acme solar holdings limited - deutsche bank · by the registrar of companies, national capital...
TRANSCRIPT
-
DRAFT RED HERRING PROSPECTUS
Dated September 28, 2017
Please read Section 32 of the Companies Act, 2013
(This Draft Red Herring Prospectus will be updated upon filing with the RoC)
100% Book Building Issue
ACME SOLAR HOLDINGS LIMITED
Our Company was incorporated as “ACME Solar Holdings Private Limited” on June 3, 2015, as a private limited company under the Companies Act, 2013, with a certificate of incorporation granted
by the Registrar of Companies, National Capital Territory of Delhi and Haryana at New Delhi (the “RoC”). Pursuant to the conversion of our Company to a public limited company and as approved
by the shareholders of our Company pursuant to a special resolution dated May 2, 2017, our name was changed to “ACME Solar Holdings Limited” and the RoC issued a fresh certificate of
incorporation on May 12, 2017. For further details of change in name of our Company, see “History and Certain Corporate Matters” on page 153.
Corporate Identity Number: U40106HR2015PLC055641
Registered and Corporate Office: Plot Number 152, Sector 44, Gurugram - 122 002, Haryana, India
Tel: (91 124) 7117 000; Fax: (91 124) 7117 001
Contact Person: Rajesh Sodhi, Company Secretary and Compliance Officer
E-mail: [email protected]; Website: www.acmesolar.in
OUR PROMOTERS: MANOJ KUMAR UPADHYAY AND ACME CLEANTECH SOLUTIONS PRIVATE LIMITED INITIAL PUBLIC OFFERING OF UP TO [●] EQUITY SHARES OF FACE VALUE OF ` 10 EACH (THE “EQUITY SHARES”) OF ACME SOLAR HOLDINGS LIMITED (OUR “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF ` [●] PER EQUITY SHARE (INCLUDING SHARE PREMIUM OF ` [●] PER EQUITY SHARE) (THE “ISSUE PRICE”) AGGREGATING UP TO 22,000 MILLION (THE “ISSUE”). THE ISSUE SHALL CONSTITUTE [●] % OF THE POST-ISSUE PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY. OUR COMPANY MAY, IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS, OFFER A DISCOUNT OF UP TO ` [●] ON THE ISSUE PRICE TO RETAIL INDIVIDUAL INVESTORS (“RETAIL DISCOUNT”).
Our Company, in consultation with the Book Running Lead Managers and subject to approval by our Shareholders, is considering a Pre-IPO Placement of up to 5,222,079 Equity Shares to certain investors for an amount not
exceeding ₹ 5,000 million. The Pre-IPO Placement will be at the discretion of our Company and at a price to be determined by our Company in consultation with the Book Running Lead Managers. Our Company will
complete the issuance and allotment of Equity Shares pursuant to the Pre-IPO Placement prior to the filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the Issue size would be reduced
to the extent of such Pre-IPO Placement subject to the Issue size constituting at least 10% of the post-Issue paid-up Equity Share capital of our Company.
THE FACE VALUE OF THE EQUITY SHARES IS ` 10 EACH
THE PRICE BAND, THE RETAIL DISCOUNT AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS (THE
“BRLMs”) AND WILL BE ADVERTISED IN [●] EDITIONS OF [●] (A WIDELY CIRCULATED ENGLISH NATIONAL DAILY NEWSPAPER) AND [●] EDITIONS OF [●] (A WIDELY CIRCULATED
HINDI NATIONAL DAILY NEWSPAPER, HINDI ALSO BEING THE REGIONAL LANGUAGE IN THE PLACE WHERE OUR REGISTERED OFFICE IS LOCATED) AT LEAST FIVE WORKING
DAYS PRIOR TO THE BID/ ISSUE OPENING DATE AND SHALL BE MADE AVAILABLE TO BSE LIMITED (THE “BSE”) AND NATIONAL STOCK EXCHANGE OF INDIA LIMITED (THE “NSE”,
AND TOGETHER WITH BSE, THE “STOCK EXCHANGES”) FOR THE PURPOSE OF UPLOADING ON THEIR RESPECTIVE WEBSITES.
In case of a revision in the Price Band, the Bid/Issue Period will be extended for at least three additional Working Days after revision of the Price Band subject to the Bid/Issue Period not exceeding a total of 10 Working Days.
Any revision in the Price Band and the revised Bid/Issue Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a press release, and also by indicating the change on the websites
of the BRLMs, and at the terminals of the Syndicate Members and by intimation to Self-Certified Syndicate Banks (“SCSBs”), the Registered Brokers, Collecting Registrar and Share Transfer Agents
(“CRTAs”) and Collecting Depository Participants (“CDPs”), as required under the SEBI ICDR Regulations.
The Issue is being made in terms of Rule 19(2)(b)(iii) of the Securities Contracts (Regulation) Rules, 1957, as amended (the “SCRR”), the Issue is being made for at least 10% of the post-Issue paid-up Equity Share capital of
our Company.The Issue is being made through the Book Building Process and in compliance with Regulation 26(2) of the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements) Regulations,
2009, as amended (the “SEBI ICDR Regulations”), wherein at least 75% of the Issue shall be Allotted to Qualified Institutional Buyers (“QIBs”) (the “QIB Category”), provided that the Company may, in consultation with
the BRLMs, allocate up to 60% of the QIB Category to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations (the “Anchor Investor Portion”), of which one-third is to be reserved for
domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is made to Anchor Investors (the “Anchor Investor Allocation Price”). Further, 5% of the
Net QIB Portion shall be available for allocation on a proportionate basis only to Mutual Funds, and the remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to all QIBs (other than
Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Issue Price. If at least 75% of the Issue cannot be Allotted to QIBs, then the entire application money will be refunded/unblocked
forthwith. Further, not more than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Investors and not more that 10% of the Issue shall be available for allocation to Retail Individual
Investors, in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Issue Price. All Investors (other than Anchor Investors) shall mandatorily participate in this Issue only through the
Application Supported by Blocked Amount (“ASBA”) process, and shall provide details of their respective bank account in which the Bid amount will be blocked by the Self Certified Syndicate Banks (“SCSBs”). Anchor
Investors are not permitted to participate in the Anchor Investor Portion through the ASBA process. For details, see “Issue Procedure” beginning on page 421.
RISKS IN RELATION TO THE FIRST ISSUE This being the first public issue of the Equity Shares of our Company, there has been no formal market for the Equity Shares of our Company. The face value of our Equity Shares is ` 10 each and the Floor Price and Cap Price are [●] times and [●] times of the face value of the Equity Shares, respectively. The Issue Price (as determined and justified by our Company in consultation with the BRLMs, in accordance with SEBI ICDR Regulations, and
as stated in “Basis for Issue 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 and/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 Issue 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 this Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The
Equity Shares have not been recommended or approved by the Securities and Exchange Board of India (the “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” beginning on page 15.
ISSUER’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 Issue, which is material in the
context of the Issue, 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.
LISTING The Equity Shares issued though the Red Herring Prospectus are proposed to be listed on the Stock Exchanges. We have received in-principle approvals from BSE and NSE for the listing of the Equity Shares pursuant to
letters dated [●] and [●], respectively. For the purposes of this Issue, [●] is the Designated Stock Exchange.
