printmgr file - Singapore Exchange

STRICTLY CONFIDENTIAL — DO NOT FORWARDONLY TO INVESTORS WHO ARE EITHER (I) QIBs (AS DEFINED BELOW) IN RELIANCE ON RULE 144A (“RULE 144A”)UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR (II) OUTSIDE THE UNITED STATESPURCHASING IN OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S UNDER THE SECURITIES ACT(“REGULATION S”).

IMPORTANT: You must read the following before continuing. The following disclaimer applies to the offering circular following thispage (the “Offering Circular”), and you are therefore advised to read this disclaimer carefully before reading, accessing or making anyother use of the Offering Circular. In accessing the Offering Circular, you agree to be bound by the following terms and conditions,including any modifications to them any time you receive any information from us as a result of such access.

Confirmation of Your Representation: You have accessed the attached Offering Circular on the basis that you have confirmed yourrepresentation to Barclays Bank PLC, Citigroup Global Markets Inc., DBS Bank Ltd., Deutsche Bank AG, Singapore Branch, EmiratesNBD Bank PJSC, J.P. Morgan Securities plc, MUFG Securities Asia Limited and Standard Chartered Bank, in their capacity as jointbookrunners and joint lead managers (the “Joint Bookrunners and Joint Lead Managers”) and Credit Suisse (Hong Kong) Limited,Merrill Lynch (Singapore) Pte. Ltd. and Mizuho Securities (Singapore) Pte. Ltd. in their capacity as joint lead managers (the “Joint LeadManagers” and together with the Joint Bookrunners and Joint Lead Managers, referred to as the “Managers”) that (i)(A) you are outsidethe United States and to the extent you purchase the securities described in the attached Offering Circular, you will be doing so pursuant toRegulation S or (B) you are acting on behalf of, or you are, a qualified institutional buyer (“QIB”), as defined in Rule 144A, and (ii) youconsent to delivery of the attached Offering Circular and any amendments or supplements thereto by electronic transmission.

Restrictions: The attached Offering Circular is being furnished in connection with an offering exempt from registration under the SecuritiesAct solely for the purpose of enabling a prospective investor to consider the purchase of the securities described herein. You are remindedthat the information in the attached Offering Circular is not complete and may be changed. If you have gained access to this transmissioncontrary to any of the restrictions herein, you are not authorized and will not be able to purchase any of the securities described in theOffering Circular.

The attached Offering Circular is an advertisement and is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the EuropeanParliament and of the European Council (and any amendments thereto) as implemented in member states of the European Economic Area.

NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES FOR SALE OR SOLICITATIONIN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. THE SECURITIES HAVE NOT BEEN, AND WILL NOT BE,REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OROTHER JURISDICTION AND THE SECURITIES MAY NOT BE OFFERED, SOLD, RESOLD, TRANSFERRED OR DELIVERED,DIRECTLY OR INDIRECTLY, WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN ATRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLESTATE OR LOCAL SECURITIES LAWS.

Except with respect to eligible investors in jurisdictions where such offer is permitted by law, nothing in this electronic transmissionconstitutes an offer or an invitation by or on behalf of either the issuer of the securities or the Managers to subscribe for or purchase any ofthe securities described therein and access has been limited so that it shall not constitute a “general advertisement” or “general solicitation”(as those terms are used in Regulation D under the Securities Act) or “directed selling efforts” (within the meaning of Regulation S) in theUnited States. If a jurisdiction requires that the offering be made by a licensed broker or dealer and the Managers or any affiliate of theManagers is a licensed broker or dealer in that jurisdiction, the offering shall be deemed to be made by the Managers or their affiliates onbehalf of the issuer in such jurisdiction.

You are reminded that this Offering Circular has been delivered to you on the basis that you are a person into whose possession thisOffering Circular may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located and you may not, norare you authorized to, deliver this Offering Circular to any other person.

In accordance with the provisions of applicable Indian regulations, only investors that are residents of Financial Action Task Force(“FATF”) or International Organization of Securities Commission’s (“IOSCO”) compliant jurisdictions and Multilateral and RegionalFinancial Institutions where India is a member country are eligible to purchase the Notes (defined below) issued by the Issuer. This OfferingCircular is being sent at your request and by accepting the e-mail and accessing this Offering Circular you shall be deemed to haverepresented to us that you are a resident of a FATF or an IOSCO compliant jurisdiction.

This Offering Circular has not been and will not be filed, produced or published as an offer document (whether a prospectus in respect of apublic offer or an information memorandum or private placement offer cum application letter or other offering material in respect of anyprivate placement under the Companies Act, 2013, or rules framed thereunder, each as amended, or any other applicable Indian laws) withany Registrar of Companies in India (“RoC”) or the Securities and Exchange Board of India (“SEBI”) or the Reserve Bank of India(“RBI”) or any other statutory or regulatory body of like nature in India, save and except for any information from any part of this OfferingCircular which is (i) mandatorily required to be disclosed or filed in India under any applicable Indian laws, including, but not limited to,the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015, as amended, and under the listing agreementwith any Indian stock exchange pursuant to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015, as amended, or (ii) pursuant to the sanction of any regulatory and adjudicatory body in India.

Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions. If you havegained access to this transmission contrary to the foregoing restrictions, you are not allowed to purchase any of the securities describedherein in the attached.

Actions That You May Not Take: You should not reply by e-mail to this electronic transmission, and you may not purchase any securitiesby doing so. Any reply e-mail communications, including those you generate by using the “Reply” function on your e-mail software, will beignored or rejected.

YOU ARE NOT AUTHORIZED TO AND YOU MAY NOT FORWARD OR DELIVER THE ATTACHED OFFERING CIRCULAR,ELECTRONICALLY OR OTHERWISE, TO ANY OTHER PERSON OR REPRODUCE SUCH OFFERING CIRCULAR IN ANYMANNER WHATSOEVER. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS OFFERING CIRCULAR ANDTHE ATTACHED OFFERING CIRCULAR, IN WHOLE OR IN PART, IS UNAUTHORIZED. FAILURE TO COMPLY WITH THISDIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHERJURISDICTIONS.

You are responsible for protecting against viruses and other items of a destructive nature. Your use of this electronic transmission is at yourown risk, and it is your responsibility to take precautions to ensure that it is free from viruses and other items of a destructive nature.

This Offering Circular has been sent to you in an electronic form. You are reminded that documents transmitted via this medium may bealtered or changed during the process of electronic transmission and consequently none of the issuer of the securities, the Managers or anyperson who controls any of them or any of their respective affiliates and their respective directors, officers, employees, representatives andagents accepts any liability or responsibility whatsoever in respect of any difference between the Offering Circular distributed to you inelectronic form and the hard copy version available to you on request from the Managers.

Adani Electricity Mumbai Limited(incorporated in the Republic of India with limited liability under the Indian Companies Act, 1956)

U.S.$1,000,000,000 3.949% Senior Secured Notes due 2030Issue Price: 100.00%

The U.S.$1,000,000,000 3.949% Senior Secured Notes due 2030 (the “Notes”) will be issued by Adani Electricity Mumbai Limited (the“Company” or the “Issuer”) on February 12, 2020 (the “Closing Date”). The Notes will bear interest at the rate of 3.949% per annum of theprincipal amount of the Notes, payable semi-annually in arrear on the interest payment dates falling on February 12 and August 12 of eachyear. Payment on the Notes will be made without deduction for or on account of taxes of India to the extent described under “Terms andConditions of the Notes — Taxation”.

Subject to the receipt of the necessary approvals under the ECB Guidelines, the Notes may be redeemed at the option of the Issuer in whole,but not in part, at any time at par plus accrued interest, in the event of certain tax changes as described under “Terms and Conditions of theNotes”. Subject to the receipt of the necessary approvals under the ECB Guidelines, upon the occurrence of a Change of Control TriggeringEvent (as defined in the Conditions), each Noteholder shall have the right to require that the Issuer redeem such Noteholder’s Notes at anamount equal to 101% of their principal amount (together with interest accrued to the date fixed for redemption) as described under “Termsand Conditions of the Notes”. Following the occurrence of a Sweep Event, the Notes may be redeemed at the option of the Issuer in part up tothe relevant Excess Amount, at any time on giving not less than 30 days nor more than 60 days’ written notice to the Noteholders, the NoteTrustee and the Principal Paying Agent, at an amount equal to their principal amount (together with interest accrued to but excluding the datefixed for redemption) as described under “Terms and Conditions of the Notes”.

Subject to the receipt of the necessary approvals under the ECB Guidelines, the Notes may be redeemed at the option of the Issuer in whole,or in part, at any time on giving not less than 30 nor more than 60 days’ written notice to the Noteholders and the Note Trustee and thePrincipal Paying Agent, at an amount equal to the principal amount plus the Applicable Premium applicable to the Notes (together withinterest accrued to the date fixed for redemption) as described under “Terms and Conditions of the Notes”.

The Notes mature on February 12, 2030.

The Notes will be direct, unconditional and unsubordinated obligations of the Issuer. The Notes will be secured to the extent of the SecurityInterest in relation to the Notes (the “Collateral”) that will be created under the Security Documents (as defined herein) that are to beexecuted on or before the respective security longstop dates as set out in “Description of the Collateral and Security Documents”. The Noteswill rank at all times pari passu without any preference among themselves. The obligations of the Issuer under the Notes will be secured infavor of the Security Trustee by the Security Documents under security arrangements more fully described in “Terms and Conditions of theNotes”. The Collateral will consist of certain of the Issuer and any other Obligor’s assets. The Collateral will also secure certain of the Issuerand any other Obligor’s other secured obligations. See “Description of the Collateral and Security Documents” and “Description of thePrincipal Senior Note Documents”.

Prior to the offering, there has been no market for the Notes. Approval in-principle has been received for the listing of and quotation for theNotes on the Official List of the Singapore Exchange Securities Trading Limited (the “SGX-ST”). The SGX-ST assumes no responsibility forthe correctness of any of the statements made or opinions expressed or reports contained in this Offering Circular. Admission of the Notes tothe Official List of the SGX-ST and quotation of the Notes is not to be taken as an indication of the merits of the Issuer, our subsidiary,associated companies or the Notes.

The Notes will be issued in registered form in denominations of U.S.$200,000 each and integral multiples of U.S.$1,000 in excess thereof.

For a discussion of certain risks relating to the Issuer and the Notes, see “Risk Factors” beginning on page 22 of this OfferingCircular.

The Notes have not been, and will not be, registered under the United States Securities Act of 1933 (the “Securities Act”) or the securitieslaws of any other jurisdiction and may not be offered or sold within the United States, except pursuant to an exemption from, or intransactions not subject to, the registration requirements of the Securities Act. Accordingly, the Notes are being offered and sold within theUnited States to qualified institutional buyers (“QIBs”) in reliance on Rule 144A under the Securities Act (“Rule 144A”) and outside theUnited States in offshore transactions as defined in, and in reliance on, Regulation S under the Securities Act (“Regulation S”).

Notes which are offered and sold in offshore transactions in reliance on Regulation S will be represented by beneficial interests in anunrestricted global certificate (the “Regulation S Global Certificate”) in registered form, without interest coupons attached, which will beregistered in the name of The Bank of New York Depository (Nominees) Limited as nominee for, and shall be deposited on or about theClosing Date with, a common depositary for Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking S.A. (“Clearstream,Luxembourg”). Notes which are offered and sold in reliance on Rule 144A will be represented by beneficial interests in a restricted globalcertificate (the “Rule 144A Global Certificate” and, together with the Regulation S Global Certificate, the “Global Certificates”) inregistered form, without interest coupons attached, which will be deposited on or about the Closing Date with a custodian (the “Custodian”)for, and registered in the name of Cede & Co. as nominee for, The Depository Trust Company (“DTC”).

This Offering Circular has not been and will not be (a) filed as a prospectus or a statement in lieu of prospectus in respect of a public offer, or(b) registered as an information memorandum or private placement offer cum application letter or any other offering material in accordancewith the Companies Act, 2013 or rules framed thereunder (the “Companies Act”) and other applicable laws in India for the time being inforce with SEBI or the RBI or Registrar of Companies (“RoC”) or any other regulatory or statutory authority in India save and except for anyinformation from any part of this Offering Circular which is (i) mandatorily required to be disclosed or filed in India under any applicableIndian laws, including, but not limited to, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015, asamended, and under the listing agreement with any Indian stock exchange pursuant to the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015, as amended or (ii) pursuant to the sanction of any regulatory and adjudicatorybody in India. This Offering Circular has not been and will not be reviewed or approved by any regulatory authority in India or Indian stockexchange. This Offering Circular and the Notes are not and should not be construed as an advertisement, invitation, offer or sale of anysecurities whether by way of private placement or to the public in India. The Notes will not be offered or sold, directly or indirectly, in Indiaor to, or for the account or benefit of, any person resident in India.

This Offering Circular is an advertisement and is not a prospectus for the purpose of Regulation (EU) 2017/1129.

Joint Bookrunners and Joint Lead Managers

Barclays Citigroup DBS Bank Ltd. Deutsche Bank

Emirates NBD Capital J.P. Morgan MUFG Standard Chartered Bank

Joint Lead ManagersBofA Securities Credit Suisse Mizuho Securities

The date of this Offering Circular is February 5, 2020

Neither the U.S. Securities and Exchange Commission (the “SEC”) nor any state securities commission has

approved or disapproved of the Notes or determined if this Offering Circular is truthful or complete. Any

representation to the contrary is a criminal offense in the United States.

Our Company and the managers named in the “Subscription and Sale” section of this Offering Circular (the

“Managers”) reserve the right to withdraw the offering of the Notes at any time or to reject any offer to

purchase, in whole or in part, for any reason, or to sell less than all of the Notes offered hereby.

This Offering Circular is personal to the prospective investor to whom it has been delivered by the Managers or

any of their respective affiliates and does not constitute an offer to any other person or to the public in general to

subscribe for or otherwise acquire the Notes. Distribution of this Offering Circular to any person other than the

prospective investor and those persons, if any, retained to advise that prospective investor with respect thereto is

unauthorized, and any disclosure of its contents without our Company’s prior written consent is prohibited. The

prospective investor, by accepting delivery of this Offering Circular, agrees to the foregoing and agrees not to

make any photocopies of this Offering Circular.

This Offering Circular is intended solely for the purpose of soliciting indications of interest in the Notes from

qualified investors and does not purport to summarize all of the terms, conditions, covenants and other provisions

contained in any transaction documents described herein. The information provided herein is not exhaustive. The

market information in this Offering Circular (other than that from the CRISIL Report (as defined herein)) has

been obtained by our Company from publicly available sources deemed by it to be reliable. Notwithstanding any

investigation that the Managers or any of their respective affiliates may have conducted with respect to the

information contained herein, the Managers do not accept any liability in relation to the information contained in

this Offering Circular or its distribution or with regard to any other information supplied by or on our Company’s

behalf.

Prospective investors in the Notes should rely only on the information contained in this Offering Circular.

Neither our Company nor the Managers, Madison Pacific Trust Limited (the “Note Trustee”) or the Agents or

any of their respective representatives, agents, directors, officers, employees, advisers or affiliates have

authorized the provision of information different from that contained in this Offering Circular. The information

contained in this Offering Circular may be accurate only as of the date of such information, regardless of the time

of delivery of this Offering Circular or of any sale of the Notes. Neither the delivery of this Offering Circular nor

any sale made hereunder shall under any circumstances imply that there has been no change in our affairs or that

the information set forth herein is correct as of any date subsequent to the date hereof.

Prospective investors hereby acknowledge that (i) they have not relied on the Managers, the Note Trustee or the

Agents or any person affiliated with the Managers, the Note Trustee or the Agents or any of their respective

representatives, agents, directors, officers, employees, advisers or affiliates in connection with any investigation

of the accuracy of such information or their investment decision, and (ii) no person has been authorized to give

any information or to make any representation concerning our Company or the Notes (other than as contained

herein and information given by our Company’s duly authorized officers and employees in connection with

investors’ examination of our Company and the terms of the offering) and, if given or made, any such other

information or representation should not be relied upon as having been authorized by our Company, the

Managers, the Note Trustee or the Agents or any of their respective representatives, agents, directors, officers,

employees, advisers or affiliates.

None of the Managers, our Company, the Note Trustee, the Agents or their respective representatives,agents, directors, officers, employees, advisers or affiliates is making any representation to any offeree orpurchaser of the Notes offered hereby regarding the legality of any investment by such offeree orpurchaser under applicable legal investment or similar laws. None of the Managers, the Note Trustee, the

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Agents or their respective representatives, agents, directors, officers, employees, advisers or affiliatesmakes any representation, warranty or undertaking, express or implied, or accepts any responsibility,with respect to the accuracy or completeness of any of the information in this Offering Circular. To thefullest extent permitted by law, none of the Managers, the Note Trustee or the Agents or any of theirrespective representatives, agents, directors, officers, employees, advisers or affiliates accepts anyresponsibility for the contents of this Offering Circular or for any other statement made or purported tobe made by the Managers, the Note Trustee or the Agents or any of their respective representatives,agents, directors, officers, employees, advisers or affiliates or on their behalf in connection with ourCompany or the issue and offering of the Notes. Each of the Managers, the Note Trustee and the Agentsand each of their respective representatives, agents, directors, officers, employees, advisers or affiliatesaccordingly disclaims any and all liability whether arising in tort or contract or otherwise which it mightotherwise have in respect of this Offering Circular or any such statement.

Each prospective investor contemplating purchasing any Notes should make its own independentinvestigation of the financial condition and affairs, and its own appraisal of the creditworthiness of ourCompany and the terms of the Notes being offered, including the merits and risks involved and itspurchase of the Notes, should be based upon such investigations with its own tax, legal and businessadvisers as it deems necessary. See “Risk Factors” for a discussion of certain factors to be considered. Anyprospective investor in the Notes should be able to bear the economic risk of an investment in the Notes foran indefinite period of time.

This Offering Circular does not constitute an offer to sell, or a solicitation of an offer to buy, any Notes offered

hereby by any person in any jurisdiction in which it is unlawful for such person to make an offer or solicitation in

such jurisdiction.

The distribution of this Offering Circular and the offer and sale of the Notes may, in certain jurisdictions, be

restricted by law. None of the Managers, our Company, the Note Trustee or the Agents or any of their respective

representatives, agents, directors, officers, employees, advisers or affiliates represents that this Offering Circular

may be lawfully distributed, or that any Notes may be lawfully offered, in compliance with any applicable

registration or other requirements in any such jurisdiction, or pursuant to an exemption available thereunder, or

assumes any responsibility for facilitating any such distribution or offering. In particular, no action has been

taken by our Company or the Managers or any of their respective affiliates which would permit a public offering

of any Notes or distribution of this Offering Circular in any jurisdiction where action for that purpose is required.

Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this Offering Circular nor any

advertisement or other offering material may be distributed or published in any jurisdiction, except under

circumstances that will result in compliance with any applicable laws and regulations.

Each purchaser of the Notes (each a “Noteholder”) must comply with all applicable laws and regulations in force

in each jurisdiction in which it purchases, offers or sells the Notes or possesses or distributes this Offering

Circular, and must obtain any consent, approval or permission required for the purchase, offer or sale by it of the

Notes under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes

purchases, offers or sales. Persons into whose possession this Offering Circular or any Notes may come must

inform themselves about, and observe, any such restrictions on the distribution of this Offering Circular and the

offering and sale of the Notes. In particular, there are restrictions on the offer and sale of the Notes, and the

circulation of documents relating thereto, in certain jurisdictions, including the United States and the European

Economic Area and to persons connected therewith. See “Subscription and Sale” and “Transfer Restrictions”.

This Offering Circular has not been, nor will it be, filed, produced or published as an offer document (whether a

prospectus in respect of a public offer or information memorandum or other offering material in respect of any

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private placement under the Companies Act or any other applicable Indian laws) with any Registrar of

Companies, the Securities and Exchange Board of India or any Indian stock exchange or any other statutory or

regulatory body of like nature in India, save and except for any information from any part of this Offering

Circular which is (i) mandatorily required to be disclosed or filed in India under any applicable Indian laws,

including but not limited to, the Securities and Exchange Board of India (Prohibition of Insider Trading)

Regulations 2015, as amended, and under the listing agreement with any Indian stock exchange pursuant to the

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 or

(ii) pursuant to the sanction of any regulatory and adjudicatory body in India.

Further, the Notes will not be offered or sold, and have not been offered or sold, in India by means of any

document, whether as a principal or agent nor have the Managers circulated or distributed, nor will they circulate

or distribute, this Offering Circular or any other offering document or material relating to the Notes, directly or

indirectly, to any person or the public or any member of the public in India or otherwise generally distributed or

circulated in India. The Notes have not been offered or sold, and will not be offered or sold to any person, in

India in circumstances which would constitute an advertisement, invitation, offer, sale or solicitation of an offer

to subscribe for or purchase any securities (whether to the public or by way of private placement) within the

meaning of the Companies Act or any other applicable Indian laws for the time being in force.

This Offering Circular or any material relating to the Notes has not been and will not be circulated or distributed

to any prospective investor who is not a resident of a FATF compliant jurisdiction or IOSCO compliant

jurisdiction, and the Notes will not be offered or sold or transferred and have not been offered or sold or

transferred to any person who is not a resident of a FATF compliant jurisdiction or IOSCO compliant

jurisdiction.

For the purposes of this Offering Circular, FATF compliant jurisdiction and IOSCO compliant jurisdiction shall

have the following meanings:

“FATF compliant jurisdiction” means a country that is a member of Financial Action Task Force (“FATF”) or

a member of a FATF-style regional body; and should not be a country identified in the public statement of the

FATF as (a) a jurisdiction having a strategic anti-money laundering or combating the financing of terrorism

deficiencies to which counter measures apply; or (b) a jurisdiction that has not made sufficient progress in

addressing the deficiencies or has not committed to an action plan developed with the FATF to address the

deficiencies.

“IOSCO compliant jurisdiction” means a country whose securities market regulator is a signatory to the

International Organization of Securities Commission’s (“IOSCO”) Multilateral Memorandum of Understanding

(Appendix A Signatories) or a signatory to bilateral Memorandum of Understanding with the Securities and

Exchange Board of India for information sharing arrangements.

Multilateral and regional financial institutions where India is a member country will also be considered as

recognized investors.

Each Manager has represented and agreed that, to the best of its knowledge and belief, the Notes are only being

issued and sold to a person who is a resident of a FATF or IOSCO compliant jurisdiction.

Neither this Offering Circular nor any other material relating to the Notes has been or will be circulated or

distributed to any prospective investor which is an overseas branch of an Indian bank.

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This Offering Circular has been prepared on the basis that all offers of the Notes will be made pursuant to an

exemption under Article 3 of the Prospectus Regulation, as implemented in member states of the European

Economic Area, from the requirement to produce a prospectus for offers of the Notes.

In connection with the issue of the Notes, Standard Chartered Bank (the “Stabilizing Manager”) or any person

acting on behalf of the Stabilizing Manager may, to the extent permitted by applicable laws and directives,

over-allot the Notes or effect transactions with a view to supporting the price of the Notes at a level higher than

that which might otherwise prevail, but, in so doing, the Stabilizing Manager or any person acting on behalf of

the Stabilizing Manager shall act as principal and not as agent of our Company. However, there is no assurance

that the Stabilizing Manager or any person acting on behalf of the Stabilizing Manager will undertake

stabilization action. Any loss or profit sustained as a consequence of any such overallotment or stabilization shall

be for the account of the Managers.

Singapore SFA Product Classification: In connection with Section 309B of the Securities and Futures Act

(Chapter 289) of Singapore (the “SFA”) and the Securities and Futures (Capital Markets Products) Regulations

2018 of Singapore (the “CMP Regulations 2018”), the Issuer has determined, and hereby notifies all relevant

persons (as defined in Section 309A(1) of the SFA), that the Notes are ‘prescribed capital markets products’ (as

defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA

04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on

Investment Products).

MiFID II product governance / Professional investors and ECPs only target market — Solely for the

purposes of the manufacturer’s product approval process, the target market assessment in respect of the Notes

has led to the conclusion that: (i) the target market for the Notes is eligible counterparties and professional clients

only, each as defined in Directive 2014/65/EU (as amended, “MiFID II”); and (ii) all channels for distribution of

the Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering,

selling or recommending the Notes (a “distributor”) should take into consideration the manufacturer’s target

market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target

market assessment in respect of the Notes (by either adopting or refining the manufacturer’s target market

assessment) and determining appropriate distribution channels.

PRIIPS REGULATION/PROHIBITION OF SALES TO EEA RETAIL INVESTORS

The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or

otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a

retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of

MiFID II; or (ii) a customer within the meaning of Directive (EU) 2016/97 (the “Insurance DistributionDirective”), where that customer would not qualify as a professional client as defined in point (10) of

Article 4(1) of MiFID II. Consequently, no key information document required by Regulation (EU) No

1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the Notes or otherwise making them

available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise

making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

In this Offering Circular, unless the context otherwise indicates or implies, references to “you”, “your”,

“offeree”, “purchaser”, “subscriber”, “recipient”, “investor”, “prospective investor” and “potential

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investor” are to the prospective investors in the Offering, and references to “we”, “our Company” or “theIssuer” are to Adani Electricity Mumbai Limited, unless otherwise specified.

All references in this Offering Circular to “acre” mean 43,559.6 square feet or 4,046.9 square meters.

Unless otherwise stated, references in this Offering Circular to a particular year are to the calendar year ended on

December 31 and to a particular “financial year” and “fiscal year” are to the year ended on March 31.

The financial information included in this Offering Circular only includes audited financial statements as of and

for the financial year ended March 31, 2019 and the reviewed Unaudited Special Purpose Interim Condensed

Financial Information as of and for the six months ended September 30, 2019 and September 30, 2018 because

ATL acquired a 100% stake in Reliance Generation and Supply Limited from Reliance Infrastructure Limited

(which ATL renamed as Adani Electricity Mumbai Limited) on August 29, 2018 (the “Acquisition”).

Accordingly the financial information for the period when AEML was a subsidiary of Reliance Infrastructure

Limited is not included in this Offering Circular. Further, because of the Acquisition, we have limited operational

history post-Acquisition and all Operating Information included in this Offering Circular for the period prior to

the Acquisition has been extracted from information provided by the seller and publicly available documents and

information, including annual reports, information available on corporate websites and documents filed by seller

with its respective regulators. Such information has not been independently verified by us, our auditors or the

Managers.

Deloitte Haskins & Sells LLP (“DHS LLP”), the current statutory auditors of the Issuer, is a firm registered with

the Institute of Chartered Accountants of India. It has been reported that in connection with certain alleged lapses

identified by the Serious Fraud Investigation Office in one of its audit engagements, the Ministry of Corporate

Affairs in India (“MCA”) has filed, among others, a petition with the National Company Law Tribunal

(“NCLT”) seeking an order under Section 140(5) of the Companies Act to impose a restriction on DHS LLP

(and another large audit firm which was the joint auditor with DHS LLP in respect of the said audit engagement

in a recent past fiscal year) from being appointed as an auditor of any company for a five-year period. The MCA

has also made other applications before other judicial/quasi-judicial forums seeking certain other orders against

DHS LLP and the other audit firm. Both the audit firms have raised objections to the proceedings on technical

and legal grounds. DHS LLP has challenged against the orders issued by the NCLT including, in particular, the

applicability of Section 140(5) to it and appeals are pending before the National Company Law Appellate

Tribunal (“NCLAT”). Separately, both the audit firms have challenged the proceedings before the Bombay High

Court in a writ. The matters are currently subjudice. As of date, there are no orders that prevent DHS LLP from

continuing as auditors of the Issuer.

Any reference in this Offering Circular to any legislation, act, regulation, statutory provision or notification is a

reference to such legislation, act, regulation, statutory provision or notification as the same may have been, or

may from time to time be, amended, supplemented or replaced.

Capitalized terms not otherwise defined in this Offering Circular have the meanings given to them in “Definitions

and Abbreviations”.

Financial Statements

The audited financial statements as of and for the financial year ended March 31, 2019 included in this Offering

Circular have been prepared in accordance with the Indian Accounting Standards (“Ind-AS”), as notified under

the Companies (Indian Accounting Standard) Rules, 2017 read with Section 133 of the Companies Act, 2013, as

amended from time to time. No comparative information as of and for the financial year ended March 31, 2018 is

v

available. See “Risk Factors — There is only limited historical financial information available for our business,

and all operating information included in this Offering Circular which relates to the period prior to ATL’s

acquisition of AEML (“Operating Information”) has been extracted from information the seller (Reliance

Infrastructure Limited) has provided as well as public sources and has not been independently verified by us, our

auditors or Managers.”

The reviewed Unaudited Special Purpose Interim Condensed financial information as of and for the six months

ended September 30, 2019 and September 30, 2018 has been prepared in accordance with the recognition and

measurement principles laid down in the Indian Accounting Standard 34 “ Interim Financial Reporting” (“IndAS 34”) as notified under the Companies (Accounting Standards) Rules, 2017 read with section 133 of the

Companies Act, 2013 as amended from time to time and other accounting principles generally accepted in India.

EBITDA and EBITDA Margin (Non-Ind-AS Measures)

In this Offering Circular, we refer to EBITDA, a non-Ind-AS measure. We define EBITDA for any period as

Total Income, deducting Cost of Power Purchased, Cost of Fuel, Transmission Charges, Purchase of Traded

Goods, Employee Benefits Expense, Other Expenses and Regulatory Income or Expense (net) for such period.

We define EBITDA Margin for any period as the ratio of EBITDA to Total Income for such period. EBITDA

includes gain / (loss) from foreign exchange. Our Company’s management believes that EBITDA and EBITDA

Margin data provide investors with additional information about our performance, as well our ability to incur and

service debt and make capital expenditure, and are measures commonly used by investors. This data, however,

should not be considered in isolation or as a substitute for measures of performance prepared in accordance with

Ind-AS or as an alternative to cash flow from operating, investing or financing activities or any other measure of

liquidity derived in accordance with Ind-AS.

EBITDA and EBITDA Margin described in this Offering Circular are not substitutes for Ind-AS measures of

earnings and may not be comparable to similarly titled measures reported by other companies due to differences

in the way these measures are calculated. Due to these limitations, the EBITDA and EBITDA Margin data

included in this Offering Circular should not be considered as measures of discretionary cash available to our

Company to invest in the growth of our business or as measures of cash that will be available to them to meet

their obligations. Investors are advised to compensate for these limitations by reading these non-Ind-AS

measures in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of

Operations” and relying primarily on the financial statements prepared in accordance with Ind-AS included

elsewhere in this Offering Circular and using the EBITDA and EBITDA Margin data only to supplement their

evaluation of our performance. Furthermore, EBITDA as defined above is different from the definition of

“EBITDA” for purposes of the Common Terms Deed. See “Appendix — Glossary of Defined Terms”.

Rounding

In this Offering Circular, certain amounts have been rounded; accordingly, figures shown as totals in certain

tables may not be an arithmetic aggregation of the figures which precede them.

Currency

In this Offering Circular, all references to “Indian Rupees”, “INR”, “Rupees” and “Rs.” are to Indian Rupees,

the legal currency of India, and all references to “U.S. dollars” and “U.S.$” are to United States dollars, the legal

currency of the United States, and all references to “S$” are to Singapore dollars, the legal currency of Singapore.

vi

All references herein to “India” are to the Republic of India and its territories and possessions and all references

to the “U.S.” or the “United States” are to the United States of America and its territories and possessions.

Website

The information on our websites, any website referred to herein or any website directly or indirectly linked to

such websites, is not incorporated by reference into this Offering Circular and should not be relied upon.

U.S. INFORMATION

This Offering Circular is being submitted on a confidential basis in the United States to a limited number of QIBs

for informational use solely in connection with the consideration of the purchase of the Notes. Its use for any

other purpose in the United States is not authorized. It may not be copied or reproduced in whole or in part nor

may it be distributed or any of its contents disclosed to anyone other than the prospective investors to whom it is

originally submitted.

For the offering, our Company and the Managers are relying upon exemptions from registration under the

Securities Act for offers and sales of securities which do not involve a public offering, including Rule 144A.

Prospective investors are hereby notified that sellers of the Notes may be relying on the exemption from the

provisions of Section 5 of the Securities Act provided by Rule 144A. The Notes are subject to restrictions on

transferability and resale. Purchasers of the Notes may not transfer or resell the Notes except as permitted under

the Securities Act and applicable state securities laws.

AVAILABLE INFORMATION

Our Company agrees that, for so long as any Notes are “restricted securities” within the meaning of

Rule 144(a)(3) under the Securities Act, it will, during any period in which it is neither subject to Section 13 or

15(d) of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”) nor exempt from reporting pursuant to

Rule 12g3-2b thereunder, provide to any holder or beneficial owner of such restricted securities or to any

prospective purchaser of such restricted securities designated by such holder or beneficial owner or to the Note

Trustee for delivery to such holder, beneficial owner or prospective purchaser, in each case upon the request of

such holder, beneficial owner, prospective purchaser or Note Trustee, the information required to be provided by

Rule 144A(d)(4) under the Securities Act.

INDUSTRY AND MARKET DATA

Information in this Offering Circular regarding market position, growth rates and other industry data pertaining

to our businesses consists of estimates based on data reports compiled by professional organizations and analysts,

data from other external sources and our knowledge of the markets in which we compete. The statistical

information included in this Offering Circular relating to the industry in which we operate has been reproduced

from various trade, industry and government publications and websites, including the World Economic Outlook

Updates published by the International Monetary Fund, the website of the World Bank, the website of the

MERC, the website of the Central Electricity Authority and the website of the Ministry of Power of India.

This data is subject to change and cannot be verified with complete certainty due to limits on the availability and

reliability of the raw data and other limitations and uncertainties inherent in any statistical survey. In many cases,

vii

there is no readily available external information (whether from trade or industry associations, government

bodies or other organizations) to validate market-related analyzes and estimates, so we rely on internally

developed estimates. While we have compiled, extracted and reproduced this data from external sources,

including third parties, trade, industry or general publications, we accept responsibility for accurately

reproducing such data. However, neither our Company nor the Managers, the Note Trustee or the Agents have

independently verified this data and neither our Company nor the Managers, the Note Trustee or the Agents

make any representation regarding the accuracy of such data. Similarly, while we believe our internal estimates

to be reasonable, such estimates have not been verified by any independent sources and neither our Company nor

the Managers, the Note Trustee or the Agents can assure potential investors as to their accuracy. Internal and

third-party estimates and projections cited in this Offering Circular are subject to significant uncertainties that

could cause actual data to differ materially from the estimated or projected figures. No assurances are or can be

given that these figures will be achieved. As a result, you are cautioned against undue reliance on such

information. The extent to which the market and industry data contained in this Offering Circular is meaningful

depends on the investor’s familiarity with an understanding of the methodologies used in compiling such data.

Disclaimer of CRISIL Research

CRISIL Research, a division of CRISIL Limited (“CRISIL”) has taken due care and caution in preparing the

report titled ‘Outlook on Power Market in India and Mumbai Region’ dated December 2019 (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, except

to the extent that such errors or omissions result from CRISIL’s gross negligence, fraud, deliberate breach of

duty or willful misconduct. 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 an expert advice or investment advice or any form of

investment banking within the meaning of any applicable law or regulation. CRISIL especially states that it has

no liability whatsoever to the subscribers, users, transmitters or distributors of the Report, except to the extent

that any such liability arises from CRISIL’s gross negligence, fraud, deliberate breach of duty or willful

misconduct. Without limiting the generality of the foregoing, nothing in the Report is to be construed as CRISIL

providing or intending to provide any services in jurisdictions where CRISIL does not have the necessary

permission and/or registration to carry out its business activities in this regard. Adani Electricity Mumbai

Limited will be responsible for ensuring compliance and consequences of non-compliance 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 (“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.

LISTING AND TRADING

Approval in-principle has been received for the listing of and quotation for the Notes on the SGX-ST. The

SGX-ST assumes no responsibility for the correctness of any statements made, opinions expressed or reports

contained herein. Admission of the Notes to the Official List of the SGX-ST is not to be taken as an indication of

the merits of the Issuer, its subsidiaries, associated companies or the Notes. The Notes will be traded on the

SGX-ST in a minimum board lot size of S$200,000 (or its equivalent in other currencies) for so long as the Notes

are listed on the SGX-ST and the rules of the SGX-ST so require.

So long as the Notes are listed on the SGX-ST and the rules of the SGX so require, if a Global Certificate is

exchanged for definitive Certificates, the Issuer shall appoint and maintain a paying agent in Singapore, where

viii

the Notes may be presented or surrendered for payment or redemption. In addition, if a Global Certificate is

exchanged for definitive Certificates, an announcement of such exchange shall be made by or on behalf of the

Issuer through the SGX-ST and such announcement will include all material information with respect to the

delivery of the definitive Certificates, including details of the paying agent in Singapore.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Offering Circular that are not statements of historical fact constitute

“forward-looking statements”. Investors can generally identify forward-looking statements by terminology such

as “aim”, “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “forecast”, “guideline”, “intend”,

“may”, “objective”, “plan”, “potential”, “predict”, “project”, “pursue”, “shall”, “should”, “target”, “will”,

“would”, or other words or phrases of similar import but these are not the exclusive means of identifying these

statements.

All statements regarding our expected business, prospects, financial condition and results of operations are

forward-looking statements. These forward-looking statements include statements as to our business strategy,

revenue and profitability, growth plans and other matters discussed in this Offering Circular that are not

historical facts. These forward-looking statements and any other projections contained in this Offering Circular

(whether made by us or any third party) are predictions and involve known and unknown risks, uncertainties,

assumptions and other factors that may cause our actual business, prospects, financial condition or results of

operations to be materially different from any future business, prospects, financial condition or results of

operations expressed or implied by such forward-looking statements or other projections. Important factors that

could cause actual results to differ materially from our expectations include:

‰ any changes in the tariff policies of the MERC;

‰ failure to obtain and retain relevant licenses from the MERC;

‰ adverse changes in Indian economic and political environment;

‰ our ability to finance our anticipated capital expenditure through borrowings, the global and domestic

capital markets, revenues from our operations or otherwise;

‰ the effects of competition in Mumbai area in which we conduct our operations or more generally in the

Indian distribution industry;

‰ the effects of changes in laws, regulations, taxation or accounting standards or practices;

‰ our ability to successfully implement our growth strategy, including through acquisitions;

‰ technological changes;

‰ the effects of natural disasters impairing our facilities;

‰ breach by our third parties of their obligations;

‰ our success in gaining new consumers for our distribution business;

‰ our success at evaluating costs and potential cost overruns and delays in our new or existing power

transmission and distribution projects;

ix

‰ the financial stability of India; and

‰ fluctuations in Indian currency exchange rates, inflation rates or interest rates.

The forward-looking statements contained in this Offering Circular are based on the beliefs of the management

of our Company, as well as the assumptions made by and information currently available to the management of

our Company. Although we believe that the expectations reflected in such forward-looking statements are

reasonable at this time, we cannot assure investors that such expectations will prove to be correct. Given these

uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements. All

subsequent forward-looking statements attributable to us are expressly qualified in their entirety by reference to

these cautionary statements. The forward-looking statements speak only as of the date of this Offering Circular

and none of our Company, the Managers, the Note Trustee or the Agents assume any responsibility to update or

revise any of the forward-looking statements to reflect events or circumstances after the date of this Offering

Circular.

ENFORCEABILITY OF CIVIL LIABILITIES

Our Company is a limited liability public unlisted company incorporated under the laws of India. All or

substantially all of our directors and executive officers named herein are residents of India and all of our assets,

and all or a substantial portion of assets of such persons, are located in India. As a result, it may not be possible

for investors to effect service of process on us or such persons in jurisdictions outside of India, or to enforce

against them judgments obtained in courts outside of India predicated upon our civil liabilities or of such

directors and executive officers under laws other than the laws of India, including judgments predicated upon the

civil liability provisions of the federal securities laws of the United States. In addition, India is not a party to any

international treaty in relation to the recognition or enforcement of foreign judgments. Our Company understands

that the statutory basis for recognition and enforcement of foreign judgments is provided for under Section 13

and Section 44A of the Indian Code of Civil Procedure, 1908 (the “Civil Code”). Section 44A of the Civil Code

provides that, where a foreign judgment has been rendered by a superior court in any country or territory outside

India which the Government of India (“GoI”) has by notification declared to be a reciprocating territory, it may

be enforced in India by proceedings in execution as if the judgment had been rendered by the relevant court in

India. However, Section 44A of the Civil Code is applicable only to monetary decrees other than those being in

the nature of any amounts payable in respect of taxes or other charges of a like nature or in respect of a fine or

other penalty and is not applicable to arbitration awards, even if such awards are enforceable as a decree or

judgment. While each of the United Kingdom, Singapore and Hong Kong has been declared by the GoI to be a

reciprocating territory for the purposes of Section 44A of the Civil Code and the High Courts of England as a

relevant superior court, the United States has not been declared by the GoI to be a reciprocating territory for the

purposes of Section 44A of the Civil Code. Accordingly, a judgment of a superior court in the United Kingdom

may be enforceable by proceedings in execution, and a judgment not of a superior court by a fresh suit resulting

in a judgment or order. A judgment of a court in a jurisdiction which is not a reciprocating territory, including

that of a court in the United States, may be enforced only by a new suit upon the judgment and not by

proceedings in execution. Furthermore, the execution of foreign decrees under Section 44A of the Civil Code is

subject to exceptions under Section 13 of the Civil Code. Section 13 of the Civil Code provides that a foreign

judgment to which this section applies shall be conclusive as to any matter thereby directly adjudicated upon

between the same parties or between parties under whom they or any of them claim to litigate under the same

title, except: (i) where it has not been pronounced by a court of competent jurisdiction; (ii) where it has not been

given on the merits of the case; (iii) where it appears on the face of the proceedings to be founded on an incorrect

view of international law or a refusal to recognize the law of India in cases where such law is applicable;

x

(iv) where the proceedings in which the judgment was obtained were opposed to natural justice; (v) where it has

been obtained by fraud; or (vi) where it sustains a claim founded on a breach of any law in force in India. Under

the Civil Code, a court in India shall, upon the production of any document purporting to be a certified copy of a

foreign judgment, presume that the judgment was pronounced by a court of competent jurisdiction unless the

contrary appears on record and such presumption may be displaced by proving want of jurisdiction. The suit

must be brought in India within three years of the date of the judgment in the same manner as any other suit filed

to enforce a civil liability in India. It is unlikely that a court in India would award damages on the same basis as a

foreign court if an action were brought in India. Furthermore, it is unlikely that an Indian court would enforce a

foreign judgment if it viewed the amount of damages awarded as excessive or inconsistent with Indian practice.

A party seeking to enforce a foreign judgment in India is required to obtain approval from the Reserve Bank of

India (the “RBI”) under the Foreign Exchange Management Act, 1999 (“FEMA”) and the rules and regulations

framed thereunder, to execute such a judgment and repatriate outside India any amount recovered pursuant to

execution. Any judgment in a foreign currency would be converted into Indian Rupees on the date of the

judgment and not on the date of the payment. Our Company would not be entitled to immunity based on

sovereignty from any legal proceedings in India.

xi

TABLE OF CONTENTS

Page

DEFINITIONS AND ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

SUMMARY FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

SUMMARY OF THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

REGULATIONS AND POLICIES IN INDIA RELATING TO THE POWER SECTOR . . . . . . . . . . . . . . . 92

BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

BOARD OF DIRECTORS AND SENIOR MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

REGULATIONS AND POLICIES IN INDIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

DESCRIPTION OF THE ADANI GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

DESCRIPTION OF MATERIAL INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

TERMS AND CONDITIONS OF THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

DESCRIPTION OF THE COLLATERAL AND SECURITY DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . 202

DESCRIPTION OF THE PRINCIPAL SENIOR NOTE DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206

GLOBAL CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243

TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247

CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253

SUBSCRIPTION AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257

TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263

LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266

INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267

APPENDIX — GLOSSARY OF DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268

INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

xii

DEFINITIONS AND ABBREVIATIONS

The following terms used in this Offering Circular have the meanings set forth below.

Company Related Terms

Adani Group All entities that constitute the Adani Group Companies

Adani Group Companies Companies, firms and ventures promoted by our Promoters

ADTPS Adani Dahanu Thermal Power Station

AEL Adani Enterprises Limited

AEML Adani Electricity Mumbai Limited

AEML-D AEML-Distribution

AEML Obligor Group or ObligorGroup

Our Company and PDSL

AMPL Adani Mining Private Limited

APL Adani Power Limited

APML Adani Power Maharashtra Limited

Articles of Association Articles of Association of our Company, as amended

ATL Adani Transmission Limited

ATIL Adani Transmission (India) Limited

Board/Board of Directors Board of directors of our Company

Director(s) Director(s) of our Company

Electricity Act Indian Electricity Act, 2003, as amended

Equity Shares Equity shares of our Company of face value of Rs. 10 each fullypaid-up

MEGPTCL Maharashtra Eastern Grid Power Transmission Company Limited

NBFC Non-Banking Financial Company

PDSL Power Distribution Services Limited (formerly known as AdaniElectricity Mumbai Services Limited)

1

PLF Plant Load Factor

Promoter Group Persons and entities constituting the promoter group of ourCompany in accordance with Regulation 2(1)(pp) of the SEBI (Issueof Capital and Disclosure Requirements) Regulations, 2018 anddisclosed in “Principal Shareholders”

Promoters Promoters of our Company, i.e. Gautam S. Adani and Rajesh S.Adani. For details, see “Principal Shareholders”

TPC The Tata Power Company Limited

Technical and Industry Related Terms

AC Alternating current

BOOM Build, own, operate and maintain

BPTA Bulk power transmission agreement

CEA Central Electricity Authority

CERC Central Electricity Regulatory Commission

ckms Circuit kilometers

ckt Circuit

CTU Central transmission utility

CUF Capacity utilization factor

DBFOT Design, build, finance, operate and transfer

DC Direct current

GDP Gross domestic product

GoI Government of India

HT High tension

HVDC High voltage direct current

InSTS Intra- state transmission system

ISTS Inter-state transmission system

2

IVR Interactive voice response

kCal Kilocalories

kV Kilovolt

kWh Kilowatt hour

LT Low tension

MERC Maharashtra Electricity Regulatory Commission

MSETCL Maharashtra State Electricity Transmission Company Limited

MUs Million Units

MVA Mega volt ampere

MW Megawatt

NLDC National load dispatch center

NTPC NTPC Limited (formerly known as National Thermal PowerCorporation Limited)

Paris Agreement Agreement within the United Nations Framework Convention onClimate Change, dealing with greenhouse-gas-emissions mitigation,adaptation, and finance, signed on April 22, 2016

PGCIL Power Grid Corporation of India Limited

PPP Public Private Partnership

PPRA Past Period Regulatory Assets

RAB Regulatory Asset Base

R-Infra Reliance Infrastructure Limited

RLDC Regional load dispatch center

RSA Revenue sharing agreement

SEB State Electricity Board

SERC State Electricity Regulatory Commission

SLDC State load dispatch center

3

STU State transmission utility

TBCB Tariff-based competitive bidding

TSA Transmission service agreement

TSP Transmission service provider

TSU Transmission system user

Notwithstanding the definitions set out above, the defined terms in the financial statements included in this

Offering Circular have the meanings given to such terms therein.

4

SUMMARY

This summary highlights information contained elsewhere in this Offering Circular and does not contain all of

the information that you should consider before investing in the Notes. You should read this entire document,

including “Risk Factors” and the financial statements and related notes included elsewhere in this Offering

Circular, before making an investment decision. This Offering Circular includes forward-looking statements that

involve risks and uncertainties. See “Forward-Looking Statements”.

Business Overview

Mumbai, the state capital of Maharashtra is also India’s financial capital and principal centre of commerce.

