u u...website: contact person: m muralikrishna inr000000221 our promoters: dr. satyanarayana chava,...

PROSPECTUSDated: December 12, 2016

(Please read Sections 26 and 32 of the Companies Act, 2013)100% Book Built Offer

BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE OFFER

Kotak Mahindra Capital Company Limited1st Floor, 27 BKC, Plot No. 27, “G” Block,Bandra Kurla Complex, Bandra (East), Mumbai 400 051, Maharashtra, IndiaTel: +91 22 4336 0000; Fax: +91 22 6713 2447E-mail: [email protected] Investor grievance email: [email protected]: www.investmentbank.kotak.comContact Person: Ganesh RaneSEBI Registration No.: INM000008704

Citigroup Global Markets India Private Limited1202, 12th Floor, First International Financial Center, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051, Maharashtra, IndiaTel: +91 22 6175 9999; Fax: +91 22 6175 9961E-mail: [email protected] Investor grievance e-mail: [email protected]: http://www.online.citibank.co.in/rhtm/citigroupglobalscreen1.htmContact Person: Rahul Roy SEBI Registration No.: INM000010718

Jefferies India Private Limited42/43, 2 North Avenue, Maker Maxity, Bandra-Kurla Complex, Bandra (East) Mumbai 400 051, Maharashtra, IndiaTel: +91 22 4356 6000, Fax: +91 22 6765 5595 E-mail: [email protected] grievance email:[email protected]: www.jefferies.comContact Person: Ashish ParasrampuriaSEBI Registration No.: INM000011443

SBI Capital Markets Limited202, Maker Tower “E”Cuffe ParadeMumbai 400 005, Maharashtra, IndiaTel: +9122 2217 8300, Fax: +9122 2218 8332E-mail: [email protected] grievance e-mail: [email protected]: www.sbicaps.comContact Person: Kavita Tanwani/ Sambit RathSEBI Registration No.: INM000003531

Karvy Computershare Private LimitedSelenium Tower BPlot No. 31-32, Gachibowli Financial District, NanakramgudaHyderabad 500 032 Tel: +91 40 6716 2222, Fax: +91 40 2343 1551 E-mail: [email protected] grievance email: [email protected]: www.karisma.karvy.comContact Person: M MuralikrishnaSEBI Registration No.: INR000000221

OUR PROMOTERS: DR. SATYANARAYANA CHAVA, NAGA RANI CHAVA, DR. RAJU SRIHARI KALIDINDI, RAVI KUMAR V V AND DR. LAKSHMANA RAO C VINITIAL PUBLIC OFFERING OF 31,116,785^ EQUITY SHARES OF FACE VALUE OF `10 EACH (“EQUITY SHARES”) OF LAURUS LABS LIMITED (“COMPANY” OR “ISSUER”) FOR CASH AT A PRICE OF `428 PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF `418 PER EQUITY SHARE) (THE “OFFER PRICE”) AGGREGATING TO `13,305.10 MILLION*^ (“OFFER”) COMPRISING A FRESH ISSUE OF 7,009,345^ EQUITY SHARES AGGREGATING TO `2,997.10 MILLION*^ (“FRESH ISSUE”) AND AN OFFER FOR SALE OF 24,107,440 EQUITY SHARES BY THE SELLING SHAREHOLDERS (AS DEFINED HEREUNDER), AGGREGATING TO `10,308.00 MILLION* (“OFFER FOR SALE”). THE OFFER INCLUDES A RESERVATION OF 322,164^ EQUITY SHARES, AGGREGATING TO ̀ 125 MILLION, FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED HEREIN) NOT EXCEEDING 5% OF OUR POST-OFFER PAID UP EQUITY SHARE CAPITAL (THE “EMPLOYEE RESERVATION PORTION”). THE OFFER LESS THE EMPLOYEE RESERVATION PORTION IS HEREINAFTER REFERRED TO AS THE “NET OFFER”. THE OFFER AND THE NET OFFER SHALL CONSTITUTE 29.42%^ AND 29.12%^, RESPECTIVELY OF THE POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY. THE ANCHOR INVESTOR OFFER PRICE IS `428 PER EQUITY SHARE.THE FACE VALUE OF EQUITY SHARES IS `10 EACH. THE OFFER PRICE IS 42.80 TIMES THE FACE VALUE OF THE EQUITY SHARES.** Employee Discount of `40 to the Offer Price (equivalent to 9.35% of the Offer Price) was offered to the Eligible Employees bidding in the Employee Reservation Portion. All amounts have been included taking into consideration the Employee Discount.^Subject to finalisation of Basis of Allotment

In terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”), and in accordance with Regulation 26(1) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (the “SEBI ICDR Regulations”) the Offer was made through the Book Building Process wherein 50% of the Net Offer was allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”), provided that our Company allocated upto 60% of the QIB Portion to Anchor Investors on a discretionary basis, out of which one-third was reserved for domestic Mutual Funds only, subject to valid Bids having been received from domestic Mutual Funds at or above the Anchor Investor Offer Price, in accordance with the SEBI ICDR Regulations. 5% of the QIB Portion (excluding the Anchor Investor Portion) was available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion was available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids having been received at or above the Offer Price. Further, not less than 15% of the Net Offer was available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Offer was available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids having been received at or above the Offer Price. Further, 322,164 Equity Shares were available for allocation on a proportionate basis to Eligible Employees, subject to valid Bids having been received from them at or above the Offer Price after the Employee Discount. All potential investors, other than Anchor Investors, were required to mandatorily utilise the Application Supported by Blocked Amount (“ASBA”) process providing details of their respective bank account which were blocked by the Self Certified Syndicate Banks (“SCSBs”) to participate in the Offer. Anchor Investors were not permitted to participate in the Anchor Investor Portion through the ASBA process. For details, see “Offer Procedure” on page 539.

RISK IN RELATION TO THE FIRST OFFERThis being the first public issue of our Company, there has been no formal market for the Equity Shares. The face value of the Equity Shares is `10 and the Offer Price is 42.80 times the face value. The Offer Price (determined and justified by our Company in consultation with the BRLMs as stated under “Basis for Offer Price” on page 105) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.

GENERAL RISKSInvestments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Offer unless they can afford to take the risk of losing their entire investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Offer. For taking an investment decision, investors must rely on their own examination of our Company and the Offer, including the risks involved. The Equity Shares in the Offer have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents of this Prospectus. Specific attention of the investors is invited to “Risk Factors” on page 18.

ISSUER’S AND SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITYOur Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to our Company and the Offer, which is material in the context of the Offer, that the information contained in this 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 Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. Further, each Selling Shareholder, severally and not jointly, accepts responsibility for and confirms only statements specifically confirmed or undertaken by such Selling Shareholder in this Prospectus to the extent that the statements specifically pertain to such Selling Shareholder and its portion of the Equity Shares offered under the Offer for Sale and confirms that such statements are true and correct in all material respects and are not misleading in any material respect.

LISTINGThe Equity Shares offered through the Red Herring Prospectus are proposed to be listed on the BSE and the NSE. Our Company has received an ‘in-principle’ approval from the BSE and the NSE for the listing of the Equity Shares pursuant to letters dated August 31, 2016 and September 12, 2016, respectively. For the purposes of the Offer, the Designated Stock Exchange shall be BSE. A signed copy of the Red Herring Prospectus was and this Prospectus shall be delivered for registration to the RoC in accordance with Section 26(4) of the Companies Act, 2013. For details of the material contracts and documents which were made available for inspection from the date of the Red Herring Prospectus, upto the Bid/ Offer Closing Date, see “Material Contracts and Documents for Inspection” on page 693.

