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DRAFT RED HERRING PROSPECTUS
Dated: July 19, 2018
Please read Section 32 of the Companies Act, 2013
(This Draft Red Herring Prospectus will be updated upon filing
with the RoC)
100% Book Built Offer
Aakash Educational Services Limited
Our Company was incorporated in New Delhi, India on October 15,
2007 as “Aakash Educational Services Limited”, a public limited
company under the Companies Act, 1956 with the Registrar of
Companies,
National Capital Territory of Delhi and Haryana at New Delhi
(“RoC”) and we received a certificate of commencement of business
from the RoC on January 9, 2008. Our Company was converted into a
private
limited company and its name was changed to “Aakash Educational
Services Private Limited” and a fresh certificate of incorporation
dated June 21, 2014 was issued by the RoC. Subsequently, our
Company was converted into a public limited company and a fresh
certificate of incorporation dated July 5, 2018 was issued by the
RoC. Consequently, our Company’s name was changed to “Aakash
Educational Services
Limited”. For further details on change of name and registered
office of our Company, see “History and Certain Corporate Matters”
on page 155.
Registered Office: Plot no. 8, Aakash Tower, Pusa Road, New
Delhi 110 005, India
Tel: +91 11 4762 3400; Fax: + 91 11 4762 3472; Website:
www.aakash.ac.in Contact Person: Veerendra Kumar Achanta, Company
Secretary and Compliance Officer
E-mail: [email protected]
CIN: U80300DL2007PLC169398
OUR PROMOTERS: MR. J.C. CHAUDHRY AND MR. AAKASH CHAUDHRY
INITIAL PUBLIC OFFERING OF 18,500,000 EQUITY SHARES OF FACE
VALUE OF ₹ 5 EACH (“EQUITY SHARE”) OF AAKASH EDUCATIONAL SERVICES
LIMITED (“OUR COMPANY” OR “THE COMPANY”) FOR CASH AT A PRICE OF ₹
[●] PER EQUITY SHARE (THE “OFFER PRICE”) AGGREGATING TO ₹ [●]
MILLION THROUGH AN OFFER FOR
SALE CONSISTING OF 14,427,015 EQUITY SHARES BY MR. J.C. CHAUDHRY
AND 1,366,773 EQUITY SHARES BY MR. AAKASH CHAUDHRY (COLLECTIVELY
THE “PROMOTER
SELLING SHAREHOLDERS”) AND 1,865,646 EQUITY SHARES BY MS. KAMLA
CHAUDHRY, 389,530 EQUITY SHARES BY DR. AASHISH CHAUDHRY, 225,518
EQUITY SHARES BY
DR. MEINAL CHAUDHRY AND 225,518 EQUITY SHARES BY MS. NEETU
CHAUDHRY (COLLECTIVELY THE “OTHER SELLING SHAREHOLDERS” AND
TOGETHER WITH THE
PROMOTER SELLING SHAREHOLDERS, THE “SELLING SHAREHOLDERS”, AND
SUCH OFFER, THE “OFFER” OR THE “OFFER FOR SALE”). THE OFFER
INCLUDES A
RESERVATION OF UP TO [●] EQUITY SHARES, AGGREGATING TO ₹ [●]
MILLION, FOR PURCHASE BY ELIGIBLE EMPLOYEES (AS DEFINED
HEREINAFTER) NOT EXCEEDING 5% OF OUR POST-OFFER PAID-UP EQUITY
SHARE CAPITAL (THE “EMPLOYEE RESERVATION PORTION”). THE OFFER LESS
THE EMPLOYEE RESERVATION PORTION IS
HEREINAFTER REFERRED TO AS THE “NET OFFER”. THE OFFER AND THE
NET OFFER SHALL CONSTITUTE [●]% AND [●]%, RESPECTIVELY OF THE
FULLY-DILUTED POST-
OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.
THE FACE VALUE OF EQUITY SHARES IS ₹ 5 EACH. THE PRICE BAND, THE
AMOUNT OF DISCOUNT, IF ANY, TO RETAIL INDIVIDUAL INVESTORS (THE
“RETAIL DISCOUNT”)
AND THE ELIGIBLE EMPLOYEES BIDDING IN THE EMPLOYEE RESERVATION
PORTION (THE “EMPLOYEE DISCOUNT”) AND THE MINIMUM BID LOT WILL BE
DECIDED BY
OUR COMPANY, IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS
TO THE OFFER (THE “BRLMS”), AND WILL BE ADVERTISED IN [●] EDITIONS
OF THE
ENGLISH NATIONAL DAILY NEWSPAPER, [●] AND [●] EDITIONS OF THE
HINDI NATIONAL DAILY NEWSPAPER, [●] (HINDI ALSO BEING THE REGIONAL
LANGUAGE OF NEW
DELHI WHERE OUR REGISTERED OFFICE IS LOCATED), EACH WITH WIDE
CIRCULATION, AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/OFFER
OPENING DATE AND
SUCH ADVERTISEMENT WILL BE MADE AVAILABLE TO THE BSE LIMITED
(THE “BSE”) AND THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED (THE
“NSE”, AND
TOGETHER WITH THE BSE, THE “STOCK EXCHANGES”) FOR THE PURPOSE OF
UPLOADING ON THEIR RESPECTIVE WEBSITES.*
* Retail Discount of ₹ [●] to the Offer Price may be offered to
Retail Individual Investors and an Employee Discount of ₹ [●] to
the Offer Price may be offered to the Eligible Employees Bidding in
the Employee Reservation Portion.
In case of any revision in the Price Band, the Bid/Offer Period
will be extended by at least three additional Working Days after
such revision of the Price Band, subject to the Bid/Offer Period
not exceeding ten
Working Days. Any revision in the Price Band and the revised
Bid/Offer Period, if applicable, will be widely disseminated by
notification to the Stock Exchanges, by issuing a press release,
and also by indicating
the change on the respective websites of the BRLMs and the
terminals of the Syndicate Members (as defined hereinafter) and by
intimation to the other Designated Intermediaries (as defined
hereinafter).
The Offer is being made through the Book Building Process, in
terms of Rule 19(2)(b) of the Securities Contracts (Regulation)
Rules, 1957, as amended (the “SCRR”) and in compliance with
Regulation 26(2) of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009,
as amended (the “SEBI ICDR Regulations”), wherein at least 75% of
the Net Offer will be Allotted
on a proportionate basis to Qualified Institutional Buyers
(“QIBs”, and such portion, the “QIB Portion”), provided that our
Company may, in consultation with the BRLMs, allocate up to 60% of
the QIB Portion
to Anchor Investors on a discretionary basis in accordance with
the SEBI ICDR Regulations (the “Anchor Investor Portion”), of which
one-third will be reserved for domestic Mutual Funds only, subject
to valid Bids being received from domestic Mutual Funds at or above
the Anchor Investor Allocation Price, in accordance with the SEBI
ICDR Regulations. Further, 5% of the QIB Portion (excluding the
Anchor Investor
Portion) will be available for allocation on a proportionate
basis only to Mutual Funds, and the remainder of the QIB Portion
will be available for allocation on a proportionate basis to all
QIBs (other than Anchor
Investors), including Mutual Funds, subject to valid Bids being
received at or above the Offer Price. If at least 75% of the Net
Offer cannot be Allotted to QIBs, then the entire application money
shall be refunded
forthwith. Further, not more than 15% of the Net Offer will be
available for allocation on a proportionate basis to
Non-Institutional Investors and not more than 10% of the Net Offer
will be available for allocation to Retail Individual Investors in
accordance with the SEBI ICDR Regulations, subject to valid Bids
being received at or above the Offer Price. Further, up to [●]
Equity Shares will be available for allocation on a
proportionate basis to Eligible Employees, subject to valid Bids
being received at or above the Offer Price. All potential
investors, other than Anchor Investors, are required to mandatorily
utilize the Application
Supported by Blocked Amount (“ASBA”) process by providing
details of their respective bank accounts in which the
corresponding Bid Amounts will be blocked by the self certified
syndicate banks (“SCSBs”) to participate in the Offer. Anchor
Investors are not permitted to participate in the Anchor Investor
Portion through the ASBA process. For further details, see “Offer
Procedure” on page 340.
RISKS IN RELATION TO THE FIRST OFFER
This being the first public offering of securities of our
Company, there has been no formal market for the Equity Shares. The
face value of the Equity Shares is ₹ 5 each and the Floor Price is
[●] times of the face value and the Cap Price is [●] times of the
face value. The Offer Price (determined and justified by our
Company, in consultation with the BRLMs, as stated in “Basis for
Offer Price” on page 83) should not be taken to be indicative of
the market price of the Equity Shares after the Equity Shares are
listed. No assurance can be given regarding an active or sustained
trading in the Equity Shares or regarding the price at
which the Equity Shares will be traded after listing.
