CASHPOR® MICRO CREDIT a Company Incorporated Under
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Private & Confidential For Private Circulation Only No: Addressed to: CASHPOR® MICRO CREDIT A company incorporated under Section 25 of the Companies Act, 1956 and continuing under Section 8 of the Companies Act, 2013 Date of Incorporation: December 10, 2002 Registered Office: –S-8/107, 107-A-1, 2 nd Floor, Varanasi Trade Centre Khajuri, Maqbool Alam Road, Varanasi- 221002 Telephone No .: +91 542-2505590/92, Contact Person : B. B. Singh- CFO E-mail: [email protected] ; [email protected]; [email protected] Website: www.cashpor.in Draft INFORMATION MEMORANDUM Draft Information Memorandum dated November 11,2020 for issue of 500 (Five Hundred ) rated, listed, secured, redeemable non-convertible debentures having face value of Rs. 10,00,000/- (Rupees Ten Lakhs only) each, of the aggregate nominal value of Rs. 50,00,00,000/- (Rupees Fifty Crores only) with a green shoe option of 250 (Two Hundred and Fifty) rated, listed, secured, redeemable non-convertible debentures having face value of Rs. 10,00,000/- (Rupees Ten Lakhs only) each, of the aggregate nominal value of 25,00,00,000/- (Rupees Twenty Five Crores only) on a private placement basis (the “ Issue ”). Background This Information Memorandum is related to the Debentures to be issued by CASHPOR Micro Credit (the “ Issuer ” or “ Company ” or “ CMC ”) on a private placement basis and contains relevant information and disclosures required for the purpose of issuing of the Debentures. The issue of the Debentures comprised in the Issue and described under this Information Memorandum has been authorised by the Issuer through resolutions passed by the shareholders of the Issuer on September 11, 2020 pursuant to Section 42 of the Act read with applicable rules of the Act, and the Board of Directors of the Issuer on November 6, 2020 by circulation and the Memorandum and Articles of Association of the Company. The present issue of Debentures in terms of this Information Memorandum is within the overall powers of the Board as per the above shareholder resolution(s). General Risks Investment in debt and debt related securities involve 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 and only after reading the information carefully. For taking an investment decision, the Investors must rely on their own examination of the Company and the Issue including the risks involved. The Debentures have not been recommended or approved by Securities and Exchange Board of India (“ SEBI ”) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of Investors is invited to the statement of Risk Factors at SECTION 3: of this memorandum of private placement for issue of Debentures on a private placement basis (“ Information Memorandum ” or “Disclosure Document ”). This Information Memorandum has not been submitted, cleared or approved by SEBI. 1 Private & Confidential For Private Circulation Only Issuer’s Absolute Responsibility The Issuer, having made all reasonable inquiries, confirms and represents that the information contained in this Information Memorandum/ Disclosure Document 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 document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. The Issuer is solely responsible for the correctness, adequacy and disclosure of all relevant information herein. Credit Rating The Debentures proposed to be issued by the Issuer have been rated by Acuité Ratings & Research Limited (“ Rating Agency ”). The Rating Agency has, vide its letter dated November 6, 2020 assigned a rating of “ACUITE A” with “stable” outlook in respect of the Debentures. The above rating is 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 rating agency and should be evaluated independently of any other ratings. Please refer to Annexure I of this Information Memorandum for the letter dated November 6, 2020 from the Rating Agency assigning the credit rating above mentioned. Issue Schedule Issue Opens on: November 18, 2020 Issue Closing on: November 18, 2020 Deemed Date of Allotment: November 19, 2020 The Issuer reserves the right to change the Issue Schedule including the Deemed Date of Allotment at its sole discretion, without giving any reasons or prior notice. The Issue shall be open for subscription during the banking hours on each day during the period covered by the Issue Schedule. Listing The Debentures are proposed to be listed on the wholesale debt market of the Bombay Stock Exchange (“ BSE ”). Registrar and Transfer Agent Debenture Trustee IDBI Trusteeship Services Limited