EDELWEISS FINANCIAL SERVICES LIMITED Draft Prospectus
September 11, 2023
EDELWEISS FINANCIAL SERVICES LIMITED
Edelweiss Financial Services Limited (the "Company" or "Issuer") was incorporated at Mumbai on November 21, 1995 as a public limited company with the name 'Edelweiss Capital Limited' under the provisions of the Companies Act, 1956. Thereafter, a certificate of commencement of business was issued to the Issuer by the Registrar of Companies Maharashtra, at Mumbai, ("RoC"), on January 16, 1996. Subsequently, the name of the Issuer was changed to 'Edelweiss Financial Services Limited' pursuant to a fresh certificate of incorporation issued by the RoC on August 1, 2011. For more information about the Issuer, please refer "General Information" and "History and Main Objects" on pages 49 and 158.
Registered Office: Edelweiss House, Off C.S.T. Road, Kalina, Mumbai 400 098, Maharashtra, India; Tel.: +91 22 4079 5199;
CIN: L99999MH1995PLC094641; PAN: AAACE1461E; Website: www.edelweissfin.com; Email: efslncd@edelweissfin.com
Company Secretary and Compliance Officer: Mr. Tarun Khurana; Tel.: +91 22 4079 5199; Email: efslncd@edelweissfin.com
Chief Financial Officer: Ms. Ananya Suneja; Tel: +91 22 4079 5199; Email: efslncd@edelweissfin.com
PUBLIC ISSUE BY THE ISSUER OF SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES OF FACE VALUE OF ₹ 1,000 EACH ("NCDS" OR "DEBENTURES") FOR AN AMOUNT UP TO ₹ 1,000 MILLION ("BASE ISSUE SIZE") WITH A GREEN SHOE OPTION OF UP TO ₹ 1,000 MILLION, CUMULATIVELY AGGREGATING UP TO 20,00,000 NCDs FOR AN AMOUNT AGGREGATING UP TO ₹ 2,000 MILLION ("ISSUE LIMIT") HEREINAFTER REFERRED TO AS THE "ISSUE". THE NCDs WILL BE ISSUED THE ON TERMS AND CONDITIONS AS SET OUT IN THE PROSPECTUS FOR ANY WHICH SHOULD BE READ TOGETHER WITH THIS DRAFT PROSPECTUS (COLLECTIVELY, THE "OFFER DOCUMENTS"). THE ISSUE IS BEING MADE PURSUANT TO THE PROVISIONS OF SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF NON- CONVERTIBLE SECURITIES) REGULATIONS, 2021, AS AMENDED (THE "SEBI NCS REGULATIONS"), THE COMPANIES ACT, 2013 AND RULES MADE THEREUNDER AS AMENDED TO THE EXTENT NOTIFIED AND THE SEBI NCS MASTER CIRCULAR. THE ISSUE IS NOT UNDERWRITTEN.
OUR PROMOTERS
- Rashesh Shah; Email: efslncd@edelweissfin.com; Tel: +91 22 4079 5199; (ii) Venkatchalam Ramaswamy; Email: efslncd@edelweissfin.com; Tel: +91 22 4079 5199, (iii) Vidya Shah; Email: efslncd@edelweissfin.com; Tel: +91 22 4079 5199; and (iv) Aparna T.C; Email: efslncd@edelweissfin.com; Tel: +91 22 4079 5199. For details of our Promoters, see "Our Promoter" on page 181.
GENERAL RISKS
Investment in non-convertible securities is risky and investors should not invest any funds in such securities unless they can afford to take the risk attached to such investments. Investors are advised to take an informed decision and to read the risk factors carefully before investing in this offering. For taking an investment decision, investors must rely on their examination of the issue including the risks involved in it. Specific attention of investors is invited to statement of risk factors contained under "Risk Factors" and "Material Development" on page 18 and 203 respectively. These risks are not, and are not intended to be, a complete list of all risks and considerations relevant to the non-convertible securities or investor's decision to purchase such securities. This Draft Prospectus has not been and will not be approved by any regulatory authority in India, including the Securities and Exchange Board of India ("SEBI"), the Reserve Bank of India ("RBI"), any registrar of companies or any stock exchange in Indian or do they guarantee the accuracy or adequacy of this document.