LAURUS LABS LIMITED Our Company was originally incorporated as Laurus Labs Private Limited on September 19, 2005 at Hyderabad, Andhra Pradesh, India as a private limited company under the Companies Act, 1956. Our Company was subsequently converted into a public limited company and its name was changed to Laurus Labs Limited and a fresh certificate of incorporation consequent upon change of name on conversion to a public limited company was issued by the Registrar of Companies, Andhra Pradesh and Telangana, located at Hyderabad (“RoC”) on February 12, 2007. Subsequently the name of our Company was changed to Aptuit Laurus Limited and a fresh certificate of incorporation consequent upon change of name was issued by the RoC on July 19, 2007. Thereafter our Company was converted into a private limited company and its name was changed to Aptuit Laurus Private Limited and a fresh certificate of incorporation consequent upon change of name on conversion to a private limited company was issued by the RoC on July 24, 2007. Subsequently the name of our Company was changed to Laurus Labs Private Limited and a fresh certificate of incorporation consequent upon change of name was issued by the RoC on February 21, 2012. Our Company was converted into a public limited company and the name of our Company was changed to Laurus Labs Limited and a fresh certificate of incorporation consequent upon change of name on conversion to a public limited company was issued by the RoC on August 16, 2016. For details of change in the name and registered office of our Company, see “History and Certain Corporate Matters” on page 190.

Registered Office: Plot No.21, Jawaharlal Nehru Pharma City, Parawada, Visakhapatnam 531 021, Andhra Pradesh, IndiaCorporate Office: 2nd Floor, Serene Chambers, Road No. 7, Banjara Hills, Hyderabad 500 034, Telangana, India

Contact Person: G. Venkateswar Reddy, Company Secretary and Compliance Officer; Tel: +91 40 3980 4333; Fax: +91 40 3980 4320E-mail: [email protected]; Website: www.lauruslabs.com; Corporate Identity Number: U24239AP2005PLC047518

BID/OFFER PROGRAMMEBID/OFFER OPENED ON DECEMBER 6, 2016(1)

BID/OFFER CLOSED ON DECEMBER 8, 2016(1) The Anchor Investor Bid/Offer Period opened and closed one Working Day prior to the Bid/Offer Opening Date i.e.December 5, 2016 .

U U

TABLE OF CONTENTS

SECTION I: GENERAL .......................................................................................................................................... 2

DEFINITIONS AND ABBREVIATIONS ......................................................................................................... 2

PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA .................................................... 14

FORWARD-LOOKING STATEMENTS ........................................................................................................ 16

SECTION II: RISK FACTORS ............................................................................................................................. 18

SECTION III: INTRODUCTION .......................................................................................................................... 43

SUMMARY OF INDUSTRY ........................................................................................................................... 43

SUMMARY OF OUR BUSINESS ................................................................................................................... 46

SUMMARY OF FINANCIAL INFORMATION ............................................................................................. 51

THE OFFER ..................................................................................................................................................... 60

GENERAL INFORMATION ........................................................................................................................... 62

CAPITAL STRUCTURE ................................................................................................................................. 71

OBJECTS OF THE OFFER .............................................................................................................................. 96

BASIS FOR OFFER PRICE ........................................................................................................................... 105

STATEMENT OF TAX BENEFITS .............................................................................................................. 109

SECTION IV: ABOUT OUR COMPANY ............................................................................................................ 114

INDUSTRY OVERVIEW .............................................................................................................................. 114

OUR BUSINESS ............................................................................................................................................ 166

REGULATIONS AND POLICIES ................................................................................................................. 183

HISTORY AND CERTAIN CORPORATE MATTERS ................................................................................ 190

OUR MANAGEMENT .................................................................................................................................. 201

OUR PROMOTERS AND PROMOTER GROUP ......................................................................................... 220

OUR GROUP ENTITY .................................................................................................................................. 225

RELATED PARTY TRANSACTIONS ......................................................................................................... 227

DIVIDEND POLICY ..................................................................................................................................... 228

SECTION V: FINANCIAL INFORMATION ....................................................................................................... 230

FINANCIAL STATEMENTS ........................................................................................................................ 230

CAPITALISATION STATEMENT AS ADJUSTED FOR THE OFFER ...................................................... 451

FINANCIAL INDEBTEDNESS .................................................................................................................... 453

IND AS FINANCIAL INFORMATION ........................................................................................................ 456

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS ............................................................................................................................................... 476

SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IND AS .................... 498

SECTION VI: LEGAL AND OTHER INFORMATION....................................................................................... 505

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ..................................................... 505

GOVERNMENT AND OTHER APPROVALS ............................................................................................. 509

OTHER REGULATORY AND STATUTORY DISCLOSURES .................................................................. 513

SECTION VII: OFFER INFORMATION ............................................................................................................ 531

TERMS OF THE OFFER ............................................................................................................................... 531

OFFER STRUCTURE .................................................................................................................................... 536

OFFER PROCEDURE ................................................................................................................................... 539

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ............................................... 587

SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION ........................................................ 588

SECTION IX: OTHER INFORMATION............................................................................................................. 693

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .................................................................. 693

DECLARATION ............................................................................................................................................ 697

2

SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

This Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates or implies,

shall have the meaning as provided below. References to any legislation, act, regulation, rules, guidelines or

policies shall be to such legislation, act or regulation, as amended from time to time.

General Terms

Term Description

“our Company”, “the Company”,

“the Issuer” or “Laurus Labs”

Laurus Labs Limited, a company incorporated under the Companies Act, 1956 and

having its Registered Office at Plot No.21, Jawaharlal Nehru Pharma City, Parawada,

Visakhapatnam 531 021, Andhra Pradesh, India

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

Subsidiaries

Company Related Terms

Term Description

Aptuit Aptuit (Asia) Private Limited

Aptuit Informatics Aptuit Informatics India Private Limited

Aptuit Singapore Aptuit (Singapore) Private Limited

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

Auditors/Statutory Auditors Statutory auditors of our Company, namely, S. R. Batliboi & Associates LLP, Chartered

Accountants

Board/Board of Directors Board of directors of our Company or a duly constituted committee thereof

Bluewater Bluewater Investment Ltd

CCPS Series A Preference Shares, Series B Preference Shares and Series C Preference Shares

Corporate Office Corporate office of our Company located at 2nd Floor, Serene Chambers, Road No.7,

Banjara Hills, Hyderabad 500 034, Telangana, India

Director(s) Director(s) of our Company

Equity Shares Equity shares of our Company of face value of `10 each

ESOP 2011 Laurus Employee Stock Option Scheme 2011

ESOP 2016 Laurus Employee Stock Option Scheme 2016

Erstwhile Associate Company Our erstwhile associate company, namely Sriam Labs Private Limited which became our

wholly owned Subsidiary with effect from November 1, 2016

Erstwhile Subsidiary Our erstwhile subsidiary company, namely Viziphar Biosciences Private Limited which

we divested, with effect from April 1, 2016

FIP Fidelity India Principals

FIL Capital Advisors FIL Capital Advisors Trustee Company Private Limited

FIL Capital Management FIL Capital Management (Mauritius) Limited

Frost and Sullivan Frost and Sullivan (India) Private Limited

Group Entity The company as covered under the applicable accounting standards and also other

companies as considered material by our Board, as identified in“Our Group Entity” on

page 225

Ind AS Financial Statements Special Purpose Unconsolidated Ind AS Financial Statements and Special Purpose

Consolidated Ind AS Financial Statements

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

ICDR Regulations, Section 2(51) of the Companies Act, 2013 and as disclosed in “Our

Management” on page 217

Laurus Inc. Laurus Synthesis Inc.