GENERAL RISK
Investments in equity and equity-related securities involve a
degree of risk and investors should not invest any funds in the
Offer unless they can afford to take the risk of losing their
entire investment. Investors
are advised to read the risk factors carefully before taking an
investment decision in the Offer. For taking an investment
decision, investors must rely on their own examination of our
Company and the Offer, including the risks involved. The Equity
Shares offered in the Offer have not been recommended or approved
by the Securities and Exchange Board of India (the “SEBI”), nor
does the SEBI guarantee the
accuracy or adequacy of the contents of this Draft Red Herring
Prospectus. Specific attention of the investors is invited to “Risk
Factors” on page 15.
COMPANY AND SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts
responsibility for and confirms that this Draft Red Herring
Prospectus contains all information with regard to our Company and
the Offer, which is material in the context of the Offer, that the
information contained in this Draft Red Herring Prospectus 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 Draft Red Herring
Prospectus as a whole or any of such information or the expression
of any such
opinions or intentions misleading in any material respect. The
Selling Shareholders, severally and not jointly, assume
responsibility only for statements expressly and specifically made
by such Selling Shareholder
in this Draft Red Herring Prospectus to the extent that such
statements contain information in relation to the respective
Selling Shareholder and their respective portion of the Equity
Shares being offered by them in the Offer and confirms that such
statements are true and correct in all material respects and not
misleading in any material respect.
LISTING
The Equity Shares offered through the Red Herring Prospectus are
proposed to be listed on the BSE and the NSE. Our Company has
received an ‘in-principle’ approval from each of the BSE and the
NSE for the
listing of the Equity Shares pursuant to letters dated [●] and
[●], respectively. For the purposes of the Offer, the Designated
Stock Exchange will be the [●]. A signed copy of the Red Herring
Prospectus and the Prospectus will be delivered for registration to
the RoC in accordance with Section 26(4) of the Companies Act,
2013. For details of the material contracts and documents available
for inspection from the date of
the Red Herring Prospectus up to the Bid/Offer Closing Date, see
“Material Contracts and Documents for Inspection” on page 406.
BOOK RUNNING LEAD MANAGERS TO THE OFFER REGISTRAR TO THE
OFFER
Kotak Mahindra Capital Company Limited 1st Floor, 27 BKC, Plot
No. 27
“G” Block, Bandra Kurla Complex
Bandra (East), Mumbai 400 051
Maharashtra, India
Tel: +91 22 4336 0000
Fax: +91 22 6713 2447
E-mail: [email protected]
Investor Grievance ID: [email protected]
Website: www.investmentbank.kotak.com
Contact Person: Ganesh Rane
SEBI Registration No.: INM000008704
Citigroup Global Markets India Private Limited 1202, 12th
Floor
First International Financial Centre
G-Block, Bandra Kurla Complex
Bandra (East)
Mumbai 400 098
Maharashtra, India
Tel: +91 22 6175 9999
Fax: +91 22 6175 9961
E-mail: [email protected]
Investor Grievance ID: [email protected]
Website:
http://www.online.citibank.co.in/rhtm/citigroupglobals
creen1.htm
Contact Person: Nishit Dedhia
SEBI Registration No.: INM000010718
CLSA India Private Limited 8/F Dalamal House
Nariman Point
Mumbai 400 021
Maharashtra, India
Tel: +91 22 6650 5050
Fax: +91 22 2284 0271
E-mail: [email protected]
Investor Grievance ID: [email protected]
Website: www.india.clsa.com
Contact Person: Rahul Choudhary
SEBI Registration number: INM000010619
Link Intime India Private Limited C-101, 1st Floor, 247 Park
L.B.S. Marg, Vikhroli (West)
Mumbai 400 083
Maharashtra, India
Tel: +91 22 4918 6200
Fax: +91 22 4918 6195
E-mail: [email protected]
Website: www.linkintime.co.in
Investor Grievance ID:
[email protected]
Contact Person: Shanti Gopalkrishnan SEBI Registration No.:
INR000004058
BID/OFFER PROGRAM OFFER/BID OPENING DATE:[●]
(1) OFFER/BID CLOSING DATE: [●]
(2)
(1) Our Company may, in consultation with the BRLMs, consider
participation by Anchor Investors in accordance with the SEBI ICDR
Regulations. The Anchor Investor Bid/Offer Period will be one
Working Day prior to the
Bid/Offer Opening Date.
(2) Our Company may, in consultation with the BRLMs, consider
closing the Bid/Offer Period for QIBs one Working Day prior to the
Bid/Offer Closing Date in accordance with the SEBI ICDR
Regulations.
http://www.aakash.ac.in/mailto:[email protected]://www.investmentbank.kotak.com/http://www.online.citibank.co.in/rhtm/citigroupglobalscreen1.htmhttp://www.online.citibank.co.in/rhtm/citigroupglobalscreen1.htmhttp://www.india.clsa.com/http://www.linkintime.co.in/
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TABLE OF CONTENTS
SECTION I: GENERAL
.............................................................................................................................................
1 DEFINITIONS AND ABBREVIATIONS
....................................................................................................................
1 CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND
MARKET DATA ............. 10 FORWARD-LOOKING STATEMENTS
...................................................................................................................
13
SECTION II: RISK FACTORS
...............................................................................................................................
15
SECTION III: INTRODUCTION
...........................................................................................................................
44 SUMMARY OF INDUSTRY
.....................................................................................................................................
44 SUMMARY OF BUSINESS
.......................................................................................................................................
49 SUMMARY OF FINANCIAL INFORMATION
.......................................................................................................
52 THE OFFER
................................................................................................................................................................
56 GENERAL INFORMATION
......................................................................................................................................
58 CAPITAL STRUCTURE
............................................................................................................................................
66 OBJECTS OF THE OFFER
........................................................................................................................................
81 BASIS FOR OFFER PRICE
.......................................................................................................................................
83 STATEMENT OF SPECIAL TAX BENEFITS
..........................................................................................................
86 CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
............................................................................
89
SECTION IV: ABOUT OUR COMPANY
..............................................................................................................
92 INDUSTRY OVERVIEW
...........................................................................................................................................
92 OUR BUSINESS
.......................................................................................................................................................
129 KEY REGULATIONS AND POLICIES
..................................................................................................................
151 HISTORY AND CERTAIN CORPORATE MATTERS
..........................................................................................
155 OUR MANAGEMENT
.............................................................................................................................................
160 OUR PROMOTERS AND PROMOTER GROUP
...................................................................................................
176 OUR GROUP COMPANIES
....................................................................................................................................
181 RELATED PARTY TRANSACTIONS
....................................................................................................................
187 DIVIDEND POLICY
................................................................................................................................................
188
SECTION V: FINANCIAL INFORMATION
......................................................................................................
189 FINANCIAL STATEMENTS
...................................................................................................................................
189 FINANCIAL INDEBTEDNESS
...............................................................................................................................
275 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF
OPERATIONS
..........................................................................................................................................................
276
SECTION VI: LEGAL AND OTHER INFORMATION
....................................................................................
300 OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS
............................................................... 300
GOVERNMENT AND OTHER APPROVALS
.......................................................................................................
306 OTHER REGULATORY AND STATUTORY DISCLOSURES
............................................................................
310
SECTION VII: OFFER RELATED INFORMATION
........................................................................................
325 TERMS OF THE OFFER
..........................................................................................................................................
325 OFFER STRUCTURE
..............................................................................................................................................
337 OFFER PROCEDURE
..............................................................................................................................................
340
SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION
......................................... 385
SECTION IX: OTHER INFORMATION
............................................................................................................
406 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
..................................................................
406 DECLARATION
.......................................................................................................................................................
409
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1
SECTION I: GENERAL
DEFINITIONS AND ABBREVIATIONS
This Draft Red Herring Prospectus uses certain definitions and
abbreviations which, unless otherwise specified
or the context otherwise indicates, requires or implies, shall
have the meanings as provided below. References to
any legislation, act, regulation, rule, guideline, policy,
circular, notification or clarification shall be deemed to
include all amendments, supplements, re-enactments and
modifications thereto from time to time, and any
reference to a statutory provision shall include any subordinate
legislation made from time to time thereunder. If
there is any inconsistency between the definitions given below
and the definitions contained in the General
Information Document (as defined hereinafter), the following
definitions shall prevail.
General Terms
Term
Description
The Company or our Company or
we or us or our
Aakash Educational Services Limited, a public limited company
incorporated under the Companies
Act, 1956, whose registered office is situated at Plot No. 8,
Aakash Tower, Pusa Road, New Delhi
110 005, India
Company Related Terms
Term
Description
Aakash ESOP Scheme The employee stock option scheme instituted
by our Company, namely the Aakash Educational
Services Limited - Employee Stock Option Plan 2015, as amended.
For details, see “Capital Structure” on page 66
Aakash Healthcare Aakash Healthcare Private Limited
Acquisition Agreement 1 Agreement dated April 1, 2008 between
our Company and Mr. J.C. Chaudhry for acquisition by our
Company of the business of running coaching centers from Mr.
