals of the other members of the Syndicate.

The Offer is being made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”). The Offer is being made through the Book Building Process, in compliance with Regulation 26(1)

of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (“SEBI ICDR Regulations”), wherein not more than 50% of the Offer shall be allocated on a

proportionate basis to QIBs (“QIB Portion”), provided that our Company and the Promoter Selling Shareholder, in consultation with the BRLMs, may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis (“Anchor Investor Portion’’), at the Anchor Investor Allocation Price. At least 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 Anchor Investor Allocation Price. In the event of under-subscription, or non-allocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the QIB Portion. 5% of the Net QIB

Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the Net 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. However, if the aggregate demand from Mutual Funds is less than 5% of the Net QIB Portion, the balance Equity Shares

available for allocation in the Mutual Fund Portion will be added to the remaining Net QIB Portion for proportionate allocation to QIBs. Further, not less than 15% of the Offer shall be available for allocation on a proportionate

basis to Non-Institutional Bidders and not less than 35% of the 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 Bidders, other than Anchor Investors, shall mandatorily participate in this Offer through the 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 Offer through ASBA Process. For details, see “Offer Procedure” on page 251.

RISKS IN RELATION TO THE FIRST OFFER

This being the first public offer 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 and the Promoter Selling Shareholder, in consultation with the BRLMs, on the basis of the assessment of market demand for the Equity Shares by way of the Book Building Process, as stated under “Basis for Offer Price” on page 88) 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 “Risk Factors” on page 15.

ISSUER’S AND PROMOTER SELLING SHAREHOLDER’S 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 this 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. The Promoter Selling Shareholder accepts responsibility for and confirms that the statements specifically made or confirmed by the Promoter Selling Shareholder in this Draft Red Herring Prospectus to the extent of information specifically pertaining to itself and the Offered Shares, are true and correct in all material aspects and are not misleading in any material respect.

LISTING

The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on BSE and NSE. Our Company has received an ‘in-principle’ approval from BSE and 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 signed 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 395.

BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE OFFER

ICICI Securities Limited

ICICI Centre H.T. Parekh Marg

Churchgate, Mumbai 400 020

Maharashtra, India Tel : +91 22 2288 2460

Fax : +91 22 2282 6580

E-mail: [email protected] Investor grievance E-mail:

[email protected]

Website: www.icicisecurities.com

Contact Person: Shekhar Asnani/ Anurag Byas/ Vishal Kanjani

SEBI Registration No.: INM000011179

Credit Suisse Securities (India) Private

Limited Ceejay House, 9th Floor

Plot F, Shivsagar Estate

Dr. Annie Besant Road Worli, Mumbai 400 018

Maharashtra, India

Tel: +91 22 6777 3885 Fax: +91 22 6777 3820

E-mail:list.grameenkootaipo@credit-

suisse.com

Investor grievance E-mail: list.igcellmer-

[email protected] Website: www.credit-suisse.com Contact Person: Abhay Agarwal

SEBI Registration No.: MB/

INM000011161

IIFL Holdings Limited

10th Floor, IIFL Centre Kamala City, Senapati Bapat Marg

Lower Parel (West), Mumbai 400

013 Maharashtra, India

Tel: +91 22 4646 4600

Fax: +91 22 2493 1073 E-mail: [email protected]

Investor grievance E-mail:

[email protected]

Website: www.iiflcap.com Contact Person: Vishal Bangard/

Pranay Doshi


Kotak Mahindra Capital Company

Limited 1st Floor, 27 BKC, Plot No. 27

“G” Block, Bandra Kurla Complex

Bandra (East), Mumbai 400 051 Maharashtra, India

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


Karvy Computershare Private Limited

Karvy Selenium, Tower B Plot 31-32, Gachibowli

Financial District, Nanakramguda

Hyderabad 500 032 Tel: +91 40 6716 2222

Fax: +91 40 2343 1551

E-mail: [email protected] Investor grievance E-mail:

[email protected]

Website: http:// 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 and the Promoter Selling Shareholder may, in consultation with the BRLMs, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor Investor

Bidding Date shall be one Working Day prior to the Bid/ Offer Opening Date (2) Our Company and the Promoter Selling Shareholder may, in consultation with the BRLMs, 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

http://www.grameenkoota.org/

TABLE OF CONTENTS

SECTION I: GENERAL ........................................................................................................................................................... 1

DEFINITIONS AND ABBREVIATIONS .............................................................................................................................. 1 CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA AND

CURRENCY OF PRESENTATION ..................................................................................................................................... 10 FORWARD-LOOKING STATEMENTS ............................................................................................................................. 13

SECTION II: RISK FACTORS ............................................................................................................................................. 15

SECTION III: INTRODUCTION.......................................................................................................................................... 42

SUMMARY OF INDUSTRY ................................................................................................................................................ 42 SUMMARY OF OUR BUSINESS ........................................................................................................................................ 46 SUMMARY OF FINANCIAL INFORMATION .................................................................................................................. 53 THE OFFER .......................................................................................................................................................................... 59 GENERAL INFORMATION ................................................................................................................................................ 60 CAPITAL STRUCTURE ...................................................................................................................................................... 68 OBJECTS OF THE OFFER ................................................................................................................................................... 85 BASIS FOR OFFER PRICE .................................................................................................................................................. 88 STATEMENT OF SPECIAL TAX BENEFITS..................................................................................................................... 91

SECTION IV: ABOUT OUR COMPANY ............................................................................................................................ 93

INDUSTRY OVERVIEW ..................................................................................................................................................... 93 OUR BUSINESS ................................................................................................................................................................. 123 REGULATIONS AND POLICIES ...................................................................................................................................... 145 HISTORY AND CERTAIN CORPORATE MATTERS ..................................................................................................... 151 OUR MANAGEMENT ....................................................................................................................................................... 156 OUR PROMOTER AND PROMOTER GROUP ................................................................................................................ 172 OUR GROUP COMPANIES ............................................................................................................................................... 175 RELATED PARTY TRANSACTIONS .............................................................................................................................. 176 DIVIDEND POLICY ........................................................................................................................................................... 177 SELECTED STATISTICAL INFORMATION ................................................................................................................... 178

