CSB BANK LIMITED (Formerly known as The …...RED HERRING PROSPECTUS November 13, 2019 Please read...
Transcript of CSB BANK LIMITED (Formerly known as The …...RED HERRING PROSPECTUS November 13, 2019 Please read...
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RED HERRING PROSPECTUS
November 13, 2019
Please read Section 32 of the Companies Act, 2013
100% Book Built Offer
CSB BANK LIMITED (Formerly known as The Catholic Syrian Bank Limited)
Our Bank was incorporated on November 26, 1920 under the Indian Companies Act, 1913 as ‘The Catholic Syrian Bank Limited’. A fresh certificate of incorporation under the Companies Act, 1956 was
issued by the Registrar of Companies, Kerala at Ernakulum (“RoC”) on April 14, 1987. The Shareholders of our Bank approved the change of the name of our Bank from ‘The Catholic Syrian Bank
Limited’ to ‘CSB Bank Limited’ through a postal ballot resolution dated May 4, 2019. RBI through its letter bearing reference number DBR.PSBD.No.8231/16.01.060/2018-19 dated April 1, 2019
conveyed its ‘no objection’ in terms of Section 49B of the Banking Regulation Act to the change of name of our Bank from ‘The Catholic Syrian Bank Limited’ to ‘CSB Bank Limited’. Subsequently, a
fresh certificate of incorporation under the Companies Act, 2013 was issued by the RoC on June 10, 2019 and a fresh license bearing no. MUM-147 dated June 28, 2019 was issued by the RBI under our
new name to carry on the banking business in India, in lieu of our previous license dated June 19, 1969. The name of our Bank was changed to ‘CSB Bank Limited’ from “The Catholic Syrian Bank
Limited”, in the second schedule of the RBI Act with effect from June 10, 2019. For details of changes in the registered office of our Bank, see “History and Certain Corporate Matters” beginning on
page 199.
Registered and Corporate Office: ‘CSB Bhavan’, Post Box No. 502, St. Mary’s College Road, Thrissur 680 020, Kerala, India
Contact Person: Mr. Sijo Varghese, Company Secretary and Compliance Officer; Telephone no.: +91 487 2333 020, +91 487 2338 764; Facsimile: +91 487 2333 170
E-mail: [email protected]; Website: www.csb.co.in; Corporate Identification Number: U65191KL1920PLC000175
*Our Bank 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.
**Our Bank 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. ***IIFL Securities Limited is involved as a merchant banker only in marketing of the Offer.
OUR PROMOTER: FIH MAURITIUS INVESTMENTS LTD
INITIAL PUBLIC OFFERING OF UP TO [●] EQUITY SHARES OF FACE VALUE OF ₹ 10 EACH (“EQUITY SHARES”) OF CSB BANK LIMITED (“OUR BANK” OR “THE BANK” OR
“THE ISSUER”) FOR CASH AT A PRICE OF UP TO ₹ [●] PER EQUITY SHARE (INCLUDING SHARE PREMIUM OF ₹ [●] PER EQUITY SHARE) (THE “OFFER PRICE”)
AGGREGATING UP TO ₹ [●] MILLION (THE “OFFER”) COMPRISING A FRESH ISSUE OF [●] EQUITY SHARES BY OUR BANK AGGREGATING UP TO ₹ 240 MILLION (“FRESH
ISSUE”) AND AN OFFER FOR SALE OF UP TO 19,778,298 EQUITY SHARES AGGREGATING TO ₹ [●] MILLION BY THE SELLING SHAREHOLDERS, (“OFFER FOR SALE”). THE
OFFER WILL CONSTITUTE [●]% OF THE POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR BANK.
THE MINIMUM BID LOT WILL BE DECIDED BY OUR BANK IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS AND THE PRICE BAND WILL BE DECIDED
BY OUR BANK IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS AND WILL BE ADVERTISED IN ALL EDITIONS OF FINANCIAL EXPRESS, ALL
EDITIONS OF JANSATTA AND ALL KERALA EDITIONS OF DEEPIKA (WHICH ARE ENGLISH, HINDI AND MALAYALAM NEWSPAPERS, RESPECTIVELY, MALAYALAM
BEING THE REGIONAL LANGUAGE OF KERALA, WHERE THE REGISTERED OFFICE OF OUR BANK IS LOCATED), EACH WITH WIDE CIRCULATION, AT LEAST TWO
WORKING DAYS PRIOR TO THE BID/OFFER OPENING DATE AND SHALL BE MADE AVAILABLE TO BSE LIMITED (“BSE”) AND THE NATIONAL STOCK EXCHANGE OF
INDIA LIMITED (“NSE”, TOGETHER WITH BSE, THE “STOCK EXCHANGES”) FOR 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. In cases of force majeure, banking strike or similar circumstances, our Bank may, for reasons to be recorded in writing, extend the Bid/Offer Period for a minimum of three
Working Days, 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, shall be widely disseminated by notification
to the Stock Exchanges, by issuing a press release, and also by indicating the change on the respective websites of the BRLMs and at the terminals of the members of the Syndicate and by intimation to
Designated Intermediaries.
This Offer is being made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”) read with Regulation 31 of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (the “SEBI ICDR Regulations”). This Offer is being made through the Book Building Process in accordance with
Regulation 6(2) of the SEBI ICDR Regulations wherein atleast 75% of the Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”) (the “QIB Portion”),
provided that our Bank, in consultation with the BRLMs may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion shall be
reserved for domestic Mutual Funds, subject to valid Bids being received from the domestic Mutual Funds at or above the Anchor Investor Allocation Price. 5% of the QIB Portion (excluding the Anchor
Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB
Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Offer Price. If at least 75% of the Offer cannot be Allotted to QIBs, the entire
application money shall be refunded forthwith. Further, not more than 15% of the Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not more than 10% 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 from them at or above the Offer Price. All Bidders,
other than Anchor Investors, are mandatorily required to participate in the Offer through the Application Supported by Blocked Amount (“ASBA”) process by providing details of their respective bank
accounts and UPI ID in case of RIIs, as applicable, which will be blocked by the Self Certified Syndicate Banks (“SCSBs”), as the case may be. Anchor Investors are not permitted to participate in the
Anchor Investor Portion through the ASBA process. For details, see “Offer Procedure” beginning on page 624.
RISK IN RELATION TO THE FIRST OFFER
This being the first public offer of our Bank, there has been no formal market for the Equity Shares of our Bank. The face value of the Equity Shares is `10. The Offer Price/Floor Price/Price Band 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 of our Bank
nor regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISK
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 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 Bank 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 Red Herring Prospectus. Specific attention of the investors is invited to “Risk Factors” beginning on page 23.
ISSUER’S AND SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY
Our Bank, having made all reasonable inquiries, accepts responsibility for and confirms that this Red Herring Prospectus contains all information with regard to our Bank and the Offer, which is material
in the context of the Offer, that the information contained in this Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and
intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Red Herring Prospectus as a whole or any of such information or the expression of any
such opinions or intentions misleading in any material respect. Each of the Selling Shareholders, severally and not jointly, accepts responsibility for and confirms that the statements made or confirmed by
such Selling Shareholders in this Red Herring Prospectus to the extent of information specifically pertaining to itself as a Selling Shareholder and its portion of the Equity Shares offered in the Offer and
assume responsibility that such statements are true and correct in all material respects and not misleading in any material respect.