J.C. Chaudhry
Acquisition Agreement 2 Agreement dated April 1, 2008 between
our Company and Mr. Aakash Chaudhry for acquisition by
our Company of the business of running franchisee coaching
centers at Mumbai under the name and
style of ‘Aakash Institute/Aakash IIT-JEE-Mumbai Franchise’ from
Mr. Aakash Chaudhry
AoA or Articles or Articles of Association
The articles of association of our Company, as amended
Audit Committee The audit committee of our Board of Directors as
described in “Our Management” on page 160
Auditors or Statutory Auditors The statutory auditors of our
Company, namely B S R & Co. LLP, Chartered Accountants
Board or Board of Directors The board of directors of our
Company or a duly constituted committee thereof
Corporate Social Responsibility Committee or CSR Committee
The corporate social responsibility committee of our Board of
Directors as described in “Our Management” on page 160
Deed of Assignment Deed of assignment dated June 18, 2018
between our Company and J C Jagruti pursuant to which J C
Jagruti has assigned all rights, title and interest in certain
trademarks, trademark applications and
copyrights related to the education business to our Company
Destination Home Destination Home Private Limited
Director(s) The director(s) of our Company
Equity Shares Equity shares of our Company of face value of ₹ 5
each
Executive Director(s) The executive Director(s) of our
Company
Group Companies The companies that are covered under the
applicable accounting standards and any other company
considered material by our Board of Directors, as disclosed in
“Our Group Companies” on page 181 Independent Director(s) The
independent Director(s) of our Company
IPO Committee The IPO Committee of our Board of Directors
comprising Mr. J.C. Chaudhry, Mr. Aakash Chaudhry
and Dr. Pramath Raj Sinha and constituted to facilitate the
process of the Offer
J C Jagruti J C Jagruti Private Limited
Key Management Personnel Key management personnel of our Company
in terms of Regulation 2(1)(s) of the SEBI ICDR
Regulations and Section 2(51) of the Companies Act, 2013 and as
disclosed in “Our Management” on
page 160
MoA/Memorandum/Memorandum
of Association
The memorandum of association of our Company, as amended
Nomination, Remuneration &
Compensation Committee
The nomination, remuneration & compensation committee of our
Board of Directors as described in
“Our Management” on page 160
Non-executive Director(s) The non-executive Director(s) of our
Company
Promoters The promoters of our Company, namely Mr. J.C. Chaudhry
and Mr. Aakash Chaudhry
Promoter Group The entities and persons constituting the
promoter group of our Company in terms of Regulation
2(1)(zb) of the SEBI ICDR Regulations, as disclosed in “Our
Promoters and Promoter Group” on
page 176
Registered Office The registered office of our Company, which is
located at Plot No. 8, Aakash Tower, Pusa Road, New
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2
Term
Description
Delhi 110 005, India
Registrar of Companies or RoC The Registrar of Companies,
National Capital Territory of Delhi and Haryana at New Delhi
Restated Financial Information The restated financial statements
of our Company, which comprise the restated statement of assets
and
liabilities as at and for the Financial Years ended March 31,
2018, 2017, 2016, 2015 and 2014, the
restated statement of profit and loss, the restated statement of
changes in equity and the restated statement of cash flows as at
and for the Financial Years ended March 31, 2018, 2017, 2016, 2015
and
2014, and the significant accounting policies, together with the
annexures and the notes thereto, which
have been prepared in accordance with the Companies Act, 2013,
and restated in accordance with the SEBI ICDR Regulations. The
Restated Financial Information have been compiled:
(a) As at and for the Financial Years ended March 31, 2018 and
2017: from the audited financial statements of our Company as at
and for the Financial Years ended March 31, 2018 and 2017
being the comparative period for the Financial Year ended March
31, 2018, prepared in accordance with Ind AS prescribed under
Section 133 of the Companies Act, 2013, other
relevant provisions of the Companies Act and other accounting
principles generally accepted in
India;
(b) As at and for the Financial Years ended March 31, 2016 and
2015: from the audited financial statements of our Company as at
and for the Financial Years ended March 31, 2016 and 2015,
prepared in accordance with the Companies (Accounting Standards)
Rules, 2006, as amended,
other relevant provisions of the Companies Act and other
accounting principles generally accepted in India, which have been
translated into figures as per Ind AS to align accounting
policies, exemptions and disclosures as adopted by our Company
on its first time adoption of
Ind AS as on the Transition Date; and
(c) As at and for the Financial Year ended March 31, 2014: from
the audited financial statements of our Company as at and for the
Financial Year ended March 31, 2014, prepared in accordance
with Accounting Standards prescribed under Section 211 (3C) of
the Companies Act, 1956 read
with the Companies (Accounting Standards) Rules, 2006, which
have been translated into figures as per Ind AS to align accounting
policies, exemptions and disclosures as adopted by
our Company on its first time adoption of Ind AS as on the
Transition Date.
The Restated Financial Information for the Financial Years ended
March 31 2016, 2015 and 2014 are
referred to as “the Proforma Ind AS Restated Financial
Information” as per the guidance note issued
by ICAI.
Shareholders The holders of the Equity Shares, from time to
time
Stakeholders’ Relationship
Committee
The stakeholders’ relationship committee of our Board of
Directors as described in “Our
Management” on page 160
Surabhi Infra Surabhi Infra & Management Services
Limited
Transition Date The beginning of the earliest period for which
our Company has presented its balance sheet under Ind
AS in the first annual financial statements, being, April 1,
2016
Whole-time Director(s) Director(s) in the whole-time employment
of our Company
Offer Related Terms
Term
Description
Acknowledgement Slip The slip or document issued by the
Designated Intermediary to a Bidder as proof of registration of
the
Bid cum Application Form
Allotment or Allot or Allotted Unless the context otherwise
requires, the transfer of the Equity Shares offered by the Selling
Shareholders pursuant to the Offer for Sale to the successful
Bidders
Allotment Advice Note or advice or intimation of Allotment sent
to each successful Bidder who has been or is to be
Allotted the Equity Shares after the Basis of Allotment has been
approved by the Designated Stock Exchange
Allottee A successful Bidder to whom the Equity Shares are
Allotted
Anchor Investor A Qualified Institutional Buyer, applying under
the Anchor Investor Portion, in accordance with the
SEBI ICDR Regulations and the Red Herring Prospectus, who has
Bid for an amount of at least ₹ 100 million
Anchor Investor Allocation Price The price at which Equity
Shares will be allocated to Anchor Investors at the end of the
Anchor
Investor Bid/Offer Period in terms of the Red Herring Prospectus
and the Prospectus, which will be decided by our Company, in
consultation with the BRLMs
Anchor Investor Application Form The form used by an Anchor
Investor to make a Bid in the Anchor Investor Portion and which
will be
considered as an application for Allotment in terms of the Red
Herring Prospectus and the Prospectus
Anchor Investor Bid/Offer Period The day, one Working Day prior
to the Bid/Offer Opening Date, on which Bids by Anchor Investors
will be submitted and allocation to Anchor Investors will be
completed
Anchor Investor Offer Price The final price at which Equity
Shares will be Allotted to Anchor Investors in terms of the Red
Herring
Prospectus and the Prospectus, which price will be equal to or
higher than the Offer Price, but not
higher than the Cap Price. The Anchor Investor Offer Price will
be decided by our Company, in
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3
Term
Description
consultation with the BRLMs
Anchor Investor Portion Up to 60% of the QIB Portion, or up to
[●] Equity Shares, which may be allocated by our Company, in
consultation with the BRLMs, to Anchor Investors on a discretionary
basis in accordance with the
SEBI ICDR Regulations. One-third of the Anchor Investor Portion
will be reserved for domestic
Mutual Funds, subject to valid Bids being received from domestic
Mutual Funds at or above the Anchor Investor Allocation Price
Application Supported by Blocked
Amount or ASBA
An application, whether physical or electronic, used by ASBA
Bidders to make a Bid and to authorize
an SCSB to block the Bid Amount in the ASBA Account
ASBA Account A bank account maintained with an SCSB and
specified in the ASBA Form submitted by ASBA Bidders, which may be
blocked by such SCSB to the extent of the Bid Amount specified in
such
ASBA Form
ASBA Bid A Bid made by an ASBA Bidder
ASBA Bidder Any Bidder except Anchor Investors
ASBA Form An application form, whether physical or electronic,
used by ASBA Bidders which will be considered
as the application for Allotment in terms of the Red Herring
Prospectus and the Prospectus
Banker(s) to the Offer The Escrow Collection Bank(s), Refund
Bank(s) and Public Offer Account Bank
Basis of Allotment The basis on which Equity Shares will be
Allotted to successful Bidders under the Offer and which is
described in “Offer Procedure” on page 340
Bid An indication to make an offer during the Bid/Offer Period
by ASBA Bidders pursuant to submission
of the ASBA Form, or during the Anchor Investor Bid/Offer Period
by the Anchor Investors pursuant to submission of the Anchor
Investor Application Form, to purchase the Equity Shares at a price
within
the Price Band, including all revisions and modifications
thereto, in accordance with the SEBI ICDR
Regulations. The term “Bidding” shall be construed
accordingly