COUPON RATE, COUPON PAYMENT FREQUENCY, REDEMPTION DATE, REDEMPTION AMOUNT & ELIGIBLE INVESTORS
For details relating to Coupon Rate, Coupon Payment Frequency, Redemption Date, Redemption Amount & Eligible Investors of the NCDs, please refer to the section titled "Issue Related Information" on page 261.
CREDIT RATING
The NCDs proposed to be issued under the Issue have been rated "CRISIL AA-/Negative (pronounced as CRISIL double A minus rating with Negative outlook)" for an amount of ₹ 10,000 million by CRISIL vide their rating letter dated September 1, 2023 with rating rationale dated August 31, 2023. The ratings given by the Credit Rating Agency is valid as on the date of this Draft Prospectus and shall remain valid until the rating is revised or withdrawn. The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The rating agency has a right to suspend or withdraw the rating at any time on the basis of factors such as new information. These rating is not a recommendation to buy, sell or hold securities and Investors should take their own decisions. Please refer to Annexure A of this Draft Prospectus for the rating letter, rationale and press release of the above rating.
LISTING
The NCDs offered through this Draft Prospectus and the Prospectus are proposed to be listed on BSE Limited ("BSE") and BSE shall be the Designated Stock Exchange. The Issuer has received an 'in- principle' approval from BSE vide their letter no. [•] dated [•].
PUBLIC COMMENTS
This Draft Prospectus dated September 11, 2023 has been filed with the BSE, pursuant to the provisions of the SEBI NCS Regulations and will be open for public comments for a period of 7 (seven) Working Days (i.e., until 5 p.m.) from the date of filing of this Draft Prospectus with the BSE. All comments on this Draft Prospectus are to be forwarded to the attention of the Compliance Officer of the Issuer. Comments may be sent through post, facsimile or e-mail. Please note that all comments by post must be received by the Issuer by 5:00 p.m. (IST) on the seventh Working Day from the date on which this Draft Prospectus is hosted on the website of the Stock Exchanges. All comments received on this Draft Prospectus will be suitably addressed prior to filing of the Prospectus with the RoC.
LEAD MANAGERS TO THE ISSUE | REGISTRAR TO THE ISSUE | ||
KFIN TECHNOLOGIES LIMITED | |||
Trust Investment Advisors Private Limited | Nuvama Wealth Management Limited# | (formerly known as Kfin Technologies Private Limited) | |
(formerly known as Edelweiss Securities Limited) | Selenium Tower B, Plot 31-32, Gachibowli, | ||
109/110, Balarama, Bandra Kurla Complex | |||
8th Floor, Wing A, Building No 3 | Financial District, Nanakramguda, | ||
Bandra (East), Mumbai - 400 051 | |||
Inspire BKC, G Block, Bandra Kurla Complex, | Serilingampally, Hyderabad - 500 032, | ||
Maharashtra, India | |||
Bandra East, Mumbai - 400 051 | Telangana | ||
Tel: +91 22 4084 5000 | |||
Tel: +91 22 4009 4400 | Tel: +91 40 6716 2222 | ||
Fax: +91 22 4084 5066 | |||
Email: efsl.ncd@nuvama.com | Fax: +91 40 6716 1563 | ||
Email:projectpragati9.trust@trustgroup.in | |||
Investor Grievance Email: customerservice.mb@nuvama.com | Email:efsl0823.ncdipo@kfintech.com | ||
Website: www.trustgroup.in | |||
Website: www.nuvama.com | Website: www.kfintech.com | ||
Contact Person: Hani Jalan | |||
Contact Person: Saili Dave | Contact Person: M. Murali Krishna | ||
DEBENTURE TRUSTEE TO THE ISSUE | CREDIT RATING AGENCY | STATUTORY AUDITOR | |
S. R. Batliboi & Co. LLP | |||
12th Floor, The Ruby 29 | |||
Senapati Bapat Marg Dadar | |||
Beacon Trusteeship Limited* | CRISIL Ratings Limited | (West), | |
CRISIL House, Central Avenue, | Mumbai 400 028 | ||
4 C&D, Siddhivinayak Chambers, | |||
Hiranandani Business Park, | Maharashtra, India | ||
Gandhi Nagar, Opp. MIG Cricket Club | |||
Powai, Mumbai 400076 | Tel: + 91 22 6819 8000 | ||
Bandra (East), Mumbai 400 051 | |||
Tel: + 91 22 3342 3000 | Email: srbc@srb.in | ||
Tel.: +91 22 26558759 | |||
Email:crisilratingdesk@crisil.com | Contact Person: Shrawan Jalan | ||
Email:contact@beacontrustee.co.in | |||
Website:www.crisil.com/ratings | |||
Website: www.beacontrustee.co.in | |||
Contact Person: Ajit Velonie | |||
Contact Person: Kaustubh Kulkarni | |||
ISSUE PROGRAMME** |
ISSUE OPENS ON: [•]
ISSUE CLOSES ON: [•]
*Beacon Trusteeship Limited under Regulation 8 of SEBI NCS Regulations has by its letter dated September 11, 2023 given its consent for its appointment as Debenture Trustee to the Issue and for its name to be included in this Draft Prospectus and the Prospectus and in all the subsequent periodical communications sent to the holders of the NCDs issued pursuant to the Issue.