SECTION V: FINANCIAL INFORMATION .................................................................................................................... 187

FINANCIAL STATEMENTS ............................................................................................................................................. 187 SUMMARY OF CERTAIN SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IND AS ....................... 188 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

............................................................................................................................................................................................. 191 FINANCIAL INDEBTEDNESS ......................................................................................................................................... 216

SECTION VI: LEGAL AND OTHER INFORMATION .................................................................................................. 218

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS .......................................................................... 218 GOVERNMENT AND OTHER APPROVALS .................................................................................................................. 226 OTHER REGULATORY AND STATUTORY DISCLOSURES ....................................................................................... 228

SECTION VII: OFFER INFORMATION .......................................................................................................................... 245

TERMS OF THE OFFER .................................................................................................................................................... 245 OFFER STRUCTURE ......................................................................................................................................................... 248 OFFER PROCEDURE ........................................................................................................................................................ 251

SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION ................................................................. 287

SECTION IX: OTHER INFORMATION ........................................................................................................................... 353

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ............................................................................. 353 DECLARATION ................................................................................................................................................................. 355

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, rules, guidelines or policies

shall be to such legislation, act or regulation, rules, guidelines and policies as amended from time to time. In case of any

inconsistency between the definitions given below and the definitions contained in the General Information Document, the

definitions given below shall prevail.

The words and expressions used but not defined herein shall have the meaning as is assigned to such terms under the Companies

Act, the SEBI ICDR Regulations, the SCRA, the Depositories Act or the rules and regulations made thereunder, unless the

context otherwise indicates or implies.

General Terms

Term Description

“our Company”, “the

Company”, or “the Issuer”

CreditAccess Grameen Limited, a public limited company incorporated under the Companies Act, 1956 and

having its registered office at New No. 49 (Old No. 725), 46th Cross, 8th Block, Jayanagar, Next to

Rajalakshmi Kalyan Mantap, Bangalore 560 071, Karnataka, India

“we”, “us” or “our” Unless the context otherwise indicates or implies, refers to our Company

Company and Promoter Selling Shareholder Related Terms

Term Description

2008 ESPP The Grameen Financial Services Private Limited 2008 Employee Stock Purchase Plan

Active Customers Customers that currently have loans outstanding with our Company

ALM Committee The asset liability management committee of our Company

Articles of Association/ AoA Articles of Association of our Company, as amended

Audit Committee The audit committee of our Board as described in “Our Management” on page 156

Board/ Board of Directors Board of Directors of our Company, including a duly constituted committee thereof

BDOs Business Development Officers

BTA Business transfer agreement dated October 2, 2007 amongst certain trustees of TMT and SCPL

CAA CreditAccess Asia N.V.

CCD Compulsorily convertible debentures of our Company of nominal value ₹ 1,000,000 each CCPS Compulsorily convertible cumulative preference shares of our Company of face value of ₹ 10 each CGT Compulsory Group Training

CROs Customer Relationship Officers

CSR Committee The corporate social responsibility committee of our Board as described in “Our Management” on page 156

Customers Active customers and other customers (i) that have been onboarded by our Company but have not yet been

provided a loan; or that have fully repaid their loans but continue to be part of their JLG

DTDs Debenture Trust Deeds entered into by our Company

Director(s) Director(s) of our Company

Eligible Employee (s) An employee of our Company, and Directors, who qualify for issue of options under the ESOP Plan and who

fulfill the conditions as decided by the Nomination and Remuneration Committee

Equity Shares Equity Shares of our Company of face value of ₹ 10 each ESOP Plan GKFSPL Employees Stock Option Plan – 2011, as amended

Independent Directors Independent directors on our Board, and eligible to be appointed as independent directors under the provisions

of the Companies Act and the Listing Regulation. For details of the Independent Directors, see “Our

Management” on page 156

IPO Committee IPO Committee of our Board constituted pursuant to the resolution of our Board dated October 4, 2017

Key Management Personnel Key management personnel of our Company in terms of Regulation 2(1)(s) of the SEBI ICDR Regulations

and Section 2(51) of the Companies Act, 2013 and as disclosed in “Our Management” on page 156

MD & CEO/ Executive

Director

The managing director and chief executive officer of our Company, Udaya Kumar Hebbar

Nomination and

Remuneration Committee

The nomination and remuneration committee of our Board as described in “Our Management” on page 156

Nominee Directors Directors appointed on our Board by identified Shareholders in accordance with the AoA

Memorandum of

Association/ MoA

Memorandum of Association of our Company, as amended

Offered Shares Up to 10,281,317 Equity Shares offered by the Promoter Selling Shareholder in the Offer for Sale as per its

board resolution dated January 16, 2018 (as amended by its board resolution dated January 22, 2018)

Order Order dated November 22, 2017 issued by the National Company Law Tribunal approving the scheme of

amalgamation of MV Microfin Private Limited with our Company

Promoter The promoter of our Company namely, CAA

Promoter Group The entities constituting the promoter group of our Company in terms of Regulation 2(1)(zb) of the SEBI

ICDR Regulations. For details, see “Our Promoter and Promoter Group” on page 172

2

Term Description

Promoter Selling

Shareholder

Our Promoter, CAA

Registered Office Registered and corporate office of our Company located at New No. 49 (Old No. 725), 46th Cross, 8th Block,

Jayanagar, Next to Rajalakshmi Kalyan Mantap, Bangalore 560 071, Karnataka, India

Registrar Agreement The agreement dated January 19, 2018, entered into amongst our Company, the Promoter Selling Shareholder

and the Registrar to the Offer, in relation to the responsibilities and obligations of the Registrar to the Offer

pertaining to the Offer

Registrar of Companies/

RoC

Registrar of Companies, Bangalore situated at Karnataka, India

Restated Financial

Statements

The restated financial information of our Company which comprises of the restated summary statement of

assets and liabilities, the restated summary statement of profits and losses and the restated summary statement

of cash flows as at and for the Financial Years ended March 31, 2017, March 31, 2016, March 31, 2015,

March 31, 2014, March 31, 2013 and for the six month period ended September 30, 2017, together with the

annexures thereto

SCPL Sanni Collection Private Limited

Scheme of Amalgamation Scheme of amalgamation filed pursuant to Section 230-232 of the Companies Act, 2013 before the National