Bid Amount In relation to each Bid, the highest value of the
optional Bids indicated in the Bid cum Application Form and payable
by the Bidder or blocked in the ASBA Account of the ASBA Bidder, as
the case
may be, upon submission of such Bid cum Application Form. For
Retail Individual Investors, the Bid
Amount will be net of any Retail Discount and for Eligible
Employees, the Bid Amount will be net of any Employee Discount
The maximum Bid Amount under the Employee Reservation Portion by
an Eligible Employee shall not exceed ₹ 500,000 (which will be net
of any Employee Discount). However, the initial Allotment to an
Eligible Employee in the Employee Reservation Portion shall not
exceed ₹ 200,000 (which will be net of any Employee Discount). Only
in the event of an under-subscription in the Employee Reservation
Portion post the initial Allotment, such unsubscribed portion may
be Allotted on a
proportionate basis to Eligible Employee Bidding in the Employee
Reservation Portion, for a value in
excess of ₹ 200,000 (which will be net of any Employee
Discount), subject to the total Allotment to an Eligible Employee
not exceeding ₹ 500,000 (which will be net of any Employee
Discount)
Bid cum Application Form The Anchor Investor Application Form or
the ASBA Form, as the case may be
Bid Lot [●] Equity Shares
Bid/Offer Closing Date Except in relation to any Bids received
from the Anchor Investors, the date after which the Designated
Intermediaries shall not accept any Bids, which will be notified in
[●] editions of the English national
daily newspaper, [●] and [●] editions of the Hindi national
daily newspaper, [●] (Hindi also being the
regional language of New Delhi, where our Registered Office is
located), each with wide circulation. Our Company may, in
consultation with the BRLMs, consider closing the Bid/Offer Period
for QIBs
one Working Day prior to the Bid/Offer Closing Date in
accordance with the SEBI ICDR Regulations
Bid/Offer Opening Date Except in relation to any Bids received
from Anchor Investors, the date on which the Designated
Intermediaries will start accepting Bids, which will be notified in
[●] editions of the English national
daily newspaper, [●] and [●] editions of the Hindi national
daily newspaper, [●] (Hindi also being the
regional language of New Delhi, where our Registered Office is
located), each with wide circulation
Bid/Offer Period Except in relation to Anchor Investors, the
period between the Bid/Offer Opening Date and the
Bid/Offer Closing Date, inclusive of both days, during which
prospective Bidders can submit their
Bids, including any revisions thereof in accordance with the
SEBI ICDR Regulations
Bidder Any prospective investor who makes a Bid pursuant to the
terms of the Red Herring Prospectus and the Bid cum Application
Form and unless otherwise stated or implied, includes an Anchor
Investor
Bidding Centers The centers at which at the Designated
Intermediaries will accept the ASBA Forms, i.e., Designated
Branches for SCSBs, Specified Locations for Syndicate, Broker
Centers for Registered Brokers,
Designated RTA Locations for RTAs and Designated CDP Locations
for CDPs
Book Building Process or Book
Building Method
The book building process, as provided in Schedule XI of the
SEBI ICDR Regulations, in terms of
which the Offer is being made
Book Running Lead Managers or
BRLMs
The book running lead managers to the Offer, namely Kotak, Citi
and CLSA
Broker Centers The broker centers notified by the Stock
Exchanges where ASBA Bidders can submit the ASBA
Forms to a Registered Broker. The details of such Broker
Centers, along with the names and contact
details of the Registered Brokers are available on the
respective websites of the Stock Exchanges (www.bseindia.com and
www.nseindia.com)
CAN or Confirmation of Allocation
Note
A notice or intimation of allocation of the Equity Shares sent
to Anchor Investors who will be
allocated the Equity Shares, after the Anchor Investor Bid/Offer
Period
Cap Price The higher end of the Price Band, subject to any
revision thereto, above which the Offer Price and the Anchor
Investor Offer Price will not be finalized and above which no Bids
will be accepted
Citi Citigroup Global Markets India Private Limited
http://www.bseindia.com/http://www.nseindia.com/
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4
Term
Description
Client ID Client identification number maintained with one of
the Depositories in relation to demat account
CLSA CLSA India Private Limited
Collecting Depository Participant
or CDP
A depository participant as defined under the Depositories Act,
registered with SEBI and who is
eligible to procure Bids at the Designated CDP Locations in
terms of circular (No.
CIR/CFD/POLICYCELL/11/2015) dated November 10, 2015 issued by
the SEBI
Cut-off Price The Offer Price finalized by our Company, in
consultation with the BRLMs, which may be any price within the
Price Band. Only Retail Individual Investors and Eligible Employees
Bidding in the
Employee Reservation Portion are entitled to Bid at the Cut-off
Price. No other category of Bidders is
entitled to Bid at the Cut-off Price
Demographic Details The demographic details of the Bidders
including the Bidder’s address, name of the Bidder’s
father/husband, investor status, occupation and bank account
details
Designated Branches Such branches of the SCSBs which will
collect the ASBA Forms used by the ASBA Bidders and a list of which
is available on the website of the SEBI at
www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34
and updated from
time to time
Designated CDP Locations Such locations of the CDPs where
Bidders can submit the ASBA Forms. The details of such Designated
CDP Locations, along with names and contact details of the
Collecting Depository
Participants eligible to accept ASBA Forms are available on the
respective websites of the Stock
Exchanges (www.bseindia.com and www.nseindia.com)
Designated Date The date on which funds from the Escrow
Account(s) are transferred to the Public Offer Account or
the Refund Account(s) as appropriate and the amounts blocked by
the SCSBs are transferred to the
Public Offer Account or unblocked, as appropriate, after filing
of the Prospectus with the RoC
Designated Intermediaries Syndicate, sub-Syndicate/agents,
SCSBs, Registered Brokers, CDPs and RTAs, who are authorized to
collect ASBA Forms from the ASBA Bidders, in relation to the
Offer
Designated RTA Locations Such locations of the RTAs where
Bidders can submit the ASBA Forms to the RTAs. The details of
such Designated RTA Locations, along with names and contact
details of the RTAs eligible to accept ASBA Forms are available on
the respective websites of the Stock Exchanges (www.bseindia.com
and
www.nseindia.com)
Designated Stock Exchange [●]
Draft Red Herring Prospectus or DRHP
This draft red herring prospectus dated July 19, 2018 filed with
the SEBI and issued in accordance with the SEBI ICDR Regulations,
which does not contain complete particulars of the price at
which
the Equity Shares will be Allotted and the size of the Offer,
including any addenda or corrigenda
thereto
Eligible Employees All permanent and full-time employees of our
Company (excluding such employees not eligible to invest in the
Offer under applicable law, rules, regulations and guidelines) as
of the date of filing of the
Red Herring Prospectus with the RoC and who continue to be
employees of our Company until the
submission of the Bid cum Application Form and are resident and
present in India as on the date of submission of the Bid cum
Application Form
Eligible FPI(s) FPI(s) from jurisdictions outside India where it
is not unlawful to make an offer or invitation under the
Offer and in relation to whom the Bid cum Application Form and
Red Herring Prospectus constitutes an invitation to purchase the
Equity Shares offered thereby
Eligible NRI(s) NRI(s) from jurisdictions outside India where it
is not unlawful to make an offer or invitation under the
Offer and in relation to whom the Bid cum Application Form and
the Red Herring Prospectus constitutes an invitation to purchase
the Equity Shares offered thereby
Employee Discount A discount of ₹ [●] to the Offer Price that
may be offered to the Eligible Employees Bidding in the Employee
Reservation Portion, by our Company in consultation with the
BRLMs
Employee Reservation Portion The portion of the Offer, being up
to [●] Equity Shares aggregating to ₹ [●] million, available for
allocation to Eligible Employees, on a proportionate basis
Escrow Account(s) Account opened with the Escrow Collection
Bank(s) and in whose favor the Anchor Investors will
transfer money through direct credit or NACH or NEFT or RTGS in
respect of the Bid Amount when
submitting a Bid
Escrow Agreement The agreement to be entered into among our
Company, the Selling Shareholders, the Registrar to the
Offer, the BRLMs, the Syndicate Members, the Escrow Collection
Bank(s), the Public Offer Account
Bank and the Refund Bank(s) for, inter alia, collection of the
Bid Amounts from Anchor Investors, transfer of funds to the Public
Offer Account and where applicable, remitting refunds of the
amounts
collected from Anchor Investors, on the terms and conditions
thereof
Escrow Collection Bank(s) The bank(s) which are clearing members
and registered with the SEBI as bankers to an issue and with
whom the Escrow Account(s) shall be opened, in this case being
[●]
First Bidder Bidder whose name appears first in the Bid cum
Application Form or the Revision Form and in case of
joint Bids, whose name shall also appear as the first holder of
the beneficiary account held in joint
names
Floor Price The lower end of the Price Band, subject to any
revision thereto, at or above which the Offer Price and the Anchor
Investor Offer Price will be finalized and below which no Bids will
be accepted and which
will not be less than the face value of the Equity Shares
General Information Document or GID
The General Information Document for Investing in Public Issues
prepared and issued in accordance with the circular (No.
CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by the SEBI,
as
updated to reflect enactments and regulations to the extent
applicable to a public issue, including
circular (No. CIR/CFD/POLICYCELL/11/2015) dated November 10,
2015 and circular (No. SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January
21, 2016 issued by the SEBI, as suitably modified
and included in “Offer Procedure” on page 340
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34http://www.bseindia.com/http://www.nseindia.com/http://www.bseindia.com/http://www.nseindia.com/
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5
Term
Description
Kotak Kotak Mahindra Capital Company Limited
Maximum RII Allottees The maximum number of RIIs who can be
Allotted the minimum Bid Lot. This is computed by dividing the
total number of Equity Shares available for Allotment to RIIs by
the minimum Bid Lot
Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor
Investor Portion), or [●] Equity Shares, which shall be
available for allocation only to Mutual Funds on a proportionate
basis, subject to valid Bids being received at or above the Offer
Price
Net Offer The Offer less the Employee Reservation Portion
Non-Institutional Investors or NIIs All Bidders (including
Category III FPIs) that are not QIBs or Retail Individual Investors
or Eligible
Employees Bidding in the Employee Reservation Portion and who
have Bid for Equity Shares for an amount of more than ₹ 200,000
(but not including NRIs other than Eligible NRIs)
Non-Institutional Portion The portion of the Offer being not
more than 15% of the Net Offer, or [●] Equity Shares, which
shall
be available for allocation on a proportionate basis to
Non-Institutional Investors, subject to valid Bids being received
at or above the Offer Price
Offer or Offer for Sale The initial public offering of
18,500,000 Equity Shares for cash at a price of ₹ [●] each,
aggregating to ₹ [●] million by way of an offer for sale by the
Selling Shareholders. The Offer comprises the Net Offer to the
public of [●] Equity Shares aggregating to ₹ [●] million and the
Employee Reservation Portion of [●] Equity Shares aggregating to ₹
[●] million for purchase by Eligible Employees
Offer Agreement The agreement dated July 19, 2018 entered into
among our Company, the Selling Shareholders and the
BRLMs, pursuant to which certain arrangements are agreed to in
relation to the Offer
Offer Price The final price at which Equity Shares will be
Allotted to successful Bidders (except Anchor Investors) as
determined in accordance with the Book Building Process and
determined by the Company in
consultation with the BRLMs, in terms of the Red Herring
Prospectus. Equity Shares will be Allotted
to Anchor Investors at the Anchor Investor Offer Price in terms
of the Red Herring Prospectus
A Retail Discount of ₹ [●] per Equity Share on the Offer Price
may be offered to Retail Individual Investors
An Employee Discount of ₹ [●] per Equity Share on the Offer
Price may be offered to Eligible Employees Bidding in the Employee
Reservation Portion
Other Selling Shareholders Ms. Kamla Chaudhry, Dr. Aashish
Chaudhry, Dr. Meinal Chaudhry and Ms. Neetu Chaudhry
Price Band Price band of a minimum price of ₹ [●] per Equity
Share (i.e., the Floor Price) and the maximum price of ₹ [●] per
Equity Share (i.e., the Cap Price), including any revisions
thereof. The Price Band and the minimum Bid Lot for the Offer will
be decided by our Company, in consultation with the BRLMs and shall
be advertised in [●] editions of the English national daily
newspaper [●] and [●] editions of the
Hindi national daily newspaper [●] (Hindi also being the
regional language of New Delhi, where our
Registered Office is located), each with wide circulation, at
least five Working Days prior to the Bid/Offer Opening Date
Pricing Date The date on which our Company, in consultation with
the BRLMs, will finalize the Offer Price
Promoter Selling Shareholders Mr. J.C. Chaudhry and Mr. Aakash
Chaudhry
Prospectus The prospectus for the Offer to be filed with the RoC
on or after the Pricing Date in accordance with Section 26 of the
Companies Act, 2013 and the SEBI ICDR Regulations, containing,
inter alia, the
Offer Price, the size of the Offer and certain other
information, including any addenda or corrigenda
thereto
Public Offer Account ‘No-lien’ and ‘non interest-bearing’ bank
account opened in accordance with Section 40(3) of the
Companies Act, 2013, with the Public Offer Account Bank to
receive money from the Escrow
Account(s) and the ASBA Accounts maintained with the SCSBs on
the Designated Date
Public Offer Account Bank Escrow Collection Bank(s) with which
the Public Offer Account shall be opened, being [●]
QIB Portion The portion of the Offer being at least 75% of the
Net Offer, or [●] Equity Shares, which shall be
Allotted on a proportionate basis to QIBs, including the Anchor
Investor Portion (in which allocation
shall be on a discretionary basis, as determined by our Company,
in consultation with the BRLMs),
subject to valid Bids being received at or above the Offer Price
or the Anchor Investor Allocation
Price, as applicable
Qualified Institutional Buyers,
QIBs or QIB Bidders
Qualified institutional buyers as defined under Regulation
2(1)(zd) of the SEBI ICDR Regulations
Red Herring Prospectus or RHP The red herring prospectus for the
Offer to be issued by our Company in accordance with Section 32
of
the Companies Act, 2013 and the SEBI ICDR Regulations, which
will not have complete particulars of
the price at which the Equity Shares will be Allotted and the
size of the Offer, including any addenda or corrigenda thereto. The
Red Herring Prospectus will be filed with the RoC at least three
days before
the Bid/Offer Opening Date and will become the Prospectus upon
registration with the RoC after the
Pricing Date
Refund Account(s) ‘No-lien’ and ‘non interest-bearing’ bank
account opened with the Refund Bank(s) from which refunds
(excluding refunds to ASBA Bidders), if any, of the whole or part
of the Bid Amount may be made to
the Anchor Investors
Refund Bank(s) Escrow Collection Bank(s) with which Refund
Account(s) shall be opened, being [●]
Registered Brokers The stock brokers registered with the stock
exchanges having nationwide terminals, other than the
Members of the Syndicate and eligible to procure Bids in terms
of circular (No. CIR/CFD/14/2012)
dated October 4, 2012 issued by the SEBI
Registrar Agreement The agreement dated July 9, 2018, entered
into among our Company and the Registrar to the Offer in relation
to the responsibilities and obligations of the Registrar to the
Offer pertaining to the Offer
Registrar and Share Transfer Registrar and share transfer agents
registered with the SEBI and eligible to procure Bids at the
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6
Term
Description
Agents or RTAs Designated RTA Locations in terms of circular
(No. CIR/CFD/POLICYCELL/11/2015) dated November 10, 2015 issued by
the SEBI
Registrar to the Offer or Registrar Link Inktime India Private
Limited
Retail Discount A discount of ₹ [●] to the Offer Price that may
be offered to the Retail Individual Investors by our Company in
consultation with the BRLMs, at the time of making a Bid
Retail Individual Investors or RIIs Individual Bidders other
than Eligible Employees Bidding in the Employee Reservation Portion
who have Bid for Equity Shares for an amount of not more than ₹
200,000 in any of the bidding options in the Net Offer (including
HUFs applying through the karta and Eligible NRIs) and does not
include
NRIs (other than Eligible NRIs)
Retail Portion The portion of the Offer being not more than 10%
of the Net Offer, or [●] Equity Shares, which shall
be available for allocation to Retail Individual Investors in
accordance with the SEBI ICDR
Regulations, subject to valid Bids being received at or above
the Offer Price
Revision Form The form used by the Bidders to modify the
quantity of Equity Shares or the Bid Amount in their Bid
cum Application Forms or any previous Revision Forms. QIBs and
Non-Institutional Investors are not
allowed to withdraw or lower their Bids (in terms of the
quantity of Equity Shares or the Bid Amount) at any stage. Retail
Individual Investors and Eligible Employees Bidding in the Employee
Reservation
Portion can revise their Bids during the Bid/Offer Period and
withdraw their Bids until Bid/Offer
Closing Date
Self Certified Syndicate Banks/SCSBs
The banks registered with the SEBI and offering services in
relation to ASBA, a list of which is available on the website of
the SEBI at
www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognizedFpi=yes&intmId=34
and updated from
time to time
Share Escrow Agent The share escrow agent appointed pursuant to
the Share Escrow Agreement, being [●]
Share Escrow Agreement The agreement to be entered into among
our Company, the Selling Shareholders and the Share Escrow
Agent in connection with the transfer of Equity Shares under the
Offer for Sale by the Selling
Shareholders and the credit of such Equity Shares to the demat
account of the Allottees
Selling Shareholders Together, the Promoter Selling Shareholders
and the Other Selling Shareholders
Specified Locations
Bidding Centers where the Syndicate will accept ASBA Forms, a
list of which is available at the
website of the SEBI at
www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35
and updated from time to time
Syndicate/Members of the
Syndicate
The BRLMs and the Syndicate Members
Syndicate Agreement The agreement to be entered into among the
BRLMs, the Syndicate Members and our Company in relation to the
collection of Bid cum Application Forms by the Syndicate
Syndicate Members
Intermediaries registered with the SEBI who are permitted to
carry out activities as an underwriter,
being [●]
Underwriters [●]
Underwriting Agreement The agreement to be entered into among
the Underwriters, our Company and the Selling Shareholders
on or after the Pricing Date but prior to the filing of the
Prospectus with the RoC
Working Day(s) All days other than the second and the fourth
Saturday of a month or a Sunday or a public holiday on which
commercial banks in Mumbai, India are open for business, except
with reference to
announcement of the Price Band and the Bid/Offer Period,
“Working Day(s)” will mean all days,
excluding all Saturdays, Sundays and public holidays on which
commercial banks in Mumbai, Maharashtra, India are open for
business and with reference to the time period between the
Bid/Offer
Closing Date and the listing of the Equity Shares on the Stock
Exchanges, “Working Day(s)” shall
mean all trading days of Stock Exchanges, excluding Sundays and
bank holidays, as per the circular (No.
SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016 issued by the
SEBI
Industry/Business Related Terms
Term
Description
Aakash Centers Our classroom centers, including Owned Centers
and Franchisee Centers
ACST Admission Cum Scholarship Test
Agile Boards Interactive boards at Aakash Centers
AIATS All India Aakash Test Series
ANTHE Aakash National Talent Hunt Examination
ATQ Aakash Talent Quest
CBSE Central Board of Secondary Education
CRISIL CRISIL Research, a division of CRISIL Limited
CRISIL Report A report titled “Assessment of Coaching Industry
in India” dated July 12, 2018 prepared by CRISIL
Franchisee Third party franchisees
Franchisee Agreement Franchisee agreement entered into with our
Franchisees
Franchisee Center Aakash Center operated by Franchisee
HBSCE National standard examination in
astronomy/biology/chemistry/physics, co-ordinated by the Homi
Bhabha Centre for Science Education
IMO International Mathematics Olympiads
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognizedFpi=yes&intmId=34http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35
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7
Term
Description
JEE Joint Engineering Entrance
JSTSE Junior Science Talent Search Examinations
KVPY Kishore Vaigyanik Protsahan Yojna
Long-Term Courses Two-year courses, one-year courses and
repeater courses
NAT National Academic Team
NEET National Eligibility cum Entrance Test
Net Fees Fees, net of any concessions and refunds, collected
from the students by our Franchisees
NSEJS National Standard Examinations in Junior Science
NSEs National Standard Examinations
NSO National Science Olympiad
NTSE National Talent Search Examinations
Owned Center Aakash Center operated by our Company
Profit Profit for the year as restated
Student Count Number of students who have paid at least one
instalment of the tuition fee component for that course
in that fiscal year, in addition to the admission fee and
registration fee in that fiscal year or earlier
fiscal year in respect of the Long-Term Courses at Owned Centers
or Franchisee Centers, and includes
carry forward students (i.e. students who were enrolled in the
previous year(s) and remained enrolled
in the current fiscal year) and students who paid but
subsequently dropped out
Conventional Terms/Abbreviations Term
Description
AGM Annual General Meeting
Alternative Investment Funds or
AIFs
Alternative investment funds as defined in, and registered
under, the SEBI AIF Regulations
Arbitration Act The Arbitration and Conciliation Act, 1996
AS or Accounting Standards Accounting Standards as notified by
Companies (Accounting Standards) Rules, 2016
BSE BSE Limited
CAGR Compounded Annual Growth Rate
Category I FPIs FPIs registered as “Category I foreign portfolio
investors” under the SEBI FPI Regulations
Category II FPIs FPIs registered as “Category II foreign
portfolio investors” under the SEBI FPI Regulations
Category III FPIs FPIs registered as “Category III foreign
portfolio investors” under the SEBI FPI Regulations
CCI Competition Commission of India
CDSL Central Depository Services (India) Limited
CIN Corporate Identity Number
Companies Act The Companies Act, 1956, to the extent effective
and the Companies Act, 2013, to the extent notified,
as applicable
Companies Act, 2013 The Companies Act, 2013, to the extent
notified, read with the rules, regulations, clarifications and
modifications thereunder
Companies Act, 1956 The Companies Act, 1956, to the extent
effective read with rules, regulations, clarifications and
modifications thereunder
Competition Act The Competition Act, 2002
COPRA Consumer Protection Act, 1986
Depositories NSDL and CDSL
Depositories Act The Depositories Act, 1996
DIN Director Identification Number
DIPP Department of Industrial Policy and Promotion, Ministry of
Commerce and Industry, Government of
India
DP or Depository Participant A depository participant as defined
under the Depositories Act
DP ID Depository Participant’s identification number
EGM Extraordinary General Meeting
EPS Earnings Per Share
EPF Act Employees’ Provident Funds and Miscellaneous Provisions
Act, 1952
ESI Act Employees’ State Insurance Act, 1948
FCNR Account Foreign Currency Non-Resident Account, and has the
meaning ascribed to the term “FCNR(B)
account” under the Foreign Exchange Management (Deposit)
Regulations, 2016
FDI Foreign Direct Investment
FDI Policy The ‘Consolidated FDI Policy Circular of 2017’ (No.
5(1)/2017-FC-1) issued by the DIPP, which took effect from August
28, 2017
FEMA
The Foreign Exchange Management Act, 1999, read with the rules
and regulations thereunder
FEMA Regulations The Foreign Exchange Management (Transfer or
Issue of Security by a Person Resident Outside India) Regulations,
2017
Financial Year or Fiscal or Fiscal
Year or FY
Unless stated otherwise, the period of 12 months ending March 31
of that particular year
FIR First information report
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8
Term
Description
FPIs Foreign Portfolio Investors as defined under the SEBI FPI
Regulations
FVCI Foreign venture capital investors as defined in, and
registered with, the SEBI under the SEBI FVCI Regulations
GAAR General anti-avoidance rules
GDP Gross Domestic Product
GST Goods and Services Tax
HUF Hindu undivided family
IBC Insolvency and Bankruptcy Code, 2016
ICAI The Institute of Chartered Accountants of India
ICDS Income Computation and Disclosure Standards notified by the
Ministry of Finance on March 31, 2015
IFRS International Financial Reporting Standards of the
International Accounting Standards Board
Income-tax Act The Income-tax Act, 1961
Ind AS The Indian Accounting Standards referred to and notified
under Section 133 of the Companies Act
Ind AS Rules The Companies (Indian Accounting Standards) Rules,
2015
Previous GAAP Generally accepted accounting principles in India
that were notified by the MCA under the
Companies (Accounting Standards) Rules, 2006, and amended
pursuant to the relevant provisions of
the Companies Act
IPC Indian Penal Code, 1860
IPO Initial public offering
IRDAI Insurance Regulatory and Development Authority of
India
IRDAI Investment Regulations Insurance Regulatory and
Development Authority of India (Investment) Regulations, 2016
IST Indian Standard Time
IT Act Information Technology Act, 2000
KYC Know Your Customer
Listing Agreement The agreement to be entered into between our
Company and each of the Stock Exchanges in relation
to listing of the Equity Shares on such Stock Exchanges
MAT Minimum alternate tax
MCA Ministry of Corporate Affairs, Government of India
Mn/mn Million
Mutual Fund(s) Mutual fund(s) registered with the SEBI under the
Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996
N.A. or NA Not applicable
NACH National Automated Clearing House
NAV Net asset value
NEFT National Electronic Fund Transfer
NR or Non-Resident A person resident outside India, as defined
under the FEMA, including Eligible NRIs, FPIs and FVCIs
registered with the SEBI
NRE Account Non-Resident External Account, as defined under the
Foreign Exchange Management (Deposit)
Regulations, 2016
NRI A person resident outside India, who is a citizen of India
or an ‘Overseas Citizen of India’ cardholder within the meaning of
section 7(A) of the Citizenship Act, 1955
NRO Account Non-Resident Ordinary Account, as defined under the
Foreign Exchange Management (Deposit)
Regulations, 2016
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
OCB/Overseas Corporate Body A company, partnership, society or
other corporate body owned directly or indirectly to the extent
of
at least 60% by NRIs including overseas trusts, in which not
less than 60% of beneficial interest is
irrevocably held by NRIs directly or indirectly and which was in
existence on October 3, 2003 and immediately prior to such date had
taken benefits under the general permission granted to OCBs
under
the FEMA. OCBs are not allowed to invest in the Offer
P&L Profit and loss
p.a. Per annum
P/E Ratio Price/Earnings Ratio
PAN Permanent Account Number allotted under the Income-tax
Act
PAT Profit after tax
Regulation S Regulation S under the U.S. Securities Act
RoNW Return on Net Worth
RoW Rest of the World
RTGS Real Time Gross Settlement
Rule 144A Rule 144A under the U.S. Securities Act
SCRA The Securities Contracts (Regulation) Act, 1956
SCRR The Securities Contracts (Regulation) Rules, 1957
SEBI The Securities and Exchange Board of India constituted
under the SEBI Act
SEBI Act The Securities and Exchange Board of India Act,
1992
SEBI AIF Regulations The Securities and Exchange Board of India
(Alternative Investment Funds) Regulations, 2012
SEBI Depository Regulations The Securities and Exchange Board of
India (Depositories and Participants) Regulations, 1996
SEBI FPI Regulations The Securities and Exchange Board of India
(Foreign Portfolio Investors) Regulations, 2014
SEBI FVCI Regulations The Securities and Exchange Board of India
(Foreign Venture Capital Investors) Regulations, 2000
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9
Term
Description
SEBI Ind AS Transition Circular Circular No.