BOOK RUNNING LEAD MANAGERS
REGISTRAR TO THE ISSUE
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:
Website: www.icicisecurities.com
Contact person: Arjun A Mehrotra / Nidhi
Wangnoo
SEBI Registration No.: INM000011179
Citigroup Global Markets India Private Limited
1202,12th Floor, First International Financial Centre
G Block C 54 & 55
Bandra Kurla Complex, Bandra (East)
Mumbai 400 098
Maharashtra, India
Tel: (91 22) 6175 9999
Fax: (91 22) 6175 9961
Email: [email protected]
Investor Grievance E-Mail:
Website: www.online.citibank.co.in
Contact Person: Jigar Jatakia
SEBI Registration No.: INM000010718
Deutsche Equities India Private Limited
The Capital, 14th floor
C -70, G Block, Bandra Kurla Complex
Mumbai 400 051
Maharashtra, India
Tel: (91 22) 7180 4444
Fax: (91 22) 7180 4199
Email: [email protected]
Investor grievance email: db.redressal
@db.com
Website: www.db.com/India
Contact person: Viren Jairath
SEBI Registration No.: INM000010833
Link Intime India Private Limited C-101, 1st Floor, 247 Park,
Lal Bhadur Shastri Marg
Vikhroli (West)
Mumbai 400 083
Maharashtra, India
Tel: (91 22) 4918 6200
Fax: (91 22) 4918 6195
E-mail: [email protected]
Investor Grievance E-mail:
Website: www.linkintime.co.in
Contact Person: Shanti Gopalkrishnan
SEBI Registration No.: INR000004058
BID/ISSUE PERIOD*
BID/ISSUE OPENS ON[●] (1) BID/ISSUE CLOSES ON [●](2)
(1) Our Company in consultation with the BRLMs, may 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/Issue Opening Date.
(2) Our Company in consultation with the BRLMs, may decide to close the Bid/Issue Period for QIBs one Working Day prior to the Bid/Issue Closing Date, in accordance with the SEBI ICDR Regulations.
http://www.acmesolar.in/mailto:[email protected]://www.linkintime.co.in/
-
TABLE OF CONTENTS
SECTION I - GENERAL ............................................................................................................................... 2
DEFINITIONS AND ABBREVIATIONS .................................................................................................... 2
CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA AND
CURRENCY OF PRESENTATION ............................................................................................................ 12 FORWARD-LOOKING STATEMENTS ................................................................................................... 14
SECTION II - RISK FACTORS ................................................................................................................. 15
SECTION III – INTRODUCTION ............................................................................................................. 42
SUMMARY OF INDUSTRY ........................................................................................................................ 42 SUMMARY OF BUSINESS ......................................................................................................................... 47 SUMMARY FINANCIAL INFORMATION .............................................................................................. 56 THE ISSUE .................................................................................................................................................... 63 GENERAL INFORMATION ....................................................................................................................... 65 CAPITAL STRUCTURE .............................................................................................................................. 73 OBJECTS OF THE ISSUE ........................................................................................................................... 81 BASIS FOR ISSUE PRICE .......................................................................................................................... 88 STATEMENT OF TAX BENEFITS ............................................................................................................ 91
SECTION IV: ABOUT THE COMPANY.................................................................................................. 94
INDUSTRY OVERVIEW ............................................................................................................................. 94 BUSINESS .................................................................................................................................................... 120 KEY REGULATIONS AND POLICIES IN INDIA................................................................................. 147 HISTORY AND CERTAIN CORPORATE MATTERS ......................................................................... 153 MANAGEMENT ......................................................................................................................................... 173 PROMOTERS AND PROMOTER GROUP ............................................................................................ 185 GROUP COMPANIES................................................................................................................................ 191 DIVIDEND POLICY ................................................................................................................................... 197
SECTION V – FINANCIAL INFORMATION ........................................................................................ 198
FINANCIAL STATEMENTS..................................................................................................................... 198 PRO FORMA FINANCIAL STATEMENTS ........................................................................................... 353 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS ...................................................................................................................................... 362 FINANCIAL INDEBTEDNESS ................................................................................................................. 385
SECTION VI – LEGAL AND OTHER INFORMATION ...................................................................... 387
OUTSTANDING LITIGATION AND OTHER MATERIAL DEVELOPMENTS .............................. 387 GOVERNMENT AND OTHER APPROVALS ........................................................................................ 399 OTHER REGULATORY AND STATUTORY DISCLOSURES ........................................................... 402
SECTION VII – ISSUE RELATED INFORMATION ........................................................................... 414
ISSUE STRUCTURE .................................................................................................................................. 414 TERMS OF THE ISSUE ............................................................................................................................. 418 ISSUE PROCEDURE.................................................................................................................................. 421
SECTION VIII – MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ........................... 467
SECTION IX – OTHER INFORMATION .............................................................................................. 480
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ................................................ 480
DECLARATION ......................................................................................................................................... 482
-
2
SECTION I - GENERAL
DEFINITIONS AND ABBREVIATIONS
Unless the context otherwise indicates or implies, the following terms shall have the meanings provided below
in this Draft Red Herring Prospectus, and references to any statute, regulation, rule, guidelines, circular,
notification or clarification or policies will include any amendments or re-enactments thereto, from time to time.
Notwithstanding the foregoing, terms in “Main Provisions of the Articles of Association”, “Statement of Tax
Benefits”, “Industry Overview”, “Basis for Issue Price”, “Key Regulations and Policies in India”, “Financial
Information”, “Outstanding Litigation and Other Material Developments” and “Part B” of “Issue Procedure”,
will have the meaning ascribed to such terms in these respective sections.
In case of any inconsistency between the definitions given below and the definitions contained in the General
Information Document (as defined below), the definitions given below shall prevail.
The words and expressions used but not defined in this Draft Red Herring Prospectus will have the same
meaning as assigned to such terms under the Companies Act 1956 (as superseded and substituted by notified
provisions of the Companies Act, 2013), the SEBI Act, the SEBI ICDR Regulations, the SCRA, the Depositories
Act and the rules and regulations made thereunder.
General Terms
Term Description
“our Company”, “the
Company” or “the Issuer”
ACME Solar Holdings Limited, a company incorporated in India under the Companies Act
2013 with its registered and corporate office located at Plot Number 152, Sector 44,
Gurugram - 122 002, Haryana, India
“we”, “the”, “our” or “us” Unless the context otherwise indicates or implies, refers to our Company together with its
Subsidiaries
Company Related Terms
Term Description
Aarohi Solar Aarohi Solar Private Limited