Mumbai is the seventh most populous city in the world and has the distinction of being one of the largest and

most densely populated urban areas in the world. Mumbai’s real GDP growth between financial year 2012 and

financial year 2018 was approximately 11% per annum and Mumbai contributes approximately 6% to India’s

real GDP. The average per capita income of Mumbai residents is approximately U.S.$8,700 which is

approximately four times that of the per capita income of an average Indian resident. Further, the electricity

consumption of Mumbai for the financial year 2019 is 18,341 MUs. The average electricity bill of our consumers

in financial year 2019 was U.S.$95 which was approximately 1.1% of the per capita income of an average

Mumbai resident.

Business Overview

Our business can be broadly categorized under the following categories: (a) Distribution, (b) Transmission, and

(c) Generation.

Supplying electricity to~ 12 mn consumers

RETAIL

WIRES

TRANSMISSION

GENERATION

Integrated Utility

ExternalPower

PurchaseOther

Distributioncompanies

Distribution

SERVICES

541 ckt km Transmission networkCaters to ~ 70% of AEML’s total distribution requirement

3,268 MUs Procured from DahanuOne of the most efficient IPPs in India

99.99% Supply

24 X 7 Consumer Service through online

25 Unique Payment options

Key Highlights

PDSL to provide services to AEML and otherATL group companies

99.99%

19,580 km4,825 km

3,815 MVA

7.85%Wires Availability Distribution Loss

Transformation Capacity

HT Cable LT Cable

5

a. Distribution Business

Retail Business

Our distribution license authorizes us to distribute electricity to consumers in an area extending over 400 sq. km.

that includes the suburban areas of Mumbai and the Mira-Bhayander Municipal Corporation area in the Thane

District of the state of Maharashtra. The entire licensed area is a densely populated urban mix of residential,

commercial and industrial consumers and growth in our distribution network is fueled by the ever-increasing

electricity consumption of Mumbai. The energy wheeled through our distribution network, has grown by

312 MUs from 9,857 MUs in the financial year ended March 31, 2017 to 10,169 MUs in the financial year ended

March 31, 2019, representing an increase of 3.17%. We added an additional 66,664 households to our

distribution network from financial year ended March 31, 2017 to financial year ended March 31, 2019,

increasing from 2.97 million households as of March 31, 2017 to 3.03 million households (representing

approximately 12 million consumers) as of March 31, 2019 representing an increase of 2%.

Wires Business

Our power distribution network in Mumbai primarily consists of underground cables. As of September 30, 2019,

our wire network consisted of approximately 4,825 km of high-tension cables, approximately 19,580 km of

low-tension cables (including service cables and streetlight cables) and approximately 6,575 substations.

Below is our distribution network coverage map in Mumbai with its incumbents:

6

Revenue Certainty

We carry out monthly billing for our consumers with a meter reading cycle spread over an entire month.

Consumers are given a specified period to pay their bills in accordance with the MERC regulations.

Non-payment by any consumer during this period results in delayed payment charges and interest, while a

continued failure to pay results in a consumer being disconnected from our supply of electricity, in compliance

with the MERC regulations. Our collection efficiency is close to 100%. The electricity is supplied to premises

and not to individuals. Thus, any default is required to be paid by any subsequent occupant of the premise. See

“Regulations and Policies in India”.

b. Transmission Business

Our distribution system receives power supply from ADTPS by virtue of being connected by our power

transmission system and the state grid. Our transmission system is also connected to the transmission systems of

MSETCL and The Tata Power Company Limited (“TPC”) at different interconnection points, which helps bring

in additional power into Mumbai through the state grid and strengthen the Mumbai power system. The power

received at various EHV stations is supplied mainly through underground cables to our distribution receiving

stations for onward distribution to consumers.

c. Generation Business

ADTPS is a washed coal-fired 500 MW thermal power station, sited on a 848.9 hectare site at Dahanu in the

State of Maharashtra, approximately 120 km north of our licensed distribution area in Mumbai, between the

Savata and Dandi creeks, approximately four km from the Dahanu railway station. ADTPS operates two

250 MW generating units. The first unit of ADTPS started commercial operations in July 1995 and the second

unit started commercial operations in January 1996.

In the six months ended September 30, 2019 and the financial year ended March 31, 2019, we generated total

income of Rs. 41,659.6 million and Rs. 76,432.1 million, respectively, and net profit of Rs. 1,281.2 million and

Rs. 614.8 million, respectively. Revenues from operations accounted for 98.6% and 98.0% of our total income in

six months ended September 30, 2019 and the financial year ended March 31, 2019, respectively, with the

balance coming from other income.

Our Competitive Strengths

We believe that the following are our principal competitive strengths:

‰ Large and creditworthy distribution consumer base with continually growing rates of energy consumption

‰ Strong infrastructure with a long track-record of high reliability

‰ Stable and evolved regulatory framework

‰ Long-term, recurring, stable and predictable revenue streams provide strong cash flows

7

‰ Track-record of efficient operating history with a high focus on sustainability

‰ Skilled and experienced senior management team and competent and committed workforce

Our Strategies

Our key strategies are:

‰ Relentless focus on providing sustainable, reliable and affordable power to our consumers

‰ Continued focus on environmental sustainability and social initiative

‰ Increased responsiveness to consumers and continue to deliver premier service

Recent Developments

‰ ATL, AEML, PDSL and Qatar Holding LLC (“QH”), a wholly-owned investment holding company of the

Qatar Investment Authority, have signed definitive agreements for stapled acquisitions by QH of 25.1% in

each of AEML and PDSL from ATL, and a debt investment in AEML by QH in the form of Shareholder

Affiliate Debt (the “QIA Transaction”). The total QH investment in AEML will be approximately

Rs. 32,000 million (equivalent to approximately U.S.$450 million, of which approximately U.S.$282

million is the Shareholder Affiliate Debt). The Shareholder Affiliate Debt proceeds will be utilized for

repayment of our existing senior indebtedness.

ATL and QIA have agreed definitive plans to ensure that over 30% of the electricity supplied by AEML is

sourced from solar and wind power plants by the year 2023. In addition, ATL and QIA have agreed a

number of other green initiatives to combat climate change and facilitate the transition to a sustainable, low

carbon economy. The QIA Transaction is expected to complete in early 2020 subject to receipt of

regulatory approvals and satisfaction of customary conditions precedent. Through its order dated

January 29, 2020, the MERC provided its in-principle approval (such approval, the “MERC QIATransaction Approval”) for the proposed changes in the shareholding pattern of our Company pursuant to

the transfer of 25.1% of the equity shares held by ATL in our Company to QH as contemplated by the QIA

Transaction. The MERC QIA Transaction Approval is subject to the following conditions:

a. The Company shall ensure that the change in shareholding contemplated as a result of the QIA

Transaction should not contravene any provisions of applicable laws and that all statutory clearances

or approvals under the Companies Act, 2013 and any other applicable laws, rules or regulations are

obtained by the Company before completion of the QIA Transaction; and

b. There shall not be any adverse impact on tariffs as a result of the QIA Transaction.

Further, the Competition Commission of India, by way of a letter dated December 19, 2019, has

acknowledged the notice filed by QH under the green channel route in connection with the QIA

Transaction. Certain conditions precedent which are required for the completion of the QIA Transaction

are yet to be fulfilled.

As a part of the QIA Transaction, QH will have typical shareholder rights in our Obligor Group, including

the right to appoint certain directors to our board, access to business and financial information, rights of

first offer and tag along and drag along rights in relation to future transactions.

8

The Shareholder Affiliate Debt from QH (“QH Loan”) will be a U.S. dollar denominated term loan facility

and is intended to be used to repay our existing senior financial indebtedness. The QH Loan will become

available once conditions to which the QIA Transaction is generally subject are satisfied and the

acquisition by QH is completed. Once the loan is drawn down it will be subject to the Intercreditor Deed

and the Project Accounts Deed. It will have a maturity date of 20 years from the utilization of the facility.

We have agreed with QIA that certain accounts below the AEML Distributions Account in the Project

Accounts Deed waterfall will be subject to security in favor of QH and will not be secured for the Primary

Creditors as set out in the Project Accounts Deed.

As a condition precedent to the QIA Transaction, ATL’s outstanding unsecured perpetual instruments and

inter corporate deposits have been converted into shareholder equity.

‰ We are committed to green initiatives to further increase our share of renewable procurement to 30% by

financial year 2023 and to 50% by financial year 2025. As a stepping stone to the commitment, we have

already tied up 700 MW grid connected hybrid power (solar and wind) at Rs. 3.24 per unit, delivering 50%

CUF, for which regulatory approval has been received.

‰ PDSL has been incorporated as a 100% subsidiary of ATL. PDSL shall provide services to us and other

ATL Group companies. Further, PDSL has not engaged in any business activities since the date of its

incorporation, other than those incidental to its incorporation and establishment as a direct wholly-owned

subsidiary of ATL. PDSL has no employees or subsidiaries and has no borrowings or indebtedness in the

nature of borrowings, liabilities, guarantees or other contingent liabilities, as on the date of this Offering

Circular.

‰ We have incorporated Adani Electricity Mumbai Infra Limited as a wholly owned subsidiary for the

purpose of carrying out works like infrastructure development, transmission line development along with

the commissioning of HVDC.

About our Company

Our Company’s business has been running since 1926.

Our Company’s registered office is Adani House, 56, Shrimali Society, Near Mithakali Six Roads, Navrangpura,

Ahmedabad, Gujarat, 380009, India, telephone number +91 (079) 25555 555 and corporate office is Adani

Electricity Mumbai Limited, Devidas Lane, off SVP Road, Near Devidas Telephone Exchange, Borivali (W),

Mumbai 400103, Maharashtra, India. Our Company’s website is https://www.adanielectricity.com/. Information

on our Company’s website or the website of any other member of the Adani Group does not constitute a part of

this Offering Circular.

9

SUMMARY FINANCIAL INFORMATION

Our financial statements have been prepared in accordance with Ind-AS, as specified under Section 133 of the

Companies Act, 2013, read with the Companies (Indian Accounting Standard) Rules, 2015, as amended. The

selected financial information presented below should be read in conjunction with the financial statements and

the notes thereto included elsewhere in this Offering Circular as well as “Management’s Discussion and Analysis

of Financial Condition and Results of Operations”.

The tables below show certain financial information as of and for the financial year ended March 31, 2019 and

the six months ended September 30, 2019 and September 30, 2018. Our financial information as of and for the

financial year ended March 31, 2019 has been derived from our audited financial statements included elsewhere

in this Offering Circular. The financial information as of and for the six months ended September 30, 2019 and

September 30, 2018 has been derived from the reviewed Unaudited Special Purpose Interim Condensed Financial

Information included elsewhere in this Offering Circular. See “Presentation of Financial and Other

Information”.

Summary of Assets and Liabilities

As of

September 30,

2019

March 31,

2019

(in Rs. million)

ASSETSNon-Current AssetsProperty, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,334.2 117,977.7

Capital Work-In-Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,919.3 2,397.5

Right-of-Use Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974.4 —

Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,911.8 9,850.6

Financial Assets

(i) Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,209.2

(ii) Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400.4 411.6

(iii) Other Financial Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389.7 404.1

Deferred Tax Assets (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835.7 1,013.2

Other Non-current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,740.1 1,348.7

Total Non-current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136,505.6 134,612.6

Current AssetsInventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,976.2 3,350.6

Financial Assets(i) Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,984.5 435.5

(ii) Trade Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,703.7 4,257.0

(iii) Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,133.2 914.0

(iv) Bank Balances other than (iii) above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,627.2 2,834.7

10

As of

September 30,

2019

March 31,

2019

(in Rs. million)

(v) Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,092.1 85.3

(vi) Other Financial Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,756.0 11,137.1

Other Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,357.6 1,030.4

Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,630.5 24,044.6

Regulatory Deferral Account — Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,562.6 11,055.9

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,698.7 169,713.1

EQUITYEquity Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,000.5 34,000.5

Unsecured Perpetual Instrument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,714.2 2,572.3

Other Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,008.2 3,868.9

Total Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,722.9 40,441.7

LIABILITIESNon-Current LiabilitiesFinancial Liabilities

(i) Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,427.6 79,021.9

(ii) Trade Payables

(a) total outstanding dues of micro enterprises and small enterprises . . . . . . . . . . . . . . — —

(b) total outstanding dues of creditors other than micro enterprises and small

enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218.0 218.0

(iii) Lease Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517.7 —

Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,390.4 4,385.4

Other Non-Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,311.8 2,248.3

Total Non-current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,865.5 85,873.6

Current LiabilitiesFinancial Liabilities

(i) Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,748.2 9,856.1

(ii) Trade Payables

(A) total outstanding dues of micro enterprises and small enterprises . . . . . . . . . . . . . . 20.0 2.8

(B) total outstanding dues of creditors other than micro enterprises and small

enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,973.5 11,709.9

(iii) Lease Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251.5 —

(iv) Other Financial Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,743.9 16,038.1

Other Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,289.8 2,382.4

Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547.6 602.1

Income Tax Liabilities (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205.4 90.8

Total Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,779.9 40,682.2

Regulatory Deferral Account — Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,330.4 2,715.6

Total Equity and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,698.7 169,713.1

11

Summary of Profit and Loss

For the six months ended

September 30,

For the

financial

year ended

March 31,

2019 2018 2019

(in Rs. million)

IncomeRevenue from Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,089.3 38,693.5 74,939.3

Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570.3 418.0 1,492.8

Total Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,659.6 39,111.5 76,432.1

ExpensesCost of power purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,487.7 15,819.9 29,591.7

Cost of fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,631.3 6,604.0 11,935.6

Transmission charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,993.8 2,119.7 3,911.9

Purchases of traded goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.1 — 106.8

Employee Benefits Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,701.9 4,176.3 8,678.8

Finance Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,818.6 5,717.1 10,018.2

Depreciation and Amortization Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,467.3 2,508.4 4,927.1

Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,433.5 3,224.3 7,146.5

Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,593.2 40,169.7 76,316.6

Profit/(Loss) Before Rate Regulated Activities, Exceptional Items and

Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,066.4 (1,058.2) 115.5

Regulatory Income/(Expense) (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,284.0) 1,114.8 1,575.9

Profit Before Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,782.4 56.6 1,691.4

Tax ExpenseCurrent Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323.7 14.3 419.8

Deferred Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177.5 21.8 656.8

Total Tax Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501.2 36.1 1,076.6

Net Profit for the Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,281.2 20.5 614.8

Other Financial DataEBITDA(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,068.3 8,282.1 16,636.7

EBITDA Margin(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.8% 21.2% 21.8%

Notes:

(1) We define EBITDA for any period as Total Income, deducting Cost of power purchase, Cost of Fuel, Transmission Charges, Purchase

of Traded Goods, Employee Benefit Expense, Other Expenses and Regulatory Income / (Expense) (net) for such period. EBITDA

includes gain / (loss) from foreign exchange. Our management believes that EBITDA data provides investors with additional

information about our performance, as well our ability to incur and service debt and make capital expenditure, and are measures

commonly used by investors. This data, however, should not be considered in isolation or as a substitute for measures of performance

prepared in accordance with Ind-AS or as an alternative to cash flow from operating, investing or financing activities or any other

measure of liquidity derived in accordance with Ind-AS. For further information, see “Presentation of Financial and Other

Information — EBITDA and EBITDA Margin (Non-Ind-AS Measures)”.

12

(2) We define EBITDA Margin for any period as the ratio of EBITDA to Total Income for such period. Our management believes that

EBITDA Margin data provides investors with additional information about our performance, as well our ability to incur and service

debt and make capital expenditure, and are measures commonly used by investors. This data, however, should not be considered in

isolation or as a substitute for measures of performance prepared in accordance with Ind-AS or as an alternative to cash flow from

operating, investing or financing activities or any other measure of liquidity derived in accordance with Ind-AS. For further

information, see “Presentation of Financial and Other Information — EBITDA and EBITDA Margin (Non-Ind-AS Measures)”.

A reconciliation from Total Income to EBITDA for the periods indicated is set out below:

For the six months ended

September 30,

For the

financial

year ended

March 31,

2019 2018 2019

(in Rs. million)

IncomeTotal Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,659.6 39,111.5 76,432.1

Adjusted for:Cost of Power Purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,487.7 15,819.9 29,591.7

Cost of Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,631.3 6,604.0 11,935.6

Transmission Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,993.8 2,119.7 3,911.9

Purchases of traded goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.1 — 106.8

Employee Benefits Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,701.9 4,176.3 8,678.8

Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,433.5 3,224.3 7,146.5

Regulatory Income/(Expense) (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,284.0) 1,114.8 1,575.9

EBITDA(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,068.3 8,282.1 16,636.7

EBITDA Margin(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.8% 21.2% 21.8%

Notes:

(1) See note (1) above.

(2) See note (2) above.

Summary of Cash Flows

For the six months ended

September 30,

For the

financial

year ended

March 31,

2019 2018 2019

(in Rs. million)

Net cash generated from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . 20,764.7 4,092.7 7,394.1

Net cash flow (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,912.8) (112,510.0) (116,541.0)

Net cash flow from/(used in) financing activities . . . . . . . . . . . . . . . . . . . . . . (7,632.7) 110,183.8 110,059.5

Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 3,219.2 1,766.5 912.6

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SUMMARY OF THE OFFERING

The following summary highlights selected information regarding the terms of the Notes and other financing

documents and is not intended to be complete. For a more complete understanding of the Notes, you should read

this entire Offering Circular carefully, including the “Terms and Conditions of the Notes”, “Description of the

Collateral and Security Documents” and “Description of the Principal Senior Note Documents”. Capitalized

terms used in this Summary of the Offering and not otherwise defined have the respective meanings given to such

terms in the Terms and Conditions of the Notes and “Appendix—Glossary of Defined Terms”.

Issuer Adani Electricity Mumbai Limited

Obligor Power Distribution Services Limited and any company whichbecomes an Obligor in accordance with the Common Terms Deed.

Notes Offered U.S.$1,000,000,000 3.949% senior secured notes due 2030 (the“Notes”).

Denomination The Notes will be issued in denominations of U.S.$200,000 and inintegral multiples of U.S.$1,000 in excess thereof.

Issue Price 100.00% of principal amount.

Maturity Date February 12, 2030

Interest Rate The Notes will bear interest on their outstanding principal amountfrom and including the Closing Date at the rate of 3.949% perannum.

Interest Payment Dates The Notes will be paid interest semi-annually in arrear on eachInterest Payment Date, being February 12 and August 12 in eachyear, commencing on August 12, 2020, provided that if any datedetermined in accordance with the foregoing is not a Business Day,the relevant Interest Payment Date will be postponed to the next daywhich is a Business Day. Interest will be payable in accordance withthe applicable laws of India, including but not limited to the ECBGuidelines.

Use of Proceeds The proceeds from the issue of the Notes will be used by the Issueras described under “Use of Proceeds”.

Joint Bookrunners and Joint LeadManagers

Barclays Bank PLC, Citigroup Global Markets Inc., DBS Bank Ltd.,Deutsche Bank AG, Singapore Branch, Emirates NBD Bank PJSC,J.P. Morgan Securities plc, MUFG Securities Asia Limited andStandard Chartered Bank

Joint Lead Managers Credit Suisse (Hong Kong) Limited, Merrill Lynch (Singapore) Pte.Ltd. and Mizuho Securities (Singapore) Pte. Ltd.

Managers The Joint Bookrunners and Joint Lead Managers together with theJoint Lead Manager

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Ranking The Notes will be direct, unconditional and unsubordinatedobligations of the Issuer. The Notes will be secured to the extent ofthe Collateral that will be created under the Security Documents.

The Issuer will, no later than the date that is 90 days after theClosing Date (“First Security Longstop Date”), enter into orprocure the entry into, documentation in respect of the Issuer InitialCollateral Documents.

The Issuer will use best efforts to procure the relevant approvalsfrom regulatory authorities in India and to complete the formalitiesfor release of charge of existing lenders as soon as possible. TheIssuer will, within 90 days from the date the Issuer procures therelevant regulatory approvals and completes the requirements andobtains the relevant consents and permissions for release of chargeof its existing lenders (“Second Security Longstop Date”), enterinto or procure the entry into, as applicable, of documentation inrespect of Subsequent Collateral Documents.

The Notes will rank at all times pari passu without any preferenceamong themselves.

Security The Collateral will be granted by the Issuer, any other Obligor, ATLand upon it becoming a Shareholder in AEML, QH, as applicable,under the Security Documents, and in each case will be created infavor of SBICAP Trustee Company Limited (the “SecurityTrustee”) who will hold that security on trust, pursuant to thesecurity trustee agreement to be entered into between, among others,the Issuer and the Security Trustee (the “Security Trust Deed”) ason the Closing Date for each of the Noteholders, the Note Trusteeand other Senior Secured Creditors from time to time. See“Description of the Collateral and Security Documents”.

Intercreditor arrangements The Notes will be subject to the terms of the intercreditor deed, tobe dated on or around the Closing Date (the “Intercreditor Deed”),by, among others, the Senior Lenders, the Senior Secured HedgeCounterparties and the Security Trustee. The Intercreditor Deedregulates the interaction between various groups of creditors of theIssuer and any other Obligor, in relation to undertaking enforcementactions and/or undertaking any actions upon occurrence of an Eventof Default and the terms of subordination of certain loans granted bythe Shareholder Affiliate Creditors (as specified in the IntercreditorDeed) to indebtedness provided or to be provided to Issuer or theObligor from the Primary Creditors. See further “Description of theCollateral and Security Documents” and “Description of thePrincipal Senior Note Documents — Intercreditor Deed”.

Common Terms Deed The Issuer, Power Distribution Services Limited, the Note Trusteeand the Security Trustee, are to be party to a Common Terms Deed,

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to be dated on or around the Closing Date. The Common TermsDeed sets out the representations, covenants (positive, negative andfinancial) and Events of Default which apply to each Senior NoteDocument (including the Notes). See “Description of the Collateraland Security Documents” and “Description of the Principal SeniorNote Documents —Common Terms Deed”.

Restrictive Covenants The Issuer will procure that any other Obligor will not provide anyguarantee in respect of any indebtedness of the Issuer unless, at thesame time or prior thereto, the obligations of the Issuer under theNotes and the Note Trust Deed have the benefit of such guarantee orother arrangement as the Note Trustee in its absolute discretion shalldeem to be not materially less beneficial to the Noteholders or asshall be approved by an Extraordinary Resolution (as defined in theNote Trust Deed) of the Noteholders.

In addition, the Issuer has undertaken that it will not, and willprocure that any other Obligor will not, create any Security Interest(as defined in the Common Terms Deed) over any of theirrespective assets or undertaking for the benefit of any other personunder any indebtedness prior to the creation, perfection andregistration of the Collateral, which shall be completed on or beforethe respective security longstop dates as set out in “Description ofthe Collateral and Security Documents”.

The Issuer and any other Obligor have also agreed in the CommonTerms Deed to comply with certain covenants, including, amongother things, covenants limiting the circumstances in which they candispose of material assets, conduct certain transactions, grantsecurity interests or incur debt obligations and covenants relating tothe funding of the Project Accounts and maintenance of a debtservice cover ratio. These covenants are incorporated by referenceinto the Terms and Conditions of the Notes. See “Description of thePrincipal Senior Note Documents — Common Terms Deed”.

Events of Default The Events of Default noted below are in summary form only. Eachof the Events of Default summarized below is subject to theapplicable remedy or cure period, threshold, carve out, exception orother qualification as is set out in “Description of the PrincipalSenior Note Documents — Common Terms Deed — Events ofDefault” and investors should read the full text of that section tofully understand the Events of Default. The ECB Guidelines, at thetime of any accelerated payment or redemption in the event of anEvent of Default, may require the Issuer to obtain the prior approvalof the RBI or the AD Bank, as the case may be, in accordance withthe ECB Guidelines, before effecting the redemption of the Notesprior to their stated maturity, and such approval may not beforthcoming.

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In summary, the Events of Default in respect of the Notes inter aliainclude:

(a) certain failures by the Issuer and any other Obligor to pay an

amount due and owing under the Primary Debt Documents

(other than a failure to pay Subordinated Debt in certain

circumstances);

(b) certain breaches by the Issuer any other Obligor of its

undertaking to ensure that the Debt Service Cover Ratio is not

less than 1.1:1.0;

(c) the issuer or any other Obligor does not perform or comply

with any one or more of its other obligations under a Senior

Note Document, and such default has a Material Adverse

Effect;

(d) any other present or future indebtedness of the Issuer and any

other Obligors (other than indebtedness payable under a

Shareholder Affiliate Debt (as defined under the Common

Terms Deed)) becomes due and payable prior to its stated

maturity or is not paid when due provided that (A) the

aggregate amount of the relevant indebtedness, guarantees and

indemnities equals or exceeds U.S.$25,000,000 (or its

equivalent in another currency) and (B) the foregoing shall not

apply to any Existing Debt Document at any time prior to the

date which falls 45 calendar days after the Closing Date;

(e) any of the Issuer or any other Obligor is (or is, or could be,

deemed by law or a court to be) insolvent or bankrupt or

unable to pay its debts;

(f) an order is made and is not discharged or stayed within 60

days or an effective resolution passed for the winding-up or

dissolution of the Issuer or any other Obligor;

(g) the seizure, compulsory acquisition, expropriation or

nationalization of all or a material part of the assets of the

Issuer or any other Obligor or all or a majority of the shares or

units in the Issuer or any other Obligor or, in each case, a final

order is made in relation to such action;

(h) it is or will become unlawful for the Issuer or any other

Obligor to perform or comply with any one or more of its

obligations under any Senior Note Document;

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(i) a Senior Note Document ceases to be, or is claimed by the

Issuer or any other Obligor not to be, in full force and effect,

or is repudiated by the Issuer or any other Obligor;

(j) one or more final judgments, final arbitral awards, final

settlements or orders for the payment of money is made

against the Issuer or any other Obligor, and continue(s) to

remain unsatisfied and unstayed after the date specified for

payment in that judgment, award, settlement or order, or, if

not so specified, for a period of 30 Business Days after the

date(s) thereof and, in each case, such circumstances have a

Material Adverse Effect;

(k) any material representation or warranty made by the Issuer or

any other Obligor in any Senior Note Document being

incorrect or misleading in a material respect;

(l) any Security Document required to be entered into is not

entered into, or is not valid by the date specified in the Senior

Note Documents, or any Security Document, once entered

into, is not in full force and effect and does not create the

Security Interest in favor of the Security Trustee for the

benefit of the relevant Senior Note Parties, which it is

expressed to create;

(m) any Security Interest, present or future, created or assumed by

the Issuer or any other Obligor becomes enforceable and any

step is taken to enforce it, which is not stayed within 60 days;

and

(n) any event or circumstance, or series of events or

circumstances (whether related or not) occurs which has or

would have a Material Adverse Effect.

Additional Tax Amounts In the event that certain taxes are payable in respect of payments onthe Notes, the Issuer will, subject to certain exceptions, pay suchadditional amounts as will result, after deduction or withholding ofsuch taxes, in the payment of the amounts which would have beenpayable in respect of the Notes, had no such withholding ordeduction been required. See “Taxation”.

Optional early redemption The Notes may be redeemed at the option of the Issuer at any time,in whole but not in part, on giving not less than 30 nor more than60 days’ written notice to the Noteholders and the Note Trustee andthe Principal Paying Agent, at a redemption price equal to theprincipal amount plus the Applicable Premium applicable to theNotes (together with interest accrued to the date fixed forredemption). See Condition 6.4 of the Terms and Conditions of theNotes.

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Following the occurrence of a Sweep Event, the Issuer may utilizeany amount (“Excess Amount”) in the Senior Debt RedemptionAccount which is in excess of the amount then held in the SeniorDebt Restricted Amortization Account for the redemption of Notes.The Notes may be redeemed at the option of the Issuer in part up tothe relevant Excess Amount, at any time on giving not less than30 days nor more than 60 days’ notice to the Noteholders inaccordance with Condition 17 and to the Note Trustee and thePrincipal Paying Agent in writing, at an amount equal to theirprincipal amount (together with interest accrued to but excluding thedate fixed for redemption). No Applicable Premium applies if theNotes are redeemed pursuant to Condition 6.4(ii) of the Terms andConditions of the Notes.

The ECB Guidelines will require the Issuer to obtain the priorapproval of the Reserve Bank of India or the designated authorizeddealer bank, as the case may be, in accordance with the ECBGuidelines before effecting a redemption of the Notes prior to theMaturity Date and such approval may not be forthcoming.

Optional early redemption for taxreasons

The Notes may be redeemed at the option of the Issuer at any timein whole or in part, on giving not less than 30 nor more than60 days’ notice to the Noteholders and to the Note Trustee and thePrincipal Paying Agent, at their principal amount (together withinterest accrued to the date fixed for redemption), if (i) the Issuersatisfies the Note Trustee immediately prior to the giving of suchnotice that on the occasion of the next payment due under the Notesthe Issuer has or will become obliged to pay Additional TaxAmounts as provided or referred to in Condition 8 of the Terms andConditions of the Notes, to the extent such Additional Tax Amountis a result of any change in, or amendment to, the laws orregulations of the relevant Tax Jurisdiction (as defined inCondition 8), or any change in the application or officialinterpretation of such laws or regulations, which change oramendment becomes effective on or after the Closing Date and(ii) such obligation cannot be avoided by the Issuer takingreasonable measures available to it, provided that no such notice ofredemption shall be given earlier than 90 days prior to the earliestdate on which the Issuer would be obliged to pay such AdditionalTax Amounts were a payment in respect of the Notes then due. SeeCondition 8.2 of the Terms and Conditions of the Notes.

The ECB Guidelines may require the Issuer to obtain the priorapproval of the Reserve Bank of India or the designated authorizeddealer bank, as the case may be, in accordance with the ECBGuidelines before effecting a redemption of the Notes prior to theMaturity Date and such approval may not be forthcoming.

Redemption following a Change ofControl Triggering Event

Upon the occurrence of a Change of Control Triggering Event (asdefined in Condition 6.3), each Noteholder shall have the right to

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require that the Issuer redeem such Noteholder’s Notes at 101% oftheir principal amount (together with interest accrued to the datefixed for redemption).

The ECB Guidelines may require the Issuer to obtain the priorapproval of the Reserve Bank of India or the designated authorizeddealer bank, as the case may be, in accordance with the ECBGuidelines before effecting a redemption of the Notes prior to theMaturity Date and such approval may not be forthcoming.

Form and registration of Notes The Notes will upon issue be initially represented by one or moreglobal certificates in fully registered form.

Notes which are offered and sold outside the United States inreliance on Regulation S will be represented by interests in a globalcertificate (the “Regulation S Global Certificate”), deposited with,and registered in the name of, The Bank of New York Depository(Nominees) Limited as nominee for the common depositary forEuroclear and Clearstream, Luxembourg on or about the ClosingDate. Notes which are offered and sold in the United States inreliance on Rule 144A will be represented by interests in a globalcertificate (the “Rule 144A Global Certificate” and, together withthe Regulation S Global Certificate, the “Global Certificates”),deposited with a custodian for, and registered in the name of,Cede & Co., as nominee for DTC on or about the Closing Date.

Beneficial interests in the Global Certificates will be shown on, andtransfers thereof will be effected only through, records maintainedby DTC, Euroclear, Clearstream, Luxembourg and their respectivedirect and indirect participants. Beneficial interests in the GlobalCertificates may not be exchanged for Notes in definitive formexcept in the limited circumstances described under “GlobalCertificates”.

See also generally, “Clearance and Settlement” and “Subscriptionand Sale”.

Transfer Restrictions The Notes have not been registered under the Securities Act, or thesecurities laws of any other jurisdiction, and may not be offered orsold within the United States, except pursuant to an exemption from,or in a transaction not subject to, the registration requirements of theSecurities Act. Accordingly, the Notes are being offered and sold inthe United States only to qualified institutional buyers (as defined inRule 144A) in accordance with Rule 144A and outside the UnitedStates in offshore transactions in accordance with Regulation S.There are other restrictions on the offer, sale and/or transfer of theNotes in, among others, India, Hong Kong, Japan, Singapore, theEuropean Economic Area and the United Kingdom. For adescription of the selling restrictions on offers, sales and deliveriesof the Notes, see “Subscription and Sale”.

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Listing and Trading Approval in-principle has been received for the listing of andquotation for the Notes on the SGX-ST. The SGX-ST assumes noresponsibility for the correctness of any statements made, opinionsexpressed or reports contained herein. Admission of the Notes to theOfficial List of the SGX-ST is not to be taken as an indication of themerits of the Issuer, its subsidiary, associated companies or theNotes. The Notes will be traded on the SGX-ST in a minimumboard lot size of S$200,000 (or its equivalent in other currencies) forso long as the Notes are listed on the SGX-ST and the rules of theSGX-ST so require.

Anticipated Rating of the Notes The Issuer anticipates the Notes to be rated “BBB-” by Fitch and“Baa3” by Moody’s. A security rating is not a recommendation tobuy, sell or hold securities insofar as such ratings do not comment asto market price or suitability for a particular investor. There is noassurance that any rating will remain in effect for a given period oftime or that any rating will not be revised or withdrawn entirely by arating agency in the future if in its judgment circumstances warrant.Ratings may be changed, withdrawn or suspended at any time. Weare under no obligation to update information regarding such ratingsshould they change over time.

Governing Law The Notes, the Note Trust Deed, the Agency Agreement and theCommon Terms Deed will be governed by the laws of England. TheIntercreditor Deed, the Project Accounts Deed and the SecurityDocuments will be governed by Indian law.

Note Trustee Madison Pacific Trust Limited.

Principal Paying Agent The Bank of New York Mellon.

Registrars The Bank of New York Mellon with respect to Notes held throughDTC and The Bank of New York Mellon SA/NV, LuxembourgBranch with respect to Notes held through Euroclear or Clearstream,Luxembourg.

Paying Agent The Bank of New York Mellon, London Branch.

Transfer Agents The Bank of New York Mellon with respect to Notes clearedthrough DTC and The Bank of New York Mellon SA/NV,Luxembourg Branch with respect to Notes cleared throughEuroclear and Clearstream, Luxembourg.

CUSIP Rule 144A Notes: 00654G AA1

ISIN Rule 144A Notes: US00654GAA13

Regulation S Notes: XS2109438205

Common Codes Rule 144A Notes: 211305576

Regulation S Notes: 210943820

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RISK FACTORS

Prospective investors should carefully consider the risks and uncertainties described below and the information

contained elsewhere in this Offering Circular before making an investment in the Notes. In making an investment

decision, each investor must rely on its own examination of us and the terms of the offering of the Notes. The

risks described below are not the only ones faced by us or for investments in India in general. Our business,

prospects, financial condition and results of operations could be materially adversely affected by any of these

risks. There are a number of factors, including those described below, that may adversely affect our ability to

make payment on the Notes. The risks described below are not the only ones that may affect the Notes. Additional

risks not currently known to us or that we currently deem immaterial may also impair our business, prospects,

financial condition and results of operations.

This Offering Circular also contains forward-looking statements that involve risks and uncertainties. Our results

could differ materially from such forward-looking statements as a result of certain factors including the

considerations described below and elsewhere in this Offering Circular.

Risks Related to Business and Industry

The enactment of the Indian Electricity Act, 2003, as amended (the “Electricity Act”) provides a policydirection towards open access and multiple licensing that has increased competition for our power business.

The enactment of the Electricity Act has resulted in structural changes in the power sector in India, including the

de-licensing of power generation, competition in supply, open access to distribution and transmission systems,

the re-organization of the State Electricity Boards (the “SEBs”) and the introduction of franchising in electricity

distribution. However, while allowing us flexibility to sell power and explore business opportunities in electricity

transmission, distribution and trading, the provisions of the Electricity Act have increased the scope for

competition in our supply and distribution businesses and may continue to do so. For further details, see

“Regulations and Policies in India Relating to the Power Sector”.

We are not the sole electricity supply company in our licensed area of supply. While we do not expect a

significant loss of consumers to The Tata Power Company Limited (“TPC”), it is possible that there may be

some erosion of our consumer base once TPC develops and strengthens its distribution network. Retail tariffs are

determined by the Maharashtra Electricity Regulatory Commission (the “MERC”) after factoring in a given

amount of recovery through the Cross-Subsidy Surcharge (“CSS”) from consumers taking their power supply

from TPC. CSS, however, is recoverable from such consumers only if they remain connected to our network.

Therefore, if a large number of CSS paying consumers migrate to TPC’s network in the future, recovery of CSS

could decrease, and this could materially affect our business, revenue and results of operations.

Competitive bidding for power transmission and distribution further increases competition in our business. We

may find it difficult to compete with our existing and new competitors, who may have greater resources than we

do, be able to achieve better economies of scale and be better equipped to protect themselves against any sudden

or unfavorable changes in business environment, allowing them to bid at more competitive rates or charge more

attractive tariffs. We may, as a result, face the pressure of decreased margins due to such competition. As more

participants enter our business, we may not be able to retain our existing consumers or attract new consumers.

We may not be able to compete effectively, and our failure to do so could materially and adversely affect our

business, financial condition and results of operations.

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The power business in Mumbai is dependent on tariff regulations issued by the MERC and any changes to thecurrent tariff policies or modifications of any tariff standards could have an adverse effect on our business,prospects, revenues and results of operation.

The provisions of the Electricity Act and the rules and regulations thereunder govern power tariffs in India.

Under such regulations, these tariffs are either established through a competitive bidding process or are approved

by the central or state regulations (other than tariffs under captive power projects and contracts for the sale of

power with a term of less than one year). The competitive bidding guidelines allow bidders to quote on a tariff

composed of a fixed element and a floating element (which is escalated based on an index prescribed by the

regulator). In respect of our business for supply of electricity in Mumbai for which the tariff is determined by the

MERC, we submit a forecast of aggregate revenue requirements and expected revenue from the tariff and charges

for each financial year for the MERC’s approval. For further details, see “Regulations and Policies in India

Relating to the Power Sector”.

The tariff regulations of the MERC govern the determination of tariffs in the State of Maharashtra in which the

city of Mumbai falls. The current tariff regulations consider the escalation in power purchase costs to be

uncontrollable and allow their complete recovery from consumers by way of tariff and fuel adjustment charges.

Such recovery of additional cost is allowed as a pass through in tariffs. However, there is no assurance of

recovery of additional cost if we incur costs in excess of the terms approved by the MERC or in excess of the

indicative market rates. Tariffs include various cost elements and if the actual cost incurred is higher than the

approved level, there is no assurance that the additional cost incurred will be allowed by the regulator and passed

through in the tariff. In case any such expenditure is uncontrollable in nature, full pass through of all such

expenditure is allowed in future tariffs through regulatory gap recovery. In the event any expenditure is

determined controllable in nature, only one third of the cost of such expenditure will be allowed to be passed

through in the tariff. There might also be differences in the RAB and asset value as per our financial statements,

since we have accounted assets at fair value on the appointed date (i.e. April 1, 2018) as per the scheme of

arrangement between R-Infra and AEML. In addition, during the tariff determination process, the MERC carries

out prudence checks on the costs submitted by us, and there is a possibility that the MERC may disallow any cost

incurred by us if the MERC is not satisfied with our justifications for the cost incurred or if the MERC disagrees

with the treatment adopted by us. Further, tariff regulations are subject to change by the MERC. Any such

change may have a material adverse impact on our ability to recover our costs through tariffs. Further, while our

performance levels in the past have and currently exceed the minimum stipulated norms, there can be no

assurance that we will continue to meet such standards or that such standards will not be made more stringent.

We are currently operating within the prescribed expenses approved by the MERC, but as our assets grow older,

we will face the risk of exceeding the prescribed limits which may not be allowed by the MERC. The

Government of Maharashtra has by way of a notification dated January 4, 2019, notified the framework for Tariff

Based Competitive Bidding (“TBCB”) in order to encourage competition in development of transmission

projects. Based on this notification, future schemes envisaged by State Transmission Utilities (“STU”) might be

awarded through the TBCB route. In such a scenario, we would be required to place a competitive bid for any

scheme, rather than recover costs under the conventional ARR method that we follow currently. These factors

could, in turn, have an adverse effect on our business, revenues and results of operations.

Failure to obtain and retain the required licenses could have a material adverse impact on our business,prospects, revenues and results of operations.

We have a license (the “License”) granted under the Electricity Act to distribute electricity in the suburbs and

surrounding areas of Mumbai, which expires on August 15, 2036. The License may be revoked by the MERC

prior to the expiry date in certain circumstances, including a willful and prolonged default by us under the

23

Electricity Act, for example, through our inability to satisfy our universal service obligation as described in the

License, our inability to make statutory payments and our consistent failure to meet the standards of performance

laid out in the License. In addition, the MERC may revoke our License if it deems our financial condition to be

such that we would be unable to fully and efficiently discharge the duties imposed under the License.

If we fail to obtain or retain any approvals or licenses essential to our businesses, or renewals thereof in a timely

manner, or fail to comply with the conditions prescribed therein, it may result in penalties or interruption of our

operations and our business may be adversely affected. Though we obtain all required permissions for

implementing different schemes, the completion of a project in time is always at risk due to any interruption or

delay caused by the public or regulatory authorities. Furthermore, although we currently obtain and maintain all

required regulatory norms, there can be no guarantee that any such license will not be withdrawn in the future, or

that any applicable regulation or method of implementation will not change. This could have a material adverse

effect on our business, revenues and results of operations.

Some of our existing financing agreements require us to comply with certain covenants prior to undertakingvarious actions, including taking further debt; failure to comply with such covenants or to otherwise obtainwaivers or fully repay the relevant borrowings, could result in a default under the terms of the relevantfinancing documents.

Some of the financing agreements relating to our existing indebtedness include various conditions and covenants.

Failure to meet these conditions could have significant consequences on our business and operations. In

particular, the incurrence of additional debt pursuant to the issue of the Notes and/or the taking of certain actions

in connection with the issuance of Notes, will breach the conditions and covenants prohibiting or limiting such

transactions under the terms of certain existing indebtedness. Prior to issuance of the Notes, the Issuer has

provided or will provide notice to such lenders of its intention to prepay the entire amount of outstanding

indebtedness of such lenders. We intend to utilize a substantial portion of the Notes proceeds on or after the

Closing Date to repay all or a portion of our existing indebtedness. However, in the interim period falling

between the date of issuance of the Notes and the making of the relevant prepayment, a lender could assert that

we have failed to comply with the terms under the applicable financing agreement. Any such failure to comply

with the requirements under these financing agreements that is not waived by our lenders, may constitute a

breach of the terms of the relevant financing documents and may lead to, inter alia, a termination and/or

acceleration of such credit facilities and enforcement of their security interests and may trigger cross defaults

under other financing agreements. As we intend to repay all or a portion of our existing indebtedness that contain

such aforesaid restrictions, which is permitted subject to conditions as stated in the respective financing

documents including payment of prepayment charges, as part of the refinancing, we do not intend to obtain

written waivers or consents for such transactions. Also see “— Failure to drawdown under the QH Loan may

result in our failure to fully repay our existing indebtedness, could adversely impact our financial condition and

could affect our ability to comply with the terms of the Notes”.

Our revenue generation is currently concentrated in Mumbai. There could be a material adverse effect on ourrevenues and results of operations if our consumers in Mumbai source their power from other suppliers.

Our revenue from power supply and transmission charges in Mumbai contributed approximately 96.0% and

97.0% of our total income in the financial year ended March 31, 2019 and the six months ended September 30,

2019, respectively. Further, given that our License allows us to distribute electricity only in the suburbs and

surrounding areas of Mumbai, we are dependent on certain key large non-retail consumers such as Mumbai

Metro One Private Limited and Bhabha Atomic Research Centre. Following the implementation of the Electricity

Act, non-retail consumers with a demand in excess of 1 MVA are entitled to purchase power from any preferred

24

source. If a significant number of these consumers choose to source power from other suppliers, our revenue and

results of operations could be materially and adversely affected.

We are dependent on TPC for payment of various charges due to us from TPC for Changeover (“Group II”)Consumers using our distribution network.

The MERC, in its tariff order dated September 12, 2018, approved the aggregate revenue requirement and

determined the tariff for our distribution business for the financial years 2019 and 2020. As part of the tariff

order, we are permitted to charge wheeling charges towards capital and operating expenditure of the distribution

network and CSS to changeover consumers (consumers supplied by TPC), so as to supply power at cheaper rates

to low-end and below-poverty-line consumers. Furthermore, the tariff order approved the recovery of regulatory

assets accumulated in our books by levying regulatory asset charge (“RAC”) and allowed us to levy RAC to such

changeover consumers. As the CSS and RAC levied on changeover consumers is paid to us by TPC, any failure

on the part of TPC to pay us, for any reason whatsoever, may adversely affect our business, results of operations

and cash flows.

Our performance in providing uninterrupted electricity supply is dependent on various third parties. Failure tosupply power to our consumers may have a significant adverse effect on our business, revenues, results ofoperations and prospects.

Unplanned outages of any of our generating stations, failure in our transmission systems, failure in interregional

transmission as a result of inadequate inter-regional transmission capacity and consequent network congestion, or

failure in distribution systems could prevent us from supplying power to our consumers. The occurrence of these

or other similar events could have a material adverse effect on our business, financial condition, revenues and

results of operations.

Failure to tie up long-term power purchase arrangements (“PPAs”) for the Mumbai power distributionbusiness will adversely affect our business and results of operations in Mumbai.

We source energy for supply to our consumers in the Mumbai power distribution area from Adani Dahanu

Thermal Power Station (“ADTPS”). ADTPS has completed 24 years of operations and a residual life assessment

(“RLA”) study has been carried out for the main plant and balance of plant by M/s. NTPC ALSTOM Power

Services (P) Limited for Unit 1 and M/s. NTPC GE Power Services Private Limited for Unit 2. The RLA study

was carried out in 2016 and 2018 for Units 1 and 2, respectively, wherein the remaining life of the critical

equipment has been detailed. Based on this study, ADTPS has consumed only 30% of its average life as of the

date of this study. In the event that ADTPS does not meet its expected useful life, this could impact our existing

PPA with our distribution licensee, AEML-D.

We have also signed renewable energy purchase contracts to purchase power generated from solar and wind

energy power plants towards the renewable power purchase obligation (“RPO”) required by the MERC

regulations and intend to keep on adding solar capacity in the future as a sustainable long-term source of power

with non-scalable rates. Further, we are also planning to procure solar power to meet our RPOs and reduce our

dependence on the short-term market. A petition filed before the MERC for approving the request for proposal

for purchase of renewable power was approved on January 8, 2020.

These contracts are intended to ensure the steady availability of reliable power to our power distribution business

in Mumbai. However, early termination, failure to extend or renew these existing power purchase contracts and/

or enter into new contracts for procuring energy requirements in the future at competitive rates may significantly

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affect the power distribution business in Mumbai and adversely affect our business, prospects and results of

operations. We may also be required to enter into new power purchase contracts owing to a potential increase in

demand from our consumers. Any failure by us in entering into these new contracts at competitive rates may

adversely affect our business, prospects and results of operations.

Failure to obtain sufficient coal supplies for ADTPS in a timely manner, on appropriate terms and atcompetitive prices may have a material adverse effect on our business and results of operations.

We are dependent on Government-owned entities, which are the sole suppliers of domestically produced coal in

India, for the supply of all domestic coal to ADTPS, and on the Government-owned Indian Railways for

transporting such coal to our power plant. In the past, there have been occasions when such entities have not been

able to supply sufficient quantities of coal to the power plant. Factors including, without limitation, any delays or

interruption in the supply of coal, any increase in the cost of such fuel or any deterioration in relationships

between us and our suppliers may have an adverse effect on the costs allocated for our projects.

In addition, the Government-appointed coal linkage committee determines the amount of coal that we and other

users of coal can source from a particular mine. The quality of coal, especially its carbon content, may vary

significantly depending on the quality of the reserves from which the coal originates. Any deterioration in the

quality of the coal supplied to us may adversely impact our ability to generate sufficient power and may have an

adverse impact on our operations.

We import coal to supplement our domestic coal allocation. However, the boilers at ADTPS are designed to fire

low gross calorific value domestic coal. It is therefore not technically feasible for us to use high gross calorific

value imported coal as a sole source of fuel, and it must be blended with domestic coal. Hence, the availability

and supply of domestic coal remains an important part of our operations. Therefore, our ability to source foreign

coal is not sufficient for us to ensure continued operations in the absence of, or a shortfall in, the supply of

domestic coal.

