RELIANCE GENERAL INSURANCE COMPANY LIMITED€¦ · RELIANCE GENERAL INSURANCE COMPANY LIMITED Our...

Draft Red Herring Prospectus

Dated February 8, 2019

(Please read Section 32 of the Companies Act, 2013) 100% Book Building Offer

RELIANCE GENERAL INSURANCE COMPANY LIMITED

Our Company was originally incorporated as ‘Reliance General Insurance Limited’, a public limited company under the Companies Act, 1956, pursuant to a certificate of incorporation issued by the RoC on August 17, 2000.

Thereafter, the name of our Company was changed to ‘Reliance General Insurance Company Limited’ and a fresh certificate of incorporation was issued by the RoC, on October 12, 2000. Subsequently, our Company

received a certificate for commencement of business on November 17, 2000 from the RoC. Pursuant to a certificate issued by the Insurance Regulatory and Development Authority of India (“IRDAI”) on October 23, 2000,

our Company was registered with the IRDAI (registration number 103). For details of changes in the name and registered office address of our Company, see ‘History and Certain Corporate Matters’ on page 188.

Registered Office: H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai 400 710, Maharashtra, India

Corporate Office: Reliance Centre, South Wing, 4th Floor, Off. Western Express Highway, Santacruz (East), Mumbai 400 055, Maharashtra, India

Contact Person: Mohan Khandekar, Company Secretary and Compliance Officer for the Offer; Tel.: + 91 22 33031000;

E-mail: [email protected]; Website: www.reliancegeneral.co.in; Corporate Identity Number: U66603MH2000PLC128300

PROMOTER OF OUR COMPANY: RELIANCE CAPITAL LIMITED

INITIAL PUBLIC OFFERING OF UP TO [●] EQUITY SHARES OF FACE VALUE OF ₹ 10 EACH (“EQUITY SHARES”) OF RELIANCE GENERAL INSURANCE COMPANY LIMITED (OUR “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF ₹ [●] PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF ₹ [●] PER EQUITY SHARE (THE “OFFER PRICE”) AGGREGATING UP TO ₹ [●] MILLION (THE “OFFER”). THE OFFER COMPRISES OF A FRESH ISSUE OF UP TO [●] EQUITY SHARES BY OUR COMPANY AGGREGATING UP TO ₹ 2,000 MILLION (THE “FRESH ISSUE”) AND AN OFFER FOR SALE BY RELIANCE CAPITAL LIMITED, THE PROMOTER OF OUR COMPANY (THE “PROMOTER SELLING SHAREHOLDER”), OF UP TO 79,489,821 EQUITY SHARES AGGREGATING UP TO ₹ [●] MILLION (“THE OFFER FOR SALE”). THE OFFER SHALL CONSTITUTE UP TO [●] % OF THE POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY. THE OFFER SHALL COMPRISE OF A NET OFFER OF UP TO [●]

EQUITY SHARES AND RELIANCE CAPITAL SHAREHOLDERS’ RESERVATION PORTION OF UP TO 10% OF THE OFFER. THE OFFER AND THE NET OFFER SHALL CONSTITUTE [●]% AND [●]%,

RESPECTIVELY OF THE POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.

THE FACE VALUE OF THE EQUITY SHARE IS ₹ 10. THE OFFER PRICE IS [●] TIMES THE FACE VALUE OF THE EQUITY SHARES.

THE PRICE BAND AND THE MINIMUM BID LOT SIZE WILL BE DECIDED BY OUR COMPANY AND THE PROMOTER SELLING SHAREHOLDER IN CONSULTATION WITH THE GCBRLMS AND THE BRLMS

AND WILL BE ADVERTISED IN ALL EDITIONS OF THE ENGLISH NATIONAL DAILY NEWSPAPER [●], ALL EDITIONS OF THE HINDI NATIONAL DAILY NEWSPAPER [●], AND THE [●] EDITION OF THE

MARATHI DAILY NEWSPAPER [●] (MARATHI BEING THE REGIONAL LANGUAGE OF MAHARASHTRA WHEREIN THE REGISTERED OFFICE OF OUR COMPANY IS LOCATED), EACH WITH WIDE

CIRCULATION, AT LEAST TWO WORKING DAYS PRIOR TO THE BID/ OFFER OPENING DATE AND SHALL BE MADE AVAILABLE TO THE BSE LIMITED (“BSE”) AND NATIONAL STOCK EXCHANGE OF

INDIA LIMITED (“NSE”, AND TOGETHER WITH BSE, THE “STOCK EXCHANGES”) FOR UPLOADING ON THEIR RESPECTIVE WEBSITES.

In case of any revision in the Price Band, the Bid/ Offer Period shall be extended for at least three additional Working Days after such revision of the Price Band, subject to the total Bid/Offer Period not exceeding 10 Working Days. In cases of

force majeure, banking strike or similar circumstances, our Company may, for reasons to be recorded in writing, extend the Bid / Offer Period for a minimum of three Working Days, subject to the Bid/ Offer Period not exceeding 10 Working Days. Any revision in the Price Band, and the revised Bid/ Offer Period, if applicable, shall be widely disseminated by notification to the Stock Exchanges by issuing a press release and also by indicating the change on the websites of the

GCBRLMs and the BRLMs and at the terminals of the Members of the Syndicate and by intimation to Designated Intermediaries and Sponsor Bank.

The Offer is being made in terms of Rule 19(2)(b)(iii) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”). The Offer is being made through the Book Building Process in accordance with Regulation 6(1) of the Securities and

Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (“SEBI ICDR Regulations”), wherein 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIB Portion”), provided that our Company and the Promoter Selling Shareholder in consultation with the GCBRLMs and the BRLMs may allocate up to 60% of the QIB Portion to Anchor Investors at the Anchor Investor Allocation Price, on a

discretionary basis, out of which at least one-third will be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. In the event of under-subscription or non-

allocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion. The number of Equity Shares representing 5% of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to QIBs (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received from them at or above the Offer Price. However, if

the aggregate demand from Mutual Funds is less than 5% of the Net QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the remaining Net QIB Portion for proportionate allocation to QIBs. Further,

not less than 15% of the Net Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Offer shall be available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR

Regulations, subject to valid Bids being received from them at or above the Offer Price. For details, see “Offer Procedure” on page 395.

RISKS IN RELATION TO 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. The Offer Price/Floor Price/Price Band, as determined and justified by our Company and the Promoter Selling Shareholder in consultation with the GCBRLMs and the BRLMs in accordance with the SEBI ICDR Regulations and as stated in “Basis for Offer Price” on page 89 should not be taken to be indicative of the market price of the

Equity Shares after such Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares nor 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 this 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 this Offer. For taking an investment decision, investors must rely on their own examination of the Issuer and this Offer, including the risks involved. The Equity Shares 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 21.

DISCLAIMER CLAUSE OF THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA (“IRDAI”)

The IRDAI does not undertake any responsibility for the financial soundness of our Company or for the correctness of any of the statements made or opinions expressed in this connection. Any approval by the IRDAI under the IRDAI Capital Regulations (as defined in “Definitions and Abbreviations”) shall not in any manner be deemed to be or serve as a validation of the representations by our Company in the offer document. The Offer has not been recommended or approved by

IRDAI, nor does IRDAI guarantee the accuracy or adequacy of the contents / information in this disclosure document. It is to be distinctly understood that this disclosure document should not in any way be deemed or construed to have been

approved or vetted by IRDAI.

COMPANY AND PROMOTER SELLING SHAREHOLDER’S ABSOLUTE RESPONSIBILITY

Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company and this Offer, which is material in the context of this

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 Promoter Selling Shareholder

accepts responsibility for and confirms only the statements specifically made by the Promoter Selling Shareholder in this Draft Red Herring Prospectus to the extent of information specifically pertaining to it and the Offered Shares assumes responsibility that such statements are true and correct in all material respects and not misleading in any material respect.