LISTING
The Equity Shares offered through this Red Herring Prospectus are proposed to be listed on the Stock Exchanges. Our Bank has received ‘in-principle’ approvals from the BSE and the NSE for the listing
of the Equity Shares pursuant to letters dated September 18, 2019 and September 20, 2019, respectively. For the purposes of the Offer, the Designated Stock Exchange shall be NSE. A signed copy of this
Red Herring Prospectus and the Prospectus shall be filed with 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 this Red Herring Prospectus until the Bid/ Offer Closing Date, see “Material Contracts and Documents for Inspection” beginning on page 652. BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE OFFER
Axis Capital Limited
1st floor, Axis House
C-2 Wadia International Centre
Pandurang Budhkar Marg
Mumbai 400 025
Telephone no.: +91 22 4325 2183
E-mail: [email protected]
Investor Grievance e-mail: [email protected]
Website: www.axiscapital.co.in
Contact Person: Ms. Simran Gadh
SEBI Registration No.: INM000012029
IIFL Securities Limited***
10th Floor, IIFL Centre
Kamala City, Senapati Bapat Marg
Lower Parel (West), Mumbai – 400 013
Telephone no.: +91 22 4646 4600
E-mail:[email protected]
Investor Grievance e-mail:[email protected]
Website: www.iiflcap.com
Contact Person: Mr. Pinak Bhattacharyya / Mr. Ujjaval Kumar
SEBI Registration No.: INM000010940
Link Intime India Private Limited
C-101, 1st Floor, 247 Park
L.B.S Marg, Vikhroli (West)
Mumbai 400 083
Telephone no.: +91 22 4918 6200
E-mail: [email protected]
Investor Grievance e-mail: [email protected]
Website: www.linkintime.co.in
Contact Person: Mr. Shanti Gopalkrishnan
SEBI Registration No.: INR000004058
BID/OFFER OPENS ON* November 22, 2019
BID/OFFER CLOSES ON** November 26, 2019
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TABLE OF CONTENTS
SECTION I: GENERAL........................................................................................................................................................... 3
DEFINITIONS AND ABBREVIATIONS ............................................................................................................................. 3 CERTAIN COVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ........................... 15 FORWARD-LOOKING STATEMENTS ............................................................................................................................ 17SUMMARY OF THE OFFER DOCUMENT ....................................................................................................................... 18
SECTION II: RISK FACTORS ............................................................................................................................................. 23
SECTION III: INTRODUCTION.......................................................................................................................................... 59
SUMMARY OF FINANCIAL INFORMATION ................................................................................................................. 59THE OFFER ......................................................................................................................................................................... 66 GENERAL INFORMATION ............................................................................................................................................... 67CAPITAL STRUCTURE...................................................................................................................................................... 75 OBJECTS OF THE OFFER .................................................................................................................................................. 98 BASIS FOR OFFER PRICE ............................................................................................................................................... 103 STATEMENT OF SPECIAL TAX BENEFITS.................................................................................................................. 107
SECTION IV: ABOUT OUR BANK ................................................................................................................................... 117
INDUSTRY OVERVIEW .................................................................................................................................................. 117 OUR BUSINESS ................................................................................................................................................................ 143 KEY REGULATIONS AND POLICIES IN INDIA ........................................................................................................... 185 HISTORY AND CERTAIN CORPORATE MATTERS .................................................................................................... 199 OUR MANAGEMENT ...................................................................................................................................................... 207 OUR PROMOTER, PROMOTER GROUP AND GROUP COMPANY............................................................................ 232DIVIDEND POLICY.......................................................................................................................................................... 237
SECTION V: FINANCIAL INFORMATION .................................................................................................................... 238
FINANCIAL STATEMENTS ............................................................................................................................................ 238 OTHER FINANCIAL INFORMATION ............................................................................................................................ 380 FINANCIAL INDEBTEDNESS......................................................................................................................................... 401MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................................................................................................................................................................... 403 SELECTED STATISTICAL INFORMATION .................................................................................................................. 437
SECTION VI: LEGAL AND OTHER INFORMATION ................................................................................................... 469
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ......................................................................... 469 GOVERNMENT AND OTHER APPROVALS ................................................................................................................. 539 OTHER REGULATORY AND STATUTORY DISCLOSURES ...................................................................................... 606
SECTION VII: OFFER INFORMATION........................................................................................................................... 616
TERMS OF THE OFFER.................................................................................................................................................... 616 OFFER STRUCTURE ........................................................................................................................................................ 620 OFFER PROCEDURE........................................................................................................................................................ 624 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES.................................................................... 642
SECTION VIII: DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES OF ASSOCIATION .. 643
MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ...................................................................................... 643
SECTION IX: OTHER INFORMATION ........................................................................................................................... 652
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ............................................................................ 652 DECLARATION ................................................................................................................................................................ 654
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SECTION I: GENERAL
DEFINITIONS AND ABBREVIATIONS
This Red Herring Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates or
implies, or unless otherwise specified, shall have the meaning as provided below, and references to any legislation,
statute, regulation, rules, guidelines or policies shall be to such legislation, statute, regulation, rule, guidelines or policy
as amended from time to time and any reference to a statutory provision shall include any subordinate legislation made
from time to time under that provision.
The words and expressions used in this Red Herring Prospectus but not defined herein, shall have, to the extent
applicable, the meanings ascribed to such terms under the Companies Act, the SEBI ICDR Regulations, the SCRA, the
Depositories Act or the rules and regulations made thereunder.
Notwithstanding the foregoing, terms used in “Statement of Special Tax Benefits”, “Key Regulations and Policies in
India” “Financial Statements”, “Outstanding Litigation and Material Developments” and “Main Provisions of Articles
of Association” beginning on pages 107, 185, 238, 469 and 643, respectively, shall have the meaning ascribed to such
terms in these respective sections.
General terms
Term Description
“our Bank”, “the Bank” or “the
Issuer”
CSB Bank Limited (formerly known as The Catholic Syrian Bank Limited), a
banking company within the meaning of Section 5(c) of the Banking Regulation Act,
incorporated under the Indian
Companies Act, 1913 and having the CIN U65191KL1920PLC000175 and
registered and corporate office at CSB Bhavan, Post Box No. 502, St. Mary’s
College Road, Thrissur 680 020, Kerala.
“we”, “us”, or “our” Unless the context otherwise indicates or implies, our Bank.
Bank related terms
Term Description
2013 ESOS Scheme CSB Employee Stock Option Scheme, 2013
2019 ESOS Scheme CSB Employee Stock Option Scheme, 2019
Amended and Restated Investment
Agreement
Amended and Restated Investment Agreement dated October 15, 2018 entered into
between our Bank and FIHM.
“Articles of Association” or “AoA” Articles of Association of our Bank, as amended.
Audit Committee The audit committee of the Board of Directors, as described in “Our Management”
beginning on page 207.
“Auditors” or “Statutory Auditors” Statutory auditors of our Bank, namely, M/s. R G N Price & Co, Chartered
Accountants.
“Board” or “Board of Directors” Board of directors of our Bank or a duly constituted committee thereof.
“Chief Executive Officer” or
“CEO”
Chief executive officer of our Bank, Mr. Rajendran Chinna Veerappan.
“Chief Financial Officer” or
“CFO”
Chief financial officer of our Bank, Ms. Veluthattil Maheswari.
Company Secretary and
Compliance Officer
Company Secretary and Compliance Officer to the Offer, Mr. Sijo Varghese.
Corporate Social Responsibility
Committee
The corporate social responsibility committee of our Board, as described in “Our
Management” beginning on page 207.
CSB ESOS Trust A trust settled by our Bank under the provisions of the Indian Trust Act, 1882, by
way of trust deed dated May 20, 2019, for the purpose of administering the 2019
ESOS Scheme.
Director(s) Director(s) on the Board.
ESOS Schemes Collectively, the 2013 ESOS Scheme and 2019 ESOS Scheme.
Equity Shares Equity shares of our Bank of face value of ₹10 each.
Executive Director An executive director of our Bank.
FIHM FIH Mauritius Investments Ltd
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Term Description
Group Company(ies) In terms of the SEBI ICDR Regulations, the term “group companies”, includes (i)
such companies (other than promoter(s) and subsidiary(ies)) with which the relevant
issuer company had related party transactions during the period for which financial
information is disclosed, as covered under applicable accounting standards, and (ii)
any other companies considered material by the board of directors of the relevant
issuer company.
