SHYAM METALICS AND ENERGY LIMITEDShyam Metalics and Energy Limited “Company”) was originally...

DRAFT RED HERRING PROSPECTUS

Dated: August 6, 2018 (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 Issue

SHYAM METALICS AND ENERGY LIMITED

Shyam Metalics and Energy Limited (“Company”) was originally incorporated as Shyam DRI Power Limited on December 10, 2002 at Kolkata, West Bengal, India as a public limited company under the Companies

Act, 1956 and received the certificate for commencement of business from the Registrar of Companies, West Bengal at Kolkata (“RoC”) on December 11, 2002. Subsequently, the name of our Company was changed

to Shyam Metalics and Energy Limited vide a special resolution passed by our Shareholders on November 23, 2009, and a fresh certificate of incorporation consequent upon change of name was issued by the RoC on

January 5, 2010. For details of the change in the name and registered office of our Company, see “History and Certain Corporate Matters” on page 168.

Registered and Corporate Office: Trinity Tower, 7th Floor, 83, Topsia Road, Kolkata – 700046, West Bengal, India Contact Person: Birendra Kumar Jain, Company Secretary and Compliance Officer; Tel: +91 33 4016 4000; Fax: +91 33 4016 4025

E-mail: [email protected]; Website: www.shyammetalics.com

Corporate Identity Number: U40101WB2002PLC095491

OUR PROMOTERS: MAHABIR PRASAD AGARWAL, BRIJ BHUSHAN AGARWAL, SANJAY KUMAR AGARWAL, SUBHAM CAPITAL PRIVATE LIMITED, SUBHAM BUILDWELL

PRIVATE LIMITED, NARANTAK DEALCOMM LIMITED, KALPATARU HOUSEFIN & TRADING PRIVATE LIMITED, DORITE TRACON PRIVATE LIMITED AND TOPLIGHT

MERCANTILES PRIVATE LIMITED

INITIAL PUBLIC OFFER OF UP TO [] EQUITY SHARES OF FACE VALUE OF `10 EACH (“EQUITY SHARES”) OF SHYAM METALICS AND ENERGY LIMITED (“COMPANY” OR “ISSUER”)

FOR CASH AT A PRICE* OF `[●] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF `[●] PER EQUITY SHARE) (“ISSUE PRICE”) AGGREGATING UP TO `9,090 MILLION (“ISSUE”).

THE ISSUE SHALL CONSTITUTE [●]% OF THE POST-ISSUE PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY. THE ISSUE INCLUDES A RESERVATION OF UP TO [●] EQUITY

SHARES, AGGREGATING UP TO `90 MILLION, FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED HEREIN) NOT EXCEEDING 5% OF OUR POST-ISSUE PAID-UP EQUITY

SHARE CAPITAL (THE “EMPLOYEE RESERVATION PORTION”). THE ISSUE LESS THE EMPLOYEE RESERVATION PORTION IS HEREINAFTER REFERRED TO AS THE “NET ISSUE”.

THE ISSUE AND THE NET ISSUE SHALL CONSTITUTE [●]% AND [●]%, RESPECTIVELY, OF THE POST-ISSUE PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.

THE FACE VALUE OF THE EQUITY SHARES IS `10 EACH. THE PRICE BAND, THE RETAIL DISCOUNT, THE EMPLOYEE DISCOUNT AS APPLICABLE, AND THE MINIMUM BID LOT WILL

BE DECIDED BY OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS (“BRLMS”) AND WILL BE ADVERTISED IN ALL EDITIONS OF [●], AN ENGLISH

NATIONAL NEWSPAPER, ALL EDITIONS OF [●], A HINDI NATIONAL NEWSPAPER AND KOLKATA EDITION OF [●], A BENGALI NEWSPAPER (WHICH ARE WIDELY CIRCULATED

ENGLISH, HINDI AND BENGALI NEWSPAPERS, RESPECTIVELY, BENGALI BEING THE REGIONAL LANGUAGE OF WEST BENGAL, WHERE OUR REGISTERED AND CORPORATE

OFFICE IS LOCATED), AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/ISSUE OPENING DATE AND SHALL BE MADE AVAILABLE TO THE BSE LIMITED (“BSE”) AND THE

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

*A discount of up to [●]% on the Issue Price may be offered to Retail Individual Bidders (“Retail Discount”) equivalent to `[●] per Equity Share and to Eligible Employees Bidding in the Employee Reservation Portion

(“Employee Discount”) equivalent to `[●] per Equity Share.

In case of any revision to the Price Band, the Bid/Issue Period will be extended by at least three additional Working Days after such revision of the Price Band, subject to the Bid/Issue Period not exceeding 10

Working Days. Any revision in the Price Band and the revised Bid/Issue Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a press release, and also by indicating

the change on the websites of the BRLMs and at the terminals of the Syndicate Members and by intimation to the Designated Intermediaries.

The Issue is being made in terms of Rule 19(2)(b)(ii) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”), read with Regulation 41 of the SEBI ICDR Regulations. The Issue is being made

in accordance with Regulation 26(1) of the SEBI ICDR Regulations, through the Book Building Process wherein not more than 50% of the Net Issue shall be allocated on a proportionate basis to Qualified Institutional

Buyers (“QIBs”) (“QIB Portion”), provided that our Company in consultation with the BRLMs may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI

ICDR Regulations, 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 Issue 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 Issue Price.

Further, not less than 15% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue 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 Issue Price. All potential investors, other than Anchor Investors, are required to mandatorily

utilise the Application Supported by Blocked Amount (“ASBA”) process providing details of their respective bank accounts which will be blocked by the Self Certified Syndicate Banks (“SCSBs”). For details, see

“Issue Procedure” on page 514.

RISK IN RELATION TO THE FIRST ISSUE

This being the first public issue of our Company, there has been no formal market for the Equity Shares of our Company. 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 Issue Price (determined and justified by our Company, in consultation with the BRLMs as stated under “Basis for Issue Price” on page [●]) 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 Issue unless they can afford to take the risk of losing their entire investment. Investors are

advised to read the risk factors carefully before taking an investment decision in the Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue, including

the risks involved. The Equity Shares in the Issue 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 14.

COMPANY’S ABSOLUTE RESPONSIBILITY

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

material in the context of the Issue, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and

intentions expressed herein are honestly held and that there are no other facts, the omission or inclusion of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of

any such opinions or intentions, misleading in any material respect.

LISTING

The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on the Stock Exchanges. 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 Issue, the Designated Stock Exchange shall be [●]. A signed copy of the Red Herring Prospectus and the Prospectus shall

be delivered for registration to the RoC in accordance with Sections 26(4) and 32 of the Companies Act, 2013. For details of the material contracts and documents, which will be made available for inspection from

the date of the Red Herring Prospectus up to Bid/Issue Closing Date, see “Material Contracts and Documents for Inspection” on page 599.

BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE

ICICI Securities Limited

ICICI Center

H.T. Parekh Marg

Churchgate

Mumbai 400 020

Maharashtra, India

Tel: +91 22 2288 2460

Fax: +91 22 2282 6580

E-mail:

[email protected]

Investor grievance email:

[email protected]

Website: www.icicisecurities.com

Contact Person: Suyash Jain /

Rupesh Khant

SEBI Registration No.:

INM000011179

Edelweiss Financial Services Limited

14th Floor, Edelweiss House

Off C.S.T. Road, Kalina

Mumbai 400 098

Maharashtra, India

Tel: +91 22 4009 4400

Fax: +91 22 4086 3610

E-mail:

[email protected]

Investor grievance e-mail:

[email protected]

Website: www.edelweissfin.com

Contact Person: Disha Doshi/ Milap

Maru

SEBI Registration No.: INM0000010650

IIFL Holdings Limited

10th 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

E-mail: [email protected]

Investor Grievance E-mail:

[email protected]

Website: www.iiflcap.com

Contact Person: Pinak Bhattacharyya/

Nishita Mody


INM000010940

JM Financial Limited

7th Floor Cnergy

Appasaheb Marathe Marg

Prabhadevi, Mumbai 400 025

Maharashtra, India

Tel: +91 22 6630 3030

Fax: +91 22 6630 3330


Investor Grievance E-mail:

[email protected]

Website: www.jmfl.com

Contact Person: Prachee Dhuri

SEBI Registration No.: INM000010361

Karvy Computershare Private

Limited

Karvy Selenium, Tower B

Plot 31-32, Gachibowli

Financial District, Nanakramguda

Hyderabad 500 032

Tel: +91 40 6716 2222

Fax: +91 40 2343 1551


Investor grievance email:

[email protected]

Website: http://karisma.karvy.com

Contact Person: M. Murali Krishna


INR000000221

BID/ISSUE PROGRAMME

BID/ISSUE OPENS ON [●](1)

BID/ISSUE CLOSES ON [●](2)

(1) Our Company may, in consultation with the BRLMs, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor Investor Bid/Issue Period shall be one Working Day

prior to the Bid/Issue Opening Date.

(2) Our Company may, in consultation with the BRLMs, consider closing the Bid/Issue Period for QIBs one Working Day prior to the Bid/issue Closing Date in accordance with the SEBI ICDR Regulations

TABLE OF CONTENTS

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

DEFINITIONS AND ABBREVIATIONS ........................................................................................................................... 2 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ..................................................................... 11 FORWARD-LOOKING STATEMENTS .......................................................................................................................... 13

SECTION II: RISK FACTORS .......................................................................................................................................... 14

SECTION III: INTRODUCTION ....................................................................................................................................... 38

SUMMARY OF INDUSTRY ............................................................................................................................................ 38 SUMMARY OF OUR BUSINESS .................................................................................................................................... 43 SUMMARY OF FINANCIAL INFORMATION .............................................................................................................. 49 THE ISSUE ........................................................................................................................................................................ 62 GENERAL INFORMATION ............................................................................................................................................ 64 CAPITAL STRUCTURE ................................................................................................................................................... 71 OBJECTS OF THE ISSUE................................................................................................................................................. 87 BASIS FOR ISSUE PRICE .............................................................................................................................................. 102 STATEMENT OF TAX BENEFITS ................................................................................................................................ 105

SECTION IV: ABOUT OUR COMPANY ....................................................................................................................... 108

INDUSTRY OVERVIEW ............................................................................................................................................... 108 OUR BUSINESS .............................................................................................................................................................. 148 REGULATIONS AND POLICIES .................................................................................................................................. 164 HISTORY AND CERTAIN CORPORATE MATTERS ................................................................................................. 168 OUR MANAGEMENT .................................................................................................................................................... 184 OUR PROMOTERS AND PROMOTER GROUP .......................................................................................................... 202 OUR GROUP COMPANIES ........................................................................................................................................... 211 RELATED PARTY TRANSACTIONS ........................................................................................................................... 221 DIVIDEND POLICY ....................................................................................................................................................... 222

SECTION V: FINANCIAL INFORMATION ................................................................................................................. 223

FINANCIAL STATEMENTS.......................................................................................................................................... 223 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS ................................................................................................................................................................. 452 FINANCIAL INDEBTEDNESS ...................................................................................................................................... 479

SECTION VI: LEGAL AND OTHER INFORMATION ............................................................................................... 482

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS....................................................................... 482 GOVERNMENT APPROVALS ...................................................................................................................................... 491 OTHER REGULATORY AND STATUTORY DISCLOSURES ................................................................................... 493

SECTION VII: ISSUE INFORMATION ......................................................................................................................... 508

TERMS OF THE ISSUE .................................................................................................................................................. 508 ISSUE STRUCTURE....................................................................................................................................................... 512 ISSUE PROCEDURE ...................................................................................................................................................... 514 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ................................................................. 555

SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION .............................................................. 556

SECTION IX: OTHER INFORMATION ........................................................................................................................ 599

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ......................................................................... 599 DECLARATION ............................................................................................................................................................. 601

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, regulation, rules, guidelines or policies as amended from time to time. In case of any inconsistency

between the definitions given below and the definitions contained in the General Information Document (as defined below), the

definitions given below shall prevail.

General Terms

Term Description

“our Company”, “the Company”, “the

Issuer”

Shyam Metalics and Energy Limited, a company incorporated under the Companies Act, 1956 and

having its Registered and Corporate Office at Trinity Tower, 7th Floor, 83, Topsia Road, Kolkata –

700046, West Bengal, India

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

and Associate Companies

Company Related Terms

Term Description

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

Associate Companies Associate companies of our Company, namely: (i) Kecons Tradecare Private Limited; and (ii) Meghana Vyapaar Private Limited

Audit Committee Audit Committee of our Company as described in “Our Management” on page 184

Auditors/Statutory Auditors Statutory auditors of our Company, namely, S.K. Agrawal & Co., Chartered Accountants

Average cost of Power from Captive

power Plant

Average cost of Power from Captive Power Plant = Total cost of power from all Captive Power Plants

