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THE TATA POWER COMPANY LIMITED (The Tata Power Company Limited (the “Issuer”), incorporated in India with limited liability on September 18, 1919 under the Companies Act, 1913)

Registered Office: Bombay House, 24 Homi Mody Street, Mumbai 400 001, India

Compliance Person: Mr. B.J. Shroff, Company Secretary Email of Compliance Person: [email protected]

Telephone: +91 22 6665 8282; Fax: +91 22 6665 8885;

Website: www.tatapower.com

ISSUE BY WAY OF PRIVATE PLACEMENT BY THE ISSUER OF UNSECURED, SUBORDINATED, PERPETUAL, LISTED, RATED SECURITIES

IN THE FORM OF NON-CONVERTIBLE DEBENTURES (THE “DEBENTURES”) OF A FACE VALUE OF RS. 10, 00,000 EACH FOR CASH AT

PAR WITH MARKETABLE LOT OF 1 DEBENTURE AGGREGATING UP TO RS. 1,500 CRORES (THE “ISSUE”).

GENERAL RISKS

Investment in debt and debt related securities involves a degree of risk and Investors should not invest any funds in the debt instruments, unless they can afford to

take the risks attached to such investments. For taking an investment decision, potential Investors must rely on their own examination of the Issuer and the Issue

including the risks involved. The Debentures have not been recommended or approved by the Securities and Exchange Board of India (―SEBI‖) nor does SEBI

guarantee the accuracy or adequacy of this document. Special attention of investors is invited to the statement of Risk Factors in this Information Memorandum.

ISSUER’S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Information Memorandum contains all information with regard to

the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Information Memorandum is true and correct in all

material respects 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 Information Memorandum as a whole or any of such information or the expression of any such opinions or intentions misleading

in any material respect.

CREDIT RATING

Credit Analysis and Research Limited (―CARE‖) has vide its dated May 27, 2011 assigned a rating of CARE AA to the Debentures proposed to be issued by the

Issuer pursuant to this Information Memorandum. This rating of the Debentures by CARE indicates high safety for timely servicing of debt obligations.CRISIL

Limited (―CRISIL‖) has vide its letter no. NJ/CR/TPCL/2011/CH1113 dated May 30, 2011 assigned a rating of AA to the Debentures proposed to be issued by the

Issuer pursuant to this Information Memorandum. This rating of the Debentures by CRISIL indicates high level of safety.

The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or

withdrawal at any time by the assigning rating agency and should be evaluated independently of any other ratings. Please refer to the Annexure to this Information

Memorandum for rationale for the above ratings.

LISTING

The Debentures offered through this Information Memorandum are proposed to be listed on the Wholesale Debt Market (―WDM‖) Segment of the National Stock

Exchange of India Limited (―NSE‖). The Issuer shall comply with the requirements of the listing agreement to the extent applicable to it on a continuous basis.

Application for ‗in-principle‘ listing approval was made to NSE through letter dated May 30, 2011. NSE has given their ‗in-principle‘ listing approval for the

Debentures through the letter dated May 31, 2011.

ISSUE PROGRAMME

ISSUE OPENING DATE ISSUE CLOSING DATE PAY-IN DATE

June 1, 2011 June 1, 2011 June 1, 2011

The Issue shall be subject to the provisions of the Companies Act, 1956, the Memorandum and Articles of Association of the Issuer, the terms and conditions of this

Information Memorandum filed with the NSE, the Application Form, and other terms and conditions as may be incorporated in the Debenture Trust Deed and other

documents in relation to the Issue.

JOINT LEAD ARRANGERS DEBENTURE TRUSTEE REGISTRAR TO THE ISSUE

Standard Chartered Bank

90, Mahatma Gandhi Road

Fort, Mumbai 400 001, India

Tel No: 91 22 22670224

Fax No: +91 22 22651255

Email: [email protected]

Contact Person : Mr. Kaustubh

Kulkarni

Yes Bank Limited

Debt Capital Markets

Nehru Centre, 10th Floor, Discovery of

India, Dr. A.B. Road, Worli, Mumbai 400

018, India

Tel. No. +91 22 6669 9191

Fax No. +91 22 6669 9018


Contact Person: Mr. Sushil Budhia

IDBI Trusteeship Services Limited

Asian Building, Ground Floor, 17, R.

Kamani Marg, Ballard Estate, Mumbai

400 001, India

Tel No.: +91 22 4080 7000

Fax No.: +91 22 6631 1776


Contact Person: Mr. Ajit Guruji, Vice

President

TSR Darashaw

6-10, Haji Moosa Patrawala

Industrial Estate

20, Dr. E. Moses Road, Mahalaxmi

Mumbai 400 011

Tel No. +91 22 6656 8484

Fax No:+ 91 22 66568494


Contact Person : Ms. Vidya

Brahme, Manager

http://www.tatapower.com/

mailto:[email protected]



TABLE OF CONTENTS

DISCLAIMERS .................................................................................................................................................... 1

DEFINITIONS AND ABBREVIATIONS .......................................................................................................... 5

FORWARD LOOKING STATEMENTS ........................................................................................................ 10

RISK FACTORS ................................................................................................................................................ 11

HISTORY AND BUSINESS OF THE ISSUER ............................................................................................... 29

SUMMARY TERM SHEET .............................................................................................................................. 40

OBJECTS OF THE ISSUE................................................................................................................................ 45

REGULATORY DISCLOSURES..................................................................................................................... 46

ISSUE PROCEDURE ........................................................................................................................................ 53

UNDERTAKINGS BY THE ISSUER .............................................................................................................. 61

DECLARATION ................................................................................................................................................ 62

ANNEXURE A .................................................................................................................................................... 63

ANNEXURE B .................................................................................................................................................... 66

ANNEXURE C .................................................................................................................................................... 71

ANNEXURE D .................................................................................................................................................... 73

ANNEXURE E .................................................................................................................................................... 74

Private & Confidential – For Private Circulation Only

(This Information Memorandum is neither a Prospectus

nor a Statement in Lieu of Prospectus)

Dated: June 1, 2011

Information Memorandum

1

DISCLAIMERS

ISSUER’S DISCLAIMER

This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus under the

Companies Act, 1956 (the ―Companies Act‖). The Issue of Debentures to be listed on the WDM segment of the

NSE is being made strictly on a private placement basis. This Information Memorandum is not intended to be

circulated to more than 49 (forty-nine) Eligible Investors. Multiple copies hereof given to the same entity shall

be deemed to be given to the same person and shall be treated as such. It does not constitute and shall not be

deemed to constitute an offer or an invitation to subscribe to the Debentures to the public of India in general.

This Information Memorandum should not be construed to be a prospectus or a statement in lieu of prospectus

under the Companies Act. Apart from this Information Memorandum, no offer document or prospectus has been

prepared in connection with the offering of this Issue or in relation to the Issuer nor is such a prospectus

required to be registered under applicable laws.

This Information Memorandum has been prepared in conformity with the SEBI (Issue and Listing of Debt

Securities) Regulations, 2008. Therefore, as per the applicable provisions, copy of this Information

Memorandum has not been filed or submitted to SEBI for its review and/or approval. Further, since the Issue is

being strictly made on a private placement basis only, the provisions of Section 60 of the Companies Act shall

not be applicable and accordingly, a copy of this Information Memorandum has not been filed with the ROC or

the SEBI.

This Information Memorandum has been prepared to provide general information about the Issuer to potential

Investors to whom it is addressed and who are willing and eligible to subscribe to the Debentures. This

Information Memorandum does not purport to contain all the information that any potential Investor may

require. Neither this Information Memorandum nor any other information supplied in connection with the

Debentures is intended to provide the basis of any credit or other evaluation and any recipient of this

Information Memorandum should not consider such receipt a recommendation to purchase any Debentures.

Each Investor contemplating purchasing any Debentures should make its own independent investigation of the

financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer as well as

the structure of the Issue. Potential Investors should consult their own financial, legal, tax and other professional

advisors as to the risks and investment considerations arising from an investment in the Debentures and should

possess the appropriate resources to analyze such investment and the suitability of such investment to such

Investor‘s particular circumstances. It is the responsibility of potential investors to also ensure that they will sell

these Debentures in strict accordance with this Information Memorandum and other applicable laws, so that the

sale does not constitute an offer to the public, within the meaning of the Companies Act, 1956. Neither the

intermediary nor their agents nor advisors associated with this Issue undertake to review the financial condition

nor affairs of the Issuer during the life of the arrangements contemplated by this Information Memorandum or

have any responsibility to advise any investor or potential investor in the Debentures of any information coming

to the attention of any other intermediary.

The Issuer confirms that, as of the date hereof, this Information Memorandum (including the documents

incorporated by reference herein, if any) contains all information that is material in the context of the Issue and

issue of the Debentures, is accurate in all material respects and does not contain any untrue statement of a

material fact or omit to state any material fact necessary to make the statements herein, in the light of the

circumstances under which they are made, and are not misleading. No person has been authorized to give any

information or to make any representation not contained or incorporated by reference in this Information

Memorandum or in any material made available by the Issuer to any potential Investor pursuant hereto and, if

given or made, such information or representation must not be relied upon as having been authorized by the

Issuer. The legal advisors to the Issuer and any other intermediaries and their agents or advisors associated with

this Issue have not separately verified the information contained herein. Accordingly, no representation,

warranty or undertaking, express or implied, is made and no responsibility is accepted by any such intermediary

as to the accuracy or completeness of the information contained in this Information Memorandum or any other

information provided by the Issuer. Accordingly, the legal advisors to the Issuer and other intermediaries

associated with this Issue shall have no liability in relation to the information contained in this Information

Memorandum or any other information provided by the Issuer in connection with the Issue.

The Issuer does not undertake to update the Information Memorandum to reflect subsequent events after the

date of the Information Memorandum and thus it should not be relied upon with respect to such subsequent




Dated: June 1, 2011


2

events without first confirming its accuracy with the Issuer.

Neither the delivery of this Information Memorandum nor any issue of Debentures made hereunder shall, under

any circumstances, constitute a representation or create any implication that there has been no change in the

affairs of the Issuer since the date hereof.

This Information Memorandum and the contents hereof are restricted only for the intended recipient(s)

who have been addressed directly and specifically through a communication by the Issuer and/or the

Joint Lead Arrangers and only such recipients are eligible to apply for the Debentures. All Investors are

required to comply with the relevant regulations/guidelines applicable to them for investing in this Issue.

The contents of this Information Memorandum are intended to be used only by those potential Investors

to whom it is distributed. It is not intended for distribution to any other person and should not be

reproduced by the recipient.

Each copy of this Information Memorandum is serially numbered and the person, to whom a copy of the

Information Memorandum is sent, is alone entitled to apply for the Debentures. No invitation is being made to

any persons other than those to whom application forms along with this Information Memorandum being issued

have been sent. Any application by a person to whom the Information Memorandum has not been sent by the

Issuer shall be rejected without assigning any reason.

Invitations, offers and sales of the Debentures shall only be made pursuant to this Information Memorandum.

You may not be and are not authorized to (1) deliver this Information Memorandum to any other person; or (2)

reproduce this Information Memorandum in any manner whatsoever. Any distribution or reproduction of this

Information Memorandum in whole or in part or any public announcement or any announcement to third parties

regarding the contents of this Information Memorandum is unauthorized. Failure to comply with this instruction

may result in a violation of the SEBI Debt Regulations or other applicable laws of India and other jurisdictions.

This Information Memorandum has been prepared by the Issuer for providing information in connection with

the proposed Issue described in this Information Memorandum.

Each person receiving this Information Memorandum acknowledges that such person has been afforded an

opportunity to request and to review and has received all additional information considered by it to be necessary

to verify the accuracy of or to supplement the information herein and such person has not relied on any

intermediary associated with this Issue in connection with its investigation of the accuracy of such information

or its investment decision.

The Issuer does not undertake to update the Information Memorandum to reflect subsequent events after the

date of the Information Memorandum and thus it should not be relied upon with respect to such subsequent

events without first confirming its accuracy with the Issuer.

Neither the delivery of this Information Memorandum nor any sale of Debentures made hereunder shall, under

any circumstances, constitute a representation or create any implication that there has been no change in the

affairs of the Issuer since the date hereof.

The Issue is a domestic issue restricted to India and no steps have been taken or will be taken to facilitate the

Issue in any jurisdictions other than India. This Information Memorandum is not intended for distribution to, or

use by, any person or entity in any jurisdiction or country where distribution or use of such information would

be contrary to law or regulation. This Information Memorandum does not constitute, nor may it be used for or in

connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not

authorized or to any person to whom it is unlawful to make such an offer or solicitation. No action is being

taken to permit an offering of the Debentures or the distribution of this Information Memorandum in any

jurisdiction where such action is required. Persons into whose possession this Information Memorandum comes

are required to inform themselves about and to observe any such restrictions. The Information Memorandum is

made available to Investors in the Issue on the strict understanding that it is confidential and may not be

transmitted to others, whether in electronic form or otherwise.

DISCLAIMER IN RESPECT OF JURISDICTION

This Issue is made in India to investors as specified under ―Eligible Investors‖ of this Information

Memorandum, who shall be specifically approached by the Issuer. This Information Memorandum does not

constitute an offer to sell or an invitation to subscribe to Debentures offered hereby to any person to whom it is




Dated: June 1, 2011


3

not specifically addressed. Any disputes arising out of this Issue will be subject to the jurisdiction of the courts

of Mumbai. This Issue is made in India to persons resident in India. This Information Memorandum does not

constitute an offer to sell or an invitation to subscribe to the Debentures herein, in any other jurisdiction and to

any person to whom it is unlawful to make an offer or invitation in such jurisdiction.

DISCLAIMER CLAUSE OF THE NSE

As required, a copy of this Information Memorandum has been filed with the NSE in terms of the SEBI Debt

Regulations for hosting the same on its website.

It is to be distinctly understood that submission of this Information Memorandum to the NSE or hosting the

same on its website should not in any way be deemed or construed to mean that this Information Memorandum

has been reviewed, cleared or approved by the NSE, nor does the NSE in any manner warrant, certify or endorse

the correctness or completeness of any of the contents of this Information Memorandum, nor does the NSE

warrant that the Issuer‘s Debentures will be listed or will continue to be listed on the NSE, nor does the NSE

take any responsibility for the soundness of the financial and other conditions of the Issuer, its promoters, its

management or any scheme or project of the Issuer. Every person who desires to apply for or otherwise acquire

any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not

have any claim against the NSE whatsoever by reason of any loss which may be suffered by such person

consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or

omitted to be stated herein or any other reason whatsoever.

DISCLAIMER CLAUSE OF THE JOINT LEAD ARRANGERS

The Issuer has authorized Standard Chartered Bank (―SCB‖) and Yes Bank Limited (―YBL‖) to distribute this

Information Memorandum in connection with the Issue and the Debentures proposed to be issued in the Issue.

―SCB‖ means Standard Chartered and any group, subsidiary, associate or affiliate of Standard Chartered and

their respective directors, representatives or employees and/or any persons connected with them.

―YBL‖ means Yes Bank and any group, subsidiary, associate or affiliate of Yes Bank and their respective

directors, representatives or employees and/or any persons connected with them.

Nothing in this Information Memorandum constitutes an offer of securities for sale in the United States or any

other jurisdiction where such offer or placement would be in violation of any law, rule or regulation.

The Issuer has prepared this Information Memorandum and the Issuer is solely responsible for its contents. The

Issuer will comply with all laws, rules and regulations and has obtained all regulatory, governmental and

corporate approvals for the issuance of the Debentures. All the information contained in this Information

Memorandum has been provided by the Issuer or is from publicly available information, and such information

has not been independently verified by the Joint Lead Arrangers. No representation or warranty, expressed or

implied, is or will be made, and no responsibility or liability is or will be accepted, by the Joint Lead Arrangers

or its affiliates for the accuracy, completeness, reliability, correctness or fairness of this Information

Memorandum or any of the information or opinions contained therein, and the Joint Arrangers hereby expressly

disclaim, to the fullest extent permitted by law, any responsibility for the contents of this Information

memorandum and any liability, whether arising in tort or contract or otherwise, relating to or resulting from this

Information Memorandum or any information or errors contained therein or any omissions therefrom. Each

person, by accepting this Information Memorandum, agrees that the Joint Lead Arrangers will not have any such

liability.

Each person in possession of this Information Memorandum should carefully read and retain this Information

Memorandum. However, each such person in possession of this Information Memorandum are not to construe

the contents of this Information Memorandum as investment, legal, accounting, regulatory or tax advice, and

such persons in possession of this Information Memorandum should consult with their own advisors as to all

legal, accounting, regulatory, tax, financial and related matters concerning an investment in the Debentures.

FORCE MAJEURE

The Issuer reserves the right to withdraw the offer prior to the earliest closing date in the event of any




Dated: June 1, 2011


4

unforeseen development adversely affecting the economic and regulatory environment or otherwise. In such an

event, the Issuer will refund the application money along with the interest payable on such application money

without giving any reason.

CONFIDENTIALITY

The information and data contained herein is submitted to each recipient of this Information Memorandum on a

strictly private and confidential basis. By accepting a copy of this information memorandum, each recipient

agrees that neither it nor any of its employees or advisors will use the information contained herein for any

purpose other than evaluating the specific transactions described herein or will divulge to any other party any

such information. This Information Memorandum must not be photocopied, reproduced, extracted or distributed

in full or in part to any person other than the recipient without the prior written consent of the Issuer.

CAUTIONARY NOTE

The Investors have agreed that they, (i) are knowledgeable and experienced in financial and business matters,

have expertise in assessing credit, market and all other relevant risk and are capable of evaluating, and have

evaluated, independently the merits, risks and suitability of purchasing the Debentures; (ii) understand that the

Issuer has not provided, and will not provide, any material or other information regarding the Debentures,

except as included in the Information Memorandum, (iii) have not requested the Issuer to provide it with any

such material or other information, (iv) have not relied on any investigation that any person acting on their

behalf may have conducted with respect to the Debentures, (v) have made their own investment decision

regarding the Debentures based on their own knowledge (and information they have or which is publicly

available) with respect to the Debentures or the Issuer (vi) have had access to such information as deemed

necessary or appropriate in connection with purchase of the Debentures, (vii) are not relying upon, and have not

relied upon, any statement, representation or warranty made by any person, including, without limitation, the

Issuer, and (viii) understand that, by purchase or holding of the Debentures, they are assuming and are capable

of bearing the risk of loss that may occur with respect to the Debentures, including the possibility that they may

lose all or a substantial portion of their investment in the Debentures, and they will not look to the Joint Lead

Arrangers for all or part of any such loss or losses that they may suffer.

Neither this Information Memorandum nor any other information supplied in connection with the Issue of

Debentures is intended to provide the basis of any credit or other evaluation and any recipient of this

Information Memorandum should not consider such receipt as a recommendation to purchase any Debentures.

Each Investor contemplating purchasing any Debentures should make its own independent investigation of the

financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer. Potential

Investors should consult their own financial, legal, tax and other professional advisors as to the risks and

investment considerations arising from an investment in the Debentures and should possess the appropriate

resources to analyze such investment and the suitability of such investment to such Investor‘s particular

circumstances. This Information Memorandum is made available to potential Investors on the strict

understanding that it is confidential. Recipients shall not be entitled to use any of the information otherwise than

for the purpose of deciding whether or not to invest in the Debentures.

No person, including any employee of the Issuer, has been authorised to give any information or to make any

representation not contained in this Information Memorandum. Any information or representation not contained

herein must not be relied upon as having being authorised by or on behalf of the Issuer. Neither the delivery of

this Information Memorandum at any time nor any statement made in connection with the offering of the

Debentures shall under the circumstances imply that any information/ representation contained herein is correct

at any time subsequent to the date of this Information Memorandum. The distribution of this Information

Memorandum or the Application Forms and the offer, sale, pledge or disposal of the Debentures may be

restricted by law in certain jurisdictions. This Information Memorandum does not constitute an offer to sell or

an invitation to subscribe to the Debentures in any other jurisdiction and to any person to whom it is unlawful to

make such offer or invitation in such jurisdiction. Persons into whose possession this Information Memorandum

comes are required by the Issuer to inform themselves about and observe any such restrictions. The sale or

transfer of these Debentures outside India may require regulatory approvals in India, including without

limitation, the approval of the RBI.




Dated: June 1, 2011


5

DEFINITIONS AND ABBREVIATIONS

Unless the context otherwise indicates or requires, the following terms shall have the meanings given below in

this Information Memorandum.

General Terms

Term Description

Issuer/Tata Power The Tata Power Company Limited, incorporated in India with limited liability on

September 18, 1919 under the Companies Act, 1913 and having its Registered Office

at Bombay House, 24 Homi Mody Street, Mumbai 400 001, India

―we‖, ―us‖, ―our‖ Unless the context otherwise requires, the Issuer.

Issuer Related Terms

Term Description

ATE Appellate Tribunal for Electricity

Andhra Valley The Andhra Valley Power Supply Company Limited

Articles of Association The articles of association of the Issuer as amended from time to time

Arutmin PT Arutmin

BEST Brihanmumbai Electric Supply and Transport Undertaking

Bhira Bhira Investment Limited

Bhivpuri Bhivpuri Investments Limited

Board of Directors/

Board

The board of directors of the Issuer or a duly constituted committee thereof

Board Resolution Resolution of the Board of Directors dated May 19, 2011 authorizing the issue of the

Debentures

Bumi PT Bumi Resources TBK

CCoW Coal Contracts of Work

CERC Central Electricity Regulatory Commission

CGPL Coastal Gujarat Power Limited

Coal Companies Indonesian coal mining operations: KPC, Arutmin, Indocoal, PT Indo Kalsel and PT

Indo Kaltim

Committee Committee for issuing guarantees for hybrid capital instruments to be issued by

foreign subsidiaries, a committee of the Board of Directors duly authorized by the

Board Resolution to finalize the terms and conditions of the Issue

Director(s) Director(s) on the Board, as appointed from time to time

Doosan Doosan Heavy Industries & Construction Company Limited

IEL Industrial Energy Limited

Indocoal Indocoal Resources (Cayman) Limited

Jojobera The Issuer‘s thermal power plant in Jamshedpur, Jharkhand

KPC PT Kaltim Prima Coal




Dated: June 1, 2011


6

Term Description

KPTCL Karnataka Power Transmission Corporation Limited

LIBOR London Interbank Offered Rate

MERC Maharashtra Electricity Regulatory Commission

MTPA Million tonnes p.a.