Accordingly, the Board pursuant to the Materiality Policy, has determined that other
than such companies with which there were related party transactions during the
period for which the Restated Financial Information are disclosed in this Red
Herring Prospectus, which are ‘group companies’, in terms of the SEBI ICDR
Regulations, a company shall be considered material and will, consequently, be
disclosed as a ‘group company’ in this Red Herring Prospectus if such company is a
member of the Promoter Group of our Bank and has entered into one or more
transactions with our Bank in the most recent audited period, the monetary value of
which transactions, individually or in the aggregate, exceed 10% of the total restated
revenue of our Bank (on a consolidated basis, to the extent applicable) for the most
recent audited period as per the Restated Financial Information of our Bank (on a
consolidated basis, to the extent applicable) disclosed in this Red Herring
Prospectus.
IPO Committee The IPO Committee of our Board, as described in “Our Management” beginning on
page 207.
Investment Agreement Investment Agreement dated February 20, 2018 entered into between our Bank and
FIHM as superseded and replaced by Amended and Restated Investment Agreement.
Independent Directors Independent directors on our Board. For details of the Independent Directors, see
“Our Management” beginning on page 207.
Investor Director(s) A Director on our Board appointed by FIHM pursuant to the Investment Agreement.
Key Managerial Personnel Key managerial personnel of our Bank in terms of Regulation 2(1) (bb) of the SEBI
ICDR Regulations and as disclosed in “Our Management” beginning on page 207.
“Managing Director” or “MD” The managing director of our Bank, Mr. Rajendran Chinna Veerappan.
Material Branches Branches of our Bank constituting (i) the top 25 branches, which are located in five
states and two union territories on the basis of their business contribution (advances
and deposits) as on September 30, 2019, and (ii) out of the remaining 11 states and
two union territories, top one branch identified from each of these remaining states
and union territories on the basis of their business contribution (advances and
deposits) as on September 30, 2019.
Materiality Policy The policy adopted by our Board on May 23, 2019, for identification of : (a)
material outstanding litigation proceedings; (b) Group Company; and (c) material
creditors, pursuant to the requirements of the SEBI ICDR Regulations and for the
purposes of disclosure in this Red Herring Prospectus.
“Memorandum of Association” or
“MoA”
Memorandum of Association of our Bank, as amended.
Nomination and Remuneration
Committee
The nomination and remuneration committee of our Board, as described in “Our
Management” beginning on page 207.
Non- executive Directors A Director not being an Executive Director.
Promoter Group The entities constituting the promoter group of our Bank in terms of Regulation 2(1)
(pp) of the SEBI ICDR Regulations, as disclosed in “Our Promoter, Promoter
Group and Group Company” beginning on page 232.
Promoter The promoter of our Bank, namely, FIH Mauritius Investments Ltd
“Registered Office” or “Registered
and Corporate Office”
The registered and corporate office of our Bank, located at CSB Bhavan, Post Box
No. 502, St. Mary’s College Road, Thrissur 680 020.
“Registrar of Companies” or
“RoC”
Registrar of Companies, Kerala at Ernakulam.
Risk Management Committee The risk management committee of the Board of Directors, as described in “Our
Management” beginning on page 207.
Restated Financial Information Restated Financial Information of our Bank comprising of the Restated Statement of
Assets and Liabilities as at September 30, 2019 and years ended March 31, 2019,
2018 and 2017, the Restated Statements of Profit and Loss for the six month period
ended September 30, 2019 and years ended March 31, 2019, March 31, 2018 and
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Term Description
March 31, 2017 and Restated Cash Flow Statement for the six month period ended
September 30, 2019 and the years ended March 31, 2019, March 31, 2018 and
March 31, 2017, the Summary Statement of Significant Accounting Policies and
Notes to Accounts for the six month period ended September 30, 2019 and the years
ended March 31, 2019, March 31, 2018 and March 31, 2017, and other explanatory
information attached thereto, as approved by the Board of Directors at their meeting
held on October 17, 2019.
Shareholder(s) Shareholders holding Equity Shares our Bank, from time to time.
Stakeholders’ Relationship
Committee
The stakeholders’ relationship committee of the Board of Directors as described in
“Our Management” beginning on page 207.
Warrant Letter Letter agreement dated August 7, 2019 entered into between our Bank and FIHM.
Waiver Letter Waiver letter dated July 30, 2019 read with extension of the waiver letter dated
September 27, 2019 entered into between our Bank and FIHM.
Offer related terms
Term Description
Acknowledgement Slip The slip or document issued by a Designated Intermediary(ies) to a Bidder as proof
of registration of the Bid cum Application Form.
“Allot”, “Allotment” or “Allotted” The allotment or transfer, as the case may be, of Equity Shares pursuant to the Offer
to the successful Bidders.
Allotment Advice Note or advice or intimation of Allotment sent to the Bidders who have been or are to
be Allotted the Equity Shares after the Basis of Allotment has been approved by the
Designated Stock Exchange.
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 this
Red Herring Prospectus.
Anchor Investor Allocation Price The price at which Equity Shares will be allocated to Anchor Investors in terms of
this Red Herring Prospectus, which will be decided by our Bank, in consultation with
the BRLMs.
Anchor Investor Application Form The form used by an Anchor Investor to make a Bid in the Anchor Investor Portion
and which will be considered as an application for Allotment in terms of this Red
Herring Prospectus and Prospectus.
Anchor Investor Bidding Date The day, being 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 Offer Price Final price at which the Equity Shares will be issued and Allotted to Anchor
Investors in terms of this 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 Bank, in consultation with the
BRLMs.
Anchor Investor Portion Up to 60% of the QIB Portion which may be allocated by our Bank 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.
Anchor Investor Pay-In Date With respect to Anchor Investor(s), it shall be the Anchor Investor Bidding Date, and
in the event the Anchor Investor Allocation Price is lower than the Offer Price, not
later than two Working Days after the Bid/ Offer Closing Date.
Application Supported by Blocked
Amount or ASBA
An application, whether physical or electronic, used by ASBA Bidders to make a Bid
and authorize an SCSB to block the Bid Amount in the specified bank account
maintained with such SCSB and will include amounts blocked by SCSB upon
acceptance of UPI Mandate Request by RIBs using the UPI Mechanism.
ASBA Account A bank account maintained with an SCSB which may be blocked by such SCSB or
the account of the RII blocked upon acceptance of UPI Mandate Request by the RIIs
using the UPI Mechanism.
ASBA Bidders All Bidders except Anchor Investors.
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Term Description
ASBA Form An application form, whether physical or electronic, used by ASBA Bidders which
will be considered as the application for Allotment in terms of this Red Herring
Prospectus and the Prospectus.
Banker to the Offer Collectively, the Escrow Collection Bank(s), Refund Bank(s), Sponsor Bank and
Public Offer Account Bank(s).
Basis of Allotment Basis on which Equity Shares will be Allotted to successful Bidders under the Offer,
as described in “Offer Structure” beginning on page 620.
Bid An indication to make an offer during the Bid/Offer Period by an ASBA Bidder
pursuant to submission of the ASBA Form, or on the Anchor Investor Bidding Date
by an Anchor Investor pursuant to submission of the Anchor Investor Application
Form, to subscribe to or purchase the Equity Shares of our Bank at a price within the
Price Band, including all revisions and modifications thereto as permitted under the
SEBI ICDR Regulations and in terms of this Red Herring Prospectus and the Bid cum Application form. The term “Bidding” shall be construed accordingly.
Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form and
payable by the Bidder or blocked in the ASBA Account of the Bidder, as the case
may be, upon submission of the Bid.
Bid cum Application Form The Anchor Investor Application Form or the ASBA Form, as the context requires.
Bid Lot [●] Equity Shares and in multiples of [●] Equity Shares thereafter. 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, being November 26, 2019.
Our Bank, in consultation with the BRLMs, may consider closing the Bid/Offer
Period for QIBs one Working Day prior to the Bid/Offer Closing Date in accordance
with the SEBI ICDR Regulations.