Laurus Investment Agreement Investment agreement dated May 2, 2014 executed between our Company, Dr.

Satyanarayana Chava, Naga Rani Chava, Ravi Kumar V V, Dr. Raju Srihari Kalidindi,

FIL Capital Management, FIP, Aptuit, Bluewater and other shareholders of our

Company, as amended

Memorandum of

Association/MOA

Memorandum of Association of our Company, as amended

Promoters Promoters of our Company, namely, Dr. Satyanarayana Chava, Naga Rani Chava, Dr.

Raju Srihari Kalidindi, Ravi Kumar V V and Dr. Lakshmana Rao C V

For details, see “Our Promoters and Promoter Group” on page 220

Promoter Group Persons and entities constituting the promoter group of our Company in terms of

Regulation 2(1)(zb) of the SEBI ICDR Regulations

3

Term Description

For details, see “Our Promoters and Promoter Group” on page 220

Registered Office Registered office of our Company located at Plot No.21, Jawaharlal Nehru Pharma City,

Parawada, Visakhapatnam 531 021, Andhra Pradesh, India

Registrar of Companies/RoC Registrar of Companies, Andhra Pradesh & Telangana, located at Hyderabad

Restated Consolidated Financial

Statements

The restated consolidated financial information of our Company, our Erstwhile

Subsidiary, our Erstwhile Associate Company and Laurus Inc. which comprises of the

restated consolidated balance sheet, the restated consolidated profit and loss information

and the restated consolidated cash flow information as at and for the six months ended

September 30, 2016 and the financial years ended March 31, 2016, March 31, 2015 and

March 31, 2014, together with the annexures and notes thereto, which have been prepared

in accordance with the Companies Act, the Indian GAAP and restated in accordance with

the SEBI ICDR Regulations

Restated Financial Statements Collectively, the Restated Consolidated Financial Statements and the Restated

Unconsolidated Financial Statements

Restated Unconsolidated Financial

Statements

The restated unconsolidated financial information of our Company which comprises of

the restated unconsolidated balance sheet, the restated unconsolidated profit and loss and

the restated unconsolidated cash flow information as at and for the six months ended

September 30, 2016 and the financial years ended March 31, 2016, March 31, 2015,

March 31, 2014, March 31, 2013 and March 31, 2012, which have been prepared in

accordance with the Companies Act, the Indian GAAP and restated in accordance with

the SEBI ICDR Regulations

R&D Center Research and Development Center located at Plot No. DS1 and DS2, IKP Knowledge

Park, Turkapally, Shameerpet, Ranga Reddy District, Hyderabad 500 078, Telangana,

India

Selling Shareholders Aptuit, Bluewater, FIL Capital Management and FIP (acting through its trustee FIL

Capital Advisors)

Series A Preference Shares 0.001% fully and compulsorily convertible, cumulative, participating and non-

redeemable Series A preference shares of face value of `10 each

Series B Preference Shares 0.001% fully and compulsorily convertible, cumulative, participating and non-

redeemable Series B preference shares of face value of `243 each

Series C Preference Shares 0.001% fully and compulsorily convertible, cumulative, participating and non-

redeemable Series C preference shares of face value of `10 each

Shareholders Shareholders of our Company from time to time

Special Purpose Consolidated Ind

AS Financial Statements

Special purpose consolidated financial statements of our Company, our Erstwhile

Subsidiary, our Erstwhile Associate Company and Laurus Inc., which comprise the

balance sheets as at September 30, 2016 and March 31, 2016, the opening balance sheet

as at April 1, 2015 (transition date balance sheet), the statements of profit and loss, the

statements of cash flows and the statements of changes in equity for the six-month period

ended September 30, 2016 and for the year ended March 31, 2016, and a summary of the

significant accounting policies and other explanatory information which have been

prepared in accordance with the recognition and measurement principles of Ind AS

prescribed under section 133 of the Companies Act, 2013 read with rule 3 of the

Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Accounting

Standards) Amendment Rules, 2016. These financial statements can change if (a) there

are any new Ind AS standards issued through March 31, 2017, (b) there are any

amendments/modifications made to existing Ind AS standards or interpretations thereof

through March 31, 2017 effecting the Ind AS balances in these financial statements and

(c) if the Company makes any changes in the elections and/or exemptions selected on

adoption of Ind AS at its transition date of April 1, 2015; when company will prepare and

issue its first complete Ind AS financial statements as at and for the year ending March

31, 2017

Special Purpose Unconsolidated

Ind AS Financial Statements

Special purpose financial statements of our Company, which comprise the balance sheets

as at September 30, 2016 and March 31, 2016, the opening balance sheet as at April 1,

2015 (transition date balance sheet), the statements of profit and loss, the statements of

cash flows and the statements of changes in equity for the six-month period ended

September 30, 2016 and for the year ended March 31, 2016, and a summary of the

significant accounting policies and other explanatory information which have been

prepared in accordance with the recognition and measurement principles of Ind AS

prescribed under section 133 of the Companies Act, 2013 read with rule 3 of the

Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Accounting

Standards) Amendment Rules, 2016. These financial statements can change if (a) there

are any new Ind AS standards issued through March 31, 2017, (b) there are any

amendments/modifications made to existing Ind AS standards or interpretations thereof

through March 31, 2017 effecting the Ind AS balances in these financial statements and

(c) if the Company makes any changes in the elections and/or exemptions selected on

4

Term Description

adoption of Ind AS at its transition date of April 1, 2015; when company will prepare and

issue its first complete Ind AS financial statements as at and for the year ending March

31, 2017

Sriam Labs Sriam Labs Private Limited

Subsidiaries or individually known

as Subsidiary

Subsidiaries of our Company namely:

1. Laurus Synthesis Inc.; and 2. Sriam Labs Private Limited (with effect from November 1, 2016)

Unit 1 Manufacturing facility located at Plot No. 21, Jawaharlal Nehru Pharma City, Parawada,


Unit 2 Manufacturing facility located at Plot No. 19, 20, 21, APSEZ, Achutapuram,


Unit 3 Manufacturing facility located at Plot No. 18, Jawaharlal Nehru Pharma City, Parawada,


Unit 4 Manufacturing facility located at Plot No 25, 25A to 25K, APSEZ – Denotified Area,

Alalamkoduru Village, Rambilli (M), Visakhapatnam, Andhra Pradesh

Unit 5 Manufacturing facility located at Plot No 102 and 103, Lemarthi Village, Parawada (M),

Visakhapatnam 531 021, Andhra Pradesh

Viziphar Viziphar Biosciences Private Limited

Offer Related Terms

Term Description

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

registration of the Bid cum Application Form

Allot/Allotment/Allotted Unless the context otherwise requires, allotment of the Equity Shares pursuant to the

Fresh Issue and transfer of the Equity Shares offered by the Selling Shareholders

pursuant to the Offer for Sale 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, who applied under the Anchor Investor Portion in

accordance with the requirements specified in the SEBI ICDR Regulations and the Red

Herring Prospectus

Anchor Investor Allocation Price Price at which Equity Shares were allocated to Anchor Investors at the end of the Anchor