MU Million Units

MVA MegaVolt Ampere

MW Megawatts

Memorandum of

Association

The memorandum of association of the Issuer as amended from time to time

Merchant Capacity The power to be bought and sold in open market through contracts and exchanges

Mumbai License Area The area in which the Issuer is licensed to supply and distribute electricity in Mumbai

Mundra UMPP 4,000 MW Ultra Mega Power Project located near Tundawanda village in Mundra

Taluka, Kutch district of Gujarat being developed by CGPL

NACAS National Advisory Committee on Accounting Standards

NDPL North Delhi Power Limited

New Mining Law new law on mineral and coal mining passed by the Indonesian government on January

12, 2009

Olympus Capital Olympus Capital Holdings Asia, Crystal Aquamarine BV and Cedrim Holding BV

PPA Power purchase agreement

Registered Office Bombay House, 24 Homi Mody Street, Mumbai 400 001, India

SEB State Electricity Board

SED Strategic Electronics Division of the Issuer

SERC State Electricity Regulatory Commission

Tata Electric

Companies

The Issuer, Tata Hydro and Andhra Valley

Tata Group The group of companies under the Tata brand

Tata Hydro The Tata Hydro-Electric Power Supply Co. Limited

Tata Power Group Tata Power, and its subsidiaries being NELCO Limited, Chemical Terminal Trombay

Limited, Af-taab Investment Company Limited, Tata Power Trading Company

Limited, Tatanet Services Limited, Maithon Power Limited, Powerlinks Transmission

Limited, Coastal Gujarat Power Limited, Industrial Energy Limited, Bhivpuri

Investments Limited, Bhira Investments Limited, Khopoli Investments Limited,

Veltina Holdings Limited, Industrial Power Infrastructure Limited, Industrial Power

Utility Limited, North Delhi Power Limited, Trust Energy Resources Pte. Limited and

Energy Eastern Pte. Limited, Vantech Investment Limited, PT Itamaraya Tbk, Tata

Power Green Energy Limited, Dugar Hydro Power Limited; and its joint venture

companies being PT Indo Coal Resources (Cayman) Limited, PT Arutmin, PT

Indocoal Kaltim Resources, PT Indocoal Kalsel Resources, PT Kaltim Prima Coal,

Tubed Coal Mines Limited, Mandakini Coal Company Limited, Tata BP Solar India

Limited and Dagachhu Hydro Power Corporation Limited, (each of these subsidiaries

and joint venture companies a ―Group Company‖)




Dated: June 1, 2011


7

Term Description

Tata Sons Tata Sons Limited

Tata Steel Tata Steel Limited

Tata Power Trading Tata Power Trading Company Limited

UMPP Ultra Mega Power Project

Issue Related Terms

Term Description

Allot/ Allotment/

Allotted

Unless the context otherwise requires or implies, the allotment of the Debentures

pursuant to the Issue

Application Form The form in which an Investor can apply for subscription to the Debentures as

attached in Annexure A

Beneficial Owner(s) Holder(s) of the Debentures in dematerialized form as defined under section 2 of the

Depositories Act, 1996

CARE Credit Analysis and Research Limited

CRISIL CRISIL Limited

Consolidated

Debenture Certificate

has the meaning set forth in the Section titled ―Issue Procedure‖.

DRR Debenture Redemption Reserve required under Section 117C of the Companies Act

Debt Listing

Agreement

Simplified debt listing agreement entered into with NSE for the listing of the

Debentures on the NSE, as amended from time to time

Debentures Unsecured, subordinated, perpetual, rated, listed securities in the form of non-

convertible debentures having face value of Rs. 10,00,000/- each for cash at par with

marketable lot of 1 debenture aggregating up to Rs. 1,500 Crores.

Debentureholder(s) Persons who are for the time being holders of the Debentures and whose names are

most recently entered into the Register of Debentureholders and shall include the

Beneficial Owners

Debenture

Trustee/Trustee

Trustee for the Debentureholders, in this case being IDBI Trusteeship Services

Limited

Debenture Trust Deed Means the trust deed to be entered into between the Debenture Trustee and the Issuer

in relation to the Issue

Debenture Trustee

Regulations

Securities and Exchange Board of India (Debenture Trustee) Regulations, 1993, as

amended

Deemed Date of

Allotment

June 2, 2011

Depository A depository registered with the SEBI under the Securities and Exchange Board of

India (Depositories and Participant) Regulations, 1996, as amended from time to time,

in this case being NSDL and CDSL

Eligible Investors The following categories of investors together constitute ―Eligible Investors‖:

Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus

nor a Statement in Lieu of Prospectus) Dated: June 1, 2011


8

Term Description

Companies and bodies corporate including but not limited to NBFCs;

Commercial banks;

Financial institutions;

Insurance companies; and

Any other entity eligible to make loans and advances to the Issuer without such loans and advances being characterized as public deposits in accordance with Rule 2(b) of the Companies (Acceptance of Deposits) Rules, 1975

in each case, solely in India

Governmental Authority

shall mean any:

a) government (central, state or otherwise) or sovereign state;

b) any governmental agency, semi-governmental or judicial or quasi-judicial or administrative entity, department or authority, or any political subdivision thereof;

c) international organization, agency or authority, and

including, without limitation, any stock exchange or any self-regulatory organization, established under any applicable law


This Information Memorandum through which this Issue is being made

Investor(s) Such person who subscribe to this Issue

Issue Issue by way of private placement of the Debentures by the Issuer as further described in this Information Memorandum

NSE National Stock Exchange of India Limited

Record Date Date which is 3 days prior to each Distribution Payment Date for the purposes of actual payment or as prescribed by SEBI

Register of Debentureholders

The register maintained by the Issuer at its Registered Office as per section 152 of the Companies Act, containing the names of the Debentureholders entitled to receive interest in respect of the Debentures on the Record Date, and shall include the register of Beneficial Owners maintained by the Depository under section 11 of the Depositories Act

Registered Debenture holder

The Debentureholder whose name appears in the Register of Debentureholders or in the beneficial ownership record furnished by the Depository for this purpose

Registrar/Registrar to the Issue

Registrar to this Issue, in this case being TSR Darashaw

Working Days All days except Saturday, Sunday and any public holiday, on which high value clearing facility is available in banks of Mumbai

Conventional and General Terms, Abbreviations and References to Other Business Entities

Abbreviation Full form

CDSL Central Depository Services (India) Limited Companies Act The Companies Act, 1956, as amended from time to time Depositories Act The Depositories Act, 1996, as amended from time to time




Dated: June 1, 2011


9

Abbreviation Full form

Depository Participant/

DP

A depository participant as defined under the Depositories Act

DP ID Depository Participant Identification Number

DTC Direct Tax Code Bill, 2010

Equity Shares Equity shares of the Issuer of Face Value of Rs. 10 each

FII Foreign Institutional Investor

Financial Year Period of twelve months ended March 31 of that particular year, unless otherwise

stated

Government Government of the Republic of India

IT Act The Income Tax Act, 1961, as amended from time to time

NBFC Non-banking financial company

NRI Non-resident Indian

NSDL National Securities Depository Limited

OCB Overseas corporate body

p.a. Per annum

PAN Permanent Account Number

RBI The Reserve Bank of India

RBI Act Reserve Bank of India Act, 1934

RoC / ROC The Registrar of Companies, Maharashtra

Rs. Rupees

SCRA Securities Contract (Regulations) Act, 1956

SEBI The Securities and Exchange Board of India constituted under the SEBI Act, 1992

SEBI Act The Securities and Exchange Board of India Act, 1992, as amended

SEBI Debt

Regulations

SEBI (Issue and Listing of Debt Securities) Regulations, 2008 issued by SEBI, as

amended from time to time

WDM Wholesale Debt Market




10

FORWARD LOOKING STATEMENTS

Certain statements contained in this Information Memorandum that are not statements of historical fact constitute ‘forward-looking statements’. Potential Debentureholders can generally identify forward-looking statements by terminology such as ‘aim’, ‘anticipate’, ‘believe’, ‘continue’, ‘could’, ‘estimate’, ‘expect’, ‘intend’, ‘may’, ‘objective’, ‘plan’, ‘potential’, ‘project’, ‘pursue’, ‘shall’, ‘should’, ‘will’, ‘would’, or other words or phrases of similar import. Similarly, statements that describe our strategies, objectives, plans or goals are also forward-looking statements. All statements regarding our expected financial conditions, results of operations, business plans and prospects are forward-looking statements. These forward-looking statements include statements as to our business strategy, revenue and profitability, new business and other matters that are not historical facts. All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our expectations include, among others:

growth prospects of the Indian power and infrastructure sector and related policy developments;

general, political, economic, social and business conditions in Indian and other global markets;

our ability to successfully implement our strategy, growth and expansion plans;

competition in the Indian markets;

availability of adequate debt and equity financing at reasonable terms;

performance of the Indian debt and equity markets;

changes in laws and regulations applicable to companies in India, including foreign exchange control regulations in India; and

other factors discussed in this Information Memorandum, including under the section entitled “Risk Factors”.

Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to those discussed under the section entitled “History and Business of the Issuer”. Although we believe that the expectations reflected in such forward-looking statements are reasonable at this time, we cannot assure investors that such expectations will prove to be correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements. If any of these risks and uncertainties materialize, or if any of our underlying assumptions prove to be incorrect, our actual results of operations or financial condition could differ materially from that described herein as anticipated, believed, estimated or expected. All subsequent forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. The Issuer undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

Forward looking statements speak only as of the date of this Information Memorandum. None of the Issuer, its Directors, its officers or any of their respective affiliates or associates has any obligation to update or otherwise revise any statement 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.




Dated: June 1, 2011


11

RISK FACTORS

The Issuer believes that the following factors may affect its ability to fulfill its obligations under the Debentures.

All of these factors are contingencies which may or may not occur and the Issuer is not in a position to express

a view on the likelihood of any such contingency occurring. These risks may include, among others, business

aspects, equity market, bond market, interest rate, market volatility and economic, political and regulatory risks

and any combination of these and other risks. Prospective investors should carefully consider all the

information in this Information Memorandum, including the risks and uncertainties described below, before

making an investment in the Debentures. To obtain a complete understanding, prospective investors should read

this section in conjunction with the remaining sections of this Information Memorandum, as well as the other

financial and statistical information contained in this Information Memorandum. If any of the following risks, or

other risks that are not currently known or are now deemed immaterial, actually occur, the Issuer’s business,

results of operations and financial condition could suffer, the price of Debentures could decline, and the

investor may lose all or part of their investment. More than one risk factor may have simultaneous effect with

regard to the Debentures such that the effect of a particular risk factor may not be predictable. In addition,

more than one risk factor may have a compounding effect which may not be predictable. No assurance can be

given as to the effect that any combination of risk factors may have on the value of the Debentures. The inability

of the Issuer to pay interest, principal or other amounts on or in connection with the Debentures may occur for

other reasons which may not be considered significant risks by the Issuer based on information currently

available to them or which they may not currently be able to anticipate. You must rely on your own examination

of the Issuer and this Issue, including the risks and uncertainties involved. The ordering of the risk factors is

intended to facilitate ease of reading and reference and does not in any manner indicate the importance of one

risk factor over another.

RISKS RELATED TO THE ISSUER AND THE TATA POWER GROUP

The Issuer plans to create additional generating capacity, which will involve substantial capital expenditure

and other risks associated with major projects

The Issuer intends to expand its power generating capacity significantly to meet the increasing demand forecast

in India in the foreseeable future. The Issuer intends to construct additional power plants, expand its existing

plants, increase output capacity and improve and expand its transmission and distribution services through

optimisation and modernisation schemes. It has established, or will establish, special purpose vehicles or joint

ventures for these purposes. The Issuer has invested, and may further invest, considerable resources in

developing these generation plants and services.

Some of the Issuer‘s ventures are under development and have not yet achieved commercial operation. Power

projects have a long gestation period of typically three to five years, due to the process involved in

commissioning power projects. This process typically includes the process of applying for and obtaining

government approvals, including permission for acquiring land, environmental approvals and approvals for the

use of water. It also requires the entering into of fuel supply agreements, evacuation agreements, financing

agreements, raw material agreements and obtaining detailed project reports, after which the construction process

commences. Further, power plants typically require months or even years after being commissioned before

positive cash flows can be generated, if at all. In addition, increased development activity in the power sector in

India, the commercial viability of the Issuer‘s power projects may need to be re-evaluated and it may not be able

to realise the benefits or returns on investment as expected.

The construction and expansion of the Issuer‘s various projects involves substantial capital expenditure and

other risks associated with major projects, such as cost overruns, interest during construction (―IDC‖), delays in

implementation, technical and economic viability and changes in market conditions. Although the companies in

the Tata Power Group may enter into turnkey contracts for the supply or installation of certain equipment or for

certain civil works of its plants and facilities, the Tata Power Group faces the risk that it will have to fund any

project delays or cost overruns arising from various factors, such as availability, cost and quality of materials for

construction such as steel, cement etc required for such projects. The scheduled completion dates for Tata Power

Group‘s projects are estimates and are subject to delays and other risks. Among other things, the Tata Power

Group is subject to risks on account of significant increases in prices or shortages of equipment and building

material (which may prove defective), technical skills and labour, adverse weather conditions, third party

performance risks, environmental risks, changes in market conditions, changes in government or regulatory

policies, litigation, delays in obtaining requisite approvals, permits, licences or certifications from the relevant




Dated: June 1, 2011


12

authorities. These and other unforeseeable problems and circumstances could adversely affect the Tata Power

Group‘s ability to develop its power projects in the time estimated. These could result in cost overruns,

termination of a project‘s development and/or a breach of the financial covenants imposed by lenders. Although

the Tata Power Group builds a contingency into its expected total project costs, there can be no certainty that

such a contingency will be sufficient to fund any such costs.

The completion of the project on schedule is also dependent on completion of related infrastructure by third

parties. These related infrastructures include ports, high voltage evacuation, railways, roads, water ways, dams

etc. A delay in construction of the related infrastructure by third parties can delay the commissioning of Tata

Power Group‘s projects.

In addition, failure to complete a project according to its original specifications or schedule, if at all, may give

rise to potential liabilities and could render certain benefits available under various government statutes being

unavailable. As a result of this, the Issuer‘s returns on investments may be lower than originally expected.

Any of the above risks may adversely affect the Tata Power Group‘s business, results of operations and

prospects. In particular, any delay in relation to or non-completion of any of the Tata Power Group‘s projects

aimed at increasing its generating capacity will adversely impact the Tata Power Group‘s projections for future

operating capacity.

Risks relating to growth and expansion.

The Issuer expects that its growth strategy will place significant demands on its management, financial and other

resources. It will require the Issuer to develop and improve its operational, financial, management, recruitment

and administrative ability on a continuous basis which it may not be able to effect, which may require

significant expenditure, could disrupt the Issuer‘s business, reduce its profitability or otherwise adversely affect

its results of operations and financial condition.

The Issuer continues to evaluate merger and acquisition opportunities, both in India and internationally, and may

make additional mergers and acquisitions in the future if suitable opportunities arise. Acquisitions involve

additional risks, such as liabilities and integration of operations, and failure to manage any acquisition may

affect its profitability, its revenues and results of operations may be adversely affected.

Disruption to the supply of services and equipment or increase in the cost of the materials may adversely

affect the Tata Power Group’s business.

The Tata Power Group requires the continued support of certain original equipment manufacturers to supply

necessary services and equipment to maintain its projects at affordable costs. For example, CGPL is dependent

on the supply of the boiler package and the turbine package for the Mundra UMPP from Doosan and Toshiba

Power System Company, respectively. There is a risk that the Tata Power Group may be unable to procure the

required services or equipment from these manufacturers (for example, as a result of the bankruptcy of the

manufacturer or natural disasters). In addition, the cost of these services or this equipment may exceed the

budgeted cost, or there may be a delay in the supply of such equipment or a default by a supplier in respect of its

supply obligations. In such a scenario, there may be a material adverse impact on, specifically, the Mundra

UMPP and Maithon mega power project plant in Jharkhand, and more generally, on Tata Power Group‘s

business, results of operations and prospects.

The Tata Power Group‘s business is affected by the availability, cost and quality of the materials such as steel,

cement, etc., which are used to construct and develop its projects. The prices and supply of these materials

depend on factors not under the Tata Power Group‘s control, including general economic conditions,

competition, production levels, transportation costs and import duties. If, for any reason, the Tata Power

Group‘s primary suppliers of steel and cement should curtail or discontinue their delivery of such materials in

the quantities needed and at prices that are competitive, the Tata Power Group‘s ability to meet the material

requirements for its projects could be impaired and construction schedules could be disrupted. This would have

an adverse effect on the Tata Power Group‘s results of operations.

Interruption in fuel supplies or an increase in the cost of fuel may adversely affect the Tata Power Group’s

business costs and revenues.

Dependence on a few fuel suppliers for power projects and continuing operations exposes the Tata Power




Dated: June 1, 2011


13

Group‘s power projects to serious vulnerabilities. These include non-supply due to reserves depletion, pro-rata

scaling down of supply to all consumers, onerous contractual terms (such as no penalties for short supply while

enjoying the comfort of minimum guaranteed off-take or payments in respect thereof) and an inability to obtain

alternative fuel at short notice. Several of the Tata Power Group‘s current generation operations and projects

under implementation are, or will be, coal-fired thermal plants, a majority of which are, or will be, dependent on

an adequate supply of low ash, low sulphur coal imported from Indonesia. These imports, which are difficult to

source, could be subject to disruption and may not be capable of ready substitution. There can be no guarantee

that such supply will not be disrupted, whether as a result of Indonesian government action or otherwise.

Failure to obtain sufficient fuel supplies for any of the Tata Power Group‘s power projects in a timely manner,

on appropriate terms and at competitive prices may have a material adverse impact on the Tata Power Group‘s

revenues and results of operations.

As part of its effort to secure fuel supplies for the Mundra UMPP, the Issuer has established a Singapore

subsidiary for the ownership of newly built cape size bulk carriers which will be deployed to transport coal from

Indonesia to India for the Mundra UMPP. The shipping business is a new area of business for the Issuer. There

can be no assurance that any ships commissioned by the Issuer will be built and delivered in accordance with the

estimated time or cost or that the Issuer will be able to secure the use of ships through long-term charter

arrangements. Failure to obtain sufficient shipping capacity may have an impact upon the Issuer‘s ability to

supply coal from Indonesia to its thermal generation projects.

For the renewable power capacity of the Issuer, the plant load factor (―PLF‖) depends on the wind speed or

solar insolation, as may be applicable. Any adverse changes in these factors may have a material adverse impact

on the Tata Power Group‘s revenues and results of operations.

Failures to get power to market may significantly adversely affect the Issuer’s business, revenues, results of

operations and prospects.

The Tata Power Group‘s revenue generation is dependent upon it being able to deliver power to its customers.

Unplanned outages of generating stations, failure in transmission systems, failure in inter-regional transmission,

consequent network congestion or failures in distribution systems could prevent the Issuer from supplying

power to its customers. The occurrence of these events or any other similar events could have a material adverse

effect on the Issuer‘s business, revenues and results of operations.

Tata Power’s shareholding in its subsidiaries and joint venture companies may get diluted resulting in an

adverse impact on the business and financial position of the Tata Power Group.

A substantial part of the Issuer‘s business is undertaken by it through its subsidiaries and joint venture

companies where the Issuer regularly provides equity and debt financing. A certain portion of the third party

debt financing taken by the such entities require the Issuer to pledge the shares held by it in its relevant

subsidiary or joint venture company in favour of the concerned lender. Any default in such loans can result in

the concerned lender enforcing the pledge and acquiring the shares held by the Issuer in the relevant subsidiary

or joint venture company. In such circumstances, the Issuer‘s ownership in such relevant subsidiary or joint

venture company may be diluted. Such an event may have an adverse impact on the business and financial

position of the Tata Power Group.

Failure to obtain and retain approvals and licences, or changes in applicable regulations or their

implementation, may adversely affect the Tata Power Group’s operations.

The Issuer and certain companies of the Tata Power Group are subject to extensive government regulation. They

therefore require certain approvals, licences, registrations and permissions for operating their respective

businesses, some of which may have expired and for which they have either made, or are in the process of

making, an application for obtaining the approval or its renewal. If the Issuer or any Tata Power Group company

fails to obtain or retain any of these approvals or licences, or renewals thereof, in a timely manner, their business

may be adversely affected. Furthermore, although the Tata Power Group currently obtains and maintains all

required regulatory licences, there can be no guarantee that any such licence will not be withdrawn in the future,

or that any applicable regulation or method of implementation will not change. This could have a material

adverse effect on the Tata Power Group‘s business, revenues and results of operations.




Dated: June 1, 2011


14

The Issuer’s revenue generation is currently concentrated in Mumbai and primarily on two major customers

there. There could be a material adverse effect on the Issuer’s revenues and results of operations if these

customers source power from other suppliers.

The Issuer‘s revenue from power supply and transmission charges in Mumbai contributed approximately

72.54% of its total non-consolidated revenues in the Financial Year 2011. In addition, in the Financial Year

2011, 58.75% of units sold by Tata Power Generation were derived from two customers, Reliance Infrastructure

Limited and BEST. However, from April 1, 2011, the Issuer no longer supplies power to Reliance Infrastructure

Limited.

Following the implementation of the Electricity Act, 2003, distribution licensees such as Reliance Infrastructure

Limited and BEST became free to purchase power from sources other than the Issuer, and bulk supply (as

opposed to retail) customers with a demand in excess of 1 MVA became entitled to access the distribution

networks in the Mumbai License Area. This allows them to purchase power from sources other than the Issuer.

If a significant number of these customers source power from other suppliers, this could have a material adverse

effect on the revenues and results of operations of the Issuer. Bulk supply customers, in particular Reliance

Infrastructure Limited, may also set up additional generation capacities of their own and thus reduce the power

off-take from the Issuer, which in turn could also have an adverse effect on its revenues and results of

operations.

The Issuer and certain companies in the Tata Power Group may not be able to acquire sufficient land for

project site development or on commercially acceptable terms. This could have an adverse effect on the Tata

Power Group’s results of operations and prospects. Also, the Tata Power Group’s land acquisition strategy

may be adversely affected by public opposition to its power and mining operations.