Bid/Offer Opening Date Except in relation to any Bids received from the Anchor Investors, the date on which
the Designated Intermediaries shall start accepting Bids, being November 22, 2019.
Bid/Offer Period Except in relation to Anchor Investors, the period between the Bid/Offer Opening
Date and the Bid/Offer Closing Date, inclusive of both days, during which
prospective Bidders can submit their Bids, including any revisions thereof, in
accordance with the SEBI ICDR Regulations.
Our Bank may, in consultation with the BRLMs, consider closing the Bid/Offer
Period for the QIB Category one Working Day prior to the Bid/Offer Closing Date in
accordance with the SEBI ICDR Regulations.
Bidder Any prospective investor who makes a Bid pursuant to the terms of this Red Herring
Prospectus and the Bid cum Application Form and unless otherwise stated or implied,
includes an Anchor Investor.
Bidding Centers Centers at which at the Designated Intermediaries shall accept the ASBA Forms, i.e.,
Designated SCSB Branches for SCSBs, Specified Locations for Syndicate, Broker
Centres for Registered Brokers, Designated RTA Locations for RTAs and Designated
CDP Locations for CDPs.
Book Building Process Book building process, as provided in Schedule XIII 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, Axis Capital Limited and IIFL
Securities Limited.*
*IIFL Securities Limited is involved as a merchant banker only in marketing of the
Offer.
Broker Centres Broker centres notified by the Stock Exchanges where Bidders can submit the ASBA
Forms to a Registered Broker. The details of such Broker Centres, along with the
names and contact details of the Registered Broker are available on the respective
websites of the Stock Exchanges (www.bseindia.com and www.nseindia.com).
“CAN” or “Confirmation of
Allocation Note”
Notice or intimation of allocation of the Equity Shares sent to Anchor Investors, who
have been allocated the Equity Shares, on/after the Anchor Investor Bidding Date.
“Collecting Registrar and Share
Transfer Agents” or “CRTAs”
Registrar and share transfer agents registered with SEBI and eligible to procure Bids
at the Designated RTA Locations in terms of the UPI Circular.
Cap Price The higher end of the Price Band, above which the Offer Price and the Anchor
Investor Offer Price will not be finalised and above which no Bids will be accepted.
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http://www.bseindia/http://www.nseindia/
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Term Description
Cash Escrow and Sponsor Bank
Agreement
The agreement dated November 13, 2019 entered into by our Bank, the Selling
Shareholders, the Registrar to the Offer, the BRLMs, the Banker to the Offer,
including the Sponsor Bank in accordance with the UPI Circular, for the collection of
the Bid Amounts from Anchor Investors, transfer of funds to the Public Offer
Account and where applicable, refunds of the amounts collected from Bidders, on the
terms and conditions 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, registered with
SEBI and who is eligible to procure Bids at the Designated CDP Locations in terms
of circular number CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015
issued by SEBI.
Cut-off Price Offer Price, finalised by our Bank, in consultation with the BRLMs, which shall be
any price within the Price Band.
Only Retail Individual Bidders are entitled to Bid at the Cut-off Price. QIBs
(including Anchor Investors) and Non-Institutional Bidders are not entitled to Bid at
the Cut-off Price.
Demographic Details Details of the Bidders including the Bidder’s address, name of the Bidder’s
father/husband, investor status, occupation and bank account details and UPI ID,
where applicable.
Designated CDP Locations Such locations of the CDPs where Bidders can submit the ASBA Forms. The details
of such Designated CDP Locations, along with names and contact details of the
CDPs eligible to accept ASBA Forms are available on the respective websites of the
Stock Exchanges (www.bseindia.com and www.nseindia.com).
Designated Date The date on which funds are transferred from the Escrow Account and the amounts
blocked are transferred from the ASBA Accounts, as the case may be, to the Public
Offer Account or the Refund Account, as appropriate, in terms of this Red Herring
Prospectus and the Prospectus, after the finalisation of the Basis of Allotment in
consultation with the Designated Stock Exchange.
Designated Intermediaries Collectively, the Syndicate, sub-syndicate/agents, SCSBs, Registered Brokers, CDPs
and RTAs, who are authorized to collect ASBA Forms from the ASBA Bidders, in
relation to the Offer.
Designated RTA Locations Such locations of the RTAs where Bidders can submit the ASBA Forms to RTAs.
The details of such Designated RTA Locations, along with names and contact details
of the RTAs eligible to accept ASBA Forms are available on the respective websites
of the Stock Exchanges (www.bseindia.com and www.nseindia.com).
Designated SCSB Branches Such branches of the SCSBs which shall collect the ASBA Forms, a list of which is
available on the website of SEBI at
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes or at such
other website as may be prescribed by SEBI from time to time.
Designated Stock Exchange NSE.
“Draft Red Herring Prospectus” or
“DRHP”
The draft red herring prospectus dated August 9, 2019 issued in accordance with the
SEBI ICDR Regulations, which did 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 NRI(s) NRI(s) from jurisdictions outside India where it is not unlawful to make an offer or
invitation under the Offer and in relation to whom the ASBA Form and this Red
Herring Prospectus will constitute an invitation to subscribe to or to purchase the
Equity Shares.
Escrow Account(s) Account opened with the Escrow Collection Bank(s) and in whose favour the Anchor
Investors will transfer money through direct credit/NEFT/RTGS/NACH in respect of
the Bid Amount when submitting a Bid.
Escrow Collection Bank(s) Bank(s) which are clearing members and registered with SEBI as bankers to an issue
and with whom the Escrow Account(s) will be opened, in this case being ICICI Bank
Limited.
First Bidder Bidder whose name shall be mentioned in the Bid cum Application Form or the
Revision Form and in case of joint Bids, whose name shall also appear as the first
holder of the beneficiary account held in joint names.
7
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Term Description
Floor Price The lower end of the Price Band, subject to any revision thereto, at or above which
the Offer Price and the Anchor Investor Offer Price will be finalised and below
which no Bids will be accepted.
Fresh Issue Fresh issue of up to [●] Equity Shares aggregating up to ₹ 240 million to be issued by
our Bank.
General Information Document 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, circular
(SEBI/HO/CFD/DIL2/CIR/P/2018/138) dated November 1, 2018 circular no.
SEBI/HO/CFD/DIL2/CIR/P/2019/50 dated April 3, 2019, circular bearing no.
SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28, 2019, and circular bearing
number SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019, as amended from
time to time. The General Information Document is available on the websites of the
Stock Exchanges and the Book Running Lead Managers.
Maximum RIB Allottees Maximum number of RIBs who can be allotted the minimum Bid Lot. This is
computed by dividing the total number of Equity Shares available for Allotment to
RIBs by the minimum Bid Lot, subject to valid Bids being received at or above the
Offer Price.
Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor Investor Portion), or [●] Equity Shares
which shall be available for allocation to Mutual Funds only 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 QIB Portion The portion of the QIB Portion less the number of Equity Shares Allotted to the
Anchor Investors.
Net Proceeds Proceeds of the Fresh Issue that will be available to our Bank, less Offer Expenses to
the extent applicable to the Fresh Issue. For further details, plese see “Objects of the
Offer” beginning on page 98. “Non-Institutional Bidder” or
“NIBs”
All Bidders that are not QIBs or Retail Individual Bidders and who have Bid for
Equity Shares for an amount more than ₹ 200,000 (but not including NRIs other than
Eligible NRIs).
Non-Institutional Portion The portion of the Offer being not more 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.
Offer Agreement The agreement dated August 9, 2019 amongst our Bank, the Selling Shareholders and
the BRLMs, pursuant to which certain arrangements are agreed to in relation to the
Offer.
Offer The initial public offer of up to [●] Equity Shares of face value of ₹10 each for cash
at a price of ₹[●] each, aggregating up to ₹[●] million, comprising (i) the Fresh Issue
of up to [●] Equity Shares aggregating up to ₹ 240 million, and (ii) Offer for Sale of
19,778,298 Equity Shares aggregating up to ₹ [●] million by the Selling
Shareholders.
