HEALTHCARE GLOBAL ENTERPRISES LIMITED - Draft Red ...

DRAFT RED HERRING PROSPECTUS Dated: July 24, 2015

(The Draft Red Herring Prospectus will be updated upon filing with the RoC) (Please read Section 32 of the Companies Act, 2013)

100% Book Built Offer

HEALTHCARE GLOBAL ENTERPRISES LIMITED

Our Company was originally incorporated as Curie Centre of Oncology Private Limited on March 12, 1998 at Bengaluru, Karnataka, India as a private limited company under the Companies Act, 1956. The name of our Company was subsequently changed to HealthCare Global Enterprises Private Limited and a fresh certificate of incorporation consequent upon change of name was issued by the RoC on November 14, 2005. Our Company was converted into a public limited company pursuant to a special resolution passed by our Shareholders at the extraordinary general meeting held on May 20, 2006 and the name of our Company was changed to HealthCare Global Enterprises Limited. A fresh certificate of incorporation consequent upon conversion to a public limited company was issued by the RoC on July 5, 2006. For details of change in the name and registered office of our Company, see History and Certain Corporate Matters on page 177.

Registered Office: HCG Tower, No. 8, P Kalinga Rao Road, Sampangi Rama Nagar, Bengaluru 560 027, Karnataka, India Contact Person: Sunu Manuel, Company Secretary and Compliance Officer; Tel: +91 80 4660 7700; Fax: +91 80 4660 7749

E-mail: [email protected]; Website: www.hcgel.com Corporate Identification Number: U15200KA1998PLC023489

OUR PROMOTERS: DR. BS AJAI KUMAR, DR. GANESH NAYAK, DR. BS RAMESH, DR. KS GOPINATH AND DR. M GOPICHAND PUBLIC OFFER OF UP TO 31,098,000 EQUITY SHARES OF FACE VALUE OF `10 EACH (EQUITY SHARES) OF HEALTHCARE GLOBAL ENTERPRISES LIMITED (COMPANY OR ISSUER) FOR CASH AT A PRICE OF `[] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF `[] PER EQUITY SHARE) AGGREGATING UP TO `[] MILLION (OFFER) COMPRISING A FRESH ISSUE OF UP TO 11,600,000 EQUITY SHARES AGGREGATING UP TO `[] MILLION (FRESH ISSUE) AND AN OFFER FOR SALE OF UP TO 19,498,000 EQUITY SHARES BY THE SELLING SHAREHOLDERS (AS DEFINED HEREUNDER) AGGREGATING UP TO `[] MILLION (OFFER FOR SALE). THE OFFER WOULD CONSTITUTE 36.83% OF OUR POST-OFFER PAID-UP EQUITY SHARE CAPITAL. THE FACE VALUE OF EQUITY SHARES IS `10 EACH. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY AND THE INVESTOR SELLING SHAREHOLDERS (AS DEFINED HEREUNDER) IN CONSULTATION WITH THE BRLMS AND WILL BE ADVERTISED IN [] EDITIONS OF [], [] EDITIONS OF [] AND [] EDITIONS OF [] (WHICH ARE WIDELY CIRCULATED ENGLISH, HINDI AND KANNADA NEWSPAPERS RESPECTIVELY, KANNADA BEING THE REGIONAL LANGUAGE OF KARNATAKA, WHERE OUR REGISTERED OFFICE IS LOCATED) AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/OFFER OPENING DATE AND SHALL BE MADE AVAILABLE TO THE BSE LIMITED AND THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED FOR THE PURPOSE OF UPLOADING ON THEIR WEBSITES. In case of any revision in the Price Band, the Bid/Offer Period will be extended by at least three additional Working Days after such revision in the Price Band, subject to the Bid/Offer Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated by notification to BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE), by issuing a press release, and also by indicating the change on the website of the BRLMs and at the terminals of the Syndicate Members. In terms of Rule 19(2)(b)(ii) of the Securities Contracts (Regulation) Rules, 1957, as amended (SCRR), and in accordance with Regulation 26(2) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (the SEBI ICDR Regulations), the Offer is being made for at least such percentage of Equity Shares equivalent to the value of `4,000 million and the post-Offer capital of our Company at the Offer Price is more than `16,000 million but less than or equal to `40,000 million. The Offer is being made through the Book Building Process wherein at least 75% of the Offer shall be Allotted on a proportionate basis to Qualified Institutional Buyers (QIBs), provided that our Company in consultation with the Investor Selling Shareholders may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis, out of which one-third shall be reserved for domestic Mutual Funds only, subject to valid Bids being 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) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not more than 15% of the Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not more than 10% of the Offer shall be available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. All potential investors, other than Anchor Investors, may participate in this Offer through an Application Supported by Blocked Amount (ASBA) process providing details of their respective bank account which will be blocked by the Self Certified Syndicate Banks (SCSBs). QIBs (except Anchor Investors) and Non-Institutional Bidders are mandatorily required to utilise the ASBA process to participate in this Offer. For details, see Offer Procedure on page 319.

RISK IN RELATION TO THE FIRST OFFER This 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 Floor Price is [] times the face value and the Cap Price is [] times the face value. The Offer Price (determined and justified by our Company in consultation with the Investor Selling Shareholders and the BRLMs as stated under Basis for Offer Price on page 118) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.

GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Offer unless they can afford to take the risk of losing their entire investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Offer. For taking an investment decision, investors must rely on their own examination of our Company and the Offer, including the risks involved. The Equity Shares in the Offer have not been recommended or approved by the Securities and Exchange Board of India (SEBI), nor does SEBI guarantee the accuracy or adequacy of the contents of this Draft Red Herring Prospectus. Specific attention of the investors is invited to Risk Factors on page 16.

ISSUERS AND SELLING SHAREHOLDERS ABSOLUTE RESPONSIBILITY Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company and the Offer, which is material in the context of the Offer, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. The Other Selling Shareholders severally and not jointly accept responsibility that this Draft Red Herring Prospectus contains all information about them as Other Selling Shareholders in the context of the Offer for Sale and further assume responsibility for statements in relation to them included in this Draft Red Herring Prospectus. Further, the Investor Selling Shareholders severally and not jointly, accept responsibility only for statements expressly made by such Investor Selling Shareholder in relation to itself in this Draft Red Herring Prospectus.

LISTING The 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 [] and [], respectively. For the purposes of the Offer, the Designated Stock Exchange shall be [].