The Issuer and certain companies in the Tata Power Group are in the process of acquiring land for the

development and/or implementation of certain of their projects. It cannot be certain that such acquisitions will

be completed in a timely manner, on terms that are commercially acceptable, or at all. This could have an

adverse effect on the Tata Power Group‘s results of operations and prospects. The Issuer may also face public

opposition to its land acquisition policies. Further, the Issuer and the relevant Tata Power Group company

implementing power projects cannot be certain of the cost of any financial compensation that they may have to

pay to individuals or entities pursuant to any compulsory acquisition orders or resettlement and rehabilitation

packages implemented by the Indian state authorities. Such payment could have a material adverse effect on the

Group‘s results of operations and prospects.

Also, environmental awareness throughout the world, including in India and other emerging markets, has grown

significantly, in part due to the perceived negative impact that thermal power generation and mining operations

have on the environment. Public protest over the Tata Power Group‘s acquisition of land, power or mining

operations could cause operations to slow down, damage the Tata Power Group‘s reputation and goodwill with

the government or members of the public in the countries in which the Tata Power Group operates or has

interests. It could also lead to damage being caused to the Tata Power Group‘s facilities as well as interruption

to the supply of fuel to the Tata Power Group‘s thermal generation plants. Public protest could also affect the

ability of the Tata Power Group to obtain necessary licences to expand existing facilities or establish new

operations. Consequently, growing public awareness of environmental issues could lead to opposition, which

could have a material adverse effect on the Tata Power Group‘s business, results of operations, financial

condition and prospects.

The Issuer is substantially dependent on the coal segment of its business, which makes it subject to a number

of additional risks. Coal prices are cyclical and subject to significant fluctuations, and any significant decline

in the prices the Coal Companies receive for coal could have a material adverse effect on the results of

operations and cash flows of the Coal Companies and consequently, also that of the Tata Power Group.

On 26 June 2007, the Issuer (through its wholly-owned overseas subsidiaries) completed the acquisition of a 30

% equity interest in the Coal Companies from PT Bumi Resources Tbk, for coal mining operations in Indonesia.

For the Financial Year 2011, the coal segment (which comprises the indirect holding of the Issuer in the Coal

Companies) contributed 32.90% of the Issuer‘s consolidated revenue. As such, the Issuer is dependent on the

coal segment for a significant portion of its consolidated revenues and any adverse developments in relation to




15

the operations of the Coal Companies could result in a material adverse effect on the Tata Power Group’s business, results of operations and prospects. The Coal Companies’ results of operations are highly dependent upon the prices they receive for coal. The world coal markets are sensitive to changes in coal mining capacity and output levels, patterns of demand and consumption of coal from the electricity generation industry and other industries for which coal is the principal fuel and changes in the world economy. The coal consumption patterns of the electricity generation, steel and cement industries are affected by the demand for these customers’ products, local environmental and other governmental regulations, technological developments and the price and availability of competing coal and alternative fuel supplies. All of these factors can have a significant impact on the selling prices for coal. Prices for coal products are also based upon or affected by global coal prices, which tend to be highly cyclical and subject to significant fluctuations. Prices for coal products are also affected by a variety of other factors over which the Coal Companies have no control, including weather, distribution problems and labour disputes. Coal mining is subject to unexpected disruptions which could cause the Coal Companies’ results of operations to fluctuate across fiscal periods. The Coal Companies’ surface mining operations are subject to events and operating conditions that could disrupt production, loading and transportation of coal at or from their mines for varying lengths of time. These events and conditions include: adverse weather and natural disasters, including heavy rains, floods, earthquakes and forest fires;

unexpected equipment failures and maintenance problems;

failure to obtain key materials and supplies, such as explosives, fuel and spare parts;

variations in coal seam thickness, the amount and type of rock and soil (overburden) overlying the coal

seam and other discrepancies to geological models;

delays or disruptions in coal chains, shipments of coal products or importation of equipment and spare parts;

changes in geologic conditions and geotechnical instability of the highwall of mining pits; and

reserve estimates proving to be incorrect. Any disruption of the Coal Companies’ operations in the event that mining operations are disrupted could have a material adverse effect on the Tata Power Group’s business and results of operations. The estimates of reserve and resource figures of the Coal Companies are subject to assumptions which, if incorrect could have an adverse effect on the Tata Power Group’s business and financial condition. Although reserve and resource figures of the Coal Companies have been carefully prepared using engineering, economic, hydrological and geo-technical data assembled and analysed by the Coal Companies or, in some instances, have been prepared, reviewed or verified by independent mining experts, these amounts are estimates only. There are numerous uncertainties inherent in estimating quantity and quality of, and costs to mine, recoverable reserves, including many factors outside the control of the Coal Companies. Further, sustained downward movements in coal prices could render less economical, or uneconomical, some or all of the coal production related activities to be undertaken by the Coal Companies. There can be no assurance that any particular level of recovery of coal from such reserves or resources will in fact be realised or that an identified resource will ever qualify as a resource to be mined commercially and/or which can be legally and economically exploited. This could have an adverse impact on the availability of sufficient supplies of coal for the Tata Power Group’s projects and the value of its investments in the Coal Companies, which, in turn, could adversely impact on the Tata Power Group’s business and financial condition. The Tata Power Group may have limited access to funding for the development and implementation of its power projects which may limit the expansion of its business.




Dated: June 1, 2011


16

The acquisition, construction and expansion of power plants, in addition to the ongoing improvements required

to maintain or upgrade existing assets, are capital intensive. Such costs are usually funded from a mixture of

operating cash flow and third party financing. The Issuer intends to finance 70 % to 80 % of the cost of each of

its prospective projects with third party debt. Given its growth plans, the Issuer expects that it or the relevant

Tata Power Group company implementing the power projects will incur substantial borrowings in the future.

The availability of such borrowings and access to the capital markets for financing would depend on various

factors including but not limited to prevailing market conditions, any regulatory approvals, if required, and the

acceptability of the financing terms offered. There can be no assurance that future financings in the form of debt

or equity will be available, whether on acceptable terms, in sufficient amounts or otherwise.

The Issuer has equity investments and capital commitments, the terms of which may restrict its ability to

liquidate such investments and therefore may adversely affect its business and operations.

The Issuer has made and will continue to make capital investments, loans, advances and other commitments to

support certain of its subsidiaries, joint venture companies and associates. In the past, these investments and

commitments have included capital contributions, loans and corporate guarantees to enhance the financial

condition or liquidity of such subsidiaries, joint venture companies and associates. Certain of the Issuer‘s non-

core investments are in sectors which can be volatile, such as the telecommunications sector in which it has

invested through Panatone Finvest Limited, Tata Communications Limited, Tata Teleservices Limited and Tata

Teleservices (Maharashtra) Limited. Some of the agreements, pursuant to which such investments were made,

may contain certain terms which may restrict the Issuer‘s ability to liquidate such investments.

The Issuer also has limited experience in relation to certain of its non-core investments. If the business and

operations of the Issuer‘s subsidiaries, joint venture companies and associates deteriorate, the Issuer may suffer

losses and or be required to write-off or write-down the value of its investments. The Issuer may make capital

expenditures in the future, which may be financed through additional debt, including subsidiary debt. In

addition, certain loans or advances may not be repaid or may need to be restructured, or the Issuer may be

required to outlay capital under its commitment to support these companies. This may have a material adverse

effect on the Issuer‘s business and revenues.

The success of the Tata Power Group’s power plants depends on the reliable and stable supply of water to its

power plants. In the event of water shortages, its power plants may be required to reduce their water

consumption, which would reduce their power generation capability.

All of the Tata Power Group‘s thermal and hydro power plants require a reliable water source. There can be no

assurance that water supply to the Tata Power Group‘s thermal power plants, particularly to projects situated

away from the coast, will continue to be dependable. In the event of water shortages, its power plants may be

required to reduce water consumption, which would reduce their power generation capability and have an

adverse impact on the Tata Power Group‘s business, results of operations and prospects. Further, if the Issuer or

the relevant Tata Power Group Company do not receive the necessary approvals and licences to draw sea water

from the relevant government authorities, it will have to find alternative sources of water supply.

In addition, government approvals and licences are subject to numerous conditions, some of which are onerous

and require the licence holders to incur substantial expenditure. If the Tata Power Group fails to comply, or a

regulator claims it has not complied, with these conditions, the Tata Power Group‘s business, prospects,

financial condition and results of operations may be adversely affected to a material extent.

The provisions of the Electricity Act, 2003 and tariff regulations have significantly increased competition for

the Tata Power Group in the power sector. Changes in captive power status for projects could result in an

increase in costs.

The Electricity Act, 2003 has resulted in substantial changes in the power sector in India, including delicensing

of generation, greater competition in supply, open access to distribution and transmission systems and the

reorganisation and privatisation of certain of the SEBs. However, while allowing the Tata Power Group greater

flexibility to sell power, the provisions of the Electricity Act, 2003 have increased the scope for competition in

the Tata Power Group‘s supply and distribution businesses, and may continue to do so, which could adversely

affect its revenues, results of operations and prospects. The continued impact of the provisions of the Electricity

Act, 2003 and the National Electricity Policy could have a material adverse affect on the Tata Power Group‘s

revenues and results of operations.




Dated: June 1, 2011


17

The provisions of the Electricity Act, 2003 and the rules and regulations thereunder govern power tariffs in

India. Under these regulations, these tariffs are either established through competitive bidding or as determined

by central or state regulations (other than tariffs under captive power projects and contracts for the sale of power

with a term of less than one year, which are each not subject to regulatory restriction). The competitive bidding

guidelines allow bidders to quote on a tariff composed of a fixed element (which is fixed for the entire term of

the contract) and a floating element (which is escalated semi-annually based on an index prescribed by the

regulator). In respect of the supply of electricity for which the tariff is determined by the state regulator, the Tata

Power Group must submit a forecast of its aggregate revenue requirement and expected revenue from the tariff

and charges for each financial year for approval by the state regulator.

Under the Electricity Act, 2003, state governments have inherent powers to regulate, although the body which

primarily carries out this function is the CERC. In case of a shortage of power in the state where the Group‘s

projects could be located, the states may impose restrictions on the sale of power to parties outside the state.

This could create a shortfall in performance of the Tata Power Group‘s power supply obligations as well as loss

of potential opportunities.

The Issuer‘s operations in Mumbai accounted for approximately 2,027 MW of installed capacity, which

includes 100 MW of Merchant Capacity as at March 31, 2011. The power generated under the Merchant

Capacity is sold in the open wholesale market. Consequently, the sale of the Merchant Capacity depends on the

fluctuations of the wholesale merchant market and any reduction in the tariffs of Merchant Capacity could have

an adverse effect on the Issuer‘s revenues.

In relation to tariffs which are to be approved by the SERC, there can be no assurance that any additional costs

will be recovered. In addition, in the case of contracts which are won through the competitive bidding process,

there can be no assurance that the Tata Power Group‘s estimates when calculating such costs and charges will

be accurate or effective and enable the Tata Power Group to recoup its underlying costs (including fuel costs)

under such contracts. In such a scenario, the Issuer (or its relevant subsidiary of joint venture) which constructs

and operate the relevant power plant, could be liable for significantly increased costs and would only be able to

pass on a part of these increased costs to the purchasers of power. Further, tariff regulations are subject to

change by the regulator which may have a material adverse impact on the Tata Power Group‘s ability to pass on

costs to the same extent as it is currently able to do so. All of the above could have an adverse effect on the Tata

Power Group‘s revenues and results of operations.

Under the Electricity Act, 2003, captive power projects benefit from lesser regulation and are not subject to

tariff regulations and restrictions imposed by the CERC and SERCs, so buyer and seller are free to negotiate and

agree the relevant tariff without regulatory input or approval. However, such projects need to meet certain

structural requirements to be afforded captive power status. Currently the Jojobera thermal power plant which

has captive status is under regulatory scrutiny, which for this or other projects, will result in an increase in

management time spent attending to such investigations or questions, which may detract from the Tata Power

Group‘s business and adversely affect its results of operations and prospects. There can be no assurance that any

of the Tata Power Group‘s captive power projects, whether current or future, will obtain or retain captive status,

which could result in additional tariff regulations which could adversely impact revenues and results of

operations. Further, any amendments to the conditions required to obtain captive power status made by the

regulators could result in an increased cost in complying with these conditions or a loss of captive power status.

Currently, NDPL is carrying regulatory dues (regulator being the Delhi Electricity Regulation Commission) of

approximately Rs. 23 billion on its books. The Issuer estimates that it would need a 25% hike in tariff to recover

these regulatory assets. Such a substantial rise in tariffs is expected to be implemented over a period of three-

five years. This may result in strained cash flows for the Issuer and may have a material effect on the financial

condition of the Issuer.

Increasingly stringent environmental regulations may adversely affect the Tata Power Group’s business,

results of operations and prospects.

The Tata Power Group‘s power plants are subject to environmental regulations promulgated by the Ministry of

Environment and the State Pollution Control Boards. In the event that an environmental hazard were to be found

at the site of one of its power stations, or if the operation of the power stations were to result in material

contamination of the environment, the Issuer or its relevant Tata Power Group company could be subject to

substantial liabilities to the Government, the state governments and to third parties. Such liabilities may be




Dated: June 1, 2011


18

expensive to remedy. There can be no assurance that compliance with such environmental laws and regulations

will not result in a curtailment of production or a material increase in costs, or otherwise have a material adverse

effect on the Tata Power Group‘s business, financial condition, results of operations or prospects.

Despite using low ash, low sulphur coal imported from Indonesia where possible, the Tata Power Group

generates a considerable amount of ash in its operations. There are limited options for utilising ash and therefore

the demand for ash is currently low. The Tata Power Group‘s current methods to utilise or dispose of ash may

be insufficient to dispose of the ash that it expects to generate. The Issuer is subject to a government

requirement that 100 % of the fly ash produced through its generation activities must be gainfully utilised by

2014. The Tubed coal mine and Mandakini coal mine, expected to be operational from mid 2014 are open cast

mines.

The current and increasingly strict environmental regulations which may be imposed in the future in relation to

the Tata Power Group business could require significant capital expenditure in order to ensure compliance

therewith. This could adversely affect the Tata Power Group‘s revenues, results of operations and prospects.

Further, the scope and extent of new environmental regulations, including their effect on the Group‘s operations

cannot be predicted with any certainty.

The Issuer’s revenues and results of operations could be materially affected if its assumptions in respect of

the fuel costs for the imported coal based UMPP prove incorrect.

CGPL, which is a special purpose vehicle of the Issuer for the Mundra UMPP, has committed to charging 55%

of the cost of the coal in the PPA at a fixed rate without any escalation. This exposes CGPL and the Issuer to

any unfavourable movement in spot coal prices over the term of the PPA. Given the volatility in the fuel prices

and significant increases in recent years, this could have a material adverse effect on the Tata Power Group‘s

revenues and results of operations. As per the Indian GAAP accounting standards adopted by the Issuer such

adverse effects may result in an impairment of the Issuer‘s investment in CGPL.

General conditions in the power sector, including historically weak payment records or difficulties enforcing

the state government guarantee, could significantly adversely affect the Tata Power Group’s revenues and

results of operations.

The Indian power sector is vulnerable to the Government‘s political will to allow reforms and privatisation of

the sector. The historically weak financial position of the power sector, especially that of the SEBs, has an

impact on the industry as a whole. The SEBs will be significant customers for the Mundra UMPP and the

Maithon plant. The state-owned power distribution companies have had a weak credit history and there can be

no assurance that these entities will always be able to pay their obligations in a timely fashion, if at all. Power

projects in which the Tata Power Group has invested or in which it plans to invest may sell power to the state

power companies formed as a result of the privatisation of the majority of the SEBs. However, as a result of the

state companies‘ generally weak payment record, project companies established to develop and operate the

power projects would normally seek (and would normally require for the purpose of obtaining bank finance)

additional payment assurance in the form of bank letters of credit and escrow arrangements. Nevertheless, there

can be no assurance that the vulnerable condition of the sector, including the trend of substantial payment

defaults by customers, will not adversely affect the Tata Power Group‘s revenues and results of operations.

The Tata Power Group may face difficulties enforcing state government guarantees in power purchase

agreements in comparison to guarantees granted by private sector procurers. In the past, when faced with

disputes and counterclaims between transmission companies, electricity boards and generation companies

caused by a variety of factors, certain state governments have refused to perform their obligations under such

guarantees until such disputes or counterclaims have been fully resolved. Reaching such a final resolution can

take a substantial period of time and could have a material adverse effect on the cash flows, income, business

prospects and results of operations of the relevant Tata Power Group company.

Furthermore, in order to promote renewable generation, the various SERCs usually declare preferential tariffs

for renewable power and renewable purchase obligations for SEBs and distribution licensees. The recovery of

such tariff from SEBs and distribution licensees may be very difficult. In addition, if the subsidies and

preferential tariffs for green power are withdrawn by the SERCs then the returns on the renewable generation

capacity of the Issuer will be lower, which may affect the financial position of the Issuer.




Dated: June 1, 2011


19

Corporate, employment, third party contractor, insurance risks and failure to keep up with technological

changes could have an adverse effect on the Issuer’s financial performance, results of operations and

prospects.

The Issuer believes it has a good corporate reputation and its businesses generally have a high profile in India

and internationally. Should any part of the Issuer‘s operations fail to meet high safety, quality, social,

environmental and ethical standards, its corporate reputation could be damaged. This could lead to the rejection

of the Issuer as a preferred service provider by customers, devaluation of the Tata brand and diversion of

management time into rebuilding and restoring its reputation which could have a material adverse effect on the

Issuer‘s business, financial condition, results of operations and prospects.

The Issuer depends on senior executive and other key management members to implement its projects and

business strategies. If any of these individuals resigns or discontinues his or her service with no adequate

replacement there could be a material adverse effect on the Issuer‘s ability to successfully implement its projects

and business strategies. Further, if the Government imposes on the Issuer the requirement to employ specified

individuals in accordance with Government set targets, the Issuer may be forced to employ individuals without

the requisite skills. This could have a material adverse impact on the Issuer‘s business and its prospects.

Operations could be adversely affected by strikes, work stoppages or increased wage demands by employees or

any other kind of disputes with employees. A large number of the Issuer‘s employees are members of labour

unions. The Issuer may be unable to negotiate acceptable collective bargaining agreements with those who have

chosen to be represented by unions, which could lead to union-initiated work stoppages, including strikes.

The Issuer also enters into contracts with independent contractors and these contractors source and use labour.

Although the Issuer does not engage these labourers directly, it is possible that the Issuer may be held

responsible for wage payments to labourers engaged by contractors should the contractors default on wage

payments.

The construction work at certain of the Tata Power Group‘s projects is being, and will be, performed by third

party contractors where the Issuer does not have direct control over the day-to-day activities and is reliant on

such contractors performing these services in accordance with the relevant contracts. The Tata Power Group‘s

projects may not be completed as or when envisaged, if at all, thus leading to unexpected costs. The Tata Power

Group may not recover all or any losses they incur because of legal action in respect of breach by third party

contractors of their respective obligations and may incur losses because of funding the repair of any defective

work or paying damages to persons who have suffered any loss as a result of such defective work.

Activities in the power generation business can be dangerous and can cause injury to people or property in

certain circumstances. This could subject the Issuer to significant disruptions in its business and to legal and

regulatory action. The Issuer‘s future success will depend, in part, on its ability to respond to technological

advances and emerging power generation industry standards and practices on a cost-effective and timely basis.

All of the above could adversely affect its business, financial condition and results of operations.

The Issuer relies upon insurance coverage to insure against damage and loss to its projects that may occur

during construction and operation, but, the insurance the Issuer obtains may not be sufficient to protect it from

all losses, either as it is an uninsured loss or a loss in excess of insured limits, which may have a material

adverse impact on the Issuer‘s business, results of operations and financial condition.

The Issuer‘s future success will depend, in part, on its ability to respond to technological advances and emerging

power generation industry standards and practices on a cost-effective and timely basis. Changes in technology

and high fuel costs of thermal power projects may make newer generation power projects or equipment more

competitive than more traditional power projects or may require the Issuer to make additional capital

expenditures to upgrade its facilities. In addition, there are other technologies that can produce electricity. The

primary alternative technologies are fuel cells, micro turbines, windmills and photovoltaic (solar) cells. If the

Issuer is unable to adapt in a timely manner to changing market conditions, customer requirements or

technological changes, its business and financial performance could be adversely affected. Further, the Issuer is

implementing supercritical technology in Mundra UMPP. This supercritical technology is being employed for

the first time by the Issuer. The Issuer does not have operations and maintenance experience in this technology.

Any disruptions in the operations may have a material adverse effect on the revenues and results of CGPL and

the Tata Power Group.




Dated: June 1, 2011


20

The Issuer may be adversely affected due to mitigants for Climate Change and environmental factors

Around 78% of the installed capacity of the Tata Power Group in the Financial Year 2011 is thermal capacity

utilizing fossil fuels like coal, oil and gas for generation of power. Thermal generation will continue to be a

major part of Tata Power Group‘s generation capacity in future also. If in the future certain regulations are

introduced, in view of the prevailing climate change and environmental issues, which make use of fossil fuels

for power generation illegal or economically disadvantageous, the revenues of the Tata Power Group might be

materially affected.

The Issuer currently enjoys certain significant tax incentives which may not be available in the future. This

could have an adverse effect on the Issuer’s financial performance, results of operations and prospects.

The Issuer currently enjoys the benefit of various tax incentives provided by both the Government and the state

governments, in the form of tax holidays, exemptions, accelerated depreciation benefits for renewable power

projects and subsidies, in order to encourage investment in the power sector. These incentives have a substantial

positive impact on the Issuer‘s returns from these projects. The most significant of these incentives is the benefit

under Section 80-IA of the Indian Income Tax Act, 1961, which provides for a tax holiday of ten years out of

the first fifteen years from commissioning of the infrastructure project. The Issuer‘s financial performance,

results of operations and prospects could be adversely affected if these benefits are amended or withdrawn or

become unavailable (following the expiry of the time period for which the benefit is available) if its claim for

deductions under Section 80-IA or other tax incentives are disputed or disallowed by the taxation authority.

Further, the Direct Tax Code Bill, 2010 (the ―DTC‖), proposes to replace the existing Income Tax Act and other

direct tax laws in India, with a view to simplify and rationalise the tax provisions into one unified code. The

DTC which was tabled before the Indian parliament for debate and discussion on August 30, 2010 is proposed

to come into effect from April 1, 2012. The various proposals included in the DTC are subject to review by the

Indian parliament and the impact, if any, is not quantifiable at this stage. It is possible that the DTC, once

introduced, could significantly alter the taxation regime, including incentives and benefits, applicable to the

Issuer.