ACME Babadham ACME Babadham Solar Power Private Limited
ACME Bhiwadi ACME Bhiwadi Solar Power Private Limited
ACME Cleantech ACME Cleantech Solutions Private Limited
ACME Cleantech (S) ACME Cleantech Solutions (S) Private Limited, Singapore
ACME Deoghar ACME Deoghar Solar Power Private Limited
ACME Fazilka ACME Fazilka Power Private Limited
ACME Group MKU Holdings, ACME Cleantech and its subsidiaries
ACME Hisar ACME Hisar Solar Power Private Limited
ACME Jaipur ACME Jaipur Solar Power Private Limited
ACME Jaisalmer ACME Jaisalmer Solar Power Private Limited
ACME Jodhpur ACME Jodhpur Solar Power Private Limited
ACME Kaithal ACME Kaithal Solar Power Private Limited
ACME Karimnagar ACME Karimnagar Solar Power Private Limited
ACME Karnal ACME Karnal Solar Power Private Limited
ACME Koppal ACME Koppal Solar Energy Private Limited
ACME Kurukshetra ACME Kurukshetra Solar Energy Private Limited
ACME Magadh ACME Magadh Solar Power Private Limited
ACME Mahbubnagar ACME Mahbubnagar Solar Energy Private Limited
ACME Medak ACME Medak Solar Energy Private Limited
ACME Nalanda ACME Nalanda Solar Power Private Limited
ACME Narwana ACME Narwana Solar Power Private Limited
ACME Nizamabad ACME Nizamabad Solar Energy Private Limited
ACME Odisha ACME Odisha Solar Power Private Limited
ACME Panipat ACME Panipat Solar Power Private Limited
ACME PV ACME PV Powertech Private Limited
ACME Raipur ACME Raipur Solar Power Private Limited
ACME Ranga Reddy ACME Ranga Reddy Solar Power Private Limited
-
3
Term Description
ACME Rewa ACME Rewa Solar Energy Private Limited
ACME Rewari ACME Rewari Solar Power Private Limited
ACME Solar Energy ACME Solar Energy Private Limited
ACME Solar Energy (M.P.) ACME Solar Energy (Madhya Pradesh) Private Limited
ACME Solar Rooftop ACME Solar Rooftop Systems Private Limited
ACME Solar Technologies ACME Solar Technologies (Gujarat) Private Limited
ACME Technology ACME Solar Power Technology Private Limited
ACME Transport ACME Transport Solutions Private Limited
ACME Vijayapura ACME Vijayapura Solar Energy Private Limited
ACME Warangal ACME Warangal Solar Power Private Limited
ACME Yamunanagar ACME Yamunanagar Solar Power Private Limited
AoA/Articles of
Association/Articles
The articles of association of our Company, as amended
Audit Committee The audit committee of our Board
Auditors/Joint Auditors The statutory auditors of our Company, being Walker Chandiok & Co. LLP and S. Tekriwal
& Associates
Banola Power Banola Power Private Limited
Board/ Board of Directors The board of directors of our Company, or a duly constituted committee thereof
CCDs Compulsorily convertible debentures
Corporate Office The corporate office of our Company located at the same address as our Registered Office
CSR Committee The corporate social responsibility committee of our Board
Dayakara Solar Dayakara Solar Power Private Limited
Dayanidhi Solar Dayanidhi Solar Power Private Limited
Devishi Renewable Devishi Renewable Energy Private Limited
Devishi Solar Devishi Solar Power Private Limited
Director(s) The director(s) on our Board
Eminent Solar Eminent Solar Power Private Limited
Equity Shares The equity shares of our Company of face value of ` 10 each ESOP Scheme 2017 ACME Employee Stock Option Plan 2017
Grahati Solar Grahati Solar Energy Private Limited
Group Companies Companies which are covered under the applicable accounting standards and such other
companies as considered material by our Board, as identified in “Group Companies” on page
191
KMP/ 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 described in “Management -
Key Management Personnel” on page 183
Mahisagar Power Mahisagar Power Private Limited
Materiality Policy The policy adopted by our Board in its meeting dated September 18, 2017 for determining
(i) Group Companies; (ii) outstanding material litigation involving our Company,
Subsidiaries, Directors, Promoters and Group Companies; and (iii) outstanding dues to
creditors in respect of our Company, in terms of the SEBI ICDR Regulations for the
purposes of disclosure in the offer documents. For further details, see “Group Companies”
and “Outstanding Litigation and Other Material Developments” on pages 191 and 387,
respectively
Mihit Solar Mihit Solar Power Private Limited
MKU Holdings MKU Holdings Private Limited
MoA/Memorandum
of Association
The memorandum of association of our Company, as amended
Moolchand Moolchand Industrial Estates Private Limited
NCDs Non convertible debentures
Neemuch Solar Neemuch Solar Power Private Limited
Niranjana Solar Niranjana Solar Energy Private Limited
Nirosha Nirosha Power Private Limited
Nomination and
Remuneration Committee
The nomination and remuneration committee of our Board
Nominees Mamta Upadhyay, Manoj Kumar Upadhyay, MKU Holdings, Rajesh Sodhi, Ramamurthy
Muthusamy and VRS Infotech
Pro Forma Financial
Statements
The pro forma financial statements of our Company, comprising the pro forma statement of
profit and loss for Fiscal 2017, prepared in accordance with the requirements of paragraph
23 of item (IX)(B) of Schedule VIII of the SEBI ICDR Regulations, prepared to reflect, the
impact of the Restructuring on a consolidated basis
Project SPV Each project SPV our Company along with its nominees holds 100% of the equity
shareholding
-
4
Term Description
Promoter Group Persons and entities constituting the promoter group of our Company, pursuant to Regulation
2(1)(zb) of the SEBI ICDR Regulations and as disclosed in “Promoters and Promoter Group”
on page 189 to 190
Promoters The promoters of our Company, namely Manoj Kumar Upadhyay and ACME Cleantech.
For details, see “Promoters and Promoter Group” beginning on page 185
Purvanchal Solar Purvanchal Solar Power Private Limited
Registered Office The registered office of our Company located at Plot Number 152, Sector 44, Gurugram - 122
002, Haryana, India
Registrar of Companies/RoC Registrar of Companies, National Capital Territory of Delhi and Haryana at New Delhi. For
further details, see “General Information” on page 65
Restated Consolidated
Financial Statements
The restated consolidated financial statements of our Company which comprises the restated
consolidated balance sheet, the restated consolidated profit and loss and the restated
consolidated cash flow statements as at and for the years ended March 31, 2017 and March
31, 2016 together with the annexures and the notes thereto, which have been prepared in
accordance with the Companies Act and restated in accordance with the SEBI ICDR
Regulations.
Restated Financial
Statements
Restated Consolidated Financial Statements and Restated Standalone Financial Statements,
collectively
Restated Standalone
Financial Statements
The restated standalone financial statements of our Company which comprises the restated
standalone balance sheet, the restated standalone profit and loss and the restated standalone
cash flow statement as at and for the years ended March 31, 2017 and March 31, 2016
together with the annexures and the notes thereto, which have been prepared in accordance
with the Companies Act and restated in accordance with the SEBI ICDR Regulations
Restructuring The internal restructuring of the ACME group pursuant to which our Company acquired
controlling interests over all the solar power assets of the ACME Group and became the
holding company of ACME Solar Energy, Niranjana Solar, Aarohi Solar, Vishwatma Solar,
ACME Jaisalmer and Dayanidhi Solar, as fully described in “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” on page 363 to 364
Rewanchal Solar Rewanchal Solar Power Private Limited
Shareholders The holders of the Equity Shares of our Company from time to time
SPV Special purpose vehicle
Stakeholders Relationship
Committee
The stakeholders relationship committee of our Board
Subsidiaries The subsidiaries of our Company as disclosed in “History and Certain Corporate Matters –
Our Subsidiaries” from page 157 to 172
Sunworld Energy Sunworld Energy Private Limited
Sunworld Innovations Sunworld Innovations Private Limited
Sunworld Solar Sunworld Solar Power Private Limited
Vishwatma Solar Vishwatma Solar Energy Private Limited
Vittanath Vittanath Power Private Limited
VRS Infotech VRS Infotech Private Limited
Yogesh Power Yogesh Power Private Limited
Issue Related Terms
Term Description
Acknowledgment Slip The slip or document issued by the Designated Intermediary(ies) to a Bidder as proof of
registration of the Bid cum Application Form
Allotment Advice The note or advice or intimation of Allotment, sent to each successful Bidder who has been or
is to be Allotted the Equity Shares after approval of the Basis of Allotment by the Designated
Stock Exchange
Allotted/Allotment/Allot The issue, allotment and transfer of the Equity Shares to successful Bidders pursuant to the
Issue
Allottee A successful Bidder to whom the Equity Shares are Allotted
Anchor Escrow Account Account opened with Escrow Collection Bank for the Issue and in whose favour the Anchor
Investors will transfer money through direct credit or NEFT or RTGS in respect of the Bid
Amount when submitting a Bid
Anchor Investor A QIB, who applies under the Anchor Investor Portion in accordance with the requirements
specified in the SEBI ICDR Regulations and who has Bid for an amount of at least ` 100 million.