Total production units

Board/Board of Directors Board of directors of our Company, as constituted from time to time, including a duly constituted

committee thereof

Corporate Social Responsibility

Committee/CSR Committee

The Corporate Social Responsibility Committee of our Company as described in “Our Management”

on page 184

CRISIL CRISIL Limited

CRISIL Report Report titled “Market Assessment and outlook across Steel Industry value chain” dated July 2018

issued by CRISIL

DAPL Damodar Aluminium Private Limited

Director(s) Director(s) of our Company

Dorite Tracon Dorite Tracon Private Limited

EBITDA EBITDA = Profit/(loss) before tax + interest cost + depreciation and amortization expense – non-

operating other income

Employees Stock Option Growth

Plan 2018

Shyam Metalics Employees Stock Option Growth Plan 2018

Employees Stock Option Loyalty

Plan 2018

Shyam Metalics Employees Stock Option Loyalty Plan 2018

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

Executive Directors Executive Directors of our Company

Gross Debt to EBITDA Gross Debt EBITDA = Gross debt

EBITDA

Gross debt = long term borrowings + short term borrowings + current maturities of long term borrowing

Gross Debt to Equity Gross Debt to Equity = Gross debt

Total equity

Gross debt = long term borrowings + short term borrowings + current maturities of long term

borrowings

Total equity = Equity Share capital + other equity, i.e, reserves and surplus

Group Companies The companies that are covered under the applicable accounting standards and any other company considered material by the Board of Directors, pursuant to a policy on materiality of group companies

approved by the Board, as disclosed in “Our Group Companies” on page 211

Independent Director Independent Director(s) on our Board

Interest Coverage Interest coverage = EBIT

Interest cost

EBIT = Profit/(loss) before tax + interest – non-operating other income

IPO Committee The IPO Committee of our Company as described in “Our Management” on page 184

Kalpataru Housefin Kalpataru Housefin and Trading Private Limited

KCPL Kolhan Complex Private Limited

3

Term Description

Key Management Personnel Key management personnel of our Company in terms of the Companies Act, 2013 and the SEBI ICDR

Regulations and disclosed in “Our Management – Key Management Personnel” on page 199

KTPL Kecons Tradecare Private Limited

Memorandum of Association/ MoA Memorandum of Association of our Company, as amended

MHPL Meadow Housing Private Limited

MVPL Meghana Vyapaar Private Limited

Narantak Dealcomm Narantak Dealcomm Limited

Nomination and Remuneration

Committee

The Nomination and Remuneration Committee of our Company as described in “Our Management”

on page 184

Promoter Group Persons and entities constituting the promoter group of our Company in terms of Regulation 2(1)(zb)

of the SEBI ICDR Regulations. For details, see “Our Promoters and Promoter Group” on page 202

Promoters Promoters of our Company namely, Mahabir Prasad Agarwal, Brij Bhushan Agarwal, Sanjay Kumar

Agarwal, Subham Capital Private Limited, Subham Buildwell Private Limited, Narantak Dealcomm

Limited, Kalpataru Housefin & Trading Private Limited, Dorite Tracon Private Limited and Toplight

Mercantiles Private Limited.

For details, see “Our Promoters and Promoter Group” on page 202

Registered Office / Registered and

Corporate Office

Registered and corporate office of our Company located at Trinity Tower, 7th Floor, 83, Topsia Road,

Kolkata – 700046, West Bengal, India

Registrar of Companies/RoC Registrar of Companies, West Bengal, situated at Kolkata

Restated Consolidated Financial

Statements

Restated consolidated financial statements of our Company as at and for the Fiscals 2018, 2017 and

2016 prepared in accordance with Ind AS and for Fiscals 2015 and 2014 prepared in accordance with

Indian GAAP and examined by the Auditor in accordance with the requirements of the Companies Act

and restated in accordance with the provisions of the SEBI ICDR Regulations

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

Statements

Restated Standalone Financial Statements

Restated standalone financial statements of our Company as at and for the Fiscals 2018, 2017 and 2016 prepared in accordance with Ind AS and for Fiscals 2015 and 2014 prepared in accordance with Indian

GAAP and examined by the Auditor in accordance with the requirements of the Companies Act and

restated in accordance with the provisions of the SEBI ICDR Regulations

RHPPL Renaissance Hydro Power Private Limited

RoCE RoCE (Return on Capital Employed) = EBIT

Total capital employed

EBIT = Profit/(loss) before tax + interest cost – non-operating other income

Total capital employed = Total assets – current liabilities*

*Current maturities on long term debt has been excluded from current liabilities

SBSPL Shyam Business Solutions Private Limited

Senior Management Personnel The persons listed as senior management personnel in “Our Management” on page 184

SFAL Shyam Ferro Alloys Limited

SAL Sundaram Alloys Limited

Shareholders Shareholders of our Company from time to time

SOJPL Shyam Ores (Jharkhand) Private Limited

SSPL Shyam SEL and Power Limited

SSPPL Singhbhum Steel and Power Private Limited

Stakeholders Relationship

Committee

The Stakeholders Relationship Committee of our Company as described in “Our Management” on

page 184

Subham Buildwell Subham Buildwell Private Limited

Subham Capital Subham Capital Private Limited

Subsidiaries or individually known as

Subsidiary

Subsidiaries of our Company, namely:

(i) Shyam SEL and Power Limited; (ii) Damodar Aluminium Private Limited; (iii) Singhbhum Steel and Power Private Limited; (iv) Shyam Business Solutions Private Limited; (v) Shyam Ores (Jharkhand) Private Limited; (vi) Renaissance Hydro Power Private Limited; (vii) Hrashva Storage and Warehousing Private Limited; (viii) Meadow Housing Private Limited; (ix) Shyam Energy Limited; (x) Taurus Estates Private Limited; and (xi) Whispering Developers Private Limited;

Toplight Mercantiles Toplight Mercantiles Private Limited

HSWPL Hrashva Storage and Warehousing Private Limited

SEL Shyam Energy Limited

WDPL Whispering Developers Private Limited

TEPL Taurus Estates Private Limited

Sonata Retails Sonata Retails Private Limited

Sonata Traders Sonata Traders Private Limited

4

Term Description

Sonata Dealtrade Sonata Dealtrade Private Limited

Issue Related Terms

Term Description

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

Bid cum Application Form

Allot/Allotment/Allotted Allotment of the Equity Shares pursuant to the Issue and to the Allottees

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

SEBI ICDR Regulations

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

Investor Bid/Issue Period, in terms of the Red Herring Prospectus and Prospectus

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

shall be submitted and allocation to Anchor Investors shall be completed

Anchor Investor Issue 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 Issue Price but not

higher than the Cap Price

The Anchor Investor Issue Price will be decided by our Company, in consultation with the BRLMs