The reduction in Mumbai’s high end consumer base may have an adverse impact on the Issuer’s business

and revenues.

In the recent past, many businesses, in particular industrial consumers, have decided to shift their operations out

of Mumbai to nearby areas or other states due to the high cost of operating in Mumbai. The industrial and

commercial sectors represents Mumbai‘s high end consumer base and accounts for a significant portion of

power consumers. Therefore, although demand for power currently outstrips supply and is forecast to do so for

the foreseeable future, and while the Issuer sells its power to other distribution licensees, who then on-sell to

industrial end users, this exodus could have an adverse impact on the Issuer‘s business and revenues.

Disruption to the development or operation of any of the Tata Power Group’s assets could adversely affect

the Tata Power Group’s business.

The development or operation of the Tata Power Group‘s projects may be disrupted for reasons beyond its

control. These include, among other things, the occurrence of explosions, fires, earthquakes and other natural

calamities and disasters, prolonged spells of abnormal rainfall, breakdown, failure or substandard performance

of equipment, improper installation or operation of equipment, accidents, operational problems, transportation

interruptions, other environmental risks and labour disputes. In addition, projects may also be a target of terrorist

attack or other civil disturbance.

Further, the Tata Power Group relies on extremely sophisticated and complex machinery that is built by third

parties and may be susceptible to malfunction. Although, in certain cases, the Issuer is entitled to be

compensated by manufacturers for certain equipment failures and defects, such arrangements may not fully

compensate the Issuer or the relevant Tata Power Group company. In addition, the Issuer may not be entitled to

compensation for indirect losses such as loss of profits or business interruption under such agreements. If such




Dated: June 1, 2011


21

operational difficulties occur in the future, they may have a material adverse effect on the Tata Power Group‘s

business, financial condition and results of operations.

If the Issuer or any of the companies in the Tata Power Group do not operate their facilities efficiently, or

otherwise breaches their contractual obligations, they may face penalties under the terms of their power

purchase agreements into which they have entered or may enter in the future.

Power purchase agreements generally set out certain penalties payable by the Issuer or the relevant Tata Power

Group company, in the event performance does not meet certain levels such as payment of liquidated damages

in connection with unavailability of contracted power or non-satisfaction of certain other conditions. The

customers of the Tata Power Group will not reimburse the Issuer or the relevant Tata Power Group company for

any increased costs arising as a result of its plants‘ failure to operate within the agreed norms. This could, in

turn, have an adverse affect on the Tata Power Group‘s revenues and results of operations.

Disagreements with the Issuer’s joint venture partners or unfavourable terms in the agreements governing

those joint ventures could adversely affect the Issuer’s operations.

The Issuer currently participates in a number of joint venture arrangements, including Powerlinks, NDPL,

Maithon Power Limited, Tata BP Solar Limited, Dagachhu Hydro Power Corporation Limited, and the

acquisition (through its wholly-owned overseas subsidiaries) of a 30% equity interest in the Coal Companies.

The success of these joint ventures depends significantly on the satisfactory performance by the joint venture

partners and the fulfilment of their obligations. If a joint venture partner fails to perform its obligations

satisfactorily, the joint venture may be unable to perform adequately or deliver its contracted services. The

Issuer‘s level of participation in each joint venture varies and it does not have a controlling interest in some

operations. In certain instances, the Issuer‘s ability to withdraw funds (including dividends) and its ability to

exercise management control depends on receiving the consent of its joint venture partners. The Issuer‘s

operations and revenues may be adversely affected to a material extent if disagreements develop with its joint

venture partners and are not resolved in a timely manner.

The Issuer may be involved in legal and administrative proceedings arising from its operations from time.

The Issuer may be involved from time to time in disputes with various parties, which may result in legal and/or

administrative proceedings, litigation costs and/or unfavourable decisions, resulting in financial losses and delay

of commencement or completion of our projects. The Issuer cannot provide any assurances regarding the

outcome of these litigations. Any adverse outcome may affect the financial condition and results of operations

of the Issuer.

The dispute with Reliance Infrastructure Limited in connection with the standby charges payable to the

Maharashtra State Electricity Distribution Company Limited is yet to be finally resolved and could have a

material adverse effect on the Issuer’s operations and financial condition.

The Issuer has filed an appeal in the Supreme Court against Orders by the ATE regarding sharing of standby

charges between the Issuer and Reliance Infrastructure Limited. The Issuer has, in accordance with the Supreme

Court‘s order, deposited an amount of Rs.2, 270.0 million and submitted a bank guarantee for an equal amount.

Reliance Infrastructure Limited has withdrawn the sum of Rs.2, 270.0 million deposited by the Issuer, on an

undertaking that in the event of the appeal being decided against it, either in whole or in part, such amount as

may be determined as being refundable by Reliance Infrastructure Limited shall be refunded to the Issuer,

without demur, together with interest as may be determined by the Supreme Court.

As a matter of prudence, the Issuer has accounted standby charges since 1 April 2004, on the basis determined

by the MERC Order. However, no provision has been made in the accounts for the cost of interest that may be

finally determined as payable to Reliance Infrastructure Limited. The final outcome of the matter could have a

material adverse effect on the Issuer‘s results of operations and financial condition.

Apart from the standby charges the dispute with Reliance Infrastructure Limited in connection with ―Take or

Pay‖ obligation is still not resolved. Any adverse outcome may affect the financial condition and results of

operation of the Issuer.

The dispute with Olympus Capital in connection with an investment agreement is yet to be finally resolved

and could have a material adverse effect on Tata Power Group.




Dated: June 1, 2011


22

On 30 June, 2010 the Issuer and two of its wholly-owned subsidiaries namely Bhira and Bhivpuri entered into

an investment agreement with Olympus Capital in relation to a U.S.$ 300 million investment by Olympus

Capital in Bhira and Bhivpuri. The agreement was subject to certain conditions precedent as specified in the

investment agreement which were not fulfilled by the contractual longstop date, duly extended with mutual

agreement between the parties. On January 1, 2011, the Issuer announced to the Bombay Stock Exchange and

the NSE that the Issuer itself, Bhira and Bhivpuri had terminated the investment agreement with Olympus

Capital. By a letter dated April 21, 2011, Olympus Capital gave notice to the Issuer, Bhira and Bhivpuri of its

initiation of the first phase of a dispute resolution procedure under the investment agreement in relation to that

termination. Olympus Capital has indicated that it considers that it is entitled to specific performance of the

investment agreement or substantial damages. Whilst the Issuer believes, based on legal advice, that it has

validly terminated the investment agreement, any adverse outcome in the dispute may affect the financial

condition and results of operation of the Issuer.

The Indonesian government has passed a new mining law which, if brought into effect, may affect the Tata

Power Group’s coal mining operations in Indonesia and may consequently affect the Tata Power Group’s

business, costs and revenues.

On January 12, 2009, the Indonesian government passed the New Mining Law that repealed the existing law and

created a new regime for the grant and implementation of mining rights. It is unclear how the New Mining Law

will affect the Tata Power Group‘s coal mining operations as the implementing regulations, which are expected

to set out the specific regulatory changes brought about by the New Mining Law have not yet been promulgated.

The Indonesian government has however, circulated drafts of these regulations.

Some of the changes proposed by the draft regulations include:

1. allocation of a specified quantity of the coal produced by coal mining firms to Indonesian markets;

2. possible establishment of benchmark prices for sales of coal and other minerals within and outside

Indonesia;

3. requirement to process and refine coal and other minerals in Indonesia;

4. payment of royalty in kind instead of cash; and

5. requirements for foreign investors to divest a certain percentage of their share in mining projects after a

specified period of time.

There is no certainty that the regulations finally implemented by the Indonesian government will be the same as

the draft regulations. However, any changes to the legal and regulatory regime on mineral and coal mining in

Indonesia may affect the way the Tata Power Group conducts its mining operations and may consequently,

affect the Tata Power Group‘s business, costs and revenues. KPC and Arutmin have first generation CCoW

granted by the Indonesian Government. First generation CCoWs are structured as contracts between the

concession holder and the central government and ratified by the Indonesian parliament. A first generation

CCoW has ―lex specialist‖ status, which means that provisions contained in it sit above general Indonesian law.

In the event that any provision under the first generation CCoW are in conflict with general Indonesian law, the

provisions under the first generation CCoW would prevail.

The New Mining Law provides that existing CCoWs could remain valid until expiration of their term, but these

need to be ―transitioned‖ to conform to the New Mining Law within 1 year of the implementation of the New

Mining Law. Transitioned CCoWs are also able to be extended beyond their term without the need for being re-

tendered. KPC and Arutmin are currently working towards a smooth transition. It is likely that KPC and

Arutmin would have to comply with certain provisions in the New Mining Law for the transition and are

currently in discussions with the Indonesian government on this topic.

Failure to implement a smooth transition process could adversely affect the Tata Power Group‘s business, costs

and revenues.

The structure and specific provisions of the Tata Power Group’s financing arrangements could give rise to

certain additional risks.




Dated: June 1, 2011


23

Certain of the Issuer‘s loan agreements and other debt arrangements require the Issuer to obtain lender consents

before, among other things, issuing debentures or shares, entering into any transaction of merger, consolidation,

reorganisation, disposing of assets or changing its management and control. Further, certain financial covenants

may limit the Issuer‘s ability to borrow additional money or to grant additional security or issue guarantees.

There can be no assurance that such consents will be obtained in the future, which may adversely affect the

Issuer‘s operations and growth prospects.

The use of borrowings also presents certain additional risks for any Tata Power Group company. The company

may be unable to service interest payments and principal repayments or comply with other requirements of any

loans, rendering borrowings immediately repayable in whole or in part, together with any attendant cost. A Tata

Power Group company may also be forced to sell some of its assets to meet such obligations, with the risk that

borrowings will not be able to be refinanced or that the terms of such refinancing may be less favourable than

the terms of the existing borrowing. In addition, the borrowings of any Tata Power Group company will

generally be secured against some or all of the relevant company‘s assets and in particular the assets related to

the relevant project. Any event of default would result in the lenders enforcing their security and taking

possession of the underlying properties. Any cross-default provisions could magnify the effect of an individual

default and if such a provision were exercised, this could result in a substantial loss to the Tata Power Group.

The companies in the Tata Power Group may be required to re-finance any borrowings they have from time to

time. A number of factors (including changes in interest rates, conditions in the banking market and general

economic conditions which are beyond the Group‘s control) may make it difficult for the companies in the Tata

Power Group to obtain such new finance on attractive terms or at all. There will be an adverse impact on the

results of operations of the Tata Power Group if borrowings become more expensive relative to the income

received from investments. If the companies in the Tata Power Group are not able to obtain new finance for any

reason, the relevant company may suffer a substantial loss as a result of having to dispose off those of their

investments which cannot be re-financed.

The Issuer may also guarantee the payment and performance of the obligations of certain of its subsidiaries and

joint venture companies under various contracts and loan agreements. As default by such subsidiary or joint

venture company would require the Issuer to fulfil its payment obligations under such guarantees, which could

have an adverse effect on the Issuer‘s cash flows and results of operations.

Issuer may not be able to service all of the Tata Power Group’s existing or proposed debt obligations, which

could adversely affect its business and results of operations.

The Issuer‘s ability to meet the Tata Power Group‘s existing and future debt service obligations and to repay

outstanding borrowings under its funding arrangements will depend primarily upon the ongoing cash flow

generated by its business. Certain of its borrowings are subject to floating interest rates which may increase.

However, revenues under the PPAs may not increase correspondingly. In addition, the duration of the Issuer‘s

PPAs may not match the duration of the related financial arrangements and thereby expose the Issuer and the

Tata Power Group to refinancing risk. The Issuer may not generate sufficient cash to enable it to service existing

or proposed borrowings, comply with covenants or fund other liquidity needs.

Further, the Issuer (or if any of the members of the Tata Power Group) will face additional risks if it fails to

meet the debt service obligations or financial covenants required under the terms of its financing documents. In

such a scenario, the relevant lenders could declare it in default under the terms of its borrowings, accelerate the

maturity of its obligations, exercise rights of substitution over the financed project or replace directors on the

board of the borrower. There can be no assurance that in the event of any such acceleration, the Issuer will have

sufficient resources to repay these borrowings. Failure to meet obligations under debt financing arrangements

could have a material adverse effect on the Tata Power Group‘s cash flows, business and results of operations.

At present, the domestic long term rating from CRISIL is ‗AA‘ with positive outlook and LAA with positive

outlook from ICRA. The international corporate credit rating from Standard and Poor‘s is ‗BB-‘ with positive

outlook and ‗Ba3‘ with stable outlook from Moody‘s. The Issuer cannot guarantee that rating agencies will not

make downgrades to the Issuer‘s credit ratings in the future. Any downgrade of the Issuer‘s credit rating for

international and domestic debt by international and domestic rating agencies respectively may have an adverse

impact on the Issuer‘s ability to raise additional financing and the interest rates and commercial terms on which

such financing is available. The Issuer was downgraded in 2007 mainly following its decision to acquire equity




Dated: June 1, 2011


24

in Indonesian coal companies and the execution of the Mundra UMPP. Further rating downgrades could

therefore have an adverse effect on its results of operations, financial condition and growth prospects.

Financing not at competitive rates, higher cost of borrowing and financing structure could adversely affect

the Issuer’s financial performance, results of operations and prospects.

The Issuer‘s growing business needs requires it to raise funds through commercial borrowings. Its ability to

raise funds at competitive rates depends on its credit rating, regulatory environment in India and the liquidity

scenario in the economy. The developments in the international markets affect the Indian economy including the

financial liquidity position. It is exposed to the risk of liquidity in the financial markets. Changes in economic

and financial conditions could make it difficult to access funds at competitive rates. It also face certain

restrictions to raise money from international markets which are relatively cheaper sources of money and this

further constrains our ability to raise cheaper funds.

Fluctuations in interest rates and exchange rates could result in foreign exchange losses

Government and monetary authorities may impose (as some have done in the past) exchange controls that could

adversely affect an applicable exchange rate. A depreciation of the value of the Rupee will affect the cost of the

Tata Power Group‘s purchases denominated in currencies other than the Rupee. Any significant fluctuation in

exchange rates to the Tata Power Group‘s disadvantage may increase the cost of the Tata Power Group‘s debt

and derivative contracts and generally have a material adverse effect on the results of operations of the Tata

Power Group.

The Tata Power Group has significant borrowings in foreign currency. Interest on many of these loans floats by

reference to the LIBOR. The Tata Power Group does continually monitor its exposure to exchange rate

fluctuations and periodically engage in currency and interest rate hedging in order to decrease its foreign

exchange exposure when it is deemed to be appropriate. However, there can be no assurance that such hedging

arrangements will be adequate. A weakening of the Rupee against the U.S. dollar, Yen and other major foreign

currencies may have a material adverse effect on its cost of borrowing in Rupee terms, and consequently may

increase the cost of financing of its expenditure in Rupee terms. This could have a material adverse effect on the

Tata Power Group‘s results of operations and financial condition.

Tata Sons Limited, as principal shareholder of the Issuer, may take actions which may conflict with the

interests of other shareholders of the Issuer.

The principal shareholder of the Issuer is Tata Sons which, as at March 31, 2011, beneficially owned

approximately 29.81% of the Issuer‘s equity shares. Moreover, Tata Sons, along with other Tata Group

companies and related trusts, together controlled approximately 31.81% of the Issuer‘s equity shares as at March

31, 2011.

Tata Sons, as a significant shareholder, will continue to have the ability to exert influence over the actions of the

Issuer. Tata Sons may also engage in activities that conflict with the interest of the Issuer‘s shareholders and in

such event the Issuer‘s shareholders could be disadvantaged by these actions. Tata Sons could cause the Issuer

to pursue strategic objectives that conflict with the interests of the Issuer‘s shareholders. For example, the Issuer

has engaged in, and will continue to engage in, transactions with members of the Tata Group. Details of the

Issuer‘s related party transactions are set forth under ―Schedule J (Notes Forming Part of the Consolidated

Financial Statements)—Note 31 (Related Party Disclosures)‖ of its audited consolidated financial statements.

Conflict of interest may arise between the Issuer, its affiliates and the Issuer‘s principal shareholder or its

affiliates, possibly resulting in the conclusion of transactions of terms not determined by market forces. Any

such conflict of interest could adversely affect the Issuer‘s results of operations and financial covenants.

EXTERNAL RISK FACTORS

A slowdown in economic growth in India or an increase in oil or coal prices could have an adverse effect on

the Tata Power Group’s business.

The Tata Power Group‘s performance and the growth of the Indian power industry are necessarily dependent on

the health of the overall Indian economy. The Indian economy has shown sustained growth over the recent years

with GDP adjusted for inflation, growing at 7.2% in the Financial Year 2010, 6.7% in the Financial Year 2009




Dated: June 1, 2011


25

and 9.0% in the Financial Year 2008. However, the growth in industrial production in India has been variable.

Any slowdown in the Indian economy could adversely affect the Tata Power Group‘s business. In addition,

increases in the prices of oil, coal and petroleum products could result in an increase in costs for Issuer and

movements in interest rates, or various other factors affecting the growth of industrial, manufacturing and

services sector or a general down trend in the economy could adversely affect its business.

Any downgrade of India’s sovereign debt rating by an international rating agency could have a negative

impact on the Issuer’s results of operations and financial condition.

Any downgrade of India‘s credit rating for domestic and international debt by international rating agencies may

adversely impact on the Issuer‘s ability to raise additional financing and the interest rates and commercial terms

on which such additional financing is available. This could have an adverse effect on the Issuer‘s ability to

obtain financing to fund its growth on favourable terms or at all and, as a result, could have a material adverse

effect on its results of operations, financial condition and prospects.

Any legal and regulatory changes in the future could have a negative impact on the Issuer’s results of

operations and financial condition.

Future government policies and changes in laws and regulations in India and comments, statements or policy

changes by any regulator, including but not limited to the SEBI or the RBI, as well as any future government

policies and changes in laws and regulations in Indonesia or other countries where the Tata Power Group has a

significant presence may adversely affect the Debentures, and restrict the Issuer‘s ability to do business in its

target markets. The timing and content of any new law or regulation is not within the Issuer‘s control and such

new law, regulation, comment, statement or policy change could have an adverse effect on its business, results

of operations and financial condition.

Further, the SEBI, the NSE or other regulatory authorities may require clarifications on this Information

Memorandum, which may cause a delay in the issuance of Debentures or may result in the Debentures being

materially affected or even rejected.

The mandatory adoption of IFRS may have a material adverse effect on the Issuer’s results of operations.

The Institute of Chartered Accountants of India, the accounting body that regulates the accounting firms in

India, has announced a road map for the adoption of and convergence with the IFRS, pursuant to which some

public companies in India will be required to prepare their annual and interim financial statements under IFRS.

Presently these standards are in the form of exposure drafts issued by the Institute of Chartered Accountants of

India and are yet to be cleared for placing before NACAS. Once the standards are recommended by NACAS,

they will need to be approved by the Ministry of Corporate Affairs. The new standards will be effective based

on transitional arrangements and as of dates as may be prescribed in notified standards.

Since there is significant lack of clarity on the adoption of and convergence with IFRS and there is not yet a

significant body of established practice on which to draw in forming judgments regarding its implementation

and application, the Issuer has not determined with any degree of certainty the impact that such adoption will

have on its financial reporting although it is likely that any changes to accounting for transactions in the nature

of a lease and for regulatory assets will be of particular relevance to the Tata Power Group. There can be no

assurance that the Issuer‘s financial condition, results of operations, cash flows or changes in shareholders‘

equity will not appear materially worse under IFRS than under Indian GAAP. As the Issuer transitions to IFRS

reporting, it may encounter difficulties in the ongoing process of implementing and enhancing its management

information systems. There can be no assurance that the Issuer‘s adoption of IFRS and any failure to

successfully adopt IFRS will not have a material adverse effect on the Issuer‘s reported results of operations and

financial condition.

RISKS RELATING TO THE ISSUE

Our management will have significant flexibility in applying proceeds received from the Debentures. The

fund requirement and deployment have not been appraised by any bank or financial institution.

We intend to use the proceeds of the Debentures for general corporate purposes including without limitation

capital expenditure, working capital and refinancing of existing debt and for any other purposed in accordance




Dated: June 1, 2011


26

with the applicable laws and regulations. The fund requirement and deployment is based on internal

management estimates and has not been appraised by any bank or financial institution. Accordingly, the

management will have significant flexibility in applying the proceeds received by us from the Debentures.

Further, as per the provisions of the SEBI Debt Listing Regulations, we are not required to appoint a monitoring

agency and therefore no monitoring agency has been appointed for the Debentures.

This Information Memorandum includes changes in the authorized, issued and subscribed capital structure

only for the last five years which may not completely reflect the longer term financial history of the Issuer.

As per Schedule I of the SEBI Debt Regulations, the Issuer is required to disclose a brief history of the Issuer

since its incorporation giving details of, inter alia, changes in its authorized, issued and subscribed capital

structure. However the Issuer having been incorporated as early as September 18, 1919 has only disclosed the

changes in its authorized, issued and subscribed capital structure for the last five years which may not

completely reflect the exact financial history of the Issuer.

Any downgrading in credit rating of the Debentures may affect the value of the Debentures and thus the

ability to raise further funds.

The Debentures have been rated AA by CRISIL and CARE AA by CARE. The Issuer cannot guarantee that the

ratings on the Debentures will not be downgraded. A downgrade in the credit ratings may lower the value of the

Debentures and may also affect the Issuer‘s ability to raise further funds.

Changes in interest rates may affect the price of the Issuer’s Debentures.

All securities where a fixed rate of interest is offered, such as the Debentures, are subject to price risk. Interest

rates are highly sensitive and fluctuations thereof are dependent upon many factors which are beyond the

Issuer‘s control, including the monetary policies of the RBI, de-regulation of the financial services sector in

India, domestic and international economic and political conditions, inflation and other factors. The price of

such securities will vary inversely with changes in prevailing interest rates, i.e. when interest rates rise, prices of

fixed income securities fall and when interest rates drop, the prices increase. The extent of fall or rise in the

prices is a function of the existing coupon, days to maturity and the increase or decrease in the level of

prevailing interest rates. Increased rates of interest, which frequently accompany inflation and/or a growing

economy, are likely to have a negative effect on the price of the Debentures.