Anchor Investor Allocation
Price
The price at which Equity Shares will be allocated to Anchor Investors according to the
terms of the Red Herring Prospectus and Prospectus, which will be decided by our
Company 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 the Red Herring
-
5
Term Description
Prospectus and the Prospectus
Anchor Investor Bidding Date The date one Working Day prior to the Bid/Issue Opening Date on which Bids by Anchor
Investors shall be submitted and allocation to the Anchor Investors shall be completed
Anchor Investor Issue Price The final price at which the Equity Shares will be Allotted to Anchor Investors in terms of
the Red Herring Prospectus and the Prospectus, which will be a price equal to or higher
than the Issue Price but not higher than the Cap Price. The Anchor Investor Issue Price will
be decided by our Company, in consultation with the BRLMs
Anchor Investor Portion Up to 60% of the QIB Category, which may be allocated by our Company, in consultation
with the BRLMs, to Anchor Investors, on a discretionary basis, in accordance with SEBI
ICDR Regulations. One-third of the Anchor Investor Portion is reserved for domestic
Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or
above the price at which allocation is made to Anchor Investors
Application Supported by
Blocked Amount/ ASBA
The application (whether physical or electronic) by a Bidder (other than Anchor Investors)
to make a Bid authorizing the relevant SCSB to block the Bid Amount in the relevant
ASBA Account
ASBA Account A bank account maintained with an SCSB and specified in the Bid cum Application Form
which will be blocked by such SCSB to the extent of the appropriate Bid Amount in
relation to a Bid by a Bidder (other than a Bid by an Anchor Investor)
ASBA Form An application form, whether physical or electronic, used by Bidders bidding through the
ASBA process, which will be considered as the application for Allotment in terms of the
Red Herring Prospectus and the Prospectus
Basis of Allotment The basis on which the Equity Shares will be Allotted to successful Bidders under the Issue,
described in “Issue Procedure” on page 456 to 458
Bid An indication to make an offer during the Bid/Issue Period by a Bidder (other than an Anchor
Investor), or on the Anchor Investor Bidding Date by an Anchor Investor, pursuant to
submission of a Bid cum Application Form, to subscribe for or purchase our Equity Shares at
a price within the Price Band, including all revisions and modifications thereto, to the extent
permissible under the SEBI ICDR Regulations, in terms of the Red Herring Prospectus and
the Bid cum Application Form.
The term “Bidding” shall be construed accordingly.
Bid Amount The highest value of the optional Bids as indicated in the Bid cum Application Form and
payable by the Bidder or as blocked in the ASBA Account of the Bidder, as the case may
be, upon submission of the Bid in the Issue less Retail Discount
Bid cum Application Form The form in terms of which the Bidder shall make a Bid, being the ASBA Form and the
Anchor Investor Application Form, as applicable, and which shall be considered as the
application for the Allotment pursuant to the terms of the Red Herring Prospectus and the
Prospectus
Bid Lot [●] Equity Shares
Bid/Issue Closing Date Except in relation to Anchor Investors, the date after which the Designated Intermediaries
shall not accept any Bids for the Issue, which shall be published in [●] editions of [●] (a
widely circulated English national daily newspaper) and [●] editions of [●] (a widely
circulated Hindi national daily newspaper, Hindi also being the regional language in the
place where our Registered Office is located) and in case of any revisions, the extended
Bid/Issue Closing Date shall also be notified on the websites and terminals of the Syndicate
Members, as required under the SEBI ICDR Regulations. Our Company in consultation with
the BRLMs, may decide to close the Bid/Issue Period for QIBs one Working Day prior to the
Bid/Issue Closing Date, subject to the SEBI ICDR Regulations
Bid/Issue Opening Date Except in relation to Anchor Investors, the date on which the Designated Intermediaries shall
start accepting Bids for the Issue, which shall be published in [●] editions of [●] (a widely
circulated English national daily newspaper) and [●] editions of [●] (a widely circulated Hindi
national daily newspaper, Hindi also being the regional language in the place where our
Registered Office is located) and in case of any revisions, the extended Bid/Issue Closing
Date shall also be notified on the websites and terminals of the Syndicate Members, as
required under the SEBI ICDR Regulations.
Bid/Issue Period Except in relation to Anchor Investors, the period between the Bid/Issue Opening Date and
the Bid/Issue Closing Date, inclusive of both days during which prospective Bidders
(excluding Anchor Investors) can submit their Bids, including any revisions thereof in
accordance with the SEBI ICDR Regulations and the terms of the Red Herring Prospectus.
Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring
Prospectus and the Bid cum Application Form and unless otherwise stated or implied,
includes an Anchor Investor
Bidding Centres Centres at which the Designated Intermediaries shall accept the Bid cum Application Forms,
being the Designated SCSB Branch for SCSBs, Specified Locations for the Syndicate, Broker
Centres for Registered Brokers, Designated RTA Locations for RTAs and Designated CDP
-
6
Term Description
Locations for CDPs.
Book Building Process The book building process as described in Schedule XI of the SEBI ICDR Regulations, in
terms of which the Issue is being made
Book Running Lead
Managers/BRLMs
I-Sec, Citi and Deutsche, the book running lead managers to the Issue
Broker Centres Broker centres of the Registered Brokers, where Bidders (other than Anchor Investors) can
submit the Bid cum Application Forms. 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
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 Issue Price and Anchor Investor Issue Price
will not be finalized and above which no Bids will be accepted, including any revisions
thereof
Citi Citigroup Global Markets India Private Limited
Client ID Client identification number of the Bidder’s beneficiary account
Collecting Depository
Participants/CDPs
A depository participant, as defined under the Depositories Act, 1996 and registered under
Section 12 (1A) of the SEBI Act and who is eligible to procure Bids at the Designated CDP
Locations in terms of circular no. CIR/CFD/POLICYCELL/11/2015 dated November 10,
2015 issued by SEBI
Cut-off Price The Issue Price, finalised by our Company, in consultation with the BRLMs, which shall be
any price within the Price Band. Only Retail Individual Investors are entitled to Bid at the
Cut-off Price. QIBs (including Anchor Investors) and Non-Institutional Investors are not
entitled to Bid at the Cut-off Price
Deutsche Deutsche Equities India Private Limited
Demographic Details The details of the Bidders including the Bidders’ address, names of the Bidders’
father/husband, investor status, occupation and bank account details
Designated Branches Such branches of the SCSBs which may collect the Bid cum Application Form used by
Bidders (other than Anchor Investors), a list of which is available at the website of the SEBI
(http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries) and updated
from time to time
Designated CDP Locations Such centres of the Collecting Depository Participants where Bidders (other than Anchor
Investors) can submit the Bid cum Application Forms. The details of such Designated CDP
Locations, along with the names and contact details of the CDPs are available on the
respective websites of the Stock Exchanges and updated from time to time
Designated Date The date on which the funds from the Anchor Escrow Accounts are transferred to the
Public Issue Account or the Refund Account(s), as appropriate, and the amounts blocked by
the SCSBs are transferred from the ASBA Accounts, to the Public Issue Account or Refund
Account(s), as applicable, in terms of the Red Herring Prospectus after the Prospectus is filed
with the RoC.
Designated Intermediaries Collectively, the members of the Syndicate, sub-syndicate/agents, SCSBs, Registered
Brokers, CDPs and RTAs, who are authorized to collect Bid cum Application Forms from
the Bidders (other than Anchor Investors), in relation to the Issue
Designated RTA Locations Such centres of the RTAs where Bidders (other than Anchor Investors) can submit the Bid
cum Application Forms. The details of such Designated RTA Locations, along with the names
and contact details of the RTAs are available on the respective websites of the Stock
Exchanges (www.nseindia.com and www.bseindia.com) and updated from time to time
Designated Stock Exchange [●]
Draft Red Herring
Prospectus/DRHP
This draft red herring prospectus dated September 28, 2017, issued in accordance with the
SEBI ICDR Regulations, which does not contain complete particulars of the price at which
our Equity Shares will be Allotted, including any addenda or corrigenda thereto
Eligible NRI A non-resident Indian, resident in a jurisdiction outside India where it is not unlawful to make
an offer or invitation under the Issue and in relation to whom the Red Herring Prospectus
constitutes an invitation to subscribe for the Equity Shares
Escrow Agreement Agreement dated [●], entered into among our Company, the Registrar to the Issue, the
BRLMs, Escrow Collection Bank(s), Public Issue Bank and Refund Bank, among others, for
collection of the Bid Amounts from Anchor Investors and transfer of funds from the Public
Issue Account and where applicable remitting refunds, if any, to the Anchor Investors, on the
terms and conditions thereof
Escrow Collection Bank(s) The bank(s) which is/are clearing members and are registered with the SEBI as an escrow
bank, with whom the Anchor Escrow Accounts in relation to the Issue for Bids by Anchor
Investors will be opened, in this case being [●]
First Bidder The Bidder whose name appears first in the Bid cum Application Form or the Revision
Form and in case of joint Bidders, whose name appears as the first holder of the beneficiary
account held in joint names
-
7
Term Description
Floor Price The lower end of the Price Band, and any revisions thereof, at or above which the Issue Price
and the Anchor Investor Issue Price will be finalized and below which no Bids will be
accepted and which shall not be less than the face value of the Equity Shares
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 and (SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016
notified by SEBI and included in “Issue Procedure” from page 431 to 466
IPO Initial public offering
I-Sec ICICI Securities Limited
Issue Public issue of up to [●] Equity Shares of face value ₹10 each for cash at a price of ₹ [●]
including a premium of ` [●] per Equity Share, aggregating up to ` 22,000 million.