BOOK RUNNING LEAD MANAGERS

Kotak Mahindra Capital Company Limited 1st Floor, 27 BKC, Plot No. 27 G Block, Bandra Kurla Complex Bandra (East), Mumbai 400 051 Maharashtra, India Tel: +91 22 4336 0000 Fax: +91 22 6713 2447 E-mail: [email protected] Investor grievance email: [email protected] Website: www.investmentbank.kotak.com Contact Person: Ganesh Rane SEBI Registration No.: INM000008704

Edelweiss Financial Services Limited 14th Floor, Edelweiss House Off CST Road, Kalina Mumbai 400 098 Maharashtra, India Tel: + 91 22 4009 4400 Fax: +91 22 4086 3610 Email: [email protected] Investor grievance email: [email protected] Website: www.edelweissfin.com Contact Person: Siddharth Shah/Vivek Kumar SEBI Registration No.: INM0000010650

Goldman Sachs (India) Securities Private Limited Rational House 951-A, Appasaheb Marathe Marg Prabhadevi, Mumbai 400 025 Maharashtra, India Tel: +91 22 6616 9000 Fax: +91 22 6616 9090 Email: [email protected] Investor grievance email: [email protected] Website: http://www.goldmansachs.com/worldwide/india/offerings.html Contact Person:Dipak Daga SEBI Registration No.: INM000011054

REGISTRAR TO THE OFFER

IDFC Securities Limited Naman Chambers, C-32, G Block Bandra Kurla Complex Bandra (East), Mumbai 400 051 Maharashtra, India Tel: +91 22 6622 2600 Fax: +91 22 6622 2501 Email: [email protected] Investor grievance email: [email protected] Website: www.idfccapital.com Contact Person: Gaurav Goyal SEBI Registration No.: MB/INM000011336

IIFL Holdings Limited 8th Floor, IIFL Centre Kamala City, Senapati Bapat Marg Lower Parel (West), Mumbai 400 013 Maharashtra, India Tel: +91 22 4646 4600 Fax: +91 22 2493 1073 Email: [email protected] Investor grievance email: [email protected] Website: www.iiflcap.com Contact Person: Pinak Bhattacharyya/Vishal Bangard SEBI Registration No.: INM000010940

Yes Bank Limited Yes Bank Tower, IFC, Tower 2, 18th Floor Senapati Bapat Marg, Elphinstone (West) Mumbai 400 013 Maharashtra, India Tel: +91 22 3366 9000 Fax: +91 22 2421 4508 Email: [email protected] Investor grievance email: [email protected] Website: www.yesbank.in Contact Person: Dhruvin Mehta SEBI Registration No.: MB/INM000010874

Karvy Computershare Private Limited Karvy Selenium Tower B Plot 31-32, Gacchibowli Financial District, Nanakramguda Hyderabad 500 032 Tel: +91 40 6716 2222 Fax: +91 40 2343 1551 E-mail: [email protected] Investor grievance email: [email protected] Website: www.karisma.karvy.com Contact Person: Rakesh Santhalia SEBI Registration No.: INR000000221

BID/OFFER PROGRAMME BID/OFFER OPENS ON [](1) BID/OFFER CLOSES ON [](2) (1) Our Company may, in consultation with the Investor Selling Shareholders and the BRLMs, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor Investor

Bid/Offer Period shall be one Working Day prior to the Bid/Offer Opening Date (2) Our Company may, in consultation with the Investor Selling Shareholders and the BRLMs, consider closing the Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer Closing Date in accordance

with the SEBI ICDR Regulations

I D F C IIFL

http://www.hcgoncology.com/http://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=CZ7rKzwOMyXsnM&tbnid=B8FWrCqEMSRLzM:&ved=0CAcQjRw&url=http://commons.wikimedia.org/wiki/File:Goldman_Sachs.svg&ei=ESM2VPu0NNjkuQS9u4KACg&bvm=bv.76943099,d.c2E&psig=AFQjCNHcrZKeQD35n5nbnxC9NPe8JtesXg&ust=1412920361090281

TABLE OF CONTENTS

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

DEFINITIONS AND ABBREVIATIONS ......................................................................................................... 2 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA .................................................... 12 FORWARD-LOOKING STATEMENTS ........................................................................................................ 14

SECTION II: RISK FACTORS ........................................................................................................................ 16

SECTION III: INTRODUCTION .................................................................................................................... 45

SUMMARY OF INDUSTRY ........................................................................................................................... 45 SUMMARY OF OUR BUSINESS ................................................................................................................... 49 SUMMARY OF FINANCIAL INFORMATION ............................................................................................. 55 THE OFFER ..................................................................................................................................................... 63 GENERAL INFORMATION ........................................................................................................................... 65 CAPITAL STRUCTURE ................................................................................................................................. 74 OBJECTS OF THE OFFER ............................................................................................................................ 110 BASIS FOR OFFER PRICE ........................................................................................................................... 118 STATEMENT OF TAX BENEFITS .............................................................................................................. 121

SECTION IV: ABOUT OUR COMPANY ..................................................................................................... 135

INDUSTRY OVERVIEW .............................................................................................................................. 135 OUR BUSINESS ............................................................................................................................................ 147 REGULATIONS AND POLICIES ................................................................................................................. 171 HISTORY AND CERTAIN CORPORATE MATTERS ................................................................................ 177 OUR MANAGEMENT .................................................................................................................................. 193 OUR PROMOTERS ....................................................................................................................................... 210 OUR GROUP ENTITIES ............................................................................................................................... 214 RELATED PARTY TRANSACTIONS ......................................................................................................... 219 DIVIDEND POLICY ..................................................................................................................................... 220

SECTION V: FINANCIAL INFORMATION ............................................................................................... 221

FINANCIAL STATEMENTS ........................................................................................................................ 221 FINANCIAL INDEBTEDNESS .................................................................................................................... 222 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS ............................................................................................................................................... 254

SECTION VI: LEGAL AND OTHER INFORMATION ............................................................................. 277

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ..................................................... 277 GOVERNMENT AND OTHER APPROVALS ............................................................................................. 290 OTHER REGULATORY AND STATUTORY DISCLOSURES .................................................................. 293

SECTION VII: OFFER INFORMATION ..................................................................................................... 311

TERMS OF THE OFFER ............................................................................................................................... 311 OFFER STRUCTURE .................................................................................................................................... 314 OFFER PROCEDURE ................................................................................................................................... 319 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ............................................... 372

SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION............................................ 373

SECTION IX: OTHER INFORMATION ..................................................................................................... 483

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ........................................................ 483 DECLARATION ............................................................................................................................................. 486

2

SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless the context

otherwise indicates or implies, shall have the meaning as provided below. References to any legislation, act,

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

time.

General Terms

Term Description

our Company, the Company,

the Issuer or HCG

HealthCare Global Enterprises Limited, a company incorporated under the Companies

Act, 1956 and having its Registered Office at HCG Tower, No. 8, P Kalinga Rao

Road, Sampangi Rama Nagar, Bengaluru 560 027, Karnataka, India

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

its Subsidiaries and LLPs

Company Related Terms

Term Description

AOPL Aastha Oncology Private Limited, a company incorporated under the Companies Act,

1956 and having its registered office at 1, Maharasthra Society, Near Mithakali Six

Road, Ellisbridge, Ahmedabad 380 006, Gujarat, India

APEX HCG LLP APEX HCG Oncology Hospitals LLP

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

Auditors/Statutory Auditors Statutory auditors of our Company, namely, Deloitte Haskins & Sells, Chartered

Accountants

BACC Healthcare BACC Health Care Private Limited

BCCHI The Bharath Charitable Cancer Hospital and Institute (Private Charitable Trust)

BMORCL Banashankari Medical and Oncology Research Centre Private Limited

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

Corporate Office Corporate office of our Company located at Tower Block, Unity Building Complex,

No. 3, Mission Road, Bengaluru 560 027, Karnataka, India

Director(s) Director(s) of our Company

DKR Healthcare DKR Healthcare Private Limited

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

ESOP 2010 Employee Stock Option Scheme 2010

ESOP 2014 Employee Stock Option Scheme 2014

Evolvence Evolvence India Life Sciences Fund LLC

GMH LLP Gutti Malnad Hospital LLP

Group Entities Companies, firms, ventures, etc. promoted by our Promoters, irrespective of whether

or not such entities are covered under Section 370(1B) of the Companies Act.