Company Law Tribunal for the amalgamation of MV Microfin Private Limited with our Company

Shareholders Equity shareholders of our Company from time to time

Stakeholders’ Relationship

Committee

The stakeholders’ relationship committee of our Board as described in “Our Management” on page 156

Statutory Auditors Statutory auditors of our Company, namely, S.R. Batliboi & Co. LLP, Chartered Accountants

TMT T. Muniswamappa Trust

Offer Related Terms

Term Description

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

Bid/ 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 the Offered Shares by the Promoter Selling Shareholder pursuant to the Offer for Sale to the successful

Bidders

Allotment Advice Note or advice or intimation of Allotment sent to the successful 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

Allottee A successful Bidder to whom the Equity Shares are Allotted

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 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 and the Promoter Selling Shareholder, in

consultation with the BRLMs

Anchor Investor Bidding

Date

The day, one Working Day prior to the Bid/ Offer Opening Date, on which Bids by Anchor Investors shall be

submitted and allocation to Anchor Investors shall be completed

Anchor Investor Form The form used by an Anchor Investor to Bid in the Anchor Investor Portion in accordance with the

requirements specified under the SEBI ICDR Regulations and the Red Herring Prospectus

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 and the Promoter Selling Shareholder, in

consultation with the BRLMs

Anchor Investor Pay-in Date In case of the Anchor Investor Offer Price being higher than the Anchor Investor Allocation Price, the date

as mentioned in the CAN but not later than two Working Days after the Bid/ Offer Closing Date

Anchor Investor Portion Up to 60% of the QIB Portion which may be allocated by our Company and the Promoter Selling Shareholder,

in consultation with the BRLMs, to Anchor Investors on a discretionary basis in accordance with the SEBI

ICDR Regulations

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

Application Supported by

Blocked Amount or ASBA

An application, whether physical or electronic, used by Bidders, other than Anchor Investors, to make a Bid

authorising an SCSB to block the Bid Amount in the ASBA Account

ASBA Account An account maintained with an SCSB and specified in the ASBA Form submitted by ASBA Bidders for

blocking the Bid Amount mentioned in the Bid cum Application Form

ASBA Bid A Bid made by an ASBA Bidder

ASBA Bidder(s) Bidders (other than Anchor Investors) in the Offer who intend to submit their Bid through the ASBA process

ASBA Form An application form, whether physical or electronic, used by ASBA Bidders to make Bids which will be

considered as the application for Allotment in terms of the Red Herring Prospectus and the Prospectus

Banker(s) to the Offer Collectively, the Escrow Collection Bank(s), the Public Offer Account Bank(s) and the Refund Bank(s)

3

Term Description

Basis of Allotment Basis on which Equity Shares will be Allotted to successful Bidders under the Offer and which is described

in “Offer Procedure” on page 251

Bid An indication to make an offer during the Bid/ Offer Period by a Bidder (other than Anchor Investor), or on

the Anchor Investor Bidding Date by an Anchor Investor pursuant to submission of the Bid cum Application

Form to subscribe to or purchase the Equity Shares at a price within the Price Band, including all revisions

and modifications thereto as permitted under the SEBI ICDR Regulations in accordance with the Red Herring

Prospectus and Bid cum Application Form

The term “Bidding” shall be construed accordingly

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 for the Issue, which shall be notified in [●] editions of the English

national daily newspaper [●], [●] editions of the Hindi national daily newspaper [●], and [●] editions of the

Kannada daily newspaper [●], each with wide circulation. Our Company may, in consultation with the

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

Date in accordance with the SEBI Regulations which shall also be notified by advertisement in the same

newspapers where the Bid/ Offer Opening Date was published, in accordance with the SEBI ICDR

Regulations

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 ASBA Bidder and Anchor Investor

Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form and payable by the Bidder or

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 Form or the ASBA Form, as the context may require

Bid Lot [●] Equity Shares

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 for the Offer, which shall be notified in [●] editions of the English

national daily newspaper [●], [●] editions of the Hindi national daily newspaper [●], and [●] editions of the

Kannada daily newspaper [●], each with wide circulation, and in case of any revision, the revised Bid/ Offer

Opening Date also to be notified on the website and terminals of the Syndicate and SCSBs, as required under

the SEBI ICDR Regulations

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 Bidders can submit their Bids, including any revisions

thereof

Bidding Centres Centres at which the Designated Intermediaries shall accept the ASBA Forms, i.e. Designated Branches for

SCSBs, Specified Locations for the Syndicate, Brokers 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 terms of which the

Offer is being made

Book Running Lead

Managers or BRLMs

The book running lead managers to the Offer namely, ICICI Securities Limited, Credit Suisse Securities

(India) Private Limited, IIFL Holdings Limited and Kotak Mahindra Capital Company Limited

Broker Centres Broker centres of the Registered Brokers where Bidders can submit the Bid cum Application Forms to

Registered Brokers

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)

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 Bidding Date

Cap Price The higher end of the Price Band, above which the Offer Price and Anchor Investor Offer Price will not be

finalised and above which no Bids will be accepted (including any revisions thereof)

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

Collecting Depository

Participant or CDP

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

Credit Suisse Credit Suisse Securities (India) Private Limited

Cut-Off Price Offer Price, which shall be any price within the Price Band finalised by our Company and the Promoter

Selling Shareholder in consultation with the BRLMs

Only Retail Individual Bidders 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 The demographic details of the Bidders such as their respective addresses, occupation, PAN, name of the

Bidder’s father/ husband, investor status, MICR Code and bank account details

Designated Branches Such branches of the SCSBs which shall collect the Bid cum Application Forms used by the ASBA Bidders,

a list of which is available on the website of SEBI at http:// www.sebi.gov.in/ sebiweb/ other/

OtherAction.do?doRecognisedFpi=yes&intmId=35, updated from time to time, or at such other website as

may be prescribed by SEBI from time to time

Designated CDP Locations Such locations of the CDPs where ASBA Bidders can submit the ASBA Forms, a list of which, along with

names and contact details of the Collecting Depository Participants eligible to accept ASBA Forms are