Our Company is considering, subject to approval by our Shareholders, a Pre-IPO Placement
of up to 5,222,079 Equity Shares to certain investors for an amount not exceeding ₹ 5,000
million. The Pre-IPO Placement will be at the discretion of our Company and at a price to
be determined by our Company. Our Company will complete the issuance and allotment of
Equity Shares pursuant to the Pre-IPO Placement prior to the filing of the Red Herring
Prospectus with the RoC. If the Pre-IPO Placement is completed, the Issue size would be
reduced to the extent of such Pre-IPO Placement subject to the Issue size constituting at
least 10% of the post-Issue paid-up Equity Share capital of our Company
Issue Agreement The agreement dated September 27, 2017 entered into among our Company and the BRLMs,
pursuant to which certain arrangements are agreed to in relation to the Issue
Issue Price The final price (less Retail Discount, if applicable) at which Equity Shares will be Allotted to
the successful Bidders (other than Anchor Investors), as determined in accordance with the
Book Building Process and determined by our Company, in consultation with the BRLMs in
terms of the Red Herring Prospectus on the Pricing Date
Equity Shares will be Allotted to Anchor Investors at the Anchor Investor Issue Price in
terms of the Red Herring Prospectus
Maximum RII Allottees
The maximum number of RIIs who can be allotted the minimum Bid Lot. This is computed
by dividing the total number of Equity Shares available for Allotment to RIIs by the
minimum Bid Lot
Minimum Promoters’
Contribution
Aggregate of 20% of the fully diluted post-Issue Equity Share capital of our Company held
by our Promoters which shall be provided towards minimum promoters’ contribution and
locked-in for a period of three years from the date of Allotment
Monitoring Agency [●]
Monitoring Agency Agreement Agreement dated [●] entered into between our Company and [name of the monitoring
agency.]
Mutual Fund Portion 5% of the QIB Category (other than 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 Issue Price
Net Proceeds Proceeds of the Issue that will be available to our Company, i.e., gross proceeds of the Issue,
less Issue Expenses to the extent applicable to the Issue
Net QIB Portion The QIB Category less the number of Equity Shares Allotted to Anchor Investors
Non-Institutional Category The portion of the Issue, being not more than 15% of the Issue or [●] Equity Shares, available
for allocation on a proportionate basis to Non-Institutional Investors subject to valid Bids
being received at or above the Issue Price
Non-Institutional
Investors/NIIs
All Bidders, including Category III FPIs that are not QIBs (including Anchor Investors) or
Retail Individual Investors, who have Bid for Equity Shares for an amount of more than ` 200,000 (but not including NRIs other than Eligible NRIs)
Pre-IPO Placement Placement of Equity Shares to certain investors post filing of this Draft Red Herring
Prospectus with SEBI but prior to filing of the Red Herring Prospectus with the RoC,
subject to such terms and conditions as disclosed in this Draft Red Herring Prospectus.
Price Band Price band of the Floor Price of ₹ [●] and a Cap Price of ₹ [●], including any revisions
thereof. The Price Band and the minimum Bid Lot size for the Issue will be decided by our
Company, in consultation with the BRLMs, and advertised in [●] editions of [●], a widely
circulated English national daily newspaper and [●] editions of [●] (a widely circulated Hindi
national daily newspaper, Hindi also being the regional language in the place where our
Registered Office is located) at least five Working Days prior to the Bid/Issue 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 websites
Pricing Date The date on which our Company, in consultation with the BRLMs, shall finalize the Issue
Price
-
8
Term Description
Prospectus The Prospectus to be filed with the RoC for this Issue on or after the Pricing Date in
accordance with the provisions of Section 26 of the Companies Act 2013 and the SEBI ICDR
Regulations, containing the Issue Price, the size of the Issue and certain other information,
including any addenda or corrigenda thereto
Public Issue Account The account(s) to be opened with the Escrow Collections Banks under Section 40(3) of the
Companies Act 2013 to receive monies from the Anchor Escrow Account(s) and the ASBA
Accounts on the Designated Date
Public Issue Bank Bank(s) with which the Public Issue Account(s) shall be maintained, in this case being [●]
QIB Category The portion of the Issue, being at least 75% of the Issue or [●] Equity Shares to be Allotted to
QIBs on a proportionate basis, including the Anchor Investor Portion (in which allocation
shall be on a discretionary basis, as determined by our Company in consultation with the
BRLMs), subject to valid Bids being received at or above the Issue Price
Qualified Institutional Buyers
or QIBs
A qualified institutional buyer 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 and which shall be filed with the RoC at least
three Working Days before the Bid/Issue Opening Date and will become the Prospectus
after filing with the RoC after the Pricing Date, including any addenda or corrigenda
thereto
Refund Account(s) Account(s) opened with the Refund Bank from which refunds, if any, of the whole or part of
the Bid Amount shall be made to Anchor Investors
Refund Bank(s) The Escrow Collection Bank with whom the Refund Account(s) will be opened, in this case
being [●]
Registered Brokers Stock brokers registered with the stock exchanges having nationwide terminals, other than
the members of the Syndicate and eligible to procure Bids in terms of circular number
CIR/CFD/14/2012 dated October 14, 2012, issued by SEBI
Registrar Agreement The agreement dated September 21, 2017, entered into among our Company and the Registrar
to the Issue in relation to the responsibilities and obligations of the Registrar to the Issue
pertaining to the Issue
Registrar and Share Transfer
Agents or RTAs
Registrar and share transfer agents registered with SEBI and eligible to procure Bids at the
Designated RTA Locations in terms of circular no. CIR/CFD/POLICYCELL/11/2015 dated
November 10, 2015 issued by SEBI
Registrar to the Issue Link Intime India Private Limited
Retail Category The portion of the Issue, being not more than 10% of the Issue or [●] Equity Shares, available
for allocation to Retail Individual Investors, which shall not be less than the minimum Bid lot,
subject to availability in the Retail Category
Retail Discount A discount of up to ` [●] on the Issue Price available to Retail Individual Investors by our Company, in consultation with the Book Running Lead Managers, at the time of making a
Bid. The Price Band, Retail Discount, if any, and minimum Bid lot decided by our
Company in consultation with the BRLMs, and advertised in [●] editions of [●], a widely
circulated English national daily newspaper and [●] editions of [●] (a widely circulated Hindi
national daily newspaper, Hindi also being the regional language in the place where our
Registered Office is located) , at least five Working Days prior to the Bid/Issue Opening
Date and shall be made available to the Stock Exchanges for the purpose of uploading on
their website
Retail Individual Investors/
RIIs
Bidders (including HUFs and Eligible NRIs) whose Bid Amount for Equity Shares in the
Issue is not more than ` 200,000 in any of the bidding options in the Issue (including HUFs applying through their karta and Eligible NRIs and does not include NRIs other than Eligible
NRIs)
Revision Form The form used by the Bidders to modify the quantity of Equity Shares or the Bid Amount in
any of their Bid cum Application Forms or any previous Revision Form(s), as applicable.
QIBs and Non-Institutional Investors are not permitted to withdraw their Bid(s) or lower the
size of their Bid(s) (in terms of quantity of Equity Shares or the Bid Amount) at any stage.