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

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

One-third of the Anchor Investor Portion 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

which shall be determined by the Company, in consultation with the BRLMs

Application Supported by Blocked

Amount or ASBA

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

an SCSB to block the Bid Amount in the ASBA Account

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

Bidders for blocking the Bid Amount mentioned in the ASBA Form

ASBA Bidders All Bidders except Anchor Investors

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

Banker(s) to the Issue/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 Allotment will be made as described in “Issue Procedure – Part B – General

Information Document for Investing in Public Issues – Allotment Procedure and Basis of Allotment”

on page 545

Bid An indication to make an offer during the Bid/Issue Period by an ASBA Bidder pursuant to submission

of the ASBA Form, or during the Anchor Investor Bid/Issue Period by an Anchor Investor pursuant

to submission of the Anchor Investor Application Form, to subscribe to or purchase the Equity Shares

at a price within the Price Band, including all revisions and modifications thereto as permitted under

the SEBI ICDR Regulations as per the 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 amounts indicated in the Bid cum Application Form (less Retail

Discount and Employee Discount as applicable) and, in the case of Retail Individual Bidders Bidding

at the Cut Off Price, the Cap Price multiplied by the number of Equity Shares Bid for by such Retail

Individual Bidder and mentioned in the Bid cum Application Form and payable by the Bidder or

blocked in the ASBA Account of the Bidder, as the case may be, upon submission of the Bid in the

Issue.

Eligible Employees applying in the Employee Reservation Portion, subject to the Bid Amount being

up to ₹200,000, can apply at the Cut-Off Price and the Bid amount shall be Cap Price net of Employee

Discount,multiplied by the number of Equity Shares Bid for by such Eligible Employee and mentioned

in the Bid cum Application Form. The maximum Bid Amount under the Employee Reservation

Portion by an Eligible Employee shall not exceed ₹500,000 on a net basis. However, the initial

Allotment to an Eligible Employee in the Employee Reservation Portion shall not exceed ₹200,000.

Only in the event of an under-subscription in the Employee Reservation Portion post the initial

allotment, such unsubscribed portion may be Allotted on a proportionate basis to Eligible Employees

Bidding in the Employee Reservation Portion, for a value in excess of ₹200,000, subject to the total

Allotment to an Eligible Employee not exceeding ₹500,000

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

Bid Lot [●]

5

Term Description

Bid/Issue 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 published in all editions of [●], an English

national newspaper, all editions of [●], a Hindi national newspaper and Kolkata edition of [●], a

Bengali daily newspaper (Bengali being the regional language of West Bengal, where our Registered

and Corporate Office is located) each with wide circulation. In case of any revision, the extended Bid/

Issue Closing shall also be notified on the websites and terminals of the Members of the Syndicate as

required under the SEBI ICDR Regulations and also intimated to the SCSBs, Registered Brokers,

RTAs and Designated CDPs

Our Company may, in consultation with the BRLMs, consider closing the Bid/Issue Period for the

QIB Category one Working Day prior to the Bid/Issue Closing Date, in accordance with the SEBI

ICDR Regulations

Bid/Issue 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 published in all editions of [●], an English

national newspaper, all editions of [●], a Hindi national newspaper and Kolkata edition of [●], a

Bengali daily newspaper (Bengali being the regional language of West Bengal where our Registered

and Corporate Office is located) each with wide circulation

Bid/Issue Period Except in relation to Anchor Investors, the period between the Bid/Issue Opening Date and the

Bid/Issue Closing Date, inclusive of both days, during which prospective Bidders 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, and includes an ASBA Bidder

and an Anchor Investor

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

Branches for SCSBs, Specified Locations for Syndicate, Broker Centres for Registered Brokers,

Designated RTA Locations for RTAs and Designated CDP Locations for CDPs

Book Building Process Book building process, as provided in Schedule XI of the SEBI ICDR Regulations, in terms of which

the Issue is being made

BRLM or Book Running Lead

Manager

The book running lead managers to the Issue namely, ICICI Securities Limited, Edelwiss Financial

Services Limited, IIFL Holdings Limited and JM Financial Limited

Broker Centres Broker centres of the Registered Brokers notified by the Stock Exchanges where 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, www.bseindia.com and

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

CAN/Confirmation of Allocation

Note

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

have been allocated the Equity Shares, after the Anchor Investor Bid/Issue Period

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

will not be finalised and above which no Bids will be accepted, including any revision thereof

Client ID Client identification number of the Bidder’s beneficiary account maintained with one of the

Depositories in relation to the demat account

Collecting Depository Participant or

CDP

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 circular no.

CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI, as per the list available

on the websites of the Stock Exchanges, www.bseindia.com and www.nseindia.com, as updated from

time to time

Cut-off Price Issue Price, finalised by our Company, in consultation with the BRLMs which shall be any price

within the Price Band

Only Retail Individual Bidders Bidding under the Retail Portion and Eligible Employees Bidding

under the Employe Reservation Portion (subject to the Bid Amount being up to `200,000) are entitled

to Bid at the Cut-off Price. QIBs, Non-Institutional Bidders and Eligible Employees Bidding under

the Employe Reservation Portion (subject to the Bid Amount above `200,000) are not entitled to Bid

at the Cut-off Price

Demographic Details Details of the Bidders including the Bidder’s address, name of the Bidder’s father/husband, investor

status, occupation and bank account details

Designated CDP Locations Such locations of the CDPs where ASBA Bidders can submit the ASBA Forms

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

eligible to accept ASBA Forms are available on the respective websites of the Stock Exchanges

(www.bseindia.com and www.nseindia.com) and updated from time to time

Designated Date The date on which funds are transferred from the Escrow Account and the amounts blocked by the

SCSBs are transferred from the ASBA Accounts, as the case may be, to the Public Issue Account or

the Refund Account, as appropriate, after filing of the Prospectus with the RoC Designated Intermediaries Collectively, Syndicate, sub-syndicate members/agents, SCSBs, Registered Brokers, CDPs and

RTAs, who are authorized to collect ASBA Forms from the ASBA Bidders, in relation to the Issue

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

6

Term Description

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) and updated from time to time

Designated SCSB Branches Such branches of the SCSBs which shall collect the ASBA Forms, a list of which is available on the

website of SEBI at http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes 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 August 6, 2018, issued in accordance with the SEBI ICDR

Regulations, which does not contain complete particulars, including of the Issue Price and the size of

the Issue, including any addendum and corrigendum thereto

Edelweiss Edelweiss Financial Services Limited

Eligible Employees All or any of the following:

(a) a permanent and full time employee of our Company and our Subsidiaries (excluding such employees not eligible to invest in the Issue under applicable laws, rules, regulations and

guidelines) as of the date of filing of the Red Herring Prospectus with the RoC and who continues

to be an employee of our Company until the submission of the Bid cum Application Form, and

is based, working and present in India as on the date of submission of the Bid cum Application

Form; and

(b) a Director of our Company, whether a whole time Director, part time Director or otherwise, (excluding such Directors not eligible to invest in the Issue under applicable laws, rules,

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

with the RoC and who continues to be a Director of our Company until the submission of the Bid

cum Application Form and is based and present in India as on the date of submission of the Bid

cum Application Form.