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

www.nseindia.com/ )

http://www.bseindia/http://www.nseindia/

4

Term Description

Designated Date The date on which the Escrow Collection Banks transfer funds from the Escrow Accounts, and the SCSBs

transfer funds from the ASBA Accounts, to the Public Offer Account or the Refund Account, as appropriate,

in terms of the Red Herring Prospectus

Designated Intermediaries Collectively, the members of the Syndicate, Sub-Syndicate/ agents, SCSBs, Registered Brokers, the CDPs

and RTAs, who are authorised to collect Bid cum Application Forms from the Bidders, in relation to the Offer

Designated RTA Locations Such centres of the RTAs where Bidders can submit the Bid cum Application Forms. The details of such

Designated RTA locations, along with names and contact details of the RTAs are available on the respective

websites of the Stock Exchanges (www.bseindia.com and https:// www.nseindia.com/ ) Designated Stock Exchange [●]

Draft Red Herring

Prospectus or DRHP

This draft red herring prospectus dated January 24, 2018, 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, including any addenda or corrigenda thereto

Eligible FPIs FPIs from such jurisdictions outside India where it is not unlawful to make an offer / invitation under the

Offer and in relation to whom the Bid cum Application Form and the Red Herring Prospectus constitutes an

invitation to subscribe to the Equity Shares

Eligible NRIs NRIs from such 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 purchase the Equity Shares offered there

Escrow Account Account opened with the Escrow Collection Bank(s) and in whose favour Anchor Investors can transfer

money through direct credit or NACH or NEFT or RTGS in respect of the Bid Amount when submitting a

Bid

Escrow Agreement The agreement dated [] amongst our Company, the Promoter Selling Shareholder, the Registrar to the Offer,

the BRLMs, the Syndicate Members, the Escrow Collection Bank(s) and the Refund Bank(s) for collection

of the Bid Amounts and where applicable, remitting refunds (if any) on the terms and conditions thereof

Escrow Collection Bank A bank, which is a clearing member and registered with SEBI as a banker to an offer and with whom the

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

First/ sole Bidder The Bidder whose name appears first in the Bid cum Application Form or the Revision Form and in case of

joint Bids, whose name appears 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 and which shall not

be less than the face value of Equity Shares

Fresh Issue The fresh issue of up to [] Equity Shares aggregating up to ₹ 9,000 million by our Company pursuant to the terms of the Red Herring Prospectus

General Information

Document/ GID

The General Information Document for investing in public issues, 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

circular (CIR/ CFD/ POLICYCELL/ 11/ 2015) dated November 10, 2015, the circular (CIR/ CFD/ DIL/ 1/

2016) dated January 1, 2016 and (SEBI/ HO/ CFD/ DIL/ CIR/ P/ 2016/ 26) dated January 21, 2016, notified

by SEBI and included in “Offer Procedure” on page 251

ICICI Securities ICICI Securities Limited

IIFL Holdings IIFL Holdings Limited

Kotak Kotak Mahindra Capital Company Limited

Monitoring Agency [●]

Mutual Fund Portion 5% of the Net QIB Portion or [] Equity Shares which shall be available for allocation to Mutual Funds only

on a proportionate basis, subject to valid Bids being received at or above the Offer Price

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

Regulations, 1996

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

For further information about use of the Offer proceeds and the Offer expenses, see “Objects of the Offer” on

page 85

Net QIB Portion The portion of the QIB Portion less the number of Equity Shares Allotted to the Anchor Investors

Non-Institutional Bidders All Bidders, that are not QIBs or Retail Individual Investors, who have Bid for Equity Shares for an amount

of more than ₹ 200,000 Non-Institutional Portion The portion of the Offer being not less than 15% of the Offer consisting 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 FPIs, NRIs, FVCIs and multilateral and

bilateral development financial institutions

Offer The initial public offer of up to [●] Equity Shares for cash at a price of ₹ [●], aggregating up to ₹ [●] million comprising the Fresh Issue and the Offer for Sale

Offer Agreement The agreement dated January 24, 2017 amongst our Company, the Promoter Selling Shareholder and the

BRLMs, pursuant to which certain arrangements are agreed to in relation to the Offer

Offer for Sale The offer for sale of up to 10,281,317 Equity Shares aggregating up to ₹ [●] million by the Promoter Selling Shareholder in terms of the Red Herring Prospectus

For further details in relation to Promoter Selling Shareholder, see “The Offer” on page 59

Offer Price The final price at which Equity Shares will be Allotted in terms of the Red Herring Prospectus

http://www.bseindia/

5

Term Description

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

the BRLMs on the Pricing Date in accordance with the Book-Building Process and the Red Herring

Prospectus

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 revisions thereof

The Price Band and the minimum Bid Lot size for the Offer will be decided by our Company and the Promoter

Selling Shareholder in consultation with the BRLMs and will be advertised at least five Working Days prior

to the Bid/ Offer Opening Date, in [●] editions of the English national daily newspaper [●], [●] editions of

the Hindi national daily newspaper [●] and [●] editions of the Kannada daily newspaper [●], each with wide

circulation at least five Working Days prior to the Bid/ Offer Opening Date with the relevant financial ratios

calculated at the Floor Price and at the Cap Price, and shall be made available to the Stock Exchanges for the

purpose of uploading on their respective websites

Pricing Date The date on which our Company and the Promoter Selling Shareholder in consultation with the BRLMs, will

finalise the Offer Price

Prospectus The prospectus to be filed with the RoC on or after the Pricing Date in accordance with Section 26 of the

Companies Act, 2013, and the SEBI ICDR Regulations containing, inter alia, the Offer Price, the size of the

Offer and certain other information, including any addenda or corrigenda thereto

Public Offer Account(s) Account(s) to be opened with the Public Offer Account Bank(s) under Section 40(3) of the Companies Act,

2013, to receive monies from the Escrow Account and ASBA Accounts on the Designated Date

Public Offer Account

Bank(s)

The bank(s) with whom the Public Offer Account(s) will be opened for collection of Bid Amounts from the

Escrow Account and ASBA Accounts on the Designated Date, in this case being [●]

QIB Portion The portion of the Offer (including the Anchor Investor Portion) being not more than 50% of the Offer or [●]