RIIs can revise their Bids during the Bid/Issue Period and withdraw their Bids until Bid/Issue
Closing Date
Self Certified Syndicate Banks
or SCSBs
The banks registered with the SEBI which offer the facility of ASBA and
the list of which is available on the website of the SEBI
(http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries) and updated
from time to time and at such other websites as may be prescribed by SEBI from time to time
Specified Locations Bidding centres where the Syndicate shall accept Bid cum Application Forms, a list of which
is included in the Bid cum Application Form
Stock Exchanges Collectively, the BSE Limited and the National Stock Exchange of India Limited
Sub-Syndicate
Members
Sub-syndicate members, if any, appointed by the BRLMs and the Syndicate Members, to
collect ASBA Forms and Revision Forms.
-
9
Term Description
Syndicate Agreement The agreement dated [●] entered into amongst the members of the Syndicate, our Company,
the Registrar to the Issue in relation to the collection of Bid cum Application Forms by the
Syndicate (other than Bids directly submitted to the SCSBs under the ASBA process and Bids
submitted to the Registered Brokers at the Broker Centres)
Syndicate Members Intermediaries registered with the SEBI and permitted to carry out activities as an underwriter,
in this case being [●]
Syndicate or members of the
Syndicate
Collectively, the BRLMs and the Syndicate Members
Underwriters [●]
Underwriting Agreement The agreement among our Company and the Underwriters, to be entered into on or after the
Pricing Date
Working Day(s) Any day, other than the second and fourth Saturdays of each calendar month, Sundays and
public holidays, on which commercial banks in Mumbai, India are open for business,
provided however, with reference to (a) announcement of Price Band; and (b) Bid/Issue
Period, “Working Day” shall mean any day, excluding all Saturdays, Sundays and public
holidays, on which commercial banks in Mumbai are open for business; and with reference
to the time period between the Bid/Issue Closing Date and the listing of the Equity Shares
on the Stock Exchanges, “Working Day” shall mean all trading days of the Stock
Exchanges, excluding Sundays and bank holidays, as per the SEBI Circular
SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21, 2016
Conventional and General Terms and Abbreviations
Term Description
AIF(s) Alternative Investment Funds
BSE BSE Limited
CAGR Compounded Annual Growth Rate
Category III FPIs FPIs registered as category III FPIs under the SEBI FPI Regulations, which shall include all other
FPIs not eligible under category I and II foreign portfolio investors, such as endowments,
charitable societies, charitable trusts, foundations, corporate bodies, trusts, individuals and family
offices
CDSL Central Depository Services (India) Limited
CIN Corporate Identity Number
Companies Act Companies Act, 1956 (without reference to the provisions thereof that have ceased to have
effect upon notification of the Notified Sections) and the Companies Act, 2013, read with the
rules, regulations, clarifications and modifications thereunder
Companies Act 1956 Companies Act, 1956 (without reference to the provisions thereof that have ceased to have
effect upon notification of the Notified Sections)
Companies Act 2013 Companies Act, 2013, to the extent in force pursuant to the notification of the Notified
Sections, read with the rules, regulations, clarifications and modifications thereunder
Consolidated FDI Policy The consolidated FDI Policy, effective from August 28, 2017, issued by the Department of
Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India,
and any modifications thereto or substitutions thereof, issued from time to time
CRISIL CRISIL Limited
Depositories Act The Depositories Act, 1996
Depository A depository registered with the SEBI under the Securities and Exchange Board of India
(Depositories and Participants) Regulations, 1996
DIPP Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, GoI
DP ID Depository Participant’s identity number
EBITDA Earnings Before Interest, Tax, Depreciation and Amortization
EPF Act Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
EPS Earnings per share
ESI Act Employees’ State Insurance Act, 1948
Euro Euro, the official single currency of the participating member states of the European Economic
and Monetary Union of the Treaty establishing the European Community
Factories Act Factories Act, 1948
FCNR Account Foreign Currency Non Resident (Bank) account established in accordance with the FEMA
FDI Foreign direct investment
FEMA The Foreign Exchange Management Act, 1999 read with rules and regulations thereunder
Financial Year/Fiscal The period of 12 months commencing on April 1 of the immediately preceding calendar year
and ending on March 31 of that particular calendar year
FPIs A foreign portfolio investor who has been registered pursuant to the SEBI FPI Regulations
FVCI Foreign Venture Capital Investors (as defined under the Securities and Exchange Board of
India (Foreign Venture Capital Investors) Regulations, 2000) registered with SEBI
-
10
Term Description
GAAR General Anti-Avoidance Rules
GDP Gross Domestic Product
GoI Government of India
GST Goods and services tax
HUF(s) Hindu Undivided Family(ies)
IAS Rules The Companies (Indian Accounting Standards) Rules, 2015
ICAI Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards
IFSC Indian Financial System Code
Income Tax Act Income Tax Act, 1961
Ind AS The Indian Accounting Standards referred to in the Companies (Indian Accounting Standard)
Rules, 2015
Indian GAAP Generally Accepted Accounting Principles in India
INR or Rupee or ₹ or Rs. Indian Rupee, the official currency of the Republic of India
IT Information Technology
MCA Ministry of Corporate Affairs, GoI
Mn Million
Mutual Funds Mutual funds registered with the SEBI under the Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996
Notified Sections The sections of the Companies Act, 2013 that have been notified by the MCA and are currently in
effect
NR/ Non-resident A person resident outside India, as defined under the FEMA and includes an NRI
NRI Non-Resident Indian
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
P/E Ratio Price/Earnings Ratio
PAN Permanent account number
PAT Profit after tax
Payment of Bonus Act Payment of Bonus Act, 1965
Payment of Gratuity Act Payment of Gratuity Act, 1972
RBI Reserve Bank of India
Regulation S Regulation S under the U.S. Securities Act, 1933
SCRA Securities Contract (Regulation) Act, 1956
SCRR Securities Contracts (Regulation) Rules, 1957
SEBI Securities and Exchange Board of India constituted under the SEBI Act
SEBI Act Securities and Exchange Board of India Act, 1992
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
SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009
SEBI Listing Regulations SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
STT Securities Transaction Tax
Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011
Trademarks Act Trademarks Act, 1999
U.S. GAAP Generally Accepted Accounting Principles in the United State of America
US$/ USD/ US Dollar United States Dollar, the official currency of the United States of America
USA/ U.S./ US United States of America, its territories and possessions, any state of the United States of America
and the District of Columbia
VAT Value Added Tax
VCFs Venture capital funds as defined in and registered with the SEBI under the Securities and
Exchange Board of India (Venture Capital Fund) Regulations, 1996 or the Securities and
Exchange Board of India (Alternative Investment Funds) Regulations, 2012, as the case ma y be
Wilful Defaulter(s) Wilful Defaulter as defined under Regulation 2(zn) of the SEBI ICDR Regulations
Industry Related Terms/Abbreviations
Term Description
AC Alternating Current
AD Accelerated Depreciation
Air Act Air Prevention and Control of Pollution Act, 1981
APTEL Appellate Tribunal for Electricity
-
11
AT&C Aggregate Technical and Commercial
CEA Central Electricity Authority
CERC Central Electricity Regulatory Commission
Commercial Operation Date or
COD
The date on which a solar power project is commissioned and synchronized with the
respective grid or substation
Committed solar project A solar power project which has not commenced construction or achieved its COD and
which is the subject of a letter of intent entered into between an off-taker and a solar
power developer
CPSUS Central Public Sector Undertakings
CUF Capacity Utilization Factor
DC Direct current
DMRC Delhi Metro Rail Corporation
Electricity Act Electricity Act, 2003
Electricity Rules Electricity Rules, 2005
EPC Engineering, Procurement and Construction
EPF Act Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
GA Grid availability
GEC Scheme Green Energy Scheme
GERC Gujarat Electricity Regulatory Commission
GHI Global Horizontal Irradiation
Gujarat Solar Policy Gujarat Solar Power Policy, 2015
GUVNL Gujarat Urja Vikas Nigam Limited
HERC Haryana Electricity Regulatory Commission
IMF International Monetary Fund
IPP Independent Power Producer
IREA International Renewable Agency
Karnataka Policy Karnataka Solar Policy 2014
KREDL Kerala Renewable Energy Development Limited
MNRE Ministry of New and Renewable Energy
MP Policy Madhya Pradesh Solar Power Policy, 2012
MW Mega Watts- Represents Alternating Current Capacity
MWp Mega Watts- Represents Direct Current Capacity
NAPCC National Action Plan on Climate Change
National Electricity Policy National Electricity Policy, 2005
National Tariff Policy National Tariff Policy, 2016
NCEF National Clean Energy Fund
NSM National Solar Mission
NVVN NTPC Vidyut Vyapar Nigam Limited
Operational solar project A solar power project which has achieved its COD
PAF Plant Availability Factor
PFS PTC India Financial Services
PGCIL Power Grid Corporation of India Limited
PLF Plant Load Factor
PPA Power Purchase Agreement
REC Rural Electrification Corporation
REC Mechanism Mechanism to develop the market in electricity from non-conventional energy sources by
issuance of transferable and saleable credit certificates
REC Regulations Central Electricity Regulatory Commission (Terms and Conditions for Recognition and
Issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations,
2010
RPO Renewable Purchase Obligations
SECI Solar Energy Corporation of India Limited
SERCs State Electricity Regulatory Commissions
Tariff Regulations Central Electricity Regulatory Commission (Terms and Conditions for Tariff Determination
from Renewable Energy Sources) Regulations, 2017
Telangana Policy Telangana Solar Power Policy, 2015
TUV Reports TUV Rheinland (India) Private Limited’s Technical Reports
UDAY Ujwal Discom Assurance Yojana
Under-construction solar
project
A solar power project which is being constructed according to the terms of the relevant PPA
and which has not achieved its COD
VGF Viability Gap Funding
Water Act Water Prevention and Control of Pollution Act, 1974
Water Cess Act Water (Prevention and Control of Pollution) Cess Act, 1977
-
12
CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA AND
CURRENCY OF PRESENTATION
Certain Conventions
All references in this Draft Red Herring Prospectus to “India” are to the Republic of India.