The Tata Power Group may raise further borrowings and charge its assets.

The Tata Power Group is not barred from raising future borrowings and may charge its assets from time to time.

The Debentures are subordinated to the claims of other creditors.

The Debentures are unsecured and are subordinated to the claims of all other senior unsecured creditors. The

Debentures are senior only to preference and equity share capital and any other securities at par with preference

and equity share capital of the Issuer. The Debentures will rank pari passu with each other in a winding-up of

the Issuer.

Debentureholders are advised that liabilities of the Issuer may also arise out of events that are not reflected on

the balance sheet of the Issuer, including, without limitation, the issuance of other guarantees. Claims made

under such guarantees will become unsubordinated liabilities of the Issuer and in a winding-up will need to be

paid in full before the obligations under the Debentures may be satisfied.

There is no limitation on issuing senior or pari passu securities.

There is no restriction on the amount of securities or other liabilities which the Issuer may issue or incur and

which rank senior to, or pari passu with, the Debentures. The issue of any such securities or the incurrence of

any such other liabilities may reduce the amount (if any) recoverable by Debentureholders on a winding-up of

the Issuer.

The Debentures are perpetual and accordingly have no fixed final redemption date.




Dated: June 1, 2011


27

The Debentures are perpetual and, although the Issuer may redeem the Debentures in certain circumstances

prior to such date, the Issuer is under no obligation to do so. The Debentureholders have no right to call for the

redemption of Debentures. They can only declare the Debentures due and payable in certain circumstances

relating to payment default (other than as validly deferred) and insolvency leading to winding-up of the Issuer.

Therefore, Debentureholders should be aware that they may be required to bear the financial risks associated

with an investment in long-term securities.

Uncertain trading market

The Issuer intends to list the Debentures on the WDM segment of the NSE. The Issuer cannot provide any

guarantee that the Debentures will be frequently traded on the NSE and that there would be any market for the

Debentures.

The Debentures may not be a suitable investment for all purchasers.

Potential Investors should ensure that they understand the nature of the Debentures and the extent of their

exposure to risk, that they have sufficient knowledge, experience and access to professional advisers to make

their own legal, tax, accounting and financial evaluation of the merits and risks of investment in the Debentures

and that they consider the suitability of the Debentures as an investment in the light of their own circumstances

and financial condition.

The Issuer may not be able to maintain adequate DRR for the Debentures

Section 117C of the Companies Act stipulates that where a company issues debentures, it must create a DRR for

the redemption of such debentures, to which adequate amounts shall be credited, from out of its profits every

year until such debentures are redeemed. Further, as per extant circular no. 6/3/2001-CL.V dated April 18, 2002

issued by the Government of India with respect to creation of DRR, for manufacturing and infrastructure

companies, the adequacy of DRR is defined at 25 % of the value of debentures issued through private placement

route.

In case the Issuer is unable to generate any profit, it may not be able to provide for the DRR even to the extent

of the stipulated 25 %.

Changes in Taxation related legislation could affect the value of the Debentures.

Potential Investors of the Debentures should be aware that they may be required to pay stamp duties or other

documentary charges/taxes in accordance with the laws and practices of India. Payment and/or delivery of any

amount due in respect of the Debentures will be conditional upon the payment of all applicable taxes, duties

and/or expenses. Potential Investors who are in any doubt as to their tax position should consult their own

independent tax advisers. In addition, potential Investors should be aware that tax regulations and their

application by the relevant taxation authorities change from time to time. Accordingly, it is not possible to

predict the precise tax treatment which will apply at any given time.

Under certain conditions, interest payments under the Debentures may be deferred.

The Issuer may defer all or some of the interest which would otherwise be payable on the Debentures on any

Distribution Payment Date provided that, during the six month period preceding the relevant Distribution

Payment Date (i) no dividend or interest has been declared or paid on or in respect of the Issuer‘s preference or

equity share capital or Parity Securities; and (ii) none of the Issuer‘s preference or equity share capital or Parity

Securities were redeemed, purchased, cancelled, bought back or otherwise acquired for any consideration by the

Issuer. Please refer to the “Summary Term Sheet” on page 40.

Any interest payments so deferred together with interest accrued thereon shall constitute Arrears of Distribution.

The Issuer may settle any outstanding Arrears of Distribution at any time. While the deferral of interest

payments continues, the Issuer may make payments on any of its securities ranking senior to the Debentures.

Any deferral of interest payments could likely have an adverse effect on the market price of the Debentures. In

addition, as a result of the interest deferral provision of the Debentures, the market price of the Debentures may




Dated: June 1, 2011


28

be more volatile than the market prices of other debt securities on which interest accrues that are not subject to

such deferrals and may be more sensitive generally to adverse changes in the Issuer‘s financial condition.

Fixed rate securities have a market risk.

The Debentures will bear interest at a fixed rate. A holder of a security with a fixed interest rate is exposed to

the risk that the price of such security falls as a result of changes in the current interest rate on the capital market

(the ―Market Interest Rate‖). While the nominal interest rate of a security with a fixed interest rate is fixed

during the life of such security or during a certain period of time, the Market Interest Rate typically changes on a

daily basis. A change of the Market Interest Rate causes the price of such security to change. If the Market

Interest Rate increases, the price of such security typically falls. If the Market Interest Rate falls, the price of a

security with a fixed interest rate typically increases. Investors should be aware that movements of the Market

Interest Rate can adversely affect the price of the Debentures and can lead to losses for the Debentureholders if

they sell the Debentures.

Modification, waivers and substitution

The conditions of the Debentures contain provisions for calling meetings of Debentureholders to consider

matters affecting their interests generally. These provisions permit defined majorities to bind all

Debentureholders including Debentureholders who did not attend and vote at the relevant meeting and

Debentureholders who voted in a manner contrary to the majority.

Change of law

The conditions of the Debentures are based on laws in effect as at the date of this Information Memorandum. No

assurance can be given as to the impact of any possible judicial decision or change to relevant law or

administrative practice after the date of this Information Memorandum.




Dated: June 1, 2011


29

HISTORY AND BUSINESS OF THE ISSUER

HISTORY OF THE ISSUER

Tata Hydro was founded in 1906 and awarded a licence to supply and distribute electricity in Mumbai in 1907.

In 1915, Tata Hydro commissioned its first power station, the hydro plant at Khopoli. In the 1920s, hydro plants

at Bhivpuri and Bhira were added.

The Issuer was incorporated in 1919 under the Companies Act, 1913 and is now regulated by the Companies

Act, 1956. Following incorporation, the Issuer, Andhra Valley and Tata Hydro, collectively referred to as Tata

Electric Companies, operated in conjunction. In the 1960s, the Issuer developed its first thermal power plant at

Trombay. In the 1990s the Issuer expanded outside Maharashtra into Jharkhand and Karnataka. Vide its order

dated October 18, 2000, the High Court of Judicature at Bombay sanctioned the arrangement embodied in the

Scheme of Amalgamation of the Issuer with Andhra Valley and Tata Hydro. Andhra Valley and Tata Hydro

ceased to exist with effect from November 27, 2000.

BUSINESS OF THE ISSUER

The Issuer is an integrated utility company primarily engaged in the generation, transmission, distribution and

trading of electricity in India. As one of the largest private sector generators in India by capacity, it owns and

operates power stations with an aggregate capacity of approximately 3,127 MW as at March 31, 2011. In

addition, the Issuer is currently in the process of implementing a number of power projects, which, upon

completion, will increase the Tata Power Group‘s overall generation capacity to approximately 8,516 MW by

March 2013.

The Tata Power Group‘s core business is organized into five segments: (i) generation, (ii) transmission, (iii)

distribution, (iv) fuel and logistics, and (v) trading. The Issuer is the top listed holding company in the Tata

Power Group and also carries out certain generation, transmission and distribution activities focussed largely on

the Mumbai region. Other power businesses and the fuel and logistics operations are conducted through the Tata

Power Group companies.

Generation

The Issuer has an extensive generating portfolio consisting of thermal (coal, oil and gas), hydro and wind power.

The output of the generating assets in Maharashtra is primarily used to meet the requirements of the distribution

licensees in Mumbai. The output of Issuer‘s plant in Jharkhand is sold to Tata Steel at arm‘s length terms under

a PPA and the surplus power, if any, is traded. The power generated at the plant at Belgaum in Karnataka is sold

to KPTCL under a long term PPA. Approximately one-sixth of the power generated in the Haldia plant is sold to

the West Bengal State Electricity Distribution Company Limited and the balance is traded through Tata Power

Trading Company Limited.

The Issuer‘s operations in Mumbai accounted for approximately 2,027 MW of installed capacity, which

includes 100 MW of Merchant Capacity as at March 31, 2011. The Issuer‘s subsidiary, Tata Power Generation,

has two PPAs with BEST for 1,000 MW and with Tata Power Distribution for 527 MW expiring on March 31,

2018. BEST, and Tata Power Distribution are the Issuer‘s main customers in Mumbai.

In addition, the Issuer is implementing a number of new power projects as part of its planned expansion of

generating capacity. CGPL, a 100 % subsidiary of the Issuer, is implementing a UMPP at Mundra in Gujarat,

the first UMPP to be awarded by the Government of India through competitive bidding. Tata Power also owns a

74 % interest in MPL, which is a joint venture between the Issuer and the state-owned Damodar Valley

Corporation in connection with a 1,050 MW mega power project in Jharkhand. The Issuer is also in the process

of implementing wind power projects in Maharashtra and Tamil Nadu with a combined capacity of 148 MW. In

addition, the Issuer is executing a 126 MW hydro project in Bhutan through a Dagachhu Hydro Power

Corporation Limited, a joint venture company between the Issuer and The Royal Government of Bhutan as well

as a solar project with a capacity of 25 MW in Mithapur, Gujarat. A consortium comprising the Issuer and SN

Power Norway has recently won the bid for a 236 MW ―Dugar Hydro Electric Project‖ in Chenab Valley in

Himachal Pradesh. The Issuer is also in the process of implementing a 240 MW geothermal power project,




Dated: June 1, 2011


30

called Sorik Merapi, in a consortium comprising of the Issuer, Origin Energy Australia and PT Supraco

Indonesia.

The Tata Power Group has also established a joint venture, IEL, with Tata Steel in order to provide Tata Steel

with its captive power requirements. Through IEL, the Issuer has added two units of 120 MW each at

Jamshedpur and Jojobera for generation of power to meet the requirements of the expansion of Tata Steel‘s

operations at the site.

The Issuer has increased its power generation capacity significantly in the past few years and will continue to

increase its generation capacity over the coming financial years. This can broadly be represented as follows:

Financial Year MW at the end of

Financial Year

(March 31)

2005 2,183

2006 2,303

2007 2,348

2008 2,364

2009 2,785

2010 2,977

2011 3,127

Financial Year Capacity Addition (MWs) MW at the end of

Financial Year

(March 31)

2012 2,863 (CGPL:1,600, Wind:148,

Mithapur:25, Maithon:1,050,

Lodhivali:40)

5,990

2013 2,526 (CGPL:2,400, DHPC:126) 8,516

Transmission and Distribution

Tata Power Distribution distributes electricity in the city of Mumbai, where it had over 160,000 customers as at

March 31, 2011. The total aggregate amount of power sold by the Issuer in Mumbai in Financial Year 2011 was

4,393 MUs, as compared to 2,782 MUs during the Financial Year 2010. As at March 31, 2011, Tata Power

Distribution had a distribution network of approximately 1,824 kilometres of high tension and low tension

underground cable network, 99 kilometres of overhead line network, 17 receiving stations, 14 distribution sub-

stations and more than 400 consumer sub-stations. The Issuer continues to invest in and expand this network.

As at March 31, 2011, the Issuer held a 51 % stake in a distribution company, NDPL, which was privatized in

July 2002. The remaining 49 % is held by the Delhi Power Company Limited, a company where the government

holds 100% of the shares. NDPL supplies power to a largely residential customer base in northern Delhi. NDPL

has upgraded its network to improve reliability and had over 1.10 million customers as at March 31, 2011. The

total aggregate amount of power sold by NDPL in Delhi in Financial Year 2011 was 6,373 MUs, as compared to

5,816 MUs sold during the Financial Year 2010.

The Issuer holds a 51% interest in Powerlinks Transmission Limited, a joint venture with Power Grid

Corporation of India Limited. This joint venture has been formed primarily to evacuate power from the Tala

Hydro Project in Bhutan and the north-eastern and eastern Indian states to New Delhi and adjoining areas. The

power will be transmitted through the Issuer‘s transmission lines, which are located between Siliguri in West

Bengal and Mandola in Uttar Pradesh. These transmission lines span a distance of approximately 1,200

kilometres.

Fuel Sources

As a part of its strategy to safeguard long term and economical supplies of quality coal, the Issuer has acquired,

through its wholly-owned overseas subsidiaries, a 30 % equity interest in certain Indonesian thermal coal

producers, including KPC and Arutmin and certain trading companies of Bumi.




Dated: June 1, 2011


31

In addition to its equity investment in the Indonesian coal mining operations i.e. in the Coal Companies, the

Issuer has entered into coal purchase agreements with Indocoal, PT Adaro Indonesia, Samtan Co. Ltd. and Trust

Energy Resources Pte Limited. Under the coal purchase agreement with Indocoal, the Issuer along with its

subsidiaries is entitled to purchase 10.11 MTPA of coal (+/- 20 %). The Issuer also purchases coal from PT

Adaro Indonesia, under two contracts for 1 MTPA (with an optional additional 0.25 MTPA) and 1 MTPA (with

an optional additional 0.20 MTPA), respectively. Under each contract ,the minimum off take obligation is 0.75

MTPA and price is reset semi-annually. The Issuer has also entered into a coal purchase agreement with Samtan

Co. Ltd., for the purchase of 0.65 MTPA of coal.

Together with certain joint venture partners, the Issuer has also been allocated the Tubed coal block in

Jharkhand, which is 40 % owned by the Issuer, and the Mandakini coal block in Orissa, which is 33.33 %

owned by the Issuer. The Issuer‘s share of the coal off-take from the Tubed coal mining block and from the

Mandakini coal mining blocks is expected to be 2.4 MTPA and 2.5 MTPA, respectively. These operations are

expected to provide fuel for the Issuer‘s coal based power projects in India. Coal from Tubed coal block is

planned to be used in the power project at Tiruldih where as the Manadkini coal block is planned to be utilised

in the Naraj Marthapur project.

The Issuer sources oil, including low sulphur heavy stock, from local refineries which is delivered through

pipelines and gas from GAIL (India) Limited to its thermal power plant at Trombay.

Logistics

The Issuer‘s Singapore subsidiary, Trust Energy Resources Pte Limited, owns cape size bulk carriers which can

be deployed to transport coal from Indonesia to India. The Issuer believes that it requires approximately eight

ships to transport the required coal for the Mundra UMPP. As at March 31, 2011, Trust Energy Resources Pte

Limited has purchased two cape size ships of 180,000 deadweight tonnes, for delivery in 2011, to meet a portion

of the transport requirements of Mundra UMPP. The Issuer, through CGPL, has established another subsidiary,

Energy Eastern Pte Limited, for the purpose of chartering ships to meet the transport requirements of the

Mundra UMPP. As of the date hereof, Energy Eastern Pte Limited has entered into three charter party

agreements. It is proposed that the remaining requirement of three ships for the Mundra UMPP be met through

further ownership of vessels and/or long term charter arrangements. Any further requirement of ships will be

met by chartering or purchasing such ships directly by the Issuer or through its subsidiaries.

Power Trading

The Issuer has established a subsidiary, Tata Power Trading for the purpose of trading power in India. Tata

Power Trading holds a trading licence by the CERC as a category F trading entity for a period of 25 years from

June 2005 which has been converted to category 1 trading license which continues to entitle it to trade unlimited

power. In Financial Year 2011, Tata Power Trading traded a total aggregate amount of power of to 4,354 MUs

as compared to 4,075 MUs during the Financial Year 2010.

Other businesses and investments of the Issuer

The primary focus of the Issuer‘s business remains generation, transmission, supply and distribution of

electricity, together with related fuel sourcing. In addition, the Issuer has a SED which designs and develops

electronic devices for defense applications. The Issuer also has significant investment interests in the energy and

telecommunications sectors.

As at March 31, 2011, the Issuer has acquired, through its overseas subsidiaries, an 8.76 % interest in

Geodynamics Limited, an Australian company specializing in geothermal energy. As at March 31, 2011, the

Issuer also has a 5.13 % interest in Exergen Pty. Limited, which is involved in the development of technology

used in continuous hydrothermal dewatering to convert abundant brown coal into black thermal coal.

As at March 31, 2011, the Tata Group owned a 31.81 % stake in the Issuer, including a 29.81 % stake held by

Tata Sons and 2 % by other Tata Group companies.




Dated: June 1, 2011


32

MATERIAL AGREEMENTS/ DOCUMENTS

A statement containing particulars of the dates of, and parties to all material contracts and agreements involving

financial obligations of the Issuer is set out below. The following are the material documents and agreements:

1. Certified copy of the Memorandum and Articles of Association of the Issuer as amended till date;

2. Certified true copy of resolution of the Board of Directors dated May 19, 2011 authorizing the issue of

the Debentures and further authorizing the Committee to take all action and to finalize the terms and

conditions of the Debentures;

3. Certified true copy of the resolution dated May 23, 2011 of the Committee appointing the Debenture

Trustee, the rating agencies, the legal counsel and authorizing certain officials of the Issuer named

therein to execute all documents and do all such acts, deeds, matters and things in relation to the Issue;

4. Certified true copy of the resolution dated June 1, 2011 of the Committee finalizing the terms and

conditions of the Debentures;

5. Certified true copy of resolution of the shareholders of the Issuer dated August 1, 2006 passed in

accordance with Section 293(1)(d) of the Companies Act specifying the borrowing limit for the Issuer;

6. Credit rating letter dated May 30, 2011 from CRISIL and credit rating letter dated May 27, 2011 from

CARE assigning rating for this issue attached as Annexure B;

7. Annual Report of the Issuer for the Financial Year ended 2010;

8. Audited financial results of the Issuer for the Financial Year ended 2011 attached as Annexure E;

9. Consent letter from the Debenture Trustee issued on May 27, 2011 attached as Annexure C;

10. Consent letter from the Registrar to the Issue dated May 30, 2011;

11. Certificate from the statutory auditors of the Issuer stating that the present Issue of Debentures would

be within the overall borrowing limits applicable to the Issuer;

12. Agreement between the Registrar and Issuer for appointment of Registrar;

13. Agreement between the Debenture Trustee and Issuer dated May 27, 2011;

14. Copy of the in-principle approval granted by NSE dated May 31, 2011 for listing of the Debentures on

the WDM segment issued in terms of this Information Memorandum attached as Annexure D;

15. Tripartite Agreement between NSDL, Registrar and Issuer for dematerialization of Debentures; and

16. Tripartite Agreement between CDSL, Registrar and Issuer for dematerialization of Debentures.

SHARE CAPITAL AND ASSOCIATED CORPORATE HISTORY OF THE ISSUER

The increases in the authorized share capital at different dates are given below:

During the last five years, there has been no change in the authorized share capital of the Issuer.

Share Capital Details of the Issuer

The Issuer‘s share capital as on date of this Information Memorandum is set forth below.

No. of

Shares

Share Capital

Face Value

Face

Value

Premium Total Share Capital

Rs. Rs. Rs. Rs.




Dated: June 1, 2011


33

No. of

Shares

Share Capital

Face Value

Face

Value

Premium Total Share Capital

Rs. Rs. Rs. Rs.

AUTHORISED

CAPITAL

Equity Shares 300,000,000 3,000,000,000 10 N.A. 3,000,000,000

Preference Shares 22,900,000 2,229,000,000 100 N.A. 2,229,000,000

SUBSCRIBED

CAPITAL

Equity 237,307,236 2,373,072,360 10 N.A. 2,373,072,360

Preference Nil - - - Nil

Details of Changes in Capital Structure of the Issuer in the last five years as on May 20, 2011:

Date of Allotment No. of Shares Particulars of Issues

July 3, 2007 9,894,000 Allotment of Shares to Tata Sons on a preferential basis

October 5, 2007 804,088

Shares issued upon conversion of FCCBs issued on 21 February 2005

October 19, 2007 3,887,559


November 6, 2007

3,285,521


November 23, 2007 796,595


December 14, 2007 829,638


December 31, 2007 688,745


January 25, 2008 816,348


February 29, 2008 1,138,002


March 21, 2008 661,802


May 2, 2008 1,468


May 23, 2008 79,072


June 20, 2008 73,419


July 25, 2008 533,613


February 6, 2009 36,709


April 24, 2009 312,033


June 19, 2009 272,680


July 27, 2009 14,838,110

Allotment of Shares pursuant to the issue of Global Depository

Receipts

September 11, 245,955 Shares issued upon conversion of FCCBs issued on 21 February 2005




Dated: June 1, 2011


34

Date of Allotment No. of Shares Particulars of Issues

2009

October 30, 2009 95,444


January 29, 2010 117,470


February 26, 2010 1,101


Total 39,409,372

History of change in share capital

Shareholding Pattern

The top ten equity and preference shareholders of the Issuer as on the date of this Information Memorandum is

as set forth below:

Top 10 equity shareholders of the Issuer as on May 20, 2011:

Sr.

No.

Name of Shareholder Address of

Shareholder

No. of Shares

held

% of

Shareholding

1 Tata Sons Limited Bombay House,

24 Homi Mody Street,

Mumbai 400001

70,751,157 29.81

2 Life Insurance Corporation of

India

Investment Department

6th

floor, West wing

Central Office

Yogakshema

Jeevan Bima Marg

Mumbai 400 021

30,789,656 12.97

3 The Bank Of New York C/o, ICICI Bank Limited

SMS Empire Complex

1st floor, 414, Senapati Bapat

Marg

Mumbai 400 013

7, 822,111 3.30

4 The New India Assurance

Company Limited

New India Assurance

Building

87, M G Road

Fort

Mumbai 400 001

6,652,662 2.80

5 General Insurance Corporation

Of India

Suraksha, 170 J Tata Road

Churchgate

Mumbai 400 020

6,211,947 2.62

6 ICICI Prudential Life Insurance

Company Limited

Deutsche Bank AG,

DB House, Hazarimal

Somani Marg,

Post Box No. 1142, Fort,

Mumbai 400001

3,529,770 1.49

7 The Royal Bank of Scotland Plc

as depositary of First State Asia

Pacific Leaders Fund, a sub

fund of First State Investments

ICVC

Deutsche Bank AG,

DB House, Hazarimal

Somani Marg,


Mumbai 400001

3,313,959 1.40

8 Aberdeen Asset Managers

Limited A/C Aberdeen

International India

HSBC Securities Services

2nd

floor "Shiv"

Plot No. 139-140b Western

3,110,000 1.31




Dated: June 1, 2011


35

Sr.