For details, see Our Group Entities on page 214

HCG Africa HealthCare Global (Africa) Pvt. Ltd.

HCG Diwan Chand LLP HealthCare Diwan Chand Imaging LLP

HCG EKO LLP HCG EKO Oncology LLP

HCG Kenya HealthCare Global (Kenya) Private Limited

HCG Mauritius HCG (Mauritius) Pvt. Ltd.

HCG Medi-Surge HCG Medi-Surge Hospitals Private Limited

HCG NCHRI LLP HCG NCHRI Oncology LLP

HCG Pinnacle HCG Pinnacle Oncology Private Limited

HCG Regency HCG Regency Oncology Healthcare Private Limited

HCG Senthil HealthCare Global Senthil Multi Specialty Hospitals Private Limited

HCG Tanzania HealthCare Global (Tanzania) Private Limited

HCG TVH HCG TVH Medical Imaging Private Limited

HCG Uganda HealthCare Global (Uganda) Private Limited

HCG Vijay HealthCare Global Vijay Oncology Private Limited

HMS HCG Multi-Specialty Hospital

IHDUA International Human Development and Upliftment Academy (Private Trust)

KDCPL Kruti Designers and Contractors Private Limited

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

3

Term Description

in Our Management on page 193

LLPs Limited Liability Partnership firms in which our Company is a partner, namely:

1. APEX HCG LLP 2. HCG Diwan Chand LLP 3. HCG EKO LLP 4. HCG NCHRI LLP 5. HCG Oncology LLP 6. Strand-Triesta LLP

Malnad Hospital Malnad Hospital and Institute of Oncology Private Limited

Malnad LLP Malnad Hi Tech Diagnostic Centre LLP

MAT Milestone Army Trust, an Indian trust, having its principal office at Tower A-602, 6th

floor, Express Zone, Western Express Highway, opposite Oberoi Mall, Malad East,

Mumbai, Maharashtra, India of which Shachindra Nath is the trustee

Memorandum of

Association/MOA

Memorandum of Association of our Company, as amended

MIMS HCG MIMS HCG Oncology Private Limited

MPEF Milestone Private Equity Fund, an Indian trust, registered with SEBI as a venture

capital fund having its principal office at Tower A-602, 6th floor, Express Zone,

Western Express Highway, opposite Oberoi Mall, Malad East, Mumbai, Maharashtra,

India, through its scheme namely India Build-Out Fund-I of which IL&FS Trust

Company Limited is the trustee

NTICPL Napean Trading and Investment Company Private Limited

PIOF PI Opportunities Fund I, a venture capital fund registered under the SEBI VCF Regulations and having its principal office at No. 5 Janmabhoomi Marg, Fort,

Mumbai, Maharashtra, India

Promoter Promoters of our Company, namely, Dr. BS Ajai Kumar, Dr. Ganesh Nayak, Dr. BS

Ramesh, Dr. KS Gopinath and Dr. M Gopichand

For details, see Our Promoters on page 210

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

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

Registered Office Registered office of our Company located at HCG Tower, No. 8, P Kalinga Rao Road,

Sampangi Rama Nagar, Bengaluru 560 027, Karnataka, India

Registrar of Companies/RoC Registrar of Companies, Bangalore situated at Karnataka, India

Restated Consolidated Financial

Statements

The restated audited consolidated financial information of our Company, Subsidiaries

and associates which comprises of the restated audited consolidated balance sheet, the

restated audited consolidated profit and loss information and the restated audited

consolidated cash flow information as at and for the financial years ended March 31,

2015, March 31, 2014, March 31, 2013, March 31, 2012 and March 31, 2011, together

with the annexures and notes thereto

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

Standalone Financial Statements

Restated Standalone Financial

Statements

The restated audited standalone financial information of our Company which

comprises of the restated audited standalone balance sheet, the restated audited

standalone profit and loss information and the restated audited standalone cash flow

information as at and for the financial years ended March 31, 2015, March 31, 2014,

March 31, 2013, March 31, 2012 and March 31, 2011, together with the annexures and

notes thereto

Shareholders Shareholders of our Company from time to time

SSDURCPL Sada Sharada Diagnostic Urology and Rehabilitation Centre Private Limited

SSHDUA Sada Sharada Human Development and Upliftment Academy

SSTRI Sada Sharada Tumour and Research Institute

Strand-Triesta LLP Strand-Triesta Cancer Genomics LLP

Subsidiaries or individually

known as Subsidiary

Subsidiaries of our Company namely:

1. BACC Healthcare 2. DKR Healthcare 3. HCG Medi-Surge 4. HCG Pinnacle 5. HCG Regency 6. HCG TVH 7. HCG Africa 8. HCG Mauritius 9. HCG Kenya 10. HCG Tanzania 11. HCG Uganda

4

Term Description

12. HCG Senthil 13. Malnad Hospital 14. MIMS HCG

Ubiquitous Ubiquitous Oncoreach LLP

V-Sciences V-Sciences Investments Pte Ltd, a company incorporated under the laws of Singapore

and having its registered office at 60B, Orchard Road, #06-18, Tower 2, The

Atrium@Orchard, Singapore

Offer Related Terms

Term Description

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, applying under the Anchor Investor Portion in

accordance with the requirements specified in the SEBI ICDR Regulations

Anchor Investor Allocation Price The price at which Equity Shares will be allocated to Anchor Investors in terms of the

Red Herring Prospectus and the Prospectus which will be decided by our Company, in

consultation with the Investor Selling Shareholders and the BRLMs

Anchor Investor Bid/Offer Period The day, one Working Day prior to the Bid/Offer Opening Date, on which Bids by

Anchor Investors shall be submitted

Anchor Investor Offer Price Final price at which the Equity Shares will be Allotted to Anchor Investors in terms of

the Red Herring Prospectus and the Prospectus, which price will be equal to or higher

than the Offer Price but not higher than the Cap Price

The Anchor Investor Offer Price will be decided by our Company in consultation with

the Investor Selling Shareholders and the BRLMs

Anchor Investor Portion Up to 60% of the QIB Portion which may be allocated by our Company in

consultation with the Investor Selling Shareholders and the BRLMs, to Anchor

Investors on a discretionary basis

One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds,

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

Anchor Investor Allocation Price

Application Supported by

Blocked Amount or ASBA

An application, whether physical or electronic, used by Bidders, other than Anchor

Investors, to make a Bid authorising an SCSB to block the Bid Amount in the ASBA

Account

ASBA is mandatory for QIBs (except Anchor Investors) and Non Institutional Bidders

participating in the Offer

ASBA Account An account maintained with an SCSB and specified in the Bid cum Application Form

submitted by ASBA Bidders for blocking the Bid Amount mentioned in the Bid cum

Application Form

ASBA Bid A Bid made by an ASBA Bidder

ASBA Bidder Prospective investors (other than Anchor Investors) in the Offer who intend to submit

their Bid through the ASBA process

Banker(s) to the Offer/Escrow

Collection Bank(s)

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

and with whom the Escrow Account will be opened, in this case being []

