Private & Confidential - For Private Circulation Only Reference No.: AFPL/NCD/20-21/Series B/ __ INFORMATION MEMORANDUM Avendus Finance Private Limited A Private Limited Company incorporated under the Companies Act, 1956 Date of Incorporation: May 15, 1996 1; CIN: U65921MH1996PTC251407 Registered Office: The IL&FS Financial Centre, 6th floor, C and D Quadrant, Bandra – Kurla Complex, Bandra (East), Mumbai – 400 051, Maharashtra Telephone No.: 022 66480050; Fax No.: 022 66480040 Email: [email protected]; Website: www.avendus.com INFORMATION MEMORANDUM AND PRIVATE PLACEMENT OFFER CUM APPLICATION LETTER (“INFORMATION MEMORANDUM”) FOR A PRIVATE PLACEMENT BY AVENDUS FINANCE PRIVATE LIMITED (“COMPANY” OR “ISSUER”) OF DEBENTURES WITH A FACE VALUE OF RS. 10,00,000 (INDIAN RUPEES TEN LAKH) EACH, IN THE NATURE OF RATED, SECURED, REDEEMABLE, PRINCIPAL PROTECTED, NON- COVERTIBLE MARKET LINKED DEBENTURES, AGGREGATING UP TO INR 10,00,00,000 (INDIAN RUPEES TEN CRORE) WITH A GREEN SHOE OPTION TO RETAIN OVERSUBSCRIPTION UPTO INR 15,00,00,000 (INDIAN RUPEES FIFTEEN CRORE) IN ALL FOR AN OVERALL AMOUNT AGGREGATING TO RS. 25,00,00,000 (INDIAN RUPEES TWENTY FIVE CRORE) (THE “ISSUE” AND SUCH DEBENTURES, THE “DEBENTURES”). THIS INFORMATION MEMORANDUM IS AS PER SCHEDULE I OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF DEBT SECURITIES) REGULATIONS, 2008 AS AMENDED FROM TIME TO TIME ("SEBI DEBT LISTING REGULATIONS") AND THE COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014, AS AMENDED FROM TIME TO TIME BACKGROUND: This Information Memorandum is related to the Debentures to be issued by the Issuer 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 authorized by the Issuer through resolutions passed by the shareholders of the Issuer on May 18, 2020and resolutions of the Board of Directors of the Issuer dated April 9, 2020 read with the resolution of the non-convertible debenture allotment committee of the Board of Directors dated April 9, 2020, Circular Resolution of Committee dated May 20, 2020 and the memorandum of association and articles of association of the Issuer. The Issue in terms of this Information Memorandum is within the overall powers of the Board of Directors of the Issuer as per the aforementioned resolution(s). GENERAL RISKS: Identified Investors should read the Section “Risk Factors” and consult their own legal, regulatory, tax, financial and/or accounting advisors about risks associated with an investment in such Debentures and the suitability of investing in such Debentures in the light of their circumstances. Investment in these Debentures involves a degree of risk and Identified Investors should not invest in this Issue unless they can afford to take the risks associated with such investments. Identified Investors are advised to read this Information Memorandum carefully before taking an investment decision in this Issue. For taking an investment decision, Identified 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 Information Memorandum. This Information Memorandum has not been submitted to or approved by SEBI. ISSUER’S ABSOLUTE RESPONSIBILTY: The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that, to the best of its knowledge, this Information Memorandum contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue and as required under the Schedule I of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008, Section 42 of the Companies Act, 2013 and the rules framed thereunder, 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 document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. 1 The Issuer was formerly known as Pacific Hire-Purchase Private Limited. Pursuant to acquisition by Avendus Capital Private Limited, the Issuer’s name was changed to Avendus Finance Private Limited with effect from September 18, 2014. (Please refer Section 4.4 hereof for details) Information Memorandum CREDIT RATING: The Debentures proposed to be issued by the Issuer have been rated by CRISIL Limited (“Rating Agency” or “CRISIL”). The Rating Agency has assigned a rating of “CRISIL PP-MLD A+r/Stable” (Outlook: Stable) (Pronounced CRISIL PP-MxLD A plus r rating with Stable outlook) in respect of the Debentures. Instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk. The rating is not a recommendation to buy, sell or hold securities and Identified Investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the Rating Agency and each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in the future. The Rating Agency has the right to suspend, withdraw the rating at any time on the basis of new