No.

Name of Shareholder Address of

Shareholder

No. of Shares

held

% of

Shareholding

Opportunities Fund (Mauritius)

Limited

Express Highway Sahar Road

junction

Vile Parle (East) Mumbai

400 057

9 The Royal Bank of Scotland Plc

as depositary of First State

Global Emerging Markets

Leaders Fund, a sub fund of

First State Investments ICVC

Deutsche Bank AG,

DB House, Hazarimal

Somani Marg,


Mumbai 400001

2,672,253 1.13

10 Mathews Pacific Tiger Fund Deutsche Bank AG,

DB House, Hazarimal

Somani Marg,


Mumbai 400001

2,385,014 1.01

Grand Total 137,238,529 57.83

The Issuer has not issued any preference shares as of the date of the Information Memorandum.

Details of Borrowings of the Issuer

Please see below for the total debt outstanding in Indian Rupees of the Issuer as on March 31, 2011:

Name of Lender

Type of

Borrowing

Amount

Sanctioned

(Rs.

million)

Amount

Outstandi

ng as on

March 31,

2011 (Rs.

million)

Asian Development Bank Rupee Loan 1,950 1,498

IDBI Bank Limited Rupee Loan 4,000 4,000

IDBI Bank Limited Rupee Loan 3,000 2,925

HDFC Bank Rupee Loan 6,000 5,142

ICICI Bank Limited Rupee Loan 1,500 1,345

ICICI Bank Limited Rupee Loan 290 290

Indian Renewable Energy Development Agency Limited Rupee Loan 950 694

Infrastructure Development Finance Company Limited Rupee Loan 600 60

Infrastructure Development Finance Company Limited Rupee Loan 2,500 2,400



Secured Redeemable Non-Convertible Debentures Rupee

Bonds 22,000 22,000

Buyers Credit

Working

Capital - 5,030

Temporary overdrawn balance in bank current accounts Working

Capital - 1,835

Sales Tax Deferral Other

Borrowings - 836

Short Term Borrowing from Companies

Other

Borrowings - 51

Notes due 2017 issued under the U.S.$1500,000,000 Euro medium

term note program

Foreign

Currency

Bonds

- 2,661




Dated: June 1, 2011


36

Name of Lender

Type of

Borrowing

Amount

Sanctioned

(Rs.

million)

Amount

Outstandi

ng as on

March 31,

2011 (Rs.

million)

Export-Import Bank of India

Foreign

Currency

Loan

- 135

U.S.$300,000,000 1,75% foreign currency convertible bonds due

2014

Foreign

Currency

Bonds

- 13,404

Grand Total 69,892

Please see below for the total debt outstanding of the Issuer by way of issuance of non-convertible debentures as

on May 20, 2011:

Issue Date of

Issuance

Face Value

per

Debenture

(Rs.)

Amount

Outstanding

(Rs.

Million)

Rate of

Interest

(%)

Repayment

Terms

Security

7.10%

Secured,

Redeemable,

Non-

Convertible

Debentures

September 29,

2004 to

October 18,

2004

10,00,000 6000.00 6.00 Redeemable

in 3

installments

in October,

2013,

October, 2014

and October,

2015

First pari passu

charge on the

immovable

properties at

Village Takve

Khurd of

Taluka Mawal

and

hypothecation

of plant and

machinery and

other movable

assets

10.10%

Secured,

Redeemable,

Non-

Convertible

Debentures

April 15, 2008

to April 22,

2008

10,00,000 5000.00 10.10 Bullet

Repayment in

April, 2018

First pari passu

charge on the

immovable

properties at

Village Takve

Khurd of

Taluka Mawal

and

hypothecation

of plant and

machinery and

other movable

assets

10.40%

Secured,

Redeemable,

Non-

Convertible

Debentures

June 13 ,2008

to June 16,

2008

10,00,000 5000.00 10.40 Bullet

Repayment in

June, 2018

First pari passu

charge on the

immovable

properties at

Village Takve

Khurd of

Taluka Mawal

and

hypothecation

of plant and




Dated: June 1, 2011


37

Issue Date of

Issuance

Face Value

per

Debenture

(Rs.)

Amount

Outstanding

(Rs.

Million)

Rate of

Interest

(%)

Repayment

Terms

Security

machinery and

other movable

assets

9.15%

Secured,

Redeemable,

Non-

Convertible

Debentures

July 15, 2010

to July 20,

2010

35,000,000 3,500 9.15 Redeemable

in 15 yearly

installments

First pari passu

charge on all

movable

properties

pertaining to:

(1) 50.40 MW

Wind Farm

Project at

Sadodar Village

,Samana Plains,

Jamnagar

district ,in the

state of Gujarat;

and (2) 50.40

MW Wind

Farm Project at

Gadag Plains

,Gadag District,

in the state of

Karnataka and

First pari passu

charge on

immovable

properties at

Village Mota

Panch Devda,

Taluka

Kalavad,

District

Jamnagar, State

Gujarat bearing

Survey

No.230/P1 and

242/1/P1

aggregating to

1.0219 acres

9.15% Rated,

Listed,

Taxable,

Secured,

Redeemable,

Non-

Convertible

Debenture(s)

with

Separately

Transferable

Redeemable

Principal

Parts

September 15,

2010

1,562,500 2,500 9.15 Redeemable

in 15 yearly

installments

first pari passu

charge on the

immovable

properties of

the Issuer at

Takve Khurd of

Taluka Mawal,

District, Pune

and Sub-

District Mawal

as well as first

pari passu

charge on

movable fixed

assets




Dated: June 1, 2011


38

Issue Date of

Issuance

Face Value

per

Debenture

(Rs.)

Amount

Outstanding

(Rs.

Million)

Rate of

Interest

(%)

Repayment

Terms

Security

(excluding land

and buildings)

of the Issuer,

present and

future except

assets of all

wind mill

projects,

present and

future, subject

to existing

charges created

in favour of the

existing lenders

of the Issuer for

securing its

existing

working capital

facilities

List of Top 10 holders of non-convertible debentures of the Issuer as on May 20, 2011

Sr.

No.

List of top 10 Non

Convertible Debenture

holders

Amount

Outstanding

%

Total

Address

1. Life Insurance Corporation

Of India

8800 40.00 Investment Department

6th

floor, West wing

Central Office

Yogakshema

Jeevan Bima Marg

Mumbai 400 021

2. Reliance Capital Trustee

Company Limited A/C

Reliance monthly

2500 11.36 Deutche Bank AG

DB House

Hazarimal Somani Marg Post Box No.

1142

Fort

Mumbai 400 001

3. Axis Bank Limited 1922 8.74 A Wing, 3rd

floor

Bezzola Complex

Suman Nagar

Sion Trombay Road Chembur

Mumbai 400 071

4. SBI Life Insurance

Company Limited

1650 7.50 HDFC Bank Limited, Custody Services

Lodha -1, Think Techno Campus, 8th

floor

Next to Kanjur Marg Railway Station

Kanjur Marg (E)

Mumbai 400 042

5. IDBI Bank Limited 1450 6.59 13th

floor

Investment Division

ISMOD, IDBI Towers

Cuffee Parade

Mumbai 400 005

6. Canara Bank, Mumbai 1000 4.55 Domestic Treasury (Back office)

Maker Chamber-111




Dated: June 1, 2011


39

Sr.

No.

List of top 10 Non

Convertible Debenture

holders

Amount

Outstanding

%

Total

Address

7th

floor, Nariman Point

Mumbai 400 021

7. ICICI Prudential Life

Insurance Company

Limited

650 2.95 Deutsche Bank AG

DB House

Hazarimal Somani Marg

Post Box No. 1142

Fort

Mumbai 400 001

8. Army Group Insurance

Fund

550 2.50 AGI Bhawan Rao

Tula Ram Marg

Post Vasant Vihar

New Delhi 110 057

9. General Insurance

Corporation Of India

550 2.50 Suraksha, 170 J Tata Road Churchgate

Mumbai 400 020

10. United India Assurance

Company Limited

500 2.27 24, Whites Road,

Chennai 600014




40

SUMMARY TERM SHEET

Issuer The Tata Power Company Limited

Joint Lead Arrangers/ Managers

Standard Chartered Bank and Yes Bank Limited

Legal Adviser Amarchand & Mangaldas & Suresh A. Shroff & Co

Instrument Unsecured, Subordinated, Perpetual, Rated, Listed Securities in the form of Non-Convertible Debentures (the “Debentures”)

Status and Ranking of the Debentures

Obligations of the Issuer under the Debentures will rank:

junior to any senior unsecured obligations of the Issuer;

pari passu with each other and with any Parity Securities of the Issuer; and

senior to preference and equity share capital and any other securities at par with preference or equity share capital of the Issuer

For the purpose of this clause, Parity Securities shall mean: (i) any security issued by the Issuer which ranks pari passu with the Debentures; and (ii) any security guaranteed by the Issuer or subject to the benefit of an indemnity entered into by the Issuer, where the Issuer’s obligations under the relevant guarantee or indemnity rank pari passu with the Issuer’s obligations under the Debentures.

Face Value Rs. 10,00,000 per Debenture

Minimum Subscription for Debentures

As the current Issue of Debentures is being made on private placement basis, the requirement of minimum subscription shall not be applicable and therefore the Issuer shall not be liable to refund the Issue subscription(s)/ proceed(s) in the event of the total Issue collection falling short of Issue Size or certain percentage of Issue Size.

Issue Size Up to 15,000 Debentures of face value of Rs. 10,00,000 each aggregating to Rs. 1,500 Crores

Mode of Placement On private placement basis to all Eligible Investors

Issue price per Debenture

Rs. 10,00,000 per Debenture

Redemption Price The Debentures are perpetual. However, in the case of redemption of the Debentures on the relevant Call Option Date on which the Issuer exercises the Call Option or the Early Redemption Date, as the case may be, all principal amounts outstanding on the Debentures along with the accrued interest and other amounts owed shall be payable.

Tenor/Maturity Perpetual

Interest on Application Money

Interest on application money will be paid to Investors at the rate of 11.40% per annum from the date of realization of subscription money up to one day prior to the Deemed Date of Allotment. Such interest shall be payable within 7 Working Days from the Deemed Date of Allotment

Redemption Amount All principal amounts outstanding shall be payable on the relevant Call Option Date on which the Issuer exercises the Call Option or the Early Redemption Date, as the case may be, in one bullet installment. On the Call Option Date or the Early Redemption Date, as the case may be, the accrued interest and other amounts owed




41

will also be payable.

Distribution Rate Subject to Optional Distribution Deferral and the Distribution Step up, the Issuer shall be liable to pay Distribution on the Debentures at the fixed rate of 11.40% per annum, payable on a semi-annual basis on each Distribution Payment Date.

Distribution Period Each Distribution Period shall be each period from (and including) any Distribution Payment Date to (but excluding) the next succeeding Distribution Payment Date. In the case of the first Distribution Payment Date falling in October, 2011 interest shall accrue from and including the Deemed Date of Allotment to (but excluding) the first Distribution Payment Date, being the 31st day of October, and if such day is not a Working Day, the day immediately prior to the 31st day of October that is a Working Day. All interest accruing for any Distribution Period shall accrue from day to day and be calculated on the basis of the actual number of days elapsed and a year of 365 days (or 366 days in case of a leap year), at the applicable Distribution Rate and rounded off to the nearest Rupee.

Distribution Payment Date

Payable semi-annually on the 31st day of October and 30th day of April in each year (and if such day is not a Working Day, the day immediately prior to the 30th day of April or 31st day of October, as the case may be, that is a Working Day) with the first distribution payment date falling on October 31, 2011.

Optional Distribution Deferral

Yes. Distribution, which would otherwise be payable on an Distribution Payment Date, may be deferred at the option of the Issuer if, during the 6 months preceding the relevant Distribution Payment Date:

(i) no dividend or interest has been declared in respect of the Issuer’s preference or equity share capital or Parity Securities; or

(ii) none of the Issuer’s preference or equity share capital or Parity Securities were redeemed, purchased, cancelled, bought back or otherwise acquired for any consideration by the Issuer.

Any Distribution so deferred shall bear interest as if it constituted the principal of the Debentures at the Distribution Payment Date.

Any Distribution not paid on the Distribution Payment Date shall constitute an “Arrears of Distribution”. The Issuer may further defer any Arrears of Distribution by complying with the foregoing requirements.

Notwithstanding anything mentioned herein, the Issuer may choose to pay the Arrears of Distribution, in whole and not in part, on any day to the holders of the Debentures. Any payment made by the Issuer to the holders of the Debentures shall be first appropriated towards the Arrears of Distribution.

Distribution not paid will accumulate until such distributions are fully paid.

Cumulative Distribution All unpaid Distribution pursuant to Optional Distribution Deferral shall be cumulative on a semi-annual compounded basis

Dividend and Capital Stopper

Yes. Unless all Arrears of Distribution are fully paid, the Issuer shall not:

declare or pay any dividends or distributions or make any other payment on, or will procure that no dividend, distribution or other payment is made on any securities of the Issuer ranking pari passu with, or junior to, the Debentures; or

redeem, reduce, cancel, buy back or acquire for any consideration any security of the Issuer ranking pari passu with, or junior to, the Debentures.

Redemption Date The Debentures are perpetual.




Dated: June 1, 2011


42

Yield on Redemption The Debentures are perpetual

Put Option None

Call Option Call Option can be exercised, at par, by the Issuer at the end of 10 years from the

Deemed date of Allotment and at the end of every year thereafter (each a ―Call

Option Date‖), subject to provision of prior written notice to the holders of the

Debentures at least thirty days prior to the date when the Call Option is proposed to

be exercised.

Distribution Step Up At the expiry of 10 years from the Deemed Date of Allotment, if the Call Option is

not exercised by the Issuer, the Distribution Rate shall be revised upwards by 1%.

Consequently, the Distribution Rate shall increase to 12.40% per annum and

Distribution at the revised rate of 12.40% per annum shall be payable semi-

annually.

Shut Period 3 days commencing on the Record Date and ending on each Distribution Payment

Date or the relevant Call Option Date on which the Issuer exercises the Call Option.

Record Date Date which is 3 days prior to each Distribution Payment Date and relevant Call

Option Date on which the Issuer exercises the Call Option for the purposes of

actual payment or as prescribed by SEBI. Registered Debentureholders on the

Record Date will be the recipients of actual payment of Distribution by the Issuer

Security Unsecured

Replacement Capital

Covenant Agreement

At or around the time of issuance of the Debentures, the Issuer will enter into a

Replacement Capital Covenant Agreement with any one of the lenders of a

Covered Debt, as identified by CRISIL and Standard & Poor‘s, ranking senior to

the Debentures which will provide that the Issuer will not redeem or purchase the

Debentures, unless and to the extent that that the Issuer has sold or issued shares, or

securities for which the Issuer will receive equity credit, at the time of sale or

issuance, that is equal to or greater than the equity credit attributed to the

Debentures, so redeemed or purchased, as at the Deemed Date of Allotment. The

restriction imposed on the Issuer to redeem or purchase the Debentures shall not

apply during the period when, inter alia, the credit rating of the Debentures is

upgraded by CRISIL to AA+ or higher and the corporate credit rating assigned to

the Issuer is upgraded by Standard & Poor‘s to BB or higher.

The RCC will terminate on the earlier of:

(i) the date on which there is no material debt outstanding to serve as Covered

Debt; or

(ii) any date on which a majority of the Covered Lenders consent or agree to the

termination of the Replacement Capital Covenant Agreement; or

(iii) 30 years from the Deemed Date of Allotment; or

(iv) the date on which there are no Debentures outstanding and all obligations of

the Replacement Capital Covenant Agreement have been met.

For the purpose of this clause, Covered Debt shall mean the facility designated by

the Issuer, as identified by CRISIL and Standard & Poor‘s, the lenders of which

shall have the benefit of the Replacement Capital Covenant Agreement.

Covered Lenders shall mean the lenders of the Covered Debt.

Future Borrowings Subject to compliance with the documents relating to the issuance of Debentures,

the Issuer shall be entitled to borrow or raise loans or create encumbrances or avail

financial assistance in whatever form, and also issue promissory notes or

debentures or guarantees or indemnities or other securities, without the consent of,




Dated: June 1, 2011


43

or intimation to the Debentureholders or the Debenture Trustee in this connection.

Opening Date of the

Issue

June 1, 2011

Closing Date of the

Issue

June 1, 2011

Pay-in-Date June 1, 2011

Deemed Date of

Allotment

June 2, 2011

Issuance mode Dematerialized

Trading Dematerialized

Market Lot 1 Debenture

Listing On the WDM Segment of the NSE. The Issuer shall ensure that the listing of the

Debentures takes place within 15 Working Days from the Deemed Date of

Allotment.

Depository NSDL and CDSL

Tax Deduction at

Source

The amount of tax deduction on interest payable on any listed dematerialised

security held by any person resident in India would be subject to the provisions of

the Income Tax Act, 1961 and any future amendments or modifications thereof or

any bilateral tax treaty, if applicable and all payments by the Issuer shall be paid net

of withholding tax or tax deductions at source.

Conditions Precedent The Issuer will provide documents in form and substance satisfactory to the Joint

Lead Arrangers, including but not limited to:

1. all applicable internal and external approvals for the Issue and resolutions

passed by the board of directors of the Issuer;

2. all documentation required in relation to the listing of the Debentures; and

3. all consents, authorizations and approvals (both statutory and regulatory)

pertaining to the Issue, including but not limited to those under the Companies

Act and the SEBI Debt Regulations

Conditions Subsequent The Issuer will, following the Allotment take certain actions as may be required by

the Joint Lead Arrangers and Debenture Trustee in a form and with the substance

satisfactory to them, including but not limited to:

1. enter into the Debenture Trust Deed and any other related documents,

instruments or deeds (as determined by the Debenture Trustee) within 15

Working Days from the Deemed Date of Allotment; and

2. submit listing documents to the NSE and obtain a listing for the Debentures

within 15 (fifteen) Working Days from the Deemed Date of Allotment.

Events of Default The Debenture Trust Deed will set out certain event of default the occurrence of

which will lead to the Debentures, accrued interest and all other amounts

thereunder becoming immediately due and payable upon notification of the

Debenture Trustee (as directed by the Debentureholders):

1. if, subject to the right to defer interest described above, the Issuer does not

pay any principal or distribution or other amount due and payable in respect

of the Debentures or any of them in full within 30 days of its due date; or

2. the Issuer is declared bankrupt, insolvent or dissolved or liquidated or any




Dated: June 1, 2011


44

other analogous insolvency order is made against the Issuer.

The date on which the Debenture Trustee gives notice to the Issuer upon the

occurrence of Event of Default shall be called the Early Redemption Date.

Modification of Rights The rights, privileges, terms and conditions attached to the Debentures may be

varied, modified or abrogated with the consent, in writing, of those

Debentureholders who hold at least three fourth of the outstanding amount of the

Debentures or with the sanction accorded pursuant to a Special Resolution passed

at a meeting of the Debentureholders, provided that nothing in such consent or

resolution shall be operative against the Issuer where such consent or resolution

modifies or varies the terms and conditions of the Debentures, if the same are not

acceptable to the Issuer.

Expenses The Issuer will pay all legal expenses, rating, trustee, depository, registrar and

transfer agent and legal advisor fees incurred in connection with the Issue as well as

all stamp duties payable in relation to any of the documents for the Issue including

but not limited to the Debenture Trust Deed. Issuer will also be responsible for all

expenses involved in the issuance of the Debentures and all other applicable

charges. In addition, the Issuer will also be liable for all expenses incurred by the

Joint Lead Arrangers, including legal fees, whether or not the Debentures are issued

or not.

Credit Rating CARE AA by CARE and AA by CRISIL

Special Resolution Will be a resolution passed at a meeting of the Debentureholders duly convened

and held in accordance with provisions herein contained and carried by a majority

consisting of such number of Debentureholders which shall represent not less than

75 (seventy five) % of the nominal value of Debentures then outstanding or if a poll

is demanded by a majority representing not less than 75 (seventy five) % of the

nominal value of Debentures then outstanding on such poll

Documents The Issuer confirms that it will enter into the Debenture Trust Deed and other

relevant documents required in relation to the issuance of the Debentures within 15

Working Days from the Deemed Date of Allotment and all such documents shall

reflect the terms and conditions in this Information Memorandum

Governing Law The Debentures are governed by and will be construed in accordance with Indian

law. The Issuer, the Debentures and Issuer‘s obligations under the Debentures shall,

at all times, be subject to the directions of the SEBI. The Debentureholders, by

purchasing the Debentures, agree that the courts and tribunals at Mumbai shall have

non-exclusive jurisdiction with respect to matters relating to the Debentures.

Tax Benefits Potential Investors are advised to consider the tax implications in respect of

subscription to the Debentures in consultation with their tax advisors.

Purchase and Sale of

Debentures

The Debentures will be traded on the NSE subject to applicable regulations




Dated: June 1, 2011


45

OBJECTS OF THE ISSUE

Funds Requirement and Utilisation of Net Proceeds

The utilization of funds proposed to be raised through this private placement will be for general business

purpose including without limitation capital expenditure, working capital and refinancing of existing debt.

However the Issuer is specifically excluded from using the proceeds for acquisition or purchase of land and

investment in equity / capital markets.




Dated: June 1, 2011


46

REGULATORY DISCLOSURES

This section sets out information as required by Schedule I of the SEBI Debt Regulations.

1. Name and registered office of the Issuer

Name: The Tata Power Company Limited

Registered Office: Bombay House, 24 Homi Mody Street, Mumbai 400 001, India

Tel No. +91 22 6665 8282

Fax No. +91 22 6665 8885

Compliance Person: Mr. B.J. Shroff, Company Secretary



2. Names and details of the directors of the Issuer

The following table sets forth details regarding the Issuer‘s Board of Directors as on the date of the


Sr.