Most of our imported coal is sourced from Indonesia. Any changes to the legal and regulatory regime on mineral

and coal mining in Indonesia may affect the way we procure coal and may consequently affect our costs,

revenues and business prospects.

Our dependence on a few coal suppliers for electricity generation exposes us to operational risks, such as

non-supply due to reserves depletion, pro rata scaling down of supply to all consumers, onerous contractual terms

(penalties for short supply) and an inability to obtain alternative fuel at short notice. Failure to obtain sufficient

coal supplies for our electricity generation plant in a timely manner, on appropriate terms and at competitive

prices may have a material adverse effect on our revenues and results of operations.

A delay in payment of monthly transmission charges by the STUs may adversely affect our cash flows.

In accordance with the Sharing of Charges and Losses Regulations and the order of the MERC dated June 27,

2006, a transmission licensee such as our Company is entitled to recover its approved tariff from InSTS charges

collected by the STUs. The STUs collect transmission charges from distribution licensees and TSUs on a

monthly basis and pay these back to the transmission licensees. The payment mechanism is structured, in

accordance with the CERC Tariff Regulations, the MERC (MYT) Regulations 2011, the MERC (MYT)

Regulations 2015 and the MERC (MYT) Regulations 2019, to incentivize the end consumers to make timely

payments through rebates and a surcharge that is levied on untimely payments. For further details, see

“Regulations and Policies in India Relating to the Power Sector”. If there is any failure or delay on the part of

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distribution licensees or TSUs to make the requisite payments to the STUs, which affects the capability of the

STUs to make the corresponding payments to us as a transmission licensee, our business, prospects, financial

condition and results of operations may be adversely affected.

The dangerous nature of our business may cause injury to people or property that may lead to significantdisruption to our business and a consequent decrease in our revenue.

Occupational health and safety are a key risk area in the operation and maintenance of energy transmission and

distribution networks. There are risks caused by circumstances beyond our control, as well as the inherently

dangerous nature of maintenance and construction work involving electricity transmission and distribution

facilities. For example, our business requires our employees and contractors at ADTPS to work under potentially

risky circumstances, with highly flammable and explosive materials. Despite our attempted compliance with the

requisite safety requirements and standards, our operations are subject to hazards associated with the handling of

such dangerous materials. If improperly handled or subjected to unsuitable conditions, these materials could

cause fatalities and severe injuries to our employees, contract laborers or other persons, cause damage to our

properties and properties of others or harm the environment. Due to the nature of these materials, we may be

liable for certain costs related to hazardous materials, including the costs for health-related claims, or removal or

treatment of such substances, including claims and litigation from our current or former employees for injuries

arising from occupational exposure to materials or other hazards at our power plants. For further details, see

“Legal Proceedings”. This could subject us to significant disruption in our business and to legal and regulatory

actions, which could adversely affect our business, financial condition and results of operations.

We may not be able to obtain or maintain adequate insurance to cover all losses we may incur in our businessoperations or otherwise.

Our operations are subject to several risks generally associated with the generation, transmission and distribution

of electricity. These risks include explosions, fires, earthquakes and other natural disasters and calamities,

breakdowns, failures or substandard performance of equipment, improper installation or operation of equipment,

accidents, acts of terrorism, operational problems, human error, transportation interruptions and labor

disturbances. These risks can cause personal injury and loss of life and damage to, or the destruction of, property

and equipment (including infrastructure developed by us) and may result in the limitation or interruption of our

business operations and the imposition of civil or criminal liabilities. While we carry insurance coverage for

contingencies and amounts which we believe is in accordance with industry practices, our insurance

arrangements prove insufficient to cover all material losses that we may incur in the future. If our losses

significantly exceed our insurance coverage or cannot be recovered through insurance, our business, prospects,

financial condition and results of operations could be materially adversely affected.

In addition, we may not be able to maintain insurance of the types or at levels which we deem necessary or

adequate or at rates which we consider reasonable, particularly in case of significant increases in premium levels

at the time of renewing our insurance policies. If we are unable to pass increased insurance costs on to our

consumers, the costs of higher insurance premiums could have a material adverse effect on our business,

prospects, financial condition and results of operations. Furthermore, the occurrence of an event for which we are

not adequately or sufficiently insured or the successful assertion of one or more large claims against us that

exceed available insurance coverage, or changes in our insurance policies (including premium increases or the

imposition of large deductible or co-insurance requirements), could have a material adverse effect on our

business, prospects, financial condition and results of operations.

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Our success depends in large part upon our management team and skilled personnel and our ability to attractand retain such persons. The loss of key personnel may have an adverse effect on our business, results ofoperations, financial condition and growth prospects.

Our performance depends on the continued service of our management team and skilled personnel. We also face

a continuous challenge to recruit and retain a sufficient number of suitably skilled personnel, particularly as we

implement our growth and expansion strategy. Generally, there is significant competition for management and

other skilled personnel in India and in the businesses in which we operate, and it may be difficult to attract and

retain the skilled personnel we need. In particular, even if we were to increase our pay structure to attract and

retain such personnel, we may be unable to compete with other companies for suitably skilled personnel to the

extent they are able to provide more competitive compensation and benefits. Furthermore, we may not be able to

redeploy and retrain our employees to keep pace with continuing changes, evolving standards and changing

consumer preferences. The loss of key personnel may have a material adverse effect on our business, prospects,

financial condition and results of operations. For further details, see “Board of Directors and Senior

Management”.

We may have limited access to funding for the development and execution of our capital expenditure, whichmay limit the expansion of our business, and financing at non-competitive rates, higher cost of borrowing andfinancing structure could adversely affect our financial performance, condition, results of operations andprospects.

Our growing business needs require us to raise funds through commercial borrowings. The acquisition,

construction and expansion of new facilities, in addition to the ongoing improvements required to maintain or

upgrade existing assets, are capital intensive. Such costs are usually funded from a mixture of operating cash

flow and third-party financing. We intend to finance up to 70% of the cost of each of the prospective projects

with third-party debt. Given our growth plans, we may incur substantial borrowings in the future. There can be

no assurance that future financings in the form of debt or equity will be available, whether on acceptable terms,

in sufficient amounts or at all.

Further, the lack of adequate funding at competitive terms or at all could delay the development and execution of

our projects which in turn may adversely affect our business, financial condition and results of its operations. Our

ability to raise funds at competitive rates depends on our credit rating, the regulatory environment in India, global

and economic conditions in India, general liquidity conditions and the financing terms offered. Changes in

economic and financial conditions could make it difficult for us to access funds at competitive rates. We may

also face certain restrictions when raising money from international markets, which may further constrain our

ability to raise funds at competitive rates.

Our indebtedness and the conditions and restrictions imposed by our financing arrangements could adverselyaffect our ability to conduct our business and operations.

Our borrowings are secured, among other things, by our immoveable property, our movable assets, book-debts,

operating cash flows and receivables, both present and future as well as a pledge over shares in our Company

held by ATL. Our indebtedness may affect our business and operations in several important ways, including the

following:

‰ a portion of our cash flows may be used towards repayment of our existing debt, which will reduce the

availability of our cash flow to fund our working capital, capital expenditure, acquisitions and other general

corporate requirements;

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‰ our ability to obtain additional financing in the future at all or at reasonable terms may be restricted or our

financing cost may increase due to sudden adverse market conditions, particularly because a significant

proportion of our existing financing arrangements are in the form of borrowings from banks;

‰ prior consent may be required from the existing lenders in order to undertake any further indebtedness or

security creation, and prior consent for alterations in our capital structure, changes in our management,

payment of dividend, revaluation or sale of our assets, undertaking of new projects, creation of

subsidiaries, change in accounting policies, undertaking any merger or amalgamation, investment in or

lending to other companies, undertaking guarantee obligations on behalf of other companies and creation

of further charge on our fixed assets. If we are held to be in breach of any financial or other covenants

contained in any of our financing arrangements, our obligations may be accelerated, and we may be

required to immediately repay our borrowings either in whole or in part;

‰ certain financing agreements contain cross default or cross acceleration provisions which could trigger

defaults under our other financing arrangements. Failure to meet these conditions or obtain the relevant

consents could have significant consequences on our business and operations; and

‰ our business, financial condition and results of operations could be materially and adversely affected if we

are unable to service our indebtedness or otherwise comply with financial and other covenants specified in

our financing agreements.

In the event that we are unable to service our existing and future debt obligations, our business, financialcondition, results of operations and cash flows may be materially adversely affected.

We may be unable to service interest payments and principal repayments or comply with other requirements of

any loans, rendering borrowings immediately repayable, in whole or in part, together with any attendant cost. We

may also be forced to sell some of our assets to meet such obligations, with the risk that borrowings may not be

refinanced or that the terms of such refinancing may be less favorable than the terms of the existing borrowing.

In addition, our borrowings will generally be secured against some or all of our assets. Any event of default

would result in the lenders enforcing their security and taking possession of the underlying assets.

We may be required to refinance any borrowings from time to time. A number of factors (including changes in

interest rates, conditions in the banking and finance market and general economic conditions, which are beyond

our control) may make it difficult for us to obtain such new finance on attractive terms, or at all. There will be an

adverse impact on our results of operations if borrowings become more expensive relative to the income received

from investments. If we are not able to obtain new financing for any reason, we may suffer a substantial loss as a

result of having to dispose of investments which cannot be refinanced.

Our ability to meet existing and future debt service obligations and to repay outstanding borrowings under our

funding arrangements will depend primarily upon the ongoing cash flow generated by our business. Certain of

our borrowings are subject to floating interest rates which may increase the interest payment obligations in the

event of an increase in interest rates. However, our revenue may not increase correspondingly. We may not

generate sufficient cash to enable us to service existing or proposed borrowings, comply with covenants or fund

other liquidity needs.

Further, we will face additional risks if we fail to meet the debt service obligations or financial covenants

required under the terms of our financing documents. In such a scenario, the relevant lenders could declare us to

be in default under the terms of our borrowings, accelerate the maturity of our obligations, exercise rights of

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substitution over the financed project or replace directors on the board. There can be no assurance that, in the

event of any such acceleration, we will have sufficient resources to repay these borrowings. Failure to meet

obligations under our debt financing arrangements could have a material adverse effect on our cash flows,

business and results of operations.

We suffer transmission and distribution (“T&D”) losses in the delivery of the electricity.

T&D losses refer to the losses incurred during the distribution of electricity through a network which is not billed

by the distributor. These losses are generally caused by technical effects such as energy losses in the form of

transformer loss, heat given off by cables, faulty metering and theft. Our T&D losses for the financial year ended

March 31, 2019 amounted to 7.85% of the total electricity delivered by us to the system. There can be no

assurance that we will be able to reduce the T&D losses or prevent them from increasing in the future. Further, in

the event the T&D losses exceed the thresholds prescribed by the MERC, our revenue and financial condition

may be adversely affected.

We may be exposed to increased risks from acquisitions, joint ventures or investments, which may affect ourbusiness prospects, results of operations, financial condition and cash flows.

In addition to growth through our internal efforts, we intend to rely upon strategic acquisitions to provide us with

access to new businesses and markets both in our existing business, as well as in new areas.

Any acquisitions that we may undertake, along with potential joint ventures or other investments, may expose us

to additional business and operating risks and uncertainties, including but not limited to the following:

‰ the direct and indirect costs in connection with such transactions;

‰ the inability to effectively integrate and manage the acquired businesses;

‰ our inability to exert control over the actions of our joint venture partners, including any non-performance,

default or bankruptcy of the joint venture partners;

‰ our inability to exert control over strategic decisions made by these companies;

‰ the time and resources expended to coordinate internal systems, controls, procedures and policies;

‰ the disruption in ongoing business and diversion of management’s time and attention from other business

concerns;

‰ the potential loss of key employees and consumers of the acquired businesses;

‰ the risk that an investment or acquisition may reduce our future earnings; and

‰ exposure to unknown liabilities.

If we are unable to successfully implement our acquisition or expansion strategy or address the risks associated

with such acquisitions or expansions, or if we encounter unforeseen expenses, difficulties, complications or

delays frequently encountered in connection with the integration of acquired entities and the expansion of

operations, our growth and ability to compete may be impaired. We may fail to achieve acquisition synergies and

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be required to focus resources on integration of operations, rather than on our business. We may also experience

difficulties in integrating the acquisition into our existing business and operations. Our failure to derive

anticipated synergies could affect our business, financial condition and results of operations. Future acquisitions

may also expose us to potential risks, including risks associated with the integration of new operations, services

and personnel, unforeseen or hidden liabilities, the diversion of resources from our existing businesses and

technologies, our inability to generate sufficient revenue to offset the costs of acquisitions, and potential loss of,

or harm to, relationships with employees, suppliers or consumers, any of which could significantly disrupt our

ability to manage our business and adversely affect our financial condition and results of operations.

There is only limited historical financial information available for our business, and all operating informationincluded in this Offering Circular which relates to the period prior to ATL’s acquisition of AEML (“OperatingInformation”) has been extracted from information the seller (Reliance Infrastructure Limited) has providedas well as public sources and has not been independently verified by us, our auditors or the Managers.

The financial information included in this Offering Circular only includes audited financial statements as of and

for the financial year ended March 31, 2019 and reviewed Unaudited Special Purpose Interim Condensed

Financial Information as of and for the six months ended September 30, 2019 and September 30, 2018 because

ATL acquired a 100% stake in Reliance Generation and Supply Limited from Reliance Infrastructure Limited

(which we renamed as Adani Electricity Mumbai Limited) on August 31, 2018 (the “Acquisition”). Accordingly,

the financial information for the period when AEML was a subsidiary of Reliance Infrastructure Limited is not

included in this Offering Circular. Further, because of the Acquisition, we have limited operational history post-

Acquisition and all Operating Information included in this Offering Circular for the period prior to the

Acquisition has been extracted from information provided by the seller and publicly available documents and

information, including annual reports, information available on corporate websites and documents filed by the

seller with its respective regulators. Such information has not been independently verified by us, our auditors or

the Managers.

The limited historical financial information and operating information post-Acquisition available with respect to

our business may make it difficult for investors to assess our financial position and operating results for the dates

and periods presented, and such limited information may not be indicative of our future financial position or

operating results. Further, period-to-period comparisons of our operating results and our results of operations for

any period should not be relied upon as an indication of our performance for any future period.

Power transmission and distribution companies are typically subject to certain adverse publicity andreputational risks, which make them vulnerable to negative consumer perception and could lead to increasedregulatory oversight or other sanctions.

Transmission and distribution companies are key to transmitting and distributing electricity that is critical to end

use consumers, and as a result, have been the subject of public criticism focused on the reliability of their

distribution services, the speed with which they are able to respond to outages and their billing practices. From

time to time, our consumers may express dissatisfaction with our services, including, among other things,

dissatisfaction with our consumer support, our billing policies, and the way our solutions operate. In

circumstances where we are not able to handle consumer complaints effectively, our brand and reputation may

suffer, we may lose our consumers’ confidence, and they may choose not to renew their contracts with us. We

have in the past, been subject to negative publicity on account of our consumers raising concerns with amounts

charged in their electricity bills. Adverse publicity of this nature could also render private utilities companies

such as our Company to be susceptible to less favorable regulatory outcomes or increased regulatory oversight.

Unfavorable regulatory outcomes can include more stringent laws and regulations governing our operations, as

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well as fines, penalties or other sanctions or requirements, such as orders to issue refunds to our consumers, any

of which could likely increase our compliance costs, and could have a negative impact on our reputation,

business, results of operations, cash flow and financial condition.

Upgrading or renovation work or physical damage to our generation, transmission or distribution systems maydisrupt our operations.

Our generation, transmission and distribution systems may need to undergo upgrading or renovation work from

time to time to retain their competitiveness and may also require unforeseen ad hoc maintenance or repairs in

respect of faults or problems that may develop or because of new planning laws or regulations, natural disasters,

sabotage, physical and cyber terrorist attacks or other events that can cause service interruptions to consumers,

network failures, breakdowns or unplanned outages. Our generation, transmission and distribution systems may

suffer some disruptions and it may not be possible to continue operations on areas affected by such upgrading or

renovation work. In addition, physical damage to our generation, transmission and distribution systems and

major equipment such as switchgears, transformers, cables, pillars, panels, capacitors, transmission towers,

reactors, turbine, generator exciter, generator transformant, boiler and cooling water pumps that result from fire,

severe weather or other causes may lead to a significant disruption to business and operations and, together with

the foregoing, may result in unforeseen costs which may have a material adverse effect on our business,

prospects, financial condition and results of operations. Any service disruption in our transmission or distribution

systems may cause loss or damage to our consumers, who may seek to recover damages from our Company,

which may harm our business and reputation.

Our operations could be disrupted by strikes, work stoppages or increased demands by employees. Stringentlabor laws may also harm our ability to have flexible human resource policies and labor union problems couldnegatively affect our processing capacity, cash flows and overall profitability.

As of September 30, 2019, we had a workforce, including both employees and independent contractors, of

12,057 workers. Our workers were on strike during the period from August 28, 2018 to September 1, 2018. There

can be no assurance that we will not experience disruptions to operations due to disputes or other problems with

our work force, which may adversely affect our business. Furthermore, a large number of our employees are

members of labor unions. Although these unions are not affiliated to national labor organizations, any actions by

these labor unions may divert management’s attention and result in an adverse impact on consumer service

thereby creating a brand risk as well as increased costs. We may be unable to negotiate acceptable collective

bargaining agreements with those who have chosen to be represented by unions, which could lead to union-

initiated work stoppages, including strikes. The occurrence of such events could materially adversely affect our

business, prospects, financial condition and results of operations.

We enter into contracts with independent contractors to complete specified assignments and these contractors are

required to source the labor necessary to complete such assignments. Although we do not engage these laborers

directly, under Indian law (including the provisions of the Contract Labor (Regulation and Abolition) Act, 1970,

as amended), we may be held responsible for wage payments to laborers engaged by contractors, should the

contractors default on wage payments or provide certain amenities, such as rest rooms and first aid facilities,

should the contractors fail to provide such amenities. Any requirement to fund such payments or provide

amenities may materially adversely affect our business, prospects, financial condition and results of operations.

India has a stringent labor legislation that protects the interests of workers, including legislation that sets forth

detailed procedures for dispute resolution and employee removal, imposes financial obligations on employers

upon employee layoffs and regulates contract labor. These laws may restrict our or our affiliates’ ability to have

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human resource policies that would allow us to react swiftly to the needs of our business, discharge employees or

downsize. We may also experience labor unrest in the future, which may disrupt our operations. If such delays or

disruptions occur or continue for a prolonged period of time, our overall profitability could be negatively

affected. We also depend on third party contract labor. It is possible under Indian law that we may be held

responsible for wage payments to these laborers if their contractors default on payment. We may be held liable

for any non-payment by contractors and any such order or direction from a court or any other regulatory

authority may harm our business, prospects, financial condition, results of our operations and cash flows.

Some of our immovable properties may have certain irregularities in title, as a result of which our operationsmay be impaired.

We possess immovable properties at various locations for the purposes of our business, held either on a freehold

or a leasehold basis. Several of our material immovable properties for our transmission and distribution business,

whether owned or leased, have certain irregularities in title, including that the deeds for transfer of property are

inadequately stamped or have not been executed or registered with the concerned authority. As a result, we may

not be able to prove tenancy or ownership rights over such property. In addition, registration of land title in India

is not centralized and has not been fully computerized. Land records are often hand-written in local languages

and may not be legible or correctly spelt and at times may be in poor condition or untraceable, making it difficult

to ascertain title. Title risks can be particularly acute where fragmented land rights are acquired from

agriculturalists and small landholders. Further, title records in India presently provide only for presumptive title

rather than a guaranteed title to the land. Indian law, for example, recognizes the ability of persons to affect a

valid mortgage on an unregistered basis by the physical delivery of original title documents to a lender. Adverse

possession under Indian law also gives rise, on 12 years’ occupation, to valid ownership rights as against all

parties, including government entities that are landowners, without the requirement of registration of ownership

rights by the adverse possessor. Title to land may be defective as a result of a failure on our part, or on the part of

a prior transferee, to obtain the consent of all relevant persons or to duly complete stamping and registration

requirements. The uncertainty of title to land may impede the processes of acquisition, independent verification

and transfer of title, and any disputes in respect of land title that we may become party to may take several years

and considerable expense to resolve if they become the subject of court proceedings.

We are involved in various legal, regulatory and other proceedings which could be costly and time-consumingand require significant attention from our management. If determined against us, such proceedings couldhave a material adverse effect on our financial condition and results of operations.

We are currently involved in a number of legal and other proceedings arising in the ordinary course of our

business. These proceedings are pending at different levels of adjudication before various courts and tribunals.

See “Legal Proceedings” for further details. We may in the future also be involved in additional proceedings,

many of which could be material to our business. For example, we may become subject to additional demands

from government or tax authorities, including, but not limited to, on account of differing interpretations of central

and state tax statutes in India, which are extensive and subject to change from time to time. Changes in

regulations or tax policies, or adoption of differing interpretations of existing provisions, and enforcement thereof

by governmental, taxation or judicial authorities in India may become the subject of legal proceedings involving

us from time to time.

We cannot assure you that these legal proceedings will be decided in our favor or that no further liability will

arise out of these proceedings. Furthermore, such legal proceedings could divert management time and attention

and consume its financial resources. An adverse decision in any of these proceedings could adversely affect our

profitability and reputation and could have a material adverse effect on our business, financial condition and

33

results of operations. Furthermore, if any new developments arise, for instance a change in law or rulings against

us by courts or tribunals, we may face losses and may have to make provisions in our financial statements, which

could increase our expenses and liabilities.

Additionally, claims may be brought against or by us from time to time regarding, for example, defective or

incomplete work, shortfall or defects in services, personal injuries or deaths, damage to or destruction of

property, breach of warranty, late completion of work, delayed payments, breach of intellectual property rights or

regulatory non-compliance, and may subject us to litigation, arbitration and other legal proceedings, which may

be expensive, lengthy, disruptive to normal business operations and require significant attention from

management. For further details, see “Legal Proceedings”.

Charges and write-downs associated with such legal proceedings could have a material adverse effect on our

business, prospects, financial condition, results of operations and cash flows. Moreover, legal proceedings,

particularly those resulting in judgments or findings against us, may harm our reputation and competitiveness in

the market.

Certain Adani Group Companies are involved in various legal, regulatory and other proceedings which couldhave a material adverse effect on our business and reputation.

Certain Adani Group Companies from time to time are involved in litigation, claims and other proceedings

relating to the conduct of their businesses, including environmental claims, proceedings relating to abuse of

market position, tax disputes and proceedings involving securities dealings by other Adani Group Companies

and/or their directors. Any such claims could result in litigation, including regulatory proceedings by

Government and other agencies including the MERC, the MOEF, the Maharashtra Pollution Control Board, the

Ministry of Home Affairs, the Central Bureau of Investigation and SEBI against the relevant Adani Group

Company, which could harm our reputation and materially adversely affect our business, prospects, financial

condition and results of operations.

Notwithstanding certain media allegations regarding relationships of the relevant Adani Group Company with

Electrogen Infra FZE, a subcontractor for the equipment and machinery that is the subject of the DRI notice, we

believe that the relevant Adani Group Company’s procurement of the equipment and machinery, that is the

subject of the DRI notice, was conducted on an arm’s length basis in accordance with all applicable laws. In

October 2017, the Additional Director General (Adjudication), the adjudicating authority of the DRI (the

“Adjudicating Authority”), set aside all the allegations and dropped the show cause notice. It has been held by

the Adjudicating Authority that all the imports between the Adani group entities in India and Electrogen Infra

FZE were genuine and being undertaken at arm’s length and concluded that the value declared is correct and the

value is not required to be re-determined.

In February 2018, the Indian Customs Department filed an appeal against the DRI order before the Appellate

Tribunal, Mumbai. However, no stay has been granted against the DRI order. The matter is currently pending and

no hearing date has been fixed as of the date of this Offering Circular. Any order or judgment in this matter could

result in significant monetary fines and confiscation of equipment and machinery and other adverse

consequences, including penalties under Indian law, including without limitation the FEMA. The management’s

time may be diverted in relation to such proceedings, and Adani Group Companies may also be required to

utilize financial resources towards these matters. Any potential violation of any Indian laws and regulations, if

adversely determined, could have a material adverse effect on the Adani Group’s business, prospects, financial

condition, results of operations and reputation.

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We may be subject to claims with respect to our intellectual property and our efforts to protect our intellectualproperty may not be sufficient.

We have made various applications for the grant of the intellectual property used by us, which are currently

pending. We cannot assure you that such intellectual property will be registered in our name.

Additionally, we have entered into deeds of assignment with Reliance Infrastructure Limited (“R-Infra”), in

relation to the assignment of patents that have been awarded in the name of R-Infra, for patents such as, theft

proof feeder pillar, power distribution unit with theft detecting mechanism, testing kit for digital control system

cards.

Our inability to obtain registration for and use such intellectual property will adversely affect our business,

prospects, financial condition and results of operations.

The power transmission and distribution industry in India is highly regulated, which limits our flexibility andmay adversely affect our financial performance.

The energy industry in India is highly regulated. Tariffs determined by regulatory order generate a large majority

of our revenue. These tariffs are subject to periodic reviews by the CERC and the MERC, as applicable. We have

no ability or flexibility to charge more for regulated services than is provided for under the relevant tariff. The

current CERC (Terms and Conditions of Tariff) Regulations, 2019 (the “CERC Tariff Regulations”) are

effective for a period of five years, from April 1, 2019 to March 31, 2024. The current MERC (Multi Year Tariff)

Regulations, 2015 (the “MERC Tariff Regulations”) are effective for a period of four years, from April 1, 2016

to March 31, 2020. The MERC has published the MERC (Multi Year Tariff), Regulations, 2019, which will be

applicable for the control period between April 1, 2020 to March 31, 2025. See “Regulations and Policies in

India Relating to the Power Sector” for further details. Reimbursement amounts for operations and maintenance

expenses are highly regulated and do not necessarily reflect actual or projected operating costs, and if the

regulated operations and maintenance charges set by the CERC or the MERC, as applicable, are lower than our

costs, our business, financial condition and results of operation could be adversely affected.

Environmental legislation directed to prevent climate change and restrictions on greenhouse gas emissionsmay affect the results of operations generated by thermal power plants.

Countries have implemented or are considering to implement regulatory frameworks in order to reduce

greenhouse gas emissions. Such regulatory frameworks may include the implementation of cap and trade

regimens, taxes on carbon, higher efficiency standards and incentives or mandates for renewable energy. The

growing concern about climate change and greenhouse gasses, such as those included in the Paris Agreement

COP-21 of the United Nations, may lead to the imposition of additional environmental regulations. Compliance

with such environmental regulations may increase the costs of operation and maintenance of our power plants

and require the implementation of new emission controls, make provisions or pay taxes relating to greenhouse

gas emissions, or force us to administer and manage a program of greenhouse gas emissions, which may

negatively affect our business, financial condition and results of operations.

Our operations are subject to environmental, health and safety laws and regulations and right of waypermissions from statutory and land authorities, which may involve substantial compliance measures andcosts.

Our business and operations are subject to various central, state and local environmental laws, rules, and

regulations and circulars relating to the control of pollution in the various locations in India where we operate. In

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particular, the discharge or emission of chemicals, dust or other pollutants into the air, soil or water that exceed

permitted levels and cause damage to others may give rise to liability to the Government and third parties, and

may result in our incurring costs to remedy such discharge or emissions. While we believe that our facilities are

in compliance in all material respects with applicable environmental laws and regulations and we have obtained

the requisite permissions and clearances in this regard, we may incur additional costs and liabilities in relation to

compliance with these laws and regulations or any remedial measures in relation thereto. There can be no

assurance that compliance with such environmental laws and regulations will not result in a curtailment of

production or a material increase in the costs of production or otherwise have a material adverse effect on our

financial condition, cash flow and results of operations. Environmental laws and regulations in India have been

increasing in stringency and it is possible that they will become significantly more stringent in the future. For

example, ADTPS is operated in an ecologically sensitive zone. Stricter laws and regulations, or stricter

interpretation of the existing laws and regulations, may impose new liabilities on us or result in the need for

additional investment in pollution control equipment, either of which could adversely affect our business,

financial condition and prospects. For further details, see “Regulations and Policies in India”.

If we fail to satisfy compliance requirements, we may also be subject to administrative, civil and criminal

proceedings by Indian regulatory authorities, as well as civil proceedings by environmental or civil society

groups and other individuals (including employee unions, if our employees were to unionize), which may result

in substantial claims, penalties and damages against us as well as orders that may limit, disrupt or cause closure

of our operations, any of which may adversely affect our business, results of operations and financial condition.

We may also be involved, or be held responsible, in legal proceedings relating to environmental or health and

safety matters in the future, the costs of which may be significant, or which may cause damage to our reputation

or trigger a default under the terms of our existing or future borrowings or other contractual commitments. For

further details, see “Legal Proceedings”.

Our corporate reputation could be adversely affected if we fail to meet high safety, quality, social,environmental and ethical standards.

We believe that our business has been successful in building a strong corporate reputation in India and

internationally. However, if any part of our operations fail to meet the high safety, quality, social, environmental

and ethical standards of our industry, our corporate reputation could be adversely affected. This could lead to us

being rejected as a preferred service provider by our consumers, devaluation of the ‘Adani’ brand and diversion

of management time into rebuilding and restoring the lost reputation. These events could have a material adverse

effect on our business, financial condition, results of operations and prospects.

Any failure or delay by the MERC in undertaking tariff revisions could have an adverse effect on our businessand financial condition.

The tariffs for our distribution operations in the Mumbai license area are approved by the MERC. These tariffs

typically allow for a fixed return on equity and an incentive for surpassing set targets. At periodic intervals, the

MERC typically reviews the costs to be recovered as per regulations, and the actual costs recovered along with

any under or excess recoveries are appropriately adjusted towards the tariffs set for the next year(s). However,

any delay by the MERC in undertaking these tariff revisions or not allowing cost reflective tariffs could result in

an impact on cashflows, a build-up of regulatory assets and have an adverse impact on business and financial

condition.

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Past results will not necessarily be indicative of future results due to the changing regulatory environment inthe Indian electricity industry.

Our current profitability depends on any impact the standards set by the MERC have on our operational

efficiency. There is no assurance that more stringent standards will not be set by the MERC in the future or that

the current efficiency will be maintained in our future operations. Therefore, our future results will be more

significantly influenced by our operating performance than our past results. In addition, to the extent that we

enter into non-tariff regulated businesses, the revenues and profits from these businesses may not be predictable

in the same way as the revenues and profits generated from our tariff-regulated business. Moreover, we are

subject to the general risk of the regulatory framework being changed from time to time, and in a manner that has

an adverse impact on our business and financial condition.

A delay in recovery or non-recovery of our receivables due from Government and other public bodies mayhave an adverse impact on our business and revenues.

Our receivables include receivables due from municipal corporations, Government and quasi-Government

bodies. Sometimes the settlement of dues by these entities is delayed due to either budget constraints or long bill

processing schedules. Given the quasi-Government like nature of these entities, we do not terminate the supply of

electricity to these entities. As of September 30, 2019, outstanding amounts payable by such municipal

corporations and other public bodies amounted to approximately Rs. 305 million.

We have in the past, entered into several settlement packages with the help of the State Governments. As part of

the settlement packages, we may have to consider the waiver of delayed payment charges and interest on any

amount of arrears accounted for in our books due to delayed payments, which may have an adverse effect on our

business, revenue and financial condition.

The reduction in Mumbai’s ‘high-end consumer’ base may have an adverse impact on our business andrevenues.

In the recent past, many businesses, in particular industrial consumers, have decided to shift their operations out

of Mumbai to nearby areas or other states due to the high cost of operations in Mumbai. The industrial and

commercial sectors represent Mumbai’s ‘high-end consumer’ base and account for a significant portion of our

power consumers. Therefore, although demand for power currently surpasses supply, and is also predicted to do

so for the foreseeable future, and while we sell our power to other distribution licensees who then on-sell to

industrial end users, this exodus of the ‘high-end consumers’ from Mumbai could in the future have an adverse

impact on our business, results of operations and financial condition.

Some of our consumers may have weak credit history.

We are exposed to the risks associated with entering into arrangements with other public and private buyers of

our power with weak credit histories, including industry consumers. Any change in the financial position of our

consumers that adversely affects their ability to pay us may adversely affect our own financial position and

results of operations.

Our electricity distribution revenues are exposed to variations in demand for electricity affecting consumerusage.

The revenues from our distribution business are derived from the transported volume of electricity metered at the

connections to our distribution networks. The volume of electricity used by our consumers is subject to seasonal

37

fluctuations and to a range of variables, including economic conditions, population growth, government policy,

weather, alternative energy sources, technology, energy saving behavior and the availability of adequate supplies

of electricity. Economic recession and consumer relocations out of a distribution area would also have a direct

adverse effect on our distribution business. Our consumers may also react negatively if we increase the price of

our electricity in the future, which may result in reduced demand for our electricity and loss of consumers to

competitors who may charge lower prices than us.

We do not own the “Adani” trademark, name or logo and our ability to use the trademark, name or logo maybe impaired.

We do not own the intellectual property in the name “Adani”, the logo and the associated trademarks and trade

names used by us. The intellectual property in “Adani” and associated trademarks and trade names is owned by

and registered in the favor of S.B. Adani Family Trust.

We have not entered into any legally binding arrangement for the use of the name “Adani” and the Adani logo.

Accordingly, we have limited ability to prevent any infringement of such intellectual property and a passing-off

action may not provide sufficient protection or may not provide us with a cause of action to file a suit before the

relevant authorities. We may not be able to enter into arrangements with S.B. Adani Family Trust to use the trade

name and logo on commercially viable terms or at all. We would not be able to use the trade name and logo if we

fail to enter into a legally binding agreement with S.B. Adani Family Trust for the use of the name “Adani” and

the Adani logo. If we are no longer able to use these trademarks or names or the Adani logo in connection with

our business, we may not be able to capitalize on our brand recognition, which may have an adverse effect on our

business and operations. Moreover, the use of our brand name or logo by third parties could adversely affect our

reputation, which could in turn adversely affect our financial performance. Notwithstanding the precautions we

take to protect our intellectual property rights, third parties may copy or otherwise infringe on our rights, which

may have a material adverse effect on our business, prospects, financial condition and results of operations. That

could result in costly litigation, divert management’s attention and resources, impair our ability to use the name

“Adani” and the Adani logo, and potentially subject us to significant liabilities or require us to enter into

expensive royalty or licensing agreements. Furthermore, necessary licenses may not be available to us on

satisfactory terms or at all. Any of the foregoing could materially adversely affect our business, prospects,

financial condition and results of operations. While we take care to ensure that we do not infringe the intellectual

property rights of others, we cannot determine with certainty whether we are infringing any existing third-party

intellectual property rights.

There may be certain risks associated with the QIA Transaction.

The QIA Transaction is subject to receipt of certain regulatory approvals and customary conditions precedent.

While our Company received the in-principal approval from the MERC by way of its order dated January 29,

2020 for the QIA Transaction and the acknowledgment from the Competition Commission of India, by way of a

letter dated December 19, 2019, of the notice filed by QH under the green channel route in connection with the

QIA Transaction, certain other conditions precedent which are required to complete the QIA Transaction are yet

to be fulfilled. The failure to fulfil these conditions precedent in a timely manner, or at all, may cause the QIA

Transaction not to be consummated. While failure to complete the QIA Transaction may mean that our Company

will not be able to benefit from QH’s experience in the utility sector globally, we believe that the failure to

complete the transaction will not otherwise impact our business and operations.

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Our operations may be adversely affected if there is a failure in our critical information technology (“IT”)systems or control systems.

We have a number of critical IT applications and control systems, both in our operational areas as well as in our

support functions. These include generation control, system control, distribution of electricity including fault

location and remote operations, payroll applications, billing, procurement to pay and accounting functions.

Although there are fall-back mechanisms in place, a failure in these systems may adversely affect our operations

and business.

We have material related party transactions and will continue to do so in the future.

We have entered into transactions with other entities owned by the Adani Group, including ATL, in the ordinary

course of our business. While we believe that all such transactions (which have included supply of services and

inter entity loans) have been conducted on an arm’s length basis, we might have achieved more favorable terms

had such transactions not been entered into with related parties. Furthermore, we may enter into additional

related party transactions, in the ordinary course of our business in the future. Such transactions, individually or

in the aggregate, could have a material adverse effect on our business, prospects, financial condition, results of

operations and cash flows. See “Management’s Discussion and Analysis of Financial Condition and Results of

Operations — Related Party Transactions” for further details.

Lack of transparency, threat of fraud, public sector corruption and other forms of criminal activity involvinggovernment officials increase the risk for potential liability under anti-bribery laws.

We are subject to anti-corruption and anti-bribery laws that prohibit improper payments or offers of improper

payments to governments and their officials and political parties for the purpose of obtaining or retaining

business or securing an improper advantage and require the maintenance of internal controls to prevent such

payments. Although we maintain an anti-bribery compliance program and train our employees in respect of such

matters, our employees might take actions that could expose us to liability under anti-bribery laws. In certain

circumstances, we may be held liable for actions taken by our partners and agents, even though they are not

always subject to our control. Any violation of anti-corruption laws could result in penalties, both financial and

non-financial, that could have a material adverse effect on our business and reputation.

Third-party statistical and financial data in this Offering Circular may be incomplete or unreliable.

Information regarding market position, growth rates and other industry data pertaining to our businesses

contained in this Offering Circular consists of estimates based on data reports compiled by professional

organizations and analysts, data from other external sources and our knowledge of the markets in which we

compete. We have not independently verified data obtained from industry publications and other sources referred

to in this Offering Circular and, therefore, while we believe them to be true, they may not be complete or reliable.

Such data may also be produced on different bases from those used in other industry publications. Therefore,

discussions of matters relating to India, its economy and the industries in which we currently operate in this

Offering Circular are subject to the caveat that the statistical and other data upon which such discussions are

based may be incomplete or unreliable. In many cases, there is no readily available external information (whether

from trade or industry associations, government bodies or other organizations) to validate market-related

analyzes and estimates, so we rely on internally developed estimates. Similarly, while we believe our internal

estimates to be reasonable, such estimates have not been verified by any independent sources and we cannot

assure potential investors as to their accuracy.

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Equity shares of our Company and PDSL are not listed and therefore not subject to the disclosure andcorporate governance requirements that listed companies are subject to.

Being unlisted public limited companies, the shares of our Company and PDSL are not traded on any stock

exchange. Noteholders will not have the benefit of the disclosure and corporate governance requirements that are

imposed on companies that have publicly listed equity shares in India.

Failure to drawdown under the QH Loan may result in our failure to fully repay our existing indebtedness,could adversely impact our financial condition and could affect our ability to comply with the terms of theNotes.

We intend to utilize a portion of the Notes proceeds and drawdown the full amount available under the QH Loan

on or after the Closing Date to repay all of our existing indebtedness, as soon as the relevant approvals for the

investment by the QH into our Company are obtained and the equity investments are completed, as well as once

we are permitted to make the relevant prepayments under all of our existing indebtedness. There can be no

assurance that relevant approvals for the investment by the QH will be obtained and that therefore the QH Loan

will be drawn.

Failure to complete the investment by the QH and draw under the QH Loan may result in our failure to fully

repay our existing indebtedness and accordingly, in the interim period falling between the Closing Date and the

date of the relevant prepayment, a lender could assert that we have failed to comply with the terms under the

applicable financing agreement.

Any such failure by any Issuer to comply with the requirements under these financing agreements that is not

waived by the relevant lenders or prepaid or otherwise cured within the timelines stipulated thereunder, may

constitute a breach of the terms of the relevant financing agreements and may lead to, inter alia, a termination

and/or acceleration of such financing agreements and enforcement of their security interests. Further, if one or

more of the relevant lenders declares an event of default under the relevant financing agreements, such lender or

lenders could accelerate repayment of the relevant loans or trigger cross defaults under other financing

agreements. If our obligations under any of our financing documents are accelerated or the refinancing is not

completed, our business, prospects, financial condition, results of operations and cash flows could be materially

and adversely affected.

In addition, the terms of the cross-acceleration of the Notes set out in the Common Terms Deed include a

carve-out for the acceleration of any existing debt document at any time prior to the date which falls 45 calendar

days after the Closing Date. This 45-day period takes into account the expected prepayment period for the

Existing External Indebtedness that we propose to repay or prepay out of the proceeds of the Notes and the QH

Loan. As such, the Noteholders will not be able to accelerate the Notes for any cross-acceleration of Existing

External Indebtedness for this period of 45 days.

Risks Related to India

We are exposed to risks associated with India and the performance of the Indian economy.

We derive and expect to continue to derive in the foreseeable future, most of our revenues and operating profits

from India. Changes in macroeconomic conditions generally impact the power industry and could negatively

impact our power transmission and distribution business. Accordingly, our business is highly dependent on the

state of development of the Indian economy and the macroeconomic environment prevailing in India.

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The Indian economy has been affected by the recent global economic uncertainties, volatility in interest rates,

currency exchange rates, commodity and electricity prices, adverse conditions affecting agriculture and various

other macroeconomic factors. Slowdown in the growth of the Indian economy could adversely affect our

business and our lenders and contractual counterparties, especially if such a slowdown were to be prolonged. The

growth rate of India’s GDP was 8.2%, 7.2% and 6.8% during fiscal years 2017, 2018 and 2019, respectively. The

Indian economy is undergoing many changes and it is difficult to predict the impact of certain fundamental

economic changes upon the Indian economy and, consequently, our business. Notwithstanding the RBI’s policy

initiatives, the course of market interest rates continues to be uncertain due to the high inflation, the increase in

the fiscal deficit and the Government’s borrowing program. Any continued or future inflation because of

increases in prices of commodities such as crude oil or otherwise, may result in a tightening of monetary policy

and could materially and adversely affect our business, financial condition and results of operations. Any

increase in interest rates or reduction in liquidity could adversely impact our business.

Conditions outside India, such as a slowdown or recession in the economic growth of other major countries and

regions or volatility in international securities markets, especially in the United States, Europe and China, have

an impact on the growth of the Indian economy, and Government policy may change in response to such

conditions. The global financial markets have been and continue to be extremely volatile as the international

financial markets were materially and adversely affected by a lack of liquidity, decreased confidence in the

financial sector, disruptions in the credit markets, reduced business activity, rising unemployment and eroding

consumer confidence. The United States and China are engaged in a trade tariffs war which can also negatively

impact the global economy. Further, the United States has been adopting certain protectionist measures which

may impact the trade between the U.S. and India. A slowdown in economic growth in markets such as China

could also adversely affect economic growth in India.

Negative economic developments, such as rising fiscal or trade deficits, or a default on national debt, in other

emerging market countries, may also affect investor confidence and cause increased volatility in Indian securities

markets and indirectly affect the Indian economy in general. While recent Indian governments have been focused

on encouraging private participation in the industrial sector, any adverse change in policy could result in a further

slowdown of the Indian economy. In addition, these policies will need continued support from stable regulatory

regimes that stimulate and encourage the investment of private capital into industrial development. Additionally,

an increase in trade deficit, a downgrading in India’s sovereign debt rating or a decline in India’s foreign

exchange reserves could negatively impact interest rates and liquidity, which could adversely impact the Indian

economy and our business. Any downturn in the macroeconomic environment in India could materially adversely

affect our business, prospects, financial condition and results of operations.

Changes in government policies that favor the development of power generation, including large-scale power

projects of over 1,000 MW that generally require increased transmission facilities for evacuating the electricity

they generate, may have an adverse impact on demand for transmission facilities. Since the use of our

transmission and distribution assets and our expansion plans depend or will depend on the operation of power

generation projects, macroeconomic factors that may negatively impact demand for electricity or more generally

the development of power generation projects in India or the timely commencement of their operations (such as

fuel price fluctuations, volatility and other market conditions that may adversely impact power generation

projects) could in turn have a material adverse effect on our growth prospects, business and cash flows. In

addition, access to financing may be more expensive or not available on commercially acceptable terms during

economic downturns. Any of these factors and other factors beyond our control could have a material adverse

effect on our business, prospects, financial condition and results of operations.

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A decline in India’s foreign exchange reserves may adversely affect liquidity and interest rates in the Indianeconomy.

According to the weekly statistical supplement of the RBI Bulletin, India’s foreign exchange reserves totaled

U.S.$453.42 billion as of December 6, 2019. A sharp decline in these reserves could result in reduced liquidity

and higher interest rates in the Indian economy. Reduced liquidity or an increase in interest rates in the economy

following a decline in foreign exchange reserves could have a material adverse effect on our financial

performance and ability to obtain financing on favorable terms or at all.

Political instability or significant changes in the economic liberalization and deregulation policies of theGovernment or in the states where we operate could disrupt our business.

The Government exercises significant influence over many aspects of the Indian economy. We are incorporated

in India and we derive substantially all of our revenue from India. In addition, substantially all of our assets are

located in India. Consequently, our business may be adversely affected by changes in exchange rates and

controls, interest rates, government policies, taxation, social and ethnic instability and other political and

economic developments in or affecting India and the state of Maharashtra in India where we operate.

India has a mixed economy with a large public sector and an extensively regulated private sector. The role of the

Government and state governments in the Indian economy and their effect on producers, consumers, service

providers and regulators have remained significant over the years. Since 1991, India has been following a course

of economic liberalization and financial sector reforms, including significant relaxations of restrictions on the

private sector. Nonetheless, the Government continues to have a dominant influence over many aspects of the

economy, and its economic policies, including its fiscal and economy policy, direct and indirect taxes and its

export-import policy have had and continue to have a significant effect on private-sector entities, including us.

The Government has in the past, among other things, imposed controls on the prices of a broad range of goods

and services, restricted the ability of businesses to expand existing capacity and reduce the number of their

employees, determined the allocation to businesses of raw materials and foreign exchange and reversed their

policies of economic liberalization. We may not be able to react to such changes promptly or in a cost-effective

manner.

Our ability to raise foreign capital is constrained by Indian law.

We are subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions

limit our financing sources and hence could constrain our ability to obtain financings on competitive terms and

refinance existing indebtedness. In addition, we cannot assure you that the required approvals will be granted to

us without onerous conditions, or at all. Limitations on raising foreign debt may have an adverse impact on our

business, prospects, financial condition, results of operations and cash flows.

Changing laws, rules and regulations and legal uncertainties may adversely affect our business and financialperformance.

Our business and operations are governed by various laws and regulations. Our business and financial

performance could be materially adversely affected by any change in laws or interpretations of existing laws, or

the promulgation of new laws, rules and regulations applicable to the business. The Government or state

governments could implement new regulations and policies, which could require us to obtain approvals and

licenses from the government and other regulatory bodies or impose onerous requirements and conditions on our

operations. Any such changes and the related uncertainties with respect to the implementation of the new

regulations may have a material adverse effect on our business, prospects, financial condition and results of

operations.

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The Insolvency and Bankruptcy Code in India may adversely affect our ability to pay back creditors.

The Insolvency and Bankruptcy Code, 2016 (the “Bankruptcy Code”) provides for reorganization and

insolvency resolution of corporate persons. The Bankruptcy Code offers a uniform, comprehensive insolvency

legislation encompassing all companies, partnerships, individuals and financial service providers (other than

banks). It allows creditors to assess the viability of a debtor as a business decision and agree upon a plan for its

revival or a speedy liquidation. The Bankruptcy Code creates an institutional framework, consisting of a

regulator, insolvency professionals, information utilities and adjudicatory mechanisms that facilitate a formal and

timebound insolvency resolution and liquidation process. The Bankruptcy Code enables a creditor to file a

corporate insolvency and resolution petition (“CIRP”) against the debtor, including on default in payment of

debt by the debtor. Further, in the event the CIRP is admitted by the National Company Law Tribunal against the

debtor, the moratorium provisions under the Bankruptcy Code prohibits, among other things, the creation of

encumbrances, disposing of assets of the debtor, any action to enforce the security interest of the debtor and the

institution or continuation of legal proceedings against the debtor. If the Bankruptcy Code provisions are invoked

against us, it may adversely affect our ability to pay back creditors and enforcement of creditor rights will be

subject to the Bankruptcy Code.