Financial Data
Unless indicated otherwise, the financial data in this Draft Red Herring Prospectus is derived from our Restated
Consolidated Financial Statements and Restated Standalone Financial Statements, and the respective notes,
schedules and annexures thereto, prepared in accordance with the Companies Act and restated in accordance
with the SEBI ICDR Regulations. In addition the Pro Forma Financial Statements in relation to the
Restructuring is included in this Draft Red Herring Prospectus.
Certain data included in this Draft Red Herring Prospectus in relation to certain operating metrics, financial and
other business related information not otherwise included in the Restated Financial Statements has been
reviewed and verified by TUV Rheinland (India) Private Limited and certified pursuant to the certificate on
actual energy generation dated September 22, 2017.
Our Company’s financial year commences on April 1 of the immediately preceding calendar year and ends on
March 31 of that particular calendar year, so all references to a particular financial year are to the 12 month
period commencing on April 1 of the immediately preceding calendar year and ending on March 31 of that
particular calendar year.
Ind AS differs from accounting principles with which prospective investors may be familiar in other countries,
including IFRS and US GAAP and the reconciliation of the financial information to other accounting principles
has not been provided. Our Company has not attempted to explain those differences or quantify their impact on
the financial data included in this Draft Red Herring Prospectus and investors should consult their own advisors
regarding such differences and their impact on our Company’s financial data. The degree to which the financial
information included in this Draft Red Herring Prospectus will provide meaningful information is entirely
dependent on the reader’s level of familiarity with Indian accounting policies and practices, Ind AS, the
Companies Act and the SEBI ICDR Regulations. Any reliance by persons not familiar with Ind AS, the
Companies Act, the SEBI ICDR Regulations and practices on the financial disclosures presented in this Draft
Red Herring Prospectus should accordingly be limited. See “Risk Factors - Significant differences could exist
between Ind AS and other accounting principles, such as U.S. GAAP and IFRS, which may affect investors’
assessments of our financial condition, which may be material to investors’ assessment of our financial
condition” on page 37.
Certain figures contained in this Draft Red Herring Prospectus, including financial information, have been
subject to rounding adjustments. All decimals have been rounded off to two decimal points. 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. However, where any figures that may have been sourced from third-party industry sources
are rounded off to other than two decimal points in their respective sources, such figures appear in this Draft
Red Herring Prospectus as rounded-off to such number of decimal points as provided in such respective sources.
Unless the context otherwise indicates, any percentage amounts, as set forth in “Risk Factors”, “Business”,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on
page 15, 120 and 362, respectively, and elsewhere in this Draft Red Herring Prospectus have been calculated on
the basis of the Restated Consolidated Financial Statements unless otherwise stated.
Industry and Market Data
We have commissioned a report titled “Outlook on the solar power market in India” dated September 2017,
prepared by CRISIL, for the purpose of confirming our understanding of the industry in connection with the
Issue. Further, in this regard, CRISIL has issued the following disclaimer:
CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing this
report (Report) based on the Information obtained by CRISIL from sources which it considers reliable
-
13
(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 entity covered in the Report and no part of
this Report should be construed as an expert advice or investment advice or any form of investment banking
within the meaning of any law or regulation. CRISIL especially states that it has no liability whatsoever to
the subscribers / users / transmitters/ distributors of this Report. Without limiting the generality of the
foregoing, nothing in the Report is to be construed as CRISIL providing or intending to provide any services
in jurisdictions where CRISIL does not have the necessary permission and/or registration to carry out its
business activities in this regard. ACME Solar Holdings Limited will be responsible for ensuring
compliances and consequences of non-compliances for use of the Report or part thereof outside India.
CRISIL Research operates independently of, and does not have access to information obtained by CRISIL’s
Ratings Division / CRISIL Risk and Infrastructure Solutions Ltd (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.
Industry publications generally state that the information contained in such publications has been obtained from
sources generally believed to be reliable, but their accuracy, adequacy or completeness and underlying
assumptions are not guaranteed and their reliability cannot be assured. Accordingly, no investment decisions
should be made based on such information. Although we believe that the industry and market data used in this
Draft Red Herring Prospectus is reliable, it has not been independently verified by us, the BRLMs, or any of our
or their respective affiliates or advisors, and none of these parties makes any representation as to the accuracy of
this information. 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. The extent to which the industry and market
data presented in this Draft Red Herring Prospectus is meaningful depends upon 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 we conduct our business and methodologies and assumptions may vary
widely among different market and industry sources.
Such data involves risks, uncertainties and numerous assumptions and is subject to change based on various
factors, including those discussed in “Risk Factors - This Draft Red Herring Prospectus contains information
from the technical reports and CRISIL Report, which we have commissioned” on page 34.
Currency and Units of Presentation
All references to “Rupees” or “₹” or “Rs.” are to Indian Rupees, the official currency of the Republic of India.
In this Draft Red Herring Prospectus, our Company has presented certain numerical information. All figures
have been expressed in millions. One million represents “10 lakhs” or 1,000,000. However, where any figures
that may have been sourced from third-party industry sources are expressed in denominations other than
millions in their respective sources, such figures appear in this Draft Red Herring Prospectus expressed in such
denominations as provided in such respective sources.
Exchange Rates
This Draft Red Herring Prospectus contains conversions of U.S. Dollars and other currency amounts into Indian
Rupees that have been presented solely to comply with the requirements of the SEBI ICDR Regulations. These
conversions should not be construed as a representation that such currency amounts could have been, or can be
converted into Indian Rupees, at any particular rate, or at all.
