Letter of Offer [●], 2020 For Eligible Equity Shareholders only BAJAJ ELECTRICALS LIMITED Bajaj Electricals Limited (the “Company” or the “Issuer”) was originally incorporated as “Radio Lamp Works Limited” on July 14, 1938, pursuant to a certificate of incorporation issued by the Registrar of Joint Stock Companies, Punjab. Our Company received the certificate of commencement of business from the Registrar of Joint Stock Companies, Punjab on September 12, 1938. Subsequently, the name of our Company was changed to its present name, i.e Bajaj Electricals Limited, pursuant to a certificate of change of name dated October 1, 1960, issued by the RoC. For further details, see “History and Corporate Structure” on page [●]. Registered Office: 45/47, Veer Nariman Road, Mumbai 400 001, Maharashtra, India Corporate Office: 001, 502, 701 & 801, Rustomjee Aspiree, Bhanu Shankar Yagnik Marg, Off Eastern Express Highway, Sion (East), Mumbai 400 022, Maharashtra, India Tel: +91 22 6110 7800 Contact Person: Ajay Nagle, Company Secretary and Compliance Officer Tel: +91 22 6110 7800 / 6149 7000 E-mail: [email protected]; Website: www.bajajelectricals.com Corporate Identity Number: L31500MH1938PLC009887 PROMOTERS OF OUR COMPANY: RAHULKUMAR BAJAJ, SHEKHAR BAJAJ, MADHUR BAJAJ, NIRAJ BAJAJ AND NIRAVNAYAN TRUST FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF BAJAJ ELECTRICALS LIMITED ONLY ISSUE OF UP TO [●] EQUITY SHARES OF FACE VALUE OF ₹ 2 EACH (“RIGHTS EQUITY SHARES”) OF OUR COMPANY FOR CASH AT A PRICE OF ₹ [●] PER RIGHTS EQUITY SHARE (INCLUDING A PREMIUM OF ₹ [●] PER RIGHTS EQUITY SHARE) AGGREGATING UP TO ₹ [●] MILLION ON A RIGHTS BASIS TO THE ELIGIBLE EQUITY SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF [●] RIGHTS EQUITY SHARES FOR EVERY [●] EQUITY SHARES HELD BY THE ELIGIBLE EQUITY SHAREHOLDERS OF OUR COMPANY ON THE RECORD DATE, THAT IS, ON [●](THE “ISSUE”). GENERAL RISKS Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Issue. For making an investment decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The Rights Equity Shares have neither been recommended nor approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Specific attention of the investors is invited to the section “Risk Factors” on page [●]. ISSUER’S ABSOLUTE RESPONSIBILITY Our Company, having made all reasonable inquiries, accepts responsibility for, and confirms that this Letter of Offer contains all information with regard to our Company and the Issue, which is material in the context of the Issue, that the information contained in this Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The Equity Shares are listed on BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”, and together with BSE, “Stock Exchanges”). Our Company has received “in-principle” approvals from BSE and NSE for listing the Rights Equity Shares through their letters dated [●], 2020 and [●], 2020, respectively. For the purposes of the Issue, the Designated Stock Exchange is BSE Limited. WILFUL DEFAULTER The name of one of our Non-Executive and Independent Directors appears in the list of Wilful Defaulters issued by TransUnion CIBIL Limited (formerly Credit Information Bureau (India) Limited). For further details, see “Other Regulatory and Statutory Disclosures” on page [●]. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE Edelweiss Financial Services Limited Link Intime India Private Limited 14th Floor, Edelweiss House C-101, 247 Park Off CST Road, Kalina L. B. S. Marg, Vikhroli (West) Mumbai 400 098 Mumbai 400 083 Maharashtra, India Maharashtra, India Tel: +91 22 4009 4400 Tel: +91 22 4918 6200 E-mail: [email protected] E-mail: [email protected] Website: www.edelweissfin.com Website: www.linkintime.co.in Investor Grievance E-mail: [email protected] Investor grievance e-mail: [email protected] Contact Person: Yashraj Shetty Contact Person: Sumeet Deshpande SEBI Registration Number: INM0000010650 SEBI Registration No.: INR000004058 ISSUE SCHEDULE ISSUE OPENS ON LAST DATE FOR RECEIVING REQUEST ISSUE CLOSES ON FOR SPLIT APPLICATION FORMS [●] [●] [●] TABLE OF CONTENTS SECTION I – GENERAL ........................................................................................................................................ 1 DEFINITIONS AND ABBREVIATIONS ....................................................................................................... 1 NOTICE TO INVESTORS .............................................................................................................................. 6 PRESENTATION OF FINANCIAL INFORMATION ................................................................................. 8 FORWARD LOOKING STATEMENTS ....................................................................................................... 9 SUMMARY OF THIS LETTER OF OFFER ............................................................................................... 10 SECTION II: RISK FACTORS ............................................................................................................................ 13 SECTION III: INTRODUCTION ........................................................................................................................ 33 THE ISSUE ...................................................................................................................................................... 33 SUMMARY OF FINANCIAL INFORMATION ......................................................................................... 34 GENERAL INFORMATION ......................................................................................................................... 38 CAPITAL STRUCTURE ............................................................................................................................... 43 RELATED PARTY TRANSACTIONS ........................................................................................................ 50 OBJECTS OF THE ISSUE ............................................................................................................................ 51 STATEMENT OF TAX BENEFITS .............................................................................................................. 55 SECTION IV: ABOUT OUR COMPANY ........................................................................................................... 57 HISTORY AND CORPORATE STRUCTURE ........................................................................................... 57 OUR MANAGEMENT ................................................................................................................................... 61 SECTION V: FINANCIAL INFORMATION ..................................................................................................... 65 FINANCIAL STATEMENTS ........................................................................................................................ 65 MATERIAL DEVELOPMENTS ................................................................................................................... 66 ACCOUNTING RATIOS AND CAPITALISATION STATEMENT ........................................................ 67 STOCK MARKET DATA FOR SECURITIES OF OUR COMPANY ..................................................... 69 SECTION VI: LEGAL AND OTHER INFORMATION ................................................................................... 72 OUTSTANDING LITIGATION AND DEFAULTS .................................................................................... 72 GOVERNMENT AND OTHER APPROVALS ........................................................................................... 74 OTHER REGULATORY AND STATUTORY DISCLOSURES ............................................................... 75 SECTION VII: ISSUE INFORMATION ............................................................................................................. 86 TERMS OF THE ISSUE ................................................................................................................................ 86 SECTION VIII: OTHER INFORMATION ...................................................................................................... 119 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .................................................. 119 DECLARATION ........................................................................................................................................... 121 SECTION I – GENERAL DEFINITIONS AND ABBREVIATIONS This Letter of Offer uses the definitions and abbreviations set forth below, which you should consider when reading the information contained herein. The following list of certain capitalized terms used in this Letter of Offer is intended for the convenience of the reader/prospective