Prospectus (Muthoot NCD)
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TABLE OF CONTENTS SECTION I: GENERAL ................................................................................................................................ 3 DEFINITIONS / ABBREVIATIONS ............................................................................................................... 3 FORWARD-LOOKING STATEMENTS ......................................................................................................... 6 PRESENTATION OF FINANCIAL AND OTHER INFORMATION ............................................................... 7 SECTION II: RISK FACTORS ..................................................................................................................... 8 SECTION III: INTRODUCTION ............................................................................................................... 33 GENERAL INFORMATION ......................................................................................................................... 33 SUMMARY OF BUSINESS, STRENGTH & STRATEGY ............................................................................ 40 THE ISSUE ................................................................................................................................................... 45 SUMMARY FINANCIAL INFORMATION .................................................................................................. 47 CAPITAL STRUCTURE ............................................................................................................................. 51 OBJECTS OF THE ISSUE ............................................................................................................................. 87 STATEMENT OF TAX BENEFITS ............................................................................................................... 89 SECTION IV: ABOUT THE ISSUER AND INDUSTRY OVERVIEW ................................................. 94 OUR BUSINESS ......................................................................................................................................... 101 HISTORY AND MAIN OBJECTS ............................................................................................................... 118 OUR MANAGEMENT ................................................................................................................................ 121 OUR PROMOTER ....................................................................................................................................... 136 SECTION V: FINANCIAL INFORMATION ........................................................................................... 142 DISCLOSURES ON EXISTING FINANCIAL INDEBTEDNESS ............................................................... 179 MATERIAL DEVELOPMENTS .................................................................................................................. 184 SECTION VI: ISSUE RELATED INFORMATION................................................................................. 189 TERMS OF THE ISSUE .............................................................................................................................. 189 ISSUE STRUCTURE ................................................................................................................................... 193 ISSUE PROCEDURE .................................................................................................................................. 207 SECTION VII: LEGAL AND OTHER INFORMATION ........................................................................ 223 PENDING PROCEEDINGS AND STATUTORY DEFAULTS .................................................................... 223 OTHER REGULATORY AND STATUTORY DISCLOSURES .................................................................. 232 REGULATIONS AND POLICIES ............................................................................................................... 244 SUMMARY OF KEY PROVISIONS OF ARTICLES OF ASSOCIATION .................................................. 254 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION................................................... 284 DECLARATION ........................................................................................................................................ 286 SECTION I: GENERAL DEFINITIONS / ABBREVIATIONS Company related terms Term Description ³:H´³XV´³RXU´ Muthoot Finance Limited, a public limited company incorporated under the Act, and having its registered office at Muthoot ³WKH&RPSDQ\´DQG Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 018, Kerala, India. ³,VVXHU´ AOA/Articles / Articles of Association of our Company. Articles of Association Board / Board of The Board of Directors of our Company and includes any Committee thereof from time to time. Directors CRISIL CRISIL Limited Equity Shares Equity shares of face value of ` 10 each of our Company. ICRA ICRA Limited Memorandum / Memorandum of Association of our Company. MOA NBFC Non-Banking Financial Company as defined under Section 45-IA of the RBI Act, 1934. NPA Non Performing Asset. Promoters M.G. George Muthoot, George Thomas Muthoot, George Jacob Muthoot and George Alexander Muthoot. `/ Rs./ INR/ Rupees The lawful currency of the Republic of India. Statutory Auditors The auditors of the Company, M/s. Rangamani & Co, Chartered Accountants, 17/598, 2nd Floor, Card Bank Building, West of YMCA, VCSB Road, Alleppey 688 001, Kerala, India. Issue related terms Term Description Allotment / Allotted Unless the context otherwise requires, the allotment of the NCDs pursuant to the Issue to the Allottees. Allottee The successful applicant to whom the NCDs are being/have been allotted. Application Amount The aggregate value of the NCDs applied for, as indicated in the Application Form. Application Form An Application Form-R or Application Form-NRI. Application Form-NRI The form used by an NRI applicant to apply for NCDs being issued through the Prospectus. Application Form-R The form used by an applicant other than an NRI to apply for NCDs being issued through the Prospectus. Bankers to the The bank(s) with whom Escrow Accounts will be opened as specified on page 36. Issue/Escrow Collection Banks Base Issue Public Issue of NCDs by our Company aggregating upto ` 2,500 million. Basis of Allotment The basis on which NCDs will EHDOORWWHGWRDSSOLFDQWVXQGHUWKH,VVXHDQGZKLFKLVGHVFULEHGLQ³Issue Procedure ± Basis of Allotment´RQSDJH 219. Coupon Rate The rate of interest payable in connection with the NCDs in accordance with this Prospectus. Debentures / NCDs Secured, Redeemable, Non-Convertible Debentures offered through this Prospectus aggregating upto ` 2,500 million with an option to retain over-subscription upto ` 2,500 million for issuance of additional NCDs aggregating to a total of upto ` 5,000 million. Debenture Holder (s) The holders of the NCDs. Debt Listing Agreement The listing agreement entered into between our Company and the relevant stock exchange(s) in connection with the listing of debt securities of our Company. Debt Regulations SEBI (Issue and Listing of Debt Securities) Regulations, 2008, issued by SEBI, effective from June 6, 2008 as amended from time to time Deemed Date of The date as decided by the duly authorised committee of the Board constituted by resolution of the Board dated Allotment July 25, 2011, and as mentioned on the Allotment Advice / regret. Demographic Details Details of the investor such as address, bank account details for printing on refund orders and occupation, which are based on the details provided by the Applicant in the Application Form. Depositories Act The Depositories Act, 1996, as amended from time to time. Depository(ies) National Securities Depository Limited (NSDL) and /or Central Depository Services (India) Limited (CDSL). DP / Depository A depository participant as defined under the Depositories Act. Participant Designated Stock BSE Limited. Exchange Draft Prospectus / Draft The draft prospectus dated February 13, 2012 filed with the BSE for receiving public comments in accordance with the Offer Document provisions of the Act and the Debt Regulations. Escrow Agreement Agreement dated February 23, 2012 entered into amongst our Company, the Registrar, the Escrow Collection Bank(s), the Lead Managers, for collection of the application amounts and for remitting refunds, if any, of the amounts collected, to the applicants on the terms and conditions contained therein. Escrow Account Accounts opened in connection with the Issue with the Escrow Collection Banks and in whose favour the applicant will Page | 3 Term Description issue cheques or bank drafts in respect of the application amount while submitting the application. Issue Public Issue by our Company of NCDs aggregating upto ` 2,500 million with an option to retain over-subscription upto ` 2,500 million for issuance of additional NCDs aggregating to a total of upto ` 5,000 million. Issue Opening Date March 02, 2012. Issue Closing Date March 17, 2012 or such early or extended date as may be decided by the duly authorised committee of the Board constituted by resolution of the Board dated July 25, 2011 Lead Brokers Anand Rathi Shares & Stock Brokers Limited, Bajaj Capital Investor Services Limited, Edelweiss Broking Limited, Enam Securities Private Limited, Geojit BNP Paribas Financial Services Limited, HDFC Securities Limited, ICICI Securities Limited, Integrated Enterprises (India) Limited, JM Financial Consultants Private Limtied,