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 319

Bid An indication to make an offer during the Bid/Offer Period by a Bidder pursuant to

submission of the Bid cum Application Form, or during the Anchor Investor Bid/Offer

Period by the Anchor Investors, to subscribe to or purchase the Equity Shares of our

Company 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 upon submission of the Bid

Bid cum Application Form The form used by a Bidder, including an ASBA Bidder, to make a Bid and which will

be considered as the application for Allotment or transfer, as the case may be, in terms

5

Term Description

of the Red Herring Prospectus and the Prospectus

Bid Lot []

Bid/Offer Closing Date Except in relation to any Bids received from the Anchor Investors, the date after which

the Syndicate, the Designated Branches and the Registered Brokers will not accept any

Bids, which shall be notified in two national daily newspapers, one each in English

and Hindi, and in one Kannada daily newspaper, each with wide circulation

Our Company may, in consultation with the Investor Selling Shareholders and the

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

Bid/Offer Closing Date in accordance with the SEBI ICDR Regulations

Bid/Offer Opening Date Except in relation to any Bids received from the Anchor Investors, the date on which

the Syndicate, the Designated Branches and the Registered Brokers shall start

accepting Bids, which shall be notified in two national daily newspapers, one each in

English and Hindi, and in one Kannada daily newspaper, each with wide circulation

Bid/Offer Period Except in relation to Anchor Investors, the period between the Bid/Offer Opening

Date and the Bid/Offer Closing Date, inclusive of both days, during which prospective

Bidders can submit their Bids, including any revisions thereof

Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring

Prospectus and the Bid cum Application Form and unless otherwise stated or implied,

includes an ASBA Bidder and Anchor Investor

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 Mahindra Capital

Company Limited, Edelweiss Financial Services Limited, Goldman Sachs (India)

Securities Private Limited, IDFC Securities Limited, IIFL Holdings Limited and Yes

Bank Limited

Broker Centres Broker centres notified by the Stock Exchanges where Bidders can submit the Bid

cum Application 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 The higher end of the Price Band, above which the Offer Price will not be finalised

and above which no Bids will be accepted

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

demat account

Cut-off Price Offer Price, finalised by our Company in consultation with the Investor Selling

Shareholders and the BRLMs

Only Retail Individual Bidders are entitled to Bid at the Cut-off Price. QIBs and Non-

Institutional Bidders are not entitled to Bid at the Cut-off Price

Designated Branches Such branches of the SCSBs which shall collect the Bid cum Application Forms used

by the ASBA Bidders, a list of which is available on the website of SEBI at

http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries or at

such other website as may be prescribed by SEBI from time to time

Designated Date The date on which the Escrow Collection Banks transfer funds from the Escrow

Accounts, and the SCSBs issue instructions for transfer of funds from the ASBA

Accounts, to the Public Issue Account or the Refund Account, as appropriate, in terms

of the Red Herring Prospectus following which the Board of Directors may Allot

Equity Shares to successful Bidders/Applicants in the Fresh Issue and the Selling

Shareholders may give delivery instructions for the transfer of the Equity Shares

constituting the Offer for Sale Designated Stock Exchange []

Draft Red Herring Prospectus or

DRHP

This Draft Red Herring Prospectus dated July 24, 2015, issued in accordance with the

SEBI ICDR Regulations, which does not contain complete particulars of the price at

which the Equity Shares will be Allotted and the size of the Offer

Edelweiss Edelweiss Financial Services Limited

Eligible NRI(s) NRI(s) from jurisdictions outside India where it is not unlawful to make an offer or

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

the Red Herring Prospectus will constitute an invitation to subscribe to or to purchase

the Equity Shares

Escrow Account Account opened with the Escrow Collection Bank(s) and in whose favour the Bidders

(excluding the ASBA Bidders) will issue cheques or drafts in respect of the Bid

6

Term Description

Amount when submitting a Bid

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

Computershare Private Limited

Escrow Agreement Agreement dated [] entered into by our Company, the Selling Shareholders, the

Registrar to the Offer, the BRLMs, the Syndicate Members, the Escrow Collection

Bank(s) and the Refund Bank(s) for collection of the Bid Amounts and where

applicable, refunds of the amounts collected from the Bidders (excluding the ASBA

Bidders), on the terms and conditions thereof

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 The lower end of the Price Band, subject to any revision thereto, at or above which the

Offer Price and the Anchor Investor Offer Price will be finalised and below which no

Bids will be accepted

Fresh Issue The fresh issue of up to 11,600,000 Equity Shares aggregating up to `[] million by

our Company

General Information

Document/GID

The General Information Document for investing in public issues prepared and issued

in accordance with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013

notified by SEBI, suitably modified and included in Offer Procedure on page 319

GS Goldman Sachs (India) Securities Private Limited

IDFC IDFC Securities Limited

IIFL IIFL Holdings Limited

Investor Share Escrow Agreement Agreement dated [] entered into by our Company, Dr. BS Ajai Kumar, Gangadhara

Ganapati, Investor Selling Shareholders, the 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 the demat account of the Allottees

Investor Selling Shareholders MAT, MPEF, PIOF, V-Sciences

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 466,470 Equity

Shares which shall be available for allocation to Mutual Funds only

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

(Mutual Funds) Regulations, 1996

Net Proceeds Proceeds of the Fresh Issue less our Companys share of the Offer expenses

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

Objects of the Offer on page 110

Non-Institutional Bidders All Bidders that are not QIBs or Retail Individual Bidders and who have Bid for

Equity Shares for an amount more than `200,000 (but not including NRIs other than

Eligible NRIs)

Non-Institutional Portion The portion of the Offer being not more than 15% of the Offer consisting of 4,664,700

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

Institutional Bidders, subject to valid Bids being received at or above the Offer Price

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

Indian, FIIs and FPIs

Offer The public issue of up to 31,098,000 Equity Shares of face value of `10 each for cash

at a price of `[] each, aggregating up to `[] million comprising the Fresh Issue and

the Offer for Sale

Offer Agreement The agreement dated July 24, 2015 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 up to 19,498,000 Equity Shares by Selling Shareholders at the

Offer Price aggregating up to `[] million in terms of the Red Herring Prospectus

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

Prospectus

The Offer Price will be decided by our Company in consultation with the Investor

Selling Shareholders and the BRLMs on the Pricing Date

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

Shareholders

Other Selling Shareholders 1. AOPL 2. Dr. BS Ajai Kumar

7

Term Description

3. Dr. G Kilara 4. Dr. K Harish jointly with Shubha Harish 5. Dr. Nalini Kilara 6. Ganga Ramaiah 7. Gangadhara Ganapati 8. Rajesh Ramaiah 9. Shubha Harish jointly with Dr. K Harish

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

maximum price of `[] per Equity Share (Cap Price) including revisions thereof

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

Company and the Investor Selling Shareholders in consultation with the BRLMs and

will be advertised, at least five Working Days prior to the Bid/Offer Opening Date, in

[] edition of the English national newspaper [], [] edition of the Hindi national

newspaper [], and [] edition of the Kannada newspaper [], each with wide

circulation

Pricing Date The date on which our Company in consultation with the Investor Selling