Offer for Sale The offer for sale of upto 19,778,298 Equity Shares aggregating up to ₹ [●] million
by the Selling Shareholders.
Offered Shares Up to 19,778,298 Equity Shares being offered by the Selling Shareholders in the
Offer for Sale.
Offer Price The final price at which Equity Shares will be Allotted to successful Bidders, other
than Anchor Investors. Equity Shares will be Allotted to Anchor Investors at the
Anchor Investor Offer Price in terms of this Red Herring Prospectus. The Offer Price
will be decided by our Bank, in consultation with the BRLMs on the Pricing Date, in
accordance with the Book Building Process and in terms of this Red Herring
Prospectus.
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Term Description
Price Band Price band of a minimum price of ₹ [●] per Equity Share (Floor Price) and the
maximum price of ₹ [●] per Equity Share (Cap Price) including any revisions
thereof. The Price Band and the minimum Bid Lot for the Offer will be decided by
our Bank, in consultation with the BRLMs, and will be advertised, in all editions of
Financial Express (a widely circulated English national daily newspaper) and all
editions of Jansatta (a widely circulated Hindi national daily newspaper) and in all
Kerala editions of Deepika (a widely circulated Malayalam daily newspaper,
Malayalam also being the regional language of Kerala) at least two 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 Bank in consultation with the BRLMs, will finalise the Offer
Price.
Prospectus The Prospectus to be filed with the RoC in accordance with the Companies Act,
2013, and the SEBI ICDR Regulations containing, inter alia, the Offer Price that is
determined at the end of the Book Building Process, the size of the Offer and certain
other information, including any addenda or corrigenda thereto.
Public Offer Account Bank account to be opened with the Public Offer Account Bank 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 with which the Public Offer Account is opened for collection of Bid
Amounts from Escrow Account and ASBA Account on the Designated Date, in this
case being ICICI Bank Limited.
“QIB Category” or “QIB Portion” The portion of the Offer (including the Anchor Investor Portion) being at least 75%
of the Offer consisting of [●] Equity Shares which shall be Allotted to QIBs, 5% of
which shall be allocated to Mutual Funds.
“Qualified Institutional Buyers” or
“QIBs” or “QIB Bidders”
Qualified institutional buyers as defined under Regulation 2(1)(ss) of the SEBI ICDR
Regulations.
“Red Herring Prospectus” or
“RHP”
This red herring prospectus dated November 13, 2019 issued in accordance with
Section 32 of the Companies Act, 2013 and the provisions of the SEBI ICDR
Regulations, which does not have complete particulars of the price at which the
Equity Shares will be offered and the size of the Offer including any addenda or
corrigenda thereto.
The Bid/Offer Opening Date shall be at least three Working Days after the filing of
this Red Herring Prospectus with the RoC. This Red Herring Prospectus 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 to the Anchor Investors shall be made.
Refund Bank The Banker to the Offer with whom the Refund Account(s) will be opened, in this
case being ICICI Bank Limited.
Registered Brokers Stock brokers registered with the stock exchanges having nationwide terminals, other
than the BRLMs and the Syndicate Members eligible to procure Bids.
Registrar Agreement The agreement dated August 9, 2019 amongst our Bank, the Selling Shareholders and
the Registrar to the Offer in relation to the responsibilities and obligations of the
Registrar to the Offer pertaining to the Offer.
“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 and the UPI circular, as
per the lists available on the websites of BSE and NSE.
Registrar to our Bank S.K.D.C Consultants Limited.
“Registrar to the Offer” or
“Registrar”
Link Intime India Private Limited.
“Retail Individual Bidder(s)” or
“RIB(s) or “RII(s)”
Individual Bidders who have Bid for the Equity Shares for an amount not more than
₹200,000 in any of the bidding options in the Offer (including HUFs applying
through their Karta and Eligible NRIs and does not include NRIs other than Eligible
NRIs).
Retail Portion The portion of the Offer being not more than 10% of the Offer consisting of [●]
Equity Shares which 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.
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Term Description
Revision Form Form used by the Bidders to modify the quantity of the Equity Shares or the Bid
Amount in any of their ASBA Form(s) or any previous Revision Form(s).
QIB Bidders and Non-Institutional Bidders are not allowed to withdraw or lower
their Bids (in terms of quantity 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 Bid/Offer Closing Date.
“Self-Certified Syndicate Bank(s)”
or “SCSB(s)”
The banks registered with SEBI, offering services in relation to ASBA, a list of
which is available on the website of SEBI at
http://www.sebi.gov.in/sebiweb/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.
Selling Shareholders Persons and entities listed under Annexure A.
Share Escrow Agent Escrow agent appointed pursuant to the Share Escrow Agreement, namely, Link
Intime India Private Limited.
Share Escrow Agreement The agreement dated August 9, 2019 entered into amongst the Selling Shareholders,
our Bank and the Share Escrow Agent in connection with the transfer of Equity
Shares under the Offer by such Selling Shareholders and credit of such Equity Shares
to the demat account of the Allottees.
Specified Locations Bidding centres where the Syndicate shall accept ASBA Forms from Bidders.
Sponsor Bank The Banker to the Offer registered with SEBI, a list of which is available on the
website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmI
d=41 and update from time to time, which is appointed by our Bank to act as a
conduit between the Stock Exchanges and the NPCI in order to push the mandate
collect requests and / or payment instructions of the RIIs into the UPI, the Sponsor
Bank in this Offer being, ICICI Bank Limited.
Stock Exchanges Collectively, BSE Limited and National Stock Exchange of India Limited.
Syndicate Agreement The agreement dated November 13, 2019 entered into among our Bank, the Selling
Shareholders, the BRLMs, Registrar and the Syndicate Members in relation to
collection of Bid cum Application Forms by Syndicate.
Syndicate Members Intermediaries registered with SEBI who are permitted to accept bids, applications
and place order with respect to the Offer and carry out activities as an underwriter, in
this case being the BRLMs.
“Syndicate” or “members of the
Syndicate”
Together, the BRLMs and the Syndicate Members.
Systemically Important Non-
Banking Financial Bank
Systemically important non-banking financial company as defined under Regulation
2(1)(iii) of the SEBI ICDR Regulations.
Underwriters [●].
Underwriting Agreement The agreement among the Underwriters, our Bank and the Selling Shareholders to be
entered into on or after the Pricing Date.
UPI Unified Payment Interface which is an instant payment mechanism, developed by
NPCI.
UPI Circular Circular bearing number SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 1,
2018, circular bearing number SEBI/HO/CFD/DIL2/CIR/P/2019/50 dated April 3,
2019, circular bearing number SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28,
2019, circular bearing number SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26,
2019 and circular bearing number SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated
November 8, 2019, issued by SEBI.
UPI ID ID created on UPI for single-window mobile payment system developed by the
NPCI.
UPI Mandate Request A request (intimating the RII by way of a notification on the UPI application and by
way of a SMS directing the RII to such UPI application) to the RII initiated by the
Sponsor Bank to authorise blocking of funds in the relevant ASBA Account through
the UPI application equivalent to Bid Amount and subsequent debit of funds in case
of Allotment.
UPI Mechanism The mechanism that may be used by an RII to make a Bid in the Offer in accordance
with the UPI Circular.
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Term Description
Working Day All days on which commercial banks in Mumbai are open for business; provided
however, with reference to (a) announcement of Price Band; and (b) Bid/Offer
Period, “Working Day” shall mean all days, excluding all Saturdays, Sundays and
public holidays, on which commercial banks in Mumbai are open for business; (c)
the time period between the Bid/Offer Closing Date and the listing of the Equity
Shares on the Stock Exchanges, “Working Day” shall mean all trading days of Stock
Exchanges, excluding Sundays and bank holidays, as per the circulars issued by
SEBI.
Technical / industry related terms
Term Description
AFS Available for Sale
AML Anti Money Laundering.