No.

Name of the

Directors

Age Designation Address

Other Directorships

1 Mr. Ratan Tata 73 Chairman and

Non-Executive

Director

Bakhtavar, 163,

Lower Colaba Road,

Mumbai 400 005

Tata Sons Limited

Tata Steel Limited

Tata Motors Limited

Tata Chemicals Limited

The Indian Hotels Company

Limited

Tata Global Beverages Limited

The Bombay Dyeing and

Manufacturing Company

Limited

Tata Consultancy Services

Limited

Tata Industries Limited

Tata Teleservices Limited

Antrix Corporation Limited

RNT Associates Private

Limited

Tata Technologies (Pte)

Limited, Singapore

Tata International AG Zug,

Switzerland

Tata AG Zug, Switzerland

Tata Limited., London, UK

Tata Incorporated, New York,

USA

Tata Motors European

Technical Centre, Plc, UK

Fiat S.p.A., Italy

Tata America International

Corporation Limited

Alcoa Inc., USA

Jaguar Land Rover Limited

RNT Associates International

Pte. Limited, Singapore

2 Mr. Ramabadran

Gopalakrishnan

65 Non-Executive

Director

Baug-E-Abbas, Flat

No.101, Captain

Prakash Pethe Marg,

Tata Sons Limited

Tata Chemicals Limited

Rallis India Limited


http://www.tatapower.com/




Dated: June 1, 2011


47

Sr.

No.

Name of the

Directors


Other Directorships

21/A, Cuffe Parade,

Mumbai

400 005

Azko Nobel India Limited

Castrol India Limited

Tata AutoComp Systems

Limited

Tata Technologies Limited

ABP Private Limited

Advinus Therapeutics Private

Limited

Metahelix Life Sciences

Private Limited

Dhaanya Seeds Private Limited

IMACID S.A.

Trust Energy Resources Pte.

Limited, Singapore

3 Dr. Homiar S

Vachha

69 Independent,

Non-Executive

Director

Flat No.9, Naoroji

House, Naigaum

Cross Road, Dadar,

Mumbai 400 014

Finolex Cables Limited

Tata International Limited

Tata Ceramics Limited

Af-Taab Investment Co.

Limited

North Delhi Power Limited

Graziella Shoes Limited

Bachi Shoes (India) Private

Limited

4 Mr. Adi J.

Engineer

73 Non-

independent,

Non-Executive

Director

Flat A-8, Salisbury

Apartments, Ahura

Co-op Housing

Society, Salisbury

Park, 55/2, Gultekadi,

Pune 411 037

Finolex Cables Limited


Chemical Terminal Trombay

Limited

Tata Projects Limited

Tata BP Solar India Limited

The Associated Building Co.

Limited

5 Mr. Nawshir H.

Mirza

60 Independent,

Non-Executive

Director

6A, Somerset Place,

61-D, Bhulabhai

Desai Road, Mumbai

400 026

ESAB India Limited

Mphasis BFL Limited

Thermax Limited

Foodworld Supermarkets

Limited

Coastal Gujarat Power Limited

Health & Glow Retailing

Private Limited

6 Mr. Deepak M.

Satwalekar

62 Independent,

Non-Executive

Director

9, Nutan Alka CHS,

Relief Road,

Santacruz (W),

Mumbai 400 054

Infosys Technologies Limited

Asian Paints Limited

Entertainment Network India

Limited

Piramal Healthcare Limited

IL & FS Transportations

Networks Limited

National Stock Exchange of

India Limited

Franklin Templeton Asset

Management (India) Private

Limited

Germinait Solutions Private

Limited

Indian Institute of Human

Settlement

7 Mr. Ramchandra

H. Patil

73 Independent,

Non-Executive

Flat No.901, Gloroisa

Apts, N M Kale

Axis Bank Limited

The Clearing Corporation of




Dated: June 1, 2011


48

Sr.

No.

Name of the

Directors


Other Directorships

Director Marg, Off. S K Bole

Road, Dadar (West),

Mumbai 400 028

India Limited

National Securities Clearing

Corporation India Limited

National Stock Exchange of

India Limited

NSE.It Limited

Clear Corp Dealing Systems

(India) Limited

National Securities Depository

Limited

SBI Capital Markets Limited

CorpBank Securities Limited

NSDL Database Management

Limited

L&T Infrastructure Finance

Company Limited

Axis Private Equity Limited

L&T Investment Management

Limited

8 Mr. Piyush G.

Mankad

69 Independent,

Non-Executive

Director

P - 161 , ATS Greens

Village, Sector 93-A,

Expressway, Noida

201 301

Heidelberg Cement India

Limited

Tata Elxsi Limited

Mahindra & Mahindra

Financial Services Limited

Max India Limited

ICRA Limited

Noida Toll Bridge Company

Limited

SRF Limited

United Breweries (Holdings)

Limited

M & M Forgings Limited

Tata International Limited

DSP-ML Fund Managers

Limited

Kingfisher Airlines Limited

9 Mr. Ashok K. Basu 69 Independent,

Non-Executive

Director

GD 282, Sector III,

Salt Lake, Kolkata

700 016

Tata Metaliks Limited

Usha Martin Limited

The Tinplate Company of

India Limited

Bharat Heavy Electricals

Limited

Visa Comtrade Limited

JSW Bengal Steel Limited

Visa Power Limited

West Bengal Power

Development Corporation

Limited

Carter Engineering Private

Limited

10 Mr. Thomas

Mathew T.

57 Independent,

Non-Executive

Director (LIC

Nominee)

A-1, Jeevan Jyot,

Setalvad Lane,

Napean Sea Road,

Mumbai 400 036

Larsen and Toubro Limited

Corporation Bank Limited

LIC Pension Fund Limited

L&T Infrastructure

Development Projects Limited

LIC Nomura Mutual Fund

Trustee Company Private




Dated: June 1, 2011


49

Sr.

No.

Name of the

Directors


Other Directorships

Limited

LIC (International) B.S.C. (C),

Bahrain

Life Insurance Corporation of

India

11 Mr. Anil Sardana 52 Managing

Director

15 Gagan Vihar,

Delhi 110 051

Maithon Power Limited




Limited

Bhira Investments Limited

Bhivpuri Investments Limited

12 Mr. Sowmyan

Ramakrishnan

62 Executive

Director

A-701 NCPA

Apartments, ‗A‘

Block, Nariman

Point, Mumbai 400

020

AGC Networks Ltd

NELCO Limited

Tata Power Trading Co.

Limited


Limited




Bhivpuri Investments Limited

PT Kaltim Prima Coal

PT Arutmin Indonesia

IndoCoal Resources (Cayman)

Limited

PT Indocoal Kalsel Resources

PT Indocoal Kaltim Resources

Candice Investments Pte.

Limited

OTP Geothermal Pte Ltd

Bhira Investments Ltd

13 Mr.

Sankaranarayanan

Padmanabhan

53 Executive

Director

132, Apsara, NCPA

Complex, D Tata

Road, Nariman Point,

Mumbai 400 021

Tata Power Trading Company

Limited

Industrial Energy Limited


Chemical Terminal Trombay

Limited

Powerlinks Transmission

Limited

Trust energy Resources Pte.

Limited, Singapore

14 Mr. Banmali

Agarwal

48 Executive

Director

A- Wing, 201,202-

Kalpataru Horizon,

Dr. Annie Besant

Road, Behind Dunlop

House, S K Ahire

Marg, Worli, Mumbai

– 400 018

Tata Projects Limited

Powerlinks Transmission

Limited

Maithon Power Limited


Dagachhu Hydro Power

Corporation Limited

Geodynamics Limited

OTP Geothermal Pte. Limited

None of the Issuer‘s Directors are listed as defaulters in the Credit Information Bureau (India) Limited

(CIBIL) defaulters‘ list as of the date of this Information Memorandum.

3. A Brief Summary of the Business / Activities of the Issuer and its Line of Business.




Dated: June 1, 2011


50

Please see the section headed ―History and Business of the Issuer‖.

4. A Brief History of the Issuer since its Incorporation giving Details of its Activities including any

Reorganization, Reconstruction or Amalgamation, Changes in its Capital Structure, (Authorized,

Issued and Subscribed) and Borrowings, if any.


5. Details of Debt Securities Issued and Sought to be Listed including Face Value, Nature of Debt

Securities, Mode of Issue i.e. Public Issue or Private Placement


6. Issue Size

Rs. 1,500 Crores (Rupees Fifteen Hundred Crores only).

7. Utilization of the Issue Proceeds

Please see the section headed ―Objects of the Issue‖.

8. A Statement containing Particulars of the Dates of, and Parties to all Material Contracts,

Agreements involving Financial Obligations of the Issuer

The Issuer, in the ordinary course of its business, enters into various agreements, including loan

agreements, which may contain certain financial obligations and/or provisions which may have an

impact on its financial condition. Such contracts or agreements may be inspected at the Registered

Office from 10.00 am to 12.00 pm from the date of this Information Memorandum, until the date of

closure of this Issue.


9. Details of other Borrowings including any other Issue of Debt Securities in Past:

Please see the section titled ―History and Business of the Issuer‖.

10. Any material event/development or change at the time of Issue or subsequent to Issue which may

affect the Issue of the Investor’s decision to invest/continue to invest in the debt securities.

Since March 31, 2011, in the opinion of the Issuer, other than as disclosed in this Information

Memorandum, there has not arisen any circumstance that materially or adversely affects the

profitability of the Issuer taken as a whole or the value of their consolidated assets or their ability to

pay their material liabilities over the next 12 months.

Other than as disclosed in this Information Memorandum, there are no other material events or

developments or changes at the time of this Issue or subsequent to the Issue which may affect the Issue

or the investors‘ decision to invest/ continue to invest in the Issue.

11. Particulars of the Debt Securities Issued (i) for Consideration other than Cash, whether in Whole

or in Part, (ii) at a Premium or Discount, or (iii) in Pursuance of an Option

As of the date of this Information Memorandum, the Issuer has not issued any debt securities, for

consideration other than cash, whether in whole or in part, at a premium or discount, or in pursuance of

an option.

12. A list of highest ten holders of each class or kind of securities of the Issuer as on the date of

application along with particulars as to number of shares or debt securities held by them and the

address of each such holder.




Dated: June 1, 2011


51


13. Undertaking to use a Common Form of Transfer

The Issuer will issue the Debentures in dematerialized form only and there will not be any physical

holdings. However, the Issuer will use a common transfer form for physical holdings if, at a later stage,

there is some holding in physical form due to the Depository giving the option of rematerialisation to

any Debentureholder.

14. Redemption Price, Maturity, Coupon and Yield on Redemption

Please see the section headed ―Summary Term Sheet‖.

15. Information relating to the Terms of Offer or Purchase


16. The discount at which such offer is made and the effective price for the Investor as a result of

such discount

The Debentures are being issued at face value and no discount shall be offered on the Debentures.

Accordingly, the Investors will have to pay 100 % of the Issue price per Debenture on subscription.

17. The debt to equity ratio prior to and after Issue.

Particulars Prior to Issue After the Issue

Debt Equity Ratio*

0.66

(as on March 31, 2011)

0.58

* The Debt equity ratio prior to the issuance of Debentures is 0.66 based on debt of Rs. 69,892 million

(as at March 31, 2011) and equity of Rs. 1, 06,420 million (as at March 31, 2011). The debt equity

ratio after the issuance of the Debentures (assuming full subscription) would be 0.58 based on long

term debt of Rs. 69,892 million and equity of Rs. 1,21,420 million. The debt has been calculated as the

sum of all secured loans and unsecured loans of the Issuer while the equity is computed as the sum of

share capital, reserves and surplus, and perpetual debenture (including the proposed issue of

Debentures).

For this disclosure the Issuer has used the figures of audited balance sheet as on March 31, 2011.

18. Servicing Behaviour on Existing Debt Securities, Payment of Interest on Due Dates on Terms

Loans and Debt Securities

The Issuer is discharging all its liabilities in time and will continue doing so in future as well. The

Issuer has been paying regular interest and principle whenever due.

There has been no default in payment of due interest or redemption in relation to debt securities issued /

debt taken by the Issuer prior to the date of this Information Memorandum.

19. Permission or Consent from the Prior Creditors for a Second or Pari-Passu Charge Being

Created in favour of the Trustees to the Proposed Issue has been Obtained

The proposed Issue of Debentures is unsecured and therefore, no consent is required from prior

creditors for the creation of a charge in favour of the Debenture Trustee.

20. Names of the Debenture Trustees and Consents thereof




Dated: June 1, 2011


52

The Debenture Trustee for this Issue of Debentures shall be IDBI Trusteeship Services Limited. The

Debenture Trustee has given its written consent for its appointment and inclusion of its name in the

form and context in which it appears in this Information Memorandum. IDBI Trusteeship Services

Limited has given their consent to the Issuer to act as trustee for the Debentureholders under

Regulation 4 (4) of the SEBI Debt Regulations.

The consent letter from the Debenture Trustee is attached as Annexure C.

21. Rating and rating rationale

The Issue has been rated CARE AA by CARE and AA by CRISIL. The rating letters from CARE and

CRISIL are attached as Annexure B.

22. Names of all the Recognized Stock Exchanges where Securities are Proposed to be Listed clearly

indicating the Designated Stock Exchange and also whether In Principle Approval from the

Recognized Stock Exchange has been obtained

The Debentures of the Issuer are proposed to be listed on the WDM segment of the NSE. The Issuer

shall comply with the requirements of the Debt Listing Agreement to the extent applicable to it on a

continuous basis. The NSE is therefore the designated stock exchange. The Issuer has obtained ‗in-

principle‘ approval from the NSE to list the Debentures and same is attached as Annexure D.

23. A Summary Term Sheet with Brief Prescribed Information Pertaining to the Secured/ Unsecured

Non-Convertible Debt Securities (or a Series thereof) (where Relevant)





Dated: June 1, 2011


53

ISSUE PROCEDURE

The Issuer proposes to issue the Debentures on the terms set out under ―Summary Term Sheet‖ above. The

Debentures being offered pursuant to this Information Memorandum are subject to the provisions of the

Companies Act, the SEBI Debt Regulations, the Memorandum and Articles of Association of the Issuer, the

terms of this Information Memorandum, Application Form, and other terms and conditions as may be

incorporated in the Debenture Trust Deed. This section applies to all Applicants. Please note that all Applicants

are required to make payment of the full Application Amount along with the Application Form.

Borrowing Powers of the Board

The shareholders of the Issuer, through a resolution passed at the their meeting dated August 1, 2006 authorized

the Board of Directors to borrow monies together with monies already borrowed by us, in excess of the

aggregate of the paid up capital of the Issuer and its free reserves, not exceeding Rs. 10,000 crores at any time.

Pursuant to a resolution dated May 19, 2011 by the Board and the resolutions by the Committee dated May 23,

2011 and June 1, 2011, the Issuer has been authorised to issue Debentures aggregating up to Rs. 1,500 Crores by

way of this Issue.

How to Apply

Only Eligible Investors as given hereunder may apply for the Debentures by completing the application form in

the prescribed format in BLOCK LETTERS in English as per the instructions contained therein. The minimum

number of Debentures that can be applied for and the multiples thereof shall be set out in the relevant

application form. No application can be made for a fraction of an Debenture. Application forms should be duly

completed in all respects and applications not completed in the said manner are liable to be rejected. The name

of the applicant‘s bank, type of account and account number must be duly completed by the applicant. This is

required for the applicant‘s own safety and these details will be printed on the refund orders and interest/

redemption warrants.

An application form must be accompanied by either demand draft(s) or cheque(s) drawn or made payable in

favour of the Issuer or otherwise as may be set out in the application form and crossed ―Account Payee Only‖.

Cheque(s) or demand draft(s) may be drawn on any bank including a co-operative bank, which is a member or a

sub-member of the bankers clearing house located at Mumbai. If permitted, the applicant may transfer payments

required to be made in relation to any by electronic transfer of funds/RTGS, to the bank account of the Issuer as

per details mentioned in the application form.

The Issuer assumes no responsibility for any application/cheques/demand drafts lost in mail or in transit.

Application Procedure

Potential investors will be invited to subscribe by way of Application Form as provided by the Issuer during the

period between the Issue Opening Date and the Issue Closing Date (both days inclusive). The Issuer reserves the

right to close the Issue at the earlier date on the issue being fully subscribed.

Fictitious Application: As a matter of abundant caution and although not applicable in the case of Debentures,

attention of Applicants is specially drawn to the provisions of subsection (1) of section 68A of the Companies

Act, 1956: ―Any person who: (a) makes in a fictitious name an application to a Issuer for acquiring, or

subscribing for, any shares therein, or (b) otherwise induces a Issuer to allot, or register any transfer of, shares

therein, to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which

may extend to five years‖.

Application Size

Applications are required to be for a minimum of one Debenture and multiples of one Debenture thereafter.

Who can Apply

Nothing in this Information Memorandum shall constitute and/or deem to constitute an offer or an invitation to

an offer, to be made to the public or any section thereof through this Information Memorandum and this




54

Information Memorandum and its contents should not be construed to be a prospectus under the Companies Act, 1956. The Issue is a domestic issue and is being made in India only.

This Information Memorandum and the contents hereof are restricted for only the intended recipient(s) who have been addressed directly through a communication by the Issuer and only such recipients are eligible to apply for the Debentures. The following categories of investors together constitute “Eligible Investors”:

Companies and bodies corporate including but not limited to NBFCs;

Commercial banks;

Financial institutions;

Insurance companies; and

Any other entity which make loans and advances to the Issuer without such loans and advances being

characterized as public deposits in accordance with Rule2 (b) of the Companies (Acceptance of Deposits) Rules, 1975

in each case, solely in India. Only the Eligible Investors, when specifically approached, are eligible to apply for the Debentures. Applications cannot be made by person(s) or entity(ies) resident outside India, including but not limited to FIIs, NRIs and OCBs. All investors and subsequent Debentureholders are required to comply with the relevant rules/regulations/guidelines/notifications applicable to them for investing in the Debentures. Submission of Documents Investors should submit the following documents, wherever applicable: (a) Memorandum and Articles of Association/Documents governing constitution;

(b) Government notification/certificate of incorporation;

(c) Resolution authorizing investment along with operating instructions;

(d) Power of Attorney (original and certified true copy);

(e) Form 15AA granting exemption from TDS on interest;

(f) Form 15H for claiming exemption from TDS on interest on application money, if any;

(g) Order u/s197 of IT Act;

(h) Order u/s10 of IT Act; and

(i) Specimen signatures of authorised persons duly certified by an appropriate authority. Note: Participation by potential Investors in the Issue may be subject to statutory and/or regulatory requirements applicable to them in connection with subscription to Indian securities by such categories of persons or entities. Applicants are advised to peruse the Debenture Trust Deed and further ensure that they comply with all regulatory requirements applicable to them, including exchange controls and other requirements. Applicants ought to seek independent legal and regulatory advice in relation to the laws applicable to them.




Dated: June 1, 2011


55

Permanent Account Number

Each applicant should mention their PAN allotted under the IT Act in the Application Form.

Minimum Subscription

As the current Issue of Debentures is being made on private placement basis, the requirement of minimum

subscription shall not be applicable and therefore the Issuer shall not be liable to refund the Issue

subscription(s)/ proceed(s) in the event of the total Issue collection falling short of Issue size or certain

percentage of Issue size.

Submission of completed Application Form

All applications duly completed accompanied by transfer instructions from the respective Investor‘s account to

the account of the Issuer, shall be submitted at the Registered Office of the Issuer.

Mode of Payment

All cheques/drafts must be made payable to ―The Tata Power Company Limited‖ and crossed ―A/C PAYEE

ONLY‖ or through Fund Transfer / Real time gross settlement. The RTGS details of the Issuer are as under:

IFSC Code HDFC0000240

Bank Account No. 00600110000763

Account name The Tata Power Company Limited

Branch HDFC Bank Limited, Fort Branch, Mumbai

Basis of Allotment and Schedule for Allotment and Issue of Certificates

The Issuer reserves the sole and absolute right to allot the Debentures to any Applicant. The unutilised portion

of the Application money will be refunded to the Applicant by electronic transfer to the bank account notified

by the Applicant. In case the cheque payable at par facility is not available, the Issuer‘s reserves the right to

adopt any other suitable mode of payment. The Issuer will allot the Debentures to the Debentureholders

dematerialized account within 2 Working Days of the Deemed Date of Allotment. Consolidated Debenture

Certificate will be dispatched at the sole risk of the Applicant, through registered/speed post, within 30 days

from the date of closure of the Issue. The Issuer further agrees to pay interest as per the applicable provisions of

the Companies Act, 1956, if the allotment letters/refund orders have not been dispatched to the applicants within

30 days from the date of the closure of the Issue.

Right to Accept or Reject Applications

The Board of Directors of the Issuer reserves its full, unqualified and absolute right to accept or reject any

application for subscription to the Debentures, in part or in full, without assigning any reason thereof.

Application forms that are not complete in all respects may be rejected in sole discretion of the Issuer.

Notwithstanding anything stated elsewhere, the Issuer reserves the right to accept or reject any application, in

part or in full, without assigning any reason. Subject to the aforesaid, in case of over subscription, priority will

be given to Investors on a first come first serve basis. The investors will be required to remit the funds as well as

submit the duly completed application form along with other necessary documents to the Issuer by the Deemed

Date of Allotment.

Interest on Application Money

Interest on application money will be paid to Investors at the rate of 11.40% per annum from the date of

realization of subscription money up to one day prior to the Deemed Date of Allotment. Such interest shall be

payable within 7 Working Days from the Deemed Date of Allotment. If the Deemed Date of Allotment is same

as the Issue Closing Date and Pay-in-Date no such interest will be payable.




Dated: June 1, 2011


56

Refunds

For applicants whose applications have been rejected or allotted in part, refund orders will be dispatched within

seven days from the Deemed Date of Allotment of the Debentures.

In case the Issuer has received money from applicants for Debentures in excess of the aggregate of the

application money relating to the Debentures in respect of which allotments have been made, the Registrar shall

upon receiving instructions in relation to the same from the Issuer repay the moneys to the extent of such excess,

if any.