Shareholders and the BRLMs, will finalise the Offer Price

Prospectus The Prospectus to be 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 is determined at the end of the Book Building Process,

the size of the Offer and certain other information

Public Issue Account Account opened with the Bankers to the Offer under Section 40(3) of the Companies

Act, 2013 to receive monies from the Escrow Account(s) and ASBA Accounts on the

Designated Date

QIB Category/QIB Portion The portion of the Offer (including the Anchor Investor Portion) being at least 75% of

the Offer consisting of 23,323,500 Equity Shares which shall be Allotted to QIBs

(including Anchor Investors)

Qualified Institutional Buyers or

QIBs

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

Regulations

Red Herring Prospectus or RHP The Red Herring Prospectus to be issued in accordance with Section 32 of the

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

not have complete particulars of the price at which the Equity Shares will be offered

and the size of the Offer including any addenda or corrigenda thereto

The Red Herring Prospectus will be registered with the RoC at least three days before

the Bid/Offer Opening Date and will become the Prospectus upon filing with the RoC

after the Pricing Date

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

whole or part of the Bid Amount (excluding refund to ASBA Bidders) shall be made

Refund Bank(s) []

Refunds through electronic

transfer of funds

Refunds through NECS, direct credit, RTGS or NEFT, as applicable

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

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

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

Registrar to the Offer/Registrar Karvy Computershare Private Limited

Retail Individual Bidder(s)/Retail

Individual Investor(s)/RII(s)

Individual Bidders submitting Bids, who have Bid for the Equity Shares for an amount

not more than `200,000 in any of the bidding options in the Offer (including HUFs

applying through their Karta and Eligible NRIs and does not include NRIs other than

Eligible NRIs)

Retail Portion The portion of the Offer being not more than 10% of the Offer consisting of 3,109,800

Equity Shares which shall be available for allocation to Retail Individual Bidders) in

accordance with the SEBI ICDR Regulations

Revision Form Form used by the Bidders, including ASBA Bidders, to modify the quantity of the

Equity Shares or the Bid Amount in any of their Bid cum Application Forms or any

previous Revision Form(s)

QIB Bidders and Non-Institutional Bidders are not allowed to lower their Bids (in

terms of quantity of Equity Shares or the Bid Amount) at any stage

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

8

Term Description

Selling Shareholders Investor Selling Shareholders and Other Selling Shareholders offering Equity Shares

in the Offer for Sale

Share Escrow Agreement Agreement dated July 17, 2015 entered into by AOPL, Dr. G Kilara, Dr. K Harish,

Shubha Harish, Dr. Nalini Kilara, Ganga Ramaiah, Rajesh Ramaiah, our Company

and the 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 the demat

account of the Allottees

Specified Locations Bidding centres where the Syndicate shall accept Bid cum Application Forms from

ASBA Bidders, a list of which is available on the website of SEBI (www.sebi.gov.in)

and updated from time to time

Syndicate Agreement Agreement to be entered into among the BRLMs, the Syndicate Members, our

Company and the Selling Shareholders in relation to the collection of Bids in the Offer

(other than Bids directly submitted to the SCSBs under the ASBA process and Bids

submitted to Registered Brokers at the Broker Centres)

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

underwriter, namely, []

Syndicate or Members of the

Syndicate

The BRLMs and the Syndicate Members

TRS or Transaction Registration

Slip

The slip or document issued by the Syndicate, or the SCSB (only on demand), as the

case may be, to the Bidder as proof of registration of the Bid

Underwriters []

Underwriting Agreement The agreement among the Underwriters, our Company and the Selling Shareholders to

be entered into on or after the Pricing Date

Working Day Any day, other than Saturdays and Sundays, on which commercial banks in Mumbai

are open for business, provided however, for the purpose of the time period between

the Bid/Offer Closing Date and listing of the Equity Shares on the Stock Exchanges,

Working Days shall mean all days excluding Sundays and bank holidays in Delhi or

Mumbai in accordance with the SEBI circular no. CIR/CFD/DIL/3/2010 dated April

22, 2010

Yes Bank Yes Bank Limited

Technical/Industry Related Terms/Abbreviations

Term Description

3D-CRT 3D-Conformal Radiation Therapy

CAP College of American Pathologists

CDC CDC Group plc

CT Computed Tomography

DNA Deoxyribo Nucleic Acid

EMR Electronic Medical Record

ERP Enterprise resource planning

FDG Fludeoxyglucose

GIPSA The General Insurers (Public Sector) Association of India

HIS Hospital Information Systems

IBEF India Brand Equity Foundation

ICSI Intracyctoplasmic Sperm Injection

ICU Intensive Care Unit

IGRT Image Guided Radiation Therapy

IMRT Intensity-Modulated Radiation Therapy

IUI Intrauterine Insemination

IVF In Vitro Fertilisation

LINAC Linear Accelerator

MBBS Bachelor of Medicine, Bachelor of Surgery

MRI Magnetic Resonance Imaging

NABH National Accreditation Board for Hospitals and Healthcare Providers

NABL National Accreditation Board for Testing and Calibration Laboratories

NMR Nuclear Magnetic Resonance

PACS Picture Archiving and Communication System

PCOS Poly-Cystic Ovarian Syndrome

PCR Polymerase Chain Reaction

PET-CT Positron Emission TomographyComputed Tomography

RIS Radiology Information System

RNA Ribonucleic Acid

SRS Stereotactic Radiosurgery

9

Term Description

SRT Stereotactic Radiotherapy

WBRRS Whole Body Robotic Radiosurgery

Conventional and General Terms or Abbreviations

Term Description

`/Rs./Rupees/INR Indian Rupees

AERB Atomic Energy Regulatory Board

AGM Annual General Meeting

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

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

2012

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

ART Bill The Assisted Reproductive Technologies (Regulation) Bill of 2013

ART Guidelines The Assisted Reproductive Technologies Guidelines

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

Atomic Energy Act Atomic Energy Act, 1962

Atomic Energy Rules Atomic Energy (Radiation Protection) Rules, 2004

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

Bn/bn Billion

BSE BSE Limited

CAGR Compounded Annual Growth Rate

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

CDSL Central Depository Services (India) Limited

CENVAT Central Value Added Tax

CESTAT Customs, Excise and Service Tax Appellate Tribunal

CIN Corporate Identity Number

CIT Commissioner of Income Tax

Civil Code The Code of Civil Procedure, 1908

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

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

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

the relevant rules made thereunder

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

Sections, along with the relevant rules made thereunder

Competition Act The Competition Act, 2002

Customs Act The Customs Act, 1962

DCA Drugs and Cosmetics Act, 1940

DCA Rules Drugs and Cosmetics Rules, 1945

Depositories NSDL and CDSL

Depositories Act The Depositories Act, 1996

DIN Director Identification Number

DP ID Depository Participants Identification

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

DTC Direct Taxes Code

EGM Extraordinary General Meeting

EPA Environment Protection Act, 1986

EPCG Scheme The Export Promotion Capital Goods Scheme

EPS Earnings Per Share

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

Shares of our Company are to be listed

ESI Act Employees State Insurance Act, 1948

FCNR Foreign Currency Non-Resident

FDI Foreign Direct Investment

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

FEMA Regulations FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations,

2000 and amendments thereto

10

Term Description

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

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

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

Regulations

GDP Gross Domestic Product

GIR General Index Register

GoI/Government Government of India

GST Goods and Services Tax

Hazardous Waste Rules, HMW

Rules

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

2008

ICAI The Institute of Chartered Accountants of India

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

March 31, 2015

IFRS International Financial Reporting Standards

IMCA Indian Medical Council Act, 1956

IMDA Indian Medical Degree Act, 1916

Income Tax Act The Income Tax Act, 1961

India Republic of India

Indian Accounting Standard

Rules

The Companies (Indian Accounting Standards) Rules of 2015

Indian GAAP Generally Accepted Accounting Principles in India

IPO Initial public offering

IRDA Insurance Regulatory and Development Authority of India

IST Indian Standard Time

IT Information Technology

Legal Metrology Act Legal Metrology Act, 2009

LLP Act Limited Liability Partnership Act, 2008

MCA Ministry of Corporate Affairs, Government of India

Mn/mn Million

MTP Act Medical Termination of Pregnancy Act, 1971

N.A./NA Not Applicable

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

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 or a person of Indian origin,