Investor Bid/Offer Period in terms of the Red Herring Prospectus and this Prospectus

which was 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 was considered as an application for Allotment in terms of the Red Herring

Prospectus and this Prospectus

Anchor Investor Bid/Offer Period The day, one Working Day prior to the Bid/Offer Opening Date i.e. December 5, 2016,

on which Bids by Anchor Investors were submitted and allocation to Anchor Investors

was completed

Anchor Investor Offer Price `428 per Equity Share

Anchor Investor Portion 60% of the QIB Portion consisting of 9,238,385 Equity Shares allocated by our Company

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 was reserved for domestic Mutual Funds,

subject to valid Bids having been received from domestic Mutual Funds at or above the

Anchor Investor Allocation Price

Application Supported by Blocked

Amount or ASBA

An application, whether physical or electronic, used by ASBA Bidders to make a Bid and

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

ASBA Account A bank account maintained with an SCSB and specified in the ASBA Form submitted by

ASBA Bidders for blocking the Bid Amount mentioned in the ASBA Form

ASBA Bidders Any Bidder except Anchor Investor

ASBA Form An application form, whether physical or electronic, used by ASBA Bidders which was

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

this Prospectus

Banker to the Offer/Escrow

Collection Bank

Banks which are clearing members and registered with SEBI as bankers to an issue and

with whom the Escrow Account has been opened, in this case being HDFC Bank Limited

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

which is described in “Offer Procedure” on page 575

Bid An indication to make an offer during the Bid/Offer Period by ASBA Bidders pursuant to

5

Term Description

submission of the ASBA Form, or during the Anchor Investor Bid/Offer Period by an

Anchor Investor pursuant to submission of the Anchor Investor Application Form, to

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

revisions and modifications thereto as permitted under the SEBI ICDR Regulations

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 ASBA Bidder, as the case

may be, upon submission of the Bid in the Offer, and for Eligible Employees, less

Employee Discount

Bid cum Application Form The Anchor Investor Application Form or the ASBA Form, as applicable

Bid Lot 35 Equity Shares and in multiples of 35 Equity Shares thereafter

Bid/Offer Closing Date Except in relation to any Bids received from the Anchor Investors, December 8, 2016

Bid/Offer Opening Date Except in relation to any Bids received from the Anchor Investors, December 6, 2016

Bid/Offer Period Except in relation to Anchor Investors, December 6, 2016 to December 8, 2016

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 Centers Centers at which the Designated Intermediaries accepted the ASBA Forms, i.e,

Designated SCSB Branch 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 XI of the SEBI ICDR Regulations, in

terms of which the Offer is being made

Book Running Lead Managers or

BRLMs

The book running lead managers to the Offer namely, Kotak, Citi, Jefferies and SBICAP

Broker Centres Broker centres notified by the Stock Exchanges where ASBA Bidders have submitted 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/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 Bid/Offer Period

Cap Price `428 per Equity Share

Cash Escrow Agreement Agreement dated December 3, 2016 entered into by our Company, the Selling

Shareholders, the Registrar to the Offer, the BRLMs, the Escrow Collection Bank, the Syndicate Members, the Public Issue Account Bank and the Refund Bank, inter alia, for

collection of the Bid Amounts from Anchor Investors, transfer of funds to the Public

Issue Account and where applicable, refunds of the amounts collected from Anchor

Investors, on the terms and conditions thereof

Citi Citigroup Global Markets India Private Limited

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, registered with SEBI 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 Offer Price, finalised by our Company in consultation with the BRLMs being `428 per

Equity Share

Only Retail Individual Bidders and Eligible Employees bidding in the Employee

Reservation Portion were entitled to Bid at the Cut-off Price. QIBs (including Anchor

Investors) and Non-Institutional Investors were 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

Designated Date The date on which funds are transferred by the Escrow Collection Banks from the Escrow

Account and the amounts blocked by the SCSBs are transferred from the ASBA

Accounts, as the case may be, to the Public Issue Account or the Refund Account, as

appropriate, after filing of the Prospectus with the RoC Designated CDP Locations Such locations of the CDPs where Bidders have submitted the ASBA Forms.

The details of such Designated CDP Locations, along with names and contact details of

the Collecting Depository Participants eligible to accept ASBA Forms are available on

the respective websites of the Stock Exchanges (www.bseindia.com and

www.nseindia.com)

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

6

Term Description

Designated Intermediaries 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 have submitted 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/home/list/5/3

3/0/0/Recognised-Intermediaries or at such other website as may be prescribed by SEBI

from time to time

Designated Stock Exchange BSE

Draft Red Herring Prospectus or

DRHP

The Draft Red Herring Prospectus dated August 19, 2016, 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

Eligible Employees All or any of the following:

(a) a permanent and full time employee of our Company, who was a resident Indian or an Eligible NRI investing in the Offer pursuant to Schedule 4 of the FEMA

Regulations (excluding such employees not eligible to invest in the Offer under

applicable laws, rules, regulations and guidelines) as of the date of filing of the Red

Herring Prospectus with the RoC and who continued to be an employee of our

Company until the submission of the Bid cum Application Form; and

(b) a Director of our Company, whether a whole time Director, part time Director or otherwise, who was a resident Indian or an Eligible NRI investing in the Offer

pursuant to Schedule 4 of the FEMA Regulations (excluding such Directors not

eligible to invest in the Offer under applicable laws, rules, regulations and

guidelines and any Promoter) as of the date of filing the Red Herring Prospectus

with the RoC and who continued to be a Director of our Company until the

submission of the Bid cum Application Form and was based and present in India as

on the date of submission of the Bid cum Application Form

An employee of our Company, who was recruited against a regular vacancy but was on

probation as on the date of submission of the Bid cum Application Form was also

deemed a ‘permanent and a full time employee’

The maximum Bid Amount under the Employee Reservation Portion by an Eligible

Employee shall not exceed `500,000 on a net basis. However, Allotment to an Eligible

Employee in the Employee Reservation Portion may exceed `200,000 (which will be less

Employee Discount) only in the event of an under-subscription in the Employee

Reservation Portion and such unsubscribed portion may be Allotted on a proportionate

basis to Eligible Employees Bidding in the Employee Reservation Portion, for a value in

excess of `200,000, subject to the total Allotment to an Eligible Employee not exceeding

`500,000 (which will be less Employee Discount).

Eligible NRI(s) NRI(s) investing on a non-repatriation basis in compliance with Schedule 4 of the FEMA

Regulations, from jurisdictions outside India where it is not unlawful to make an offer or

invitation under the Offer and in relation to whom the Bid cum Application Form and the

Red Herring Prospectus constituted an invitation to subscribe to or to purchase the Equity

Shares

Employee Discount A discount of `40 that was offered to the Eligible Employees bidding in the Employee

Reservation Portion, by our Company in consultation with the BRLMs, at the time of

making a Bid

Employee Reservation Portion The portion of the Offer, being 322,164^ Equity Shares aggregating to `125 million,

available for allocation to Eligible Employees, on a proportionate basis

^Subject to finalisation of Basis of Allotment

Escrow Account Account opened with the Escrow Collection Bank and in whose favour the Anchor

Investors will transfer money through direct credit/NEFT/RTGS in respect of the Bid

Amount when submitting a Bid

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

Floor Price `426 per Equity Share

Fresh Issue The fresh issue of 7,009,345^ Equity Shares aggregating up `2,997.10 million^ by our

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

7

Term Description

Company


General Information

Document/GID

The General Information Document prepared and issued in accordance with the circular

(CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by SEBI, suitably modified and

included in “Offer Procedure” on page 550

Jefferies Jefferies India Private Limited

Kotak Kotak Mahindra Capital Company Limited

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

Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor Investor Portion), or 307,947 Equity

Shares which was available for allocation to Mutual Funds only

Net Offer The Offer minus the Employee Reservation Portion

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

For further information about use of the Net Proceeds and the Offer expenses, see

“Objects of the Offer” on page 96

Non-Institutional Bidder(s) All Bidders that are not QIBs or Retail Individual Bidders or Eligible Employees bidding

in the Employee Reservation Portion, 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 less than 15% of the Net Offer consisting of 4,619,194

Equity Shares which was available for allocation on a proportionate basis to Non-

Institutional Bidders, subject to valid Bids having been received at or above the Offer

Price

Non-Resident A person resident outside India, as defined under FEMA and includes a non resident

Indian, FIIs and FPIs. Non-residents were not permitted to participate in the Offer, except

(i) an FPI (investing under the PIS route in accordance with Schedule 2A of the FEMA

Regulations); (ii) an FII (investing under the PIS route in accordance with Schedule 2 of

the FEMA Regulations); or (iii) an Eligible NRI (investing on a non-repatriation basis in

accordance with Schedule 4 of the FEMA Regulations)

Offer The initial public offering of 31,116,785^ Equity Shares of face value of `10 each for

cash at a price of `428 each, aggregating to `13,305.10 million^ comprising the Fresh

Issue and the Offer for Sale

The Offer comprised of Net Offer to the public aggregating to `13,180.10 million^ and

Employee Reservation Portion. The Offer included a reservation of 322,164^ Equity

Shares aggregating to `125 million for subscription by Eligible Employees


Offer Agreement The agreement dated August 19, 2016, as amended by an amendment agreement dated

November 25, 2016, between our Company, the Selling Shareholders and the BRLMs,

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

Offer for Sale The offer for sale of 24,107,440 Equity Shares by Selling Shareholders at the Offer Price

aggregating to `10,308.00 million in terms of the Red Herring Prospectus

Offer Price `428 per Equity Share, being the final price at which Equity Shares will be Allotted to

Bidders other than Anchor Investors. Equity Shares were Allotted to Anchor Investors at

the Anchor Investor Offer Price in terms of the Red Herring Prospectus

A discount of `40 per Equity Share on the Offer Price was offered to Eligible Employees

bidding in the Employee Reservation Portion.

The Offer Price was decided by our Company in consultation with the BRLMs on the

Pricing Date

Offer Proceeds The proceeds of the Offer that are available to our Company and the Selling Shareholders

Price Band Price band of a minimum price of `426 per Equity Share (Floor Price) and the maximum

price of `428 per Equity Share (Cap Price)

The Price Band was decided by our Company and the Selling Shareholders in

consultation with the BRLMs and the minimum Bid Lot size for the Offer was decided

by our Company in consultation with the BRLMs and was advertised, at least five

Working Days prior to the Bid/Offer Opening Date, in all editions of the English national

newspaper Financial Express, all editions of the Hindi national newspaper Jansatta and

the Visakhapatnam edition of the Telugu newspaper Prajasakti (Telugu being the regional

language of Andhra Pradesh, where the Registered Office of our Company is situated),

8

Term Description

each with wide circulation

Pricing Date December 9, 2016, the date on which our Company in consultation with the BRLMs,

finalised the Offer Price

Prospectus This prospectus dated December 12, 2016 filed with the RoC after the Pricing Date in

accordance with Section 26 of the Companies Act, 2013, and the SEBI ICDR Regulations containing, inter alia, the Offer Price that was 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 Issue Account Bank account opened under Section 40(3) of the Companies Act, 2013 to receive monies

from the Escrow Account and ASBA Accounts on the Designated Date

Public Issue Account Bank The bank with which the Public Issue Account shall be maintained, in this case being

HDFC Bank Limited

QIB Portion The portion of the Offer (including the Anchor Investor Portion) being 50% of the Net

Offer consisting of 15,397,309 Equity Shares which has been allocated to QIBs

(including Anchor Investors)

Qualified Institutional Buyers or

QIBs or QIB Bidders

Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI ICDR

Regulations provided that with respect to the Offer, this term shall not include FVCIs and

multilateral and bilateral development financial institutions.

Red Herring Prospectus or RHP The red herring prospectus dated November 25, 2016, issued in accordance with Section

32 of the Companies Act, 2013 and the provisions of the SEBI ICDR Regulations, which

did not have complete particulars of the price at which the Equity Shares were offered

and the size of the Offer, including the addenda dated December 4, 2016, December 5,

2016 and December 9, 2016.

The red herring prospectus was registered with the RoC at least three days before the

Bid/Offer Opening Date and has become the Prospectus which is filed with the RoC after

the Pricing Date

Refund Account The account opened with the Refund Bank, from which refunds, if any, of the whole or

part of the Bid Amount to the Anchor Investors shall be made

Refund Bank HDFC Bank Limited

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

than the BRLMs and the Syndicate Members and eligible to procure Bids in terms of

Circular No. CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI

Registrar Agreement The agreement dated August 18, 2016, entered into among our Company, 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 issued by SEBI

Registrar to the Offer/Registrar Karvy Computershare Private Limited

Retail Individual Bidder(s)/RIB(s) Individual Bidders, other than Eligible Employees bidding in the Employee Reservation

Portion, who have Bid for the Equity Shares for an amount not more than `200,000 in

any of the bidding options in the Net 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 less than 35% of the Net Offer consisting of

10,778,118 Equity Shares which was available for allocation to Retail Individual Bidders

in accordance with the SEBI ICDR Regulations subject to valid Bids having been

received at or above the Offer Price

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 and Eligible Employees can revise their Bids during the Bid/Offer

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

SBICAP SBI Capital Markets Limited

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/home/list/5/33/0/0/Recognised-Intermediaries and

updated from time to time

Share Escrow Agent Escrow agent appointed pursuant to the Share Escrow Agreement, namely, Karvy

Computershare Private Limited

Share Escrow Agreement Agreement dated November 25, 2016 entered into by the Selling Shareholders, our

Company and the Share Escrow Agent in connection with the transfer of Equity Shares

under the Offer for Sale by such Selling Shareholders and credit of such Equity Shares to

9

Term Description

the demat account of the Allottees

Specified Locations Bidding Centers where the Syndicate accepted ASBA Forms from Bidders

Syndicate Agreement Agreement dated December 5, 2016 entered into among the BRLMs, the Syndicate

Members, our Company and the Selling Shareholders in relation to collection of Bid cum

Application Forms by the Syndicate

Syndicate Members Intermediaries registered with SEBI who are permitted to carry out activities as an

underwriter, namely, Kotak Securities Limited and SBICAP Securities Limited

Syndicate The BRLMs and the Syndicate Members

Underwriters The BRLMs and the Syndicate Members

Underwriting Agreement The agreement dated December 12, 2016 among the Underwriters, our Company and the

Selling Shareholders

Working Day “Working Day” means all days, other than second and fourth Saturday of the month,

Sunday or a public holiday, 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

or a public holiday, on which commercial banks in Mumbai are open for business; and

with reference to 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 SEBI Circular

SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21, 2016

Technical/Industry Related/ Conventional/ General Terms/Abbreviations

Term Description

`/Rs./Rupees/INR Indian Rupees

3TC Lamivudine

ABC Abacavir

AIDS Acquired immunodeficiency syndrome

AIF Alternative Investment Fund as defined in and registered with SEBI under the Securities

and Exchange Board of India (Alternative Investments Funds) Regulations, 2012

Air Act Air (Prevention and Control of Pollution) Act, 1981

AML Acute Myeloid Leukemia

ANDA Abbreviated New Drug Applications

APIs Active Pharmaceutical Ingredients

ART Antiretroviral therapy

ARV Anti-retro Viral

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

Bn/bn Billion

Boilers Act Indian Boilers Act, 1923

BSE BSE Limited

BMW Rules Bio-Medical Waste (Management and Handling) Rules, 1998

BMS Bristol-Myers Squibb Company

CAGR CAGR = [Ending Value / Beginning Value](1/# of years) -1

Category I foreign portfolio

investors

FPIs who are registered as “Category I foreign portfolio investors” under the SEBI FPI

Regulations

Category II foreign portfolio

investors

FPIs who are registered as “Category II foreign portfolio investors” under the SEBI FPI

Regulations

Category III foreign portfolio

investors

FPIs who are registered as “Category III foreign portfolio investors” under the SEBI FPI

Regulations

CCI Competition Commission of India

CCR5 antagonists Chemokine receptor antagonists

CD4 cells CD4 T-lymphocytes

CDSL Central Depository Services (India) Limited

CDSCO Central Drugs Standard Control Organisation

CHAI Clinton Health Access Initiative, Inc.

CIN Corporate Identity Number

COBI Cobicistat

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

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

have effect upon notification of the sections of the Companies Act, 2013) along with the

relevant rules made thereunder

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

Sections, along with the relevant rules, regulations, clarifications, circulars and

notifications issued thereunder

10

Term Description

CRO Clinical research organization

CST Act Central Sales Tax Act, 1956

Competition Act The Competition Act, 2002

Customs Act The Customs Act, 1962

d4T Stavudine

DAA Acting anti-viral drugs

DCA Drugs and Cosmetics Act, 1940

DCA Rules Drugs and Cosmetics Rules, 1945

DCGI Drug Controller General of India

Depositories NSDL and CDSL

Depositories Act The Depositories Act, 1996

DFID Department for International Development

DIN Director Identification Number

DIPP Department of Industrial Policy and Promotion, Ministry of Commerce and Industry,

Government of India

DP ID Depository Participant’s Identification

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

Drugs Act Drugs (Control) Act, 1950

DRV Darunavir

DSIR Department of Scientific and Industrial Reserch

DTG Dolutegravir

EFV Efavirenz

EGM Extraordinary General Meeting

EOIs Expressions of Interest

EOU Scheme Export Oriented Unit Scheme

EPA Environment Protection Act, 1986

EPF Act The Employees Provident Fund and Miscellaneous Provisions Act, 1952

EPS Earnings Per Share

ESI Act The Employees State Insurance Act, 1948

ETV Etravirine

EVG Elvitegravir

Explosives Act The Explosives Act, 1884

FCNR Foreign Currency Non-Resident

FDI Foreign Direct Investment

FDI Policy Consolidated FDI policy circular of 2016 issued by the DIPP, with effect from June 7,

2016

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

FEMA Regulations Foreign Exchange Management (Transfer or Issue of Security by a Person Resident

Outside India) Regulations, 2000

FIs Fusion inhibitors

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

Financial Year/Fiscal/ Fiscal

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

FIPB Foreign Investment Promotion Board

Food Authority Food Safety and Standards Authority of India

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

FPP Finished pharmaceutical product

FSSA The Food Safety and Standards Act, 2006

FSSR Food Safety and Standards Rules, 2011

FTC Emtricitabine

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

Regulations

GA Generic-accessible

GDP Gross domestic product

GFATM Global Fund to Fight AIDS, Tuberculosis and Malaria

GIR General Index Register

GoI/Government Government of India

GST Goods and Services Tax

HAART Highly active antriretroviral therapy

Hazardous Waste Rules / HMW

Rules

Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008

HCV Hepatitis C Virus

HIV Human immunodeficiency virus

11

Term Description

ICAI The Institute of Chartered Accountants of India

ICDS Income Computation and Disclosure Standards notified by the Ministry of Finance on

March 31, 2015

IDV Indinavir

IFRS International Financial Reporting Standards

Income Tax Act / IT Act The Income Tax Act, 1961

Ind AS Indian Accounting Standards (Ind AS)

India Republic of India

Indian Accounting Standard

Rules

The Companies (Indian Accounting Standards) Rules of 2015

Indian GAAP Generally Accepted Accounting Principles in India

INSTIs Integrase inhibitors

IPO Initial public offering

IRDA Insurance Regulatory and Development Authority of India

IST Indian Standard Time

IT Information Technology

Legal Metrology Act Legal Metrology Act, 2009

LMICs Low and middle income countries

LPV Lopinavir

MCA Ministry of Corporate Affairs, Government of India

Mn/mn Million

MPP Medicines Patent Pool

MSIHC Rules The Manufacturing, Storage & Import of Hazardous Chemicals Rules, 1989

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

(Mutual Funds) Regulations, 1996

N.A./NA Not Applicable

NACO National AIDS Control Organisation

Narcotic Act Narcotic Drugs and Psychotropic Substances Act, 1985

NAV Net Asset Value

NBFC Non-banking financial company registered with the RBI

NECS National Electronic Clearing Services

NEFT National Electronic Fund Transfer

NNRTIs Non-nucleoside reverse transcriptase inhibitors

Notified Sections The sections of the Companies Act, 2013 that were notified by the Ministry of Corporate

Affairs, Government of India

NR Non-resident

NRE Account Non Resident External Account

NRI A person resident outside India, who is a citizen of India as defined under the Foreign

Exchange Management (Deposit) Regulations, 2000 or an ‘Overseas Citizen of India’

cardholder within the meaning of section 7(A) of the Citizenship Act, 1955

NRO Account Non Resident Ordinary Account

NRTIs Nucleoside reverse transcriptase inhibitors

NSDL National Securities Depository Limited

NSE The National Stock Exchange of India Limited

NVP Nevirapine

OCB/Overseas Corporate Body A company, partnership, society or other corporate body owned directly or indirectly to

the extent of at least 60% by NRIs including overseas trusts, in which not less than 60%

of beneficial interest is irrevocably held by NRIs directly or indirectly and which was in

existence on October 3, 2003 and immediately before such date had taken benefits under

the general permission granted to OCBs under FEMA. OCBs are not allowed to invest in

the Offer

p.a. Per annum

P/E Ratio Price/Earnings Ratio

PAN Permanent Account Number

Patents Act The Patents Act, 1970

PAT Profit After Tax

PCBs Pollution Control Boards

PEPFAR President’s Emergency Plan for AIDS Relief

PIC/s Pharmaceutical Inspection Convention and Pharmacheutical Inspection Co-operation

Scheme

PIs Protease inhibitors

PIS Portfolio Investment Scheme as stipulated under Regulations 5(2) and 5(2A) of the

FEMA Regulations, subject to terms and conditions specified under Schedules 2 and 2A

12

Term Description

of the FEMA Regulations

PLHIV People living with HIV

PrEP Pre-exposure prophylaxis

Public Liability Act Public Liability Insurance Act, 1991

RAL Raltegravir

RBI Reserve Bank of India

RoW Rest of the world

RTGS Real Time Gross Settlement

RTV Ritonavir

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 FII Regulations Securities and Exchange Board of India (Foreign Institutional Investors) Regulations,