information, etc. Please refer to Annexure III of this Information Memorandum for the letter from the Rating Agency assigning the aforementioned credit rating. LISTING: The Debentures are proposed to be listed on the wholesale debt market of the BSE Limited (“BSE”). Registrar & Share Transfer Agent Debenture Trustee Name: NSDL Database Management Limited Name: Vistra ITCL (India) Limited Address: 4th Floor, Trade World A Wing, Kamala Address: The IL&FS Financial Centre, Mills Compound, Senapati Bapat Marg, Lower Plot C-22, G Block, 7th Floor, Bandra Kurla Parel, Mumbai – 400 013 Complex, Bandra (East), Mumbai - 500051 Tel: 022 49142591 Tel: 022 26593112 Email: [email protected] Email: [email protected] Contact Person: Mr Nilesh Bhandare Contact Person: Mr. Jayesh Khaitan 2 Information Memorandum TABLE OF CONTENTS SECTION 1: DEFINITIONS AND ABBREVIATIONS 4 SECTION 2: NOTICE TO IDENTIFIED INVESTORS AND DISCLAIMERS 10 SECTION 3: RISK FACTORS 15 SECTION 4: REGULATORY DISCLOSURES 21 SECTION 5: DISCLOSURES PERTAINING TO WILFUL DEFAULT 69 SECTION 6: OTHER INFORMATION AND APPLICATION PROCESS 70 SECTION 7: DECLARATION 79 SECTION 8: ANNEXURES 80 3 Information Memorandum SECTION 1: DEFINITIONS AND ABBREVIATIONS Means Companies Act, 2013, and for any matters or affairs prior to the notification of the relevant provisions of the Companies Act, 2013, the Companies Act, 1956 Act or Companies Act and shall include any re-enactment, amendment or modification of the Companies Act, 2013, as in effect from time to time and shall include the rules made thereunder Unless the context otherwise requires or implies, the allotment of the Debentures Allot/Allotment/Allotted pursuant to this Issue. Means a person who has submitted a completed Application Form to the Issuer Applicant in relation to the Debentures in accordance with the Debt Disclosure Document. Means the application form used by the recipient of this Information Application Form Memorandum, to apply for subscription to the Debentures which is in the form annexed to this Information Memorandum and marked as Annexure V. Means the subscription amounts/money paid by the Applicants at the time of Application Money submitting the Application Form. Includes all applicable statutes, enactments or acts of any legislative body in India, laws, ordinances, rules, bye-laws, regulations, notifications, guidelines, policies, Applicable Law directions, directives and orders of any Governmental Authority and any modifications or re-enactments thereof. Means, for any date of determination, the assets of the Issuer on such date as the Assets same would be determined in accordance with Indian GAAP. Means the holder(s) of the Debentures in dematerialized form whose name(s) are Beneficial Owner(s) recorded as such with the Depository in the Register of Beneficial Owners. BSE Means BSE Limited Means a day (a) that is not a Sunday or a public holiday for the purpose of Section Business Day 25 of the Negotiable Instruments Act, 1881, and (b) on which banks are normally open for business in Mumbai, India. CDSL Means Central Depository Services Limited CIN Corporate Identification Number Means Non-Convertible Debenture Allotment Committee of the Board of Committee Directors of the Company Means the memorandum of association, the articles of association, the certificate Constitutional Documents of incorporation (each as amended from time to time) and the certificate of registration issued by the Supervisory Authorities to the Issuer. Shall have the meaning as ascribed to it in the Companies Act, 2013 and the term Control "Controlled" will be construed accordingly. Means the secured, rated, listed, redeemable, principal protected, non- convertible, market linked debentures, each having a face value of Rs. 10,00,000/- Debentures/MLDs (Indian Rupees Ten Lakh only), and aggregating upto Rs. 25,00,00,000/- (Indian Rupees Twenty Five Crore only). Means the Applicants whose names and addresses are set out in the Application Form and who have agreed to subscribe to the Debentures, and for any subsequent Debenture Holders, each person that fulfils the following requirements: (a) persons who are registered as Beneficial Owners; and Debenture Holders/ Identified (b) persons who are registered as a debenture holder in the Register Investors of Debenture Holders. Sub-paragraphs (a) and (b) shall be deemed to include transferees of the Debentures registered with the Issuer and the Depository from time to time, and in the event of any inconsistency between sub-paragraph (a) and (b) above, sub- paragraph (a) shall prevail.