and shall have the meaning ascribed to such term in the Foreign Exchange

Management (Deposit) Regulations, 2000

NRO Account Non Resident Ordinary Account

NSDL National Securities Depository Limited

NSE The National Stock Exchange of India Limited

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

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

60% of beneficial interest is irrevocably held by NRIs directly or indirectly and which

was in existence on October 3, 2003 and immediately before such date had taken

benefits under the general permission granted to OCBs under FEMA. OCBs are not

allowed to invest in the Offer

p.a. Per annum

P/E Ratio Price/Earnings Ratio

PAN Permanent Account Number

PAT Profit After Tax

Pharmacy Act Pharmacy Act, 1948

PNDT Act Pre-Conception and Pre-Natal Diagnostic Techniques (Prohibition of Sex Selection)

Act, 1994

Radiation Rules Radiation Protection Rules, 1971

11

Term Description

Radiation Surveillance Procedure Radiation Surveillance Procedures for Medical Application of Radiation, 1989

Radioactive Waste Rules Atomic Energy (Safe Disposal of Radioactice Waste) Rules, 1987

RBI Reserve Bank of India

RoC Registrar of Companies, Bangalore

RTGS Real Time Gross Settlement

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 Depository Regulations Securities and Exchange Board of India (Depositories and Participants) Regulations,

1996

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

SEBI Portfolio Manager

Regulations

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

SEBI Stock Broker Regulations Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations,

1992

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

Securities Act U.S. Securities Act, 1933

SICA Sick Industrial Companies (Special Provisions) Act, 1985

Sq. ft./sq.ft. Square feet

Stamp Act The Indian Stamp Act, 1899

State Government The government of a state in India

Stock Exchanges The BSE and the NSE

STT Securities Transaction Tax

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

Takeovers) Regulations, 2011

TAN Tax deduction account number

Transplantation of Organs Act Transplantation of Human Organs Act, 1994

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

ULIP Unit-linked insurance plan

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

USD/US$ United States Dollars

VAS Value Added Services

VAT Value Added Tax

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

Regulations

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

X-Ray Safety Code The Safety Code for Medical Diagnostic X-Ray Equipment and Installations, 2001

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

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

regulations made thereunder.

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

Provisions of Articles of Association on pages 121, F-1 and 373, respectively, shall have the meaning given to

such terms in such sections.

12

PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Certain Conventions

All references in this Draft Red Herring Prospectus to India are to the Republic of India, all references to

Kenya are to the Republic of Kenya, all references to Mauritius are to the Republic of Mauritius, all

references to Tanzania are to the United Republic of Tanzania, all references Uganda are to the Republic of

Uganda 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 Draft Red Herring Prospectus are to the page

numbers of this Draft Red Herring Prospectus.

Financial Data

Unless stated otherwise, the financial data in this Draft Red Herring 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 Draft Red Herring Prospectus, any discrepancies in any table between the total and the sums of the

amounts listed are due to rounding off. All figures in decimals have been rounded off to the second decimal and

all percentage figures have been rounded off to two decimal places and accordingly there may be consequential

changes in this Draft Red Herring Prospectus.

Our Companys 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.

There are significant differences between Indian GAAP, US GAAP and IFRS. Our Company does not provide

reconciliation of the financial information included in this Draft Red Herring Prospectus to IFRS or US GAAP.

Our Company has not attempted to explain those differences or quantify their impact on the financial data

included in this Draft Red Herring Prospectus and it is urged that you consult your own advisors regarding such

differences and their impact on financial data included in this Draft Red Herring Prospectus. For details in

connection with risks involving differences between Indian GAAP and IFRS, see Risk Factors on page 16.

Accordingly, the degree to which the financial information included in this Draft Red Herring Prospectus will

provide meaningful information is entirely dependent on the readers level of familiarity with Indian accounting

policies and practices, the Companies Act and the SEBI ICDR Regulations. Any reliance by persons not

familiar with Indian accounting policies and practices on the financial disclosures presented in this Draft Red

Herring Prospectus should accordingly be limited.

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

and Managements Discussion and Analysis of Financial Conditions and Results of Operations on pages 16,

147 and 254 respectively, and elsewhere in this Draft Red Herring Prospectus have been calculated on the basis

of the Restated Financial Statements of our Company prepared in accordance with the Companies Act and

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

EBIDTA presented in this Draft Red Herring Prospectus are supplemental measures of our performance and

liquidity that are not required by, or presented in accordance with, Indian GAAP, IFRS or US GAAP.

Furthermore, EBIDTA is not a measurement of our financial performance or liquidity under Indian GAAP,

IFRS or US GAAP and should not be considered as an alternative to net profit/loss, revenue from operations or

any other performance measures derived in accordance with Indian GAAP, IFRS or US GAAP or as an

alternative to cash flow from operations or as a measure of our liquidity. In addition, EBITDA is not a

standardised term, hence a direct comparison of EBITDA between companies may not be possible. Other

companies may calculate EBITDA differently from us, limiting its usefulness as a comparative measure.

Currency and Units of Presentation

All references to:

KES are to the Kenyan Shilling, the official currency of the Republic of Kenya;

MUR or are to the Mauritian Rupee, the official currency of the Republic of Mauritius;

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

TZS are to the Tanzanian Shilling, the official currency of the United Republic of Tanzania;

13

UGX are to the Ugandan Shilling, the official currency of the Republic of Uganda; and

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

Our Company has presented certain numerical information in this Draft Red Herring Prospectus in million

units. One million represents 1,000,000 and one billion represents 1,000,000,000.

Exchange Rates

This Draft Red Herring Prospectus contains conversions of certain other currency amounts into Indian Rupees

that have been presented solely to comply with the SEBI ICDR Regulations. These conversions should not be

construed as a representation that these currency amounts could have been, or can be converted into Indian

Rupees, at any particular rate or at all.

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

the Rupee and (i) the KES (in Rupees per KES); (ii) the MUR (in Rupees per MUR); (iii) the TZS (in Rupees per

TZS); (iv) the UGX (in Rupees per UGX); and (v) the USD (in Rupees per USD):

Currency As on March 31, 2013(1)

(`)

As on March 31, 2014(1)

(`)

As on March 31, 2015(1)

(`)

1 KES 0.64 0.69 0.67

1 MUR 1.75 1.99 1.71

1 TZS 0.03 0.04 0.04

1 UGX 0.02 0.02 0.02

1 USD 54.28 59.88 62.31 (Source: Bloomberg)

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

been considered

Industry and Market Data

Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus has been obtained

or derived from publicly available information as well as industry publications and sources.