The exchange rates of certain currencies used in this Draft Red Herring Prospectus into Indian Rupees are
provided below. (in `)
Currency Exchange rate as on June 30,
2017
Exchange rate as on March 31,
2017
Exchange rate as on March 31,
2016
1 USD 64.74 64.84 66.33
-
14
FORWARD-LOOKING STATEMENTS
This Draft Red Herring Prospectus contains certain “forward-looking statements”. These forward looking
statements include statements which can generally be identified by words or phrases such as “aim”,
“anticipate”, “believe”, “expect”, “estimate”, “intend”, “likely to”, “objective”, “plan”, “propose”, “will
continue”, “seek to”, “will pursue” or other words or phrases of similar import.
These forward-looking statements are based on our current plans, estimates and expectations and actual results
may differ materially from those suggested by such 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. This may be due to risks or uncertainties
associated with our expectations with respect to, but not limited to, regulatory changes pertaining to the
industries in India in which we have our businesses 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 our 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, changes in competition in our industry and
incidence of any natural calamities and/or acts of violence. Important factors that would cause actual results to
differ materially include, but not limited to:
our ability to bid for highly competitive central and state government solar power project auctions;
our ability to obtain the necessary funding and on acceptable terms;
the limited pool of potential purchasers of utility scale quantities of electricity;
varying radiation levels and it can only be estimated based on historical average GHI data and soiling losses
cost overruns, delays or under-estimations of our costs of construction; and
constraints in the availability of the electricity grid, including our inability to obtain access to transmission lines in a timely and cost-efficient manner.
For a further discussion of factors that could cause our actual results to differ from our expectations, see “Risk
Factors”, “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” beginning on page 15, 120 and 362, 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
future gains or losses could be materially different from those that have been estimated. Forward-looking
statements reflect our current views as of the date of this Draft Red Herring Prospectus and are not a guarantee
of future performance. Although we believe that the assumptions on which such statements are based are
reasonable, any such assumptions as well as the statement based on them could prove to be inaccurate.
Neither our Company, nor the Syndicate, 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 SEBI
requirements, our Company and the BRLMs will ensure that investors in India are informed of material
developments until the receipt of final listing and trading approvals for the Equity Shares pursuant to the Issue.
-
15
SECTION II - RISK FACTORS
An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information
in this Draft Red Herring Prospectus, including the risks and uncertainties described below, before making an
investment in our Equity Shares. The risks described below are not the only ones relevant to us or our Equity
Shares, the industry in which we operate in or to India. Additional risks and uncertainties, not presently known
to us or that we currently deem immaterial may also impair our business, results of operations, cash flows and
financial condition. If any of the following risks, or other risks that are not currently known or are now deemed
immaterial, actually occur, our business, results of operations, cash flows and financial condition could suffer,
the price of our Equity Shares could decline, and you may lose all or part of your investment. Unless specified
in the relevant risk factor below, we are not in a position to quantify the financial implication of any of the risks
mentioned below. To obtain a more detailed understanding of our business and operations, prospective
investors should read this section in conjunction with “Business” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” beginning on pages 120 and 362, respectively, as
well as the other financial and statistical information contained in this Draft Red Herring Prospectus. In
making an investment decision, prospective investors must rely on their own examination of us and the terms of
the Issue including the merits and risks involved. You should consult your tax, financial and legal advisors
about particular consequences to you of an investment in the Issue.
Prospective investors should pay particular attention to the fact that we were incorporated under the laws of
India and are subject to a legal and regulatory environment which may differ in certain respects from that of
other countries. This Draft Red Herring Prospectus also contains forward-looking statements that involve risks,
assumptions, estimates and uncertainties. Our actual results could differ from those anticipated in these
forward-looking statements as a result of certain factors, including the considerations described below and
elsewhere in this Draft Red Herring Prospectus. See “Forward-Looking Statements” beginning on page 14.
Our financial information for Fiscals 2017 and 2016, included in this Draft Red Herring Prospectus, is
prepared under Ind AS. References to “Restated Consolidated Financial Statements” are to our restated,
consolidated financial information for Fiscals 2017 and 2016. Unless stated or the context requires otherwise,
the financial information used in this section is derived from the Restated Consolidated Financial Statements.
For a discussion of our results of operations, see “Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Results of Operations” beginning on page 362.
Risks Related to Our Business and Industry
1. We may not be able to grow our portfolio of solar power projects as we rely on highly competitive central and state government solar power project auctions.
Our current business strategy includes plans to further grow our IPP assets. Competition to acquire new solar
power projects occurs at the bidding and tendering stage as we bid against other solar power IPPs for long term
PPAs in central and state government solar power auctions. We compete for project awards based on, among
other things, pricing, technical and engineering expertise, financing capabilities, past experience and track
record. The bidding and selection process is also affected by a number of factors, including factors which may
be beyond our control, such as market conditions or government incentive programs. It is difficult to predict
whether and when we will be awarded a new solar power project.
Our competitors may have greater financial resources, a more effective or established localized business
presence or a greater willingness or ability to operate with little or no operating margins for sustained periods of
time. Any increase in competition during the bidding process or decline in our competitive capabilities could
have an adverse impact on our market share and on the margins we generate from our solar power projects. The
solar power industry has witnessed continuously falling tariffs in recent times. Tariff rates have declined
significantly from Rs 7.49 per kWh, the lowest tariff in 2011, to less than Rs 3 per kWh in 2017. There can be
no assurance that we will be able to match our competitors’ bids going forward. If we miscalculate our proposed
tariff rates or if we misjudge our costs when we submit competitive bids, we may not win the rights to develop
new solar power projects or may win auctions that are not as profitable for us as we intend. In addition, after we
win a state auction and prior to signing a PPA, the tariff must be adopted by the relevant state regulatory
commission. However, there have been instances where such approval has not been obtained. For instance, the
Haryana Electricity Regulatory Commission did not approve the tariff and the draft PPA submitted by the
Haryana Power Purchase Centre. As a result, our subsidiary, ACME Panipat Solar Power Private Limited, the
successful bidder in the relevant auction held in December 2015, has not been able to undertake any activity on
-
16
this project despite winning the bid. For details, see “Outstanding Litigation and Other Material
Developments” beginning on page 387.
In addition, the rules of the auction process may change. Each state in India has its own regulatory framework
and several states have their own renewable energy policies. The rules governing the various regional power
markets may change from time to time and they may be contrary to our interests and adverse to our financial
returns. For example, most national auctions currently use the reverse auction structure, in which several bidders
take part in the same project. There can be no assurance that the central and state governments will continue to
allow us to utilize such bidding structures and any shift away from the current structures could increase the
competition and benefit other bidders more than us adversely affect our business, results of operations and cash
flows.
There can be no assurance that we will be successful in winning any of the bids we have submitted or that we
will be able to grow our IPP assets. We also incur certain costs relating to technical and other assessments when
we submit bids. If we do not win the bid, we will not be able to recoup such costs at all, which will have an
adverse effect on our results of operations.
2. Implementing our growth strategy requires significant capital expenditure and will depend to a significant extent on our ability to obtain the necessary funding and on acceptable terms.
We require significant capital for the installation and construction of our solar power projects and other aspects
of our operations. There can be no assurance that going forward we will be able to finance our projects with a
combination of equity and debt as we have done in the past or that the terms of available financing will remain
attractive. Any changes to our growth strategy could affect our ability to grow our portfolio of projects and also
force us to be more conservative with our growth strategy.
We expect to repay a portion of our existing debt with the Net Proceeds from this Issue and maintain sufficient
reserves for future expansion of our business. However, we give no assurance that we will be successful in
obtaining additional financing in the time periods required or at all, or on terms or at costs that we find attractive
or acceptable. Any such failures may render it impossible for us to fully execute our growth plan. In addition,
rising interest rates could adversely affect our ability to secure financing on favorable terms and our cost of
capital could, as a result, increase significantly.
Our ability to obtain external financing is subject to a number of uncertainties, including:
• our future financial condition, results of operations and cash flows; • the general condition of global equity and debt capital markets; • regulatory and government support in the form of tax credit incentives, and other incentives; • the continued confidence of banks and other financial institutions in us and the solar power industry; • economic, political and other conditions in India; and • ou