Issue of Debentures in Dematerialised Form

The Debentures will be issued in dematerialised form within 2 (two) Working Days from the Deemed Date of

Allotment. The Issuer has made arrangements with the Depositories for the issue of the Debentures in

dematerialised form. Investors will hold the Debentures in dematerialised form as per the provisions of

Depositories Act, 1996. The Depository Participant‘s name, DPID and beneficiary account number must be

mentioned at the appropriate place in the Application Form. The Issuer shall take necessary steps to credit the

Debentures allotted to the Depository account of the Investor. All provisions relating to issue, allotment,

transfer, transmission etc. in respect of the Debentures as prescribed under the Depositories Act, 1996 will be

applicable to the Debentures issued in dematerialized form.

If the Debentures are held in dematerialised form, then no action is required on the part of the Investors for

redemption purposes and the redemption proceeds will be paid by cheque/fund transfer/RTGS to those Investors

whose names appear on the list of beneficiaries provided by the Depository to the Issuer. The names would be

as per the Depository‘s records on the relevant record date fixed for the purpose of redemption. All such

Debentures will be simultaneously redeemed through appropriate debit corporate action.

The list of beneficiaries as of the relevant record date setting out the relevant beneficiaries‘ name and account

number, address, bank details and depositary participant‘s identification number will be given by the Depository

to the Issuer and the Registrar. Based on the information provided above, the Issuer/Registrar will dispatch the

cheque for interest / coupon payments to the beneficiaries. If permitted, the Issuer may transfer payments

required to be made in relation to any by electronic transfer of funds/RTGS, to the bank account of the

Debentureholders for redemption and interest/ coupon payments.

However, for the Debentures that are rematerialized and held in physical form, the Issuer will issue one

certificate to the relevant Debentureholder for the aggregate amount of the Debentures that are rematerialized

and held by such Debentureholder (each such certificate a ―Consolidated Debenture Certificate‖). In respect

of the Consolidated Debenture Certificate(s), the Issuer will, upon receipt of a request from the Debentureholder

within 30 days of such request, split such Consolidated Debenture Certificates into smaller denominations in

accordance with the Articles of Association, subject to a minimum denomination of one Debenture. No fees will

be charged for splitting any Consolidated Debenture Certificates but, stamp duty, if payable, will be paid by the

Debentureholder. The request to split a Consolidated Debenture Certificate shall be accompanied by the original

Consolidated Debenture Certificate which will, upon issuance of the split Consolidated Debenture Certificate,

be cancelled by the Issuer.

Deemed Date of Allotment

All benefits relating to the Debentures will be available to the Investors from the Deemed Date of Allotment.

The actual allotment of Debentures may take place on a date other than the Deemed Date of Allotment. The

Issuer reserves the right to keep multiple allotment date(s)/ deemed date(s) of allotment at its sole and absolute

discretion without any notice. The Deemed Date of Allotment may be changed (advanced/ postponed) by the

Issuer at its sole and absolute discretion.

Payment on Redemption upon exercise of Call Option by the Issuer or on Early Redemption Date

If the Issuer exercises the Call Option at any time, then in respect of Debentures held in dematerialized form,

payment of the redemption amount of the Debentures will be made by the Issuer to the beneficiaries as per the

beneficiary list provided by the Depositories as on the Record Date. The Debentures shall be taken as

discharged on payment of the Redemption Amount by the Issuer to the beneficiaries as per the beneficiary list

by making payment electronically to the bank account notified by the beneficiary. Payment of Redemption




Dated: June 1, 2011


57

Amounts to the bank account notified by the Debentureholders will be done on the relevant Call Option Date on

which the Issuer exercised the Call Option or within 7 days from the Early Redemption Date, as the case may

be. Such payment will be a legal discharge of the liability of the Issuer towards the Debentureholders. On such

payment being made, the Issuer will inform the Depositories and accordingly the account of the

Debentureholders with Depositories will be adjusted. In case of cheque issued towards redemption proceeds, the

same will be dispatched by courier or hand delivery or registered post at the address provided in the Application

at the address as notified by Debentureholder or at the address with Depositiories‘ record. Once the cheque for

redemption proceeds is dispatched to the Debentureholder(s) at the addresses provided or available from the

Depositories record, the Issuer‘s liability to redeem the Debentures on the date of redemption shall stand

extinguished and the Issuer will not be liable to pay any interest/premium, income or compensation of any kind

from the date of redemption of the Debenture(s).

In respect to the Debentures held physically under a Consolidate Debenture Certificate, payments will be made

by way of cheque or pay orders or electronically. However, if the Issuer so requires, payments on maturity may

be made on surrender of the Consolidated Debenture Certificate(s). Dispatch of cheques or pay orders in respect

of payments with respect to redemptions will be made within a period of 30 days from the date of receipt of the

duly discharged Consolidated Debenture Certificate.

Upon dispatching the payment instrument towards payment of the redemption amount as specified above in

respect of the Debentures, the liability of the Issuer shall stand extinguished.

Currency of Payment

All obligations under the Debentures including yield, are payable in Indian Rupees only.

Transfers

The Debentures shall be transferred and/ or transmitted in accordance with the applicable provisions of the

Companies Act and other applicable laws. The provisions relating to transfer, transmission and other related

matters in respect of shares of the Issuer contained in the Articles of Association and the Companies Act shall

apply, mutatis mutandis (to the extent applicable to the Debentures), to the Debentures as well. The Debentures

held in dematerialised form shall be transferred subject to and in accordance with the rules/ procedures as

prescribed by NSDL and CDSL and the relevant depositary participant‘s of the transferor or transferee and any

other applicable laws and rules notified in respect thereof. The transferee(s) should ensure that the transfer

formalities are completed prior to the Record Date. In the absence of the same, any payments will be paid to the

person, whose name appears in the Register of Debentureholders maintained by the Depository under all

circumstances. In cases where the transfer formalities have not been completed by the transferor, claims, if any,

by the transferees would need to be settled with the transferor(s) and not with the Issuer. The normal procedure

followed for transfer of securities held in dematerialized form shall be followed for transfer of these Debentures

held in electronic form. The seller should give delivery instructions containing details of the buyer‘s Depositary

Participant‘s account to his Depositary Participant. Investors may note that subject to applicable law, the

Debentures of the Issuer would be issued and traded in dematerialised form only. The Issuer undertakes that

there will be a common form of transfer available for the Debentures held under a Consolidated Debenture

Certificate.

Title

In case of:

1. Debentures held in the dematerialized form, the person for the time being appearing in the register of

Beneficial Owners maintained by the Depository; and

2. Debentures held in physical form, the person for the time being appearing in the Register of

Debentureholders as Debentureholder,

shall be treated for all purposes by the Issuer, the Debenture Trustee, the Depositories and all other persons

dealing with such person as the holder thereof and its absolute owner for all purposes whether or not it is

overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, theft or loss of

the Consolidated Debenture Certificate issued in respect of the Debentures and no person will be liable for so




Dated: June 1, 2011


58

treating the Debentureholder.

List of Beneficial Owners

The Issuer shall request the Depositories to provide a list of Beneficial Owners as at the end of the Record Date.

This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the

case may be.

Applications under Power of Attorney

A certified true copy of the power of attorney or the relevant authority as the case may be along with the names

and specimen signature(s) of all the authorized signatories and the tax exemption certificate/ document, if any,

must be lodged along with the submission of the completed Application Form. Further modifications/ additions

in the power of attorney or authority should be notified to the Issuer or to its agents or to such other person(s) at

such other address(es) as may be specified by the Issuer from time to time through a suitable communication.

In case of an application made by companies under a power of attorney or resolution or authority, a certified

true copy thereof along with memorandum and articles of association and/ or bye-laws along with other

constitutional documents must be attached to the Application Form at the time of making the application, failing

which, the Issuer reserves the full, unqualified and absolute right to accept or reject any application in whole or

in part and in either case without assigning any reason thereto. Names and specimen signatures of all the

authorized signatories must also be lodged along with the submission of the completed application.

Computation of Distribution

All distribution accruing for any Distribution Period shall accrue from day to day and be calculated on the Face

Value of principal outstanding on the Debentures at the respective coupon rate on the basis of the actual number

of days elapsed and a year of 365 days (or 366 days in case of a leap year), at the applicable Interest Rate and

rounded off to the nearest Rupee.

Effect of Holidays

Should any of the dates, including the Deemed Date of Allotment, Call Option Date, Early Redemption Date,

Distribution Payment Date or the Record Date, as defined in this Information Memorandum, fall on day which

is not a Working Day, the immediately preceding Working Day shall be considered as the effective date.

Tax Deduction at Source

Debentureholders should consult their own independent tax advisers to understand their tax positions. In

addition, Debentureholders should be aware that tax regulations and their application by the relevant taxation

authorities change from time to time. Accordingly, it is not possible to predict the precise tax treatment which

will apply at any given time. Therefore, Debentureholders are advised to consider the tax implications in respect

of subscription to the Debentures in consultation with their tax advisors.

As per the prevalent provisions of the IT Act, the amount of interest received/ receivable by the

Debentureholders is treated as a taxable income in their hands. However, with effect from June 1, 2008, no tax

is deductible at source from the amount of interest payable on any listed demat security, held by a person

resident in India. Since the Debentures shall be issued in dematerialized mode and shall be listed on the NSE, no

tax will be deductible at sources on the payment/credit of interest on the Debentures held by any person resident

in India. In the event of rematerialization of the Debentures or a change in applicable law governing the taxation

of the Debentures, the following provisions shall apply:

Any payment to be made by the Issuer shall be made to the Debenture Trustee, in the appropriate currency, at

such place as the Debenture Trustee shall designate. Except as provided in this Clause, all payments to be made

by the Issuer shall be made in full without set-off or counterclaim and free and clear of any Tax of any nature

now or hereafter imposed by any country or any subdivision or relevant authority, unless the

payment/deduction/withholding of any present and future Tax (“Tax Deduction”) is required by Applicable

Law. If any sums payable to the Debentureholders is subject to any Tax Deduction, the Issuer shall make such




Dated: June 1, 2011


59

Tax Deduction, and shall simultaneously pay to the Debenture Trustee such additional amounts as may be

necessary in order that the net amounts received by the Debentureholders after the Tax Deduction shall equal the

respective amounts which would have been receivable by the Debentureholders in the absence of such Tax

Deduction. The Issuer shall also immediately (but no later than 30 (thirty) days from the due date of payment of

such Tax Deduction to the Governmental Authority (or any shorter period stipulated by Applicable Law))

deliver to the Debenture Trustee the withholding certificate or similar certificate or an official receipt or other

official documentation evidencing such payment in accordance with Applicable Law received in connection

with the Tax Deduction.

In the event that a Debentureholder is entitled by virtue of any applicable laws to receive amounts at a lower rate

of tax withholding, such Debentureholder will provide evidence thereof to the Issuer who will then deduct Tax

at such lower rate.

Debenture Redemption Reserve

The Issuer will create Debenture Redemption Reserve (―DRR”) as may be required in case of privately placed

debentures.

As per extant circular no. 6/3/2001-CL.V dated April 18, 2002 issued by the Government of India with respect

to creation of DRR, for manufacturing and infrastructure companies, the adequacy of DRR is defined at 25 % of

the value of debentures issued through private placement route. In terms of extant provisions of Companies Act,

1956, the Issuer is required to create DRR out of profits, if any, earned by the Issuer. The Issuer shall create a

DRR and credit to the DRR such amounts as applicable under provisions of Section 117C of the Companies Act

or any other relevant statute(s), as applicable.

Right of the Issuer to Purchase, Re-sell and Re-issue Debentures

Purchase and Resale of Debentures: The Issuer may, subject to applicable laws and the Replacement Capital

Covenant Agreement, at any time and from time to time, purchase Debentures under this Issue at discount, at

par or premium in the open market. Such Debentures may, at the option of the Issuer, be cancelled, held or

resold at such a price and on such terms and conditions as the Issuer may deem fit and as permitted by

applicable laws, provided that the Issuer‘s voting rights in respect of the Debentures shall not exceed 74%.

Reissue of Debentures: Where the Issuer has redeemed any such Debentures, subject to the provisions of

Section 121 of the Companies Act, 1956 and other applicable legal provisions, the Issuer shall have and shall be

deemed always to have had the right to keep such Debentures alive for the purpose of reissue and in exercising

such right, the Issuer shall have and shall be deemed always to have had the power to reissue such Debentures

either by reissuing the same Debentures or by issuing other Debentures in their place in either case, at such a

price and on such terms and conditions (including any variations, dropping of or additions to any terms and

conditions originally stipulated) as the Issuer may deem fit.

Succession

In the event of insolvency or winding up of a Registered Debentureholder, or the first holder in the case of joint

holders, the Issuer will recognize the executor or administrator of the demised Debentureholder or the holder of

succession certificate or other legal representative of the demised Debentureholder as the Registered

Debentureholder of such Debentures, if such a person obtains probate or letter of administration or is the holder

of succession certificate or other legal representation, as the case may be, from a court in India having

jurisdiction over the matter and delivers a copy of the same to the Issuer.

The Issuer may in its absolute discretion, where it thinks fit, dispense with the production of the probate or letter

of administration or succession certificate or other legal representation, in order to recognise such holder as

being entitled to the Debentures standing in the name of the demised Debentureholder(s) on production of

sufficient documentary proof or indemnity. In case a person other than individual holds the Debentures, the

rights in the Debentures shall vest with the successor acquiring interest therein, including liquidator or such any

person appointed as per the applicable law.

Notices




Dated: June 1, 2011


60

All notices to the Debentureholders required to be given by the Issuer or the Debenture Trustee shall have been

given if sent either by registered post, by facsimile or by email to the original/ first allottees of the Debentures,

or as may be prescribed by applicable law.

All notice(s) to be given by the Debentures shall be sent by registered post or by hand delivery to the Issuer or to

such persons at such address as may be notified by the Issuer from time to time through suitable communication.

Notice(s) shall be deemed to be effective (in the case of registered post) seven business days after posting, (in

the case of facsimile/email) twenty four hours after dispatch or (in the case of personal delivery) at the time of

delivery.

Payment of outstanding amounts on the Debentures

The Issuer will comply with the terms of the Debt Listing Agreement including but not limited to ensuring that,

the Issuer shall ensure that services of ECS (Electronic Clearing Service), Direct Credit, RTGS (Real Time

Gross Settlement) or NEFT (National Electronic Funds Transfer) are used for payment of all outstanding

amounts on the Debentures, including the principal and interest accrued thereon, as per the applicable norms of

the RBI.

Debenture Trustee

The Issuer has appointed IDBI Trusteeship Services Limited as the Debenture Trustee for the Issue. All the

rights and remedies of the Debentureholders shall vest in and shall be exercised by the Debenture Trustee

without referring to the Debentureholders. All Investors are deemed to have irrevocably given their authority

and consent to IDBI Trusteeship Services Limited to act as their Debenture Trustee and for doing such acts and

signing such documents to carry out their duty in such capacity. Any payment by the Issuer to the Debenture

Trustee on behalf of the Debentureholders shall discharge the Issuer pro tanto to the Debentureholders. The

Debenture Trustee shall carry out its duties and shall perform its functions under the SEBI Debt Regulations and

this Information Memorandum, with due care, diligence and loyalty. Resignation/retirement of the Debenture

Trustee shall be as per terms of the trust deed entered into between the Issuer and the Debenture Trustee and a

notice in writing to the Debentureholders shall be provided for the same.

The Debenture Trustee shall ensure disclosure of all material events on an ongoing basis. The Debenture Trustee

will protect the interest of the Debentureholders on the occurrence of an event of default by us in regard to

timely payment of interest and repayment of principal and they will take necessary action at the Issuer‘s cost as

provided in the Debenture Trust Deed.

Rights of Debentureholders

The Debentureholders shall not be entitled to any right and privileges of shareholders other than those available

to them under the Companies Act, 1956. The Debentures shall not confer upon the holders the right to receive

notice(s) or to attend and to vote at any general meeting(s) of the shareholders of the Issuer.

Sharing of Information

The Issuer may, at its option, but subject to applicable laws, use on its own, as well as exchange, share or part

with any financial or other information about the Debentureholders available with the Issuer, with its

subsidiaries and affiliates and other banks, financial institutions, credit bureaus, agencies, statutory bodies, as

may be required and neither the Issuer nor its subsidiaries and affiliates nor their agents shall be liable for use of

the aforesaid information.




Dated: June 1, 2011


63

ANNEXURE A

APPLICATION FORM

THE TATA POWER COMPANY LIMITED

Registered Office:

Bombay House, 24 Homi Mody Street, Mumbai 400 001, India

Phone: +91 22 6665 8282 Fax: +91 22 6665 8885



APPLICATION FORM FOR PRIVATE PLACEMENT OF

UNSECURED, SUBORDINATED, NON CONVERTIBLE DEBENTURES

ISSUE OPENS ON: June 1, 2011 CLOSING ON: June 1, 2011 Date of Application __________

Dear Sirs,

Having received, read and understood the contents of the information memorandum of private placement

dated July (the “Information Memorandum”) issued by The Tata Power Company Limited (“Tata

Power”), I/We apply for allotment to me/us of the Debentures. The amount payable on application as

shown below is remitted herewith. On allotment, please place my/our name(s) on the Register of

Debenture holders under the issue. I/We bind myself/ourselves by the terms and conditions as contained

in the Information Memorandum. We note that Tata Power is entitled in its absolute discretion to accept

or reject this application whole or in part without assigning any reason whatsoever.

DEBENTURES APPLIED FOR (Rs. 10,00,000 /- per debenture) FOR BANK

USE ONLY

No.of Debenture (in

figures)

Date of receipt of

application

No. of Debentures (in

words)

Date of receipt of

cheque

Amount (Rs.) (in figures)

Date of clearance of

cheque

Amount (Rs.) (In words)

PARTICULARS OF DP ID

RTGS/Cheque/Fund

Transfer/ Demand Draft

drawn on (Name of Bank

and Branch)

Cheque/Dema

nd Draft

No./UTR No.

in case of

RTGS/ A/c no

incase of FT

RTGS/Cheque/

Demand Draft/

fund transfer

Date

DP ID No.

Client ID No.

Tax status of the Applicant (please tick one)

1. Non Exempt 2. Exempt under: Self-declaration Under Statute Certificate from I.T.

Authority

Please furnish exemption certificate, if applicable.

We apply as (tick whichever is applicable) PAYMENT PREFERENCE

1. Financial Institution 2. Company




Dated: June 1, 2011


64

3. Insurance Company 4. Commercial Bank/RRB/Co-op.Bank/UCB

5. Body Corporate

APPLICANT‘S NAME IN FULL:

Tax payer’s PAN

IT Circle/ Ward/

District

MAILING ADDRESS IN FULL (Do not repeat name) (Post Box No. alone is not sufficient)

Pi

n

Tel Fax

CONTACT PERSON

NAME DESIGNATION TEL. NO. FAX NO.

Email

TO BE FILLED IN BY THE APPLICANT

Name of the Authorized Signatory(ies) Designation Signature

……………………………………………..………………… TEAR

….…………………………………………………..................................

1. Application must be completed in full BLOCK LETTER IN ENGLISH except in case of signature.

Applications, which are not complete in every respect, are liable to be rejected.

2. Payments must be made by RTGS or cheque marked ‗A/c Payee only‘ or bank draft drawn in favour of

―The Tata Power Company Limited‖ and as per the following details:

Bank : HDFC Bank Limited

Branch : Fort Branch, Mumbai

Account Name : The Tata Power Company Limited

Account No. : 00600110000763

The TATA POWER COMPANY LIMITED Regd office:

Bombay House, 24 Homi Mody Street, Mumbai 400 001, India

APPLICATION FORM FOR PRIVATE PLACEMENT OF NON CONVERTIBLE DEBENTURES (SERIES __) ACKNOWLEDGEMENT SLIP

(To be filled by the Applicant) Received from _________________________________ an application for _____________ Debentures under Series __ Address_______________________________________ cheque/ draft No.________________ dated _______________ _____________________________________________ Drawn on __________________________________________ _________________________________________ for Rs. (in figures)____________________________________

_______________ Pin Code ______________________ for Rs. (in words) ____________________________________

Cheque Draft RTGS Payable at ________________




Dated: June 1, 2011


65

IFSC Code No. : HDFC0000240

3. Cheque or bank draft should be drawn on a scheduled bank payable at Mumbai.

4. The Original Application Form along with relevant documents should be forwarded to the Registered

Office of Tata Power to the attention of Mr. B J Shroff, on the same day the application money is

deposited in the Bank. A copy of PAN Card must accompany the application.

5. In the event of debentures offered being over subscribed, the same will be allotted in such manner and

proportion as may be decided by Tata Power.

6. The debentures shall be issued in De-mat form only and subscribers may carefully fill in the details of

Client ID/ DP ID.

7. In the case of application made under Power of Attorney or by limited companies, corporate bodies,

registered societies, trusts etc., following documents (attested by Company Secretary /Directors) must

be lodged along with the application or sent directly to Tata Power at its Registered Office to the

attention of Mr. B J Shroff along with a copy of the Application Form.

a. Memorandum and articles of association / documents governing constitution/ certificate of

incorporation.

b. Board Resolution authorising investment.

c. Certified true copy of the Power of Attorney.

d. Specimen signatures of the authorised signatories duly certified by an appropriate authority.

e. PAN (otherwise exemption certificate by IT authorities).

f. Specimen signatures of authorised persons.

g. SEBI registration certificate, if applicable.

8. The attention of applicants is drawn to Sub-Section (i) of Section 68-A of the Companies Act, 1956,

which is reproduced below:

Any person who:

a. make in a fictitious name an application to a Corporation for acquiring for any shares therein or

b. otherwise induces a Corporation to allot or register any transfer of shares therein to him or any

other person in fictitious name, shall be punishable with imprisonment for a term which may

extend to five years.

9. The applicant represents and confirms that it has understood the terms and conditions of the Debentures

and is authorised and eligible to invest in the same and perform any obligations related to such

investment.




Dated: June 1, 2011


66

ANNEXURE B

RATING LETTERS OF RATING AGENCIES ALONG WITH RATING RATIONALE




Dated: June 1, 2011


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69




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Dated: June 1, 2011


71

ANNEXURE C

CONSENT OF DEBENTURE TRUSTEE




Dated: June 1, 2011


72




Dated: June 1, 2011


73

ANNEXURE D

IN-PRINCIPLE APPROVAL OF THE NSE




Dated: June 1, 2011


74

ANNEXURE E

AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED MARCH 31, 2011

The financials follow after this page.

INTENTIONALLY LEFT BLANK




Dated: June 1, 2011


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76




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