Equity Shares to be Allotted to QIBs on a proportionate basis

Qualified Institutional

Buyers or QIBs

Qualified Institutional Buyers as defined under Regulation 2(1)(zd) of the SEBI ICDR Regulations

Red Herring Prospectus or

RHP

The Red Herring Prospectus to be issued in accordance with Section 32 of the Companies Act, 2013 and the

SEBI ICDR Regulations, which will not have complete particulars of the price at which the Equity Shares

shall be allotted (including any addenda or corrigenda thereto) and which shall be filed with the RoC at least

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

RoC on or after the Pricing Date

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

Amount shall be made

Refund Bank(s) The Banker(s) to the Offer with whom the Refund Account(s) will be opened, in this case being [●]

Refunds through electronic

transfer of funds

Refunds through NACH, direct credit, NEFT, RTGS or unblocking ASBA Accounts, as applicable

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

Members of the Syndicate and eligible to procure Bids at the Broker Centres in terms of Circular No. CIR/

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

Registrar to the Offer/

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

Retail Individual Bidder(s)/

Retail Individual

Investor(s)/ RII(s)/ RIB(s)

Bidders (including HUFs applying through their kartas and Eligible NRIs) whose Bid Amount for Equity

Shares in the Offer is not more than ₹ 200,000 in any of the bidding options in the Offer

Retail Portion The portion of the Offer being not less than 35% of the Offer or [●] Equity Shares, available for allocation to

Retail Individual Bidders in accordance with the SEBI ICDR Regulations

Revision Form Form used by the Bidders, to modify the quantity of the Equity Shares or the Bid Amount in any of their Bid

cum Application Forms or any previous Revision Form(s), as applicable

QIB Bidders and Non-Institutional Bidders are not allowed to modify their Bids (in terms of quantity of

Equity Shares or the Bid Amount) at any stage. Retail Individual Bidders can revise their Bids during the Bid/

Offer Period and withdraw their Bids until the Bid/ Offer Closing Date

Self-Certified Syndicate

Bank(s) or SCSB(s)

The banks registered with SEBI, which offer the facility of ASBA, a list of which is available on the website

of SEBI at https:// www.sebi.gov.in/ sebiweb/ other/ OtherAction.do?doRecognised=yes and updated from

time to time and at such other websites as may be prescribed by SEBI from time to time

Share Escrow Agent Share Escrow agent appointed pursuant to the Share Escrow Agreement, in this case being, [●]

Share Escrow Agreement The agreement dated [●] amongst the Promoter Selling Shareholder, our Company and the Share Escrow

Agent in connection with the deposit of the Offered Shares by the Promoter Selling Shareholder in a share

escrow account and credit of such Equity Shares to the demat account of the Allottees in accordance with the

Basis of Allotment

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

Stock Exchanges BSE and the NSE

Sub-Syndicate centres The sub-syndicate members, if any, appointed by the BRLMs and the Syndicate Members, to collect Bid cum

Application Forms and Revision Forms

Syndicate Agreement The agreement dated [●] amongst the BRLMs, the Syndicate Members, our Company and the Promoter

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

6

Term Description

Syndicate Members Intermediaries registered with SEBI who are permitted to carry out activities as an underwriter, namely, [●]

Syndicate or Members of the

Syndicate

The BRLMs and the Syndicate Members

Underwriters [●]

Underwriting Agreement The agreement dated [●] among the Underwriters, our Company and the Promoter Selling Shareholder to be

entered into on or after the Pricing Date but prior to filing of Prospectus

Working Day All days other than second and fourth Saturdays of the month, Sundays or public holidays, on which

commercial banks in Mumbai are open for business; provided however, with reference to (a) the time period

between the announcement of Price Band the Bid/ Offer Closing Date, ‘Working Day’ shall mean all days,

except Saturday, Sunday and public holidays on which commercial banks in Mumbai are open for business;

and (b) 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

Technical/ Industry Related Terms/ Abbreviations/ Terms relating to our business

Term Description

ALM Asset Liability Management

ANBC Adjusted Net Bank Credit

ATM Automated Teller Machine

AUM Assets Under Management

CIBIL Credit Information Bureau (India) Limited

CIC Credit Information Companies

CBS Core Banking Solutions

CRAR Capital-to-risk weighted assets ratio

CRISIL CRISIL Limited

CRR Cash Reserve Ratio

CSR Corporate Social Responsibility

Cost to Income ratio Operating expense (includes administration expenses, personnel expenses including staff welfare,

depreciation & amortization and bank charges) divided by NII

DB Kit Disbursement Kit

D/ E Debt/ Equity ratio

ECS Electronic Clearing System

eKYC A paperless KYC process, wherein the identity and address of the customer are verified electronically

EMI Equated Monthly Instalment

FDI Policy Consolidated FDI Policy Circular of 2017, issued by the Department of Industrial Policy and Promotion,

Ministry of Commerce and Industry, Government of India, dated August 28, 2017

Gross Non-Performing

Asset or Gross NPA or

GNPA

Gross NPA represents the non-performing portfolio loans outstanding (gross) as of the last day of the relevant

period

Gross NPA Ratio Gross NPA Ratio represents Gross NPA as a percentage of the total portfolio loans outstanding (gross) as of

the last day of the relevant period

GL Group Lending

GLP Gross Loan Portfolio

Gross AUM It represents receivables under financing activities as well as assets securitized/ assigned as of the end of the

relevant period

GRC Grievance Redressal Cell

GRT Group Recognition Test

HO Head Office

IL Individual Lending

JLG Joint Liability Group

KRI Key Risk Indicator

KYC Know-Your-Customer

MFI Micro Finance Institution

MFIN Micro Finance Institution Network

MSE Micro & Small Enterprises

MSME Micro, Small and Medium Enterprises

MUDRA Micro Units Development and Refinance Agency

Master Directions Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking

Company (Reserve Bank) Directions, 2016, as amended from time to time

NBFC Non-Banking Financial Company

NBFC – MFI Non-Banking Financial Company – Micro Finance Institution

NBFC- ND-SI Systemically Important Non-Deposit Accepting NBFC

NII Net Interest Income

NIM Net Interest Margin

Net AUM It represents the Gross AUM less assets securitized/ assigned as of the end of the relevant period