An employee of our Company or our Subsidiaries, who is recruited against a regular vacancy but is

on probation as on the date of submission of the Bid cum Application Form will also be deemed a

‘permanent and a full time employee’.

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

not exceed `500,000 (net of Employee Discount). However, the initial Allotment to an Eligible

Employee in the Employee Reservation Portion shall not exceed `200,000 (net of Employee

Discount). Only in the event of an under-subscription in the Employee Reservation Portion, post the

initial allotment, such unsubscribed portion may be Allotted on a proportionate basis to Eligible

Employees Bidding in the Employee Reservation Portion, for a value in excess of `200,000 (net of

Employee Discount), subject to the total Allotment to an Eligible Employee not exceeding `500,000

(net of Employee Discount)

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

the Issue and in relation to whom the ASBA Form and the Red Herring Prospectus will constitute an

invitation to subscribe for or purchase the Equity Shares

Employee Discount Discount of `[●] per Equity Share to the Issue Price given to Eligible Employees Bidding in the

Employee Reservation Portion

Employee Reservation Portion The portion of the Issue being up to [●] Equity Shares aggregating to `90 million, available for

allocation to Eligible Employees, on a proportionate basis

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

transfer money through direct credit/NEFT/RTGS in respect of the Bid Amount when submitting an

Anchor Investor Application Form

Escrow Agreement The agreement to be entered into by our Company, the Registrar to the Issue, the BRLMs, the Escrow

Collection Bank(s) and the Refund Bank(s) for, inter alia, collection of the Bid Amounts from Anchor

Investors, transfer of funds to the Public Issue Account and where applicable, refunds of the amounts

collected from the Anchor Investors, on the terms and conditions thereof

First Bidder Bidder whose name appears first 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 Issue Price and

the Anchor Investor Issue Price will be finalised and below which no Bids will be accepted and which

shall not be less than the face value of the Equity Shares

General Information Document/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 updated pursuant to the circular (CIR/CFD/POLICYCELL/11/2015) dated November 10, 2015

and (SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016 notified by the SEBI and included

in “Issue Procedure” on page 514

IIFL IIFL Holdings Limited

I-Sec ICICI Securities Limited

Issue The initial public offering of up to [●] Equity Shares of face value of `10 each for cash at a price of

`[●] each, aggregating up to `9,090 million

The Issue comprises of the Net Issue and the Employee Reservation Portion

7

Term Description

Issue Agreement The agreement dated August 6, 2018 entered into amongst our Company and the BRLMs, pursuant to

which certain arrangements are agreed to in relation to the Issue

Issue Price The final price at which Equity Shares will be Allotted to Bidders other than Anchor Investors. Equity

Shares will be Allotted to Anchor Investors at the Anchor Investor Issue Price in terms of the Red

Herring Prospectus

The Issue Price will be determined by our Company, in consultation with the BRLMs in terms of the

RHP on the Pricing Date in accordance with the Book Building Process

Issue Proceeds The proceeds of this Issue that will be available to our Company

JM JM Financial Limited

Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor Investor Portion), or [] Equity Shares which shall be

available for allocation to Mutual Funds only on a proportionate basis, subject to valid Bids being

received at or above the Issue Price

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

Regulations, 1996

Net Issue The Issue less the Employee Reservation Portion

Net Proceeds Gross Proceeds less Issue expenses

For further information about use of the Issue Proceeds and the Issue expenses, see “Objects of the

Issue” on page 87

Non-Institutional Bidders/NIBs All Bidders including Category III FPIs that are not QIBs, 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 Net Issue being not less than 15% of the Net Issue consisting of [] 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 Issue Price

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

FVCIs

Price Band Price Band of the Floor Price and the Cap Price including any revisions thereof

The Price Band and the minimum Bid Lot size for the Issue will be decided by our Company, in

consultation with the BRLMs and will be advertised, at least five Working Days prior to the Bid/Issue

Opening Date, in all editions of [●], an English national newspaper, all editions of [●], a Hindi national

newspaper, and Kolkata edition of [●], a Bengali newspaper (Bengali being the regional language of

West Bengal, where our Registered and Corporate Office is located), each with wide circulation. It

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

Pricing Date The date on which our Company, in consultation with the BRLMs, will finalise the Issue Price

Prospectus The Prospectus of our Company to be filed with the RoC for this Issue after the Pricing Date, in

accordance with Section 26 of the Companies Act, 2013 and the SEBI ICDR Regulations, containing,

inter-alia, the Issue Price that is determined at the end of the Book Building Process, the size of the

Issue and certain other information including any addenda or corrigenda thereto

Public Issue Account Bank The bank with which the Public Issue Account(s) shall be opened and maintained, in this case being

[●]

Public Issue Account(s) Bank account(s) opened under Section 40(3) of the Companies Act, 2013 to receive monies from the

Escrow Account and ASBA Accounts on the Designated Date

QIB Category/QIB Portion The portion of the Issue (including the Anchor Investor Portion) being upto 50% of the Net Issue

consisting of [] Equity Shares which shall be allocated to QIBs (including Anchor Investors) as

determined by our Company in consultation with the BRLMs, subject to valid Bids being received at

or above the Issue Price

Qualified Institutional Buyers or

QIBs or QIB Bidders

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

Red Herring Prospectus or RHP The Red Herring Prospectus of our Company 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 issued and the size of the Issue including

any addenda or corrigenda thereto

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

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, from which refunds, if any, of the whole or part of the Bid

Amount to the Anchor Investors shall be made

Refund Bank(s) The Bankers to the Issue with whom the Refund Account(s) will be opened, in this case being [●]

Registered Brokers Stock brokers registered with SEBI and the Stock Exchanges having nationwide terminals, other than

the BRLMs and the Syndicate Members and eligible to procure Bids in terms of Circular No.

CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI

Registrar and Share Transfer Agents

or RTAs

Registrars to an issue and share transfer agents registered with SEBI and eligible to procure Bids at

the Designated RTA Locations in terms of circular no. CIR/CFD/POLICYCELL/11/2015 dated

November 10, 2015 issued by SEBI

Registrar to the Issue or Registrar Karvy Computershare Private Limited

8

Term Description

Retail Discount Discount of `[●] per Equity Share to the Issue Price given to Retail Individual Bidders Bidding in the

Retail Portion

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

have Bid for the Equity Shares for an amount not more than `200,000 in any of the bidding options in

the Net Issue (including HUFs applying through their Karta and Eligible NRIs and does not include

NRIs other than Eligible NRIs)

Retail Portion The portion of the Issue being not less than 35% of the Net Issue consisting of [] Equity Shares which

shall be available for allocation to Retail Individual Bidder(s) in accordance with the SEBI ICDR

Regulations which shall not be less than the Minimum Bid Lot, subject to valid Bids being received

at or above the Issue Price

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

their ASBA Form(s) or any previous Revision Form(s), as applicable

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/Issue Period and withdraw their Bids until Bid/Issue 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?doRecognised=yes and

updated from time to time and at such other websites as may be prescribed by SEBI from time to time

Specified Locations Bidding Centres where the Syndicate shall accept Bid cum Application Form, a list of which is

included in the Bid cum Application Form

Stock Exchanges Collectively, the NSE and the BSE

Syndicate Collectively, the BRLMs and the Syndicate Members

Syndicate Agreement Agreement dated [] to be entered into amongst the BRLMs, the Syndicate Members, our Company

in relation to collection of Bid cum Application Forms by the Syndicate

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

namely, [●]

Underwriters []

Underwriting Agreement The agreement among the Underwriters, our Company to be entered into on or after the Pricing Date,

but prior to the filing of the Prospectus

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/Issue Period, “Working Day” shall mean all days, excluding

all Saturdays, Sundays or a public holiday, on which commercial banks in Mumbai are open for

business; and with reference to the time period between the Bid/Issue Closing Date and the listing of

the Equity Shares on the Stock Exchanges, “Working Day” shall mean all trading days of Stock

Exchanges, excluding Sundays and bank holidays, as per the SEBI Circular

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

Technical/Industry Related Terms/Abbreviations

Term Description

Kwh Kilowatt hour

MTPA Million tonnes per annum

MVA Mega Volt Ampere

MW Mega watt

TMT Thermo mechanically treated

TPA Tonnes per annum

TPD Tonnes per day

TPH Tonne per heat

Conventional and General Terms or Abbreviations

Term Description

`/Rs./Rupees/INR Indian Rupees

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

Regulations

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

AS/Accounting Standards Accounting Standards issued by the ICAI

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

which shall include investors who are not eligible under Category I and II foreign portfolio investors

such as endowments, charitable societies, charitable trusts, foundations, corporate bodies, trusts,

9

Term Description

individuals and family offices

CDSL Central Depository Services (India) Limited

CIN Corporate Identity Number

Companies Act Companies Act, 1956 and/or the Companies Act, 2013, as applicable

Companies Act, 1956 Companies Act, 1956, and the rules thereunder (without reference to the provisions thereof that have

ceased to have effect upon the notification of the Notified Sections)

Companies Act, 2013 The Companies Act, 2013, and the rules and clarifications issued thereunder to the extent in force

pursuant to the notification of the Notified Sections Consolidated FDI Policy The Consolidated FDI Policy Circular 2017, issued by the Department of Industrial Policy and

Promotion, Ministry of Commerce and Industry, Government of India

Depositories NSDL and CDSL

Depositories Act Depositories Act, 1996

DIN Director Identification Number

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

India

DP ID Depository Participant’s Identification

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

EGM Extraordinary General Meeting

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

EPS Earnings Per Share

FCNR Foreign Currency Non-Resident

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act, 1999, and the rules and regulations thereunder

FEMA Regulations FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017

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

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

FVCI(s) Foreign venture capital investor(s) as defined and registered under the SEBI FVCI Regulations

GoI/Government Government of India

GST Goods and Services Tax

HUF Hindu Undivided Family

ICAI The Institute of Chartered Accountants of India

IFRS International Financial Reporting Standards as adopted by the International Accounting Standards

Board

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

Ind AS Indian Accounting Standards

India Republic of India

Indian GAAP Generally Accepted Accounting Principles in India

IPO Initial public offering

IST Indian Standard Time

LIBOR London Interbank Offered Rate

MCLR Marginal Cost of funds based Lending Rate

Mutual Fund(s) Mutual funds registered under the SEBI (Mutual Funds) Regulations, 1996

N.A./ NA Not Applicable

NAV Net Asset Value

NACH National Automated Clearing House

NEFT National Electronic Fund Transfer

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

Notified Sections The sections of the Companies Act, 2013 that have been notified by the Ministry of Corporate Affairs,

Government of India, and are currently in effect

NR Non-resident

NRE Account Non Resident External Account

NRI An individual resident outside India who is a citizen of India or is an ‘Overseas Citizen of India’

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

NRO Account Non Resident Ordinary Account

NSDL National Securities Depository Limited

NSE 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 Issue

OCI Other Comprehensive Income

p.a. Per annum

P/E Ratio Price/Earnings Ratio

PAN Permanent Account Number

PAT Profit After Tax

RBI The Reserve Bank of India

10

Term Description

Regulation S Regulation S under the Securities Act

RoNW Return on Net Worth

RTGS Real Time Gross Settlement

SCRA Securities Contracts (Regulation) Act, 1956

SCRR Securities Contracts (Regulation) Rules, 1957

SEBI The Securities and Exchange Board of India constituted under the SEBI Act

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,

2009

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

Regulations, 2015

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

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

SICA Sick Industrial Companies (Special Provisions) Act, 1985

STT Securities Transaction Tax

Systemically Important NBFCs Systemically important non-banking financial company registered with the RBI and having a net

worth of more than `5,000 million as per the last audited financial statements

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

Regulations, 2011

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

UK United Kingdom

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

USD/US$ United States Dollars

VAT Value Added Tax

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

SEBI AIF Regulations, as the case may be

The words and expressions used in this Draft Red Herring Prospectus but not defined herein shall have, to the extent applicable, the

same meaning as is assigned to such terms under the SEBI Act, SEBI ICDR Regulations, SEBI Listing Regulations, the Companies

Act, the SCRA, the Depositories Act and the rules and regulations made thereunder.

Notwithstanding the foregoing, terms not defined but used in “Statement of Tax Benefits”, “Financial Statements” “Industry

Overview”, “Regulations and Policies”, “Outstanding Litigation and Material Developments”, “Government Approvals”, “Issue

Procedure – Part B” and “Main Provisions of Articles of Association” on pages 105, 223, 108, 164, 482, 491, 523 and 556, respectively, shall have the meaning given to such terms in such sections.

11

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 and all references to the “US”, “USA” or

“United States” are to the United States of America, together with its territories and possessions.

Unless otherwise specified, any time mentioned in this Draft Red Herring Prospectus is in Indian Standard Time. Unless indicated

otherwise, all references to a year in this Draft Red Herring Prospectus are to a calendar year.