LISTING

The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on BSE and NSE. Our Company has received in-principle approvals from BSE and NSE for listing of the Equity Shares pursuant to their letters dated [●]

and [●], respectively. For the purposes of this Offer, [●] shall be the Designated Stock Exchange. A signed copy of the Red Herring Prospectus and the Prospectus shall be delivered for registration to the RoC in accordance with Section 26(4) of the Companies Act, 2013. For details of the material contracts and documents available for inspection from the date of the Red Herring Prospectus up to the Bid/Offer Closing Date, see “Material Contracts and Documents for Inspection” on

page 429.

GLOBAL COORDINATORS AND BOOK RUNNING LEAD MANAGERS

Motilal Oswal Investment Advisors Limited

Motilal Oswal Tower, Rahimtullah, Sayani Road,

Opposite Parel ST Depot, Prabhadevi, Mumbai - 400 025,

Maharashtra, India

Tel: +91 22 3846 4380

E-mail: [email protected]

Investor Grievance E-mail: [email protected]

Website: www.motilaloswalgroup.com

Contact Person: Subodh Mallya/Kristina Dias

SEBI Registration No.: INM000011005

CLSA India Private Limited

8 / F Dalamal House

Nariman Point Mumbai 400 021, Maharashtra, India

Tel: +91 22 6650 5050


Investor Grievance E-mail: [email protected]

Website: www.india.clsa.com

Contact Person: Rahul Choudhary


Credit Suisse Securities (India) Private Limited

9th Floor, Ceejay House, Plot F,

Shivsagar Estate, Dr. Annie Besant Road, Worli, Mumbai 400 018, Maharashtra, India

Tel: +91 22 6777 3777


Investor grievance e-mail: [email protected]

Website: https://www.credit-suisse.com/in/en/investment-banking/regional-

presence/asia-pacific/india/ipo.html

Contact Person: Ashish Zambre


BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE OFFER

Haitong Securities India Private Limited

1203A, Floor 12A, Tower 2A, One Indiabulls Centre, 841,

Senapati Bapat Marg, Elphinstone Road,

Mumbai – 400 013 Maharashtra, India

Tel: +91 22 4315 6857


Investor Grievance e-mail:

[email protected] Website: http://www.htisec.com/en-us/haitong-india

Contact person: Hardik Doshi

SEBI Registration Number: INM000012045

IndusInd Bank Limited

11th Floor, Tower 1, One Indiabulls Centre,

841, Senapati Bapat Marg

Elphinstone Road

Mumbai 400 013

Maharashtra, India

Tel: +91 22 7143 2208

E-mail: [email protected] Investor grievance ID: [email protected]

Website: www.indusind.com

Contact person: Rahul Joshi

SEBI registration number: INM000005031

YES Securities (India) Limited

Unit No. 602 A, 6th floor, Tower 1 & 2,

Indiabulls Finance Centre,

Senapati Bapat Marg, Elphinstone (W),

Mumbai 400 013, Maharashtra, India

Tel.: +91 22 3012 6776


Investor grievance e-mail: [email protected] Website: www.yesinvest.in

Contact Person: Nikhil Bhiwapurkar

SEBI Registration: MB/INM000012227

Karvy Fintech Private Limited (formerly KCPL Advisory

Services Private Limited)

Karvy Selenium Tower B, Plot 31 & 32

Gachibowli, Financial District

Nanakramguda,

Hyderabad 500 032

Telangana, India

Tel: +91 40 6716 2222 E-mail: [email protected]

Investor grievance e-mail: [email protected]

Website: https://www.karvyfintech.com/

Contact person: M Murali Krishna

SEBI Registration No.: INR000000221* *The registration is currently under the name of Karvy

Computershare Private Limited. Karvy Fintech Private Limited has

filed an application with the SEBI for registration under its new

name, which is currently pending

BID/OFFER PROGRAMME

BID/ OFFER OPENS ON: * [●]

BID/ OFFER CLOSES ON: ** [●]

* Our Company and the Promoter Selling Shareholder may, in consultation with the GCBRLMs and the BRLMs, consider participation by Anchor Investors. The Anchor Investors shall Bid during the Anchor Investor Bidding Date, i.e., one Working Day prior to the

Bid/Offer Opening Date. **Our Company and the Promoter Selling Shareholder may, in consultation with the GCBRLMs and the BRLMs, decide to close Bidding by QIBs one day prior to the Bid/Offer Closing Date, in accordance with the SEBI ICDR Regulations.

mailto:[email protected]:[email protected]://www.indusind.com/https://www.credit-suisse.com/in/en.html

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TABLE OF CONTENTS

SECTION I – GENERAL ........................................................................................................................................... 1

DEFINITIONS AND ABBREVIATIONS ................................................................................................................ 1 CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA AND

CURRENCY OF PRESENTATION ....................................................................................................................... 14 FORWARD-LOOKING STATEMENTS ............................................................................................................... 16 SUMMARY OF THE OFFER DOCUMENT ......................................................................................................... 17

SECTION II - RISK FACTORS .............................................................................................................................. 21

SECTION III – INTRODUCTION .......................................................................................................................... 61

SUMMARY FINANCIAL INFORMATION ......................................................................................................... 61 THE OFFER ............................................................................................................................................................ 65 GENERAL INFORMATION .................................................................................................................................. 66 CAPITAL STRUCTURE ........................................................................................................................................ 75 OBJECTS OF THE OFFER .................................................................................................................................... 86 BASIS FOR OFFER PRICE ................................................................................................................................... 89 STATEMENT OF TAX BENEFITS ....................................................................................................................... 92

SECTION IV – ABOUT OUR COMPANY .......................................................................................................... 102

INDUSTRY OVERVIEW ..................................................................................................................................... 102 OUR BUSINESS ................................................................................................................................................... 145 REGULATIONS AND POLICIES ....................................................................................................................... 175 HISTORY AND CERTAIN CORPORATE MATTERS ...................................................................................... 188 OUR MANAGEMENT ......................................................................................................................................... 192 OUR PROMOTER AND PROMOTER GROUP ................................................................................................. 211 OUR GROUP COMPANIES ................................................................................................................................ 215 RELATED PARTY TRANSACTIONS ................................................................................................................ 232 DIVIDEND POLICY ............................................................................................................................................ 233

SECTION V – FINANCIAL INFORMATION .................................................................................................... 234

FINANCIAL STATEMENTS ............................................................................................................................... 234 OTHER FINANCIAL INFORMATION ............................................................................................................... 305 ADDITIONAL DISCLOSURES OF FINANCIAL STATEMENTS UNDER IRDAI CAPITAL

REGULATIONS ................................................................................................................................................... 306 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS ...................................................................................................................................................... 323 CAPITALISATION STATEMENT ...................................................................................................................... 351 FINANCIAL INDEBTEDNESS ........................................................................................................................... 352

SECTION VI – LEGAL AND OTHER INFORMATION .................................................................................. 354

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ........................................................... 354 GOVERNMENT AND OTHER APPROVALS ................................................................................................... 372 OTHER REGULATORY AND STATUTORY DISCLOSURES ........................................................................ 374

SECTION VII – OFFER INFORMATION .......................................................................................................... 388

TERMS OF THE OFFER ...................................................................................................................................... 388 OFFER STRUCTURE........................................................................................................................................... 392 OFFER PROCEDURE .......................................................................................................................................... 397 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ..................................................... 415

SECTION VIII - MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ........................................ 416

SECTION IX – OTHER INFORMATION ........................................................................................................... 429

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .............................................................. 429 DECLARATION ................................................................................................................................................... 432

1

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, rule, guideline, policy, circular, notification or clarification shall be to such legislation, act,

regulation, rule, guideline, policy, circular, notification or clarification as amended.