Investors may not be able to enforce a judgment of a foreign court against us, certain of our directors, or ourkey management, except by way of a suit in India on such judgment.

All our assets are located in India. In addition, substantially all of our directors and key management personnel

reside in India. As a result, it may not be possible for investors to effect service of process upon such parties

outside India, or to enforce judgments obtained against such parties outside India. In India, recognition and

enforcement of foreign judgments are provided for under Section 13 and Section 44A of the Civil Code on a

statutory basis. Section 13 of the Civil Code provides that a foreign judgment shall be conclusive regarding any

matter directly adjudicated upon, except: (i) where the judgment has not been pronounced by a court of

competent jurisdiction; (ii) where the judgment has not been given on the merits of the case; (iii) where it appears

on the face of the proceedings that the judgment is founded on an incorrect view of international law or a refusal

to recognize the law of India in cases to which such law is applicable; (iv) where the proceedings in which the

judgment was obtained were opposed to natural justice; (v) where the judgment has been obtained by fraud; and

(vi) where the judgment sustains a claim founded on a breach of any law then in force in India.

Under the Civil Code, a court in India shall, upon the production of any document purporting to be a certified

copy of a foreign judgment, presume that the judgment was pronounced by a court of competent jurisdiction

unless the contrary appears on record.

India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments.

Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a superior court,

within the meaning of such section, in any country or territory outside India, which the government has by

notification declared to be a reciprocating territory, it may be enforced in India by proceedings in execution as if

the judgment had been rendered by the relevant court in India. However, Section 44A of the Civil Code is

applicable only to monetary decrees not being in the nature of any amounts payable in respect of taxes, other

charges of a like nature or in respect of a fine or other penalty and does not apply to arbitration awards. Further,

the execution of the foreign decree under Section 44A of the Civil Code is also subject to the exceptions under

Section 13 of the Civil Code.

The United Kingdom, Singapore and Hong Kong (among others) have been declared by the government to be

reciprocating territories for the purposes of Section 44A. However, the United States has not been declared by the

government to be a reciprocating territory for the purposes of Section 44A of the Civil Code. Accordingly, a

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judgment of a court in a country which is not a reciprocating territory may be enforced in India only by a fresh

proceeding suit instituted in a court of India and not by proceedings in execution. Such a suit has to be filed in

India within three years from the date of the judgment in the same manner as any other suit filed in India to

enforce a civil liability in India. It is unlikely that a court in India would award damages on the same basis as a

foreign court would, if an action were brought in India. Further, it is unlikely that an Indian court would enforce

foreign judgments if that court were of the view that the amount of damages awarded was excessive or

inconsistent with Indian public policy. A party seeking to enforce a foreign judgment in India is required to

obtain approval from the RBI to repatriate outside India any amount recovered pursuant to the execution of such

judgment and such amount may be subject to income tax in accordance with applicable laws. In addition, any

judgment awarding damages in a foreign currency would be converted into Rupees on the date of the judgment

and not the date of payment. We cannot predict whether a suit instituted in an Indian court will be disposed of in

a timely manner or be subject to considerable delay.

Regional hostilities, terrorist acts and other acts of violence or social unrest involving India or otherneighboring countries could significantly harm our operations directly or may result in a more general loss ofconsumer confidence and reduced investment in these countries that causes significant harm to our business,prospects, financial condition, results of operations and cash flows.

India has, from time to time, experienced social and civil unrest within the country and hostilities with

neighboring countries. Terrorist attacks and other acts of violence or war involving India or other neighboring

countries may significantly harm the Indian markets and the worldwide financial markets. India has witnessed

localized terrorist attacks relatively recently, including the terrorist attacks in Mumbai in 2008 and 2011, in

New Delhi in 2011, in Pathankot in 2016 and in Pulwama in 2019. Such incidents could also create an increased

perception that investment in Indian companies involves a higher degree of risk and could have an adverse

impact on our business. Terrorist attacks, explosions or other similar occurrences may result in personal injury,

loss of life, environmental danger or severe damage to or destruction of our projects or suspension of operations,

in each case, adversely affecting our ability to maintain and operate the projects and decreasing electricity

production levels and revenues. There has also been a history of military confrontations between India and

Pakistan in the Kashmir region and along the India-Pakistan border. The change in the political status of the state

of Jammu and Kashmir by converting it into a union territory with an elected legislature with limited powers and

the revocation of the state’s special status under the constitution of India, pursuant to the passing of the Jammu

and Kashmir Reorganization Act, 2019 in August 2019, and the resultant law and order risks in Jammu and

Kashmir, as well as threats of a confrontation by senior figures in the civil and military establishment in Pakistan,

have aggravated the instability of the geopolitical situation in the region. The potential for hostilities between the

two countries is high due to recent terrorist activities in India and the aggravated geopolitical situation. Such

incidents could also create an increased perception that investment in Indian companies involves a higher degree

of risk and could adversely impact our business, financial condition, results of operations and prospects.

If any of the foregoing events occur, to the extent not fully covered by insurance (and not all such risks are

insurable), it could materially adversely affect our ability to service the Notes. The occurrence of such events

may also result in a loss of business confidence, which could potentially lead to economic recession and

generally cause significant harm to our business, prospects, financial condition, results of operations and cash

flows. In addition, any deterioration in international relations may result in investor concern regarding regional

stability. South Asia has also experienced instances of civil unrest and hostilities among neighboring countries

from time to time. There have also been incidents in and near India such as terrorist attacks in Mumbai, Delhi

and on the Indian Parliament, troop mobilizations along the India and Pakistan border and an aggravated

geopolitical situation in the region. Such military activity or terrorist attacks in the future could significantly

harm the Indian economy by disrupting communications and making travel more difficult. Resulting political

44

tensions could create a greater perception that investments in Indian companies involve a high degree of risk.

Furthermore, if India were to become engaged in armed hostilities, particularly hostilities that were protracted or

involved the threat or use of nuclear weapons, we might not be able to continue our operations.

Natural disasters could have a negative impact on the Indian economy and our business.

Natural disasters such as floods, earthquakes or famines have in the past had a negative impact on the Indian

economy. Potential effects may include damage to infrastructure and the loss of business continuity and business

information. If our facilities are affected by any of these events, our operations may be significantly interrupted,

which could materially adversely affect our business, prospects, financial condition and results of operations.

Any downgrading of India’s sovereign debt rating by an international rating agency could have a negativeimpact on our business and results of operations.

India’s sovereign rating is Baa2 with a “negative” outlook (Moody’s), BBB- with a “stable” outlook (S&P) and

BBB- with a “stable” outlook (Fitch). Any adverse revisions to India’s credit ratings by international rating

agencies may adversely affect our credit ratings and the ratings of the Notes as well as terms on which we are

able to finance future capital expenditure or refinance any existing indebtedness. This could have an adverse

effect on our capital expenditure plans, business and financial performance, and the trading price of the Notes.

Any volatility in the exchange rate may lead to a decline in India’s foreign exchange reserves and may affectliquidity and interest rates in the Indian economy and could also adversely affect us.

Capital inflows into India have remained extremely volatile responding to concerns about the domestic

macroeconomic landscape and changes in the global risk environment. While the current account deficit

(“CAD”) had shrunk sharply in the years ended March 31, 2015, 2016 and 2017, in the year ended March 31,

2018, the CAD rose sharply to U.S.$48.7 billion, compared to U.S.$15.2 billion in Fiscal 2017. India’s CAD

narrowed to U.S.$14.3 billion in the first quarter of the financial year ended March 31, 2020 from

U.S.$15.8 billion in the same period a year earlier. This increase in the CAD was primarily on account of higher

trade deficit brought about by a larger increase in merchandise imports relative to exports. The value of the

Indian Rupee is under pressure given the increased likelihood of a gradual reversal in U.S. monetary policy that

may result in a rotation of global fund flows from emerging markets to the U.S. markets over the medium term.

Although the Indian Rupee is less vulnerable given the visible moderation in inflation rates, there remains a

possibility of needing to intervene in the foreign exchange market to control volatility of the exchange rate. The

need to intervene at that point in time may result in a decline in India’s foreign exchange reserves and

subsequently reduce the amount of liquidity in the domestic financial system. This in turn could impact domestic

interest rates and may materially and adversely affect our business, financial condition and results of operations.

If inflation rises in India, we may not be able to increase the prices of our services in order to pass costs on toour consumers and our profits may decline.

Inflation rates in India have been volatile in recent years, and such volatility may continue. The annual wholesale

rate of inflation was at 0.58% (provisional) for the month of November 2019, as compared to 4.47% during the

corresponding month of 2018. Increasing inflation in India could cause a rise in the price of transportation,

wages, raw materials and other expenses, and we may be unable to reduce our costs or pass the increased costs

on to our consumers by increasing tariff rates, and our business, prospects, financial condition and results of

operations may therefore be adversely affected.

45

Companies operating in India are subject to a variety of taxes and surcharges.

Tax and other levies imposed by the central and state governments in India that affect our tax liability

include income tax and indirect taxes on goods and services such as goods and services tax (“GST”), surcharge

and cess currently being collected by the central and state governments, which are introduced on a temporary or

permanent basis from time to time. The statutory corporate income tax in India includes a surcharge on the tax

and an education cess on the tax and the surcharge resulting in the highest effective tax rate of 34.944%.

Recently, the government pursuant to the Taxation Laws (Amendment) Ordinance, 2019 amended the Income

Tax Act, 1961 (“Income Tax Act”) to reduce the corporate income tax rate in certain cases. The central or state

government may vary the corporate income tax in the future. Any such future increases or amendments may

affect the overall tax efficiency of companies operating in India and may result in significant additional taxes

becoming payable. Additional tax exposure could materially and adversely affect our business, financial

condition and results of operations.

GST has been implemented with effect from July 1, 2017 and has replaced the indirect taxes on goods

and services, such as central excise duty, service tax, central sales tax, state value added tax, surcharge and

excise, collected by the central and state governments. GST has increased administrative compliance for

companies, which is a consequence of increased registration and form filing requirements. As the taxation system

is relatively new and could be subject to further amendments in the short term for the purposes of

streamlining compliance, the consequential effects on us cannot be determined as of now and there can be no

assurance that such effects would not adversely affect our business, future financial performance and the trading

price of the Notes.

The taxation system in India could adversely affect our business, financial condition, cash flows and results ofoperations.

The provisions relating to the GAAR (General Anti Avoidance Rules) were introduced in the Finance Act 2012

and have been applicable since April 1, 2018. The GAAR provisions intend to catch arrangements declared as

“impermissible avoidance arrangements”, which is any arrangement, the main purpose or one of the main

purposes of which is to obtain a tax benefit and which satisfy at least one of the following tests (a) creates rights,

or obligations, which are not normally created between persons dealing at arm’s length; (b) results, directly or

indirectly, in misuse, or abuse, of the provisions of the Income Tax Act; (c) lacks commercial substance or is

deemed to lack commercial substance, in whole or in part; or (d) is entered into, or carried out, by means, or in a

manner, which is not normally employed for bona fide purposes. The tax consequences of the GAAR could result

in denial of tax benefits and other consequences, and if the GAAR is made applicable to us, it may have an

adverse tax impact on us. Any increases in or amendments in the tax applicable to us due to the GAAR may

result in additional taxes becoming payable by us.

The extent and reliability of Indian infrastructure could adversely affect our results of operations, financialcondition and cash flows.

India’s physical infrastructure is less developed than that of many developed nations. Any congestion or

disruption in its transportation networks, electricity grid, communication systems or any other public facility

could disrupt our normal business activity. Any deterioration of India’s physical infrastructure would harm the

national economy, disrupt the transportation of goods and supplies, and add costs to doing business in India.

These problems could interrupt our business operations, which could have a material adverse effect on our

business, prospects, financial condition and results of operations.

46

Severe weather conditions in India may have an adverse effect on our operations.

Our operations may be adversely affected by severe weather conditions in India, which may require the

evacuation of personnel, suspension or curtailment of operations, result in damage to construction sites or delays

in the delivery of our products or supply of raw materials. Collectively, the effect may cause delays to our

contract schedules and generally reduce our productivity. In addition, the implementation of our power

transmission projects, or expansion of our distribution lines may also be adversely affected during the monsoon

seasons which may lead to floods and restrict our ability to carry on construction activities and fully utilize our

resources. There could also be damage to our power transmission and distribution infrastructure following any

severe weather conditions including floods or cyclones.

We may be affected by competition law in India and any adverse application or interpretation of theCompetition Act could adversely affect our business.

The Competition Act, 2002 (the “Competition Act”), regulates practices having an appreciable adverse effect on

competition in the relevant market in India. Under the Competition Act, any formal or informal arrangement,

understanding or action in concert, which causes or is likely to cause an appreciable adverse effect on

competition, is considered void and results in the imposition of substantial monetary penalties. Further, any

agreement among competitors which, directly or indirectly, involves the determination of purchase or sale prices,

limits or controls production, supply, markets, technical development, investment or provision of services, shares

the market or source of production or provision of services by way of allocation of geographical area, type of

goods or services or number of consumers in the relevant market or, directly or indirectly, results in bid-rigging

or collusive bidding, is presumed to have an appreciable adverse effect on competition. The Competition Act also

prohibits abuse of a dominant position by any enterprise. On March 4, 2011, the GoI notified and brought into

force the combination regulation (merger control) provisions under the Competition Act with effect from June 1,

2011. These provisions require acquisitions of shares, voting rights, assets or control or mergers or

amalgamations that cross the prescribed asset and turnover based thresholds to be mandatorily notified to, and

pre-approved by, the CCI. Additionally, on May 11, 2011, the CCI issued the Competition Commission of India

(Procedure for Transaction of Business Relating to Combinations) Regulations, 2011, which sets out the

mechanism for implementation of the merger control regime in India. More recently, the CCI notified the

Competition Commission of India (Procedure for Transaction of Business Relating to Combinations)

Regulations, 2019, which provides for a deemed approval of non-overlap transactions filed under a newly-

introduced ‘green channel’ regime based on the parties’ self-assessment of overlaps (i.e. horizontal, vertical and

complimentary). However, such transactions will be considered void if the CCI disagrees with the parties’ self-

assessment.

The Competition Act aims to, among other things, prohibit all agreements and transactions which may have an

appreciable adverse effect in India. Consequently, all agreements entered into by us could be within the purview

of the Competition Act. Furthermore, the Competition Commission of India (“CCI”) has extra-territorial powers

and can investigate any agreements, abusive conduct or combination occurring outside India if such agreement,

conduct or combination has an appreciable adverse effect on competition in India. However, we cannot predict

the impact of the provisions of the Competition Act on the agreements we have entered into. We are not currently

party to any outstanding proceedings, nor have we received notice in relation to non-compliance with the

Competition Act or the agreements we have entered into. However, if we are affected, directly or indirectly, by

the application or interpretation of any provision of the Competition Act, or any enforcement proceedings

initiated by the CCI, or any adverse publicity that may be generated due to scrutiny or prosecution by the CCI or

if any prohibition or substantial penalties are levied under the Competition Act, it could materially adversely

affect our business, prospects, financial condition and results of operations.

47

Risks Related to the Notes and the Collateral

Redemption of the Notes prior to maturity may be subject to compliance with applicable regulatoryrequirements, including the prior approval of the RBI or the Authorized Dealer Bank, as the case may be.

Any early redemption of the Notes (whether due to certain tax events or a Change of Control Triggering Event or

an Event of Default, each as described in the Terms and Conditions of the Notes) may require the prior approval

of the RBI or the Authorized Dealer Bank. Compliance with any conditions specified in any such RBI or the

Authorized Dealer Bank approval will be required. The RBI and the Authorized Dealer Bank may not provide

such approval in a timely manner or at all. Furthermore, any modification or waiver of the Terms and Conditions

of the Notes which has the effect of modifying or waiving terms which are not permitted under the automatic

route for issue of bonds under the ECB Guidelines will require prior approval from the RBI in accordance with

the ECB Guidelines, and such approval may not be forthcoming.

Remittance of funds outside India by our Company pursuant to indemnification by our Company in relationto the Notes requires prior RBI approval.

Remittance of funds outside India by our Company pursuant to the indemnity clauses under the Terms and

Conditions of the Notes, the Note Trust Deed or any other agreements in relation to the Notes requires prior RBI

approval. Any approval, if and when required, for the remittance of funds outside India is at the discretion of the

RBI and we can give no assurance that we will be able to obtain such approval.

The Terms and Conditions of the Notes, which incorporate the covenants under the Common Terms Deed,limit our Company’s and any other Obligor’s financial and operating flexibility.

The Terms and Conditions of the Notes, which incorporate the covenants under the Common Terms Deed, will

restrict our Company’s and any other Obligor’s ability to, among other things:

‰ create liens;

‰ enter into certain transactions with affiliates;

‰ incur additional indebtedness;

‰ pay dividends on, or repurchase, capital stock;

‰ sell assets; and

‰ enter into new businesses.

These limitations are subject to certain exceptions and qualifications described in “Terms and Conditions of the

Notes” and “Description of the Principal Senior Note Documents”.

Further, the Terms and Conditions of the Notes restrict the ability of our Company and any other Obligor to

provide guarantees in respect of the indebtedness of our Company, subject to certain exceptions. In addition, the

Terms and Conditions of the Notes also restrict the ability of our Company and any other Obligor to create any

Security Interest over its assets or provide undertakings for the benefit of any other person under any

indebtedness prior to creation, perfection and registration of the Collateral, which shall be completed on or before

the respective security longstop dates as set out in “Description of the Collateral and Security Documents”.

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These covenants could limit our ability to pursue our growth plans, restrict our flexibility in planning for, or

reacting to, changes in our business and industry and increase our vulnerability to general adverse economic and

industry conditions.

Our Company may not be able to meet its obligations to pay or redeem the Notes.

In certain circumstances, Noteholders may require our Company to redeem all or a portion of the Notes and our

Company would be required to pay all amounts then due under the Notes. In particular, upon a Change of

Control Triggering Event, Noteholders may require our Company to redeem such Noteholders’ Notes and

following an acceleration of the Notes upon an Event of Default, our Company would be required to pay all

amounts then due under the Notes, which our Company may not be able to meet. Our Company may not be able

to make required payments in connection with the Notes if the requisite regulatory approval is not received or if

our Company does not have sufficient cash flows for those payments.

Since the Global Certificates will be held by or on behalf of the relevant Clearing Systems, investors will haveto rely on the relevant Clearing System’s procedures for transfer, voting, payment and communication withour Company.

The Notes will be represented by the Global Certificates except in certain limited circumstances described under

“Global Certificates”. The Global Certificates will be deposited with and registered in the name of a nominee of

DTC or the Common Depositary, as the case may be. Except in certain limited circumstances described under

“Global Certificates”, investors will not be entitled to receive definitive certificates. The relevant Clearing

Systems will maintain records of the beneficial interests in the Global Certificates. While the Notes are

represented by the Global Certificates, investors will be able to trade their beneficial interests only through the

relevant Clearing System. Our Company will discharge its payment obligations under the Notes by making

payments to or to the order of the relevant Clearing System for distribution to the account holders. A holder of a

beneficial interest in any of the Global Certificates must rely on the procedures of the relevant Clearing System

to receive payments under the Notes.

Our Company has no responsibility or liability for the records relating to, or payments made in respect of,

beneficial interests in the Global Certificates. Holders of beneficial interests in the Global Certificates will not

have a direct right under the Global Certificates to take enforcement action against our Company in the event of a

default under the Notes but will have to rely upon the Note Trustee to enforce their rights under the Note Trust

Deed. However, whilst the Note Trustee has the ability to accelerate the Notes, any enforcement action in respect

of the Security shall be taken through the Security Trustee, subject to the provisions of the Intercreditor Deed and

the Security Documents.

An active trading market may not develop for the Notes, in which case your ability to transfer the Notes will belimited.

The Notes are new securities for which there is no existing trading market. The liquidity of any market for the

Notes will depend on a number of factors, including general economic conditions and our financial condition,

performance and prospects, as well as recommendations of securities analysts. We have been informed by the

Managers that they may make a market in the Notes after our Company has completed the offering. However,

they are not obligated to do so and may discontinue such market-making activity at any time without notice. In

addition, market-making activity by the Managers may be subject to limits imposed by applicable law. As a

result, a market in the Notes may not develop or be maintained. If an active market in the Notes fails to develop

or be sustained, you may not be able to sell the Notes or may have to sell them at a lower price.

49

The ratings of the Notes may be downgraded or withdrawn.

The Notes are expected to be rated “BBB-” by Fitch and “Baa3” by Moody’s. The ratings of the Notes represent

the opinions of the rating agencies and their assessment of the ability of our Company to perform its obligations

under the Notes and credit risks in determining the likelihood that payments will be made when due under the

Notes. A rating is not a recommendation to buy, sell or hold securities. The ratings can be lowered or withdrawn

at any time. A reduction or withdrawal of the ratings may adversely affect the market price and liquidity of the

Notes and our ability to access the debt capital markets.

The Note Trustee may request Noteholders to provide an indemnity and/or security and/or prefunding to itssatisfaction.

In certain circumstances, the Note Trustee may (at its sole discretion) request Noteholders to provide an

indemnity and/or security and/or prefunding to its satisfaction before it takes actions on behalf of the

Noteholders. The Note Trustee shall not be obligated to take any such actions if not indemnified and/or secured

and/or prefunded to its satisfaction. Negotiating and agreeing to an indemnity and/or security and/or prefunding

can be a lengthy process and may delay when such actions can be taken.

The Note Trustee may not be able to take actions, notwithstanding the provision of an indemnity or security or

prefunding to it, in breach of the terms of the Note Trust Deed or in circumstances where there is uncertainty or

dispute as to the applicable laws or regulations and, to the extent permitted by the agreements and the applicable

law, it will be for the Noteholders to take such actions directly.

There are interest rate risks on an investment in the Notes.

Investment in fixed rate instruments such as the Notes involves the risk that subsequent changes in market

interest rates may adversely affect the value of the fixed rate instruments.

The right of Noteholders to receive payments on the Notes will be junior to certain tax and other liabilitiespreferred by law.

The Notes will be subordinated to certain liabilities preferred by law such as claims of the GoI on account of

taxes, and certain liabilities incurred in the ordinary course of our Company’s trading or banking transactions. In

particular, in the event of bankruptcy, liquidation, reorganization or winding-up, our Company’s assets will be

available to pay obligations on the Notes only after all of those liabilities that rank senior to these Notes have

been paid. In the event of bankruptcy, liquidation or winding-up, there may not be sufficient assets remaining,

after paying amounts relating to these proceedings, to pay amounts due on the Notes.

We will need the MERC approval for creation of security for the Notes.

The provisions of the Electricity Act and the rules and regulations thereunder govern our business operations

including the sale and disposal of our assets. Any charge or assignment created over our transmission and

distribution licenses will be subject the MERC approval. Further, our assets are part of a regulatory asset base

(“RAB”) and can therefore not be sold or disposed off without the approval of the MERC. Any proceeds from

the sale of such assets are required to be on an arms’ length basis and passed on to our consumers in Mumbai

through ARR. Such regulatory restrictions could constrain our ability to create security within the proposed

timelines for the Notes. In addition, we cannot assure you that the required approvals will be granted to us

without onerous conditions, or at all.

50

The failure of our Company, any other Obligor, or our shareholders to properly create, perfect and registerthe Collateral will result in an Event of Default under the Notes, and could impair the ability of theNoteholders to seek repayment.

Under the Terms and Conditions of the Notes, our Company, any other Obligor, and our shareholders will be

obligated to create, perfect and register the Collateral on or before the respective security longstop dates as set

out in “Description of the Collateral and Security Documents”. QH, upon it becoming a shareholder, has the

ability to transfer its shares in the Company and/or any other Obligor to its affiliates as well as third parties (the

“Permitted Transferee”), subject to certain conditions. Upon the release of the relevant Collateral in connection

with such transfer, such Permitted Transferee, the Company and/or any other Obligor will also be concurrently

obligated to create, perfect and register the Collateral. The creation, perfection and registration of the Collateral

will be subject to various consents, approvals and authorizations from governmental authorities and such

consents, approvals or authorizations may not be forthcoming. Accordingly, some of the documents to be

executed in relation to the Notes, including but not limited to the Security Documents, such as the pledge to be

created by our shareholders on the shares of our Company, the hypothecation of moveable assets by our

Company, the negative lien by our Company and any other Obligor, mortgage over immovable assets by our

Company, and negative lien by our shareholders in relation to the shares of the relevant Obligor, are proposed to

be entered into on or before the respective security longstop date. The Notes will not be secured, on the Closing

Date. The Notes will be secured to the extent of the Collateral that will be created under the Security Documents

that are to be executed on or before the respective security longstop date. Certain terms of these documents may

not be in agreed form and consequently the executed documents may differ from the summarized form set out in

this offering circular. If our Company, any other Obligor, or our shareholders fail to create, perfect and register

the Collateral within the specified time period, an Event of Default will occur under the Terms and Conditions of

the Notes and the Note Trustee could (but is not obliged to), subject to the provisions of the Intercreditor Deed,

request the Security Trustee to enforce the Notes. In such circumstances, our Company may not have sufficient

resources to repay the Notes, in full or at all. Moreover, any claim of the Security Trustee in a bankruptcy or

similar proceeding would be unsecured to the extent that our Company, any other Obligor, or our shareholders

have failed to create, perfect and register any Collateral, which could limit any amount recovered by the holders

of the Notes in any such proceeding. As of September 30, 2019, the Company had Rs. 92,272.9 million of

secured indebtedness outstanding (excluding unamortized financing cost). To the extent that any of this secured

indebtedness remains outstanding after the Closing Date, the creditors of such secured indebtedness will be

effectively senior to the obligations due under the Notes, until security over the Notes is created.

The Notes will not be secured by all of the assets of our Company, any other Obligor or our shareholders, and our

Company, any other Obligor or our shareholders will be permitted to create (or not otherwise restricted from

creating) security interests over certain assets to secure other obligations without providing the same security for

the benefit of the Notes. The Notes will be effectively subordinated to any other secured indebtedness of our

Company which ranks pari passu with the Notes, to the extent of the value of the assets over which the

Noteholders do not have security, securing that other indebtedness. If any other Obligor-level debt, including

working capital facilities, is secured by fixed assets and other assets of any other Obligor over which the

Noteholders do not have security, it may result in the subordination of claims of the Noteholders to the extent of

security over such assets, and such other lenders will rank in priority to the Noteholders. In the event of a

bankruptcy, liquidation, reorganization or other winding up of our Company or any other Obligor, the assets that

secure their senior secured indebtedness will be available to pay obligations on the Notes only after all senior

secured indebtedness, together with accrued interest, has been repaid. If our Company or any other Obligor is

unable to repay its secured indebtedness, the lenders could foreclose on substantially all of its assets which serve

as collateral. In this event, the senior secured lenders would be entitled to be repaid in full from the proceeds of

the liquidation of those assets before those assets would be available for distribution to other creditors, including

holders of the Notes. Holders of the Notes will participate in the proceeds of the liquidation of the remaining

51

assets of our Company or any other Obligor, ratably with holders of its secured indebtedness that is deemed to be

of the same class as the Notes.

The pledge of certain Collateral may in certain circumstances be deemed invalid or voidable.

The pledge to be created by ATL and any other shareholders of our Company (including QH upon, and subject

to, consummation of the QIA Transaction) over the equity shares of our Company as Collateral securing the

Notes may be invalid or voidable under insolvency, bankruptcy, fraudulent transfer, fraudulent preference under

the Bankruptcy Code or similar laws of India and other jurisdictions, if and to the extent applicable. In the event

the pledge of the Collateral is invalid or voidable under such laws in India, the relevant time period during which

such security is deemed invalid or voidable could be within 12 months of the date of the winding-up petition or,

under some circumstances, it could be held invalid or voidable within longer periods. If the pledges of the

Collateral were to be held void or set aside for any reason, Noteholders would have only an unsecured claim

against us, to the extent of such pledge.

The Company and any other Obligor will not provide a guarantee for the Notes, and any future subsidiaries ofthe Company and any other Obligor, will not provide any guarantee or security for the Notes.

The Company and any other Obligor will not provide a guarantee for the Notes, and any future subsidiaries of the

Company and any other Obligor, will not provide any guarantee or security for the Notes. In the event of a

bankruptcy, liquidation, reorganization or other winding up of any such subsidiary, holders of its debt and its

trade creditors will generally be entitled to payment of their claims from the assets of the relevant subsidiary

before any of those assets are made available for distribution to our Company or any other Obligor.

The value of the Collateral may not be sufficient to cover all secured obligations.

The Collateral will be shared with other creditors of our Company and any other Obligor existing on the Closing

Date and future creditors of our Company and any other Obligor on a pari passu basis. See “Description of the

Collateral and Security Documents — Collateral”. No appraisals of the Collateral have been or will be prepared.

The value of the Collateral at any time will depend on market and other economic conditions, including the

availability of suitable buyers for the Collateral. By its nature, the Collateral may be illiquid and may have no

readily ascertainable market value. Likewise, the Collateral might not be saleable or, if saleable, there could be

substantial delays in its liquidation.

Land title in India can be uncertain and we may not be able to identify or correct defects or irregularities intitle to the land which we own or have mortgaged as part of the Collateral.

There is no central title registry for real property in India and the documentation of land records in India has not

been fully computerized. Property records in India are generally maintained at the state and district level and in

local languages and are updated manually through physical records. Therefore, property records may not be

available online for inspection or updated in a timely manner, may be illegible, untraceable, incomplete or

inaccurate in certain respects, or may have been kept in poor condition, which may impede title investigations or

our ability to rely on such property records. In addition, there may be a discrepancy between the duration of the

principal lease under different orders issued by state governments in respect of a particular parcel of revenue

land. Land records are often handwritten, in local languages and not legible, which makes it difficult to ascertain

the content. In addition, land records are often in poor condition and are at times untraceable, which materially

impedes the title investigation process. Furthermore, title to land in India is often fragmented, and in many cases,

land may have multiple owners. Title may also suffer from irregularities, such as non-execution or

nonregistration of conveyance deeds and inadequate stamping and may be subjected to encumbrances that we are

52

unaware of. Any defects in, or irregularities of, title in the land parcels that have been mortgaged as part of the

Collateral, may limit any amount that may be recovered by the Noteholders in an enforcement proceeding.

Enforcing the rights of Noteholders under the Notes or the Security Documents across multiple jurisdictionsand enforcing foreign court judgment on our Company and/or any other Obligor in India may prove difficult.

Our Company, any other Obligor and ATL are incorporated in India, and the assets that will comprise the

Collateral are located in India. The Notes, the Note Trust Deed, the Agency Agreement and the Common Terms

Deed will be governed by English law. The Security Documents, the Project Accounts Deed and the Intercreditor

Deed will be governed by Indian law. In the event of a bankruptcy, liquidation, reorganization or other winding

up, proceedings could be initiated in England and India. The rights of Noteholders under the Notes and the

Security Documents will be subject to the insolvency and administrative laws of several jurisdictions and

investors might not be able to effectively enforce their rights in such complex multiple bankruptcy, insolvency or

similar proceedings. In addition, the bankruptcy, insolvency, administrative and other laws of India may be

materially different from those with which Noteholders may be familiar, including in the areas of the rights of

creditors, priority of governmental and other creditors, ability to obtain post-petition interest and duration of the

proceeding. The application of these laws, or any conflict among them, could call into question whether any

particular jurisdiction’s laws should apply, adversely affect investors’ ability to enforce their rights under the

Notes and the Security Documents in the relevant jurisdictions or limit any amounts that they may receive.

Enforcement of security usually takes a considerable period of time in India and enforcement may be subject to

delays and administrative requirements. In particular, the MERC approval will be required to take certain

enforcement action, including the disposal of certain secured assets. The claims and remedies available under

Indian law may not be as extensive as those available in other jurisdictions. As a result, it may be difficult for

investors to effect service of process, on our Company and/or any other Obligor, ATL or their respective officers

and directors, or to enforce judgments obtained in non-Indian courts against our Company and/or any other

Obligor, ATL or their respective officers and directors.

A decision to enforce the Security may be adverse to the interests of non-consenting Noteholders.

The Security Trustee is required to enforce the Security Interests securing the Senior Note in accordance with the

instructions of the Secured Creditors given under and in accordance with the Intercreditor Deed and the Security

Documents. The ability of the Security Trustee (on instructions of the Secured Creditors) to enforce the Security

Interests securing the Senior Note is restricted under the Intercreditor Deed. If an Event of Default occurs under

the Senior Note Documents or any of the other Senior Note Documents, depending upon the waiting period

(from the date of occurrence of such Event of Default), such Secured Creditors (including the holders of the

Notes) representing such percentages of Intercreditor Voting Entitlements as stipulated in the Intercreditor Deed

in respect of the decision to be taken may decide whether or not to take any enforcement action, provided that

any Secured Creditor may, notwithstanding a decision taken by any of the other groups of Secured Creditors,

individually decide to take any enforcement action, upon expiry of the maximum waiting period since the

occurrence of the Event of Default. Furthermore, such Secured Creditor(s) may, in accordance with the

Intercreditor Deed, instruct the Security Trustee to enforce the Security Interests securing the Primary Debt.

Accordingly, actions may be taken in respect of the Security Interests securing the Primary Debt that may be

adverse to holders of the Notes who did not vote in favor of enforcement. In such event, the only remedy

available to holders of the Notes would be to sue for payment under the Notes. Separately, a Secured Creditor

that intends to take enforcement action may be required to wait until the expiry of the maximum waiting period

in order to do so.

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The rights over the Collateral will not be granted directly to holders of the Notes.

The rights over the Collateral and the Note Trust Deed will not be granted directly to the Noteholders, but will be

granted only in favor of the Security Trustee. As a consequence, Noteholders will not have direct security and

will not be entitled to take enforcement action in respect of the security for the Notes, except through the Security

Trustee.

The Collateral may in certain circumstances be voidable.

The Collateral may be voidable under insolvency, bankruptcy, fraudulent transfer or similar laws of England,

India and other jurisdictions, if and to the extent applicable. In the case of the Collateral being voidable under

such laws in England, the relevant time period during which such security is voidable could be within six months

of the date of the charge or, under some circumstances, within longer periods. If the Collateral were to be voided

for any reason, holders of the Notes would have only an unsecured claim against our Company. Under Indian

law, the Security Interests granted by our Company, any other Obligor, and our shareholders may be considered

invalid if, in the event of winding-up, it is proved that our Company, any other Obligor, and our shareholders had

created a floating charge over the collateral within 12 months immediately preceding the commencement of

winding-up.

The Notes are subject to selling restrictions and restrictions on transfer, and may be transferred only to alimited pool of investors, which may adversely affect their liquidity and the price at which they may be sold.

The Notes cannot be issued to and subscribed or held by investors which are overseas branches of Indian banks.

We are not obligated to, and do not intend to, register the Notes under the Securities Act or the securities laws of

any other jurisdiction and, unless so registered, the Notes may not be offered or sold except pursuant to an

exemption from, or a transaction not subject to the registration requirements of the Securities Act and any other

applicable laws.

As a result, the Notes can only be transferred to a limited group of investors, which may adversely affect their

liquidity and the price at which they may be sold. See “Subscription and Sale — Selling Restrictions —

Disclosure of Information relating to Holders of the Notes” and “Transfer Restrictions.”

The Notes are not a suitable investment for all investors.

Each potential investor in the Notes must determine the suitability of that investment in light of its own

circumstances. In particular, each potential investor should:

‰ have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and

risks of investing in the Notes and the information contained in this Offering Circular or any applicable

supplement;

‰ have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular

financial situation, an investment in the Notes and the impact such investment will have on its overall

investment portfolio;

‰ have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes,

including where the currency for principal or interest payments is different from the potential investor’s

currency;

54

‰ understand thoroughly the terms of the Notes and be familiar with the behavior of any relevant indices and

financial markets; and

‰ be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic,

interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Payments under the Notes are subject to the ECB Guidelines regarding remittance of funds outside India.

The payment under the Notes are subject to the provisions of Indian Foreign Exchange Management Act, 1999

(FEMA) and the ECB Guidelines governing remittance of funds outside India. Any approval, if and when

required, for the remittance of funds outside India is at the discretion of the RBI and our Company may be

subjected to restrictions or delay with respect to repayment under the terms of the Notes if such approval is not

received within the expected timeframe, or at all.

55

USE OF PROCEEDS

The proceeds from the Notes will be U.S.$1,000 million. Subject to compliance with applicable laws and

regulations and as permitted by the RBI under the ECB Guidelines and the terms of the RBI Approval, our

Company will use the proceeds from the Notes for:

a. repayment of existing INR denominated indebtedness of our Company; and

b. general corporate purposes if any.

In connection with the repayment of our outstanding indebtedness, certain of our lenders may include the

Managers or their respective affiliates.

For further details of our outstanding indebtedness, see “Capitalization” and “Description of Material

Indebtedness”.

56

CAPITALIZATION

The following table sets forth our capitalization and total debt as of September 30, 2019, on an actual basis and

as adjusted to give effect to the issuance of the Notes and the expected use of proceeds thereof and the

conversion of the unsecured perpetual instruments and the inter corporate deposit from ATL into equity share

capital. This table should be read in conjunction with “Management’s Discussion and Analysis of Financial

Condition and Results of Operations” and “Use of Proceeds” and the financial statements included in this

Offering Circular.

As of

September 30, 2019

As

adjusted(5)

(in Rs. million)

Shareholders’ fundsEquity share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,000.5 40,208.2

Unsecured perpetual instruments(*) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,714.2 —

Shareholder Affiliate Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —(6)

Reserves and surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,008.2 6,212.5

Total shareholders’ funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,722.9 46,420.7

Total DebtLong-term Borrowings(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,227.2 17,280.0

Notes offered hereby(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 71,212.5

PPRA loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500.0 700.0

Inter Corporate Deposit from ATL(3)(*) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,637.1 —

Short-term Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,545.7 5,648.5

Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,910.0 94,841.0

Total Capitalization(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,632.9 141,261.7

Notes:

(*) The unsecured perpetual instruments and inter corporate deposit from ATL has been converted into equity share capital as described

under “Business — Recent Developments”.

(1) Includes current maturities of long-term borrowings and excluding unamortized financing cost.

(2) Translated from U.S dollars to Rupees at an exchange rate of U.S.$1.00=Rs.71.2125 (Foreign Exchange Dealers Association of India

as at February 5, 2020)

(3) Outstanding amount includes accrued interest.

(4) Total capitalization is the sum of total shareholders’ funds and total debt.

(5) Assumes that the proceeds from the issue of the Notes have been applied to refinance the existing INR denominated indebtedness of

our Company. Our Company may use this amount for general corporate purposes, subject to compliance with applicable laws and

regulations and as permitted by the RBI under the ECB Guidelines and the terms of the RBI Approval.

(6) Our Company has on December 11, 2019 entered into to the QH Loan as described under “Business — Recent Developments”.

However, a drawdown under the QH Loan is yet to take place.

Except as disclosed in “Business — Recent Developments”, there has been no material change to our

capitalization since September 30, 2019.

57

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

The following discussion is intended to convey our management’s perspective on our financial condition and

results of operations as of and for the financial year ended March 31, 2019 and the six months ended

September 30, 2019 and 2018, as measured in accordance with Ind-AS, as specified under Section 133 of the

Companies Act, 2013, read with the Companies (Indian Accounting Standard) Rules, 2015, as amended. The

following discussion of our financial condition and results of operations should be read in conjunction with our

financial statements included elsewhere in this Offering Circular. See “Presentation of Financial and Other

Information” and “Risk Factors — There is only limited historical financial information available for our

business, and all operating information included in this Offering Circular which relates to the period prior to

ATL’s acquisition of AEML (“Operating Information”) has been extracted from information the seller (Reliance

Infrastructure Limited) has provided as well as public sources and has not been independently verified by us, our

auditors or the Managers.”.

This section contains forward-looking statements that involve risks and uncertainties. Our actual results may

differ materially from those discussed in such forward-looking statements as a result of various factors, including

those described under “Forward-Looking Statements” and “Risk Factors”.

Overview

Mumbai, the state capital of Maharashtra is also India’s financial capital and one of the top 10 centres of

commerce in the world. It is the seventh most populous city in the world, the 24th richest city in the world (based

on USD GDP) and its’s real GDP growth between financial year 2012 and financial year 2018 was

approximately 11% p.a. Mumbai contributes approximately 6% to India’s real GDP. The average per capita

income of Mumbai residents is approximately U.S.$8,700, which is approximately four times per capita income

of an average Indian resident. Further, the electricity consumption of Mumbai for the financial year 2019 was

18,341 MUs. The average electricity bill of our consumers in financial year 2019 was approximately U.S.$95

which was approximately 1.1% of the per capita income of an average Mumbai resident.

Since our inception in 1926, we have been the primary suppliers of electricity to Mumbai, serving approximately

67% of its population and approximately 85% of its geographic area. We service consumers in suburban Mumbai

and the Mira-Bhayander Municipal Corporation area in the Thane District (adjoining Mumbai), spanning an area

of over 400 sq. km. Our integrated electricity generation, transmission and distribution utility, provides electricity

to over 3.04 million households with an outreach to over 12 million consumers of Mumbai and an annual energy

requirement of over 10,800 MUs.

Our integrated electricity supply system also includes 541 ckms of 220 kV transmission lines, consisting of

overhead and underground cable systems, eight 220/33 KV extra high voltage (“EHV”) stations, 115 220kV

bays and 285 33KV bays, with installed transformation capacity of 3,125 MVA and embedded 500 MW of

power generation. Our ‘grid-to-switch’ integrated platform makes us one of the largest private integrated electric

utilities in India.

Our company has operated for over 90 years in a stable and evolved regulatory regime having witnessed

regulations since 1956 and 17 years of regulatory orders under the current Electricity Act. We endeavor to

provide the highest quality of supply in terms of sustainable, reliable and affordable power supply with an

emphasis on excellent consumer service.

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Power Distribution Services Limited (“PDSL”) was incorporated on December 6, 2019 to provide specialized

services to Adani Transmission Limited (“ATL”) group companies (including AEML). The services to be

provided include human resource management, administrative support, information technology support, finance

and accounts, audit and assurance support, treasury management, tax advisory, security support and training,

other corporate support, business plan advisory, advisory on the implementation of best practices in line with

global utility players, and advisory on process improvement. The above services are only indicative and the

nature and quantum of services may vary. AEML and PDSL are Obligors under the Common Terms Deed and

the Terms and Conditions of the Notes. See “Terms and Conditions of the Notes”. Further, AEML and PDSL are

100% subsidiaries of ATL.

On August 29, 2018, ATL acquired a 100% stake in Reliance Electricity Generation and Supply Limited

(“REGSL”) from Reliance Infrastructure Limited and renamed it as AEML. This Acquisition marked ATL’s

entry into the integrated utility space.

The following table sets forth some of our key financial and operational information for the periods indicated:

For the six months

ended September 30,

For the

financial

year ended

March 31,

2019 2018 2019

(in Rs. million)

MUs sold (units) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,558.5 4,439.4 8,375.6

Income from sale of energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,825.1 34,221.0 66,404.0

Income from wheeling charges and Cross Subsidy Charges (CSS) . . . . . . . . . . . . 2,158.2 2,248.4 4,018.9

Transmission revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,406.7 1,471.9 2,972.3

Cost of Power Purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,487.7 15,819.9 29,591.7

Transmission Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,993.8 2,119.7 3,911.9

Cost of Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,631.3 6,604.0 11,935.6

The following table sets forth our RAB and EBITDA by asset category as of the dates and for the periods

indicated:

RAB

For the six

months ended

September 30,

2019

For

financial

year ended

March 31,

2019 EBITDA

For the six

months ended

September 30,

2019

For the

financial

year ended

March 31,

2019

(in Rs. million) (in Rs. million)

Generation . . . . . . . . . . . . . . . . . 7,775.3 7,905.8 Generation . . . . . . . . . . . . . . . 1,356.6 963.9

Transmission . . . . . . . . . . . . . . . 9,693.2 9,991.6 Transmission . . . . . . . . . . . . . 1,251.8 2,609.6

Wires . . . . . . . . . . . . . . . . . . . . . 35,615.0 36,317.6 Wires . . . . . . . . . . . . . . . . . . . 6,047.2 12,221.7

Retail . . . . . . . . . . . . . . . . . . . . . 2,201.9 2,262.8 Retail . . . . . . . . . . . . . . . . . . . 412.7 841.5

Total . . . . . . . . . . . . . . . . . . . . . 55,285.4 56,477.8 Total . . . . . . . . . . . . . . . . . . . 9,068.3 16,636.7

59

Below is a diagram showing the corporate structure of ATL and the Obligor Group:

Adani TransmissionLimited

Adani ElectricityMumbai Limited

Obligor Group

100% 100%

Power DistributionServices Limited

We have incorporated Adani Electricity Mumbai Infra Limited as a wholly owned subsidiary for the purpose of

carrying out works like infrastructure development, transmission line development along with commissioning of

HVDC.

Significant Factors Affecting Our Results of Operations

The following three factors have significantly affected our results of operations:

Tariff Structure

Our main source of revenue is tariffs from the transmission and distribution of electricity. ADTPS is an

embedded generation asset and sells power to our distribution business. Our business consists of Section 62 (Rate

of return) assets where we are paid a tariff by consumers based on rate of return and normative costs as

determined by the MERC. Under the Electricity Act and the MERC Tariff Regulations, a transmission and

distribution licensee is required to seek from the MERC a tariff determination in respect of its regulated asset

base. The applicable tariff is designed to compensate the licensee for the following:

a. Pre-determined rate of return on the licensee’s investment in the assets;

b. Return of capital invested in the assets;

c. Normative costs during operations as determined by the regulator; and

d. Efficiency linked incentives.

This tariff is determined based on a number of components that are aggregated into an Aggregate Revenue

Requirement (“ARR”) which is collected from consumers in the case of the distribution business and from the

Maharashtra State Electricity Transmission Company Limited (“MSETCL”) in the case of the transmission

business. See “Business — Business Overview — (b) Transmission Business” for further details. Each of our

generation, transmission and distribution businesses submit tariff petitions for approval to the MERC once in two

or three years as per the requirement of Multi Year Tariff (“MYT”) Regulations notified by the MERC. The

MERC approves the tariff for ensuing years based on the projected sales and projected ARR of the ensuing years.

The MERC also allows for the recovery of revenue gaps, if any, that will accrue based on truing up of previous

years. The tariffs so determined form the basis of revenue in the ensuing years. After completion of the years for

which tariffs were determined, the MERC carries out truing up these years and determines the revenue gap,

surplus based on the ARR allowed at the time of truing up and actual revenue billed. The revenue gap, surplus is

allowed to be recovered, passed on along with the tariff of future years on an annual basis. The MERC will first

60

grant a provisional order, which will form the basis for the tariff for the year, referred to as the “provisional

tariff”. The regulator will later issue a final tariff order approving a final tariff, which may be different than the

provisional tariff. See “Risk Factors — Risks Related to Business and Industry — Any failure or delay by the

MERC in undertaking tariff revisions could have an adverse effect on our business and financial condition”. The

tariffs are governed by the multi-year tariff regulations released by the MERC for every control period. The

current MERC Tariff Regulations will remain in force until March 31, 2020. Further, the MERC has released the

multi-year tariff regulations for the next control period starting April 1, 2020 to March 31, 2025.

Operating Costs

Our operating costs consist of the following components:

a. Power purchase costs for procurement of external power for our distribution business;

b. Fuel costs for generation of power at our ADTPS plant; and

c. Operations and maintenance (“O&M”) expenses and other expenses, including administration and selling

expenses.