7

Term Description

Net Non-Performing Asset

or Net NPA or NNPA

Net NPA represents the non-performing portfolio loans outstanding (net) as of the last day of the relevant

period i.e. non-performing portfolio loans outstanding (gross) as reduced by the provision for non-performing

assets

Net NPA Ratio Net NPA represents the Net NPA as a percentage of total portfolio loans outstanding as reduced by the

provision for non-performing assets as of the last day of the relevant period

NPS National Pension Scheme

NNPA Net Non-Performing Asset

NOF Net Owned Funds

Operating expense ratio Operating expense (includes administration expenses, personnel expenses including staff welfare,

depreciation & amortization and bank charges) divided by NII

OQC Operational Quality Control

OSP Outstanding Portfolio

PAR Portfolio at Risk

PD Personal Discussion

PSL Priority Sector Lending

RM Risk Manager

RoAA Return on Average Assets

RoAE Return on Average Equity

RO Risk Officer

RPCs Regional Processing Centres

RRB Regional Rural Bank

RWA Risk Weighted Asset

Rural Area Areas outside the district headquarters or state capitals

SLR Statutory Liquidity Ratio

SRO Self-Regulatory Organisation

Urban Area District headquarters or state capitals

Wilful Defaulter A person categorized as a wilful defaulter by any bank or financial institution or consortium, in accordance

with the guidelines of willful defaulters issued by the RBI and includes an issuer whose director or promoter

is categorized as such

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

AML Anti-money laundering

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

Banking Regulation Act Banking Regulation Act, 1949

Bn/ bn Billion

BSE BSE Limited

CAGR Compounded Annual Growth Rate

CDSL Central Depository Services (India) Limited

CIN Corporate Identity Number

Companies Act Companies Act, 1956 and Companies Act, 2013, as applicable

Companies Act, 1956 Companies Act, 1956 (without reference to the provisions thereof that have ceased to have effect upon

notification of the sections of the Companies Act, 2013) along with the relevant rules made thereunder

Companies Act, 2013 Companies Act, 2013, to the extent in force pursuant to the notification of the Notified Sections, along with

the relevant rules made thereunder

Depositories Collectively, the NSDL and the CDSL

Depositories Act The Depositories Act, 1996

DIN Director Identification Number

DP ID Depository Participant’s Identification

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

ECB External Commercial Borrowing

EGM Extraordinary General Meeting

EPS Earnings Per Share

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

in the form prescribed under the applicable law

FCNR Foreign Currency Non-Resident

FDI Foreign Direct Investment

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

Financial Year/ Fiscal/

Fiscal Year/ FY

Unless stated otherwise, the period of 12 months ending March 31 of that particular year

FIPB The erstwhile Foreign Investment Promotion Board

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

8

Term Description

FVCI Foreign Venture Capital Investors as defined and registered under the SEBI FVCI Regulations

GDP Gross Domestic Product

GIR General Index Register

GoI/ Government Government of India

GST Goods and Services Tax

HUF Hindu Undivided Family

ICAI The Institute of Chartered Accountants of India

IFRS International Financial Reporting Standards

IPC The Indian Penal Code, 1860, as amended

Income Tax Act The Income Tax Act, 1961

India Republic of India

Ind (AS) Indian Accounting Standards (Ind AS)

Indian Accounting Standard

Rules

The Companies (Indian Accounting Standards) Rules, 2015

Indian GAAP Generally Accepted Accounting Principles in India

IPO Initial public offering

IRDA Insurance Regulatory and Development Authority of India

IST Indian Standard Time

IT Information Technology

MCA Ministry of Corporate Affairs, Government of India

MoU Memorandum Of Understanding

Mn/ mn Million

N.A./ NA Not Applicable

NABARD National Bank for Agricultural and Rural Development

NAV Net Asset Value

NBFC-MFI Directions Master Circular – ‘Non-Banking Financial Company – Micro Finance Institutions’ (NBFC-MFI) Directions

dated July 1, 2015, updated as on April 20, 2016

NEFT National Electronic Fund Transfer

NR Non-Resident

NRE Account Non-Resident External accounts

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

NRO Account Non-Resident Ordinary accounts

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

PAN Permanent Account Number

PAT Profit After Tax

RBI Reserve Bank of India

RBI Act Reserve Bank of India Act, 1934, as amended

RHP Red Herring Prospectus

RTGS Real Time Gross Settlement

SCRA Securities Contracts (Regulation) Act, 1956, as amended

SCRR Securities Contracts (Regulation) Rules, 1957, as amended

SEBI Securities and Exchange Board of India constituted under the SEBI Act, 1992

SEBI Act Securities and Exchange Board of India Act 1992, as amended

SEBI AIF Regulations Securities and Exchange Board of India (Alternative Investments Funds) Regulations, 2012, as amended

SEBI ESOP Regulations Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, as amended

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 Investors) Regulations, 2000, as amended

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, as amended

SEBI Mutual Fund

Regulations

Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended

SEBI Portfolio Manager

Regulations

Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993, as amended

SEBI Stock Broker

Regulations

Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992, as amended

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

Securities Act U.S. Securities Act, 1933

9

Term Description

SIDBI Small Industries Development Bank of India

Stamp Act Indian Stamp Act, 1899

State Government The government of a state in India

Stock Exchanges Collectively, the BSE and the NSE

Systemically Important

NBFC

A non-banking financial company registered with the Reserve Bank of India and having a net-worth of more

than ₹ 5,000 million as per the last audited financial statements STT Securities Transaction Tax

Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

TAN Tax deduction account number

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

USD/ US$ United States Dollars

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

Notwithstanding the foregoing, terms in “Statement of Special Tax Benefits”, “Objects of the Offer”, “Financial Statements”,

“Basis for Offer Price”, “Industry Overview”, “Regulations and Policies”, “History and Certain Corporate Matters”,

“Financial Indebtedness” “Outstanding Litigation and Material Development”, “Offer Procedure” and “Main Provisions of

Articles of Association” on pages 91, 85, 187, 88, 93, 145, 151, 258, 260, 293 and 329 respectively, shall have the meaning

given to such terms in such sections.