General Terms

Term Description

“the Company”, “our Company”,

or “the Issuer” or “we”, “our” or

“us”

Reliance General Insurance Company Limited, a public limited company incorporated

under the Companies Act, 1956, and having its Registered Office at H Block, 1st Floor,

Dhirubhai Ambani Knowledge City, Navi Mumbai 400 710, Maharashtra, India and

Corporate Office at Reliance Centre, 4th Floor, South Wing, Off. Western Express

Highway, Santacruz (East), Mumbai 400 055, Maharashtra, India.

Company Related Terms

Term Description

“Articles” or “Articles of

Association” or “AoA”

The articles of association of our Company, as amended from time to time.

Audit Committee The audit committee of our Board, as described in “Our Management” on page 192.

“Auditors” or “Joint Statutory

Auditors” or “Statutory Auditors”

The current joint statutory auditors of our Company, namely, Price Waterhouse

Chartered Accountants LLP, Chartered Accountants and Pathak H.D. & Associates,

Chartered Accountants.

“Board” or “Board of Directors” The board of directors of our Company (including any duly constituted committee

thereof).

CSR Committee The corporate social responsibility committee of our Board, as described in “Our

Management” on page 192.

Corporate Office Reliance Centre, South Wing, 4th Floor, Off. Western Express Highway, Santacruz

(East), Mumbai 400 055, Maharashtra, India.

Director(s) The director(s) on our Board.

Equity Shares The equity shares of our Company of face value of ₹ 10 each.

Group Companies The companies as described in “Our Group Companies” on page 215.

Independent Director(s) Independent Director(s) on our Board.

IPO Committee The committee constituted by our Board for the Offer, as described in “Our


Key Management/ Managerial

Personnel

Key management/ managerial personnel of our Company in terms of the SEBI ICDR

Regulations, IRDAI Corporate Governance Guidelines and the Companies Act, 2013

and as disclosed in “Our Management” on page 192.

“Memorandum” or Memorandum

of Association or “MoA”

The memorandum of association of our Company, as amended from time to time.

Nomination and Remuneration

Committee

The nomination and remuneration committee of our Board, as described in “Our


Phantom Stock Plan RGICL Phantom Stock Option Scheme, 2015.

Phantom Stock Option Phantom stock option issued pursuant to the Phantom Stock Plan.

Promoter The promoter of our Company, namely, Reliance Capital Limited.

Promoter Group The entities constituting the promoter group of our Company in terms of Regulation

2(1) (pp) of the SEBI ICDR Regulations. For details, see “Our Promoter and Promoter

Group” on page 211.

Registered Office H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai 400710,

Maharashtra, India.

“Registrar of Companies” or

“RoC”

The Registrar of Companies, Maharashtra, at Mumbai.

Reliance Capital Reliance Capital Limited, a public limited company incorporated under the Companies

Act, 1956, and having its registered office at H’ block 1st floor, Dhirubhai Ambani

Knowledge City, Navi Mumbai 400 710, Maharashtra, India.

Restated Financial Information The restated financial information of our Company for the Fiscals years 2016, 2017

and 2018, and the six months ended September 30, 2017 and September 30, 2018

prepared in accordance with the Companies Act and restated in accordance with the

requirements of the SEBI ICDR Regulations and the relevant provisions of the IRDAI

Capital Regulations

2

Term Description

RGICL ESOP 2017 Reliance General Insurance Company Limited Employee Stock Option Scheme.

Shareholders The holders of the Equity Shares from time to time.

Stakeholders’ Relationship

Committee

The stakeholders’ relationship committee of our Board as described in “Our


Offer Related Terms

Term Description

Acknowledgement Slip The slip or document issued by the relevant Designated Intermediary (ies) to the

Bidder as proof of registration of the Bid cum Application Form.

‘Allot’ or ‘Allotment’ or

‘Allotted’

Allotment of Equity Shares pursuant to the Fresh Issue and transfer of the Offered

Shares by the Promoter Selling Shareholder pursuant to the Offer for Sale to the

successful Bidders.

Allotment Advice Advice or intimation of Allotment sent to the successful 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 an Allotment is made.

Anchor Investor(s) A Qualified Institutional Buyer, applying under the Anchor Investor Portion in

accordance with SEBI ICDR Regulations and the Red Herring Prospectus, and who

has Bid for an amount of at least ₹ 100 million.

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

terms of the Red Herring Prospectus and the Prospectus, which will be decided by our

Company and the Promoter Selling Shareholder in consultation with the GCBRLMs

and the BRLMs.

Anchor Investor Application

Form

The form used by an Anchor Investor to make a Bid in the Anchor Investor Portion and

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

Prospectus and the Prospectus.

Anchor Investor Bid/ Offer Period

or Anchor Investor Bidding Date

The date, one Working Day prior to the Bid/ Offer Opening Date, on which Bids by

Anchor Investors shall be submitted and allocation to Anchor Investors shall be

completed.

Anchor Investor Offer Price The 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 and the Promoter

Selling Shareholder in consultation with the GCBRLMs and the BRLMs.

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

Promoter Selling Shareholder in consultation with the GCBRLMs and the BRLMs, to

Anchor Investors on a discretionary basis in accordance with the SEBI ICDR

Regulations.

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

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

Anchor Investor Allocation Price.

Anchor Investor Pay-in Date With respect to Anchor Investor(s), it shall be the Anchor Investor Bidding Date, and

in the event the Anchor Investor Allocation Price is lower than the Offer Price, not

later than two Working Days after the Bid/ Offer Closing Date.

‘ASBA’ or ‘Application

Supported by Blocked Amount’

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

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

the specified bank account maintained with such SCSB and will include amounts

blocked by RIIs using the UPI mechanism

ASBA Account Account maintained with an SCSB which may be blocked by such SCSB or the

account of the RII Bidder blocked upon acceptance of UPI Mandate Request by RIIs

using the UPI mechanism to the extent of the Bid Amount of the Bidder/Applicant

ASBA Bid A Bid made by an ASBA Bidder.

ASBA Bidder(s) Any Bidder (other than an Anchor Investor) in the Offer who intends to submit a Bid.

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

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

and the Prospectus.

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

described in “Offer Procedure” on page 397.

Bid(s) An indication by a Bidder (other than an Anchor Investor) to make an offer during the

Bid/Offer Period pursuant to submission of the ASBA Form, or on the Anchor Investor

Bidding Date by an Anchor Investor, pursuant to the submission of the Anchor

3

Term Description

Investor Application Form, to subscribe to or purchase Equity Shares at a price within

the Price Band, including all revisions and modifications thereto, to the extent

permissible under the SEBI ICDR Regulations, in terms of the Red Herring Prospectus

and the Bid cum Application Form.

The term ‘Bidding’ shall be construed accordingly.

Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form, and

payable by an Anchor Investor or blocked in the ASBA Account of an ASBA Bidder,

as the case may be, upon submission of the Bid in the Offer.

Bid cum Application Form The Anchor Investor Application Form or the ASBA Form, as the context requires.

‘Bidder’ or ‘Applicant’ Any prospective investor who makes a Bid pursuant to the terms of the Red Herring

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

includes an Anchor Investor.

Bidding Centres Centres at which the Designated Intermediaries shall accept the ASBA Forms, i.e.,

Designated SCSB Branches for SCSBs, Specified Locations for Members of the

Syndicate, Broker Centres for Registered Brokers, Designated RTA Locations for

RTAs and Designated CDP Locations for CDPs.

Bid Lot [●] Equity Shares.

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

the Designated Intermediaries will not accept any Bids, which shall be notified in all

editions of the English national daily newspaper [●], all editions of the Hindi national

daily newspaper [●], and the [●] edition of Marathi daily newspaper [●] (Marathi being

the regional language of Maharashtra wherein our Registered Office is located), each

with wide circulation and in case of any revision, the extended Bid/Offer Closing Date

shall also be notified on the website and terminals of the Members of the Syndicate and

communicated to the designated intermediaries and the Sponsor Bank, as required

under the SEBI ICDR Regulations.