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 or the context otherwise requires, the financial data in this Draft Red Herring Prospectus is derived from

the Restated Standalone Financial Statements and the Restated Consolidated Financial Statements prepared in accordance with the

Companies Act, 2013, Ind AS, Indian GAAP, as applicable and restated in accordance with the SEBI ICDR Regulations.

Our Company’s financial year commences on April 1 and ends on March 31 of the next year. Accordingly, all references to a

particular financial year, unless stated otherwise, are to the 12 month period ended on March 31 of that year.

Our Restated Financial Statements have been prepared in accordance with Ind AS for Financial Years ended March 2018, 2017

and 2016, and Indian GAAP for Financial Years ended March 2015 and 2014. There are significant differences between Ind AS

and US GAAP and IFRS. Our Company does not provide reconciliation of its financial information 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 our Company's

financial data. For details in connection with risks involving differences between Ind AS, US GAAP and IFRS see “Risk Factors”

on page 14. Accordingly, the degree to which the financial information included in this Draft Red Herring Prospectus will provide

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

EBITDA presented in this Draft Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not

required by, or presented in accordance with, Ind AS, IFRS or US GAAP. Furthermore, EBITDA is not a measurement of our

financial performance or liquidity under Ind AS, 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 Ind AS, 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.

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

Discussion and Analysis of Financial Conditional and Results of Operations” on pages 14, 148 and 452 respectively, and elsewhere

in this Draft Red Herring Prospectus have been calculated on the basis of the Restated Financial Statements of our Company, on

standalone or consolidated basis, as the case may be, prepared in accordance with Ind AS for Financial Years ended March 2018,

2017 and 2016, and Indian GAAP for Financial Years ended March 2015 and 2014, and the Companies Act 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 the percentage figures have been rounded

off to two decimal places including percentage figures in “Risk Factors”, “Industry Overview” and “Our Business” on pages 14,

108 and 148 respectively.

Currency and Units of Presentation

All references to:

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

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

Our Company has presented all numerical information in this Draft Red Herring Prospectus in “million” units or in whole numbers

where the numbers have been too small to represent in millions. One million represents 1,000,000 and one billion represents

1,000,000,000.

12

Exchange Rates

This Draft Red Herring Prospectus contains conversion of certain other currency amounts into Indian Rupees that have been

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

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

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

USD (in Rupees per USD):

Currency As on March 31, 2018

(`)

As on March 31, 2017

(`)


(`)


(`)


(`)

1 USD 65.04 64.84 66.33 62.59 60.09 Source: RBI Reference Rate Note: 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, 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 14. Accordingly, investment decisions should not be based solely on such information.

Certain information in “Summary of Industry”, “Summary of our Business”, “Industry Overview” and “Our Business” on pages 38,

43, 108 and 148, respectively of this Draft Red Herring Prospectus has been obtained from the report titled “Market Assessment

and outlook across Steel Industry value chain” dated July 2018 prepared by CRISIL Limited which has issued the following

disclaimer:

“CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing this report (Report) based

on the Information obtained by CRISIL from sources which it considers reliable (Data). However, CRISIL does not guarantee the

accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results

obtained from the use of Data / Report. This Report is not a recommendation to invest / disinvest in any entity covered in the Report

and no part of this Report should be construed as an expert advice or investment advice or any form of investment banking within

the meaning of any law or regulation. CRISIL especially states that it has no liability whatsoever to the subscribers / users /

transmitters/ distributors of this Report. Without limiting the generality of the foregoing, nothing in the Report is to be construed as

CRISIL providing or intending to provide any services in jurisdictions where CRISIL does not have the necessary permission and/or

registration to carry out its business activities in this regard. Shyam Metalics and Energy Limited will be responsible for ensuring

compliances and consequences of non-complainces for use of the Report or part thereof outside India. CRISIL Research operates

independently of, and does not have access to information obtained by CRISIL’s Ratings Division / CRISIL Risk and Infrastructure

Solutions Ltd (CRIS), which may, in their regular operations, obtain information of a confidential nature. The views expressed in

this Report are that of CRISIL Research and not of CRISIL’s Ratings Division / CRIS. No part of this Report may be

published/reproduced in any form without CRISIL’s prior written approval.”

In accordance with the SEBI ICDR Regulations, “Basis for the Issue Price” on page 102 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 reader’s

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

methodologies in the industry in which the business of our Company is conducted, and methodologies and assumptions may vary

widely among different industry sources.

13

FORWARD-LOOKING STATEMENTS

This Draft Red Herring Prospectus contains certain “forward-looking statements”. All statements contained in this Draft Red

Herring Prospectus that are not statements of historical fact constitute “forward-looking statements”. All statements regarding our

expected financial condition and results of operations, business, plans and prospects are “forward-looking statements”. These

forward-looking statements generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”,

“estimate”, “intend”, “likely to”, “seek to”, “shall”, “objective”, “plan”, “project”, “will”, “will continue”, “will pursue” or other

words or phrases of similar import. Similarly, statements that describe our Company’s strategies, objectives, plans or goals are also

forward-looking statements. All forward-looking statements whether made by us or any third parties in this Draft Red Herring

Prospectus are based on our current plans, estimates, presumptions and expectations and 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, including but not limited to, regulatory changes pertaining to the industry in which our Company has businesses and our

ability to respond to them, our ability to successfully implement our strategy, our growth and expansion, technological changes, our

exposure to market risks, general economic and political conditions which have an impact on our business activities or investments,

the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates,

equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic laws,

regulations and taxes and changes in competition in its industry. Important factors that could cause actual results to differ materially

from our Company’s expectations include, but are not limited to, the following:

Loss of any of our suppliers or a failure by our suppliers to deliver some of our primary raw materials;

Dependance on stable and reliable logistics and transportation infrastructure;

Volatility in the demand and pricing in the steel industry and the cyclical nature of the industries it serves;

Volatility in the prices of raw materials and energy;

Unexpected loss, shutdown or slowdown of operations at any of our facilities;

Our inability to successfully implement our expansion programmes;

Our inability to expand or effectively manage our distributors or brokers, or any disruptions in our distribution network; and

Developments in the competitive environment in the steel industry, such as consolidation among our competitors.

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

Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 14, 148 and

452, respectively. By their nature, certain market risk disclosures are only estimates and could be materially different from what

actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated

and are not a guarantee of future performance.

These statements are based on our management’s belief and assumptions, which in turn are based on currently available information.