SEBI/HO/CFD/DIL/CIR/P/2016/47, dated March 31, 2016 issued by the
SEBI
SEBI ICDR Regulations The Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations,
2009
SEBI Listing Regulations The Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements)
Regulations, 2015
SEBI Mutual Fund Regulations The Securities and Exchange Board
of India (Mutual Funds) Regulations, 1996
SEBI Portfolio Manager
Regulations The Securities and Exchange Board of India
(Portfolio Managers) Regulations, 1993
SEBI SBEB Regulations The Securities and Exchange Board of India
(Share Based Employee Benefits) Regulations, 2014
SEBI Stock Broker Regulations The Securities and Exchange Board
of India (Stock Brokers and Sub-brokers) Regulations, 1992
SEBI Takeover Regulations The Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011
SEBI VCF Regulations The Securities and Exchange Board of India
(Venture Capital Fund) Regulations, 1996
SICA The erstwhile Sick Industrial Companies (Special
Provisions) Act, 1985
Sq. ft./sq.ft. Square feet
Stamp Act The Indian Stamp Act, 1899
State Government The government of a State of India
Stock Exchanges The BSE and the NSE
STT Securities Transaction Tax
Supreme Court The Supreme Court of India
Systemically Important Non-Banking Financial Company
In the context of a Bidder, a non-banking financial company
registered with the RBI and having a net worth of more than ₹ 5,000
million as per its last audited financial statements
TAN Tax Deduction and Collection Account Number allotted under
the Income-tax Act
TDS Tax deducted at source
Trade Marks Act Trade Marks Act, 1999
U.S. GAAP Generally Accepted Accounting Principles in the United
States of America
U.S. Investment Company Act The United States Investment Company
Act of 1940
U.S. Person U.S. Person as defined under Regulation S
U.S. Securities Act The United States Securities Act of 1933
VAT Value Added Tax
VCFs Venture capital funds as defined in and registered with the
SEBI under the SEBI VCF Regulations
Wilful Defaulter(s) Wilful defaulter as defined under Regulation
2(1)(zn) of the SEBI ICDR Regulations
Year/calendar year Unless context otherwise required, shall mean
the twelve month period ending December 31
The words and expressions used but not defined herein will have
the meanings assigned to such terms under the
SEBI Act, the SEBI ICDR Regulations, the Companies Act, the
SCRA, the Depositories Act and the rules and
regulations made thereunder.
In “Main Provisions of the Articles of Association” on page 385,
defined terms have the meaning given to such
terms in the Articles of Association. Notwithstanding the
foregoing, terms in “Statement of Special Tax Benefits”,
“Regulations and Policies”, “History and Certain Corporate
Matters”, “Financial Statements”, and “Outstanding
Litigation and Material Developments” on pages 86, 151, 155, 189
and 300, respectively, will have the meanings
given to such terms in these respective sections.
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CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND
MARKET DATA
Certain Conventions
All references to “India” contained in this Draft Red Herring
Prospectus are to the Republic of India and its
territories and possessions and all references herein to the
“Government”, “Indian Government”, “GoI”, “Central
Government” or the “State Government” are to the Government of
India, central or state, as applicable.
Unless otherwise specified, any time mentioned in this Draft Red
Herring Prospectus is in Indian Standard Time
(“IST”). Unless indicated otherwise, all references to a year in
this Draft Red Herring Prospectus are to a
calendar year.
Unless stated otherwise, all references to page numbers in this
Draft Red Herring Prospectus are to the page
numbers of this Draft Red Herring Prospectus.
Financial Data
Unless stated or the context requires otherwise, the financial
data included in this Draft Red Herring Prospectus is
derived from the Restated Financial Information. For further
information, see “Financial Statements” on page
189.
Our Company’s Financial Year commences on April 1 of the
immediately preceding calendar year and ends on
March 31 of that particular calendar year, so all references to
a particular Financial Year or Fiscal Year, unless
stated otherwise, are to the 12 months period commencing on
April 1 of the immediately preceding calendar year
and ending on March 31 of that particular calendar year.
Certain data included in this Draft Red Herring Prospectus in
relation to operating metrics, financial and other
business related information not otherwise included in the
Restated Financial Information has been reviewed and
verified by Nangia and Co. LLP, Chartered Accountants.
The GoI has adopted the Indian accounting standards (“Ind AS”),
which are converged with the
International Financial Reporting Standards of the International
Accounting Standards Board (“IFRS”) and
notified under Section 133 of the Companies Act, 2013. In terms
of the Ind AS Rules, we are required to prepare
our financial statements in accordance with Ind AS for periods
beginning on or after April 1, 2017 with a
Transition Date of April 1, 2016 in accordance with the MCA
Notification No. G.S.R. 111(E) dated February 16,
2015.
India has adopted the IFRS-converged accounting standards, and
not IFRS. Ind AS, therefore, differs in certain
respects from IFRS and other accounting principles and standards
with which investors may be more familiar.
While in accordance with the SEBI Ind AS Transition Circular, we
have provided a reconciliation of Ind AS and
Previous GAAP numbers, our Company has not provided
reconciliation of its financial information to U.S.
GAAP. If we were to prepare our financial statements in
accordance with such other accounting principles or
U.S. GAAP, our results of operations, financial condition and
cash flows may not be consistent with Ind AS
numbers. Prospective investors should consult their own
professional advisers for an understanding of the
differences between these accounting principles and those with
which they may be more familiar. The degree to
which the financial information included in this Draft Red
Herring Prospectus will provide meaningful
information is entirely dependent on the reader’s level of
familiarity with Indian accounting policies and
practices, the Companies Act and the SEBI ICDR Regulations. Any
reliance by persons not familiar with these
accounting principles and regulations on our financial
disclosures presented in this Draft Red Herring Prospectus
should accordingly be limited. For details of the differences
between Ind AS and other accounting standards and
the risks associated with the same, see “Risk Factors — 33.
Significant differences exist between Ind AS and other
accounting principles, such as U.S. GAAP, which investors may be
more familiar with and may consider material
to their assessment of our financial condition” and “Risk
Factors — 34. There may be an impact on our financial
statements due to the application of Ind AS 115, Revenue from
Contracts with Customers, on revenue
recognition, transition and disclosures from April 1, 2018” on
pages 34 and 34, respectively.
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All figures in decimals (including percentages) have been
rounded off to one or two decimals. However, where
any figures may have been sourced from third-party industry
sources, such figures may be rounded-off to such
number of decimal points as provided in such respective sources.
In this Draft Red Herring Prospectus, (i) the
sum or percentage change of certain numbers may not conform
exactly to the total figure given; and (ii) the sum
of the numbers in a column or row in certain tables may not
conform exactly to the total figure given for that
column or row. Any such discrepancies are due to rounding
off.
Unless stated or the context requires otherwise, any percentage
amounts, as included in “Risk Factors”, “Our
Business” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” on
pages 15, 129 and 276, respectively, and elsewhere in this Draft
Red Herring Prospectus have been calculated on
the basis of the Restated Financial Information.
Currency and Units of Presentation
All references to “₹ ” or “Rupees” or “Rs.” are to Indian
Rupees, the official currency of the Republic of India.
All references to “US$” or “USD” are to United States Dollars,
the official currency of the United States of
America.
Certain numerical information has been presented in this Draft
Red Herring Prospectus in “million” units.
1,000,000 represents one million and 1,000,000,000 represents
one billion. However, where any figures that may
have been sourced from third-party industry sources are
expressed in denominations other than millions, such
figures appear in this Draft Red Herring Prospectus expressed in
such denominations as provided in their
respective sources.
Exchange Rates
This Draft Red Herring Prospectus contains conversions of
certain other currency amounts into Indian Rupees
that have been presented solely to comply with the SEBI ICDR
Regulations. These conversions should not be
construed as a representation that these currency amounts could
have been, or can be converted into Indian
Rupees, at any particular rate or at all.
The table below sets forth, for the dates indicated, information
with respect to the exchange rate between the
Rupee and the respective foreign currencies.
Currency
Exchange rate as at
March 28, 2018(1)
(₹ )
March 31, 2017
(₹ )
March 31, 2016
(₹ )
March 31, 2015
(₹ )
March 28(2), 2014
(₹ )
1 USD 65.04 64.84 66.33 62.59 60.10
(Source: www.rbi.org.in)
(1) The reference rate is not available for March 31, 2018 being
a Saturday and March 30, 2018 and March 29, 2018 being public
holidays.
(2) The reference rate is not available for March 31, 2014,
March 30, 2014 and March 29, 2014, being a public holiday, Sunday
and Saturday, respectively.
Industry and Market Data
Unless stated otherwise, industry and market data used in this
Draft Red Herring Prospectus have been obtained
or derived from publicly available information as well as
industry publications and sources such as a report dated
July 12, 2018 and titled “Assessment of Coaching Industry in
India” (the “CRISIL Report”) that has been
prepared by CRISIL, which report has been commissioned by our
Company for the purposes of confirming our
understanding of the industry in connection with the Offer.