Our Company and the Promoter Selling Shareholder in consultation with the

GCBRLMs and the BRLMs, may consider closing the Bid/Offer Period for QIBs one

Working Day prior to the Bid/Offer Closing Date which shall also be notified in an

advertisement in same newspapers in which the Bid/Offer Opening Date was

published, as required under the SEBI ICDR Regulations.

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

the Designated Intermediaries shall start accepting Bids, which shall be notified in all

editions of the English national daily newspaper [●], all editions of the Hindi national

daily newspaper [●], and the [●] edition of Marathi daily newspaper [●] (Marathi being

the regional language of Maharashtra wherein our Registered Office is located), each

with wide circulation, and in case of any revision, the extended Bid/ Offer Opening

Date also to be notified on the website and terminals of the Members of the Syndicate

and communicated to the Designated Intermediaries and the Sponsor Bank, as required

under the SEBI ICDR Regulations.

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 Bidders can

submit their Bids, including any revisions thereof.

Book Building Process Book building process, as provided in Schedule XIII of the SEBI ICDR Regulations, in

terms of which the Offer is being made.

‘Book Running Lead Managers’

or ‘BRLMs’

The book running lead managers to the Offer, being Haitong Securities India Private

Limited, IndusInd Bank Limited and YES Securities (India) Limited.

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

ASBA Forms to a Registered Broker.

The details of such Broker Centres, along with the names and contact details of the

Registered Brokers are available on the respective websites of the Stock Exchanges at

www.bseindia.com and www.nseindia.com.

CLSA CLSA India Private Limited

Credit Suisse Credit Suisse Securities (India) Private Limited

‘CAN’ or ‘Confirmation of

Allocation Note’

Notice or intimation of allocation of the Equity Shares sent to Anchor Investors, who

have been allocated the Equity Shares, after the Anchor Investor Bidding Date.

Cap Price The higher end of the Price Band, above which the Offer Price and Anchor Investor

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 the

demat account.

‘CDP’ or ‘Collecting Depository

Participant’

A depository participant as defined under the Depositories Act, 1996, registered with

SEBI and who is eligible to procure Bids at the Designated CDP Locations in terms of

4

Term Description

circular no. CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by

SEBI.

Compliance Officer for the Offer Compliance officer for the Offer in terms of the SEBI ICDR Regulations.

Cut-Off Price Offer Price, which shall be any price within the Price Band, finalised by our Company

and the Promoter Selling Shareholder in consultation with the GCBRLMs and the

BRLMs.

Only Retail Individual Bidders and Reliance Capital Shareholders applying under the

Reliance Capital Shareholders’ Reservation Portion (subject to the Bid Amount being

upto ₹ 200,000) 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 CDP Locations Such locations of the CDPs where Bidders can submit the ASBA Forms.

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

the Collecting Depository Participants eligible to accept ASBA Forms are

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

www.nseindia.com, respectively,) as updated from time to time.

Designated Date The date on which the Escrow Collection Bank(s) transfers funds from the Escrow

Account, and funds blocked by the SCSBs and Sponsor Bank are transferred from the

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

Account, as appropriate, after finalisation of the Basis of Allotment, in terms of the

Red Herring Prospectus following which the Equity Shares will be Allotted in the

Offer.

Designated Intermediary(ies) Collectively, the Syndicate, Sub-Syndicate Members/ agents, SCSBs, Registered

Brokers, CDPs and RTAs, who are authorised to collect Bid cum Application Forms

from the Bidders in the Offer.

Designated RTA Locations Such locations of the RTAs where Bidders can submit the ASBA Forms to RTAs.

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

of the RTAs eligible to accept ASBA Forms are available on the

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

www.nseindia.com, respectively,) as updated from time to time.

Designated SCSB Branches Such branches of the SCSBs which shall collect the ASBA Forms used by the Bidders,

a list of which is available on the website of SEBI at

http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=

35, updated from time to time, or at such other website as may be prescribed by SEBI

from time to time.

Designated Stock Exchange [●]

Draft Red Herring Prospectus or

DRHP

This draft red herring prospectus dated February 8, 2019 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.

Eligible NRI 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 purchase the Equity Shares.

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

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

of the Bid Amount while submitting a Bid.

Escrow Agreement The agreement dated [●] amongst our Company, the Promoter Selling Shareholder, the

Registrar to the Offer, the GCBRLMs and the BRLMs, the Escrow Collection Bank(s),

the Public Offer Account Bank(s), the Sponsor Bank, and the Refund Bank(s) for

among other things, collection of the Bid Amounts from the Anchor Investors and

where applicable, refunds of the amounts collected from Anchor Investors, on the

terms and conditions thereof.

Escrow Collection Bank Bank which is a clearing member and registered with SEBI as a banker to an issue, and

with whom the Escrow Account(s) will be opened, in this case being [●].

First or sole Bidder The 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 issue of up to [●] Equity Shares aggregating up to ₹ 2,000 million by our Company for subscription pursuant to the terms of the Red Herring Prospectus.

“GCBRLMs” or “Global

Coordinators and Book Running

The global coordinators and book running lead managers, namely, Motilal Oswal

Investment Advisors Limited, CLSA India Private Limited and Credit Suisse Securities

5

Term Description

Lead Managers” (India) Private Limited

Haitong Haitong Securities India Private Limited

ICRA ICRA Limited.

ICRA Report Report titled “Indian General Insurance Industry - Overview” dated January, 2019

prepared by ICRA Limited.

IndusInd IndusInd Bank Limited.

General Information Document or

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 issued

by SEBI, modified and updated pursuant to, among others, the circular

(CIR/CFD/POLICYCELL/11/2015) dated November 10, 2015, the circular

(CIR/CFD/DIL/1/2016) dated January 1, 2016, the circular

(SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016, the notification dated

November 30, 2016 and the circular (SEBI/HO/CFD/DIL2/CIR/P/2018/22) dated

February 15, 2018, and circular (SEBI/HO/CFD/DIL2/CIR/P/2018/138) dated

November 1, 2018 notified by SEBI.

GIC Re General Insurance Corporation of India

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.

Materiality Policy Policy for identification of group companies, material outstanding civil litigations

proceedings of our Company, our Promoters and our Directors and material creditors

of the Company, pursuant to the disclosure requirements under SEBI ICDR

Regulations, as adopted by the Board through its resolution dated January 30, 2019.

Motilal Oswal Motilal Oswal Investment Advisors Limited

Mutual Fund Portion [●] Equity Shares which shall be available for allocation to Mutual Funds only on a

proportionate basis, subject to valid Bids being received at or above the Offer Price.

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

(Mutual Funds) Regulations, 1996.

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

Net QIB Portion The portion of the QIB Portion less the number of Equity Shares Allotted to the

Anchor Investors.

NBFC-SI A systemically important non-banking financial company as defined under Regulation

2(1)(iii) of the SEBI ICDR Regulations.

Net Offer The Offer less the Reliance Capital Shareholders’ Reservation Portion.

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

Shares for an amount more than ₹200,000.

Non-Institutional Portion Not less than [●] Equity Shares which shall be available for allocation to Non-

Institutional Bidders on a proportionate basis, subject to valid Bids being received at or

above the Offer Price.

‘Non-Resident’ or ‘NR’ A person resident outside India, as defined under FEMA and includes FPIs, VCFs,

FVCIs and NRIs.

Offer Initial public offering of up to [●] Equity Shares for cash at a price of ₹ [●] per Equity Share (including a share premium of ₹ [●] per Equity Share) aggregating up to ₹ [●] million (the “Offer”). The Offer comprises of a Fresh Issue of up to [●] Equity Shares

aggregating up to ₹ 2,000 million and an Offer for Sale of up to 79,489,821 Equity Shares aggregating up to ₹ [●] million. The Offer comprises of a Net Offer of up to [●] Equity Shares and Reliance Capital Shareholders’ Reservation Portion of up to 10% of

the Offer. The Offer and the Net Offer shall constitute [●]% and [●]%, respectively of

the post-offer paid-up equity share capital of our Company.