ANBC Adjusted Net Bank Credit.
ATM Automated Teller Machine.
Basel III Norms RBI’s Master Circular on Basel III Capital Regulations dated July 1, 2015
BO Banking Outlets.
CASA Current Account Savings Account.
CBLO Collateralised Borrowing and Lending Obligations.
CCIL Clearing Corporation of India Limited.
CDR Corporate Debt Restructuring.
CET Common Tier Equity.
CRAR Capital to Risk Asset Ratio.
CRE – RH Commercial Real Estate – Residential Housing.
CRR Cash Reserve Ratio.
CRILC Central Repository of Information on Large Credits.
DRT Debt Recovery Tribunal.
ECS Electronic Clearing Service
FIR First Information Report.
FMR Fraud Monitoring Return.
HFT Held for Trading
HTM Held to Maturity
IBA Indian Banks’ Association.
IFRS International Financial Reporting Standards.
ISE Inspection for Supervisory Evaluation.
KYC Know Your Customer.
LAP Loan Against Property.
LC Letter of Credit.
LCR Liquidity Coverage Ratio.
MCLR Marginal cost of funds based lending rate.
MSME Micro, Small and Medium Enterprises.
MUDRA Ltd Micro Units Development and Refinance Agency Limited.
NABARD National Bank for Agriculture and Rural Development.
NDTL Net Demand and Time Liabilities.
NECS National Electronic Clearing Service
NEFT National Electronic Funds Transfer
NHB National Housing Bank.
NIM Net Interest Margin.
NPA Non Performing Assets.
NSFR Net Stable Funding Ratio.
Part-time BO Part-time Banking Outlet.
PMJDY Pradhan Mantri Jan Dhan Yojna.
PSU Public Sector Undertaking.
P2P Peer-to-Peer.
RIDF Rural Infrastructure Development Fund.
RRB Regional Rural Bank.
RBS Risk Based Supervision.
SBLC Standby Letter of Credit.
11
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Term Description
SDR Strategic Debt Restructuring
SIDBI Small Industries Development Bank of India
SLR Statutory Liquidity Ratio.
SMA Special Mention Accounts.
SME Small and Medium Enterprises.
SPARC Supervisory Programme for Assessment of Risk and Capital.
STT Securities Transaction Tax.
SWIFT Society for Worldwide Interbank Financial Telecommunication
URC Unbanked Rural Centre
UNIDO United Nations Industrial Development Organisation.
NBFC Non Banking Financial Company.
WOS Wholly Owned Subsidiary.
Conventional and general terms / abbreviations
Term Description
“₹”, “Rs.”, “Rupees” or “INR” Indian Rupees.
ADs Authorised Dealers.
AML Anti Money Laundering.
AGM Annual general meeting.
AIF Alternative Investment Fund as defined in and registered with SEBI under the SEBI
AIF Regulations.
“AS” or “Accounting Standards” Accounting Standards issued by the Institute of Chartered Accountants of India.
Banking Regulation Act The Banking Regulation Act, 1949.
“Bn” or “bn” Billion.
BSE BSE Limited.
CAGR Compound Annual Growth Rate, which is computed by dividing the value of an
investment at the year-end by its value at the beginning of that period, raise the result
to the power of one divided by the period length, and subtract one from the
subsequent result: ((End Value/Start Value)^(1/Periods) -1.
Category I FPI(s) FPIs who are registered as “Category I foreign portfolio investors” under the SEBI
FPI Regulations.
Category II FPI(s) FPIs who are registered as “Category II foreign portfolio investors” under the SEBI
FPI Regulations.
CDSL Central Depository Services (India) Limited.
CIC Credit Information Company.
CICRA The Credit Information (Companies) Regulation Act, 2005.
CIRP Corporate Insolvency Resolution Process.
Companies Act, 1956 Erstwhile Companies Act, 1956 along with the relevant rules made thereunder
Companies Act/ Companies Act,
2013
Companies Act, 2013, along with the relevant rules, regulations, clarifications,
circulars and notifications issued thereunder.
CY Calendar Year.
Depositories Together, NSDL and CDSL.
Depositories Act Depositories Act, 1996.
DFS Department of Financial Services, Ministry of Finance, Government of India.
DIN Director Identification Number.
DIPP Department of Industrial Policy and Promotion.
DP ID Depository Participant’s Identification.
“DP” or “Depository Participant” A depository participant as defined under the Depositories Act.
DTL Demand and Time Liabilities
ETF Exchange Traded Funds
EBITDA Earnings before Interest, Taxes, Depreciation and Amortization, which is calculated
by adding finance cost and depreciation and amortization expense to Profit before
exceptional items less other income.
EGM Extraordinary General Meeting.
EPS Earnings per Share.
FDI Foreign Direct Investment.
FEMA The Foreign Exchange Management Act, 1999, read with rules and regulations
thereunder.
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Term Description
FEMA Rules Foreign Exchange Management (Non-debt Instruments) Rules, 2019
“Financial Year”, “Fiscal”,
“fiscal”, “Fiscal Year” or “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.
FVCI Foreign Venture Capital Investors as defined and registered under the SEBI FVCI
Regulations.
GDP Gross domestic product.
“GoI” or “Government” Government of India.
GAAR General Anti Avoidance Rules
GST Goods and services tax.
IBC The Insolvency and Bankruptcy Code, 2016.
ICAI The Institute of Chartered Accountants of India.
“Income Tax Act” or “IT Act” Income Tax Act, 1961.
Ind AS Indian Accounting Standards as referred to in and notified by the Ind AS Rules.
Ind AS Rules The Companies (Indian Accounting Standard) Rules, 2015.
India Republic of India.
Indian GAAP Generally Accepted Accounting Principles in India.
IPC The Indian Penal Code, 1860.
IPO Initial public offering.
IRDAI Insurance Regulatory and Development Authority of India
IRDA Regulations, 2015 Insurance Regulatory and Development Authority of India (Registration of Corporate
Agents) Regulations, 2015.
IST Indian Standard Time.
KYC Know Your Customer
Master Circular – Loans and
Advances
RBI’s Master Circular – Loans and Advances – Statutory and Other Restrictions
dated July 1, 2015
Master Directions for Acquisitions The Master Directions issued by the Reserve Bank of India for prior approval for
acquisition of shares or voting rights in private sector banks dated November 19,
2015.
MCA Ministry of Corporate Affairs, Government of India.
MFI Microfinance institutions.
“Mn” or “mn” Million.
MSME Micro, Small & Medium Enterprises.
“N.A.” or “NA” Not Applicable.
NACH National Automated Clearing House.
NAV Net Asset Value.
NCLT National Company Law Tribunal.
NEFT National Electronic Fund Transfer.
NBFC - AFC A non-banking financial company categorized as an asset financing company.
NBFC - SI A systemically important non-banking financial company as defined under
Regulation 2(1)(iii) of the SEBI ICDR Regulations.
No. Number.
NPA Non Performing Asset
NPCI National Payments Corporation of India.
NR Non-resident.
NRI A person resident outside India, who is a citizen of India as defined under the Foreign
Exchange Management (Deposit) Regulations, 2016 or an ‘Overseas Citizen of India’
cardholder within the meaning of Section 7(A) of the Citizenship Act, 1955.
NSDL National Securities Depository Limited.
NSE National Stock Exchange of India Limited.
“OCB” or “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 participate in the Offer.
OD Overdraft
13
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Term Description
p.a. Per annum.
P/E Ratio Price/Earnings Ratio.
PAN Permanent Account Number.
PCA Prompt Corrective Action.
PFRDA Pension Fund Regulatory and Development Authority
PMLA The Prevention of Money Laundering Act, 2002.
PPI Prepaid Payment Instruments.
Prudential Norms Prudential norms on Income Recognition, Asset Classification and Provisioning
pertaining to Advances issued by the RBI dated July 1, 2015.
PSS Act The Payment and Settlement Systems Act, 2007.