10

CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA AND

CURRENCY OF PRESENTATION

Certain Conventions

Unless otherwise specified or the context otherwise requires, all references in this Draft Red Herring Prospectus to “India” are

to the Republic of India, all references to “USA”, “US” and “United States” are to the United States of America, all references

to “Netherlands” are to the Netherlands, all references to “Philippines” are to the Republic of the Philippines, all references to

“Vietnam” are to the Socialist Republic of Vietnam, all references to “Thailand” are to the Kingdom of Thailand, all references

to “Italy” are to the Italian Republic, all references to “Luxembourg” are to the Grand Duchy of Luxembourg and all references

to “Indonesia” are to the Republic of Indonesia.

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 or unless the context requires otherwise, and to the extent applicable, the financial data 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 and all percentage figures, unless otherwise specified, have been rounded off to the

second decimal place and accordingly there may be consequential changes in this Draft Red Herring Prospectus on account of

rounding adjustments.

Our Company’s Financial Year commences on April 1 and ends on March 31 of the next year; accordingly, all references to a

particular “Financial Year”/ “Fiscal”/ “FY”, unless stated otherwise, are to the 12 month period ended on March 31 of that year.

We prepare our financial statements in accordance with Indian GAAP, which differs in some material respects from IFRS and

U.S. GAAP. Accordingly, the degree to which our Restated Financial Statements, as included in this Draft Red Herring

Prospectus, will provide meaningful information is entirely dependent on the reader’s level of familiarity with the Companies

Act, 2013, Indian GAAP and the SEBI ICDR Regulations. Any reliance by persons not familiar with Indian accounting practices

on the financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited. We have not made

any attempt to quantify or identify the impact of the differences between Indian GAAP and IND (AS) as applied to our Restated

Financial Statements and it is urged that you consult your own advisors regarding the impact of difference, if any, on financial

data included in this Draft Red Herring Prospectus. We have only included a summary of qualitative differences of certain

items between Indian GAAP and Ind (AS) in this Draft Red Herring Prospectus. For details in connection with risks, see “Risk

Factors – We may be adversely impacted by the transition to IND (AS) for periods beginning from April 1, 2018” on page 39.

Indian GAAP also differs in certain material respects from Ind (AS) which will be applicable to our Company for financial

periods commencing April 1, 2018. Given that Ind (AS) differs in many respects from Indian GAAP, our financial statements

prepared and presented in accordance with Ind AS relating to any period subsequent to April 1, 2018, may not be comparable

to our historical financial statements prepared under Indian GAAP. In the event that any of our historical financial statements,

including our financial statements for Fiscal Year 2017 are required to be also prepared in accordance with Ind (AS), such

historical Ind (AS) financial statements may vary from our historical India GAAP financial statements, and there can be no

assurance that such variation will not be material. See “Summary of Certain Significant differences between Indian GAAP and

Ind AS” and “Risk Factors - We may be adversely impacted by the transition to IND (AS) for periods beginning from April 1,

2018” on pages 230 and 39.

Any percentage amounts, as set forth in “Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of

Financial Conditions and Results of Operations” on pages 15, 123 and 233 respectively, and elsewhere in this Draft Red Herring

Prospectus, to the extent applicable, have been calculated on the basis of our Restated Financial Statements prepared in

accordance with the Companies Act and Indian GAAP and restated in accordance with the SEBI ICDR Regulations.

Currency and Units of Presentation

All references to:

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

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

“Euro” or “EUR” or “€” are to Euro, the official currency of the European Union.

11

Our Company has presented certain numerical information in this Draft Red Herring Prospectus in “million” or “billion” units,

or in absolute number where the number have been too small to present in million unless as stated, otherwise, as applicable.

One million represents 1,000,000, one billion represents 1,000,000,000 and one crore represents 10,000,000. However, figures

sourced from third party industry sources may be expressed in denominations other than millions or may be rounded off to

other than two decimal points in the respective sources, and such figures have been expressed in this Draft Red Herring

Prospectus in such denominations or rounded off to such number of decimal points as prescribed in such respective sources.

Exchange Rates

This Draft Red Herring Prospectus contains conversions 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 or at all.

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

the USD (in Rupees per USD):

Currency As on March 31,

2013

(₹ )

As on March 31,

2014

(₹ )

As on March 31,

2015(1)

(₹ )

As on March 31,

2016(1)

(₹ )

As on March 31,

2017(1)

(₹ )

As on September 30,

2017

(₹ ) 1 USD 54.39 60.10 62.59 66.33 64.84 65.35

1 EUR 69.54 82.58 67.51 75.10 69.25 77.06 (Source: RBI website)

(1) In the event that March 31 of any of the respective years is a public holiday, the previous calendar day not being a public holiday has been considered

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 and sources.

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 BRLMs or any of their affiliates or advisors. The data used in

these sources may have been reclassified 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 - Third party industry and industry-related statistical data in this Draft Red Herring

Prospectus may be incomplete, incorrect or unreliable” on page 32. Accordingly, investment decisions should not be based

solely on such information.

The sections “Summary of Industry”, “Summary of our Business”, “Industry Overview”, “Our Business” and “Management’s

Discussion and Analysis of Financial Conditions and Results of Operations” of this Draft Red Herring Prospectus contain data

and statistics from the report titled “CRISIL Research - Industry Report on the Micro Finance Industry, January 2018” prepared

by CRISIL Research, which is subject to the following disclaimer:

CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing this Report based on the

information obtained by CRISIL from sources which it considers reliable (Data). However, CRISIL does not guarantee the

accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results

obtained from the use of Data / Report. This Report is not a recommendation to invest / disinvest in any company covered in

the Report. CRISIL especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/

distributors of this Report. CRISIL Research operates independently of, and does not have access to information obtained by

CRISIL’s Ratings Division / CRISIL Risk and Infrastructure Solutions Limited (CRIS), which may, in their regular operations,

obtain information of a confidential nature. The views expressed in this Report are that of CRISIL Research and not of CRISIL’s

Ratings Division / CRIS. No part of this Report may be published / reproduced in any form without CRISIL’s prior written

approval.