Offer Agreement The agreement dated February 8, 2019 among our Company, the Promoter Selling

Shareholder, the GCBRLMs 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 79,489,821 Equity Shares aggregating up to ₹ [●] million by the Promoter Selling Shareholder, in terms of the Red Herring Prospectus.

Offer Price The final price at which Equity Shares will be Allotted to successful ASBA Bidders in

terms of the Red Herring Prospectus.

The Offer Price will be decided by our Company and the Promoter Selling Shareholder

in consultation with the GCBRLMs and the BRLMs on the Pricing Date, in accordance

with the Book-Building Process and in terms of the Red Herring Prospectus.

Offered Shares Equity Shares being offered for sale by the Promoter Selling Shareholder in the Offer.

Offer Proceeds The gross proceeds of this Offer based on the total number of Equity Shares Allotted

under this Offer and the Offer Price.

Price Band The price band ranging from the Floor Price of ₹ [●] per Equity Share to the Cap Price

6

Term Description

of ₹ [●] per Equity Share, including any revisions thereof. The Price Band and minimum Bid Lot, as decided by our Company and the Promoter Selling Shareholder,

in consultation with the GCBRLMs and the BRLMs will be advertised in all editions of

the English national daily newspaper [●], all editions of the Hindi national daily

newspaper [●], and [●] edition of the Marathi daily newspaper [●] (Marathi being the

regional language of Maharashtra wherein our Registered Office is located), each with

wide circulation, at least two Working Days prior to the Bid/ Offer Opening Date with

the relevant financial ratios calculated at the Floor Price and at the Cap Price, and shall

be made available to the Stock Exchanges for the purpose of uploading on their

respective websites.

Pricing Date The date on which our Company and the Promoter Selling Shareholder in consultation

with the GCBRLMs and the BRLMs, will finalise the Offer Price.

Promoter Selling Shareholder Reliance Capital Limited

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, the size of the Offer and certain other information, including

any addenda or corrigenda thereto.

Public Offer Account The bank account opened with the Public Offer Account Bank under Section 40(3) of

the Companies Act, 2013, to receive monies from the Escrow Account and from the

ASBA Accounts on the Designated Date.

Public Offer Account Bank Bank which is a clearing member and registered with SEBI as a banker to an issue, and

with whom the Public Offer Account(s) will be opened, in this case being [●].

‘QIBs’ or ‘Qualified Institutional

Buyers’

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

Regulations.

QIB Bidders QIBs who Bid in the Offer.

QIB Portion [●] Equity Shares, which shall be available for allocation to QIBs (including Anchor

Investors) on a proportionate basis, subject to valid Bids being received at or above the

Offer Price.

QIB Bid/ Offer Closing Date In the event our Company and the Promoter Selling Shareholder in consultation with

the GCBRLMs and the BRLMs, decide to close Bidding by QIBs one day prior to the

Bid/Offer Closing Date, the date one day prior to the Bid/Offer Closing Date;

otherwise it shall be the same as the Bid/Offer Closing Date.

‘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.

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

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

Refund Bank The Banker to the Offer with whom the Refund Account(s) will be opened, in this case

being [●].

Registrar Agreement The agreement dated February 8, 2019, entered into between our Company, the

Promoter Selling Shareholder and the Registrar to the Offer, in relation to the

responsibilities and obligations of the Registrar to the Offer pertaining to the Offer.

Registered Brokers Stock brokers registered with SEBI under the Securities and Exchange Board of India

(Stock Brokers and Sub-Brokers) Regulations, 1992 and 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’ or

‘Registrar’

Karvy Fintech Private Limited (formerly KCPL Advisory Services Private Limited)

Reliance Capital Shareholders Individuals and HUFs who are the public equity shareholders of Reliance Capital, our

Promoter (excluding such other persons not eligible under applicable laws, rules,

regulations and guidelines) as on the date of the Red Herring Prospectus.

Reliance Capital Shareholders’

Reservation Portion

Reservation of up to 10% of the Offer in favour of the Reliance Capital Shareholders.

‘RTAs’ or ‘Registrar and Share

Transfer Agents’

The registrar and share transfer agents registered with SEBI and eligible to procure

Bids at the Designated RTA Locations in terms of circular no.

CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015, issued by SEBI.

Resident Indian A person resident in India, as defined under FEMA.

‘Retail Individual Bidder(s)’ or

‘Retail Individual Investor(s)’ or

‘RII(s)’ or ‘RIB(s)’

Individual Bidders, who have Bid for the Equity Shares for an amount which is not

more than ₹ 200,000 in any of the bidding options in the Offer (including HUFs applying through their Karta and Eligible NRI Bidders) and does not include NRIs

(other than Eligible NRIs).

Retail Portion Not less than [●] Equity Shares, available for allocation to Retail Individual Bidders as

per the SEBI ICDR Regulations, subject to valid Bids being received at or above the

7

Term Description

Offer Price.

Revision Form Form used by the Bidders to modify the quantity of the Equity Shares or the Bid

Amount in any of their Bid cum Application Forms or any previous Revision Form(s).

QIB Bidders and Non-Institutional Bidders are not allowed to withdraw or lower their

Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage. Retail

Individual Bidders can revise their Bids during the Bid/ Offer Period and withdraw

their Bids until the Bid/ Offer Closing Date.

‘Self Certified Syndicate Bank(s)’

or ‘SCSB(s)’

The banks registered with SEBI, offering services in relation to ASBA,

a list of which is available on the website of SEBI at

http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=

35 or such other websites and updated from time to time.

Share Escrow Agent The share escrow agent appointed pursuant to the Share Escrow Agreement, namely

[●].

Share Escrow Agreement The agreement dated [●] between our Company, the Promoter Selling Shareholder and

the Share Escrow Agent in connection with the transfer of the Offered Shares by the

Promoter Selling Shareholder and credit of such Equity Shares to the demat account of

the Allottees in accordance with the Basis of Allotment.

Specified Locations Bidding centres where the Syndicate shall accept ASBA Forms from Bidders.

Sponsor Bank Bank registered with SEBI which is appointed by the issuer to act as a conduit between

the Stock Exchanges and the National Payments Corporation of India in order to push

the mandate collect requests and / or payment instructions of the RIIs into the UPI, the

Sponsor Bank in this case being [●]

Sub-Syndicate Members The sub-syndicate members, if any, appointed by the GCBRLMs and the BRLMs and

the Syndicate Members, to collect ASBA Forms and Revision Forms.

Syndicate Agreement The agreement dated [●] between our Company, the Registrar to the Offer, the

Promoter Selling Shareholder, the GCBRLMs and the BRLMs and the Syndicate

Members in relation to the procurement of Bid cum Application Forms by the

Syndicate.

Syndicate Members Syndicate members as defined under Regulation 2(1)(hhh) of the SEBI ICDR

Regulations, namely, [●] and [●].

‘Syndicate’ or ‘Members of the

Syndicate’

the GCBRLMs and the BRLMs and the Syndicate Members.

Underwriters [●]

Underwriting Agreement The agreement dated [●] between the Underwriters, our Company and the Promoter

Selling Shareholder, entered into on or after the Pricing Date but prior to filing of the

Prospectus with the RoC.

UPI ID ID created on Unified Payment Interface (UPI) for single-window mobile payment

system developed by the National Payments Corporation of India (NPCI).