Although we believe the assumptions upon which these forward looking statements are based on are reasonable, any of these

assumptions could prove to be inaccurate and the forward looking statements based on these assumptions could be incorrect. 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. Neither our Company, our Directors, 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 shall ensure that investors in India are informed of material developments from the date of the Draft

Red Herring Prospectus in relation to the statements and undertakings made by them in this Draft Red Herring Prospectus until the

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

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

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

14

SECTION II: RISK FACTORS

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

Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in our Equity Shares.

The risks described below are not the only ones relevant to us or our Equity Shares, but also to the industry in which we operate or

to India. Additional risks and uncertainties, not currently known to us or that we currently do not deem material may also adversely

affect our business, results of operations, cash flows and financial condition. If any of the following risks, or other risks that are not

currently known or are not currently deemed material, actually occur, our business, results of operations, cash flows and financial

condition could be adversely affected, the price of our Equity Shares could decline, and investors may lose all or part of their

investment. In order to obtain a complete understanding of our Company and our business, prospective investors should read this

section in conjunction with “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of

Operations” on pages 148 and 452, respectively, as well as the other financial and statistical information contained in this Draft

Red Herring Prospectus. In making an investment decision, prospective investors must rely on their own examination of us and our

business and the terms of the Issue including the merits and risks involved. Potential investors should consult their tax, financial

and legal advisors about the particular consequences of investing in the Issue. Unless specified or quantified in the relevant risk

factors below, we are unable to quantify the financial or other impact of any of the risks described in this section. Potential investors

should pay particular attention to the fact that our Company is incorporated under the laws of India and is subject to legal and

regulatory environment which may differ in certain respects from that of other countries.

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

uncertainties. Our actual results could differ from those anticipated in these forward-looking statements as a result of certain factors,

including the considerations described below and elsewhere in this Draft Red Herring Prospectus. See “Forward-Looking

Statements” on page 13.

In this section, any reference to the “Company” refers to Shyam Metalics and Energy Limited on an unconsolidated basis. In this

section, any reference to “we”, “us” or “our” refers to Shyam Metalics and Energy Limited and its Subsidiaries and Associates on

a consolidated basis. Unless the context requires otherwise, all financial information included herein is based on our Restated

Consolidated Financial Statements included in “Financial Statements” beginning on page 223.

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

information as well as industry publications, other sources and the report titled “Market Assessment and outlook across Steel

Industry value chain” dated July 2018 issued by CRISIL Limited (the “CRISIL Report”). Unless otherwise indicated, all financial,

operational, industry and other related information derived from the CRISIL Report and included herein with respect to any

particular year refers to such information for the relevant calendar year.

Risks relating to our Business

1. Loss of any of our suppliers or a failure by our suppliers to deliver some of our primary raw materials such as iron ore, iron ore fines, coal, chrome ore and manganese ore may have an adverse impact on our ability to continue our

manufacturing process without interruption and our ability to manufacture and deliver the products to our customers

without any delay.

We procure some of our primary raw materials such as (i) iron ore, iron ore fines and manganese ore on a purchase order

basis; (ii) coal (with the exception of the fuel supply agreements we have entered into); and (iii) chrome ore (with the

exception of the supply agreements we have entered into) on a purchase order basis, auction through government approved

auctioneers and imports and have not entered into long term contracts for the supply of such raw materials. Accordingly, we

may encounter situations where we might be unable to manufacture and deliver our products due to, amongst other reasons,

our inability to predict the increased demand for our products. Additionally, our inability to predict the market conditions

may result in us placing supply orders for inadequate quantities of such raw materials. Further, any delay/failure to deliver

or delivery of wrong or sub-standard raw materials by our suppliers may have a material and adverse effect on our business,

results of operations and financial condition.

If any of our major suppliers ceases to have business dealings with us or materially reduces the quantity of raw materials

supplied to us and we are unable to secure new suppliers for such raw materials to meet the requirements at our manufacturing

plants, our production schedule may be delayed and our business, financial condition, results of operations and prospects

will be adversely affected.

2. We are required to pay liquidated damages to some of our suppliers of coal and chrome ore in the event we do not lift a specified percentage of the annual contracted capacity

Our manufacturing plants primarily acquire coal from Mahanadi Coalfields Limited and Central Coalfields Limited pursuant

to various fuel supply agreements. Under the fuel supply agreements, we are obligated to lift between 60% - 75% of the

annual contracted capacity failing which we are required to pay compensation or liquidated damages to Mahanadi Coalfields

Limited and Central Coalfields Limited (as the case maybe). Our Company has also entered into a sale agreement for chrome

ore with Odisha Mining Corporation Limited for the Sambalpur manufacturing plant wherein we are obligated to atleast 90%

15

of the annual contracted capacity of the chrome ore, failing which we are required to pay damages equivalent to 5% of the

entire sale value of the allotted quantity. We have, in the past, faced instances where we were required to pay liquidated

damages to for non-compliances with such obligations. For example, in Fiscal 2018, liquidated damages aggregating to `5.46

million have been levied on our Company. Any payment of liquidated damages may have an effect on our business, results

of operations and financial condition.

3. Our Chairman and individual Promoter, Mahabir Prasad Agarwal, Vice Chairman and Managing Director and individual Promoter, Brij Bhushan Agarwal, Joint Managing Director and individual Promoter, Sanjay Kumar Agarwal,

whole-time Directors, Bhagwan Shaw and Dev Kumar Tiwari, and Independent Director, Venkata Krishna Nageswara

Rao Majji, are party to certain criminal proceedings.

Our Chairman and individual Promoter, Mahabir Prasad Agarwal, Vice Chairman and Managing Director and individual

Promoter, Brij Bhushan Agarwal, Joint Managing Director and our individual Promoter, Sanjay Kumar Agarwal, whole-

time Directors, Bhagwan Shaw and Dev Kumar Tiwari, and Independent Director, Venkata Krishna Nageswara Rao Majji,

are party to certain criminal proceedings. Further, our whole-time Director, Bhagwan Shaw, has been granted bail in all the

matters pending against him. For further details, see “Outstanding Litigation and Material Developments” on page 482. Any

conviction, penalties or other action against our Chairman and individual Promoter, Vice Chairman and Managing Director

and individual Promoter, Joint Managing Director and individual Promoter, whole-time Directors or Independent Director

for the offences alleged by the complainants may potentially cause negative publicity thereby affecting our reputation,

business, prospects, and financial condition.

4. Our success depends on stable and reliable logistics and transportation infrastructure. Disruption of logistics and transportation services could impair the ability of our suppliers to deliver raw materials or our ability to deliver products

to our customers which may adversely affect our operations.

Our Sambalpur and Jamuria manufacturing plants have captive railways sidings and we depend primarily on railways to

transport the raw materials for such manufacturing units. W

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