1995

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 Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015

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

Securities Act U.S. Securities Act of 1933

SEZ Act The Special Economic Zones Act, 2005

SEZ Rules Special Economic Zones Rules, 2006

SICA Sick Industrial Companies (Special Provisions) Act, 1985 (repealed with effect from

December 1, 2016)

Sq. ft./sq.ft. Square feet

Stamp Act The Indian Stamp Act, 1899

State Government The government of a state in India

State PCB State Pollution Control Board

Stock Exchanges The BSE and the NSE

STT Securities Transaction Tax

TAF Tenofovir Alafenamide

TDF Tenofovir Disoproxil Fumarate

TDF + 3TC Tenofovir and Lamivudine

Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011

TAN Tax deduction account number

Trade Marks Act Trade Marks Act, 1999

TRIPS Trade Related Agreement on Intellectual Property Rights

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

US GAAP Generally Accepted Accounting Principles in the United States of America

USD/US$ United States Dollars

VAT Value Added Tax

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

Regulations

Water Cess Act Water (Prevention & Control of Pollution) Cess Act, 1977

Water Cess Rules Water (Prevention & Control of Pollution) Cess Rules, 1978

Water Act Water (Prevention and Control of Pollution) Act, 1974

Wilful Defaulter(s) Wilful defaulter as defined under Regulation 2(zn) of SEBI ICDR Regulations

WHO World Health Organisation

ZDV or AZT Zidovudine

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

under the SEBI Act, SEBI ICDR Regulations, the Companies Act, the SCRA, the Depositories Act and the rules

and regulations made thereunder.

13

Notwithstanding the foregoing, terms in “Statement of Tax Benefits”, “Financial Statements” and “Main Provisions

of Articles of Association” on pages 109, 230 and 588, respectively, shall have the meaning given to such terms in

such sections.

14

PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Certain Conventions

All references to “India” in this Prospectus are to the Republic of India and all references to “USA”, “US” and

“United States” are to the United States of America.

Unless stated otherwise, all references to page numbers in this Prospectus are to the page numbers of this

Prospectus.

Financial Data

Unless stated otherwise or the context requires otherwise, the financial data in this Prospectus is derived from the

Restated Financial Statements prepared in accordance with the Companies Act and Indian GAAP, and restated in

accordance with the SEBI ICDR Regulations.

In this Prospectus, any discrepancies in any table between the total and the sum 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 except percentage figures in “Risk Factors”, “Industry Overview” and “Our

Business”, which are rounded off to one decimal place and accordingly there may be consequential changes in this

Prospectus.

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

references to a particular Financial Year, unless stated otherwise, are to the 12 month period ended on March 31 of

that year. The Restated Unconsolidated Financial Statements as of and for the six months ended September 30, 2016

and the Financial Years ended March 31, 2016, 2015, 2014, 2013 and 2012 and the Restated Consolidated Financial

Statements as of and for the six months ended September 30, 2016 and the Financial Years ended March 31, 2016,

2015, and 2014 are included in this Prospectus. The Company did not have any subsidiary during Financial Years

2012 and 2013. In addition, Ind AS Financial Statements along with the statement of reconciliation of the (i)

unconsolidated and consolidated statement of profit and loss as reported under previous Indian GAAP to Ind AS for

the six months ended September 30, 2016 and the Financial Year ended March 31, 2016; and (ii) unconsolidated

and consolidated equity as previously reported under previous Indian GAAP to Ind AS as at September 30, 2016,

March 31, 2016 and April 1, 2015 have also been included in this Prospectus. For further details, see “Financial

Statements”, “Ind AS Financial Information” and “Financial Information - Summary of Significant Differences

between Indian GAAP and Ind AS” beginning on pages 230, 456 and 498, respectively.

There are significant differences between Indian GAAP, Ind AS, US GAAP and IFRS. The reconciliation of the

financial information to IFRS or US GAAP has not been provided. Our Company has not attempted to explain those

differences or quantify their impact on the financial data included in this Prospectus and investors should consult

their own advisors regarding such differences and their impact on our Company’s financial data. See “Risk Factors”

on page 36 for (i) risks involving differences between Indian GAAP and IFRS or US GAAP and risks in relation to

Ind AS; and (ii) the preliminary nature of the Ind AS Financial Statements. Further, for details of significant

differences between Indian GAAP and Ind AS, see “Summary of Significant Differences Between Indian GAAP

and Ind AS” on page 498. The degree to which the financial information included in this Prospectus will provide

meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting policies and

practices, Ind AS, Indian GAAP, the Companies Act and the SEBI ICDR Regulations. Any reliance by persons not

familiar with Indian accounting policies, Ind AS, Indian GAAP, the Companies Act, the SEBI ICDR Regulations

and practices on the financial disclosures presented in this Prospectus should accordingly be limited.

Unless the context otherwise indicates, any percentage amounts, as set forth in “Risk Factors”, “Our Business” and

“Management’s Discussion and Analysis of Financial Conditions and Results of Operations” on pages 18, 166 and

476 respectively, and elsewhere in this Prospectus have been calculated on the basis of the Restated Financial

Statements of our Company and any percentage amounts set forth in “Ind AS Financial Information” on page 456

has been calculated on the basis of the Ind AS Financial Statements.

Currency and Units of Presentation

All references to:

“Rupees” or “`” or “INR” or “Rs.” are to the Indian Rupee, the official currency of India; and

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

15

Our Company has presented certain numerical information in this Prospectus in “million” units. One million

represents 1,000,000 and one billion represents 1,000,000,000.

Exchange Rates

This Prospectus contains conversions of certain other currency amounts into Indian Rupees that have been presented

solely to comply with the SEBI ICDR Regulations. These conversions should not be construed as a representation

that these currency amounts could have been, or can be converted into Indian Rupees, at any particular rate or at all.

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

Rupee and the USD (in Rupees per USD):

Currency As on March 31,

2012(1)

(`)

As on March 31,

2013(1)

(`)

As on March

31, 2014(1)

(`)

As on March 31,

2015

(`)

As on March 31,

2016

(`)

As on September

30, 2016

(`)

1 USD 51.16 54.39 60.10 62.59 66.33 66.66 (Source: https://rbi.org.in)

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

considered

Industry and Market Data

Unless stated otherwise, industry and market data used in this Prospectus has been obtained or derived from

publicly available information as well as industry publications and sources.

Industry publications generally state that the information contained in such publications has been obtained from

publicly available documents from various sources believed to be reliable but their accuracy and completeness are

not guaranteed and their reliability cannot be assured. Although we believe the industry and market data used in this

Prospectus is reliable, it has not been independently verified by us or the BRLMs or any of their affiliates or

advisors. The data used in these sources may have been reclassified by us for the purposes of presentation. Data

from these sources may also not be comparable. Such data involves risks, uncertainties and numerous assumptions

and is subject to change based on various factors, including those discussed in “Risk Factors” on page 18.

Accordingly, investment decisions should not be based solely on such information.

Information has been included in this Prospectus from the reports titled “Independent Market Research Report for

IPO covering Anti-Retro Virals (ARV) in Selected Geographies, June 2016”, “Independent Market Research Report

for IPO covering Hepatitis C in India, May 2016”, “Independent Market Research Report for IPO covering

Oncology in G7 Countries”, “Independent Market Research Report for IPO covering Contract Research and

Manufacturing Services (CRAMS) in India, June 2016” and “Independent Market Research Report for IPO

covering Nutraceuticals in Selected Geographies, June 2016” prepared by Frost & Sullivan, which reports have

been commissioned by the Company for the purposes of confirming its understanding of the industry in connection

with the Offer.