UPI Mandate Request A request (intimating the RII by way of a notification on the UPI application and by

way of a SMS directing the RII to such UPI application) to the RII initiated by the

Sponsor Bank to authorise blocking of funds on the UPI application equivalent to Bid

Amount and subsequent debit of funds in case of Allotment

UPI mechanism The bidding mechanism that may be used by an RII to make a Bid in the Offer in

accordance with SEBI circular (SEBI/HO/CFD/DIL2/CIR/P/2018/138) dated

November 1, 2018

UPI PIN Password to authenticate UPI transaction

Wilful Defaulter Wilful defaulter as defined under Regulation 2(1)(lll) of the SEBI ICDR Regulations

Working Day All days other than second and fourth Saturday of the month, Sunday or a public

holiday, on which commercial banks in Mumbai are open for business; provided,

however, with reference to (a) announcement of Price Band; and (b) Bid/ Offer Period,

the expression “Working Day” shall mean all days on which commercial banks in

Mumbai are open for business, excluding all Saturdays, Sundays or public holidays;

and (c) with reference to the time period between the Bid/ Offer Closing Date and the

listing of the Equity Shares on the Stock Exchanges, the expression ‘Working Day’

shall mean all trading days of Stock Exchanges, excluding Sundays and bank holidays,

in terms of the SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21,

2016.

XL Insurance XL Insurance Company SE – India Reinsurance Branch

YES Securities YES Securities (India) Limited

8

Technical/ Industry Related Terms/ Abbreviations

Term Description

Acquisition Cost Acquisition costs are those costs that vary with and are primarily related to the

acquisition of new and renewal insurance contracts. The most essential test is the

obligatory relationship between costs and the execution of insurance contracts (i.e.

commencement of risk)

Adjusted combined ratio Adjusted combined ratio is calculated as combined ratio less the ratio of policyholder

share of Investment Income to net written premium

Agent An individual appointed by an insurer for the purpose of soliciting or procuring

insurance business including business relating to the continuance, renewal or revival

of policies of insurance

All risk insurance policy A type of insurance policy that covers a broad range of risks, including risks that are

not explicitly excluded in the policy contract

AUM Assets under management

Available solvency margin Available solvency margin means the excess of value of assets of an insurance

company over the value of its liabilities, with certain further prescribed adjustments

by the IRDAI

AY Accident Year

Broker A licensed person/firm who arranges insurance contracts with insurance companies

and/ or reinsurance companies on behalf of his clients for remuneration

CAGR Compounded Annual Growth Rate ((End Value/Beginning Value)^(1/number of

years) – 1)

CCE Crop Cutting Experiments

Claim adjustment expenses Expenses incurred relating to settlement of claims

Claim settlement ratio Claims settled during the year divided by claims reported during the course of the

year

Claims repudiation ratio Claims repudiated during the year divided by sum of outstanding claims at the

beginning of the year and claims reported during the course of the year

Combined ratio The combined ratio is the sum of the loss ratio, expense ratio and commission ratio

Commission ratio The ratio of net commission to net written premium

Corporate agent Any entity, as prescribed by the IRDAI, that holds a valid certificate of registration

for solicitation and servicing any of life, general and health insurance business

CRM Customer relationship management

Certificate of Registration Certificate granted by the IRDAI under the IRDA (Registration of Indian Insurance

Companies) Regulations, 2000, registering an insurance company to transact the

classes of business specified therein.

Economic Capital Economic Capital is the minimum surplus required to cover potential losses, at a

given risk tolerance level, over a specified time horizon.

EMI Equated Monthly Installment

ERM Enterprise risk management

Excess of loss reinsurance (also

known as non-proportional

reinsurance)

A type of reinsurance transaction pursuant to which the reinsurer, subject to a

specified limit, indemnifies the ceding insurer against the amount of loss in excess of

a specified retention amount

Expense ratio Ratio of operating expenses related to insurance business to the net written premium

Facultative reinsurance Reinsurance transacted and negotiated on an individual risk basis. The ceding insurer

has the option to offer the individual risk to the reinsurer and the reinsurer retains the

right to accept or reject the risk

FDI Foreign Direct Investment

FLOP Fire Loss of Profit Insurance

FVA Fair Value Change Account

GDP Gross Domestic Product

GDPI Gross Direct Premium Income

GDPW Gross Direct Premium Written

General/Non-life Insurance

Business

Fire, marine or miscellaneous insurance business, whether carried on singly or in

combination with one or more of them.

Grievance disposal ratio Number of grievances disposed during a particular year divided by the sum of number

of complaints pending at the beginning of such year and the number of complaints

received during the course of the year, represented as a percentage

Gross direct premium Gross direct premium is the total premium received before taking into account

reinsurance accepted and ceded

Gross Written Premium / GWP Gross written premium is the sum of gross direct premium and the inward reinsurance

business accepted

Health Insurance Business The effecting of contracts which provide for sickness benefits or medical, surgical or

hospital expense benefits, whether in-patient or out-patient, travel cover and personal

9

Term Description

accident cover.

IAR Industrial All Risk Insurance

Incurred but not enough reported

(IBNER)

IBNER is a reserve reflecting expected changes (increases and decreases) in estimates

for reported claims only

Incurred but not reported / IBNR IBNR is a reserve to provide for claims incurred before the valuation date but are still

to be reported to the insurer by such date. IBNR includes IBNER, estimate for

reopened claims, provisions for incurred but not reported claims, provisions for

claims in transit as on the accounting date, allocated loss adjustment expenses

(“ALAE”) and ALAE claim related expenses that are directly attributable to a

specific claim.

Incurred claim ratio / Loss ratio Ratio of net incurred claims to net earned premium. The term is also known as loss

ratio.

Indian Motor Third Party Insurance

Pool / IMTPIP

The IMTPIP was a multilateral arrangement for insurance set up by the IRDAI in

respect of third- party claims against commercial vehicles, the losses or gains from

which were shared by all Indian non-life insurance companies in proportion to their

overall market share. The IMTPIP was effective from April 1, 2007 to March 31,

2012.

Indian Motor Third-Party Declined

Risk Pool / IMTPDRP

The IMTPDRP was an arrangement for insurance, set up by the IRDAI, in respect of

standalone third-party insurance for commercial vehicles that insurers “declined” to

keep on their books. The losses or gains from such pool were shared by Indian non-

life insurance companies that failed to meet a certain quota of third-party insurance

policies underwritten. The IMTPDRP was effective from April 1, 2012 to March 31,

2016.

Insurance leverage Ratio of Policyholder Liabilities to company’s net worth including fair value change

account.

Insurance Premium It is the consideration the policyholder will have to pay in order to secure the benefits

offered by the insurance policy.

Insurance risk Inherent uncertainty as to the occurrence, amount and timing of insurance liabilities.

Insurance underwriting The process by which an insurance company examines risk and determines whether

the insurer will accept the risk or not, classifies those accepted and determines the

appropriate rate for coverage provided.

Intermediary Intermediary includes entities such as insurance brokers, reinsurance brokers,

insurance consultants, corporate agents, third party administrators, surveyors and loss

assessors and such other entities as may be notified by the authority from time to time.

Investment Income Investment income will include interest, dividend, profit/loss on sale or redemption of

investments and the investment income is adjusted for amortisation, write off and

provisions.

Investment leverage Investment leverage is the ratio of total investment assets (net of borrowings) to net

worth.

IRDAI Insurance Regulatory And Development Authority of India.

ISNP Insurance Self Network Platform.

Kharif Kharif refers to the season which lasts from April to October and the crops that are

cultivated and harvested in such season.

Liquid Assets Short term investments plus cash and bank balances.

Loss adjustment expense / LAE Loss adjustment expenses are payments for costs to be incurred in connection with the

administration of claims including, for example: payments made to surveyors,

investigators, etc.

Loss Reserves Loss reserves are the reserves (or provision) for outstanding claims, IBNR and

IBNER.

Motor Accident Claims

Tribunal/MACT

Motor third party claims referred to the motor accident claims tribunal. The tribunal

deals with claims relating to loss of life and injury cases and property damage of third

party resulting from motor accidents.