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

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

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

used in this Draft Red Herring Prospectus is reliable, it has not been independently verified by us or the BRLMs

or any of their affiliates or advisors. The data used in these sources may have been reclassified by us for the

purposes of presentation. Data from these sources may also not be comparable. Such data involves risks,

uncertainties and numerous assumptions and is subject to change based on various factors, including those

discussed in Risk Factors on page 16. Accordingly, investment decisions should not be based solely on such

information.

In accordance with the SEBI ICDR Regulations, Basis for Offer Price on page 118 includes information

relating to our peer group companies. Such information has been derived from publicly available sources, and

neither we, nor the BRLMs have independently verified such information.

The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful

depends on the readers 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.

Only statements and undertakings which are specifically confirmed or undertaken by the Investor Selling

Shareholders and Other Selling Shareholders, as the case may be, in this Draft Red Herring Prospectus shall

severally and not jointly deemed to be statements and undertakings made by such Selling Shareholders. All

other statements and/or undertakings in this Draft Red Herring Prospectus shall be statements and undertakings

made by our Company even if the same relates to the Selling Shareholder(s).

14

FORWARD-LOOKING STATEMENTS

This Draft Red Herring Prospectus contains certain forward-looking statements. These forward-looking

statements generally can be identified by words or phrases such as aim, anticipate, believe, expect,

estimate, intend, objective, plan, project, will, will continue, will pursue or other words or

phrases of similar import. Similarly, statements that describe our Companys 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 the expectations with respect to, but not limited to, regulatory changes pertaining

to the industry in which our Company has businesses and its ability to respond to them, its ability to successfully

implement its strategy, its growth and expansion, technological changes, its exposure to market risks, general

economic and political conditions in India and globally which have an impact on its business activities or

investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest

rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in

India and globally, changes in laws, regulations and taxes and changes in competition in its industry. Important

factors that could cause actual results to differ materially from our Companys expectations include, but are not

limited to, the following:

reported net losses by our Company and some Subsidiaries in the recent Fiscal Years and their inability to achieve or sustain profitability in the future;

recurrence of incidents of fraud committed by employees and officers of our Subsidiaries;

unpredictability and variability of our results of operations year after year;

inability to successfully expand our HCG network and our Milann network or closing down of any of our existing centres;

inability to successfully execute our growth strategy;

outcome of the legal proceedings pending against our Promoters;

resignation of our specialist physicians or our inability to attract or retain such specialist physicians;

adverse economic, regulatory or other developments within Bengaluru, which may materially and adversely affect our centre of excellence in Bengaluru;

failure to receive payments on time from our payers; and

changes in government policies that relate to patients covered by government schemes.

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

Factors, Our Business and Managements Discussion and Analysis of Financial Condition and Results of

Operations on pages 16, 147 and 254, respectively. By their nature, certain market risk disclosures are only

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

losses could materially differ from those that have been estimated.

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

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

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

Forward-looking statements reflect the current views of our Company as of the date of this Draft Red Herring

Prospectus and are not a guarantee of future performance. These statements are based on the managements

beliefs and assumptions, which in turn are based on currently available information. Although we believe the

assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions

could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect.

Neither our Company, our Directors, the Investor Selling Shareholders, Other Selling Shareholders, the BRLMs

nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting

circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the

underlying assumptions do not come to fruition.

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

informed of material developments until the time of the grant of listing and trading permission by the Stock

Exchanges. The Investor Selling Shareholders and Other Selling Shareholders severally and not jointly will

ensure that investors are informed of material developments in relation to statements and undertakings made by

the Selling Shareholders in the Red Herring Prospectus and the Prospectus until the time of the grant of listing

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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 this

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

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SECTION II: RISK FACTORS

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

information in this Draft Red Herring Prospectus, including the risks and uncertainties described below, before

making an investment in our Equity Shares. If any one or a combination of the following risks actually occurs,

our business, prospects, financial condition and results of operations could suffer, the trading price of our

Equity Shares could decline and you may lose all or part of your investment. In addition, the risks set out in this

section may not be exhaustive and additional risks and uncertainties not presently known to us, or which we

currently deem to be immaterial, may arise or may become material in the future. Unless specified in the

relevant risk factors below, we are not in a position to quantify the financial implication of any of the risks

mentioned below. Any potential investor in, and purchaser of, the Equity Shares should pay particular attention

to the fact that we are governed in India, by a legal and regulatory environment which may be different from

that which prevails in the United States and other countries in some material respects. In making an investment

decision, prospective investors must rely on their own examination of us on a consolidated and standalone basis

and the terms of the Offer including the merits and the risks involved. To obtain a complete understanding of

our business, you should read the sections Our Business and Management's Discussion and Analysis of

Financial Condition and Result of Operations on pages 147 and 254, respectively. If our business, results of

operations or financial condition suffer, the price of our Equity Shares and the value of your investments in the

Equity Shares could decline.

This Draft Red Herring Prospectus also contains forward-looking statements that involve risks and

uncertainties. Our results could differ materially from those anticipated in these forward-looking statements as

a result of certain factors, including the considerations described below and elsewhere in this Draft Red

Herring Prospectus.

In this section, unless the context otherwise requires, a reference to our Company or to we, us and

our refers to HealthCare Global Enterprises Ltd, and its Subsidiaries and LLPs on a consolidated basis.

Unless otherwise stated or the context otherwise requires, the financial information used in this section is

derived from the audited restated consolidated and standalone financial statements of our Company.

INTERNAL RISK FACTORS

1. We and one of our Subsidiaries have reported net losses in the recent Fiscal Years and may be unable to achieve or sustain profitability in the future, which may materially and adversely impact

our business and prospects.

We incurred consolidated net losses amounting to `355.53 million and `105.14 million during Fiscal

Years 2014 and 2013 and standalone net losses amounting to `23.66 million, `394.98 million and

`71.58 million during Fiscal Years 2015, 2014 and 2013, respectively. Our Subsidiary HCG Medi-

Surge incurred net losses amounting to `21.44 million during Fiscal Year 2014. Our and HCG Medi-

Surge's net losses are primarily attributable to insufficient revenue to cover the expenses incurred on

significant amount of debt obtained, and the depreciation expenses resulting from capital investments,

in relation to the operation and expansion of our and HCG Medi-Surge's businesses. Although our

revenue has increased on a year-on-year basis in the recent Fiscal Years and we earned a consolidated

net profit amounting to `5.46 million during Fiscal Year 2015, we may be unable to achieve or sustain

profitability on this revenue growth rate in the future.