Power purchase expenses for the distribution business are recovered in tariffs based on an actual basis at

approved costs. We have been implementing various short and long term strategies such as banking of power and

increasing the mix of renewable power in order to optimize power purchase expenses and minimize the impact

on consumer tariffs. At the time of determination of tariffs in advance for a year, costs are approved by the

MERC based on projections made by us which include the cost of power purchase. However, once the tariff rates

are determined and as the year progresses, the actual costs for power purchase for the given year may differ from

what was considered and included in the original tariffs. The MERC has therefore allowed a provision by which

we are allowed to pass onto our consumers, any such changes in cost of power purchase vis-à-vis those approved

in its original tariffs. These changes could either be positive or negative and the corresponding charge is referred

to as the “Fuel Adjustment Charge”. This mechanism serves a two-fold purpose and ensures that, in the event

of the actual power purchase cost being higher than the cost approved in the tariff order, we are not out-of-pocket

and have the ability to charge our consumers. Similarly, if the actual power purchase cost incurred by us is less

than what has been approved in the tariff order, the consumer is able to realize the benefit by way of a credit

charge in the same year. The Fuel Adjustment Charge is billed by us to our consumers with a two-month lag. For

example, the difference between the power purchase cost as per the tariff order and the actual power purchase

cost incurred for the month of April will be billed to consumers in the month of June and appear as a separate

item in the consumer bill. We recognize such Fuel Adjustment Charge as and when billed to consumers as

mentioned in the above example.

Fuel costs for generation of power at ADTPS are recovered in tariffs based on normative station heat rate and

actual fuel cost per quantity. ADTPS has historically operated at an efficient station heat rate compared to the

normative level prescribed under the tariff regulations from time to time. During the period from 2004 to 2019,

the average gross station heat rate at ADTPS was 2,289 kCal/kWh, while the current MERC Tariff Regulations

specify a normative station heat rate not exceeding 2,450 kCal/kWh.

O&M expenses mainly consist of employee expenses, repairs and maintenance expenses and administrative and

general expenses. The MERC prescribes normative O&M costs for the generation, transmission and distribution

businesses by way of its tariff orders. We have planned several measures to introduce efficiencies in O&M costs

including the following:

a. Voluntary retirement scheme for employee cost optimization;

61

b. Reduction in high tension and low tension faults;

c. Outsourcing of various in-house activities; and

d. Mechanization of different business processes.

In case of any variance in actual O&M costs incurred by us vis-à-vis the normative O&M costs prescribed, the

MERC examines such variances at the time of true-up submissions made by us, and may allow us to pass such

variances to consumers if the MERC determines them to be prudent expenses. Unlike fuel adjustment charges,

such variances are subject to the MERC’s discretion.

Financing Requirements

We operate in a capital-intensive industry. As a result, our ability to access cost-effective financing is crucial to

our business. As of September 30, 2019, our outstanding borrowings (excluding unamortized financing cost)

were Rs. 96,475.4 million which included term debt of Rs. 85,227.2 million, working capital debt of Rs.

7,748.2 million and debt against approved regulatory assets of Rs. 3,500.0 million. Our existing debt financing

framework includes debt instruments from multiple Indian lenders providing both new financing and refinancing

instruments.

Our ability to access diversified pools of capital has enabled us to finance our projects regularly and on

competitive terms to maximize our capital efficiency. While we expect to fund our capital expenditure with a

combination of cash flows from operations, debt financings and equity financings, our ability to arrange for such

financing remains subject to various factors, including those affecting the macro-economic environment.

Furthermore, our ability to meet payment obligations under our outstanding debt depends on our ability to

generate significant cash flows in the future, which, to some extent, is subject to general economic, financial,

competitive, legislative and regulatory factors that are beyond our control.

The level of our borrowings and our ability to obtain additional borrowings on existing terms as well as any

interest rate fluctuations and other borrowing costs, have had and will continue to have a material effect on our

finance costs and consequently, our results of operations and financial condition. Our finance costs for the

financial year ended March 31, 2019 and the six months ended September 30, 2019 were Rs. 10,018.2 million

and Rs. 4,818.6 million, respectively. Rising interest rates could adversely affect our ability to secure financing

on favorable terms and cause our finance costs to increase.

Critical Accounting Policies

Certain of our accounting policies require the application of judgment by our management in selecting

appropriate assumptions for calculating financial estimates, which inherently contain some degree of uncertainty.

Our management bases its estimates on historical experience and various other assumptions that they believe to

be reasonable under the circumstances, the results of which form the basis for making judgments about the

reported carrying values of assets and liabilities and the reported amounts of revenues and expenses that may not

be readily apparent from other sources. Actual results may differ from these estimates under different

assumptions or conditions. The areas involving critical estimates or judgements are as follows:

1. Fair valuation of property plant and equipment including intangible assets acquired in business

combinations.

62

2. Judgement to estimate the amount of provisions required or to determine required disclosure related to

litigation and claims against us.

3. Estimates used for impairment of the transmission license.

4. Estimation of defined benefit obligation.

5. Estimation of current tax and deferred tax expense.

6. Estimates and judgments are continually evaluated. These are based on historical experience and other

factors, including expectations of future events that may have a financial impact on our operations and that

are believed to be reasonable under the circumstances they are made.

Revenue recognition

Revenue earned from contracts with consumers is recognized when control over the goods or services is

transferred to the consumer for an amount that reflects the entitled consideration to be received in exchange for

such goods or services.

Transmission of Power

Revenue from transmission of power is recognized net of cash discount over time for transmission of electricity.

As per the MERC Tariff Regulations we are required to recover our ARR comprising expenditure on account of

operations and maintenance expenses, financing costs, taxes and assured return on regulator approved equity

with additional incentive for operational efficiencies.

Input method is used to recognize revenue based on our efforts or inputs to the satisfaction of a performance

obligation to deliver power. Further, we determine our ARR as per the MERC Tariff Regulations and any

surplus/shortfall in recovery of the same is accounted for in our revenue.

Sale of Power — Distribution

Revenue from sale of power is recognized net of cash discount over time for each unit of electricity delivered at

the pre-determined rate.

Interest on Overdue Receivables / Delay Payment Charges

Consumers are billed on a monthly basis and are given an average credit period of 15 to 21 days for payment of

bills. No delayed payment charges (‘DPC’)/interest on arrears (“IOA”) are charged for the initial 15 to 21 day

period starting from the date of receipt of invoice by a consumer. Thereafter, DPC/IOA is charged or accrued on

the outstanding amount as per the rate prescribed in the relevant tariff order issued by the MERC.

Sale of Traded Goods

Revenue from sale of goods is recognized when the goods are delivered and title has passed, at which time all the

following conditions are satisfied:

a. transfer of significant risks and rewards of ownership of the goods to the buyer;

63

b. the amount of revenue can be measured reliably; and

c. it is probable that the economic benefits associated with the transaction will flow to us.

There is no significant judgment involved while evaluating the timing as to when consumers obtain control of

promised goods and services.

Amortization of Service Line Contribution

Contributions by consumers towards items of property, plant and equipment, which require an obligation to

provide electricity connectivity to the consumers, are recognized as a credit to deferred revenue. Such revenue is

recognized over the useful life of the property, plant and equipment.

Interest income

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to us

and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to

the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts

estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount

on initial recognition.

64

Results of Operations

The following table sets out data, for the periods indicated, from our statement of profit and loss:

For the six months

ended September 30,

For the

financial

year ended

March 31,

2019 2018 2019

(in Rs. million)

IncomeRevenue from Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,089.3 38,693.5 74,939.3

Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570.3 418.0 1,492.8

Total Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,659.6 39,111.5 76,432.1

ExpensesCost of power purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,487.7 15,819.9 29,591.7

Cost of fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,631.3 6,604.0 11,935.6

Transmission charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,993.8 2,119.7 3,911.9

Purchases of traded goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.1 — 106.8

Employee Benefits Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,701.9 4,176.3 8,678.8

Finance Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,818.6 5,717.1 10,018.2

Depreciation and Amortization Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,467.3 2,508.4 4,927.1

Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,433.5 3,224.3 7,146.5

Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,593.2 40,169.7 76,316.6

Profit / (Loss) Before Rate Regulated Activities, Exceptional Items and Tax . . . . 4,066.4 (1,058.2) 115.5

Regulatory Income/(Expense) (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,284.0) 1,114.8 1,575.9

Profit Before Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,782.4 56.6 1,691.4

Tax ExpenseCurrent Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323.7 14.3 419.8

Deferred Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177.5 21.8 656.8

Total Tax Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501.2 36.1 1,076.6

Net Profit for the Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,281.2 20.5 614.8

Discussion on Our Results of Operations

Income

Our income is recorded in our financial statements under “Revenue from operations” and “Other income”.

“Revenue from operations” comprises:

a. “Income from sale of power and transmission charges” consists of revenue from electricity distribution

services and transmission services. This is derived in the form of revenue from tariffs and incentive

payments. Tariffs include carrying cost of delayed orders approved by the MERC for recovery during a

particular year. Delayed orders result when a final tariff is approved for a higher amount than the related

65

provisional tariff. The carrying cost on such delayed orders are amounts calculated on a regulatory basis as

the interest on the difference in tariff amounts over the period of delay.

b. “Other Operating income” consists of income from sale of coal rejects and fly ash, street light maintenance

charges, bad debt recovery, sale of scrap and other miscellaneous income.

“Other Income” primarily comprises interest income on delayed payments charges, income from investments,

including interest income from fixed deposits and dividend payments from mutual funds.

Expenses

Our expenses primarily comprise power purchase expenses including transmission charges for the distribution

business, cost of fuel for ADTPS, employee benefit expenses, finance costs, depreciation and amortization, other

operating, administrative and selling expenses.

Net movement in Regulatory Deferral Balance

Our business is governed by Section 62 of the Electricity Act whereby the total recovery through tariffs for any

year (“net ARR”) is determined in accordance with the multi-year tariff regulations for that particular year as

prescribed by the MERC. Net movement in regulatory deferral balance consists of any under-recovery or over-

recovery of tariff revenue by us vis-à-vis the net ARR prescribed by the MERC. A negative movement implies

surplus recovery or a revenue surplus, whereas a positive movement implies under-recovery or a revenue gap.

Such revenue surplus or gap is accumulated and approved by the MERC for recovery or adjustment in net ARR

in a future period.

Tax

We pay corporate income tax at the statutory rate of 34.94%. We are also required to pay the Minimum

Alternative Tax (“MAT”) on net profits at a rate of 17.47% due to tax payable based on our ordinary income tax

rate being lower than the tax payable based on the MAT rate. PDSL will pay corporate income tax at the

statutory rate of 25.17% under the concessional tax regime. Further, there is no MAT rate applicable for PDSL

under the concessional tax regime.

Results of operations for the six months ended September 30, 2019 compared to the six months endedSeptember 30, 2018

Total Income

Our total income increased by Rs. 2,548.1 million, or 6.5%, to Rs. 41,659.6 million for the six months ended

September 30, 2019 from Rs. 39,111.5 million for the six months ended September 30, 2018.

Revenue from operations

Our revenue from operations increased by Rs. 2,395.8 million, or 6.2%, to Rs. 41,089.3 million for the six

months ended September 30, 2019 from Rs. 38,693.5 million for the six months ended September 30, 2018,

primarily as a result of an increase in tariff income (excluding fuel adjustment charges) amounting to

Rs. 1,674.6 million, an increase in recovery of fuel adjustment charges of Rs. 774.0 million and a net decrease in

other operating income/sale of traded goods of Rs. 52.8 million for the six months ended September 30, 2018.

66

Other income

Our other income increased by Rs. 152.3 million, or 36.4%, to Rs. 570.3 million for the six months ended

September 30, 2019 from Rs. 418.0 million for the six months ended September 30, 2018, primarily as a result of

recovery of DPC from MSETCL of Rs. 129.9 million for the six months ended September 30, 2019, for our

transmission business.

Total Expense

Our expenditure decreased by Rs. 2,576.5 million, or 6.4%, to Rs. 37,593.2 million for the six months ended

September 30, 2019 from Rs. 40,169.7 million for the six months ended September 30, 2018. These changes can

be further broken down as follows:

Cost of power purchased

Our costs for purchase of power decreased by Rs. 1,332.2 million, or 8.4%, to Rs. 14,487.7 million for the six

months ended September 30, 2019 from Rs. 15,819.9 million for the six months ended September 30, 2018,

primarily as a result of reduction in power purchase cost per unit (from Rs. 5.58 per unit for the six months ended

September 30, 2018 to Rs. 4.86 per unit for the six months ended September 30, 2019) due to a change in the

power mix and a decrease in the rates in the short term power market. Our distribution losses also decreased from

8.59% for the six months ended September 30, 2018 to 7.97% for the six months ended September 30, 2019.

Cost of fuel

Our costs for fuel decreased by Rs. 972.7 million, or 14.7%, to Rs. 5,631.3 million for the six months ended

September 30, 2019 from Rs. 6,604.0 million for the six months ended September 30, 2018, primarily as a result

of a reduction in the prices of coal. The reduction in the coal costs was on account of: (a) a reduction in average

imported coal price from Rs. 5,583 per ton for the six months ended September 30, 2018 to Rs. 5,430 per ton for

the six months ended September 30, 2019; and (b) a reduction in power generation from the ADTPS plant by

197 MUs, or 10%, from 1,779 MUs for the six months ended September 30, 2019 to 1,976 MUs for the six

months ended September 30, 2018.

Transmission charges

Our transmission charges decreased by Rs. 125.9 million, or 5.9%, to Rs. 1,993.8 million for the six months

ended September 30, 2019 from Rs. 2,119.7 million for the six months ended September 30, 2018, primarily as a

result of revision in charges as per the tariff orders issued by the MERC.

Purchase of traded goods

For the six months ended September 30, 2019, we recorded Rs. 59.1 million of cost for procurement of LED

bulbs for the Municipal Corporation of Greater Mumbai.

Employee benefit expense

Our employee benefit expenses increased by Rs. 525.6 million, or 12.6%, to Rs. 4,701.9 million for the six

months ended September 30, 2019 from Rs. 4,176.3 million for the six months ended September 30, 2018,

primarily as a result of annual increments and provision for revision in wages.

67

Finance cost

Our finance costs decreased by Rs. 898.5 million, or 15.7%, to Rs. 4,818.6 million for the six months ended

September 30, 2019 from Rs. 5,717.1 million for the six months ended September 30, 2018, primarily as a result

of refinancing then existing debt with new debt at a lower interest rate.

Depreciation and amortization expense

Our depreciation and amortization expenses decreased by Rs. 41.1 million, or 1.6%, to Rs. 2,467.3 million for the

six months ended September 30, 2019 from Rs. 2,508.4 million for the six months ended September 30, 2018.

Our depreciation and amortization expenses are calculated in accordance with the Companies Act, 2013.

Other expenses

Our other operating, administration and selling expenses increased by Rs. 209.2 million, or 6.5%, to

Rs. 3,433.5 million for the six months ended September 30, 2019 from Rs. 3,224.3 million for the six months

ended September 30, 2018, primarily as a result of an increase in repairs and maintenance activity due to a

prolonged monsoon season and the cost of migrating or upgrading our IT systems for the six months ended

September 30, 2019.

Profit/loss before rate regulated activities, exceptional items and tax

As a result of the foregoing, our profit rate regulated activities, exceptional items and tax increased by

Rs. 5,124.6 million, or 484.3%, to Rs. 4,066.4 million for the six months ended September 30, 2019 from a loss

of Rs. 1,058.2 million for the six months ended September 30, 2018.

Regulatory income/expense (net)

We recorded regulatory income (or revenue gap) of Rs. 1,114.8 million for the six months ended September 30,

2018 and regulatory expense (or revenue surplus) of Rs. 2,284.0 million for the six months ended September 30,

2019. Regulatory expense (or revenue surplus) for the six months ended September 30, 2019 was on account of

lower costs of actual power purchased during such period, resulting in higher recovery in tariffs for such period

compared to ARR as determined under the MERC tariff orders.

Profit before tax

As a result of the foregoing, our profit before tax increased by Rs. 1,725.8 million, or 3,049.1%, to

Rs. 1,782.4 million for the six months ended September 30, 2019 from Rs. 56.6 million for the six months ended

September 30, 2018.

Total tax expense

Our total tax expenses (including current tax and deferred tax) increased from Rs. 36.1 million for the six months

ended September 30, 2018 to Rs. 501.2 million for the six months ended September 30, 2019. This increase was

on account of increase in our profit before tax during the same period.

Net profit for the period

As a result of the foregoing, our net profit increased from Rs. 20.5 million for the six months ended

September 30, 2018 to Rs. 1,281.2 million for the six months ended September 30, 2019.

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Results of operations for the financial year ended March 31, 2019

Total Income

Our total income for the financial year ended March 31, 2019 was Rs. 76,432.1 million. This can be further

broken down as follows:

Revenue from operations

Our revenue from operations was Rs. 74,939.3 million for the financial year ended March 31, 2019, which

primarily comprises income from sale of power and transmission charges of Rs. 73,395.2 million, street light

maintenance charges of Rs. 1,075.6 million, sale of coal rejects/fly ash of Rs. 98.9 million and sale of LED bulbs

to Municipal Corporation of Greater Mumbai of Rs. 97.3 million.

Other income

Our other income was Rs. 1,492.8 million for the financial year ended March 31, 2019, which primarily

comprises interest income on bank deposits, contingency reserve investments and other interest of

Rs. 277.3 million, overdue interest on trade receivables of Rs. 166.8 million, DPC of Rs. 287.8 million, income

from prepayment of liabilities of Rs. 553.9 million, gain on sale of investments of Rs. 44.8 million and other

miscellaneous income (such as rent income, sale of scrap, bad debts recovery, foreign exchange gain (net)) of

Rs. 162.2 million.

Total Expenditure

Our total expenditure were Rs. 76,316.6 million for the financial year ended March 31, 2019. This can be further

broken down as follows:

Cost of power purchased

Our costs for purchase of power were Rs. 29,591.7 million for the financial year ended March 31, 2019, which

comprises power purchase cost of: (a) Rs. 9,307.6 million from Vidarbha Industries Power Limited;

(b) Rs. 1,999.3 million from renewable and hydro power sources; and (c) Rs. 16,531.0 million from short to

medium term power sources, including state load despatch operating charges. Further, we incurred

Rs. 1,753.8 million towards standby charges for Maharashtra State Electricity Distribution Co. Ltd.

Cost of fuel

Our costs for fuel were Rs. 11,935.6 million for the financial year ended March 31, 2019, which comprises cost

of fuel for power generation at ADTPS.

Transmission charges

Our transmission charges were Rs. 3,911.9 million for the financial year ended March 31, 2019, which comprises

transmission charges paid to MSETCL for transmission of power for the distribution business.

Purchase of traded goods

Our expenses for the purchase and sale of LED bulbs for the Municipal Corporation of Greater Mumbai was

Rs. 106.8 million for the financial year ended March 31, 2019.

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Employee benefit expense

Our employee benefit expenses were Rs. 8,678.8 million (net of staff cost capitalized) for the financial year

ended March 31, 2019, which comprises employee salaries and bonuses of Rs. 6,703.1 million, contributions to

gratuity of Rs. 732.6 million, contributions to provident fund and superannuation fund of Rs. 588.9 million,

provision for compensated absences of Rs. 370.7 million and staff welfare expenses of Rs. 952.9 million.

Further, staff cost of Rs. 669.4 million was capitalized during the financial year ended March 31, 2019.

Finance cost

Our finance cost was Rs. 10,018.2 million for the financial year ended March 31, 2019, which primarily

comprises interest on term loan of Rs. 8,817.9 million, interest on working capital loan of Rs. 537.0 million,

interest on intercorporate deposit from ATL of Rs. 311.6 million and interest on consumer security deposit of

Rs. 385.0 million.

Depreciation and amortization expense

Our depreciation and amortization expenses were Rs. 4,927.1 million for the financial year ended March 31,

2019.

Other expenses

Our other operating, administration and selling expenses were Rs. 7,146.5 million for the financial year ended

March 31, 2019, which comprises repairs and maintenance expenses, expenses towards various professional and

technical services availed, lease expenses, insurance expenses, traveling and conveyance and other administrative

expenses.

Profit/(loss) before rate regulated activities, exceptional items and tax

As a result of the foregoing, our profit before rate regulated activities, exceptional items and tax was

Rs. 115.5 million for the financial year ended March 31, 2019.

Regulatory income/expense (net)

Our net regulatory income was Rs. 1,575.9 million for the financial year ended March 31, 2019, which comprises

revenue gap worked out as under-recovery in revenue vis-à-vis ARR prescribed as per the MERC Tariff

Regulations.

Profit before tax

As a result of the foregoing, our profit before tax was Rs. 1,691.4 million for the financial year ended March 31,

2019.

Total tax expense

Our total tax expenses were Rs. 1,076.6 million for the financial year ended March 31, 2019, which comprises

current tax of Rs. 419.8 million and deferred tax of Rs. 656.8 million.

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Net profit

As a result of the foregoing, our net profit was Rs. 614.8 million for the financial year ended March 31, 2019.

Liquidity and Capital Resources

Our principal capital requirements are for:

a. project-based capital expenditure and replacement and maintenance capital expenditure in order to develop

a regulated asset base for generation, transmission and distribution business; and

b. working capital.

In the past, we have been able to finance our funding requirements for capital expenditure and working capital

through term debt, working capital debt and cash generated from our operations. We believe that after taking into

account the expected cash to be generated from our business and operations, and the refinancing of existing debt

through proceeds of the offering of the Notes, we will have sufficient liquidity to (i) meet our working capital

and other cash requirements, and (ii) repay certain indebtedness for at least 12 months from the date of this

Offering Circular. See “Use of Proceeds”. We expect to borrow money for the purpose of funding our capital

expenditure and working capital requirements.

Our sources of funding could be adversely affected by factors beyond our control. Any such factors could have a

material adverse effect on our cash flows from operations and our ability to obtain funds from external sources

on acceptable terms, in a timely manner or in sufficient amounts, or at all. See “Risk Factors — In the event that

we are unable to service our existing and future debt obligations, our business, financial condition, results of

operations and cash flows may be materially adversely affected.”

Cash Flows

The table below summarizes our cash flow for the periods indicated:

For the six months

ended September 30,

For the

financial

year ended

March 31,

2019 2018 2019

(in Rs. million)

Net cash generated from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,764.7 4,092.7 7,394.1

Net cash flow (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,912.8) (112,510.0) (116,541.0)

Net cash flow from/(used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . (7,632.7) 110,183.8 110,059.5

Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,219.2 1,766.5 912.6

Net cash from operating activities

Net cash from operating activities increased by Rs. 16,672.0 million, or 407.4%, to Rs. 20,764.7 million for the

six month period ended September 30, 2019 from Rs. 4,092.7 million for the six month period ended

September 30, 2018, primarily as a result of:

a. Realization of standby charges from TPC of Rs 4,728.1 million pursuant to a favorable judgement from the

Supreme Court of India dated August 20, 2019; and adjustment by TPC of Rs 387.3 million being amount

recoverable from us in respect of energy charges in terms of the Supreme Court judgement dated July 23, 2019

71

b. recovery of regulatory assets (net) of Rs. 10,227.5 million;

c. improvement in EBITDA by Rs. 786.2 million, to Rs. 9,068.3 million for the six month period ended

September 30, 2019 from Rs. 8,282.1 million for the six month period ended September 30, 2018;

For the financial year ended March 31, 2019, our net cash from operating activities was Rs. 7,394.1 million. This

net cash inflow was primarily attributable to operating profit before working capital changes of Rs. 16,458.2

million, which are partially offset by decrease in (i) working capital adjustments of Rs. 8,735.1 million; and

(ii) tax paid (net) of Rs. 329.0 million. Changes in working capital are attributable to increases in net financial

assets of Rs. 3,304.5 million, which are offset by decreases in (i) other net current assets of Rs. 286.7 million;

(ii) net financial liabilities of Rs. 10,758.3 million; and (iii) other current financial liabilities of Rs. 994.6 million.

Net cash used in investing activities

Net cash used in investing activities decreased by Rs. 102,597.2 million, or 91.2%, to Rs. 9,912.8 million for the

six month period ended September 30, 2019 from Rs. 112,510.0 million for the six month period ended

September 30, 2018. Cash outflow of Rs. 108,500.0 million for the six month period ended September 30, 2018

corresponds to consideration towards transfer of the business from Reliance Infrastructure Limited to AEML

through a slump sale process which was effected as part of the acquisition process.

For the financial year ended March 31, 2019, our net cash used in investing activities of Rs. 116,541.0 million

primarily included (i) Rs. 5,435.2 million for the net purchase of property, plant and equipment, capital work in

progress and intangible assets (including capital advances and capital creditors); (ii) Rs. 2,605.8 million (net of

interest received of Rs 390.3 million) invested in mutual funds and banks fixed deposit; and

(iii) Rs. 108,500.0 million in business acquisition of Mumbai suburban’s integrated generation, transmission, and

distribution business from Reliance Infrastructure Limited.

Net cash from/(used in) financing activities

Net cash outflow for financing activities was Rs. 7,632.7 million for the six month period ended September 30,

2019 against net cash inflow of Rs. 110,183.8 million for the six month period ended September 30, 2018. Net

cash inflow for the six month period ended September 30, 2018 was on account of equity inflow of

Rs. 34,000 million and debt inflow of Rs. 85,000 million as part of the proceeds for acquisition of the business by

ATL.

For the financial year ended March 31, 2019, our net cash generated from financing activities of

Rs. 110,059.5 million was primarily attributable to (i) Rs. 92,797.9 million of proceeds from long term

borrowings; (ii) Rs. 36,430.6 million of proceeds from our parent’s investment by way of equity share capital and

perpetual instruments, of which both (i) and (ii) were mainly used to fund the business acquisition of Mumbai

suburban’s integrated generation, transmission, and distribution business; and (iii) Rs. 20,553.5 million of

proceeds from short term borrowings; partially offset by (i) Rs. 17,570.0 million in repayment of long term

borrowings; (ii) Rs. 11,007.0 million in repayment of short term borrowings; and (iii) an aggregate of

Rs. 11,360.6 million in finance costs and distribution on perpetual instruments.

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Contractual Obligations and Commercial Commitments

Contractual obligations

The contractual obligations represent our estimates of future payments under capital commitments. Changes in

our business needs, cancelation provisions, as well as actions by third parties and other factors, may cause these

estimates to change. Therefore, our actual payments in future periods may vary from the current estimated

number. As of September 30, 2019, we had total material contractual obligations (not including indebtedness) of

Rs. 2,525.0 million, all of which are due by December 2020. Such obligations primarily relate to capital

expenditure corresponding to purchase orders issued by us.

Historical and planned capital expenditure

As of September 30, 2019 and March 31, 2019, our total capital work in progress was Rs. 4,919.3 million and

Rs. 2,397.5 million, respectively.

As part of the petition filed by us with the MERC for the upcoming control period from April 1, 2020 to

March 31, 2025, we have submitted the following capital expenditure plan for our generation, transmission and

distribution business:

FY2021 FY2022 FY2023 FY2024 FY2025

(in Rs. million)

Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 978.3 1,029.6 585.9 820.0 925.0

Transmission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,831.0 6.442.5 6,269.9 5,231.1 4,156.5

Wires . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,502.8 10,395.8 10,024.2 11,129.2 11,342.4

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,185.7 1,747.4 220.0 220.0 220.0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,497.8 19,615.3 17,100.0 17,400.3 16,643.9

Indebtedness

As of September 30, 2019, our total outstanding borrowings (excluding unamortized financing cost) were

Rs. 96,475.4 million, with principal amounts due in the indicated maturity periods as set forth in the table below.

Total as of

September 30,

2019

Less than

1 year

Between 1

and 2 years

Between 2

and 5 years

More than

5 years

(in Rs. million)

Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88,727.2 6,775.6 4,094.6 14,586.2 63,270.8

Secured short term* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,545.7 3,545.7 — — —

Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,202.5 4,202.5 — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,475.4 14,523.8 4,094.6 14,586.2 63,270.8

* Secured short term loans include working capital loans from banks amounting Rs. 3,311.2 million, which are reassessed on an annual

basis. Balance amount in secured short term debt is bill discounting.

For further details in relation to our outstanding borrowings, please see “Description of Material Indebtedness”.

73

We may, depending on our expected cash position and availability of additional indebtedness, repay and/or incur

additional indebtedness prior to the issuance of the Notes. We anticipate that any such additional indebtedness

will be in compliance with the terms of our existing debt.

Off-Balance Sheet Arrangements

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of

any third parties. We have not entered into any transactions with unconsolidated entities, derivative contracts that

are indexed to our shares and classified as shareholders’ equity, or that are not reflected in our financial

statements.

Related Party Transactions

We have in the past engaged, and in the future may engage, in transactions with related parties, including with

our affiliates. For a description of our related party transactions, see Note 37 to the financial statements as of and

for the financial year ended March 31, 2019 included elsewhere in this Offering Circular. For the six months

ended September 30, 2019, we entered into certain related party transactions which included, among other things,

borrowings from, and the repayment of, certain inter-corporate deposits; and the purchase of power.

Changes in Accounting Policies

We have adopted Ind AS 116 “Leases”, with effect from April 1, 2019 using the modified retrospective method

with the cumulative impact being recognized on the date of initial application on April 1, 2019. Apart from this,

there have been no changes to our accounting policies applicable to the preparation of our financial statements

included in this Offering Circular. For further information, see footnote 2(iv) of the reviewed Unaudited Special

Purpose Interim Condensed Financial Information as of and for the half year ended September 30, 2019.

Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss of future earnings, to fair values or to future cash flows that may result from a

change in the price of a financial instrument. The value of a financial instrument may change as a result of

changes in interest rates, equity prices and other market changes that affect market risk sensitive instruments.

Market risk is attributable to all market risk sensitive financial instruments, including debt.

Exchange Rate Risk

We face exchange rate risk because certain of our obligations are denominated in currencies other than Rupees.

In addition, the Notes offered hereunder will be denominated in foreign currency. To manage exchange rate risk,

we plan to enter into options, forward contracts and other derivatives in relation to this offering. There are no

such outstanding positions as of September 30, 2019.

Interest Rate Risk

Our existing assets are regulatory assets that are able to recover interest rate expenses as part of the ARR.

However, we are subject to interest rate risk, primarily because our actual borrowings are higher than the

regulated debt since AEML has acquired the business at fair value on August 29, 2018.

Interest rates are highly sensitive to many factors beyond our control, including the monetary policies of various

central banks, deregulation of the financial sector in India, domestic and international economic and political

conditions, inflation and other factors. Increases in interest rates increase the cost of servicing existing and new

debts, which adversely affects our results of operations.

74

Commodity Risk

Through the construction work which we undertake, we are exposed to market risk with respect to the prices of

coal, cement, aluminium, steel and zinc. The prices of such raw materials are subject to fluctuation based on

commodity prices, which may affect our construction costs.

Credit Risk

We are directly exposed to credit risk on trade receivables from the STUs, and indirectly exposed to credit risk

on trade receivables from end users of electricity on account of tariff payments due to us. See “Risk Factors — A

delay in payment of monthly transmission charges by the STUs may adversely affect our cash flows”.

Inflation Risk

India has experienced periods of high inflation from time to time, which has contributed to an increase in interest

rates, adversely affecting both sales and margins.

The table below shows the wholesale price index of India between 2016 and 2018, based on a price index value

of 100 in 2010:

2016 2017 2018

India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123.9 128.1 133.6

(Source: The World Bank: Wholesale price index)

Seasonality

The revenue from operations for our distribution business is based on the volume of electricity used by our

consumers which is subject to seasonal fluctuations. Accordingly, our revenues in the April to June quarter, and

the post-monsoon months of September and October, are traditionally higher than those during the other months

of the year.

75

INDUSTRY OVERVIEW

In this section, we have included data relating to the power transmission industry, both internationally and

within India, and other statistics. This information is based on industry publications, published sources and other

publicly available information, as well as beliefs of our management. We believe that the sources used are

reliable; however, we cannot ensure the accuracy or completeness of underlying assumptions of this information,

and none of our Company, the Managers, the Note Trustee, the Agents or any other person connected with the

Offering has independently verified this information. The industry information included in this section may

moreover be prepared as of specific dates and may no longer be current or reflect current trends, or may be

based on estimates, projections, forecasts and assumptions that may prove to be incorrect. Investors should not

place undue reliance on this industry information. The information in this section is derived from the sources

including the CRISIL report titled ‘Outlook on Power Market in India and Mumbai Region’ dated December

2019 and listed in “Industry and Market Data”.

Overview of the Indian Economy

India has been among the fastest-growing economies in the world over the past few years. According to

International Monetary Fund (“IMF”) forecasts, India is likely to retain its position as the fastest growing

economy within the G20 group of countries in 2019, after overtaking China in 2018. Based on the World

Economic Outlook published by IMF in October 2019, India’s economy is set to grow at 6.1% for FY 2019,

which will be higher than the global growth (which is estimated at 3.0% for 2019) and emerging market and

developing economy group (which is estimated at 3.9% for 2019).

Real GDP growth for major developing economies and United States (annual percent change)(2014 – 2019E)1

0%

2%

4%

6%

8%

10%

2014

2015

2016

2017

2018

2019

E

India China Indonesia United States

Source: World Economic Outlook (October 2019), International Monetary Fund1

India is the second most populous country in the world with a population of over 1.3 billion according to the

World Bank. With an estimated GDP (current prices) of U.S.$2.94 trillion equivalent in FY 2019 as per the

IMF1, the Indian economy is the third largest economy in the world (behind the U.S. and China) adjusted for

purchasing power parity (“PPP”) and has favorable demographics with the largest working population, with 67%

of the total population in the working age group of 15-64 years in 2018 as per the World Bank. Going forward,

the working population is expected to increase further, thereby driving consumption and growth.

1 IMF presented data and forecasts for India on a fiscal year basis and GDP from 2011 onward is based on GDP at market prices with

FY2011/12 as a base year.

76

Largest population per country in 2018 Population demographics of India (2018)

1,393 1,353

327 268 212

0

500

1,000

1,500

China India UnitedStates

Indonesia Pakistan

In M

illi

ons

Populationages 15-64

67%

Populationages 0-14

27%

Population ages65 and above

6%

Source: World Bank data

Power Sector Scenario in India

Organization of the Power Industry in India

India is the third largest consumer and producer of electricity in the world with a global share of 5.8% and 5.9%

for electricity consumption and production respectively in 2018 according to the BP Statistical Review of World

Energy 2019, 68th Edition. The total installed generation capacity in India as of October 31, 2019 was c.364 GW,

of which 54.3% is coal-based power generation as per the Executive Summary on Power Sector, October 2019

published by the Central Electricity Authority (“CEA”) of the GoI’s Ministry of Power.

Traditionally, the power sector in India has comprised of the following segments: generation, transmission and

distribution. Power generation is undertaken by the Central Government and State Governments, with increasing

participation from private players. The Transmission and Distribution (“T&D”) system is a three-tier structure

comprising distribution networks, state grids and regional grids. The distribution networks and state grids are

principally owned and operated by State Electricity Boards (“SEBs”) or other state utilities, or state governments

(through state electricity departments). Most of the inter-state and inter-regional transmission lines are owned

and operated by Power Grid Corporation of India Limited (“PGCIL”) or its joint ventures.

Electricity being a concurrent subject, both the Central and the State Governments play a decisive role in this

sector. While the Central Government has a significant share in the transmission segment, the distribution

segment is in the domain of each of the State Governments. However, for creation of generation and transmission

capacity, in line with the growing needs of the economy, all the sectors namely the Central Government, the State

Government and the private enterprises need to play a vital role.

Power Generation

During the last two five-year plans (FY 2008 to FY 2017) due to some focused efforts by the Government, there

has been significant growth in capacity additions. The Electricity Act, 2003, coupled with competitive bidding

for power procurement implemented in 2006, encouraged the participation of private players who announced

large capacity additions. As a result, private players have commissioned a significant number of projects over the

past few years leading to a robust growth in capacity addition.

The total installed generation capacity in India as of October 31, 2019 was c.364 GW, of which approximately

110 GW of capacity was added in the past five years (over October 2014 to October 2019) according to CEA.

77

Coal-based power generation has maintained its dominant position and accounts for approximately 54.3% of the

installed capacity as of October 31, 2019. Renewable energy installations have also witnessed robust growth over

the past few years and have reached approximately 83 GW capacity, constituting approximately 22.7% of total

installed generation capacity as of October 31, 2019.

Evolution of installed capacity in India (GW) Source-wise generation capacity mix asof October 31, 2019

223.3248.6

274.9305.2

326.8344.0 356.1 364.2

0.0

100.0

200.0

300.0

400.0

FY13 FY14 FY15 FY16 FY17 FY18 FY19 As ofOctober 31,

2019

Coal54.3%

Lignite1.7%

Gas6.8%

Diesel0.1%

Hydro12.5%

Nuclear1.9%

RenewableEnergySources22.7%

Source: CEA

Power Transmission & Distribution

Transmission

The Indian transmission sector is largely dominated by the state utilities while there is increasing participation

from the private sector. PGCIL owns and operates most inter-state and inter-regional transmission links in the

country, which facilitates the transfer of power between different regions. PGCIL owns and operates about

161,790 ckms of transmission lines at 800/765kV, 400kV, 220kV and 132kV EHVAC and +500kV HVDC levels

and 248 sub-stations, and a transformation capacity of about 396,825 MVA as of November 30, 2019 (Source:

PGCIL company website). The rising private-sector participation with the favorable risk-return profile of

transmission projects will also support growth in investments. From FY 2019 to 2023, private investment in the

power transmission sector is expected to be steady at 10% of the total investment according to CEA.

Currently the Government focuses on providing electricity to rural areas, which has led to the T&D systems

being extended to remote villages. There has been an increase in demand for transmission networks to carry bulk

power over longer distances and at the same time optimize the right of way, minimize losses and improve grid

reliability. As a result, there has been strong growth in the transmission system at higher voltage levels and

substation capacities. The total length of the ‘220 kV and above’ transmission lines in the country has increased

from 257,481 ckms in FY 2012 to 420,490 ckms as of November 30, 2019.

There has been significant under investment in the transmission sector as compared to the generation sector in

India over the years. Historically, the generation segment has dominated investments in the Indian power sector.

With the Government’s focus on alleviating congestion, transmission capacities are expected to witness robust

growth, and it is expected that the transmission segment share in total power sector investments will rise sharply

to 36% over FY 2019 – 2023 from 29% over FY 2014 – 2018. With such large additions, the estimated

investment in the transmission sector is expected to be Rs. 3.3 – 3.4 trillion over FY 2019 – 2023. Investments in

the sector are expected to be driven by the need for robust and reliable inter and intra state transmission systems,

to support continued generation addition, a strong push for the renewable energy sector and rural electrification.

78

Transmission line growth has lagged generationcapacity

Share of Transmission Segment in Total PowerSector Investments to Sharply Rise

24% 22%26%

51% 51%

12%17% 15%

30%33%

FY92-97 FY97-02 FY02-07 FY07-12 FY12-16

% Growth in Generation Capacity (MW)

% Growth in Transmission Line (ckt km)

49%

30%

29%

36%

21%34%

0%

20%

40%

60%

80%

100%

120%

FY14-18 FY19-23F

Generation Transmission Distribution

Source: CEA

To facilitate the transfer of power between neighboring states, state grids are inter-connected through high-

voltage transmission links to form a regional grid. There are five regional grids in India, namely, the northern,

western, southern, eastern and north-eastern regional grids. As peak demand for power does not take place at the

same time in all states, it results in a surplus in one state and a deficit in another and this mismatch has been

facilitated by regional or inter-state grids. Additionally, they also facilitate the optimal scheduling of

maintenance outages and better coordination between power plants. The Indian national grid has evolved over a

period of 60 years and has recently achieved the ‘one nation one grid’ status. Although the interregional

transmission capacity is still low, unification of the grids has helped in bridging the gap between load centers and

demand centers in India.

Distribution

Distribution is the final and critical link in the power sector value chain, purchasing power from generation

utilities and supplying electricity to end-use consumers such as residential, commercial, agricultural and

industrial segments. The fortunes of the whole power sector are closely intertwined with the distribution business

segment because it is where the revenues are generated that then flow to the upstream generation and

transmission segments.

Distribution substations connect to the transmission system at high 440/220/132 kv voltage and lower the

transmission voltage to medium voltage ranging between 11 kv and 33 kv with the use of power transformers.

Industrial consumers are usually connected through primary distribution lines at 33kv and 11kv voltage levels.

Commercial and residential customers are connected to the secondary distribution lines through service drops

and are supplied electricity at 220-240 Volts.

Indian electricity distribution, with a connected load of about c.364 GW, places the country amongst the largest

electricity consumer bases in the world. Distribution utilities were formed by the unbundling of the SEBs as per

the provisions of the Indian Electricity Act, 2003. Distribution business in India is largely dominated by state

government promoted distribution companies (“DISCOMs”).

Investments in the distribution sector have been inadequate due to the poor financial health of the DISCOMs. In

most states, the existing distribution network has been formed by expanding and interconnecting smaller and

disjointed networks. Consequently, such a weak distribution system has resulted in high losses and low

reliability.

79

However, in the recent years, there have been several initiatives taken by the Government to improve the last

mile connectivity (please refer to subsequent section for more details). There has been increased amount of

investments made by both public and private sectors to create better infrastructure and improve system

efficiency.

Tariffs and Financial Performance of State DISCOMs: In India, the average revenue realized (“ARR”) is lower

than the Average Cost of Supply (“ACS”) (cost of generation plus T&D costs). The gap between ARR and ACS

(the “ACS–ARR Gap”) has increased from Rs 0.87 per Unit in FY 2010 to Rs 1.08 per Unit in FY 2015

(without subsidy) according to CEA. Under the UDAY scheme, one of the targets was to eliminate the ACS-

ARR Gap. Post the UDAY scheme, the ACS–ARR Gap has been reduced and is currently at 0.38 Rs. per Unit as

per the UDAY portal dated January 3, 20202. Although DISCOMs have been granted partial financial autonomy,

most of them work under the administrative control of the respective state governments. As a result, tariff

revision filing has not been regular and delayed power tariff revisions have caused this gap to increase resulting

in the rise of accumulated losses at all state utilities. Further, the tariffs for agricultural and domestic consumers

are subsidized in most states. To compensate for this, most states charge higher tariffs to commercial and

industrial consumers. Long collection periods for receivables have led to increased working capital requirements

for utility companies.

Aggregate Technical and Commercial Losses (“AT&C Losses”): These losses are mainly due to inefficiencies in

the transmission and distribution stage and are caused in the process of transmission of electricity from the

procurement point to end consumers. A large part of the losses are technical in nature and depend on the type of

conductors, transformer capacity and various equipment used. AT&C losses refer to the difference between units

input into the system and the units for which the payment is collected. Since AT&C loss captures all losses in the

network including loss due to non-realization of payments and T&D loss, it is a true indicator of total losses in

the system and overall efficiency of the distribution business. UDAY estimated current AT&C losses to be at

21.35%3 as per the UDAY portal dated January 3, 2020, compared to an average 10-15% in developed countries.

This is due to poorly maintained and overburdened distribution networks, inadequate metering and theft of

electricity. However, over the coming years losses are expected to decline on account of government initiatives

such as UDAY under which state DISCOMs are obligated to reduce their AT&C losses.

T&D system losses and aggregate technical and commercial losses in India

23.0% 22.8% 22.8% 21.8% 21.4% 21.0%

25.5%22.6%

25.7%24.0% Not

AvailableNot

Available

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

FY13 FY14 FY15 FY16 FY17 FY18

T&D Losses AT&C Losses

Source: CEA, October 2019

In the recent years, the Government has introduced certain reforms in the power sector and open up the power

distribution section for privatization. With private participation in power distribution, significant benefits are

2 Does not include data of Mizoram, Nagaland, Andaman and Nicobar Islands, Lakshadweep.3 Does not include data of Mizoram, Nagaland, Andaman and Nicobar Islands, Lakshadweep

80

expected to accrue, such as reduction in AT&C losses, improvement in metering and billing practices and

improvement in revenue collection. Please refer to Key Policy Initiatives for the Development of the Power

Sector in subsequent section for more details.

Power Consumption and Demand

The per capita electricity consumption in India closely follows the growth pattern of per capita GDP. It is

expected that the growth in power demand should continue for the foreseeable future.

Growth in per capita power consumption in India rises concurrently with rising per capita GDP

818.8 883.6 914.4 957.0 1,010.0 1,075.0 1,122.0 1,149.0 1,181.0

1,497.7 1,481.6 1,485.61,610.4 1,639.7

1,761.6

2,014.0 2,037.72,171.6

0

500

1,000

1,500

2,000

2,500

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

Per Capita Consumption (kWh) GDP per capita (Current U.S.$)

Source: CEA4, CRISIL Research, World Economic Outlook Database (International Monetary Fund, October 2019)

Due to increased capacity addition buoyed by active participation from the private sector, the supply position has

improved significantly leading to a decrease in power deficit with power supply almost being able to meet the

current power demand in India. The energy deficit increased from 7.5% in FY 2002 to 11.1% in FY 2009. It has

continued to decrease since then and was 0.7% in FY 2018 according to CEA.

Improvement in the power deficit situation signifies the success of various policy initiatives and capital

investments made across the business segments. However, India’s per capita consumption remains well below its

peers. Per capita electricity consumption in India for FY 2019 is estimated at 1,181 kWh (provisional) only

according to CEA, which is significantly lower than the world average and is the lowest among the BRICS

(Brazil, Russia, India, China and South Africa) nations. The low per capita consumption in India is a result of

lower penetration of electricity at household levels as well as lower production of electricity. The Government is

committed to provide affordable continuous power for all homes, industrial and commercial establishments and

adequate power for farms. Along with generation, the Government has also increased its focus on the T&D space

which is likely to help in improving PLF levels, improving the financial health of the SEBs and reducing

transmission losses.

4 Per capita power consumption for FY 2019 is provisional as per Executive Summary on Power Sector (October 2019), CEA

81

It is expected that energy requirement growth will continue to be healthy at a CAGR of 7.1% over FY 2019 to

FY 2022 and at a CAGR of 5.5% over FY 2022 to FY 2027 as per the 19th Electric Power Survey (CEA). The

growth is in line with the gradual improvement in economic output led by higher demand from key infrastructure

and manufacturing sectors such as metals, mining, cement and auto. Power demand from industrial,

non-industrial, agricultural and commercial segments is likely to increase, and overall power demand growth is

expected to be driven by non-industrial segments. The projected demand growth envisaged in the 19th Electric

Power Survey is given below.

State

Electricity requirement*

(TWh) CAGR

Peak demand*

(GW)

FY12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 937 130

FY19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,275 4.5% (vs. FY12) 177

FY22E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,566 7.1% (vs. FY19) 226

FY27E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,047 5.5% (vs. FY22) 299

Source: Central Electricity Authority, 19th Electric Power Survey

* Electricity requirement and peak demand are estimated by aggregating the electrical energy requirement of all the States / Union

Territories and does not factor in demand side management or energy efficiency / conservation measures.

Power Sector Scenario in Mumbai

As the capital of the State of Maharashtra, which is the second-most populous state in India and the third-largest

state in terms of geographical area, Mumbai is the major financial center, economic powerhouse and industrial

hub of India. Mumbai houses the headquarters of most of the major corporates & financial institutions as well as

India’s main stock exchanges & capital market and commodity exchanges.

Mumbai has been witnessing a high growth in population which is expected to reach c.12 million in 2021

according to CRISIL Research. Within Mumbai, the population of the Suburban District is larger than that of the

Island City.

Population trend of Mumbai

(in Millions)

14

12

10

8

6

4

2

0

1911

1.1 1.4 1.41.8

3

4.2

6

8.2

9.9

12.0

Considering past

decade growth rate

of 0.3%

Considering

100 years

growth rate

of 2.5%

12.44 12.48 12.75

1921 1931 1941 1951 1961 1971 1981 1991 2001 2011 2021 E 2021 E

Source: Revised DP 2034; CRISIL Research

82

Power distribution market in the Greater Mumbai is made up of three private distribution licensee and one state

distribution licensees. These three private distribution licensees including AEML, Brihanmumbai Electric Supply

and Transport (BEST) and Tata Power, supply c.4.5 million consumers in the region, while remaining consumers

are being supplied by Maharashtra state electricity Distribution Company limited (MSEDCL) (Source: Outlook

on Power Market in India and Mumbai Region, CRISIL).