Motor Third-Party Liabilities Claims related to compensation of motor accident victims or their nearest kin for

death/bodily injury.

Net Direct Premium Income to

GDPI ratio

Net Written Premium on Gross Direct Premium / Gross Direct Premium.

Net earned premiums / NEP Net written premium adjusted by the change in unexpired risk reserve for a year.

Net incurred claims Claim incurred (net) are gross incurred claims less all claims recovered from

reinsurers related to those gross incurred claims.

Net Outstanding Claim Reserves Reserve created for unpaid claims after adjusting for amount recoverable from

reinsurers.

Net Worth Net worth represents the shareholders’ funds and is computed as sum of share capital,

reserves and surplus, share application money pending allotment, net of miscellaneous

expenditure and debit balance in the profit and loss account.

10

Term Description

Net written premium / NWP Gross written premium less premium on reinsurance ceded

Non-life insurance density The ratio of overall gross direct premium in the non-life insurance industry to the

population of a country

Non-life insurance penetration Overall gross domestic premium in the non-life insurance industry as a percentage of

gross domestic product of a country

Obligatory cession The portion of risk that Indian non-life insurance companies are required by law to

cede to Indian general insurance company as per relevant IRDAI reinsurance

regulations

Operating expense ratio Ratio of operating expenses to net written premium

Policyholders Liability Claim outstanding plus reserve for unexpired risk plus reserve for premium deficiency

Pradhan Mantri Fasal Bima Yojana

/ PMFBY

A Government of India programme under which the central and state governments

subsidise the purchase of yield-based crop insurance for farmers. The PMFBY was

launched in April 2016 and covers food crops, oilseeds and commercial and

horticultural crops

Premium ceded Premium on reinsurance ceded is the premium in relation to the risk that we cede to

our reinsurers

Premium deficiency reserve Reserve created when the expected claims and claim related expenses on unexpired

risks exceeds the unearned premium reserve

Premium To Surplus Ratio Ratio of net written premium to net worth

Proportional reinsurance A type of reinsurance transaction pursuant to which the reinsurer and the ceding

insurer share a defined percentage of the premiums and liabilities of certain

underlying insurance. The reinsurer also typically pays the ceding reinsurer a

commission

Rabi Rabi refers to the season which typically lasts from mid-November to April/May and

the crops that are cultivated and harvested in such season

Rashtriya Swasthya Bima Yojana /

RSBY

A Government of India programme under which the central and state governments

provide health insurance to low income households certain defined categories of

unorganised workers

Reinsurance Reinsurance is a transaction whereby one company, the reinsurer, agrees to indemnify

another insurance company, the reinsured against all or part of the loss that the latter

sustains under a policy or policies that it has issued, in return for a premium

Required Solvency Margin / RSM RSM1: Required solvency margin based on net premiums and shall be determined as

twenty percent (20%) of the amount which is the higher of the gross premiums

multiplied by a factor (specified) and the net premiums.

RSM2: Required solvency margin based on net incurred claims and shall be

determined as thirty percent (30%) of the amount which is the higher of the gross

incurred claims multiplied by a factor (specified) and the net incurred claims.

RSM: Required solvency margin shall be the higher of the amounts of RSM1 and

RSM2 for each line of business separately

Reserve Risk The risk that the reserves set up to meet the unpaid obligations are less than the

payment needed

Restructured Weather Based Crop

Insurance Scheme (RWBCIS)

Weather Based Crop Insurance Scheme is an index based insurance cover which aims

to mitigate the hardship of the insured farmers against the likelihood of financial loss

by providing protection against variation in specified weather indices such as rainfall,

humidity, temperature, etc. or a combination of these factors

Retained risk The amount of liability for which an insurance company will remain responsible after

accounting for its reinsurance arrangements

Retention limit The maximum amount of risk retained by an insurer, beyond which the insurer cedes

the risk to reinsurers

Rider The add-on benefits which are in addition to the benefits under a basic policy

Salvage Value recoverable from sale of scrap/recovered material arising from claim

SFSP Standard Fire And Special Perils Insurance

Solvency ratio (Solvency) The ratio of available solvency margin to the required solvency margin

Surveyor An independent professional appointed by an insurer which seeks to determine the

extent of its liability with respect to a claim that is submitted

TAC Tariff Advisory Committee

Technical reserves Technical reserves comprise of reserves for unexpired risk, premium deficiency

reserve, and outstanding claims including IBNR and IBNER

Third Party Claim Hubs Specialized offices set by our Company to handle the motor third party claims

Third-Party loss / TP loss A loss suffered by a person(s) other than the insured or insurer who has incurred

losses or is entitled to receive payment due to acts or omissions of the insured

Third-Party Motor Insurance Liability insurance purchased by an insured (the first party) from an insurer (the

second party) for protection against the claims of another (the third) party

Total Debt to Net Worth Ratio Total Debt / Net worth, where Total Debt = secured and unsecured borrowing and net

11

Term Description

worth includes share capital + reserves and surplus + application money pending for

allotment + Change in fair value account

TPA Third Party Administrators

Treaty A reinsurance contract in which a reinsurance company agrees to accept all of a

particular type of risk from the ceding insurance company. Reinsurers in a treaty

contract are obliged to accept all risks outlined in the contract

Underwriting risk Risk of premium being inadequate to cover claims and claim related expenses,

commission and operating expenses

Unearned premium reserve Amount representing that part of the premium written which is attributable to, and is

to be allocated to the succeeding accounting periods

Unexpired risk reserve / URR Sum of unearned premium reserve

UY Underwriting Year

Conventional and General Terms or Abbreviations

Term Description

‘Mn’ or ‘mn’ Million.

AGM Annual General Meeting.

AIF An alternative investment fund as defined in and registered with SEBI under the

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

2012.

AS or Accounting Standards Accounting standards as prescribed by Section 133 of the Companies Act, 2013 read

with Rule 7 of the Companies (Accounts) Rules, 2014

BSE BSE Limited.

Category II FPI FPIs registered as “Category II foreign portfolio investors” under the Securities and

Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014.

Category III FPI FPIs registered as “Category III foreign portfolio investors” under the Securities and

Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014.

CBDT Central Board of Direct Taxes, Department of Revenue, Ministry of Finance,

Government of India.

CBLO Collateralized borrowing and lending obligation

CDSL Central Depository Services (India) Limited.

CEO Chief Executive Officer.

CIN Corporate Identity Number.

CIT Commissioner of Income Tax.

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 an 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 sections by

the Ministry of Corporate Affairs, Government of India as of the date of this Draft

Red Herring Prospectus, along with the relevant rules made thereunder.

Contract Labour Act The Contract Labour (Regulation and Abolition) Act, 1970.

CSR Corporate Social Responsibility.

Depositories NSDL and CDSL.

Depositories Act The Depositories Act, 1996, read with regulations framed thereunder.

DIN Director Identification Number.

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

Government of India.

DP ID Depository Participant’s Identity Number.

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

EGM Extraordinary General Meeting.

ELSS Equity Linked Savings Scheme.

Employees Provident Fund Act Employees Provident Funds and Miscellaneous Provisions Act, 1952.

Employees State Insurance Act Employees State Insurance Act, 1948.

EPS Earnings Per Share.

FAQs Frequently asked questions.

FCNR Foreign currency non-resident account.

FDI Foreign Direct Investment.

FDI Circular Consolidated Foreign Direct Investment policy circular of 2017, effective from

August 28, 2017, issued by the DIPP.

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

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

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Term Description

outside India) Regulations, 2017.

‘Financial Year’ or ‘Fiscal or

Fiscal Year’ or ‘FY’

The period of 12 months ending March 31 of that particular year.

FIPB The erstwhile Foreign Investment Promotion Board.

Foreign Investment Rules Indian Insurance Companies (Foreign Investment) Rules, 2015

FPI(s) Foreign portfolio investors as defined under the SEBI FPI Regulations.