-
Nuvama Wealth Management Limited is deemed to be our associate as per the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992, as amended ("Merchant Bankers Regulations"). Further, in compliance with the provisions of Regulation 21A and explanation to Regulation 21A of the Merchant Bankers Reg ulations, Nuvama Wealth Management Limited would be involved only in marketing of the Issue and as per Regulation 25 (3) of SEBI NCS Regulations and shall not issue a due diligence certificate, in relation to the issue of the NCDs.
** The Issue shall remain open for subscription on Working Days from 10 a.m. to 5 p.m. (Indian Standard Time) during the period indicated in the Prospectus, except that the Issue may close on such earlier date or extended date (subject to a maximum period of 30 days from the date of the Prospectus) as may be decided by the Board of Directors of the Issuer or the Debenture Fund Raising Committee, thereof, subject to relevant approvals. In the event of an early closure or extension of the Issue; the Issuer shall ensure that notice of the same is provided to the prospective investors through an advertisement in a daily national newspaper with wide circulation and a regional daily at the place where the registered office of the Issuer is situated on or before such earlier or extended date of Issue closure. Applications Forms for the Issue will be accepted only from 10:00 a.m. to 5:00 p.m. or such extended time as may be permitted by BSE, on Working Days during the Issue Period. On the Issue Closing Date, Application Forms will be accepted only between 10:00 a.m. to 3:00 p.m. and uploaded until 5:00 p.m. (Indian Standard Time) or such extended timeas may be permitted by BSE. Further, pending mandate requests for bids placed on the last day of bidding will be validated by 5 PM on one Working Day after the Issue Closing Date. For further details please refer to the chapter titled "Issue Related Information" on page 261.
A copy of the Prospectus shall be filed with the Registrar of Companies, Maharashtra at Mumbai in terms of Section 26 of Companies Act, 2013, along with the endorsed/certified copies of all requisite
documents. For further details, please refer to the section titled "Material Contracts and Documents for Inspection" on page 326.
Table of Contents | |
CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND CURRENCY OF | |
PRESENTATION | 13 |
FORWARD LOOKING STATEMENTS | 16 |
SECTION II - RISK FACTORS | 18 |
SECTION III - INTRODUCTION | 49 |
GENERAL INFORMATION | 49 |
CAPITAL STRUCTURE | 58 |
OBJECTS OF THE ISSUE | 80 |
STATEMENT OF POSSIBLE TAX BENEFITS | 83 |
SECTION IV - ABOUT OUR COMPANY | 100 |
INDUSTRY OVERVIEW | 100 |
OUR BUSINESS | 135 |
HISTORY AND MAIN OBJECTS | 158 |
OUR MANAGEMENT | 167 |
OUR PROMOTER | 181 |
RELATED PARTY TRANSACTIONS | 184 |
REGULATIONS AND POLICIES | 189 |
SECTION V - FINANCIAL STATEMENTS | 202 |
FINANCIAL INFORMATION | 202 |
MATERIAL DEVELOPMENTS | 203 |
FINANCIAL INDEBTEDNESS | 204 |
SECTION VI - LEGAL AND OTHER INFORMATION | 217 |
OUTSTANDING LITIGATIONS | 217 |
OTHER REGULATORY AND STATUTORY DISCLOSURES | 246 |
SECTION VII - ISSUE RELATED INFORMATION | 261 |
ISSUE STRUCTURE | 261 |
TERMS OF THE ISSUE | 266 |
ISSUE PROCEDURE | 282 |
SECTION VIII - SUMMARY OF KEY PROVISIONS OF ARTICLES OF ASSOCIATION | 316 |
SECTION IX - MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION | 326 |
DECLARATION | 329 |
ANNEXURE A - CRISIL RATING, RATING RATIONALE AND PRESS RELEASE | 330 |
ANNEXURE B - DEBENTURE TRUSTEE CONSENT LETTER | 345 |
SECTION I - GENERAL
DEFINITIONS AND ABBREVIATIONS
This Draft Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates or implies, shall have the meaning ascribed to such definitions and abbreviations set forth herein. References to any legislation, act, regulation, rules, guidelines, clarifications or policies shall be to such legislation, act, regulation, rules, guidelines, clarifications or policies as amended, supplemented or re-enacted from time to time until the date of this Draft Prospectus, and any reference to a statutory provision shall include any subordinate legislation notified from time to time pursuant to such provision.