For details of risks in relation to the industry report, see “Risk Factors – We have commissioned industry reports

from Frost and Sullivan which have been used for industry related data in this Prospectus and such data has not been

independently verified by us” on page 34.

In accordance with the SEBI ICDR Regulations, “Basis for Offer Price” on page 105 includes information relating

to our peer group companies. Such information has been derived from publicly available sources, and neither we,

nor the BRLMs have independently verified such information.

The extent to which the market and industry data used in this Prospectus is meaningful depends on the reader’s

familiarity with and understanding of the methodologies used in compiling such data. There are no standard data

gathering methodologies in the industry in which the business of our Company is conducted, and methodologies and

assumptions may vary widely among different industry sources.

16

FORWARD-LOOKING STATEMENTS

This Prospectus contains certain “forward-looking statements”. These forward-looking statements generally can be

identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”, “objective”,

“plan”, “project”, “will”, “will continue”, “will pursue” or other words or phrases of similar import. Similarly,

statements that describe our Company’s strategies, objectives, plans or goals are also forward-looking statements.

All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause actual

results to differ materially from those contemplated by the relevant forward-looking statement.

Actual results may differ materially from those suggested by the forward-looking statements due to risks or

uncertainties associated with our expectations with respect to, but not limited to, regulatory changes pertaining to

the industry in which our Company operates 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 and globally 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 laws, regulations and taxes and changes in competition in our industry. Important factors that

could cause actual results to differ materially from our Company’s expectations include, but are not limited to, the

following:

any manufacturing or quality control problems;

any reduction in demand for products in the therapeutic areas from which we derive a significant portion of our revenue;

if our products become obsolete due to a breakthrough in the development of alternate drugs;

loss of one or more of our significant customers, the deterioration of their financial condition or prospects, or a reduction in their demand for our products;

our inability to effectively manage our growth or to successfully implement our business plan and growth strategy;

a slowdown or shutdown in our manufacturing operations;

any adverse developments affecting the region where our manufacturing facilities are concentrated;

our inability to accurately forecast demand for our products and manage our inventory; and

our inability to develop and commercialize new products in a timely manner or failure of our R&D efforts hindering the introduction of new products.

For further discussion of factors that could cause the actual results to differ from our estimates and expectations, see

“Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of

Operations” on pages 18, 166 and 476, respectively. By their nature, certain market risk disclosures are only

estimates and could be materially different from what actually occurs in the future. As a result, actual gains or losses

could materially differ from those that have been estimated.

We cannot assure investors that the expectations reflected in these forward-looking statements will prove to be

correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking

statements and not to regard such statements as a guarantee of future performance.

Forward-looking statements reflect the current views of our Company as of the date of this Prospectus and are not a

guarantee of future performance. These statements are based on the management’s beliefs and assumptions, which

in turn are based on currently available information. Although we believe the assumptions upon which these

forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the

forward-looking statements based on these assumptions could be incorrect. Neither our Company, our Directors, our

Promoters, the Selling Shareholders, the BRLMs nor any of their respective affiliates have any obligation to update

17

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 will ensure that investors in India are informed of material

developments from the date of this Prospectus until the time of the grant of listing and trading permission by the

Stock Exchanges. In accordance with SEBI requirements and as prescribed under applicable law, the Selling

Shareholders severally and not jointly will ensure that investors are informed of material developments in relation to

statements and undertakings made by the respective Selling Shareholders from the date of this Prospectus until the

time of the grant of listing and trading permission by the Stock Exchanges. Further, in accordance with Regulation

51A of the SEBI ICDR Regulations, our Company may be required to undertake an annual updation of the

disclosures made in the Red Herring Prospectus and make it publicly available in the manner specified by SEBI.

18

SECTION II: RISK FACTORS

RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in

this 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 and other regions we operate in. 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. In making an investment

decision, prospective investors must rely on their own examination of us and the terms of the Offer including the

merits and risks involved.

Prospective investors should pay particular attention to the fact that our Company is incorporated under the laws of

India and is subject to a legal and regulatory environment which may differ in certain respects from that of other

countries. This 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 Prospectus. See “Forward-

Looking Statements” on page 16.

Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or

other implications of any of the risks described in this section. Unless otherwise stated, the financial information of

our Company used in this section has been derived from our Restated Consolidated Financial Statements.

The Company did not have any subsidiary during financial years 2012 and 2013 and therefore, the financial data

for such years reflects the financial position of the Company on a standalone basis.

Internal Risk Factors

1. Any manufacturing or quality control problems may subject us to regulatory action, damage our reputation and have an adverse effect on our business, results of operations, financial condition and cash flows.

We currently operate three manufacturing facilities and a kilo lab facility at our R&D center in Hyderabad,

which have received one or more approvals from WHO, US FDA, PMDA, KFDA or BfArM. We set up an

R&D center in Greater Boston, United States in 2015 and are currently in the process of setting up two

additional manufacturing facilities and another R&D center in India. Further, we also have two manufacturing

facilities, one in Bibinagar near Hyderabad and the other in Visakhapatnam through our acquisition of Sriam

Labs. Consequently, in addition to Indian regulations, we are required to comply with regulations and quality

standards stipulated by such international regulators. Our manufacturing facilities and products are subject to

audit by regulatory agencies and if we are not in compliance with any of their requirements, our facilities and

products may be the subject of a warning letter or sanctions, which could result in the withholding of product

approval and the shut-down of our facilities. As part of its auditing process, a US FDA field investigator may

issue a Form 483 letter (Notice of Inspectional Observations) after an on-site inspection. If we receive a Form

483 letter, we must respond in a prompt manner to avoid receiving a subsequent US FDA warning letter. In the

past, the US FDA has issued an FDA 483 letter for our Unit 1 facility at Vishakhapatnam and our kilo lab

facility at Hyderabad, during their inspections. We have also been issued a Form 483 observation letter by the

US FDA pursuant to an inspection conducted at our Unit 2 facility at Visakhapatnam between November 28,

2016 and December 1, 2016. The Form 483 observation relates to a change in procedures (requiring mention of

target weight along with actual weight, an additional test in the intermediate stage in packaging, calibration of

pumps and extending preventive maintenance of certain equipment). Our Company is in the process of

implementing changes and replying to the US FDA within the three weeks provided to us. For details, please

see “Our Business – Description of our Business - Generics - FDF Business” on page 174. In the past, we have

successfully responded to the US FDA and received approval but we cannot assure you that we will not receive

any warning letters at any of our facilities in the future. We are also required to meet quality standards and

other specifications set out in our license agreements and other contractual arrangements.

Certain developments could adversely affect demand for our products, including the regulatory review of

products that are already marketed, new scientific information or the recall or loss of approval of products that

19

we supply, manufacture, market or sell. We face the risk of loss resulting from, and the adverse publicity

associated with, manufacturing or quality control problems, including at the stage of manufacturing of final

dosage form. Such adverse publicity harms the brand image of our products. Further, our customers to whom

we supply our APIs and other products must comply with the regulations and standards of the US FDA and

other regulatory authorities. Failure to comply with these regulatory requirements, or the receipt by these

customers of warning or deficiency letters from regulators could adversely affect the demand for our products.

We may also be subject to claims resulting from manufacturing defects or negligence in storage and handling of

our pharmaceutical products. In certain foreign jurisdictions, the quantum of damag