The distribution licensees present in Mumbai

PowaiAEML-D + TPC-D

Vile Parle – BandraAEML-D + TPC-D

Vikhroli – BhandupMSEDCL + AEML-D + TPC-D

Andheri – GoregaonAEML-D + TPC-D

Malad – DahisarAEML-D + TPC-D

Ghatkopar – KurlaMSEDCL + AEML-D + TPC-D

Wadala – SewriBEST

Walkeshwar – Peddar RoadBEST + TPC-D

Tardeo – Opera HouseBEST + TPC-D

Worli – Lower ParelBEST + TPC-D

MulundMSEDCL

Dadar - ParelBEST + TPC-D

Note: AEML supplies power in areas beyond Greater Mumbai including Mira-Bhayandar, and Uran

TPC-D supplies power in areas beyond Greater Mumbai including Mira-Bhayandar

Source: Outlook on Power Market in India and Mumbai Region, CRISIL

These distribution licensees have areas with both parallel licensing and single licensee areas across the city.

However, a large portion of the island city is catered by the private distribution licensees. AEML and Tata Power

have generation capacities linked for supplying power while BEST has long-term PPA signed with Tata Power.

Power demand in Mumbai has been though crests and troughs, with weather playing a major role in power

consumption in Mumbai. Climate change has affected the summer months in Mumbai and has affected the power

sales of the distribution licenses despite of adding new customers. The trend for power demand is also affected

by efficient design and construction of the buildings, high penetration of efficient appliances and technologies

and better urban planning than business as usual scenario.

83

Power Supplied by 3 private distribution licensees in Mumbai

9042 9283 10141 9665 9983 9695 10022 8579 8887

5851 66006974

5962 5767 4950 46854479 4605

42864393

47585216 4577

4403 45444692 4870

0

5,000

10,000

15,000

20,000

25,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Ap 2018-19 Ap 2019-20 Ap

AEML Tata Power BEST

Source: Outlook on Power Market in India and Mumbai Region, CRISIL

Note: The data provided is for the distribution licensees’ entire licensed area in the Mumbai Metropolitan Region. AEML and Tata Power

have areas outside Mumbai which is included in their power sales

Among the distribution licensees, AEML is the biggest player contributing 54.3% of total peak demand in

Mumbai and 48.3% of total sales in MUs in Mumbai. BEST and Tata Power contribute 22.5% and 23.2% of total

peak demand in Mumbai respectively, and 26.5% and 25.2% of total sales in MUs in Mumbai respectively for

FY 2018 (Source: CRISIL Research, December 2019).

84

Table. Private Distribution Licensee in Mumbai

Parameters AEML BEST Tata Power

Network Consumers

(million) . . . . . . . . . . . . . . . 3.0 0.8 0.7

1) North Division: Mira

bhayendar to Kandivalli

1) Colaba to Mahim

falling under the Mumbai

city revenue district

1) Colaba to Mahim

falling under the Mumbai

city revenue district

2) Central division:

Kandivalli to Dindoshi to

Malad

2) Sion falling under the

Mumbai city revenue

district

2) Bandra to Dahisar

under western suburbs

parts of Mumbai Suburban

revenue district

Distribution Network

Area . . . . . . . . . . . . . . . . . .

3) East division: Andheri-

kurla, chembur, Sakinaka

3) Prabha Devi, Worli,

and Wadala falling under

the Mumbai city revenue

district

3) Chunabhatti to Vikhroli

and Makhurd in eastern

suburbs parts of Mumbai

Suburban revenue district

4) South division: Bandra 4) Area of Municipal

corporation of Mira

Bhayendar

5) South Central division:

Andheri, Versova, Santa

cruz

Peak Demand (MW) . . . . . . . 1,884 780 806

MUs Sold (FY 2018) . . . . . . 8,579 4,692 4,479

Source: Company Websites, the MERC, CRISIL Research

History, Development and Regulatory Structure of the Indian Power Sector

History and Regulatory Overview

The electricity sector in India was largely controlled by Government owned entities. With rapid industrialization,

demand for power witnessed an upsurge, which necessitated significant investments. This compelled the

Government to open this sector to private participation.

The electricity sector in India has undergone significant structural changes, particularly over the last decade, with

the enactment of The Electricity Act 2003. The Act lowered barriers to private participation in the transmission

sector and established competitive bidding for certain transmission projects under the TBCB scheme, with both

public utilities and private businesses being allowed to participate in the bidding for these projects, either

individually or through joint ventures. The Act also gave the Central Electricity Regulatory Commission

(“CERC”) and the state regulatory commissions the mandate to grant licenses for the construction, maintenance

and operation of transmission lines.

85

Role of Key Government Agencies

Transmission of power in India takes place under a comprehensive framework involving multiple organizations

including state transmission utilities or STUs, the central transmission utility or CTU, Power System Operation

Corporation or POSOCO, state load dispatch centers or SLDCs, regional load dispatch centers or RLDCs, and

the National Load Dispatch Centre or NLDC. Other agencies such as the Central Electricity Authority or CEA

and Regional Power Committees or RPCs play an advisory role in shaping up the transmission sector policies,

ensuring grid stability, smooth and economical operation of the grid.

Key Policy Initiatives for the Development of the Power Sector

Government has undertaken several marquee initiatives to support growth of the power sector, and envisages to

invest approximately U.S.$250 billion in the power sector through the ‘Power for All’ scheme, with a focus on

upgrading the distribution and transmission infrastructure over FY 2016 to 2020 to augment the T&D network

and drive investments. The objective is to connect unconnected consumers in a phased manner by FY 2018, and

to ensure continuous quality, reliability and affordability of power to all domestic, commercial, agricultural and

industrial consumers.

‰ Rajiv Gandhi Grameen Vidyutikaran Yojna (“RGGVY”): Under the RGGVY, subsidy towards capital

expenditure to the tune of 90% of the project cost is provided by Rural Electrification Corporation Ltd

(“REC”), which serves as the nodal agency for implementation of the scheme. The remaining 10% is

provided by REC as a soft loan. Moreover, 100% capital subsidy is provided at a rate of Rs. 2,200 per

connection for projects undertaken for electrification of BPL households. The rural electrification

component of the scheme was subsequently subsumed into Deendayal Upadhyaya Gram Jyoti Yojana as

explained below.

‰ Power System Development Fund (“PSDF”): The Government has approved the scheme for Operation of

PSDF in 2014 which will be utilized for (i) creating necessary transmission systems of strategic importance

based on operational feedback by Load Dispatch Centers for relieving congestion in Inter-State

Transmission Systems (ISTS) and Intra-State System which are incidental to the ISTS; (ii) installation of

shunt capacitors, series compensators and other reactive energy generators for improvement of voltage

profile in the grid; (iii) installation of standard and special protection schemes, pilot and demonstrative

projects, and for setting right the discrepancies identified in protection audits on regional basis; and

(iv) renovation and modernization of transmission and distribution systems for relieving congestion.

‰ Integrated Power Development Scheme (“IPDS”): The Scheme was launched in November 2014 with the

following objectives: (i) strengthening of sub-transmission and distribution networks in the urban areas;

(ii) metering of distribution transformers / feeders / consumers in the urban area; (iii) IT enablement of

distribution sector and strengthening of the distribution network as per CCEA approval dated June 21, 2013

for completion of targets laid down under the RAPDRP for the 12th and 13th Plans by carrying forward the

approved outlay for RAPDRP to IPDS.

‰ Deendayal Upadhyaya Gram Jyoti Yojana (“DDUGJY”): The union government launched DDUGJY in

December 2014. REC is the nodal agency for the DDUGJY scheme. The main objectives of the DDUGJY

scheme are to provide access to power to all rural households and reduction of AT&C losses as per the

trajectory finalized in consultation with states by the Ministry of Power, so as to achieve constant power

supply for non-agricultural consumers and adequate power supply for agricultural consumers through

defined project components. The scheme was approved in 2014 with a total outlay of Rs. 440,330 million

86

and includes budgetary support of Rs. 334,530 million from the GoI. On April 28, 2018, electricity reached

every village under DDUGJY scheme (as per Year End Review 2018 — Ministry of Power). Now focus is

on electrifying every household under Saubhagya (as explained below).

‰ Privatization: Privatization of distribution is generally accepted as the first phase in the reforms and

restructuring of the power sector. With private participation in power distribution, significant benefits are

expected to accrue, such as reduction in AT&C losses, improvement in metering and billing practices and

improvement in revenue collection. However, the scope for privatization is limited as this is a politically

sensitive issue. Electricity distribution in some areas of the country is managed by private sector entities.

The state governments have also adopted a Distribution Franchisee (“DF”) model where the ownership of

the wire business remains with the state DISCOMs and the operation and maintenance is carried out by

private parties. Private licensees and distribution franchisees have managed to significantly reduce AT&C

losses, Torrent Power in Bhiwandi, Reliance Power (now AEML) in Mumbai, BSES Yamuna Power &

BSES Rajdhani Power in Delhi and Tata Power in Delhi being a few.

‰ RAPDRP: Aiming financial turnaround in the sector, MoP, GoI launched an Accelerated Power

Development Program (“APDP”) in 2001 wherein additional central plan assistance was made available to

states undertaking distribution reforms in a time bound manner by signing an MoU with MoP. Later, the

scheme was re-introduced as RAPDRP on September 19, 2008. RAPDRP aims to improve the financial

viability of state power utilities by reducing aggregate technical and commercial losses to 15%. The

RAPDRP program focuses on establishment of base line data, increasing accountability in the system,

reduction of AT&C losses through strengthening and upgrading of sub-transmission and distribution

networks and adoption of Information Technology.

‰ Ujwal DISCOM Assurance Yojana (“UDAY”): UDAY was launched by the Government of India on

November 20, 2015 for operational and financial turnaround of state-owned DISCOMs. The scheme aims

at (i) improving operational efficiency of DISCOMs; (ii) reduction in cost of power; (iii) Financial

Turnaround — Reduction in interest cost of DISCOMs; and (iv) enforcing financial discipline on

DISCOMs through alignment with state finances. The scheme involves provision for financial support to

the ailing distribution companies by the respective states by converting a portion of the debt to state bonds.

Besides financial support, the scheme envisages reduction of the cost of power through measures including

additional supply of domestic coal, coal linkage rationalization through swap agreements, etc. Operational

efficiency improvements are planned through smart metering, upgrading of infrastructure including

transformers, use of energy efficient lighting devices and bulbs, pumps and other heavy electric equipment.

This is a comprehensive plan for complete revival of the distribution sector. As per the UDAY portal dated

September 6, 2019, 32 states and union territories have signed up for UDAY and bonds for more than

Rs. 2,300 billion have been issued by the state governments and tariff revisions have happened in 25 out of

27 states and union territories since the beginning of the scheme. The progress on the reduction of AT&C

losses has been slower, with current AT&C loss at 21.41% for the participating states (as per the UDAY

portal as of September 6, 2019). The ACS — ARR Gap has reduced to Rs. 0.25 per Unit (as per UDAY

portal as of September 6, 2019).

‰ Pradhan Mantri Sahaj Bijli Har Ghar Yojana (“Saubhagya”): In October 2017, the Government has

formulated the Saubhagya scheme to achieve universal household electrification by providing last mile

connectivity and electricity connections to all remaining unelectrified villages and all households in rural

and urban India. All DISCOMs including private sector DISCOMs, state power departments and Rural

Electric Cooperative Societies shall be eligible for financial assistance under this scheme. REC would be

the nodal agency for operationalization of this scheme. This scheme is expected to benefit around

87

30,000,000 unelectrified households in the next two years. Total cost of this scheme is expected to be

around Rs. 163.2 billion and the budgetary support would be around Rs. 123.2 billion.

Tariff Structure for Transmission & Distribution

Overview of National Tariff Policies

Under the National Tariff Policy, 2006, the Government further emphasized competitive bidding for new

transmission projects by introducing the TBCB scheme for all transmission projects. The policy also promoted

competition in the construction of transmission infrastructure, encouraged greater investment by private business

in the sector and increased transparency. India is one of the few countries which has opened up its transmission

sector for private participation and has garnered significant interest from private players. In May 2018, the

Government proposed amendments to the national tariff policy, which aim to improve power supply, provide

clarity to competitively bid projects, reduce the cost burden on consumers, and boost the renewable energy

segment. Pursuant to the Electricity Act, transmission tariffs can be either fixed on a cost-plus basis; or

determined through a transparent process of bidding in accordance with the guidelines issued by the GoI.

Methods for Tariff Determination: Cost-plus Tariffs

Transmission

Under the Electricity Act, the CERC Tariff Regulations and the State Electricity Regulatory Commission

(“SERC”) Tariff Regulations, a transmission licensee is required to seek from the CERC or the SERC, as the

case may be, a tariff determination in respect of each of its transmission projects. The tariff applicable to any

particular transmission project is designed to compensate the licensee for the costs of construction of the

transmission project and for the operation of the project thereafter, as well as to provide a pre-determined rate of

return on the licensee’s investment in the project. This “cost-plus basis” tariff is determined based on a number

of components that are aggregated into an Annual Transmission Charge which is paid to us by PGCIL and STU,

as the case may be.

For fixed return based projects (i.e. cost-plus), the building blocks are on multi-year (four to five years) reset

basis where (i) return on equity is set by CERC or SERC; (ii) norms for capital and operating costs, operating

standards and performance indicators for the assets are established; and (iii) charges under the national tariff

framework are determined on MWh basis for power movement across state boundary.

Annual Transmission Revenuefor Each Project

O&M Costs Based on Regulations

Recovery of 90% of Asset Value

Interest on Normative Debt

Working Capital Norms as Specified

Equity Base 30% of Project Cost

Tax Based on Actual

O&M Costs

Depreciation Incentive on

Actual Availability vis-à-vis

Normative Availability

Incentive /(Penalty)

Interest on loan

Interest on WC

RoE

Tax on ROE

AnnualFixed Costs

Helps offset O&M

Expenses

Distribution

Similar to transmission projects on a cost-plus basis, the concession model for distribution business adopts a

cost-plus model, based on a similar set of building blocks where return on equity is set, and norms for cost items,

operating standards and performance indicators are established. In addition, power procurement cost will be

passed through for DISCOMs.

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Factors Encouraging Investments in Power Sector

Private Participation and Investments

There are significant investment opportunities in the power sector in India. With urbanization and

industrialization, demand for power has increased, encouraging private sector participation in the sector.

Transmission

The Indian power sector was opened to private sector participation in 1991. In 1998, the Electricity

(Amendment) Act defined transmission as a separate activity and provided for the creation of the CTU and the

STUs. In 2003, the Electricity Act lowered barriers to private participation in the transmission sector and

established competitive bidding for certain transmission projects under the TBCB scheme, with both public

utilities and private businesses being allowed to participate in the bidding for these projects, either individually or

through joint ventures. Private players have commissioned significant capacity over the past decade. The share of

the private sector in the power transmission segment has risen from nil in FY 2007, but this is still far behind the

private sector penetration in the installed power capacity section.

The Electricity Act also gave the CERC and the SERCs mandates to grant licenses for the construction,

maintenance and operation of transmission lines. Under the 2006 National Tariff Policy, the GoI further

emphasized competitive bidding for new transmission projects by introducing the TBCB scheme for all

transmission projects. The 2006 National Tariff Policy also promoted competition in the construction of

transmission infrastructure, encouraged greater investment by private business in the sector and increased

transparency.

Pace of awarding projects under the TBCB has gathered steam since its launch and there is increasing

participation from the private sector. As on July 31, 2019, 41 interstate (including 1 project scrapped)

transmission projects have been awarded through the TBCB system, of which 29 were won by private players

while the remaining 12 were won by PGCIL according to CEA. Private sector groups are fast emerging as large

independent power transmission companies even as PGCIL continues to have a significant presence.

Distribution

The power distribution sector remains inefficient with high AT&C losses and poor financial health of distribution

utilities. Several initiatives (such as UDAY and DDUGJY) have been undertaken to improve operational

efficiency and to attract private participation and investment in the sector and (as detailed in earlier section Key

Reforms for Power Distribution). The state power distribution utilities have invested substantially in metering

(such as feeder metering, metering of distribution transformers, etc.) and system strengthening schemes (which

aims to improve overall operational efficiency as well as reduction of overall system losses). Financial assistance

is provided to strengthen urban infrastructure including distribution networks in urban areas and metering of

distribution transformers/feeders/consumers under IPDS.

Though the power distribution industry is dominated by state utilities, the government has tried to increase

private participation in this sector through distribution franchise model and sub-contracting of non-core

operations. This is evidenced in increasing presence of private players / Public Private Partnership in the sector,

for example Tata Power and AEML in Mumbai city and Suburban, Tata Power Delhi Distribution (Tata Power-

DDL) in North Delhi, BSES Yamuna Power Limited (BYPL) in South & West Delhi, CESC Limited in Kolkata

and Torrent Power in Ahmedabad. The snapshot below provides an overview of the track record and contribution

of these private players in the power distribution sector.

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Table. Comparing Key Private Utilities in India5

Parameters AEML Tata Power Tata Power-DDL BYPL CESC Limited Torrent Power

License Area . . . . . . . 1) North

Division: Mira

Bhayendar to

Kandivalli

2) Central

division:

Kandivalli to

Dindoshi to

Malad

3) East

division:

Andheri-kurla,

chembur,

Sakinaka

4) South

division:

Bandra

5) South

Central

division:

Andheri,

Versova, Santa

cruz

1) Colaba to

Mahim falling

under the

Mumbai city

revenue district

2) Bandra to

Dahisar under

western suburbs

parts of

Mumbai

Suburban

revenue district

3) Chunabhatti

to Vikhroli and

Makhurd in

eastern suburbs

parts of

Mumbai

Suburban

revenue district

4) Area of

Municipal

corporation of

Mira

Bhayendar

North and

North-west part

of Delhi

South East,

North East and

Central circles

distributing in

14 divisions

including

Chandni

Chowk, Darya

Ganj, Dilshad

Garden, Jhilmil,

Karawal Nagar,

Krishna Nagar,

Laxmi Nagar,

Mayur Vihar,

Vasundhara

Enclave,

Nandnagri,

Pahar Ganj,

Patel Nagar,

Shankar Road

and Yamuna

Vihar

1) Areas

administered by

Kolkata

municipal

corporation in

the city of

Kolkata

2) Parts of

Howrah,

Hooghly, 24

Parganas

(North), 24

Parganas

(South) districts

of West Bengal

3) Franchisee in

Rajasthan-Kota,

Bharatpur and

Bikaner

Ahmedabad,

Gandhinagar,

Surat and Dahej

Operate since . . . . . . 2018^ 1919 2002 2002 1899 1996

Area (sq. km.) . . . . . . 400 475 510 200 567 425

Connected

Households(mn) . . 30 — 2.3 — 30.3 25.5

Max. Demand

(MW) . . . . . . . . . . 1,884 806 2,074 1,561 2,159 2,953

Sales in MUs (incl.

Wheeling) . . . . . . . 8,579 4,479 8,870 6,708 10,390* 11,539**

Consumption/

Consumer/Month . 250 548 451 333 262 377

5 Distribution Licensees:

AEML-D — Adani Electric Mumbai Limited — Distribution

BEST-U — Brihanmumbai Electric Supply & Transport Undertaking

BSES-R — BSES Rajdhani

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BSES-Y — BSES Yamuna

CESC — Calcutta Electric Supply Corporation

CESU — Central Electricity Supply Utility of Orissa Limited

TP-A — Torrent Power Limited Ahmedabad

TP-S — Torrent Power Limited — Surat

TP-D — Torrent Power Limited — Dahej

TPC-D — Tata Power Company Limited — Distribution

TPDDL — Tata Power Delhi Distribution Limited

Source: Respective websites, CRISIL Research

^Note: Reliance Infrastructure (BSES) commenced its electricity distribution operations in Mumbai region in FY 2002, However

AEML acquired the business in September 2018.

*Sales: 9,700 Exports: 700

**Ahmedabad: 7,835, Surat 3,276, Dahej: 426

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REGULATIONS AND POLICIES IN INDIA RELATING TO THE POWER SECTOR

The following section provides an overview of certain Indian laws and regulations governing activities in the

electricity transmission and distribution industry in India, our business and this Notes offering. The information

set out below has been obtained from sources available in the public domain and is based on the current

provisions of the Indian laws, as amended; and which are subject to amendments, changes and modifications.

The information set out below is not exhaustive and is only intended to provide general information to the

investors and is neither designed nor intended to substitute for professional legal advice. Prospective investors

should seek independent legal advice on the laws and regulations applicable to our business.

The Power Sector

Under the Constitution of India, “electricity” is included in the concurrent list which means that both, state

governments; and the central government (the “Government”) have the power to formulate policies and

guidelines to regulate the electricity industry.

The Ministry of Power (the “MoP”) is the administrative ministry of the Government governing the central

power sector in the country and oversees the operation of the Central Public Sector Undertakings (the “CPSUs”).

The Central Electricity Authority (the “CEA”) advises the MoP on electricity policies and technical matters,

among others. Further, the tariff regulations of the Maharashtra Electricity Regulatory Commission govern the

determination of tariffs in the State of Maharashtra in which the city of Mumbai falls.

The Electricity Act, 2003 (the “Electricity Act”)

The Electricity Act is a central legislation relating to the generation, transmission, distribution, trading and use of

electricity that subsumed multiple legislations that previously governed the Indian power sector. One of the

reform initiatives under the Electricity Act was the move towards a multi-buyer, multi-seller system as opposed

to the structure which permitted only a single buyer to purchase power from power generators. In addition, the

Electricity Act grants the Electricity Regulatory Commissions (“ERCs”) freedom in determining tariffs. Under

the Electricity Act, no license is required for the generation of electricity if the generating station complies with

the technical standards relating to connectivity with the grid. The Electricity Act was amended in 2004 to state

that the SERC shall, within five years from the date of commencement of the amendment, provide open access to

all consumers who require supply of electricity where maximum power at any time exceeds one Megawatt. The

Electricity Act was subsequently amended in 2007 to exempt captive power generation plants from licensing

requirements for supply to any licensee or consumer. The Electricity Act was further amended in 2010, by the

notification dated March 3, 2010, to provide that any developer of an SEZ notified under the Special Economic

Zones Act, 2005, shall be deemed to be a licensee under the Electricity Act.

The MoP has recently proposed draft amendments to the Electricity Act by way of the Electricity (Amendment)

Act, 2018 (the “Electricity Amendment Act”). The Electricity Amendment Act proposes changes in renewable

energy, cross-subsidy, open access and operations and responsibilities of ERCs, amongst other changes. For

instance, the Electricity Amendment Act introduces the concept of a renewable energy service company, which

provides renewable energy to consumers in the form of electricity. Additionally, the Electricity Amendment Act

also introduces policies to support the renewable energy sector like the National Renewable Energy Policy, to

promote smart grid, ancillary support and decentralized distribution generation. The Electricity Amendment Act

also proposes (a) a time bound reduction in cross-subsidies; and (b) a provision restricting cross-subsidies to not

more than 20% of the wheeling charge. In connection with open access, the Electricity Amendment Act proposes

that all consumers having a connected load of one Mega Watt and above with the power system, may procure, at

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their option, electricity through open access from any generating company, trading licensee, or from any other

source. The Electricity Amendment Act also proposes the separation of carriage and content, i.e. providing a

further breakup of the distribution companies into supplier and network operators and proposes to allow multiple

suppliers in the area of the distribution company.

Licensing

The Electricity Act stipulates that no person can transmit, distribute or undertake trading in electricity; unless

such person is licensed by the Central Electricity Regulatory Commission (the “CERC”) or the appropriate State

Electricity Regulatory Commission (“SERC”) under, or is exempt under, the Electricity Act. The Electricity Act

provides for transmission licensees, distribution licensees and licensees for electricity trading. There can be a

private distribution licensee as well.

Transmission

Transmission is a regulated activity and involves the intervention of various players. The Government is

responsible for facilitating the transmission and supply of electricity, particularly inter-state, regional and inter-

regional transmission. The Electricity Act vests the responsibility of efficient, economical and integrated

transmission and supply of electricity with the Government and empowers it to make regional demarcations of

the country for the same. In addition, the Government will facilitate voluntary inter-connections and coordination

of facilities for the inter-state, regional and inter-regional generation and transmission of electricity. The CEA is

required to prescribe certain grid standards under the Electricity Act and every transmission licensee must

comply with such technical standards of operation and maintenance of transmission lines. In addition, every

transmission licensee is required to obtain a license from the CERC and the SERCs.

The Electricity Act requires the Government to designate one government company as the central transmission

utility (“CTU”), which is deemed as a transmission licensee. Similarly, each state government is required to

designate one government company as a state transmission utility (“STU”), which would also be deemed as a

transmission licensee. The CTU and STUs are responsible for the transmission of electricity, planning and

coordination of the transmission system, providing non-discriminatory open access to any users and developing a

coordinated, efficient and integrated inter-state and intra-state transmission system respectively. The Electricity

Act prohibits the CTU and STUs from engaging in the business of generation of or trading in electricity. Under

the Electricity Act, a transmission licensee may, with prior intimation to the appropriate ERC, engage in any

business for the optimum utilization of its assets.

Under the Electricity Act, the Government was empowered to establish the National Load Despatch Center (the

“NLDC”) and Regional Load Despatch Centers (the “RLDCs”). The primary responsibility of the NLDC is to

ensure the optimum scheduling and dispatch of electricity among the RLDCs. The RLDCs are responsible for:

(i) optimum scheduling and dispatch of electricity within the region, in accordance with the contracts entered into

with the licensees or the generating companies operating in the region; (ii) monitoring grid operations;

(iii) keeping accounts of the quantity of electricity transmitted through the regional grid; (iv) exercising

supervision and control over the interstate transmission system; and (v) carrying out real time operations for grid

control and dispatch of electricity within the region through secure and economic operation of the regional grid

in accordance with the grid standards and grid code.

The transmission licensee is required to comply with the technical standards of operation and maintenance of

transmission lines specified by the CEA. The Electricity Act provides mandatory non-discriminatory open access

to transmission systems. The provision of open access is subject to the availability of an adequate transmission

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capacity as determined by the CTU or STU. The Electricity Act also lays down provisions for intra-state

transmission where the state commission facilitates and promotes transmission, wheeling and inter-connection

arrangements within its territorial jurisdiction for the transmission and supply of electricity by economical and

efficient utilization of the electricity.

Distribution and Retail Supply

The Electricity Act does not distinguish between distribution and retail supply of electricity. Distribution is a

licensed activity and distribution licensees are allowed to undertake trading without any separate license. Under

the Electricity Act, no license is required for the purposes of the supply of electricity. Thus, a distribution

licensee can undertake three activities through one license: trading, distribution and supply. Subject to prior

permission from the appropriate commission, the distribution licensee may engage itself in any other activities

for the optimal utilization of its assets.

In December 2014, the Government proposed to amend the Electricity Act through the Electricity (Amendment)

Bill, 2014, to segregate the distribution and supply of electricity as distinct licensed activities. As of the date of

this offering circular, the bill is pending for approval of the Lok Sabha (the lower house of parliament). If

approved, this will effectively separate the network business and the electricity supply businesses at the retail

level, which is expected to facilitate open access at the retail supply level.

Unregulated Rural Markets

The licensing requirement does not apply in cases where a person intends to generate and distribute electricity in

rural areas as notified by a state government. However, the supplier is required to comply with the requirements

specified by the CEA such as protecting the public from the dangers involved, eliminating or reducing the risks

of injury and providing notifications of accidents, failures of transmission and supply of electricity. It shall also

be required to comply with system specifications for the supply and transmission of electricity. The Electricity

Act mandates formulation of national policies governing rural electrification and local distribution and rural

off-grid supply, including those based on renewable and other non-conventional energy sources. This policy

initiative is expected to give impetus to rural electrification and conceptualize rural power as a business

opportunity.

Tariff Principles

The Electricity Act has introduced significant changes in terms of tariff principles applicable to the electricity

industry. Under the Electricity Act, the appropriate ERCs are empowered to determine the tariff for the:

‰ supply of electricity by a generating company to a distribution licensee, provided that the appropriate

commission may, in the case of a shortage of supply of electricity, fix the minimum and maximum ceiling

of tariff for sale or purchase of electricity in pursuance of an agreement, entered into between a generating

company and a licensee or between licensees, for a period not exceeding one year, to ensure reasonable

prices of electricity;

‰ transmission of electricity;

‰ wheeling of electricity; and

‰ retail of electricity, provided that in the case of distribution of electricity in the same area by two or more

distribution licensees, the appropriate commission may, for promoting competition among distribution

licensees, fix only the maximum ceiling of tariff for retail electricity.

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The appropriate ERC is required to be guided by the following while determining the tariff:

‰ the principles and methodologies specified by the CERC for determination of the tariff applicable to

generating companies and transmission licensees;

‰ the generation, transmission, distribution and supply of electricity are conducted on commercial principles;

‰ the factors that encourage competition, efficiency, economical use of resources, good performance and

optimum investments;

‰ safeguarding consumer interest

‰ ensuring recovery of the cost of electricity in a reasonable manner;

‰ the principles rewarding efficiency in performance;

‰ tariff principles for different years;

‰ that the tariff progressively reflects the cost of supply of electricity and reduces cross-subsidies in the

manner to be specified by the CERC;

‰ the promotion of co-generation and generation of electricity from renewable sources of energy; and

‰ the National Electricity Policy, 2005 (the “NEP”) and the Tariff Policy, 2016.

The Electricity Act provides that the ERC shall adopt such tariff as has been determined through a transparent

process of bidding in accordance with the guidelines issued by the Government.

The MoP has issued detailed guidelines for competitive bidding as well as standard bidding documents for

competitive bid projects. The determination of the tariff for a power project would depend on the mode of

participation in the project. Broadly, tariffs can be determined in two ways: (i) based on the tariff principles

prescribed by the CERC (cost-plus basis consisting of a capacity charge and an energy charge for generation,

annual fixed charges for transmission, incentive payments and other charges like deviation settlement charge,

congestion charges, charges for ancillary series etc.); or (ii) a competitive bidding route where the tariff is purely

market-based.

National Electricity Policy, 2005

In compliance with Section 3 of the Electricity Act, the Government announced the NEP in February 2005. The

NEP aims at achieving the following objectives:

‰ availability of electricity for all households;

‰ availability of power on demand; overcoming the energy and peaking shortages and to make available

adequate spinning reserve;

‰ supply of reliable and quality power of specified standards in an efficient manner and at reasonable rates;

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‰ per capita availability of electricity to be increased;

‰ minimum lifeline consumption of one unit per household per day;

‰ financial turnaround and commercial viability of electricity sector; and

‰ protection of consumers’ interests.

National Electricity Plan, 2019 (the “National Electricity Plan 2019”)

The Electricity Act requires the CEA to frame a national electricity plan once every five years and revise the

same from time to time in accordance with the NEP. The National Electricity Plan (Volume II: Transmission)

covering the review of the previous electricity plan, detailed a plan for the financial year 2022 and a perspective

plan for the financial year 2027, was notified by the CEA on January 15, 2019.

Major highlights of the National Electricity Plan 2019 are as follows:

‰ Transmission planning is a continuous process of identification of transmission system addition

requirements, their timing and need. The transmission requirements could arise from (i) new generation

additions in the system, (ii) increase in demand and (iii) system strengthening that may become necessary

to achieve reliability as per the planning criteria under change load generation scenario.

‰ The transmission network has increased to 367,851 ckms of transmission lines and 721,265 MVA of

transformation capacity in substations by the end of the previous electricity plan.

‰ The cross-border power exchanges with neighboring countries considered for plan period (2017 to 2022)

includes about 4,482 MW import from Bhutan and 1,100 MW export to Bangladesh. With Nepal, the

interconnection would be utilized for both import and export of power and net exchange has been

considered as negligible.

‰ About 110,000 ckms of transmission lines and about 383,000 MVA of transformation capacity in the

substations at 220 KV and above voltage levels are required to be added during plan period 2017 to 2022.

‰ The required aggregate inter-regional power transmission capacity by fiscal 2022 is 118,050 MW.

‰ In order to provide reactive power support to the grid under steady state as well as under dynamic

conditions, adequate reactive compensation in form of bus reactor and line reactors (765 KV and 400 KV)

and Static Var Compensators (“SVCs”) and Static Compensators (“STATCOMs”) have been planned.

‰ An estimated expenditure of `2,690,000 million would be required for implementation of additional

transmission system in the country (Transmission lines, Substations, and reactive compensation etc.)

during the plan period (2017 to 2022).

‰ To provide broad information on transmission capacity requirement, a ‘perspective transmission plan for

the fiscal 2027 has been prepared based on peak load demand projections in latest electric power survey

and expected generation addition during the period.

‰ At present, a majority of the Inter-State Transmission System (“ISTS”) is owned and operated by Power

Grid Corporation of India Limited (“Power Grid Corporation”) which is also CTU. Most of the ISTS are

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being built through Tariff Based Competitive Bidding (“TBCB”) process and many private sector entities

now Built Own and Operate the ISTS elements. A number of ISTS schemes are owned by the private

sector or joint venture (JV) between private sector and Power Grid Corporation are under construction. The

ISTS serves the following purpose: (i) Evacuation of power from Inter-State Generating Stations (“ISGS”)

which have beneficiaries in more than one state, (ii) Onwards transmission of power for delivery of power

from inter-state generation stations up to the delivery point of the state grid, (iii) Transfer of operational

surpluses from surplus state(s) to deficit state(s) or from surplus region(s) to deficit region(s) as needed

under relevant regulations.

‰ Intra-STS within the state are mainly owned and operated by the state transmission utilities of each state.

The Intra-STS serves the following purpose: (i) evacuation of power from the state’s generating (both

under state and private sector) stations having beneficiaries in that state; (ii) onwards transmission within

the state from ISTS boundary up to the various substations of the state grid network; and (iii) transmission

within the state grid for delivery of power to the load centers within the state.

‰ The total inter-regional capacity addition planned during the period 2017-2022 is 43,000 MW. With the

above addition, the total inter-regional capacity would grow from the present capacity of 75,050 MW to

118,050 MW by the end of the plan period 2017-2022.

‰ For some of the transmission works, implementing agencies face challenges in completion of the task. The

main challenges are: (a) forest clearance is a mandatory requirement for the portion of the line traversing

through the forest area; and (b) with increase in transmission voltage, the requirement of land for tower

footing and RoW width has increased substantially.

‰ A perspective transmission plan for 20 years (2014 to 2037) was prepared in August 2014 by CEA in

association with CTU and Power System Operation Corporation Limited. The objective of the plan was to

present a broad outline of the requirement of transmission system in the Indian grid in next 20 years.

‰ The generation plants that may come up in these 5 years (2022 to 2027) are not known. The all-India peak

demand is expected to rise from the current level of 161 GW to about 226 GW by fiscal 2022 and to about

298 GW by fiscal 2027.

‰ The transmission capacity of inter-regional links planned to be achieved by end of the previous electricity

is 68,050 MW. Total 75,050 MW the inter-regional transmission capacity was achieved against the planned

capacity of by end of previous electricity plan i.e. 68,050 MW.

‰ The total inter-regional transmission capacity (at voltage level 132 KV and above voltage level) increased

from 27,750 MW to 75,050 MW as on March 13, 2017.

‰ During fiscal 2013, 17,107 ckms of transmission lines (220 KV and above voltage level) and 63,665 MVA

of transformation capacity was commissioned. During fiscal 2014 around 16,748 ckms of transmission

lines (220 KV and above voltage level) and 57,330 MVA transformation capacity was commissioned.

During the fiscal 2015 around 22,101 ckms of transmission lines (220 KV and above voltage level) and

65,554 MVA of transformation capacity was commissioned. During fiscal 2016, around 28,114 ckms of

transmission lines (220 KV and above voltage level) and 62,849 MVA of transformation capacity was

achieved. During fiscal 2017, around 26,300 ckms of transmission lines (220 KV and above voltage level)

and 81,816 MVA of transformation capacity was achieved.

‰ Transmission constraints only during short-term periods are sometimes experienced. This is mainly due to

delay/slip in the upcoming generation projects as per target and addition of some generating units outside

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the target. A few of the transmission works were also got delayed/held up because of Right-of-Way

(“RoW”) issues, non-availability/delay in getting forest clearance and delay in land acquisition for

sub-stations.

Tariff Policy 2016 (the “Tariff Policy, 2016”)

The Tariff Policy, 2006 was issued by the Government which was further replaced by the Tariff Policy, 2016

issued by Government, under the Electricity Act.

The goals of the Tariff Policy, 2016 are to ensure availability of electricity to consumers at reasonable and

competitive rates, ensure the financial viability of the power sector, attract investment to the power sector,

promote regulatory transparency, consistency and predictability across jurisdictions, minimize perceptions of

regulatory risks, promote competition, ensure operational efficiency, improve the quality of the power supply,

promote generation of electricity from renewable sources, promote hydroelectric power generation including

Pumped Storage Projects (“PSP”) to provide adequate peaking reserves, reliable grid operation and integration of

variable renewable energy sources, evolve a dynamic and robust electricity infrastructure for better consumer

services, facilitate supply of adequate and uninterrupted power to all categories of consumers and ensure creation

of adequate capacity including reserves in generation, transmission and distribution in advance, for reliability of

supply of electricity to consumers., In so far as transmission is concerned, the Tariff Policy, 2016 seeks to

achieve the objectives of ensuring optimal development of the transmission network ahead of generation with

adequate margin for reliability and to promote efficient utilization of generation and transmission assets in the

country and to attract the required investments in the transmission sector and providing adequate returns.

The Tariff Policy, 2016 is structured so that the benefits of improved efficiency and new technology are passed

on to consumers through reduced tariffs. It also emphasizes the need for the relevant regulator to ensure the

recovery of all prudent costs when approving the financial restructuring of a transmission company. The CERC

and the SERCs may choose to appoint an independent expert to examine and verify claimed costs, to ensure they

are prudent.

The Tariff Policy, 2016 stipulates that all future inter-state transmission projects are ordinarily required to be

developed through a competitive bidding process. However, the Government may exempt a specific category of

projects of strategic importance, technical upgradation etc. or works required to be done in response to an urgent

situation, from competitive bidding, on a case-by-case basis. Intra-state transmission projects shall also be

required to be developed through competitive bidding process for projects costing above a threshold limit

decided by the relevant SERC.

In addition, power that is generated by Government generating stations is allocated to the states under a formula

set by the Government. 15% of the total share that a state is entitled to is unallocated; and is reserved for

emergency situations. Consumers in states have access to this pool of power through short-term, medium-term

and long-term access agreements. The Tariff Policy, 2016 states that in extraordinary circumstances, such as a

threat to the security of the state or public order, or a natural calamity, priority is to be given for the allocation of

power out of the unallocated share of power for that state, rather than in accordance with the relevant access

agreement.

The Tariff Policy, 2016 allows the CERC to set the rules and regulations for ancillary services. Ancillary services

are essential support services that are required to maintain a continuous balance between generation and load-in

power systems. Such services include frequency control, voltage maintenance, reactive power support and the

maintenance of generation and transmission reserves. The policy sets out the method of sharing the charges

98

necessary to support the power system or grid operations needed to maintain power quality, reliability and grid

security. However, the CERC is required to consult with the CEA, the SERCs, the Joint Electricity Regulatory

Commissions (the “JERC”), the CTU, the STUs, the NLDC, the RLDCs and the SLDCs when setting the rules

and regulations for ancillary services. The SERCs are required to adopt the rules and regulations for ancillary

services as specified by the CERC.

Proposed Amendments to the Tariff Policy 2016 (the “New Tariff Policy”)

MoP had constituted a committee to propose amendments to the Tariff Policy 2016. The New Tariff Policy

focuses on empowering the consumers. Appropriate commission shall allow and establish a mechanism for

reimbursement of carrying cost for the period of change in law until its approval, if there is any, after award of

the bids. The basic framework on service standards shall include continuity and reliability of electricity supply,

quality standards, and timely responses to application for connection/disconnection, enhancement or reduction of

connection load and disruption complaints. SERC shall notify the standards of performance of licensee with

respect to quality, continuity and reliability of service for all consumers. Penalty shall be levied on distribution

companies and credited to the respective consumers respectively, in cases of power cuts other than force majeure

conditions, Aggregate Technical and Commercial (“ATandC”) losses shall be brought down to a level of 10%

within 3 years of date on which ATandC loss level of 15% is to be achieved. Subsidies, if applicable, shall be

directly given to the customers. All consumers shall be metered and required to pay electricity charges for

consumption in accordance with the tariff fixed. In a timeframe of three years, electricity supply shall shift from

post-paid basis to prepaid basis, with automatic designed smart meters. The consumers belonging to poorer

sections of the society who consume below 60 KWh per month may receive a special support through cross

subsidy. Effective tariffs for such designated group of consumers will be at least 50% of the average cost of

supply after considering the subsidy given by the State Government. Appropriate traffic framework might be laid

down by SERCs in order to promote electric mobility and for enhancing energy security. New Tariff Policy also

brings out the simplification of tariff categories and rationalization of retail stuff. Losses in wheeling of

electricity in distribution system may be adjusted in scheduling or may be paid for in accordance with the

regulations framed by SERC. Standby charges, in the form of two-part tariff levied for the maximum demand

imposed and the energy drawn respectively from the system of distribution licensee during a month in which

such a customer has to fall back on supply from the distribution licensee for some reason, shall be applicable

only for the open access customers who have not retained contracted demand with the distribution licensee. In

case open access customer retains contracted demand partly or fully, no standby charges shall be levied. Only

tariff and penalties for drawing power beyond contracted demand as determined by the appropriate authorities

shall be applicable.

The Guidelines for Determination of Tariff by Bidding Process for Procurement of Power by DistributionLicensees, 2005

Bid Route for Procurement of Power by Distribution Licensees

Bidding essentially is based on a bulk power tariff structure. The Guidelines for Determination of Tariff by

Bidding Process for Procurement of Power by Distribution Licensees, 2005 (the “Bidding Guidelines”)

recommended bid evaluation based on a levelized tariff.

The Bidding Guidelines have been repealed by way of resolutions passed by the MoP to the extent of: (i) long-

term procurement of electricity through location-specific, coal-based power projects referred to as case II

projects; (ii) long-term procurement of electricity where the location, technology or fuel is not specified by the

procurer referred to as case I projects; (iii) procurement of electricity for the medium term; and (iv) procurement

of peaking power for the medium term.

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The MoP has issued the following guidelines (the “Revised Bidding Guidelines”) by way of resolutions:

(i) Guidelines for procurement of electricity from thermal power stations set up on a Design, Build, Finance,

Operate and Transfer (“DBFOT”) basis dated September 21, 2013. The application of these guidelines is

restricted to projects constructed and operated in accordance with a power purchase agreement for a period

of 20 years or more.

(ii) Guidelines for procurement of electricity from thermal power stations set up on a DBFOT mode basis

dated November 9, 2013 which was further amended on April 16, 2015 and May 5, 2015. The application

of these guidelines is restricted to projects constructed and operated in accordance with a power supply

agreement for a period of about 25 years including construction period, with a provision for an extension of

five years.

(iii) Guidelines for procurement of peaking power for the medium term dated February 24, 2014. The

application of these guidelines shall be restricted to projects constructed or operated in accordance with an

agreement for procurement of peaking power for a period of between one to five years, with a provision for

extension of this period for the lower of 25% of the initial contract period and one year, with mutual

consent.

(iv) Guidelines for procurement of electricity for the medium term from power stations set upon a finance, own

and operate (“FOO”) basis dated January 17, 2017 through a process of open and transparent competitive

bidding through an electronic platform (“DEEP e-Bidding Portal”). The application of these guidelines

shall be restricted to projects constructed or operated in accordance with an agreement for procurement of

power for a period of one to five years, with a provision for extension of this period for the lower of 25%

of the initial contract period and one year, with mutual consent.

All utilities intending to invite prospective power producers to construct and operate power generating stations

are required to determine tariff through the competitive bidding process based on the Revised Bidding

Guidelines, as may be applicable, comprising the model or standard bidding documents (including the model

request for qualification (“MRFQ”), model request for proposals (“MRFP”), model power supply agreement

(“MPSA”), model power purchase agreement (“MPPA”) and model agreement for procurement of power

(“MAPP”), as the case may be.

The Revised Bidding Guidelines envisage a two-step process for the selection of a bidder. The first stage, i.e. the

qualification stage of the process, involves the qualification of interested parties or consortia that make an

application in accordance with the provisions of the MRFQ. At the end of this stage, it shall be announced which

of the shortlisted suitable pre-qualified applicants will be eligible for participation in the second stage of the

bidding process, i.e. the bid stage, in accordance with the provisions of the MRFP.

Generally, the lowest bidder shall be the selected bidder. The remaining bidders shall be kept in reserve and may,

in accordance with the process specified in the MRFP, be invited to match the bid submitted by the lowest bidder

in case such lowest bidder withdraws or is not selected for any reason. In the event that none of the other bidders

match the bid of the lowest bidder, the utility may, in its discretion, invite fresh bids from the remaining bidders

or annul the bidding process, as the case may be. Bids will be invited for the project on the basis of a tariff to be

offered by a bidder for the production and supply of electricity in accordance with the terms of the MPPA,

MPSA or MAPP, as the case may be. For the purposes of bidding, the fixed charge and variable charge

(including fuel charge, transportation expenses and transmission losses) would be taken into consideration.

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The MoP has also issued guidelines for the short-term procurement of power by distribution licensees through a

tariff-based bidding process (i.e. for a period of less than or equal to one year) on May 15, 2012, which have been

amended by revised guidelines introducing the system of ‘reverse auction’ through DEEP e-Bidding Portal with

effect from April 1, 2016. The said guidelines prescribe that bids shall be invited on a round-the-clock basis

through a single-stage bidding process whereby a request for proposal shall be published and the entire process

shall be conducted necessarily by way of competitive bidding. To ensure competitiveness, the minimum number

of bidders should be at least two, other than the generating companies owned by the state government procuring

such bid.

CERC (Terms and Conditions of Tariff) Regulations, 2019

The CERC (Terms and Conditions of Tariff) Regulations, 2019 (the “CERC Tariff Regulations 2019”) are

applicable for the determination of the tariff between April 1, 2019 and March 31, 2024, for a generating station;

units of generating stations; and a transmission system or its elements, including communication systems used

for the inter-state transmission of electricity.

The CERC Tariff Regulations 2019 are not applicable to generating stations or inter-state transmission systems,

where tariffs have been discovered through competitive bidding or determined in accordance with the CERC

(Terms and Conditions for Tariff Determination from Renewable Energy Sources) Regulations, 2017; and all the

generating stations or transmission systems whose tariff has been discovered through tariff based competitive

bidding in accordance with the guidelines issued by the Government and adopted by appropriate commission

under Section 63 of the Electricity Act. The tariff for the supply of electricity from a thermal generating station

shall comprise two parts, namely a capacity charge (for recovery of annual fixed cost) and an energy charge (for

recovery of primary and secondary fuel costs and cost of limestone and any other reagent where applicable).

Tariffs for the supply of electricity from a hydro generating station shall comprise a capacity charge and an

energy charge, for the recovery of annual fixed costs through the two charges. The tariff for the transmission of

electricity on the inter-state transmission system shall comprise a transmission charge for the recovery of annual

fixed costs.

The capacity charges shall be derived on the basis of annual fixed costs and shall consist of the following

components: (i) return on equity; (ii) interest on loan capital; (iii) depreciation; (iv) interest on working capital;

and (v) operation and maintenance expenses. Energy charges shall be derived on the basis of the landed fuel cost

of a generating station (excluding the hydro generation station) and shall comprise the following costs: (i) landed

fuel cost of primary fuel; (ii) cost of secondary fuel oil consumption and (iii) cost of limestone or any other

reagent, as applicable.