The words and expressions used in this Draft Prospectus but not defined herein shall have, to the extent applicable, the same meaning ascribed to such words and expressions under the SEBI NCS Regulations, the Companies Act, 2013, the SCRA, the Depositories Act and the rules and regulations notified thereunder.
General Terms: Unless the context otherwise requires, the following terms have the meaning as ascribed to them below:
Term | Description |
Associates | Associates of the Issuer as at and for the relevant financial year/period as applicable. |
"EFSL" or "Company" or | Edelweiss Financial Services Limited, a public limited company incorporated under the |
"the Issuer" | Companies Act, 1956, and having its Registered Office at Edelweiss House, Off C.S.T. |
Road, Kalina, Mumbai 400 098, Maharashtra, India. | |
"we" or "us" or "our" | Edelweiss Financial Services Limited together with its Subsidiaries, Associates and |
Trusts for the relevant financial year/period as applicable. | |
Subsidiaries | Subsidiaries of the Issuer as at and for the relevant financial year/period as applicable. |
For the details of the subsidiaries of the Issuer, as on the date of this Draft Prospectus, see | |
"History and Main Objects" on page 158. | |
Trusts | Trusts of the Issuer as at and for the relevant financial year/period as applicable. |
For the details of the trusts of the Issuer, on the date of this Draft Prospectus, see "History | |
and Main Objects" on page 158. | |
Issuer Related Terms | |
Term | Description |
Adjusted Networth | Networth along with Equity attributable to Non-Controlling Interest |
Annual Financial | Annual Consolidated Financial Statements and Annual Standalone Financial Statements. |
Statements | |
Annual Consolidated | 2021 Audited Consolidated Ind AS Financial Statement, 2022 Audited Consolidated Ind |
Financial Statements | AS Financial Statement and 2023 Audited Consolidated Ind AS Financial Statement. |
Annual Standalone | 2021 Audited Standalone Ind AS Financial Statement, 2022 Audited Standalone Ind AS |
Financial Statements | Financial Statement and 2023 Audited Standalone Ind AS Financial Statement. |
Articles or Articles of | Articles of Association of the Issuer. |
Association or AOA | |
Audit Committee | Audit committee of the Board of Directors. |
Auditors or Statutory | The current statutory auditors of the Issuer, M/s. S. R. Batliboi & Co. LLP, Chartered |
Auditors | Accountants. |
Board or Board of Directors | Board of Directors of the Issuer or any duly constituted committee thereof. |
or our Board or our Board of | |
Directors | |
Corporate Social | Corporate Social Responsibility Committee of the Board of Directors. |
Responsibility Committee | |
Committee | A committee constituted by the Board, from time to time. |
Debenture Fund Raising | Debenture Fund Raising Committee as constituted by the Board of Directors. |
Committee | |
Directors | Directors of the Issuer. |
Equity Shares | Equity shares of the Issuer of face value of ₹ 1 each. |
1 |
2021 Audited Consolidated | The annual consolidated balance sheet as at March 31, 2021 and the annual consolidated |
Ind AS Financial Statement | statement of profit and loss for the year ended 2021 and the annual consolidated |
statement of cash flows for the year ended 2021 and the annual consolidated statement | |
of changes in equity for the year ended 2021 prepared by the Company in accordance | |
with accounting principles generally accepted in India, including the Indian Accounting | |
Standards (Ind AS) specified under section 133 of the Companies Act, 2013 read with | |
the Companies (Indian Accounting Standards) Rules, 2015, as amended. | |
2022 Audited Consolidated | The annual consolidated balance sheet as at March 31, 2022 and the annual consolidated |
Ind AS Financial Statement | statement of profit and loss for the year ended 2022 and the annual consolidated |
statement of cash flows for the year ended 2022 and the annual consolidated statement | |