In accordance with the SEBI ICDR Regulations, “Basis for Offer Price” on page 88 includes information relating to our peer

group companies. Such information has been derived from publicly available sources, and neither we, nor the BRLMs have

independently verified such information.

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 the business of our Company is conducted, and methodologies and

assumptions may vary widely among different industry sources.

12

Further, in accordance with Regulation 51A of the SEBI ICDR Regulations, and SEBI Listing Regulations, as applicable, 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.

Time

Unless otherwise stated, all references to time in this Daft Red Herring Prospectus are to Indian Standard Time.

Promoter Selling Shareholder’s statements

Only statements and undertakings which are specifically “confirmed” or “undertaken” by the Promoter Selling Shareholder, as

the case may be, in this Draft Red Herring Prospectus shall, severally and not jointly, deemed to be statements and undertakings

made by the Promoter Selling Shareholder. All other statements and/ or undertakings in this Draft Red Herring Prospectus shall

be statements and undertakings made by our Company even if the same relates to the Promoter Selling Shareholder.

13

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 Company’s strategies, objectives, plans 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. For the reasons described below, we

cannot assure investors that the expectations reflected in these forward-looking statements will prove to be correct. Therefore,

investors are cautioned not to place under reliance on such forward-looking statements and not to regard such statements as a

guarantee of future performance.

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 industry in which our

Company has businesses and its ability to respond to them, its ability to successfully implement its strategy, its growth and

expansion, technological changes, its exposure to market risks, general economic and political conditions in India and globally

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 laws, regulations and taxes and changes in competition in its industry.

Important factors that could cause actual results to differ materially from our Company’s expectations include, but are not

limited to, the following:

our operations being concentrated in Karnataka and Maharashtra;

our microfinance loans being unsecured and are susceptible to certain operation and credit risks;

ability to manage our growth, financial, accounting, administration and infrastructure effectively;

our portfolio and management of non-performing assets and/ or our provisions;

interest rate risk and volatility in interest rates;

our credit ratings our borrowing costs and access to capital and loan markets;

ability to comply with certain financial covenants in our financing documents;

our ability to access capital at competitive rates for our growth;

stability of our internal accounting systems and management of operational errors;

maintenance and expansion of our branch network;

our ability to compete effectively in our businesses;

our underwriting and risk management policies; and

our brand recall.

For further discussion of factors that could cause the actual results to differ from the expectations, see “Risk Factors”, “Our

Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 15, 123

and 233, 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 investors that the expectations reflected in these forward-looking statements will prove to be correct. Given

these uncertainties, investors 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 Promoter Selling Shareholder, the

BRLMs 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 to fruition.

14

In accordance with regulatory requirements, our Company and the BRLMs will ensure that investors in India are informed of

material developments from the date of registration of the Red Herring Prospectus with the RoC until the receipt of final listing

and trading approvals from the Stock Exchanges. The Promoter Selling Shareholder will ensure that it will keep our Company,

the BRLMs and investors informed of material developments in relation to statements and undertakings made by the Promoter

Selling Shareholder with respect to itself and the Offered Shares in the Red Herring Prospectus and the Prospectus until the

time of the grant of final listing and trading approvals by the Stock Exchanges.

15

SECTION II: RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully consider each of the following risk factors

and all other information set forth in this Draft Red Herring Prospectus, including the risks and uncertainties described below,

before making an investment in the Equity Shares. You should read this section together with "Industry Overview", "Our

Business", "Selected Statistical Information", "Regulations and Policies" and "Management's Discussion and Analysis of

Financial Condition and Results of Operations" on pages 93, 123, 178, 145 and 233, respectively, as well as the financial

statements, including the notes thereto, and other financial information included elsewhere in this Draft Red Herring

Prospectus. You should consult your tax, financial and legal advisors about the particular consequences to you of an investment

in the Equity Shares.

The risks and uncertainties described below are not the only risks that we currently face. Additional risks and uncertainties not

presently known to us or that we currently believe to be immaterial may also materially adversely affect our business, prospects,

financial condition and results of operations and cash flows. If any or some combination of the following risks, or other risks

that we do not currently know about or believe to be material, actually occur, our business, financial condition and results of

operations and cash flows could suffer, the trading price of, and the value of your investment in, our Equity Shares could

decline, and you may lose all or part of your investment. In making an investment decision, you must rely on your own

examination of our Company and the terms of this Offer, including the merits and risks involved.

This Draft Red Herring Prospectus also contains forward-looking statements that involve risks and uncertainties. Our results

could differ materially from such forward-looking statements as a result of certain factors, including the considerations

described below and elsewhere in this document.

Unless otherwise indicated or the context requires otherwise, the financial information included herein are based on our

Restated Financial Statements as of and for the years ended March 31, 2013, 2014, 2015, 2016 and 2017, and as of and for the

six months ended September 30, 2017 included in this Draft Red Herring Prospectus. For further information, see "Financial

Statements" on page 187.

INTERNAL RISK FACTORS

Risks Relating to our Business.

1. Our operations are concentrated in Karnataka and Maharashtra and any adverse developments in these states could have an adverse effect on our business, results of operations, financial condition and cash flows.

As of September 30, 2017, we conducted our operations through 440 branches in India, of which 177 branches were

located in Karnataka and 133 branches were located in Maharashtra. As of September 30, 2017, 59.02% of our Gross

AUM originated in Karnataka and 28.39% of our Gross AUM originated in Maharashtra. In the event of a regional

slowdown in the economic activity in these states, or any other developments including political unrest, disruption or

sustained economic downturn that make our products in these states less beneficial, we may experience an adverse

impact on our financial condition and results of operations, which are largely dependent on the performance and other

prevailing conditions affecting the economies of these states. The market for our products in these states may perform

differently from, and be subject to, market and regulatory developments that are different from the requirements in

other states of India. There can be no assurance that the demand for our products will grow or will not decrease in the

future in these states. Further, in the past, there have been instances of irregularities in the functioning of certain NBFCs

in the southern states of India, specifically, Andhra Pradesh (for further details, see "Industry Overview" on page 93).

While NBFC-MFIs are currently regulated by the RBI, the respective state government of these states may pass laws

which impact the business of NBFC-MFIs. There can be no as

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