Return on equity shall be computed at the base rate of 15.50% for thermal generating stations, transmission

systems, including communications system, and the run of the river hydro generating stations and at the base rate

of 16.50% for the storage type hydro generating stations including pumped storage hydro generating stations and

run-of river generating station with pondage, in compliance with the proviso given under the CERC Tariff

Regulations 2019. The base rate of return on equity shall be grossed up with the effective tax rate of the

respective financial year. For this purpose, the effective tax rate shall be considered on the basis of actual tax

paid in respect of the financial year. Incentive to a generating station or unit thereof shall be payable at a flat rate

of `0.65/KWh for ex-bus scheduled energy during peak hours and `0.5/KWh for ex-bus scheduled energy

corresponding to scheduled generation in excess of ex-bus energy corresponding to the normative annual plant

load factor.

Tariff in respect of a generating station may be determined for the whole of the generating station or unit thereof,

and tariff in respect of a transmission system may be determined for the whole of the transmission system or

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element thereof or associated communication system. The units of a generating station or all elements of a

transmission system prior to April 1, 2019, the generating company or the transmission licensee, as the case may

be, shall file consolidated petition in respect of the entire generating station or transmission system for the

purpose of determination of tariff for the period April 1, 2019 to March 31, 2024. Tariff of the associated

communication system forming part of transmission system which has achieved commercial operation prior to

April 1, 2014 shall be as per the methodology approved by the appropriate commission prior to April 1, 2014.

Where only a part of the generation capacity of a generating station is tied up for supplying power to the

beneficiaries through long term power purchase agreement, the units for such part capacity shall be clearly

identified and, in such cases, the tariff shall be determined for such identified capacity. Where the units

corresponding to such part capacity cannot be identified, the tariff of the generating station may be determined

with reference to the capital cost of the entire project, but tariff so determined shall be applicable corresponding

to the part capacity contracted for supply to the beneficiaries.

The CERC Tariff Regulations 2019 provide that the generating company or the transmission licensee, as the case

may be, may apply for the determination of a tariff in respect of a new generating station or units thereof or a

transmission system including a communication system or element thereof completed or projected to be

completed within 60 days from the date of the anticipated commercial operation or from the date of filing of the

petition, as the case may be. Where the transmission system comprises various elements, the transmission

licensee shall file an application for determination of tariff for a group of elements on incurring of expenditure of

not less than 70% of the cost envisaged in the investment approval or `2,000 million, whichever is lower, as on

the anticipated date of commercial operation. The generating company shall submit auditor certificate or

management certificate signed by authorized person not below the level or director in the company, in case of

non-availability of auditor certificate indicating the capital cost incurred as on the date of commercial operation

and the projected additional capital expenditure for respective years of the tariff period 2019 to 2024. However,

the generating company shall submit auditor certificate within 60 days of the procurement of the interim tariff

based on a management certificate. The application shall be made by the generating company or the transmission

licensee, as the case may be, by October 31, 2019, based on admitted capital cost including additional capital

expenditure already admitted and incurred up to March 31, 2019 (either based on actual or projected additional

capital expenditure) and estimated additional capital expenditure for the respective years of the tariff period from

2019 to 2024 along with the true up petition for the period from 2014 to 2019 in accordance with the CERC

(Terms and Conditions of Tariff) Regulations, 2014.

The CERC may, at its sole discretion, initially grant interim tariff on provisional basis as per the tariff

regulations. Until the final tariff is approved by the CERC in accordance with the CERC Tariff Regulations 2019,

the licensees can continue to bill the customers on the basis of provisional grants. Where the capital cost

considered by the CERC on the basis of projected additional capital expenditure submitted by the generating

company or the transmission licensee, as the case may be, falls short of the actual capital cost incurred on a

year-to-year basis by more than 10%, the generating company or the transmission licensee shall be entitled to

recover from the beneficiaries or the long-term transmission customers, as the case may be, the shortfall in tariff

corresponding to reduction in capital cost, as approved by the CERC, along with interest at 1.20 times the bank

rate as prevalent on April 1 of the respective year.

CERC (Open Access in Inter-State Transmission) Regulations, 2008

The CERC (Open Access in Inter-State Transmission) Regulations, 2008 apply to applications made for grants of

open access for energy transfer schedules commencing on or after April 1, 2008 for use of the transmission lines

or associated facilities with such lines on the inter-state transmission system. The regulations have gone through

amendments in the years 2009, 2013, 2015, 2016, 2018 and 2019.

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CERC (Grant of Connectivity, Long-Term Access and Medium-Term Open Access in Inter-StateTransmission and Related Matters) Regulations, 2009

The CERC (Grant of Connectivity, Long-Term Access and Medium-Term Open Access in Inter-State

Transmission and Related Matters) Regulations, 2009 (the “CERC Regulations”) provide various transmission

products, standardize procedures, define timelines and ensure a level playing field between market players. They

provide the procedures and requirements for obtaining connectivity to interstate transmission systems, obtaining

medium-term open access and obtaining long-term access. There have been amendments to the CERC

Regulations in relation to the appointment of a principal generator on behalf of the renewable energy generating

stations. The regulations have gone through amendments in the years 2010, 2012, 2013, 2014, 2015, 2017 and

2019.

CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2010

The CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2010 implement a point of

connection method of sharing the transmission charges of inter-state transmission systems in India for a five-year

period, replacing the earlier system of regional postage stamps. These regulations provide that the yearly

transmission charges, revenue requirements on account of foreign exchange rate variations, changes in interest

rates, and losses will be shared among the users. All the users will be default signatories to the transmission

service agreement, which also requires these users to pay the point-of-connection charge, which covers the

revenue of transmission licensees. The point of connection tariffs are based on load flow analysis and capture the

utilization of each network element by the users. The regulations have gone through amendments in the years

2011, 2012, 2015, 2017 and 2019.

CERC (Indian Electricity Grid Code) Regulations, 2010

The CERC (Indian Electricity Grid Code) Regulations, 2010 (the “Grid Code Regulations”) brings together a

single set of technical and commercial rules, encompassing all the utilities connected to/or using the ISTS. The

IEGC also lays down the rules, guidelines and standards to be followed by various persons and participants in the

system to plan, develop, maintain and operate the power system, in the most secure, reliable, economic and

efficient manner, while facilitating healthy competition in the generation and supply of electricity. These

Regulations came into force from May 3, 2010 and superseded the Indian Electricity Grid Code, 2006 which

came into effect from April 1, 2006. The regulations have gone through amendments in the years 2011, 2012,

2014, 2015, 2016, 2017 and 2019.

CERC (Standards of Performance of Inter-State Transmission Licensees) Regulations, 2012

The CERC (Standards of Performance of Inter-State Transmission Licensees) Regulations, 2012 (the “Standardof Performance Regulations”) apply to all the inter-state transmission licensees to ensure compliance with

performance standards and to provide for an efficient, reliable, coordinated and economic system of electricity

transmission. The Standard of Performance Regulations also covers the methodology for calculating

compensation in the case of loss on account of non-adherence to the standards by the transmission licensees.

Draft CERC (Grant of Connectivity and General Network Access to the inter-State transmission systemand other related matters) Regulations, 2017; and the draft CERC (Transmission Planning and otherrelated matters) Regulations, 2017

The CERC, vide its order No L-1/229/2017-CERC Dt 14.11.2017, has published draft regulation on Grant of

Connectivity and General Network Access to the Inter-State Transmission System and has invited comments/

suggestions/objections from the stakeholders and interested persons on the draft regulations.

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Further, the CERC, vide its order No. L-1/220/2017-CERC dated the April 26, 2017, has published the draft

CERC (Transmission Planning and other related matters) Regulations, 2017; and has invited comments/

suggestions from the stakeholders and interested persons on the draft regulations

CERC (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations,2017

The CERC (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2017

provide for the financial and operational norms for the determination of project specific tariffs for the renewable

technology mentioned below:

‰ solar photovoltaic and solar thermal;

‰ wind energy (including on-shore and off-shore);

‰ biomass gasifier-based projects, if a project developer opts for project specific tariff;

‰ biogas based projects, if a project developer proceeds for project specific tariff;

‰ municipal solid waste and refuse derived fuel-based projects with rankine cycle technology;

‰ hybrid solar thermal power projects;

‰ other hybrid projects including renewable–renewable or renewable–conventional sources, for which

renewable technology is approved by the Ministry of New and Renewable Energy (the “MNRE”); and

‰ any other new renewable energy technologies approved by MNRE.

The debt to equity ratio and return on equity considered for determination of project specific tariff on above

mentioned technology is 70:30 and 14%, respectively. These regulations came into force on April 1, 2017, and

unless reviewed earlier or extended by the respective authorities, shall remain in force for a period of 3 years

from the date of commencement.

Draft CERC (Prevention of Adverse Effect on Competition) Regulations, 2012

The CERC released the draft CERC (Prevention of Adverse Effect on Competition) Regulations, 2012 (the

Competition Regulations), which will be applicable to licensees or generating companies with respect to

investigation and enforcement pursuant to sections 60 and 66 of the Electricity Act. Under the Competition

Regulations, the CERC may issue appropriate directions to any licensee or generating company for entering into

an agreement or combination which causes or is likely to cause an adverse effect on competition in the electricity

industry and for abusing its dominant position in the electricity industry. As of the date of this Offering Circular,

the date for the release of the final version of the Competition Regulations has not been confirmed.

CERC (Regulation of Power Supply) Regulations, 2010

The CERC notified the CERC (Regulation of Power Supply) Regulations, 2010 (the “Power SupplyRegulations”) on September 28, 2010. The Power Supply Regulations provide that generating companies and

transmission licensees (“Regulating Entities”) can implement regulation of power supply in case of

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(i) non-payment of outstanding dues by the beneficiary, or (ii) non-maintenance of letter of credit or any other

agreed payment security mechanism. In the event that the outstanding dues are not paid by the beneficiary to the

Regulating Entity within 60 days from the date of service of the invoice, the Regulating Entity may serve a notice

on the defaulting entity for reducing the drawl schedule of, or for withdrawal of open access to ISTS from such

defaulting entity. A copy of such notice is required to be forwarded to the concerned SLDC or RLDC, in whose

control area the Regulating Entities are situated. Thereafter, within three days of receiving the notice, the

concerned SLDC/RLDC, in whose control area the defaulting entity is situated, shall propose a plan in writing

for implementing the regulation of power supply. The defaulting entity should restrict its drawl to the revised

schedule and deviations, if any, will be subjected to unscheduled inter-change charges. The generating company

is entitled to sell the surplus power made available by the restricted drawl entitled to the defaulting entity to any

person including any of the existing beneficiaries as defined under the Power Supply Regulations. The amount

received from the sale of surplus power will be adjusted against the outstanding dues of the defaulting entity,

after deduction of energy charges, trade margin and other incidental expenses borne by the generating company,

if any. Further, the transmission licensee may request the RLDC to curtail the medium-term open access or long-

term open access of the power supply to the defaulting entity.

CERC (Procedure, Terms and Conditions for grant of Transmission License and other related matters)Regulations, 2009

The CERC notified the CERC (Procedure, Terms and Conditions for grant of Transmission License and other

related matters) Regulations, 2009 (the “Transmission License Regulations”) on May 26, 2009. The

Transmission License Regulations provide for an empowered committee as referred to in the guidelines for

competitive bidding in India (the “Bidding Guidelines”) (the “Empowered Committee”) to identify projects

included in the transmission plan prepared by the CEA or network plan prepared by the CTU in accordance with

the National Electricity Policy to be developed under the Bidding Guidelines and for appointment of a project

developer to develop the projects. The Transmission License Regulations also provide for the procedure for

application for transmission license upon selection of a project for development. Under the Transmission License

Regulations, licensee is required to (i) maintain insurance with regard to the transmission assets as may be

necessary in terms of any agreements entered into by it, or under the laws in force in India; (ii) build the project

in a time-bound, efficient, coordinated and economical manner; (iii) establish, operate and maintain the project in

accordance with the prudent utility practices and the agreements; (iv) comply with such directions of the NLDC/

SLDC under the Electricity Act; (v) provide non-discriminatory open access to its transmission system for use by

any other licensee, including a distribution licensee or an electricity trader, or generating company or any other

person in accordance with the CERC (Open Access in inter-state Transmission) Regulations, 2008, as amended

from time to time; (vi) pay the license fee in accordance with the CERC (Payment of Fee) Regulations, 2008 or

such other regulations as may be in force from time to time; (vii) make an appropriate application before the

CERC for obtaining any prior approval whenever required; and (viii) comply with all other regulations, including

the regulations specified by the CERC regarding utilization of the transmission assets for a business other than

transmission of electricity. The transmission license issued, shall, unless revoked earlier, continue to be in force

for a period of 25 years from the date of issue. If the useful life of a transmission asset for which transmission

license has been issued extends beyond the period of 25 years, the CERC may consider granting license for

another term for which the licensee may make an application in accordance with Regulation 7 of the

Transmission License Regulations, two years before the expiry of the initial period of license.

CERC (Fees and Charges of Regional Load Despatch Centre and other related matters) Regulations, 2019(the “CERC RLDC Regulations”)

The CERC RLDC Regulations shall be applicable during the control period from April 1, 2019 to March 31,

2024 for determination of fees and charges to be collected by RLDCs from the generating companies,

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distribution licensees, inter-state transmission licensees, buyers, sellers and inter-state trading licensees and any

other users. The CERC also sets out the registration process and functions for RLDCs or NLDCs, application

process for determination of fees and charges, computation of capital cost, additional capitalization and

decapitalization, debt — equity ratio, fees and charges structure, computation and recovery of fees and charges

and performance linked incentives.

CERC (Planning, Coordination and Development of Economic and Efficient Inter-State TransmissionSystem by Central Transmission Utility and other related matters) Regulations, 2018 (the “CERCPlanning for Economic and Efficient IST Regulations”)

The CERC Planning for Economic and Efficient IST Regulations came into force from July 23, 2018. The

objectives of the CERC Planning for Economic and Efficient IST Regulations are to: (i) lay down the broad

principles, procedures and processes to be followed for planning and development of an efficient, coordinated,

reliable and economical system of ISTS for smooth flow of electricity from generating stations to the load

centers; (ii) ensure wider participation of stakeholders in the planning process and specify the procedures for

stakeholders consultation and participation; (iii) specify procedures to bring about transparency in the planning

process; and (iv) demarcate the roles and responsibilities of various organizations in line with the Electricity Act

for meeting above objectives. These regulations shall be applicable to CTU, STUs, generating companies

including companies having captive generating plants connected to or intending to connect with ISTS,

transmission licensees, distribution licensees, Regional Power Committees, NLDC, RLDCs and SLDCs and any

other recognized entity under the Electricity Act, involved in planning and development of inter-state

transmission system. These regulations shall be in addition to the CERC (Procedure, Terms and Conditions for

grant of Transmission License and other related matters Regulations), 2009; the CERC (Grant of Regulatory

Approval for execution of Inter-State Transmission Scheme to Central Transmission Utility Regulations), 2010;

and the tariff regulations issued by the Government from time to time under section 61 of the Electricity Act.

Maharashtra Electricity Regulatory Commission (the “MERC”)

In accordance with the Electricity Regulatory Commission Act 1998, the Government of Maharashtra established

the MERC. The main functions of the MERC are to determine the tariff structures for electricity (wholesale,

bulk, grid or retail) in the state of Maharashtra. The MERC also determines the tariff payable for the use of

transmission facilities, regulates power purchases and the procurement process of transmission utilities and

distribution utilities, issuing intra-state transmission, distribution and trading licenses, and promotes competition

and efficiency in the activities of the electricity industries. Under current legislation, all power generation

companies in Maharashtra are required to approach the MERC for all issues related to tariffs and their

determination (with the exception of tariffs determined through a competitive bidding process, on captive power

projects or contracts for the sale of power with a term of less than one year). The MERC also administers

relevant national and state regulation applicable to power generation companies in Maharashtra, sets relevant

tariff orders for them as well as presides over the resolution of disputes involving them in Maharashtra. The

MERC regulates the normative performance requirements applicable to power generation companies in

Maharashtra under its tariff orders, as regards price escalation, heat consumption, availability requirements as

percentages of power generated and transmitted, and specified working capital expenditure.

Maharashtra SEB (the “MSEB”)

The erstwhile Maharashtra State Electricity Board (“MSEB”) was looking after generation, transmission &

distribution of electricity in the State of Maharashtra barring Mumbai. After the enactment of Electricity Act

2003, MSEB was restructured into 4 Companies viz. MSEB Holding Company Limited, Maharashtra State

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Electricity Distribution Company Limited (“Mahavitaran”), Maharashtra State Power Generation Company

Limited (“Mahagenco”) and Maharashtra State Electricity Transmission Company Limited (“Mahatransco”) on

June 6, 2005. Mahavitaran distributes electricity to consumers across the State except Mumbai. Merit order

principles are being followed for the purchase of power by these entities in accordance with recommendations

from the MERC. The MERC has introduced several regulations such as those regarding standards of

performance, open access and the grid code, to ensure compliance with the Electricity Act, 2003. Mahavitaran

has been able to reduce the ATandC losses and improve its cash collections considerably.

Tariff Setting

Tariff Setting for End Consumers

Under the Electricity Act, the retail tariff or tariffs for end customers is set by the respective SERCs based on a

process of public hearings. The Electricity Act allows state governments to provide power at subsidized rates but

requires them to fund the subsidy out of their respective state government budgets. While setting the tariff for

end consumers, some states have attempted to cross-subsidize tariffs by charging lower rates for agricultural and

domestic consumers and charging higher rates for industrial and commercial consumers. Tariffs, even with cross-

subsidization, have not kept pace with the cost of supply.

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BUSINESSOverview

Mumbai, the state capital of Maharashtra is also India’s financial capital and one of the top 10 centres of

commerce in the world. It is the seventh most populous city in the world, the 24th richest city in the world (based

on USD GDP) and its’s real GDP growth between financial year 2012 and financial year 2018 was

approximately 11% per annum Mumbai contributes approximately 6% to India’s real GDP. The average per

capita income of Mumbai residents is approximately U.S.$8,700, which is approximately four times per capita

income of an average Indian resident. Further, the electricity consumption of Mumbai for the financial year 2019

was 18,341 MUs. The average electricity bill of our consumers in financial year 2019 was approximately

U.S.$95 which was approximately 1.1% of the per capita income of an average Mumbai resident.

Since our inception in 1926, we have been the primary suppliers of electricity to Mumbai, serving approximately

67% of its population and approximately 85% of its geographic area. We service consumers in suburban Mumbai

and the Mira-Bhayander Municipal Corporation area in the Thane District (adjoining Mumbai), spanning an area

of over 400 sq. km. Our integrated electricity generation, transmission and distribution utility, provides electricity

to over 3.04 million households with an outreach to over 12 million consumers of Mumbai and an annual energy

requirement of over 10,800 MUs.

Our integrated electricity supply system also includes 541 ckms of 220 kV transmission lines, consisting of

overhead and underground cable systems, eight 220/33 KV extra high voltage (“EHV”) stations, 115 220kV bays

and 285 33KV bays, with installed transformation capacity of 3,125 MVA and embedded 500 MW of power

generation. Our ‘grid-to-switch’ integrated platform makes us one of the largest private integrated electric

utilities in India.

Our company has operated for over 90 years in a stable and evolved regulatory regime having witnessed

regulations since 1956 and 17 years of regulatory orders under the current Electricity Act. We endeavor to

provide the highest quality of supply in terms of sustainable, reliable and affordable power supply with an

emphasis on excellent consumer service.

Power Distribution Services Limited (“PDSL”) was incorporated on December 6, 2019 to provide specialized

services to Adani Transmission Limited (“ATL”) group companies (including AEML). The services to be

provided include human resource management, administrative support, information technology support, finance

and accounts, audit and assurance support, treasury management, tax advisory, security support and training,

other corporate support, business plan advisory, advisory on the implementation of best practices in line with

global utility players, and advisory on process improvement. The above services are only indicative and the

nature and quantum of services may vary. AEML and PDSL are Obligors under the Common Terms Deed and

the Terms and Conditions of the Notes. See “Terms and Conditions of the Notes”. Further, AEML and PDSL are

100% subsidiaries of ATL.

On August 29, 2018, ATL acquired a 100% stake in Reliance Electricity Generation and Supply Limited

(“REGSL”) from Reliance Infrastructure Limited and renamed it as AEML. This Acquisition marked ATL’s

entry into the integrated utility space.

Our Parent Company

ATL is one of the largest power transmission and distribution companies operating in the private sector in India,

based on operational ckms of transmission lines. Through its power transmission business, ATL establishes,

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commissions, operates and maintains transmission systems across India. It has been granted licenses under the

Electricity Act for transmission of electricity, as specified under individual licenses. In the financial year ended

March 31, 2019, ATL had an average residual concession life of 31 years. As of September 30, 2019, ATL owns,

maintains and operates 11,478 ckms of electric transmission lines with a total transformation capacity of 18,330

MVA, and has 16 fully operational Transmission Systems. ATL also owns 38 substations with a capacity of

approximately 25,780 MVA.

Below is an overview of the corporate structure of ATL, setting out its relationship with AEML and PDSL, the

Obligors under the Common Terms Deed and the Terms and Conditions of the Notes.

Post-closing of the QIA Transaction, the Obligor group shareholding will be as follows:

AEML Obligor Group

AEML Obligor Group

Adani TransmissionLimited

Adani TransmissionLimited

QH

AEML PDSL

AEML

Section 62: ROA Integrated Utility

Section 62: ROA Integrated Utility Services Utility

Services Utility

PDSLMEGPTCL

Section 62: ROA Transmission Section 63 - TBCB

ATILTBCB SPVs

(U/C and Operational)

100%

25.1%74.9%

The transmission assets in ATL are both Section 63 (tariff based competitive bidding) and Section 62 (pass

through tariff) and are spread across 18 SPVs of which 12 SPVs are operational and six SPVs are under

construction.

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Business Overview

Our business can be broadly categorized under the following categories: (a) Distribution, (b) Transmission, and

(c) Generation.

Supplying electricity to~ 12 mn consumers

RETAIL

WIRES

TRANSMISSION

GENERATION

Integrated Utility

ExternalPower

PurchaseOther

Distributioncompanies

Distribution

SERVICES

541 ckt km Transmission networkCaters to ~ 70% of AEML’s total distribution requirement

3,268 MUs Procured from DahanuOne of the most efficient IPPs in India

99.99% Supply

24 X 7 Consumer Service through online

25 Unique Payment options

Key Highlights

PDSL to provide services to AEML and otherATL group companies

99.99%

19,580 km4,825 km

3,815 MVA

7.85%Wires Availability Distribution Loss

Transformation Capacity

HT Cable LT Cable

Set out below are certain key operating parameters of our business in the last three financial years:

Year Ended March 31

Business Parameters 2017 2018 2019

Retail . . . . . . . . . . . . . . . . Collection Efficiency (normative 99%) 100.65% 100.77% 100.53%

Wires . . . . . . . . . . . . . . . . Wires Availability (normative 98%) 99.98% 99.99% 99.99%

Transmission . . . . . . . . . . Transmission Availability (normative 98%) 99.80% 99.84% 99.75%

Generation . . . . . . . . . . . . Plant Availability (normative 85%) 99.50% 94.20% 96.10%

a. Distribution Business

Retail Business

Our distribution license authorizes us to distribute electricity to consumers in an area extending over 400 sq. km.

that includes the suburban areas of Mumbai and the Mira-Bhayander Municipal Corporation area in the Thane

District of the state of Maharashtra. The entire licensed area is a densely populated urban mix of residential,

commercial and industrial consumers and growth in our distribution network is fueled by the ever-increasing

electricity consumption of Mumbai. The energy wheeled through our distribution network, has grown by

312 MUs from 9,857 MUs in the financial year ended March 31, 2017 to 10,169 MUs in the financial year ended

March 31, 2019, representing an increase of 3.17%. We added an additional 66,664 households to our

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distribution network from financial year ended March 31, 2017 to financial year ended March 31, 2019,

increasing from 2.97 million households as of March 31, 2017 to 3.03 million households (representing

approximately 12 million consumers) as of March 31, 2019 representing an increase of 2%.

Wires Business

Our power distribution network in Mumbai primarily consists of underground cables. As of September 30, 2019,

our wire network consisted of approximately 4,825 km of high-tension cables, approximately 19,580 km of

low-tension cables (including service cables and streetlight cables) and approximately 6,575 substations.

Below is our distribution network coverage map in Mumbai with its incumbents:

Revenue Certainty

We carry out monthly billing for our consumers with a meter reading cycle spread over an entire month.

Consumers are given a specified period to pay their bills in accordance with the MERC regulations.

Non-payment by any consumer during this period results in delayed payment charges and interest, while a

continued failure to pay results in a consumer being disconnected from our supply of electricity, in compliance

with the MERC regulations. Our collection efficiency is close to 100%. The electricity is supplied to premises

and not to individuals. Thus, any default is required to be paid by any subsequent occupant of the premise. See

“Regulations and Policies in India”.

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Power Purchase

We continuously strive to procure power from cheaper and sustainable sources with an overall objective to offer

affordable power to the consumers of Mumbai. We are committed to increasing the share of renewable energy in

our power supply mix to 30% by 2023 and drive down the cost of power purchase.

The following table sets forth some of our key performance statistics for the six months ended September 30,

2019 and years ended March 31, 2019, 2018 and 2017:

Six months

ended

September 30, Year ended March 31,

2019 2019 2018 2017

SalesNetwork Sales (MUs)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,509 10,169 10,248 9,857

Own Sales (MUs)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,558 8,376 8,321 7,887

Peak Demand (MW)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,964 1,905 1,884 1,892

ConsumersNetwork Households (in millions)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04 3.03 3.00 2.97

Own Households (in millions)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.47 2.47 2.45 2.41

Power Distribution AssetsHigh-tension cables (km) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,825 4,798 4,554 4,364

Low-tension cables (km) (including service cables and street light

cables) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,580 19,445 17,707 17,133

Number of Distribution Transformers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,754 6,697 6,647 6,633

Number of Power Transformers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 211 204 201

Distribution CapacityDistribution Transformers (MVA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,027 4,978 4,945 4,969

Power Transformers (MVA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,815 3,751 3,616 3,559

Notes:

(1) Units consumed by consumers that are billed by AEML and TPC and use only AEML’s network.

(2) Units consumed by consumers that are billed by AEML and use AEML’s network.

(3) Maximum demand at a particular point of time in the period.

(4) Consumers billed by AEML and TPC and use only AEML’s network.

(5) Consumers billed by AEML and use AEML’s network.

b. Transmission Business

Our distribution system receives power supply from ADTPS by virtue of being connected by our power

transmission system and the state grid. Our transmission system is also connected to the transmission systems of

MSETCL and The Tata Power Company Limited (“TPC”) at different interconnection points, which helps bring

in additional power into Mumbai through the state grid and strengthen the Mumbai power system. The power

received at various EHV stations is supplied mainly through underground cables to our distribution receiving

stations for onward distribution to consumers.

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As of September 30, 2019, our transmission network consisted of the following assets:

Asset

Number/length

(ckms)

220 kV EHV Sub Station

Air Insulated Substation (AIS) based . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Gas Insulated Substation (GIS) based . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Transformers

AIS based . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

GIS based . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

220 kV transmission lines

Overhead lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 482

Underground cables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.13

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 541.13

c. Generation Business

ADTPS is a washed coal-fired 500 MW thermal power station, sited on a 848.9 hectare site at Dahanu in the

State of Maharashtra, approximately 120 km north of our licensed distribution area in Mumbai, between the

Savata and Dandi creeks, approximately four km from the Dahanu railway station. ADTPS operates two

250 MW generating units. The first unit of ADTPS started commercial operations in July 1995 and the second

unit started commercial operations in January 1996.

Fuel Supply

We utilize 100% mix of higher quality and cleaner washed coal.

We import coal to supplement the domestic coal supply from SECL, for which contracts are executed annually.

Although more expensive than domestic coal on a per ton basis, imported coal is of superior quality compared to

domestic coal. Imported coal is blended with domestic coal before being used as fuel at ADTPS, thereby leading

to an enhanced combination of cost, efficiency and heat value as well as enhanced environmental performance.

Power and Water Supply

The power to start up the boilers of ADTPS when both units are under shutdown is supplied through a connection

availed for start-up power from local licensee, i.e. MSEDCL, as per a recent order issued by the MERC. Such

connection is billed at the Industrial Tariff of the respective distribution licensee. The Irrigation Department of

the Government of Maharashtra supplies fresh water from the source of the Dhamni dam of the Surya Project to

ADTPS. The water supply agreement permits a draw of 5.48 million liters of water per day. In addition, ADTPS

also uses demineralized water to cool its equipment.

Power Sale

At full capacity, ADTPS can produce 12 MUs per day. The power plant’s full capacity is transmitted through our

transmission network to our distribution network in Mumbai. ADTPS’s power supply represents approximately

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30% of the power distributed in our licensed area in Mumbai. With the approval of the MERC, on February 23,

2018, ADTPS entered into a five-year power purchase arrangement with our distribution business to supply 500

MW of electricity generated. Prior to the expiration of this arrangement, we will approach the MERC for further

extension of the arrangement while considering the remaining useful life of ADTPS and its importance as

embedded generation in Mumbai’s islanding scheme.

Our History and Major Events

Our distribution business began in 1926, when Killick Nixon Company secured an electricity distribution license

from the then Mumbai Government to supply electricity in the suburban areas of Mumbai. The Killick Nixon

Company quickly grew and in 1930 assigned its electricity distribution license to Bombay Suburban Electric

Supply Limited (“BSES”). By 1930, BSES was distributing electricity for the purpose of powering street lighting

in the municipalities covered by its network and to supply electricity to the general public.

BSES invested extensively in the extension of mains, establishing new receiving stations, switch houses and

substations, laying feeder lines and reinforcing the High Tension System ensuring reliable power supply in the

Northern Suburb of Bombay resulting in improved conditions of supply.

Further, since the 1950s the extension of distribution mains has been confined to underground cables. A gradual

conversion of existing overhead supply lines to underground feeders was also started. The 1960s and 1970s saw

an increased impetus on productivity, consumer service and digitalization. We took various steps to electrify

majority of the rural pockets remaining in the licensed area of supply.

In 1988, we initiated steps to set up a greenfield generating station at Dahanu which was commissioned by

January 1996. Further, two advanced 220 kV receiving stations at Ghodbunder and Versova were also made

operational, facilitating direct power supply from Dahanu power station to Mumbai city.

In 2003, BSES was acquired by the Reliance Industries Limited Group and was renamed as Reliance Energy

Limited, which was subsequently changed to Reliance Infrastructure Limited (“R-Infra”).

On December 21, 2017, ATL entered into a share purchase agreement with R-Infra to acquire its integratedutility business. Pursuant to the share purchase agreement, R-Infra’s integrated utility business was de-mergedfrom R-Infra and transferred to Reliance Electric Generation and Supply Limited. On August 29, 2018, ATLacquired 100% of the equity share capital of Reliance Electric Generation and Supply Limited, which werenamed as AEML on August 31, 2018. In its history of over 90 years, the business has grown from strength tostrength, ensuring reliable power supply to one of the fastest growing cities in the world and powering Mumbaithe gateway city of India. From providing service to approximately 2,500 households in 1931, our business hasgrown to provide service to 3.04 million households (approximately 12 million consumers) as of September 30,2019.

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The following table illustrates the major events in our business’s history:

Year Event

1926 License granted to provide service to Mumbai consumers.

1931 License extended to include areas of Kandivali, Malad and Borivali.

1934 Extension of mains up to Borivali completed; began supplying street lighting in Borivali on

January 1, 1935 and in Kandivali and Malad on February 1, 1935.

1936 New substations constructed at Vile Parle (West), Chakala (Andheri East) and Chembur; Supply

commenced in Chembur.

1941 Established new receiving station in Santa Cruz to enhance safety of distribution network.

1946 Our billing system upgraded to ensure the number of bills sent out monthly matches the number of

electricity consumers.

1950 Improved supply reliability for consumers via High Tension Systems which comprises of cable

networks of 33KV, 22KV and 11KV along with associated high voltage equipment.

1952 Extended supply of electricity to industries, including the state run milk colony at Aarey in Mumbai.

1957 Construction of a five mile 22 KV Double Circuit Overhead Line between Saki and Goregaon with

six miles of 11 KV extensions.

1960 Extended supply of electricity to the Department of Civil aviation, Government of India and to the

national carrier, Air India.

1965 Initiated training programs for all categories of staff to increase productivity and improve consumer

service

1966 Extended supply of electricity to rural and underdeveloped areas in our licensed regions.

1971 Became the first utility company in India to adopt a computerized billing system.

1975 Completed construction of an underground network to protect consumers from outages during

natural disasters such as cyclones and floods.

1979 Installation of semi-high mast poles on Western Express Highway, at the time a new, improved

lighting pole introduced for the first time in India.

1982 Established mainframe for data processing to enhance billing efficiency.

1991 Distribution of Rs. 10.3 million from the Consumer’s Benefit Account to consumers against their

March energy bills as directed by the State Government

1994 Invested Rs. 580 million throughout the year towards expansion and upgrade of our system from its

maximum demand of 689 MW.

1995 Commissioned 500 MW Dahanu to meet Mumbai’s demand.

1999 Became India’s first utility company to introduce supervisory control and data acquisition

(“SCADA”) for faster fault detection and restoration.

2003 BSES became a deemed licensee pursuant to the provision of Electricity Act.

2011 License renewed for a period of 25 years from August 16, 2011.

2019 Introduced chat/voice bots using AI/machine learning for faster responsiveness.

Recent Developments

‰ ATL, AEML, PDSL and Qatar Holding LLC (“QH”), a wholly-owned investment holding company of the

Qatar Investment Authority, have signed definitive agreements for stapled acquisitions by QH of 25.1% in

each of AEML and PDSL from ATL, and a debt investment in AEML by QH in the form of Shareholder

Affiliate Debt (the “QIA Transaction”). The total QH investment in AEML will be approximately

Rs. 32,000 million (equivalent to approximately U.S.$450 million), of which approximately U.S.$282

million is the Shareholder Affiliate Debt). The Shareholder Affiliate Debt proceeds will be utilized for

repayment of our existing senior indebtedness.

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ATL and QIA have agreed definitive plans to ensure that over 30% of the electricity supplied by AEML is

sourced from solar and wind power plants by the year 2023. In addition, ATL and QIA have agreed a

number of other green initiatives to combat climate change and facilitate the transition to a sustainable, low

carbon economy. The QIA Transaction is expected to complete in early 2020 subject to receipt of

regulatory approvals and satisfaction of customary conditions precedent. Through its order dated

January 29, 2020, the MERC provided its in-principle approval (such approval, the “MERC QIATransaction Approval”) for the proposed changes in the shareholding pattern of our Company pursuant to

the transfer of 25.1% of the equity shares held by ATL in our Company to QH as contemplated by the QIA

Transaction. The MERC QIA Transaction Approval is subject to the following conditions:

a. The Company shall ensure that the change in shareholding contemplated as a result of the QIA

Transaction should not contravene any provisions of applicable laws and that all statutory clearances

or approvals under the Companies Act, 2013 and any other applicable laws, rules or regulations are

obtained by the Company before completion of the QIA Transaction; and

b. There shall not be any adverse impact on tariffs as a result of the QIA Transaction.

Further, the Competition Commission of India, by way of a letter dated December 19, 2019, has

acknowledged the notice filed by QH under the green channel route in connection with the QIA

Transaction. Certain conditions precedent which are required for the completion of the QIA Transaction

are yet to be fulfilled.

As a part of the QIA Transaction, QH will have typical shareholder rights in our Obligor Group, including

the right to appoint certain directors to our board, access to business and financial information, rights of

first offer and tag along and drag along rights in relation to future transactions.

The Shareholder Affiliate Debt from QH (“QH Loan”) will be a U.S. dollar denominated term loan facility

and is intended to be used to repay our existing senior financial indebtedness. The QH Loan will become

available once conditions to which the QIA Transaction is generally subject are satisfied and the

acquisition by QH is completed. Once the loan is drawn down it will be subject to the Intercreditor Deed

and the Project Accounts Deed. It will have a maturity date of 20 years from the utilization of the facility.

We have agreed with QIA that certain accounts below the AEML Distributions Account in the Project

Accounts Deed waterfall will be subject to security in favor of QH and will not be secured for the Primary

Creditors as set out in the Project Accounts Deed.

As a condition precedent to the QIA Transaction, ATL’s outstanding unsecured perpetual instruments and

intercorporate deposits have been converted into Shareholder equity.

‰ We are committed to green initiatives to further increase our share of renewable procurement to 30% by

financial year 2023 and to 50% by financial year 2025. As a stepping stone to the commitment, we have

already tied up 700 MW grid connected hybrid power (solar and wind) at Rs. 3.24 per unit, delivering 50%

CUF, for which regulatory approval has been received.

‰ PDSL has been incorporated as a 100% subsidiary of ATL. PDSL shall provide services to AEML and

other ATL Group companies. Further, PDSL has not engaged in any business activities since the date of its

incorporation, other than those incidental to its incorporation and establishment as a direct wholly-owned

subsidiary of ATL. PDSL has no employees or subsidiaries and has no borrowings or indebtedness in the

nature of borrowings, liabilities, guarantees or other contingent liabilities, as on the date of this Offering

Circular.

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‰ We have incorporated Adani Electricity Mumbai Infra Limited as a wholly owned subsidiary of AEML for

the purpose of carrying out works like infrastructure development, transmission line development along

with commissioning of HVDC. Adani Electricity Mumbai Infra Limited is not part of Obligor Group and is

a carved out asset.

Strengths

We believe we have the following competitive strengths:

Large and creditworthy distribution consumer base with continually growing rates of energy consumption

Mumbai is India’s financial capital and the principal center of commerce and is one of the most densely

populated areas in the world. Our distribution system serves Mumbai which has a large and diverse consumer

base with continually growing energy consumption. Our per capita electricity consumption continues to be

among the lowest (805 Kwh in India as compared to 3,927 Kwh in China and 12,994 Kwh in USA) but is

growing quickly. By 2022, the demand for energy in India is set to reach 1,894 TWh, with peak demand

increasing every year, as would be expected from a fast growing economy.

From the financial year ended March 31, 2017 to the financial year ended March 31, 2019, our network

consumers increased 2% from 2.97 million households to 3.03 million households (representing approximately

12 million consumers). The amount of energy consumed by our consumers increased 3.17% from 9,857 MUs in

the financial year ended March 31, 2017 to 10,169 MUs in the financial year ended March 31, 2019. As our

consumers in Mumbai have strong credit profiles and high propensity to pay bills in a timely manner, our

collection efficiency is high, leading to predictable cash flows. In the year ended March 31, 2019, our collection

efficiency was 100.53%.

Consumers Type

Units

consumed

(kWh) /month

Number of

Households Profile

Avg. bill/

month

(Rs.)

Collection

Efficiency

(%)

Premium Value . . . . . . . . . . . . . . >20,000 1,663 Large Scale industrial units,

hotels, corporate offices and

malls

756,480 98.70

High Value . . . . . . . . . . . . . . . . . >=4,000 and

<20,000

31,209 Medium scale industrial units

and commercial units

30,690 103.47

Mid-value . . . . . . . . . . . . . . . . . . >=300 and

<4,000

510,000 High end residential and small

units

4,630 104.24

Mass Market . . . . . . . . . . . . . . . . <300 1,922,266 Residential Consumers 1,350 99.26

Changeover . . . . . . . . . . . . . . . . . 566,789

Overall . . . . . . . . . . . . . . . . . . . . 3,031,927 100.53

Note — Changeover consumers are those consumers who are billed by TPC but use our network and pay wheeling charges to us.

Please find below our consumer segmentation based on MUs sold, number of consumers and revenue

40% 50%

10%

MU Sales

Residential

Commercial

Industrial

1%

18%

81%

# consumers

38%

12%

50%

Revenue mix Consumer Wise1 (FY19 - INR 6,677 cr)

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Strong infrastructure with a long track-record of high reliability

As of September 30, 2019, our distribution network comprised of 4,825 km of high-tension cables, 19,580 km of

low-tension cables (including service cables and street light cables) totaling 24,405 km of lines and

approximately 6,575 substations, covering over 400 sq. km. (covering approximately 85% of Mumbai area). We

distribute approximately 10,169 MUs to over 3.04 million households (representing approximately 12 million

consumers) of which 2.47 million are direct households and 0.57 million are changeover households. Given the

length and breadth of our network and service coverage, we have a significant competitive advantage over TPC,

our only competitor in the license area, whose network coverage is fairly limited. Utility infrastructure is capital

intensive and difficult to replicate and hence, acts as a high-barrier to entry. In addition to our existing large

regulatory asset base, we have continuously been working towards hardening of these assets for minimizing

down time even in adverse situations. We achieve this outcome through protection of existing infrastructure

through regular replacement and maintenance as well as creation of new infrastructure. This helps us maintain

the regulated asset base (RAB) as well as ensure quality of supply. As of September 30, 2019, our RAB was Rs.

55,285.4 million (U.S.$782.1 million) which includes regulated debt of Rs. 21,322.2 million (U.S.$301.6

million) and regulated equity of Rs. 33,963.2 (U.S.$480.5 million).

In addition to our distribution network, we also own and operate a transmission system and a generating plant.

Our Mumbai transmission network is part of Maharashtra Intra-State Transmission System (InSTS) network

interconnected with the Maharashtra State Electricity Transmission Company Limited (“MSETCL”) and TPC’s

network. This transmission infrastructure feeds power to our and TPC’s Mumbai distribution network. ADTPS,

our fully operational embedded power plant at Dahanu of 500MW (2x250MW) further allows us to provide

energy reliability for Mumbai consumers and enables us to diversify our operational and regulatory risks, thereby

solidifying our presence in the Mumbai area.

Stable and evolved regulatory framework

We operate in an established regulatory framework with a long history of regulatory stability. Our business is

currently governed by the provisions of the Electricity Act and we are regulated by the Maharashtra Electricity

Regulatory Commission (the “MERC”), which has the power to make regulations, determine tariffs and grant

licenses for the transmission and distribution of power in the state of Maharashtra.

Our business philosophy is in line with MERC’s consumer aligned mindset which is to ensure the highest quality

of power supply to all the consumers in the covered regions at affordable rates. The MERC has been responsible

for prescribing multi-year tariffs for a particular control period. The financial parameters for the MERC’s tariff

determination have largely remained the same across control periods. This framework helps in reducing

uncertainty not only for consumers but for utilities as well as they can more accurately plan their business

activities for the next four to five years by knowing the tariff principles in advance, and consumers are better able

to predict the end user tariff applicable to them.

Financial parameters such as the debt equity ratio, computation of depreciation annually based on a straight-line

method and usage of the actual rate of interest for interest rate on loans, have remained stable since the

promulgation of the first tariff regulations by the MERC and these have been reaffirmed in the MERC (Multi

Year Tariff), Regulations, 2019 (“MYT Regulations, 2019”), which will be applicable for the control period

between April 1, 2020 to March 31, 2025. There has been a change in the methodology of computing the return

on equity (“ROE”) during this period to incentivize operational efficiencies and thereby reward efficient

electrical utilities. The regulation has prescribed returns based on performance by which returns can be

maximized up to 15.5% for our wire, generation and transmission business and 17.5% for our retail business. The

regulatory framework also allows for pass-through of operating costs whereby all of our operating charges are

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fully recovered from end-users as part of tariff. The regulation also provides for certain incentive linked

payments. Further, the MERC has continuously been improving the quality of supply through a focus on: (i)

sustainability to include renewable power; (ii) supply reliability by way of constant network upgradation and

maintenance; and (iii) affordability by way of policies to ensure no tariff shocks. Set out below is a snapshot of

the allowed ROE for various periods under the MERC MYT regulations.

MYT Generation Transmission Wires Retail

2007 — 12 . . . . . . . . . . . . . . . . . . . . . 14.0% 14.0% 16.0% 16.0%

2013 — 16 . . . . . . . . . . . . . . . . . . . . . 15.5% 15.5% 15.5% 17.5%

2017 — 20 . . . . . . . . . . . . . . . . . . . . . 15.5% 15.5% 15.5% 17.5%

2021 — 25 . . . . . . . . . . . . . . . . . . . . . 14% (+1.5%*) 14% (+1.5%*) 14% (+1.5%*) 15.5% (+2.0%*)

* linked to specific performance parameters.

Long-term, recurring, stable and predictable revenue streams provide strong cash flows

Our integrated utility business enjoys the benefits of a long-term asset with regulated returns and high cash flow

visibility. Our distribution business has been in operation for over 90 years under a perpetuity-like concession

providing electricity to a very creditworthy consumer base.

Our collection efficiency is close to 100% on account of: (i) our robust internal systems and processes for billing

and collection; (ii) the variety of payment options available to consumers; (iii) affordability of tariffs; (iv) high

quality and reliable power supply; and (v) responsive consumer service. In case of under-recovery of tariff from

consumers vis-à-vis the aggregate revenue requirement, the MERC allows us to recover the shortfall (revenue

gap) along with carrying cost through tariff in future years. The robust revenue profile of the business is a direct

outcome of the stable regulatory regime as well as the high underlying creditworthiness of the consumer.

In addition, we have maintained a consistent average billing rate (“ABR”) per unit during the financial years

ended March 31, 2019, 2018 and 2017 as set out below:

INR per unit FY17 FY18 FY19

ABR without fuel adjustment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.57 7.75 7.94

We believe that our long-term transmission and distribution license provides us with recurring diversified

revenue streams and mitigates the risks arising from economic and other uncertainties. Such a stable revenue

stream will help us finance our capital expenditure plans in the coming years. This capital expenditure will also

lead to an improvement in our credit profile.

Track-record of efficient operating history with a high focus on sustainability

We have an excellent track record of the operational parameters for our integrated utility.

For our distribution business, we measure our operating performance in terms of system distribution losses.

Distribution losses are defined as the loss incurred because of heat loss in the conducting network, theft and

pilferages and inefficiency in billing. We estimate that most of the loss of energy in our distribution system is due

to heat losses in the variable component of our distribution system, known as ‘I2R losses’ or ‘technical losses’,

with a small portion of the loss attributable to meter defects, errors in metering and theft of energy. We are

currently taking various steps to reduce our distribution losses, such as strengthening and improving our

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distribution network, engaging in reactive power management, performing energy audits, conducting on-site

testing of meters for high energy consumers, installing modern static meters and smart meters, closely

supervising and verifying meter readings and improving billing practices. In the six months ended September 30,

2019, our distribution business only had a distribution loss of 7.51%, compared to India’s national average of

around 22%. Our supply reliability metrics have also improved over the years through constant adoption of

technology and best practices in our business as demonstrated below:

Our reliability metrics

For the

year ended

2005

For the

year ended

2019

SAIDI — System Average Interruption Duration Index (Average duration in mins of

sustained interruptions per consumer) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 46.42

SAIFI — System Average Interruption Frequency Index (Average frequency of sustained

interruptions per consumer) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.65 1.33

Distribution loss — Technical and commercial loss (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.10% 7.85%

As a result, AEML is among the best domestic utilities in terms of supply reliability metrics. We are committed

to further increasing the share of renewable procurement to 30% by financial year 2023 and to 50% by financial

year 2025 to provide sustainable and affordable power to our consumers (such measures, “Green Initiatives”).

As a stepping-stone to the commitment, we have already tied up with Rosepetal Solar Energy Private Limited

and received regulatory approvals for a 700 MW grid connected hybrid power (solar and wind) at Rs. 3.24 per

unit.

For our transmission business, we measure our operating performance in terms of system availability. We

operate our assets under an availability-based tariff regime, which incentivizes us to provide the highest possible

system availability. A minimum system availability of 98% is required for us to fully recover our annual

transmission charges and an availability of 99.75% makes us eligible for additional return on equity under the

MERC Regulations. We have adopted operations and maintenance practices and technologies to maintain a

consistently high standard of system availability. Historically, we have maintained system availability above

99.62%, and accordingly, we have received incentive payments for maintaining availability above the MERC’s

regulatory requirements. Our transmission system availability index was 99.75% in the financial year 2019 and

approximately 99.99% in the six months ended September 30, 2019.