of changes in equity for the year ended 2022 prepared by the Company in accordance | |
with accounting principles generally accepted in India, including the Indian Accounting | |
Standards (Ind AS) specified under section 133 of the Companies Act, 2013 read with | |
the Companies (Indian Accounting Standards) Rules, 2015, as amended. | |
2023 Audited Consolidated | The annual consolidated balance sheet as at March 31, 2023 and the annual consolidated |
Ind AS Financial Statement | statement of profit and loss for the year ended 2023 and the annual consolidated |
statement of cash flows for the year ended 2023 and the annual consolidated statement | |
of changes in equity for the year ended 2023 prepared by the Company in accordance | |
with accounting principles generally accepted in India, including the Indian Accounting | |
Standards (Ind AS) specified under section 133 of the Companies Act, 2013 read with | |
the Companies (Indian Accounting Standards) Rules, 2015, as amended. | |
2021 Audited Standalone Ind | The annual standalone balance sheet as at March 31, 2021 and the annual standalone |
AS Financial Statement | statement of profit and loss for the year ended 2021 and the annual standalone statement |
of cash flows for the year ended 2021 and the annual standalone statement of changes in | |
equity for the year ended 2021 prepared by the Company in accordance with accounting | |
principles generally accepted in India, including the Indian Accounting Standards (Ind | |
AS) specified under section 133 of the Companies Act, 2013 read with the Companies | |
(Indian Accounting Standards) Rules, 2015, as amended. | |
2022 Audited Standalone Ind | The annual standalone balance sheet as at March 31, 2022 and the annual standalone |
AS Financial Statement | statement of profit and loss for the year ended 2022 and the annual standalone statement |
of cash flows for the year ended 2022 and the annual standalone statement of changes in | |
equity for the year ended 2022 prepared by the Company in accordance with accounting | |
principles generally accepted in India, including the Indian Accounting Standards (Ind | |
AS) specified under section 133 of the Companies Act, 2013 read with the Companies | |
(Indian Accounting Standards) Rules, 2015, as amended. | |
2023 Audited Standalone Ind | The annual standalone balance sheet as at March 31, 2023 and the annual standalone |
AS Financial Statement | statement of profit and loss for the year ended 2023 and the annual standalone statement |
of cash flows for the year ended 2023 and the annual standalone statement of changes in | |
equity for the year ended 2023 prepared by the Company in accordance with accounting | |
principles generally accepted in India, including the Indian Accounting Standards (Ind | |
AS) specified under section 133 of the Companies Act, 2013 read with the Companies | |
(Indian Accounting Standards) Rules, 2015, as amended. | |
ESOPs | Employee stock options. |
Executive Director | Executive director(s) of the Issuer, as disclosed under "Our Management" on page 167. |
Independent Director(s) | The independent director(s) on our Board, in terms of Section 2(47) and Section 149(6) |
of the Companies Act, 2013 and SEBI Listing Regulations. | |
KMP / Key Managerial | Key managerial personnel of the Issuer as disclosed in this Draft Prospectus and |
Personnel | appointed in accordance with Key Managerial Personnel, as defined under Section 2(51) |
of the Companies Act, 2013. | |
LAP | Loan against property. |
"MoA" or "Memorandum"or | Memorandum of Association of the Issuer. |
"Memorandum of | |
Association" | |
Networth | As defined in Section 2(57) of the Companies Act, 2013, as follows: |
"Networth means the aggregate value of the paid-up share capital and all reserves | |
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Edelweiss Financial Services Ltd. published this content on 11 September 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 September 2023 12:45:06 UTC.