FVCI Foreign venture capital investors as defined and registered under the SEBI FVCI

Regulations.

GDP Gross domestic product.

GoI or Government or Central

Government

The Government of India.

GST Goods and services tax.

HUF Hindu undivided family.

ICAI The Institute of Chartered Accountants of India.

ICDS Income Computation and Disclosure Standards, notified by the GoI on September 29,

2016.

IFRS International Financial Reporting Standards.

Income Tax Act Income- Tax Act, 1961, read with the rules framed thereunder.

Income Tax Rules Income- Tax Rules, 1962.

Ind AS Indian Accounting Standards prescribed under section 133 of the Companies Act,

2013, as notified under Companies (Indian Accounting Standard) Rules, 2015

Indian Accounting Standard Rules Companies (Indian Accounting Standards) Rules of 2015.

Indian GAAP Generally accepted accounting principles in India.

Indian Penal Code Indian Penal Code, 1860.

Insurance Act Insurance Act, 1938.

IPO Initial public offering.

IRDA Act The Insurance Regulatory and Development Authority Act, 1999.

IRDAI Capital Regulations Insurance Regulatory and Development Authority of India (Issuance of Capital by

Indian Insurance Companies transacting other than Life Insurance Business)

Regulations, 2015.

IRDAI Corporate Governance

Guidelines

Guidelines for corporate governance issued by the IRDAI by way of circular no.

IRDA/F&A/GDL/CG/100/05/2016 dated May 18, 2016.

IRDAI Transfer Regulations Insurance Regulatory and Development Authority of India (Transfer of Equity Shares

of Insurance Companies) Regulations, 2015.

IST Indian Standard Time.

IT Information Technology.

Listed Insurance Companies

Guidelines

Insurance Regulatory and Development Authority of India (Listed Indian Insurance

Companies) Guidelines, 2016.

MCA Ministry of Corporate Affairs, Government of India.

MICR Magnetic ink character recognition.

MoU Memorandum of understanding.

N.A. Not applicable.

NAV Net asset value.

NCD Non-Convertible Debentures.

NEFT National Electronic Fund Transfer.

NPS National Pension Scheme.

NRE Account Non-Resident External account.

NRI A person resident outside India, who is a citizen of India or an overseas citizen of

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

NSDL National Securities Depository Limited.

NSE National Stock Exchange of India Limited.

‘OCB’ or ‘Overseas Corporate

Body’

A company, partnership, society or other corporate body owned directly or indirectly

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

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

was in existence on October 3, 2003 and immediately before such date was eligible to

undertake transactions pursuant to 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.

PFRDA Pension Fund Regulations Pension Fund Regulatory and Development Authority (Pension Fund) Regulations,

2015

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Term Description

PMS Portfolio Management Services.

RBI Reserve Bank of India.

“RONW”/ “RoNW” Net profit after tax / net worth as at the end of period/year.

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 Investment Funds) Regulations,

2012.

SEBI ESOP Regulations Securities and Exchange Board of India (Share Based Employee Benefits)

Regulations, 2014.

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, 2018.

SEBI Listing Regulations Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015.

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

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.

State Government The government of a state in India.

Stock Exchanges Collectively, the BSE and 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.

TDS Tax deducted at source.

U.S. GAAP Generally accepted accounting principles of the United States of America.

U.S. Investment Company Act U.S. Investment Company Act of 1940, as amended

U.S. Securities Act U.S. Securities Act of 1933, as amended.

VAT Value added tax.

VCFs Venture capital funds as defined in and registered with SEBI under SEBI

VCF Regulations.

Year/ Calendar Year The 12 month period ending December 31.

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

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

and regulations made thereunder.

Notwithstanding the foregoing, capitalised terms in “Statement of Tax Benefits”, “Financial Statements”, “Basis

for Offer Price”, “Outstanding Litigation and Material Developments”, “Offer Procedure” and “Main Provision

of the Articles of Association” on pages 92, 234, 89, 354, 397 and 416 respectively, shall have the meaning as ascribed to such terms in such sections.

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CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA AND

CURRENCY OF PRESENTATION

Page Numbers

Unless otherwise stated, all references to page numbers in this Draft Red Herring Prospectus are to page

numbers of this Draft Red Herring Prospectus.

Currency and Units of Presentation

All references to “Rupee(s)”, “Rs.” or “₹” or “INR” are to Indian Rupees, the official currency of the Republic

of India. All references to “US$” or “U.S. Dollars” or “USD” are to United States Dollars, the official

currency of the United States of America.

Exchange Rates

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

have been presented solely to comply with the requirements of SEBI ICDR Regulations. Unless otherwise stated,

the exchange rates referred to for the purpose of conversion of foreign currency amounts into Rupee amounts,

are as follows:

Currency

Exchange rate as on

September 30,

2018(2)

September 30,

2017

March 31,

2018(1) March 31, 2017 March 31, 2016

USD# 72.55(2) 65.36(3) 65.04(1) 64.84 66.33 #Source: RBI reference rate

(1) Exchange rate as on March 28, 2018, as RBI reference rate is not available for March 31, 2018, March 30, 2018 and March 29, 2018 being a Saturday and public holidays, respectively

(2) Exchange rate as on September 28, 2018, as reference rate is not available for September 30, 2018 and September 29, 2018 being a

Sunday and a Saturday, respectively. (3) Exchange rate as on September 29, 2017, as reference rate is not available for September 30, 2017 being a Saturday.

Such conversion should not be considered as a representation that such currency amounts have been, could have

been or can be converted into Rupees at any particular rate, the rates stated above or at all.

Time

All references to time in this Draft Red Herring Prospectus are to Indian Standard Time.

Financial and Other Data

Unless stated or the context requires otherwise, our financial information in this Draft Red Herring Prospectus is

derived from our Restated Financial Information, included in this Draft Red Herring Prospectus.

Our Company’s fiscal year commences on April 1 of each year and ends on March 31 of the next year.

Accordingly, all references to a particular fiscal year (referred to herein as “Fiscal”, “Fiscal Year” or “FY”) are

to the 12 month period ended March 31 of that particular year, unless otherwise specified.

India has decided to adopt the “Convergence of its existing standards with IFRS” referred to as the “Indian

Accounting Standards” or “Ind AS”. In terms of a notification released by the IRDAI, our Company is required

to prepare its financial statements in accordance with Ind AS for accounting periods beginning on April 1, 2020.

Accordingly, our financial statements for the period commencing from April 1, 2020, may not be comparable to

our historical financial statements. We have not attempted to quantify the impact of Ind AS on the financial

information included in this Draft Red Herring Prospectus, nor have we provided a reconciliation of our

financial statements to those under Ind AS.

All the figures in this Draft Red Herring Prospectus, except for figures derived from the ICRA Report (which

are in crores), have been presented in millions or in whole numbers where the numbers have been too small to

present in million unless stated otherwise. One million represents 1,000,000 and one billion represents

1,000,000,000. Certain figures contained in this Draft Red Herring Prospectus, including financial information,

have been subject to rounding adjustments. Any discrepancies in any table between the totals and the sum of the

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amounts listed are due to rounding off. Except for figures derived from our Restated Financial Information

(which are rounded off to the 2nd decimal), all figures in decimals have been rounded off to the second decimal.

In certain instances, (i) the sum or percentage change of such numbers may not conform exactly to the total

figure given, and (ii) the sum of the figures in a column or row in certain tables may not conform exactly to the

total figure given for that column or row. However, figures sourced from third-party industry sources may be

expressed in denominations other than millions or may be rounded off to other than two decimal points in the

respective sources, and such figures have been expressed in this Draft Red Herring Prospectus in such

denominations or rounded-off to such number of decimal points as provided in such respective sources.

Non-Indian GAAP Financial Measures

This Draft Red Her

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