Integrated Registry Management Services Asian Building, Ground Floor, Private Limited 17, R. Kamani Marg, Ballard Estate, 2nd Floor, Kences Towers, No. 1, Mumbai-400001 Ramakrishna Street, North Usman Road, T. Tel. : +91 22 4080 7000 Nagar, Chennai - 600 017 Fax: +91 22 6631 1776 Email : [email protected] Contact Person : Senior Vice President 2 Private & Confidential For Private Circulation Only TABLE OF CONTENTS SECTION 1: DEFINITIONS AND ABBREVIATIONS 4 SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS 9 SECTION 3: RISK FACTORS 12 SECTION 4: FINANCIAL STATEMENTS 14 SECTION 5: REGULATORY DISCLOSURES UNDER SEBI DEBT LISTING REGULATIONS 21 SECTION 6: DISCLOSURES PERTAINING TO WILFUL DEFAULT 60 SECTION 7: DECLARATION 61 SECTION 8: DISCLOSURES UNDER THE COMPANIES ACT 62 SECTION 9: APPLICANT’S DETAILS 75 SECTION 10: OTHER INFORMATION AND APPLICATION PROCESS 76 SECTION 11: DECLARATION 87 ANNEXURE I: RATING LETTER FROM THE RATING AGENCY 88 ANNEXURE II: CONSENT LETTER FROM THE DEBENTURE TRUSTEE 90 ANNEXURE III: APPLICATION FORM 94 ANNEXURE IV: AUDITED FINANCIAL STATEMENTS 98 ANNEXURE V: INDICATIVE CASHFLOW SCHEDULE 124 ANNEXURE VI: COPIES OF BOARD RESOLUTIONS 126 ANNEXURE VII: COPIES OF SHAREHOLDERS’ RESOLUTIONS 127 ANNEXURE VIII: RELATED PARTY TRANSACTIONS 128 ANNEXURE IX: DETAILS OF BRANCHES AND UNITS OF THE ISSUER 130 3 Private & Confidential For Private Circulation Only SECTION 1: DEFINITIONS AND ABBREVIATIONS Unless the context otherwise indicates or requires, the following terms shall have the meanings given below in this Information Memorandum. Accounting Standards Accounting standards and practices required to be followed under Applicable Law. Allot/Allotment/Allotted Unless the context otherwise requires or implies, the allotment of the Debentures pursuant to this Issue. Application Form The form used by the recipient of this Information Memorandum, to apply for subscription to the Debentures, which is annexed to this Information Memorandum and marked as Annexure III . Board/Board of The Board of Directors of the Issuer. Directors Business Day Any day of the week (excluding Saturdays, Sundays and any other day which is a ‘public holiday’ for the purpose of Section 25 of the Negotiable Instruments Act, 1881 (26 of 1881)) on which banks are normally open for business in Mumbai “ Business Days ” shall be construed accordingly. CDSL Central Depository Services Limited Debentures / NCDs Collectively means Debentures. Debenture Holders / The persons to whom this Information Memorandum has been Investors issued to and who have subscribed the Debentures in the primary market and thereafter shall mean and include any Person to whom the Debentures are transferred to, each who fulfils the following requirements: (a) Persons who are registered as such as the beneficial owners in terms of the Debenture Trust Deed; and (b) Persons who are registered as debenture holder(s) in the Register of Debenture Holder(s) maintained in terms of the Debenture Trust Deed. In the event of any inconsistency between sub paragraph (a) and (b) above, sub paragraph (a) shall prevail. Deemed Date of November 19, 2020 being the date on which the Debentures being Allotment issued hereunder are deemed to be allotted to the Debenture Holders. Debenture Trustee IDBI Trusteeship Services Limited, a company incorporated under the Companies Act, 1956 and having its registered office at Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai -400001 . Debenture Trustee Agreement executed by and between the Debenture Trustee and Agreement the Company for the purposes of appointment of the Debenture Trustee to act as debenture trustee in connection with the issuance of the Debentures. Debenture Trust Deed With respect to issue under this Information Memorandum, the debenture trust deed executed/to be executed by and between the Debenture Trustee and the Company inter alia recording the terms and conditions for setting out the terms upon which the Debentures are being issued and shall include the representations and warranties and the covenants to be provided by the Issuer. Deed of Hypothecation With respect to issue under this Information Memorandum, the deed of hypothecation entered/to be entered into between the 4 Private & Confidential For Private Circulation Only Issuer and the Debenture Trustee, pursuant to which hypothecation over Secured Property shall be created by the Issuer in favour of the Debenture Trustee (acting for and on behalf of the Debenture Holders ). Demat Refers to dematerialized securities which are securities that are in electronic