RBI Reserve Bank of India.
RDB Act The Recovery of Debts due to Banks and Financial Institutions Act, 1993
Regulation S Regulation S under the U.S. Securities Act
Revised Framework The new regulatory prudential framework established by the RBI for resolution of
stressed assets, pursuant to its circular dated June 7, 2019.
RTGS Real Time Gross Settlement.
SARFAESI Act Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002.
SCRA Securities Contracts (Regulation) Act, 1956.
SCRR Securities Contracts (Regulation) Rules, 1957.
SEBI Securities and Exchange Board of India constituted under the SEBI Act, 1992.
SEBI Act Securities and Exchange Board of India Act 1992.
SEBI AIF Regulations Securities and Exchange Board of India (Alternative Investments Funds)
Regulations, 2012.
SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations,
2019.
SEBI FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors)
Regulations, 2000.
SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018.
SEBI Listing Regulations Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
SEBI Merchant Bankers
Regulations
Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992.
SEBI SBEB Regulations Securities and Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014.
SEBI VCF Regulations Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996,
as repealed by the SEBI AIF Regulations.
SLR Statutory Liquidity Ratio.
SMEs Small and Micro Enterprises.
Stock Exchanges Together, BSE and NSE.
STT Securities Transaction Tax.
TDS Tax Deducted at Source.
Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011.
Trademarks Act Trade Marks Act, 1999.
“U.S.” or “USA” or “United
States”
United States of America.
U.S. GAAP Generally Accepted Accounting Principles in the United States of America.
“USD” or “US$” United States Dollars.
U.S. Securities Act United States Securities Act of 1933, as amended.
VCFs Venture Capital Funds as defined in and registered with SEBI under the SEBI VCF
Regulations.
Wilful Defaulter(s) Wilful defaulter as defined under Regulation 2(1) (lll) of the SEBI ICDR
Regulations.
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CERTAIN COVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
Certain Conventions
All references to “India” contained in this Red Herring Prospectus are to the Republic of India. All references to the
“Government”, “Indian Government”, “GOI”, “Central Government” or the “State Government” are to the Government of
India, central or state, as applicable.
Unless stated otherwise, all references to page numbers in this Red Herring Prospectus are to the page numbers of this
Red Herring Prospectus.
Financial Data
Unless stated otherwise, the financial information in this Red Herring Prospectus is derived from our Restated Financial
Information. The Restated Financial Information included in this Red Herring Prospectus are as at and for the six month
period ended September 30, 2019 and Fiscals ended March 31, 2019, March 31, 2018 and March 31, 2017, and have been
prepared in accordance with Indian GAAP and Section 26 of Part I of Chapter III of the Companies Act, 2013, the SEBI
ICDR Regulations and the Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by ICAI, as
amended from time to time.
We prepare our audited financial statements in accordance with Indian GAAP and guidelines issued by the RBI, which
differs in some respects from IFRS and U.S. GAAP. Accordingly, the degree to which the Indian GAAP financial
statements included in this Red Herring Prospectus will provide meaningful information is entirely dependent on the
reader’s level of familiarity with the Companies Act, 2013, Indian GAAP, RBI guidelines and the SEBI ICDR
Regulations. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented
in this Red Herring Prospectus should accordingly be limited. We have not attempted to quantify the impact of IFRS or
U.S. GAAP on the financial data included in this Red Herring Prospectus and we urge you to consult your own advisors
regarding such differences and their impact on our financial data. Please see “Risk Factors - Public companies in India,
including us, will be required to prepare financial statements under Ind-AS. We have not determined with any degree of
certainty the impact of such adoption on our financial reporting” on page 31.
In this Red Herring Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are
due to rounding off. All figures in decimals have been rounded off to the second decimal and all percentage figures have
been rounded off to two decimal places. In certain instances, (i) the sum or percentage change of such numbers may not
conform exactly to the total figure given; and (ii) the sum of the numbers in a column or row in certain tables may not
conform exactly to the total figure given for that column or row. Further, any figures sourced from third party industry
sources may be rounded off to other than to the second decimal to conform to their respective sources.
Our Bank’s financial year commences on April 1 and ends on March 31 of the next year. Accordingly, all references to a
particular financial year, unless stated otherwise, are to the 12 month period ended on March 31 of that year. Unless stated
otherwise, or the context requires otherwise, all references to a “year” in this Red Herring Prospectus are to a calendar
year. Further, until March 31, 1989, our Bank’s financial year commenced from January 1 and ended on December 31 of
the calendar year.
Unless the context otherwise indicates, any percentage amounts, as set forth in “Risk Factors”, “Our Business” and
“Management’s Discussion and Analysis of Financial Conditional and Results of Operations” beginning on pages 23, 143
and 403, respectively, and elsewhere in this Red Herring Prospectus have been calculated on the basis of our Restated
Financial Information.
Currency and Units of Presentation
All references to:
“Rupees” or “₹” or “INR” or “Rs.” or “Re.” are to Indian Rupee, the official currency of the Republic of India; and
“USD” or “US$” are to United States Dollar, the official currency of the United States.
Our Bank has presented certain numerical information in this Red Herring Prospectus in “million” units. One million
represents 1,000,000 and one billion represents 1,000,000,000. However, where any references that may have been
sourced from third party sources are expressed in denomination other than millions or billions, such figures appear
expressed in such denominations as provided in their respective industry sources.
Time
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All references to time in this Red Herring Prospectus are to Indian Standard Time.
Exchange Rates
This Red Herring Prospectus contains conversion of certain other currency amounts into Indian Rupees. 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 US$ (in Rupees per US$):
(Amount in ₹, unless otherwise specified)
Currency As at
September 30, 2019 March 31, 2019 March 31, 2018 March 31, 2017
1 US$ 70.68 69.17 65.04 64.84 Source: RBI reference rate and www.fbil.org.in In case of March 31 falling on a holiday, preceding working day RBI rate available has been taken
Industry and Market Data
Unless stated otherwise, industry and market data used in this Red Herring Prospectus has been obtained or derived from
various industry publications and sources, including officially prepared materials from the Government of India and its
various ministries, the RBI and its publications.
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. Accordingly, no investment decisions should be based on such information.
Although we believe the industry and market data used in this Red Herring Prospectus is reliable, it has not been
independently verified by us, the Selling Shareholders or the BRLMs or any of their affiliates or advisors. The data used
in these sources may have been re-classified by us for the purposes of presentation. Data from these sources may also not
be comparable.
The extent to which the market and industry data used in this Red Herring Prospectus is meaningful depends on the
reader’s familiarity with and understanding of the methodologies used in compiling such data. There are no standard data
gathering methodologies in the industry in which business of our Bank is conducted, and methodologies and assumptions
may vary widely among different industry sources. Such data involves risk, uncertainties and assumptions, and is subject
to change based on various factors. Accordingly, investment decisions should not be based solely on such information.
For details in relation to the risks involving the industry data, see “Risk Factors” beginning on page 23.
In accordance with the SEBI ICDR Regulations, see “Basis for Offer Price” beginning on page 103, which includes
information relating to our peer group companies. Such information has been derived from publicly available sources, and
neither we, nor the Selling Shareholders nor the BRLMs have independently verified such information.
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http://www.fbil.org.in/
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FORWARD-LOOKING STATEMENTS
This 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”, “propose”, “project”, “will”, “will continue”, “will pursue” “seek to”, “shall” or other words or phrases of similar
import. Similarly, statements whether made by us or any third parties that describe our 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.
Actual results may differ materially from those suggested by forward-looking statements due to risks or uncertainties
associated with expectations relating to, inter alia, regulatory changes pertaining to the industries in India in which we
operate and our ability to respond to them, our ability to successfully implement our strategy, our growth and expansion,
technological changes, our exposure to market risks, general economic and political conditions in India which have an
impact on its business activities or investments, the monetary and fiscal policies of India, inflation, deflation,
unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of
the financial markets in India and globally, changes in domestic laws, regulations and taxes and changes in competition in
the industries in which we operate.