Industry publications generally state that the information
contained in those publications has been obtained from
sources believed to be reliable but that their accuracy,
adequacy, completeness or underlying assumptions are not
guaranteed and their reliability cannot be assured. Although we
believe that industry and market data used in this
Draft Red Herring Prospectus is reliable, it has not been
independently verified by our Company, our Directors,
our Promoters, the Selling Shareholders, the BRLMs or any of
their respective affiliates or advisors. The data
http://www.rbi.org.in/
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12
used in these sources may have been reclassified by us for the
purposes of presentation. Data from these sources
may also not be comparable. Industry sources and publications
are also prepared based on information as at
specific dates and may no longer be current or reflect current
trends. Industry sources and publications may also
base their information on estimates and assumptions that may
prove to be incorrect. The extent to which the
industry and market data presented in this Draft Red Herring
Prospectus is meaningful depends upon the reader’s
familiarity with, and understanding of, the methodologies used
in compiling such information. There are no
standard data gathering methodologies in the industry in which
our Company conducts business and
methodologies and assumptions may vary widely among different
market and industry sources. Such data
involves risks, uncertainties and numerous assumptions and is
subject to change based on various factors,
including those disclosed in “Risk Factors” on page 15.
Accordingly, no investment decision should be solely
made on the basis of such information.
CRISIL has requested the following disclaimer for inclusion of
the information in the CRISIL Report in this
Draft Red Herring Prospectus:
“CRISIL Research, a division of CRISIL Limited (“CRISIL”) has
taken due care and caution in preparing this
report (the “Report”) based on the information obtained by
CRISIL from sources which it considers reliable (the
“Data”). However, CRISIL does not guarantee the accuracy,
adequacy or completeness of the Data or the
Report and is not responsible for any errors or omissions or for
the results obtained from the use of the Data or
the Report. The Report is not a recommendation to invest or
disinvest in any entity covered in the Report and no
part of the Report should be construed as expert advice or
investment advice or any form of investment banking
activity (within the meaning of any law or regulation). CRISIL
especially states that it has no liability whatsoever
to the subscribers, users, transmitters or distributors of the
Report. Without limiting the generality of the
foregoing, nothing in the Report will be construed as CRISIL
providing, or intending to provide, any services in
jurisdictions where CRISIL does not have the necessary
permission or registration to carry out its business
activities in this regard. Aakash Educational Services Limited
will be responsible for ensuring compliances and
consequences of non-compliances for use of the Report or part
thereof outside India. CRISIL Research operates
independently of, and does not have access to information
obtained by CRISIL’s Ratings Division or CRISIL Risk
and Infrastructure Solutions Ltd (the “CRIS”), which may, in
their regular operations, obtain information of a
confidential nature. The views expressed in the Report are that
of CRISIL Research and not of CRISIL’s Ratings
Division or CRIS. No part of the Report may be published or
reproduced in any form without CRISIL’s prior
written approval.”
For details of risks in relation to the industry report, see
“Risk Factors – 29. This Draft Red Herring Prospectus
contains information from industry sources including a report
commissioned from CRISIL. Prospective investors
are advised not to place undue reliance on such information” on
page 33.
Further, certain industry related information in “Risk Factors”,
“Summary of Industry”, “Summary of Business”,
“Industry Overview”, “Our Business” and “Management’s Discussion
and Analysis of Financial Condition and
Results of Operations” on pages 15, 44, 49, 92, 129 and 276,
respectively, has been derived from the CRISIL
Report.
In accordance with the SEBI ICDR Regulations, “Basis for Offer
Price” on page 83 includes information relating
to our listed peer group companies. Such information has been
derived from publicly available sources, and
neither we, nor the BRLMs have independently verified such
information.
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FORWARD-LOOKING STATEMENTS
This Draft Red Herring Prospectus contains certain
forward-looking statements. These forward-looking
statements generally can be identified by words or phrases such
as “aim”, “anticipate”, “believe”, “expect”,
“estimate”, “intend”, “objective”, “plan”, “project”, “propose”,
“seek to”, “likely”, “will”, “will continue”, “will
pursue”, or other words or phrases of similar import. Similarly,
statements that describe our Company’s
strategies, objectives, plans or goals are also forward-looking
statements. All forward-looking statements are
subject to risks, uncertainties and assumptions about our
Company that could cause actual results to differ
materially from those contemplated by the relevant
forward-looking statement.
Actual results may differ materially from those suggested by the
forward-looking statements due to risks or
uncertainties associated with our expectations with respect to,
but not limited to, regulatory changes pertaining to
the industry in which our Company operates and our ability to
respond to them, our ability to successfully
implement our strategy, our growth and expansion, technological
changes, our exposure to market risks, general
economic and political conditions in India and globally which
have an impact on our business activities or
investments, the monetary and fiscal policies of India,
inflation, deflation, unanticipated turbulence in interest
rates, foreign exchange rates, equity prices or other rates or
prices, the performance of the financial markets in
India and globally, changes in laws, regulations and taxes,
changes in competition in our industry, incidence of
natural calamities and/or acts of violence. Important factors
that could cause actual results to differ materially
from our Company’s expectations include, but are not limited to,
the following:
our ability to attract and retain students is heavily dependent
on factors including our reputation, our ability to maintain and
improve on the number of quality selections in the entrance
examinations, and
our ability to maintain a high level of service quality;
we are dependent on our faculty members and our ability to
attract and retain them. Any decrease in the number of our faculty
members may affect our operations and business;
our inability to adapt and update our course study material and
coaching and testing methods in accordance with the changing
curriculum, nature of questions and examination patterns in a
timely and
effective manner may materially and adversely affect our
business and financial condition;
any decrease in perceived or actual benefits by potential
students may discourage students from pursuing the medical and
engineering course, reducing demand for our courses;
any introduction of new laws and regulations for the test
preparatory service industry may have an adverse impact on our
business, and increase our compliance requirements and costs, which
may affect
our business adversely in the future;
we may not be able to renew, maintain or obtain the requisite
approvals and registrations;
our business may be adversely affected if we are unable to
maintain and develop our Aakash brand;
we may have limited control by us on the operations and risk of
discontinuation of the Franchisees, which may impact our
reputation, business and financial condition adversely;
we are dependent on a few Franchisee Centers and Franchisees for
a substantial part of our franchise business revenue as these
Franchisees own multiple Franchisee Centers;
any breach of our students’ safety and security may negatively
impact our reputation, business and financial condition;
we are dependent on the services of our Promoters, Mr. J.C.
Chaudhry and Mr. Aakash Chaudhry and other key members of our
management team. Any loss of their services may impair our ability
to operate
effectively and may have an adverse impact on our business and
financial condition;
we may not be able to implement our growth strategy successfully
and may be unable to sustain growth at historical levels;
as a substantial portion of our revenue is from the test
preparatory services conducted for the medical and engineering
entrance examinations, our revenues may be materially adversely
affected if, for
regulatory or other reasons, we discontinue any of these
courses; and
our insurance coverage may not adequately protect us against
certain operating hazards.
For further discussion of factors that could cause the actual
results to differ from the expectations, see “Risk
Factors”, “Our Business” and “Management’s Discussion and
Analysis of Financial Condition and Results of
Operations” on pages 15, 129 and 276, respectively. By their
nature, certain market risk disclosures are only
estimates and could be materially different from what actually
occurs in the future. As a result, actual gains or
losses in the future could materially differ from those that
have been estimated.
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We cannot assure investors that the expectation reflected in
these forward-looking statements will prove to be
correct. Given the uncertainties, investors are cautioned not to
place undue reliance on such forward-looking
statements and not to regard such statements as a guarantee of
future performance.
Forward-looking statements reflect the current views of our
Company as at the date of this Draft Red Herring
Prospectus and are not a guarantee of future performance. These
statements are based on our management’s
beliefs and assumptions, which in turn are based on currently
available information. Although we believe the
assumptions upon which these forward-looking statements are
based are reasonable, any of these assumptions
could prove to be inaccurate, and the forward-looking statements
based on these assumptions could be incorrect.
None of our Company, our Directors, our Promoters, the Selling
Shareholders, the Syndicate or any of their
respective affiliates has any obligation to update or otherwise
revise any statements 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. In accordance with the SEBI
requirements, our Company will ensure that investors are
informed of material developments from the date of the Red
Herring Prospectus until the date of Allotment. The
Selling Shareholders will, severally and not jointly, ensure
that investors are informed of material developments
in relation to statements and undertakings made by them in
relation to themselves and their respective portion of
the Equity Shares offered in the Offer from the date of the Red
Herring Prospectus until the date of Allotment.
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SECTION II: RISK FACTORS
An investment in the Equity Shares involves a high degree of
risk. Investors should carefully consider all the
information in this Draft Red Herring Prospectus, including the
risks and uncertainties described below, before
making an investment in the Equity Shares. The risks and
uncertainties described in this section are not the only
risks that our Company currently faces. Additional ris