We expect to continue to make substantial expenditures in the future to develop and expand our

business, which may result in us incurring future losses. We cannot assure you that we will be able to

realise any profits from such proposed expansions in a timely manner, or at all. In particular, our cancer

care business is capital intensive and new cancer centres require a gestation period to break even, as a

result of which we may not realise any profit corresponding to the amounts spent in a timely manner, or

at all. In the past, we have also experienced delays in executing our cancer care projects due to, among

other things, delays in obtaining requisite government approvals, delays by partners in completing

construction and delivering the facilities, delays by vendors in delivering equipment and changes in the

specification of the facilities due to technical and regulatory considerations, which resulted in

significant cost overruns and reduced profitability. We may also experience time and cost overruns in

the future in relation to our projects under development. Any delays and cost overruns in the future

could materially and adversely impact our profitability. Our growth strategy may also prove more

expensive than we currently anticipate and we may not succeed in increasing our revenue sufficiently

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to offset any higher expenses. These increased expenditures may impair our ability to achieve or

sustain profitability in the future. Our results of operations and profitability may also be influenced by

the timing of the opening of new centres and the number of new centres opened, as new centres

generally have lower revenue and higher operating expenses initially. See also, Management's

Discussion and Analysis of Financial Condition and Results of Operations Factors Affecting our

Financial Results Expansion of our HCG Network and our Milann Network on page 256.

Our prior losses have had and will continue to have an adverse effect on our business. If we continue to

incur losses in the future or we are unable to achieve or sustain our profitability, our business and

prospects may be materially and adversely affected.

2. There have been incidents of fraud committed by employees of one of our Subsidiaries as well as by senior managers at our cancer centres in the past. If such incidents of fraud were to recur, our

business, reputation and results of operations could be materially and adversely affected.

Our former Subsidiary, HCG Vijay recorded excess revenue amounting to `40.44 million and

corresponding excess balance in trade receivables amounting to `29.86 million and unbilled revenue

amounting to `10.58 million in the past. Of this, `32.79 million was recognised in our consolidated

financial statements for Fiscal Year 2013 and `7.65 million was recognised in our consolidated

financial statements for Fiscal Year 2012. This excess revenue was recorded due to deliberate

recording of fictitious invoices and services as revenue by certain employees of HCG Vijay. For further

details, see Financial Statements on page F-1. In addition, two senior managers of our

comprehensive cancer centres at Kalinga Rao Road and Double Road in Bengaluru had

misappropriated funds amounting to `3.00 million during Fiscal Year 2011.

Although we reversed the excess revenue for HCG Vijay in our consolidated financial statements for

Fiscal Year 2014 and have initiated legal proceedings against the employees responsible for the

fraudulent accounting, and have terminated the employment of the two senior managers at our

comprehensive cancer centres at Kalinga Rao Road and Double Road in Bengaluru, we cannot assure

you that similar incidents will not occur in the future. If such incidents of fraud were to recur, our

business, reputation and results of operations could be materially and adversely affected.

3. Our results of operations are likely to vary from year to year and be unpredictable, which could cause the market price of the Equity Shares to decline.

Our results of operations have historically varied from year to year due to various factors, and we

expect that this trend will continue. You should not rely on our past financial results for any year as

indicators of future performance. Our results of operations in any given year can be influenced by a

number of factors, many of which are outside of our control and may be difficult to predict, including:

political and economic conditions, both in and outside India and in particular, in Africa where most of our international patients come from;

non-availability of specialist physicians and doctors at our centres and hospitals;

the timing of opening and the number of new centres;

outbreak of epidemics, especially in Africa (such as Ebola), which may reduce the number of our international patients;

changes in the competitive landscape in which we operate;

changes in trends of cancer and fertility incidences in and outside India;

government policies which may affect the pricing of our medical services;

adverse publicity or loss of reputation of our centres, hospitals and brands; and/or

any other risk factors described in this Draft Red Herring Prospectus.

See also, Management's Discussion and Analysis of Financial Condition and Results of Operations

Factors Affecting our Financial Results on page 256 for details on the factors affecting our financial

results.

All of these factors, in combination or alone could negatively impact the number of our new patient

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registrations and may cause significant fluctuations in our results of operations. This variability and

unpredictability could materially and adversely affect our results of operations and financial condition.

4. The success of our business is dependent on our ability to expand our HCG network and our Milann network. If we are unable to successfully expand our HCG network and our Milann network or if

any of our existing centres or hospitals are closed down, our business, financial condition and cash

flows could be materially and adversely affected.

Historically, our business growth has been primarily driven by establishing new centres and hospitals

through various partnership arrangements and acquisitions; and we expect these to continue to be the

key drivers for our future growth. See also, Our Business Our partnership arrangements and

History and Certain Corporate Matters Summary of Key Agreements on pages 155 and 189,

respectively.

The success of our business is dependent on our ability to maintain our relationships with our partners,

to identify suitable partners and acquisitions targets and to undertake new partnership arrangements and

acquisitions. We may be unable to continue to operate our centres and hospitals if there are any

conflicts or disputes with our partners or if our partnership arrangements are not renewed at the end of

their respective terms. In the past, we have received notices seeking termination of our partnership

arrangement with Balabhai Nanavati Hospital pursuant to which we operate our comprehensive cancer

centre in Mumbai, and arbitration proceedings are currently ongoing in this regard. We have also in the

past discontinued operation of our HCG cancer centre at Erode, Tamil Nadu and our HCG day care

chemotherapy centre at Pune due to dispute with our partners. For further details of our disputes with

our partners, see Outstanding Litigation and Material Developments on page 277.

We have also, in the past, discontinued operations of a hospital we had taken on lease in Bengaluru for

economic reasons. In addition, we have withdrawn from a partnership arrangement in Uganda. As a

result of such discontinued operations, we have made significant write-offs of our amounts spent on

these centres and the hospital. We cannot assure you that any of our existing or future centres or

hospitals will not be closed temporarily or permanently in the future due to any business or other

reasons. If any of our existing or future centres or hospitals is closed, whether temporarily or

permanently, we may not derive returns on our amounts spent on such centres and hospitals, and our

business, financial condition and cash flows could be materially and adversely affected.

5. We cannot assure you that we will be able to successfully execute our growth strategies, which could affect our business, prospects and results of operations.

We propose to expand our existing network of cancer centres and fertility centres and strengthen our

brand and market presence by adopting a series of strategies. For further details, see Our Business

Our Strategies on page 151.

Our growth strategies could place significant demand on our management and our administrative,

operational and financial infrastructure. As a result, we may be unable to maintain the quality of our

services as our business grows. We could also encounter difficulties and delays in executing our

growth strategies due to a number of factors, including, without limitation, delays in project execution

resulting in significant time and cost overruns, delays or failure in receiving government approvals,

unavailability of human and capital resources, or any other risks that we may or may not have foreseen.

Our management may also change its view on the desirability of current strategies, and any resultant

change in our strategies could put significant strain on our resources. We may also be unable to achieve

the targeted levels of operations from our future projects. Further, we may be unable to achieve any

synergies or successfully integrate any acquired business into our portfolio. Any business that we

acquire may have unknown or contingent liabilities, including liabilities for failure to comply with

healthcare laws and regulations, and we may become liable for the past activities of such businesses.

Additionally, expansion into new geographic regions, including new regions in India and in Africa will

subject us to various challenges, including those relating to our lack of familiarity with the social,

political, economic and cultural conditions of these new regions, language barriers, difficulties in

staffing and managing such operations and the lack of brand recognition and reputation in such regions.

We may also encounter other additional anticipated risks and significant competition in such markets.

See also, Risk Factors Our expansion into Africa could subject us to additional business, financial

and competitive risks that we may or may not have currently envisaged on page 21. If we are unable

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