Certain important factors that could cause actual results to differ materially from our expectations include, but are not
limited to, the following:
Our ability to manage our loan exposure and NPAs;
Failure by our borrowers to repay outstanding borrowings;
Our ability to sustain or achieve growth for deposit base, including CASA deposit;
Regional concentration in southern India;
Volatility in gold prices and interest rates and other market conditions;
Our ability to maintain or grow our CASA ratio; and
Our concentration of exposure to certain industry and service sectors.
For further discussion on factors that could cause actual results to differ from expectations, see “Risk Factors”, “Our
Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on
pages 23, 143 and 403, 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.
There can be no assurance to 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 to be a guarantee of our future performance.
Forward-looking statements reflect current views as of the date of this Red Herring Prospectus and are not a guarantee of
future performance. These statements are based on our 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 Bank, our Directors, the Selling Shareholders, 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. In accordance with the SEBI ICDR Regulations, our Bank and the BRLMs will ensure that the investors in India
are informed of material developments pertaining to our Bank and the Offered Shares from the date of this Red Herring
Prospectus until the time of the grant of listing and trading permission by the Stock Exchanges. The Selling Shareholders
shall, severally and not jointly, ensure that investors are informed of material developments in relation to statements and
undertakings specifically made or confirmed by such Selling Shareholder to the extent of information specifically
pertaining to itself as a Selling Shareholder and its portion of the Equity Shares offered in the Offer in from the date of
this Red Herring Prospectus and the Prospectus until the date of Allotment.
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SUMMARY OF THE OFFER DOCUMENT
This section is a general summary of certain disclosures included in this Red Herring Prospectus and is not exhaustive,
nor does it purport to contain a summary of all the disclosures in this Red Herring Prospectus or all details relevant to
prospective investors. This summary should be read in conjunction with, and is qualified in its entirety by, the more
detailed information appearing elsewhere in this Red Herring Prospectus, including the sections titled “Risk Factors”,
“Industry Overview”, “Our Business”, “Capital Structure”, “The Offer” and “Outstanding Litigation and Material
Developments” beginning on pages 23, 117, 143, 75, 66 and 469, respectively.
Summary of business
We are one of the oldest private sector banks in India with a history of over 98 years, and a strong base in Kerala along
with significant presence in Tamil Nadu, Karnataka, and Maharashtra. We offer wide range of products and services to
our overall customer base of 1.3 million as on September 30, 2019, with particular focus on SME, retail, and NRI
customers. We deliver our products and services through multiple channels, including 412 branches (excluding three
service branches and three asset recovery branches) and 290 ATMs spread across 16 states and four union territories, and
various alternate channels.
Summary of industry
As per the World Bank Global Findex Report 2017, the adult bank account holders in India were 35% in 2011 and 53% in
2014. After the implementation of financial inclusion programme, adult bank account holders were 80% in 2017. India
stands second for largest unbanked population with about 190 million Indian adults still not having a bank account. The
total unbanked adults across the world are 1700 million. India has a share of 11% in the global unbanked adult population,
and also, in India, around 4 in 10 unbanked adults are in the age group of 15 to 24 years. (Source: Global Findex-2017
report, World Bank).
Name of Promoter
Our Promoter is FIHM. For details, see “Our Promoter, Promoter Group and Group Company” beginning on page 232.
Offer size
Offer of up to [●] Equity Shares aggregating to ₹ [●] million(1)
Of which
Fresh issue of [●] Equity Shares aggregating to ₹ 240 million
Offer for sale of up to 19,778,298 Equity Shares aggregating to ₹ [●] million by the Selling Shareholders(2) (1) The Offer has been authorised by our Board pursuant to its resolution dated March 6, 2019 and by our Shareholders pursuant to
their resolution dated May 4, 2019 passed by way of postal ballot. (2) The Equity Shares being offered by the Selling Shareholders are eligible for being offered for sale pursuant to the Offer in terms of
the SEBI ICDR Regulations. For details of authorizations received for the Offer, see “Other Regulatory and Statutory
Disclosures” on page 606.
Objects of the Offer
Particulars Amount (in ₹ million)
To augment our Bank’s Tier-I capital base to meet our Bank’s
future capital requirements which are expected to arise out of
growth in our Bank’s assets, primarily our Bank’s
loans/advances and investment portfolio and to ensure
compliance with Basel III and other RBI guidelines.
240
Aggregate pre-Offer shareholding of Selling Shareholders, Promoter and Promoter Group
S. N. Name of the Shareholder No. of Equity Shares held % of total pre-Offer paid up
equity share capital
Selling Shareholders
1. ICICI Lombard General Insurance Company Limited 1,000,000 0.581
2. HDFC Life Insurance Company Limited 4,044,000 2.348
3. ICICI Prudential Life Insurance Company Limited 3,044,000 1.767
4. The Federal Bank Limited 2,785,661 1.617
5. Bridge India Fund 2,500,000 1.452
6. Satellite Multicomm Private Limited 1,939,097 1.126
7. Way2Wealth Securities Private Limited 1,555,214 0.903
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S. N. Name of the Shareholder No. of Equity Shares held % of total pre-Offer paid up
equity share capital
8. Mr. Vinod Mohan Nair 1,000,000 0.581
9. Edelweiss Tokio Life Insurance Company Limited 846,100 0.491
10. P-Cube Enterprises Private Limited 648,000 0.376
11. Plant Lipids Private Limited 538,888 0.313
12. Ms. Sheela Raja Ram 165,771 0.096
13. Mr. Ananth Raja Ram 155,401 0.090
14. Mr. Ranjan Ghosh 100,000 0.058
15. Mr. T. S.Anantharaman 100,270 0.058
16. Mr. Raja Ram 93,969 0.055
17. Mr. Ananthagopal K P 7,500 0.004
18. Mr. Paresh Babulal Gandhi 4,000 0.002
19. Mr. Narendra Babulal Gandhi 3,202 0.002
20. Mr. Nirav Bhushan Mehta 3,000 0.002
21. Mr. Bhupendra Babulal Gandhi 1,777 0.001
22. Mr. Sukumar Menon 2,000 0.001
23. Mr. Shrikrishna Vinayak Patwardhan 2,416 0.001
24. Mr. Mecheri Unni 2,083 0.001
25. Mr. Prasanna Padmanabhan 1,200 0.001
26. Ms. Baby M. 200 0.000
Total (A) 20,543,749 11.927
Promoter and Promoter Group
1. FIHM 86,262,976 50.09
Total (B) 86,262,976 50.09
Total (A + B) 106,806,725 62.017
Summary of Financial Statements (in ₹ million other than share data)
Particulars
Six month period
ended September 30,
2019
Fiscal 2019 Fiscal 2018 Fiscal 2017
Share capital 1,722.77 859.72 810.14 810.14
Net worth* 15,359.91 9,739.95 3,536.43 5,461.46
Revenue 8,167.14 14,834.33 14,222.26 16,174.96
Profit after tax 442.72 (656.89) (1,270.88) (579.91)
Earnings per share (basic / diluted) 3.86^ (7.90) (15.70) (7.66)
Net asset value per Equity Share 89.19 73.54 43.68 67.46
Total borrowings - - 418.00 418.00
*Net worth has been defined the aggregate value of the paid-up share capital and all reserves created out of the profits and securities
premium account and debit or credit balance of profit and loss account, after deducting the aggregate value of the accumulated losses,
deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves
created out of revaluation of assets and write-back of depreciation, each as applicable, for our Bank on a restated basis.
^ Not Annualised.
Qualifications of the Auditors
The Restated Financial Information do not contain any qualification which have been given effect to.
Summary of Outstanding Litigation and Material Developments
A summary of outstanding litigation proceedings involving our Bank, our Promoter, Directors and our Group Company,
as on the date of this Red Herring Prospectus as disclosed in the section titled “Outstanding Litigation and Material
Developments” in terms of the SEBI ICDR Regulations and