For our generation business, we measure our operating performance in terms of Plant Load Factor (“PLF”), heat

rate and availability. Between 2004 and 2019, ADTPS had an average PLF of 95.64%, an average availability of

95.60% and a gross station heat rate of 2,289.34 kCal per kWh (which represents the kilo calorie heat required to

generate one unit of electricity). ADTPS had an availability of 96.09% and PLF of 82.58% in the financial year

2019. In comparison, the national average PLF for thermal power stations in India for the year ended March 2019

was 61.07% (Source: CEA FY19 Annual Report). Our gross station heat rate of 2,272.83 kCal / kWh, during

financial year 2019, is efficient compared to the normative station heat rate of 2,430 kCal / kWh. ADTPS, in the

future, will endeavor to act as an enabler for more infirm renewable power integration into the grid. In 2007,

ADTPS was the first plant in the country to install a Flue Gas Desulfurization (“FGD”) unit and we are already

in compliance with all environmental norms prescribed by MoEF. We have consistently achieved 100% fly ash

utilization and 99.9% fly ash collection efficiency at our ADTPS plant. Further, we have four ambient air quality

monitoring stations and have installed the tallest subcritical chimney in India which is 275 meters tall.

Skilled and experienced senior management team and competent and committed workforce

Our senior management team has an average of more than 28 years of experience in the fields of regulatory,

financial and corporate planning, strategic distribution and transmission and construction management, among

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others. We believe that the expertise of our senior management will play a key role in the continued growth of

our business and in the development of consistent procedures and internal controls, which are critical for our

business. Our senior management team has significant experience in implementing and operating distribution

systems. We have over 5,000 trained employees with an average experience of 19.7 years. As of September 30,

2019, our employees have installed approximately 2.47 million energy meters, over 70,000 LT pillars, over

90,000 streetlights and approximately 6,575 substations spreading across 400 sq. km. We also benefit from

having an engineering team with diverse capabilities in design, construction, project management, procurement

and quality assurance. Our engineering team ensures that our projects are successfully executed and that ongoing

operations maintain high levels of availability. Our employees have received rewards and recognitions for their

contributions to the industry as well. For example, the workforce at ADTPS has received several awards by

Government of India (“GoI”) for outstanding contributions that improve productivity and innovation.

Our Strategies

Relentless focus on providing sustainable, reliable and affordable power to our consumers

Our business philosophy is to provide the highest quality of power supply to our consumers by way of

sustainable, reliable and affordable services; with a focus on excellent consumer service. Through our business

philosophy, we intend to protect and maintain the RAB and thereby leading to hardening of assets to minimize

downtime in power supply even in adverse situations. This helps translate our business philosophy to deliver

shareholder value. We consistently benchmark ourselves with the top ranked utilities across the world (including

India) and strive to be recognized as one of the best utilities in the world.

We aim to increase our renewable power procurement from the existing 3% of total demand to approximately

30% by financial year 2023 and 50% by financial year 2025. As a step towards achieving this, we have issued a

letter of award to M/s Rosepetal Solar Private Limited for procurement of 700 MW hybrid renewable energy and

received regulatory approvals for the same on January 8, 2020.

ADTPS has been recognized as one of the most environmentally compliant thermal power plants in India with a

number of initiatives taken for sustainability such as 100% fly ash utilization and was the first plant in India to

install FGD. These activities have won many accolades for ADTPS.

Continued focus on environmental sustainability and social initiatives

We are committed to achieving excellence in environmental performance, preservation and promotion in order to

achieve a clean and healthy environment. We have received the MERC approval for procurement of 700 MW

hybrid (wind and solar) power from fiscal year 2022 onwards for 25 Years at Rs. 3.24 per unit with a guaranteed

CUF of 50%. We expect this to result in a growth of approximately 12% in renewable power procurement in

accordance with the Paris Agreement.

We actively encourage various stakeholders such as our consumers, business partners, suppliers and contractors

to achieve that. In the past, we have taken several initiatives such as using non-carcinogenic biodegradable silica

gel in our transformers, replacement of HPSV lamps with LED lamps in streetlights, replacing the petrol/diesel

vehicles with electric ones in our fleet, replacing oil type switch gears with dry type maintenance free switch

gears, using environment friendly ester filled transformers, purchasing power from renewable energy sources,

extending support to our consumers for installation of roof-top solar panels in order to reduce the consumption of

conventional energy as well as committing to compliance with all statutory requirements, environmental

regulations and quality standards prescribed by the GoI from time to time. We actively engage with our

consumers in order to address any concerns they may have with respect to their energy needs, be it installation of

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rooftop solar panels, a better understanding of their energy consumption patterns or promoting the use of energy

efficient appliances, and providing effective solutions from time to time.

As an Integrated Management Systems certified company we ensure that the three critical management systems

— quality, environment and health and safety are voluntarily implemented and audited. We have obtained

appropriate licenses for handling of hazardous wastes and ensure due compliance with all environmental

regulations while dealing with such wastes. As part of our commitment towards environment protection, we

regularly conduct tree plantation drives and have implemented energy conservation measures such as nano-

molecular thermo conductive additive treatment for our air-conditioning system which has been certified by the

Electrical Research and Development Association, Vadodara (ERDA), replacement of conventional T8 tube

lights and sodium vapor lights with LED lights. Further, we also plan to create an internal framework to enable

social competition for energy efficiency among our consumers.

ADTPS is subject to various environmental regulations and is in compliance with all material environmental

regulations and standards prescribed by the GoI. We intend to maintain our performance in the Perform, Achieve

and Trade (“PAT”) scheme, a market-based trading scheme mandated under the Energy Conservation Act and

administered by the Bureau of Energy Efficiency, which aims to promote energy efficiency in industries

operating in energy-intensive sectors by trading in Energy Saving Certificates (“ESCerts”). In the recently

conducted second cycle of PAT, ADTPS received 8,749 ESCerts as compared to 4,591 ESCerts in the first PAT

cycle. Further, ADTPS recently added three additional ISO certifications in 2019 – ISO 22301:2012(BCMS),

ISO 27031:2011 (IRBCMS), ISO 26000:2010 (Social Responsibility). We have also constituted a separate

Environment Management Group (“EMG”) to ensure all day-to-day compliance towards environment protection

for ADTPS. We continue to undertake initiatives for improving the environment and have in the past been

involved with measures such as installation of electrostatic precipitators, maintaining a sewage water treatment

plant and ambient air quality monitoring stations.

We commissioned the FGD unit at ADTPS in the year 2007 and this generation plant already complies with the

revised norms issued by MoEF in 2015. As per the implementation plan prepared by Central Electricity

Authority (“CEA”), other thermal power plants in India are required to comply with the new emission standards

by the year 2022 by installing FGD systems. Our FGD system has been operational since 2007. ADPTS has also

maintained four online ambient air quality stations, two sewage treatments for plant and colony, maintaining

more than 33% of open land under green belt. Based on its environmentally friendly implemented systems,

ADTPS has outperformed on all the environmental parameters prescribed by MoEF in India.

Parameter

UoM

TPM

(mg/Nm3)

Sox

(mg/Nm3)

NOx

(mg/Nm3)

Mercury

(mg/Nm3)

India (MOEF) Standards:—Units ‹ 500MW Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 600 600 NA

—Units ≥500 MW Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 200 600 0.03

ADTPS Achievements: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.1 105.1 303.9 0.004

TPM — Total Particulate Matter, SOx — Sulfur Oxides, NOx — Nitrogen Oxides

Energy conservation is achieved by using more renewable sources, efficient energy and conserving energy.

Below are the various initiatives that we have undertaken to conserve energy, including through demand side

management. We installed roof top solar plants with installed capacity of 80KW in our license area in 2011-12.

We have been performing walk through energy audits for sensitizing the consumers regarding conservation of

electricity since 2010. We have also run various consumer centric programs such as 5-star ceiling fan program,

5-star split AC program, LED bulbs promoting use by consumers of energy efficient devices.

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Apart from the above initiatives, we also conduct Energy Efficiency and Energy Conservation sessions which

have been attended by approximately 35,700 participants. Also, every year, we celebrate World Environment

Day (June), Coastal Clean-up Day (September) and Energy Conservation Week (December).

We have also implemented Environment, Occupational Health and Safety (“EHS”) management systems to

provide and maintain an accident-free and healthy workplace. We are also committed to ensuring the health and

safety of our employees by providing and maintaining an accident-free and healthy workplace through

implementation of EHS management systems in order to minimize health and safety hazards. Furthermore, we

proactively monitor the EHS management systems, integrate EHS procedures and best practices into our

operations, IER/HERA review on regular basis also conduct EHS training activities, like mock drill, emergency

preparedness plan, medical/health check-up for employees and undertake periodic reviews of standard operating

procedures in order to mitigate health and safety risks. We have documented a Disaster Management Plan in

order to ensure the safety of life and protection of property with minimum disruption of power. We regularly

invest in disaster management equipment such as owned and leased mobile generation sets, increasing the height

of our substations to ground plus one and rubber boats to be used during water logging. Below is a snapshot of

electrical incidences including fatalities over last three years.

Year ended March 31

Particulars 2018 2019 2020*

Fatal — Electrical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 0

Fatal — Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 1 0

Reportable — Electrical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 6 5

Reportable — Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 75 48

* As of the date of this Offering Circular

We have been a pioneer in adoption of O&M best practices and new technologies since inception to provide

reliable power supply to our consumers. We aim to strengthen our existing network and augment our capabilities

through a detailed capex plan in the future. Further, we are an integral part of Mumbai’s islanding scheme (as

described below) which has helped us serve our consumers even amidst external grid disturbances

The above measures are detailed below:

‰ We were one of the first utilities in India to introduce technologies such as supervisory control and data

acquisition (“SCADA”), demand management system (“DMS”), outage management system (“OMS”),

workflow management, field crew management, geographic information system. The use of such

integrated technologies has resulted in significant improvement of the power reliability metrics with the

distribution loss percentage reducing from 10.38% in fiscal year 2010 to 7.85% in fiscal year 2019.

Similarly, we have also established efficient operations at ADTPS which has been operational for 24 years

achieving an annual PLF of more than 100% for seven consecutive years and nine years in total, thereby

ensuring a reliable supply of power to our consumers. ADTPS has also been successful in maintaining a

100% loading factor along with availability and PLF exceeding 95% for the last 15 consecutive years.

‰ We plan to enhance operational efficiencies and improve system reliability by eliminating assets which

have outlived their life and/or have become obsolete because of recent technological developments. For

example, we will replace approximately 2,100 kms of PILC cable with XLPE cables and approximately

2,300 oil type Ring Main Units with dry type Ring Main Units. We continue to identify areas of

improvement and seek ways to address such areas.

‰ Similarly, we plan on renovating and modernizing ADTPS to extend its plant life by another 15-20 years

and to strengthen plant security against threats such as terrorism and sabotage. ADTPS has also been a

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pioneer in adopting various best-in-class practices such as the use of washed coal, blending of domestic

and imported coal and reducing annual overhaul time from more than 30 days to 15 days.

‰ Our plan is to reduce variable costs and increase cost competitiveness by supplying a combination of solar

power and thermal power generated by ADTPS and to explore the feasibility of flexible operation of

ADTPS to run at lower load when needed. With our procurement of 700 MW of grid connected wind-solar

hybrid power on a long-term basis for 25 years at Rs. 3.24 per unit with a capacity utilization factory

(“CUF”) of 50%, we will be able to reduce our overall cost of power by 20%, since the renewable power

would be available at Rs. 3.24 per unit compared to the current rate allowed by the MERC of Rs. 4.04 per

unit. This new renewable power generation is expected to commence from financial year 2022. The

availability of power through such contracts will also significantly reduce our dependency on short-term

power purchases. We intend to keep contracting power from renewable sources to achieve environmental

sustainability as well as non-escalable power tariffs. This will also lead to our tariffs staying affordable

providing us a competitive edge. With this, we can increase or decrease our load at ADTPS based on our

requirement.

‰ We are strengthening our transmission network through installing substations, laying EHV cables to

enhance the stability and reliability of the network by increasing our transformation capacity and relieving

critically loaded existing sub-stations and EHV lines. As part of this effort, we regularly study the network

constraints. For example, we plan to further strengthen the transmission corridor capacity for power supply

to meet Mumbai demand through bulk power injection schemes. Also, we plan to implement the S/4 Hana

system, which would enable us to plan, execute and generate reports and analytics based on live data. This

will simplify managing and administering our IT system and enable centralization of hardware and network

resources. This system is also easily scalable and flexible, thus enabling us to adapt and take advantage of

future trends more easily. For example, this system will lead to adoption of a cloud platform. The cloud

platform will enable us to deliver innovative solutions, to evolve and drive new revenues, connect with

consumers at a deeper level, access IoT and Big Data, and most importantly, gain relevant insights into any

data, in real-time. As a result, our decision making will be faster, which is crucial for companies in the

current digital age.

‰ We also currently have plans to commission Automatic Distribution Management system (“ADMS”),

which will enable us to monitor the distribution network and restore supply during the disruptions with the

use of artificial intelligence. Such use of ADMS will reduce downtime of our system, thus improving the

reliability of supply to the consumers. ADMS will also enable optimum utilization during normal course of

operation so that the system technical losses are minimized.

‰ Mumbai being India’s commercial capital has a few inbuilt network design elements which help improve

reliability. The city has 1,877 MW of embedded generation (including ADTPS) which effectively helps

“island” Mumbai’s power network in case of external grid disturbances. This islanding scheme of the

Mumbai network design was introduced in the year 2000 and is reviewed annually by the CEA. Our

transmission system is connected to the 1,877 MW generation system of Mumbai with installed capacities

of 500 MW (ADTPS), 447 MW (TPC — Hydro) and 930 MW (TPC -Trombay Thermal) and plays a

significant role in the islanding scheme. The automatic load shedding network ensures a constant and

reliable supply of power to our consumers.

When the frequency of the network approaches 48Hz or is at 49Hz and decreasing at the rate of 0.5Hz/

second, there is load shedding in the AEML and TPC network. When the frequency is at 47.9Hz, both TPC

and AEML network, isolate themselves from MSETCL network subsequent to which 1,877 MW of

embedded generation is available to cater to Mumbai’s demand. Further decrease in frequency to 47.7Hz

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results in TPC and AEML networks getting separated from each other. Subsequent to this, both the utilities

serve their respective consumers using their own embedded generation.

The diagram below illustrates the islanding scheme of the Mumbai network:

Increased responsiveness to consumers and continue to deliver premier service

We consider consumer feedback to be a valuable resource from which we adopt new strategies to improve

consumer relations. Since August 2018, we have implemented the following consumer facing initiatives to

improve consumer satisfaction:

Billing

To ensure accurate and easily-accessible monthly bills for consumers, we have made improvements in our billing

system including barcoding of all bills, a new feature that allows consumers to share their meter reading

photograph in case they want to report a meter reading, stringent billing quality control mechanism with

improved checks and algorithms, and customized messages on consumer bills for better transparency and

understanding.

Contact Center

Our contact center is a dedicated channel for reporting on the IVR, issues such as safety related, electrical

accidents, water logging or streetlight issues and emergency elevator failure situations resulting from power

interruptions. We have in place additional call channels and have improved our network to reduce abandoned

calls at the helpline phone number 19122, as well as a call back facility for consumers who could not reach us on

the helpline. In addition, a back-up contact center is available in Indore separate from Mumbai for redundancy,

along with redundant network communication lines to ensure 100% connectivity at all times. We have improved

call forecasting and agent handling to maintain optimum service levels.

Digital Self-Help Services

In line with the increase in smart phone usage, we have initiated and implemented various application-based

services to our consumers, including a new Adani Electricity Mobile application with enhanced security features

and a new WhatsApp Business Account for AEML created for enhancing self-help services and communication

with consumers. In addition, our IVR Self-help service allows consumers to register complaints relating to bills

not received. We also offer payment links on invoicing messages to encourage digital payments, with e-bill pdfs

downloadable over SMS. Our self-help chat bot Elektra is available on our website and mobile applications to

assist consumers with their needs. We also provide services in four languages.

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Payment Services

To encourage prompt bill payment, we provide various payment options to our consumers, including 39 offline

bill payment centers, advance payment options that are available on our mobile application, eNACH, e-wallet

and UPI internet pay option made live through adanielectricity.com, the first of its kind in the industry.

Additionally, we also provide instant notification to consumers on e-payments mode. More than 100,000

consumers shifted to digital payments, increasing the digitally-paying consumer base to over 50%, a trend we

support by organizing special payment kiosks in our divisional offices to educate consumers on digital payments.

Currently we have 50 payment kiosks installed in our licensed area thereby having a touchpoint with consumers

every 2 kms. In addition, incentives are offered to consumers to encourage payment, including cashback offers

and promotion of voluntary deposit schemes (“VDS”) at an interest rate higher than that of savings account.

Specialized and Prompt Support

We utilize both walk-in consumer care centers and social networking platforms, such as Facebook, Twitter and

WhatsApp to cater to consumer complaints and consumer education. We also offer specialized support to billing

queries via our bill-support email address that responds to client inquiries within 24 hours and provide support

for billing-related walk-ins in our specialized camps at divisional offices. We also provide specialized support for

online payment inquiries through our digital services desk, concessional tariff during religious festivals and for

consumers below poverty line we provide a concessional tariff throughout the year, smoothening of FAC for

tariff stability and ‘Easy check machine’ for onsite meter testing at consumer premise.

Consumer Safety Awareness

To raise consumer awareness on safety, we initiated the Monsoon Communication Plan on social media

platforms which distributes safety instructions and launched a safety campaign on social media and radio to

promote consumer safety during the monsoon season. We also perform electrical safety audit of industrial

consumers and provide HT/LT Arc Flash suits for field employees.

Future Consumer Service Initiatives

We have plans to implement mobile-based applications for field force automation, meter reading, meter

management, bill distribution, recovery and vigilance and to introduce variable bill printing for better consumer

experience based on individual consumers’ needs to ensure accuracy of information provided to consumers.

Implementation of a smart metering eco-system is another goal of ours as well, first targeting high-value

consumers then eventually to all consumers, with the aim of enabling consumers to monitor their consumption on

a real-time basis. In turn, such eco-system will assist us in predicting demand and managing power supply

procurement needs. Such eco-system will provide insight in to consumer behavior which will also help us

improve such eco-system.

We also plan on launching service initiatives for consumers which aims to make it more convenient for them to

interact with us with regard to meter reading, bill payment or other enquiries, service requests and complaints.

Our goals for the next few years are as below.

‰ We plan to increase centralized, back-end self-help transactions to 70% of all transactions, launch a

singular consumer satisfaction index (“CSI”) for consumer interactions, initiate consumer perception

measurement projects, enhance consumer engagement by using smart meter data, offering home energy

advisory services and minimize high billing complaints from consumers;

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‰ We aim to achieve and maintain a consumer perception top two box score of over 90% and a self-help

transaction share, e-payment transaction share and CSI of over 90%; and

‰ In addition, we are considering the opening of a model consumer facing office with high-quality facilities

that are user-friendly, using AI to provide more accurate and customized responses to consumer demands,

the deployment of a self-help kiosk for a host of services such as payment through all modes, duplicate

bills, and lodging of complaints. Our strategy for consumer acquisition from competitors includes incentive

scheme for employees and outside licensed electrical contractors for facilitating consumers for migration to

us.

Consumer Feedback and Grievance Mechanism

Complaints received are classified under two categories:

1. Commercial complaints

2. Technical complaints

1. Commercial complaints

The following is the process for consumer grievance redressal:

CommercialCompliant

(Billing, Metering andPayment)

InternalGrievanceRedressal

Forum (IGRF)

ConsumerGrievanceRedressal

Forum (CGRF)

ElectricityOmbudsman

(EO)

For the financial year ended March 31, 2019, we received 107,518 commercial complaints, out of which 51 were

elevated to the next level of IGRF, followed by 21 to CGRF and only three were elevated to the highest level of

EO. Our robust process for redressal of consumer complaints ensured that only 0.1% complaints go to the

grievance redressal forums. 99.5% of the complaints were resolved with maximum turnaround time (“TAT”) of

15 days as against the MERC’s benchmark of 30 days, the balance were resolved within 60 days, and only three

were escalated to the Electricity Ombudsman.

Particulars

The MERC

TAT

AEML maximum

TAT

Network Complaint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 hours 90 minutes

Commercial Complaints (billing, metering and payments) . . . . . . . . . . . . . . . . . . . . . . 30 days 15 days

Internal Grievance Redressal Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 days 45 days

Consumer Grievance Redressal Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 days 60 days

Electricity Ombudsman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 days NA

2. Technical Complaints

There were a total of 716,753 technical complaints for the financial year ended March 31, 2019. All of these

complaints were resolved with a maximum TAT of 1.5 hours against the prescribed benchmark of three hours.

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Process flow for speedy resolution followed by us:

CommercialComplaint

Registration ofcomplaints

Processing EscalatingClosing ofcomplaints

Call Center, Social Media & IGRmediums

Auto route complaints torespective departments

First Response –60 minutes

Final Response – 48 hours

TAT+3 days – Consumercare head

TAT+7 days – Business head

Our consumers are segmented as industrial, commercial and residential, based on the purpose for which they use

the power that we supply to them. More than half of our revenue from distribution of electricity is generated

through industrial and commercial consumers. We also facilitate high reliability of power supply for premium

and high-value consumers through focused service approach. These differentiated services include:

‰ Dedicated key account managers;

‰ Prioritized supply restoration services;

‰ SMS alerts to key stakeholders for monitoring supply interruptions of Industrial and Commercial

consumers;

‰ Stringent TATs for addressing billing and meter related issues (stringent as compared to other segments as

well as the SOP standards laid down by the regulator);

‰ Advisory and walk-through audit services;

‰ Automated meter reading;

‰ Customized and personalized “My Account” which provides information pertaining to the key account

manager, penalties levied and incentives earned; and

‰ Payment services for high value payments — RTGS using the eCMS technology.

Power Purchase

With an overarching philosophy of providing affordable and sustainable power supply, we continuously strive to

reduce our power purchase costs and optimize our sources of power supply. We source our power requirement

through various power purchase agreements in addition to our embedded generation of 500 MW sourced from

Adani Dahanu Thermal Power Station (“ADTPS”).

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The table below summarizes the salient features of our power purchase agreements (“PPAs”):

Particulars

Adani Dahanu

Thermal

Power Station

Dhursar

Solar

Power Pvt

Limited

Reliance

Innoventures

Pvt. Limited

AAA &

Sons

Enterprises

Pct

Limited

Vector

Green

Energy

Pvt.

Limited

Vector

Green

Energy

Pvt.

Limited

Tembhu

Power Pvt.

Limited

Reliance

Power

Limited

1 Capacity (inMW)

500(2x250)

40 45 3.375 18 6 4.5 45

2 Nature ofPower

Thermal -Coal Solar Wind Wind Wind Wind Small Hydro Wind

3 Date ofContract

February 12,2018

March 28,2011

March 6,2007

March 7,2008

March 25,2009

April 20,2010

November 28,2012

March 8,2011

4 Duration ofPPA

(Years)

5 25 13 13 13 13 33 13

5 CommercialOperations

Date

Unit-1 -July1995 Unit-2 –January 1996

March2012

April2009

April2009

March2009

April 2010 April 2010 June2013

6 PPA StartDate

February 23,2018

March 28,2012

April 1,2009

April 9,2009

April 21,2009

April 28,2010

December 1,2012

June 30,2013

7 PaymentSecurity

Mechanism

NA Letter ofcredit

(“LC”)for onemonth

estimatedaveragebilling

No No QuarterlyLC for

One monthbilling

QuarterlyLC for

One monthbilling

QuarterlyLC for

One monthbilling

LC forone

monthestimatedaveragebilling

8 BillingTerms

NA Monthly Monthly Monthly Monthly Monthly Monthly Monthly

9 PaymentTerms

(days fromreceipt of

Bill)

NA 30 days 45 days 30 days 30 days 30 days 30 days 30 days

10 Tariff forFY 2020(Rs. per

unit)

Fixed Cost Rs3,466.20 million

and VariableCost is Rs 3.375

per unit-approved by the

MERC

10.30 5.00 5.00 5.00 5.07 4.26 5.81

11 TerminationClause

No Yes Yes Yes Yes Yes Yes Yes

* We have a power purchase arrangement with Dahanu

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Further to the PPAs, we also have the following options for power procurement:

‰ Any shortfall after taking into consideration availability of long-term sources is purchased from the short-

term market, like the bilateral market (through an e-bidding portal of the Ministry of Power, Government

of India) and power exchanges.

o We also have proprietary membership of power exchanges such as Indian Energy Exchange Limited

(“IEX”) and Power Exchange India Limited (“PXIL”) and based on our requirement, we purchase

electricity from IEX which operates as a national level platform. There is sufficient availability of

power on such exchanges with sellers offering more than 8,000 MW per day.

o Bilateral purchases are secured through the e-bidding portal to make firm arrangements for the

upcoming month or quarter.

‰ We also engage in banking of power, wherein power is banked with another Utility to be used when

demand is high and returned when the demand is lower.

‰ We also have a standby facility with Maharashtra State Electricity Distribution Limited (“MSEDCL”) in

the event of any scheduled or unscheduled outages to ensure reliability of supply to our consumers in

Mumbai.

‰ With a commitment towards sustainability, we have issued a letter of award to M/s. Rosepetal Solar Energy

Private Limited for procurement of 700 MW grid connected wind and solar hybrid power through a unique

structure for optimization of grid downtime, with guaranteed CUF of 50% on a long term basis of 25 years

at Rs. 3.24 per unit (lower than the historical power purchase cost as shown below). Regulatory approval

for the same has also been received and generation is expected to commence from financial year 2022. The

availability of power through this PPA will save on our short-term power requirements and reduce the

overall power purchase cost. We intend to keep contracting power from renewable sources to achieve

environmental sustainability as well as non-escalable power tariffs. In line with our commitment to provide

affordable power, we have reduced our power purchase cost by 10.67% during the nine month period from

April 1, 2019 to December 31, 2019, as compared to the nine month period from April 1, 2018 to

December 31, 2018.

Average Power Procurement Cost (INR / unit)

FY17

4.77 4.86 5.144.54

FY18 FY19 YTD20

Operations and Maintenance

Our maintenance division develops and tracks the preventive maintenance plan to help ensure a safe and reliable

system. By performing preventative maintenance on our assets, we can minimize the need for reactive

maintenance, which may adversely impact reliability and tends to be more costly than preventative maintenance.

We also emphasize on line techniques in order to minimize shutdown time for periodic maintenance checks and

breakdown maintenance. We have adopted proven practices such as an outage management system, field crew

management system and work-flow management to pinpoint the fault location, route optimization using GIS and

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faster issue resolution in order to achieve these objectives. Furthermore, to prepare for certain force majeure

situations that cannot be predicted, we have implemented emergency restoration systems and we provide the

skilled labor necessary to install and operate these emergency restoration systems.

Supervisory Control and Data Acquisition (“SCADA”)

We have installed a SCADA system in the control room of each of our substations for event analysis and

operations. The SCADA system acts as an interface between the operator and the control system and allows

operators to control substations and see all events which occur during any alarm or failure of any substation

elements. The SCADA system also collects event data and alarm information from all control facilities and

presents it to operators. In addition to ensuring improved reliability and reduce interruptions in the power we

supply to our distribution consumers, the SCADA system is used for energy management and for improving our

overall distribution system performance.

Demand Management System (“DMS”)

Our Demand Management System uses a planned methodology to forecast, plan for and manage the demand for

distribution of electricity.

Outage Management System (“OMS”)

The OMS assists our workforce in the restoration of power by: (a) predicting the location of the transformer,

fuse, recloser or breaker that opens upon failure, (b) prioritizing restoration efforts and managing resources based

on criteria such as availability of emergency facilities nearby, size of outages and its duration, (c) providing

information on the extent of outages and number of consumers impacted to the management, media and

regulators, (d) calculating the estimation of restoration times and (e) managing the crews assisting the restoration.

The OMS process begins with a consumer complaint either by phone or social media which is taken up by the

consumer call center that is integrated with interactive voice response (“IVR”). Combinations of calls are then

used to determine and predict the location of the outages. The calls are also recorded and analyzed in the

consumer relationship management (“CRM”) system. OMS is also integrated with SCADA systems which

automatically reports the operation of monitored circuit breakers. After the complaints or outage predictions are

analyzed, the OMS automatically assign the complaint to the appropriate linesman, crew and the shift engineer

and informs the linesman, who then identifies the cause and provides a solution.

Workflow Management System

The Workflow Management System is used to improve reliability and optimize the field of operations by

sourcing, planning, execution, closure and compliance. Benefits of this system include: (a) more real time

operational intelligence, (b) the monitoring of network operations and supply chain, (c) providing control over

processes, (d) improved reliability and efficiency of assets and operations and (e) increased transparency and

accountability.

Field Crew Management Application

We have introduced a new technology through the adoption of a Field Crew Management Application which

better manages no-supply complaints. The application assists in minimizing outage resolution time and real-time

update of the cause of outage to cater to consumers in a timely manner.

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Geographic Information System (“GIS”)

At the core, the five systems discussed above are integrated with our GIS, addressing the spatial dimension of an

electric distribution system. GIS assists in providing analyzes in areas such as selection of suitable areas,

optimum path finding, the profile analyzes, the engineering design of wires and towers, and cost estimations. As

part of a geospatial modeling, GIS is a foremost technology that considers growth opportunities for fault analysis,

optimization of networks, load forecasting, cost estimation and selection of suitable areas.

SCADA / DMSWorkflow

Management

Field CrewManagement

OutageManagement

GIS

Outage Related Problemsare pin pointed using GIS

Workflow Optimization forfaster issue resolution

Field Crew can use GIS forroute optimization

Faults noted in SCADA canbe located using GIS

This use of such integrated technologies has resulted in the improvement of our reliability metrics, as shown in

the table below.

Year

Distribution

Loss% SAIDI SAIFI

FY 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.38 183.00 4.00

FY 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.93 108.17 2.75

FY 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.46 95.91 2.55

FY 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.49 126.62 2.83

FY 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.50 151.36 2.92

FY 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.47 53.93 1.69

FY 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.24 40.29 1.47

FY 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.83 52.76 1.63

FY 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.11 55.88 1.54

FY 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.85 46.42 1.33

SAIDI — System Average Interruption Duration Index — It is average duration of sustained interruptions per consumer.

SAIFI — System Average Interruption Frequency Index — It is average frequency of sustained interruptions per consumer.

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Our License and Regulatory Framework

Our License

We hold an electricity distribution license and an electricity transmission license, both granted to us under

Section 14 of the Electricity Act. Both licenses are for a period of 25 years and have been in force since

August 16, 2011.

Licensee fee

We are required to pay the MERC an annual license fee by April 10 of each year as prescribed under the MERC

(Fees and Charges) Regulations, 2004 in relation to our electricity distribution license and an electricity

transmission license. In the year ended March 31, 2019 we paid the MERC a fee of Rs. 22.8 million and Rs. 1.6

million for our distribution and transmission license, respectively.

Key License Terms

Each long-term license authorizes the licensee to distribute (in case of electricity distribution) or establish and

operate (in case of electricity transmission) the defined transmission lines and substations for a period of

25 years. The licensees are also required to fulfill certain duties as required by the MERC.

Distribution Business

The electricity distribution license authorizes us to distribute electricity in areas in and around the suburbs of

Mumbai including under the Mira Bhayandar Municipal Corporation (“MBMC”). We distribute electricity in the

areas between Bandra to Dahisar in western suburban Mumbai, Chunnabhatti to Vikhroli and Mankhurd in

eastern suburban Mumbai and areas administered by MBMC.

Transmission Business

The transmission license authorizes us to establish and operate the defined transmission lines and substations

inclusive of related infrastructure. We are required to execute connection agreements with other licensees

regarding interconnection points of the defined lines/sub-station bays. Our transmission license is valid until

August 15, 2036.

Duties of the licensee (Distribution Business and Transmission Business)

‰ The licensee is required to immediately notify the MERC of any change in its management control and/or

major change in its shareholding pattern.

‰ The licensee shall seek the approval of the MERC before creating any encumbrance on the assets of the

licensed business, except for any non-regulated assets of the licensed business.

‰ The licensee may engage any of its subsidiaries or holding company or a subsidiary of such holding

company to provide any goods or services in connection with the licensed business subject to following

conditions:

o transactions shall be undertaken on an “arm’s length basis”; and

o details of each transaction shall be reported to the MERC each financial year.

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Regulatory framework

Our business is regulated by the MERC which is the regulatory body for generation, transmission and

distribution of electricity in the state of Maharashtra. The MERC from time to time determines the tariff for

generation, transmission, supply, wheeling of electricity, wholesale, bulk or retail sale within the state. It also

issues licenses for intra-state transmission, distribution and trading of electricity.

The MERC decides the tariff based on the Aggregate Revenue Requirement (“ARR”) which for the different

business segments is a combination of the items set out below, among other things:

‰ Distribution Business: Normative costs (i.e., O&M, purchase cost, depreciation, interest on term loans,

interest on working capital and tax grossed up), return on equity and incentives/penalty;

‰ Transmission Business: Normative costs (i.e., O&M, purchase cost, depreciation, interest on term loans,

interest on working capital and tax grossed up) and return on equity; and

‰ Generation Business: Normative costs (i.e., O&M, purchase cost, depreciation, interest on term loans,

interest on working capital and tax grossed up), return on equity, energy charge and incentives/penalty.

For further details, see “Regulations and Policies in India relating to the Power Sector”.

Information Technology

Information technology systems are key to our ability to manage our business. Our information technology

systems enable us to coordinate our operations. To optimize the effective utilization of our distribution network

and manpower, we have installed a SCADA system in the control room of each of our substations for event

analysis and operations. The SCADA system acts as an interface between the operator and the control system and

allows operators to control substations and see all events which occur during any alarm or failure of any

substation elements. The SCADA system also collects event data and alarm information from all control facilities

and presents it to operators. In addition to ensuring improved reliability and reduced interruptions in the power

we supply to our distribution consumers, the SCADA system is used for energy management and for improving

our overall distribution system performance. For more information on our information technology systems, see

“— Operations and Maintenance”.

The use of integrated technologies has improved our reliability metrics, as show in the below tables:

12.10%

12.00%11.25%

11.04%

10.16%

10.38%

8.93%

9.46%

9.49%

9.50%

9.47%

9.24%

8.83%

8.11%7.85%

FY 05 FY 07 FY 09 FY 11 FY 13 FY 15 FY 17 FY 19

Distribution loss %

Distribution loss %

134

360 358.2

238.8183

108.17 95.91 126.62 151.36

53.93 40.29 52.76 55.88 46.42

FY 07 FY 09 FY 11 FY 13 FY 15 FY 17 FY 19

SAIDI (# mins)

SAIDI

7.82 7.8

5.384

2.75 2.55 2.83 2.921.69 1.47 1.63 1.54 1.33

FY 07 FY 09 FY 11 FY 13 FY 15 FY 17 FY 19

SAIFI (nos)

SAIFI

Intellectual Property

We rely on a variety of intellectual property such as patents, copyrights, trade secrets and trademarks to operate

our business and maintain our competitive position. As of September 30, 2019, we hold a patent for an electricity

theft detecting device and have submitted applications for registration of five additional patents with the Office

of the Controller General of Patents, Designs and Trademarks, Government of India. To the best of our

knowledge, there has not been any infringement or dispute with regard to any intellectual property rights owned

by or used by us.

Sr. No. List of Patents Status

1 Power distribution unit with theft detecting mechanism Patent Received

2 Theft proof Feeder Pillar Application made

3 Meter Testing device Application made

4 Testing kit for Digital Control System Application made

5 Isolator test jig Application made

6 Augmented Reality Operating Management Application made

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Employees

As of September 30, 2019, we had 5,059 employees performing various functions as set forth below:

Function

No. of

employees

Operations and Maintenance and Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634

Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209

Corporate Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472

Commercial Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,318

Network Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,426

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,059

Our operations require highly skilled and experienced management and technical personnel. We have two

training institutes located in Mumbai where behavioral and technical trainings are conducted. We offer our

employees comprehensive ongoing training in order to increase their competence and capabilities with respect to

transmission system operations. We have regular staff training sessions and performance enhancement programs

to develop and improve competencies in our general workforce, particularly with respect to functional skills. We

have also implemented a performance appraisal system which allows us to assess the performance of our

employees.

Our non-executive and contract employees are covered by collective bargaining agreements attached to different

unions, however, we have not experienced any material strikes, work stoppages, labor disputes or actions by or

with our employees.

We believe that we provide an attractive remuneration package to our employees including a base salary, a

tax-friendly component and a bonus along with additional benefits as per industry practice.

Insurance

We maintain insurance policies covering standard fire policies for all fixed assets and stocks of distribution

business, industrial all-risk policies for generation and transmission business, burglary policy for distribution and

transmission business, public liability, commercial general liability policies for third-party damage and transit

policies for old and new equipment. We also have money insurance policy for money in-transit and at collection

centers, directors and officers policy for indemnifying any liability, EEI policy for electronic equipment and

PEEI policy for portable electronic equipment. These insurance policies are valid from April 1, 2019 to

March 31, 2020, and are typically renewed on a yearly basis. We also maintain insurance coverage with respect

to other areas to the extent required by law, including vehicle and third-party policies. Our insurers include Bajaj

Alliance General Insurance Company Limited, TATA AIG General Insurance Company Limited, HDFC Ergo

General Insurance Company Limited, Oriental Insurance Company Limited, Reliance General Insurance and

New India Assurance Company Limited. We believe that our assets are insured in line with industry practice.

Health and Safety

We are committed to ensuring the health and safety of our employees by providing and maintaining an accident-

free and healthy workplace through implementation of EHS management systems in order to minimize health

and safety hazards. Furthermore, we proactively monitor the EHS management systems, integrate EHS

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procedures and best practices into our operations and conduct IER/HERA review on a regular basis. We also

conduct EHS training activities for employees, such as mock drill, emergency preparedness plan, medical/health

check-up for employees and undertake periodic reviews of standard operating procedures in order to mitigate

health and safety risks. We believe that we are in compliance in all material respects with Indian legislation in

relation to employee health and safety.

Environmental Matters

We are subject to environmental regulations such as consent to operate granted by Maharashtra Pollution Control

Board under Section 26 of Water (Prevention and Control of Pollution) Act, 1974 and under Section 21 of the

Air (Prevention and Control of Pollution) Act, 1981 and Authorization under Rule 5 of the Hazardous and Other

Wastes (Management and Transboundary Movement) Rules, 2016, in particular in connection with our

Generation business. See “Regulations and Policies in India — Environmental Laws”. For example, ADTPS is

situated in an eco-sensitive zone and is subject to stringent environmental norms. ADTPS’s environmental

performance is monitored by the Maharashtra Pollution Control Board and Central Pollution Control Board. In

addition, ADTPS is also regulated by the Dahanu Taluka Environment Protection Authority (“DTEPA”), which

was established to manage environmental matters in Dahanu Taluka.

According to the environmental regulations, it is mandatory for all coal based thermal power plants to utilize

100% of the fly-ash produced in a stipulated time horizon. Fly ash is oxide-rich and can be used as the raw

material for different industries. Fly ash bricks can be used as a building material. Use of fly ash in the

construction of roads and embankments has been successfully demonstrated in the country and is gaining

acceptance.

Further, on December 7, 2015, the MoEF issued revised norms requiring power plants to comply with new

emission standards by 2022 by installing FGD systems. ADTPS commissioned its FGD unit in 2007 and is

currently in compliance with the MoEF’s revised norms. As of the date of this Offering Circular, no additional

enforcement of environmental law or incident is to be fulfilled by ADTPS.

At ADTPS we have an ongoing maintenance, renovation and modernization program to maintain and enhance

the overall efficiency and reliability of its generating units. This helps to derive the most economic performance

from the plant.

Recently, ADTPS underwent the second cycle of the “Perform, Achieve and Trade” (“PAT”) scheme, a market-

based trading scheme mandated under the Energy Conservation Act and administered by the Bureau of Energy

Efficiency. This scheme aims to promote energy efficiency in industries by trading in Energy Saving Certificates

(“ESCerts”) in energy-intensive sectors. Siri Exergy, an accredited energy auditor carried out the monitoring and

verification (“M&V”) audit for ADTPS. They have recommended 8,749 ESCerts for the second cycle of PAT

based on their audit and our achieved net heat rate. ADTPS similarly gained 4,591 ESCerts during the first cycle

of PAT.

In addition to our existing management system certifications such as ISO 9001:2015, ISO 14001:2015,

ISO 27001:2013, BS OHSAS 18001:2007, ISO 50001:2011 and SA 8000:2014, in 2013, ADTPS coal testing

laboratory was also accredited for ISO 17025:2005 — Laboratory Management System by the National

Accreditation Board of Laboratories. ADTPS was certified for ISO 55001:2014 — Asset Management on

July 31, 2016. In 2019, ADTPS added three more ISO certifications — ISO 22301:2012(BCMS),

ISO 27031:2011 (IRBCMS), ISO 26000:2010 (Social Responsibility).

137

Further, to monitor the environmental performance of ADTPS, a separate Environment Management Group

(“EMG”) has been constituted as per the Ministry of Environment and Forests and Climate Change (“MoEF”)

guidelines. EMG is dedicated to ensuring all day-to-day compliance of consent conditions towards environmental

protection. EMG also ensures environmental compliance as per the Central Pollution Control Board (“CPCB”)

and MoEF, and DTEPA directions. EMG is also responsible for the circulation of the Statutory Authorities’

environment related orders and liaises with the regulatory authorities such as MPCB, CPCB and DTEPA.

We have received approval from the MERC to procure green power from a new wind-solar hybrid source

onwards for which the letter of award has been issued through a competitive bidding process to M/s Rosepetal

Solar Energy Private Limited for purchase of 700 MW for 25 years at Rs. 3.24 per unit with CUF of 50%. The

generation is expected to commence from fiscal year 2022. With this, we will be able to reduce our overall cost

of power by 20%, since the renewable power would be available at Rs 3.24 per unit compared to the previous

rate allowed by the MERC of Rs. 4.04 per unit.

The following graph below helps in providing a better understanding of how ADTPS is recognized as one of the

leading environmentally friendly plants in India. The ADTPS plant has received approximately 29 environmental

awards from various authorities since 1997, the last one being Vasundhara Puraskar in 2018 by the Maharashtra

Pollution Control Board for Environment Protection and Conservation.

Particulate Matter (mg / Nm3)

Mercury (mg / Nm3) NOx Emissions (mg / Nm3)

SOx Emissions (mg / Nm3)

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We are committed to complying with all statutory requirements, environmental regulations and quality standards

as per the guidelines published by the MoEF and the GoI from time to time.

Negotiation of Right of Way and Procurement of Land

As part of the construction process for our transmission lines, we are required to obtain right of way from

landowners whose land our transmission lines will pass through. This process is regulated by the GoI and the

relevant state governments. See “Regulations and Policies in India — Right of Way and Land Procurement”.

138

Transmission and distribution connectivity in Mumbai System is mainly through an underground cable system

passing through public roads and requires obtaining right of way permissions from authorities such as MCGM,

MBMC, PWD Railway, NHAI, and MMRDA. We have a defined public consultation procedure to negotiate

right of way for our transmission lines. Before construction of the transmission line begins, we publish a

notification in the Official Gazette for a 60-day public consultation period, during which any objections to the

construction of the transmission line can be raised. Once we receive the relevant license, we can begin

construction on the transmission line, regardless of whether the transmission line corridor passes through private

property. We pay compensation to landowners for damage to property at the higher of the value under

government regulation or market value. We also engage in corporate social responsibility activities in areas

where we seek to obtain right of way for our transmission lines.

We also acquire land for our substations. We acquire land through direct purchase or lease of government or

private properties.

Competition

We have historically held a significant share of the distribution market within the area for which we are licensed

to distribute power in Mumbai. However, we have recently faced increased competition from TPC, which is

licensed to distribute power in the same area. On October 15, 2009, the MERC issued an Order in Case No. 50 of

2009, which allows the changeover of our distribution consumers to the distribution network of TPC. Under the

MERC’s order, our consumers can avail power supplied by TPC while remaining connected to our distribution

network. Additionally, under the MERC’s Order in case number 182 of 2014, issued on June 12, 2017, existing

consumers of one distribution licensee are permitted to switch over to the distribution network of another

licensee if the other licensee has distribution mains in place and the release of the consumer to the second

licensee only requires the laying of a service line. We continuously focus on affordability of power supply by

reducing our overall power purchase costs (through incremental renewable power purchases that have non-

escalable PPA tariffs over long tenures) thereby mitigating the risk of our consumers migrating to our

competitors’ distribution networks including TPC’s distribution network. As a result, we are emerging as the

“supplier of choice”.

Among the distribution licensees, AEML is the biggest player contributing 54.3% of total peak demand in

Mumbai and 48.3% of total sales in MUs in Mumbai. BEST and Tata Power contribute 22.5% and 23.2% of total

peak demand in Mumbai respectively, and 26.5% and 25.2% of total sales in MUs in Mumbai, respectively for

FY 2018 (Source: Outlook on Power Market in India and Mumbai Region, CRISIL).

Corporate Social Responsibility

We are actively involved in various corporate social responsibility (“CSR”) activities and committed to

sustainable socio-economic development. We intend to invest each year in furtherance of our CSR initiatives as

per provisions of the Companies Act. As part of our CSR policy, we intend to focus on the development of the

communities located in the vicinity of our business operations. We undertake CSR activities through the Adani

Foundation with developmental projects in the core areas of primary education, primary health care, sustainable

livelihood development and rural infrastructure development.

In addition, we have taken the following initiatives:

‰ Tribal Development Program: We are in an association with NABARD covering 11 villages of Dahanu

and 1,000 land-owning families to provide support for livelihood for landless laborers.

139

‰ Skill Development Program: From August 2015 until September 30, 2019, we had trained over 1,100

individuals in tailoring training programs of which 1,035 became employed in garments industry.

‰ Health Development: From April 2017 to March 2019, we collaborated with medical agencies such as M/

s. Tiya Healthcare to provide medical checkup in local neighborhoods (surrounding villages of ADTPS) in

Dahanu free of charge and provide safe drinking water facilities.

‰ Education: In 2017, we constructed school buildings and provided e-learning kits to 31 government

schools for 3,100 students in Dahanu Taluka.

140

BOARD OF DIRECTORS AND SENIOR MANAGEMENT

Board of Directors

The Articles of Association of our Company provide that the minimum number of Directors shall be three and

the maximum number of Directors shall be 15. Our Company has five Directors. Our Company may, subject to

the provisions of the Articles of Association and the Companies Act, alter the maximum number of Directors by

approval of our Company’s shareholders in a special resolution.

The Articles of Association permit that, subject to our Company’s agreement and the terms of the relevant

financing documents, any financial institutions, corporations, banks or such other financing entities may appoint

one or more Directors to the Board of Directors of our Company (the “Board”) as their nominee while any loan

amount remains outstanding to them from our Company or for underwriting shares or debentures of our

Company or as long as any guarantee given by such entity in respect of any financial obligation or commitment

of our Company remains outstanding.

The quorum for meetings of the Board is one-third of the total number of Directors, or two Directors, whichever

is higher, provided that, where at any time the number of interested Directors exceeds or is equal to two-thirds of

the total strength of the Board, the number of remaining Directors present at the meeting, being not less than two,

shall be the quorum during such time.

The Directors are not required to hold any Equity Shares in order to qualify as a Director.

The table below provides information about our Company’s Directors.

Name Age Nationality

Anil Sardana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nationality: Indian

60 Chairman Non-Executive Director

Kandarp Patel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nationality: Indian

47 Managing Director and CEO

Sagar Adani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nationality: Indian

25 Non-Executive Director

K. Jairaj . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nationality: Indian

67 Independent Director

Chitra Bhatnagar . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nationality: Indian

63 Non-Executive Director

Brief Profile of the Directors

Anil Sardana is the Chairman of our Company. He holds a degree in electrical engineering from the University

of Delhi, from which he graduated with honors. Prior to joining our Company, he was the Managing Director and

Chief Executive Officer of the Tata Power group in Mumbai. He has approximately 40 years of experience in the

power and infrastructure sector and is experienced in the areas of power generation, power systems design,

power distribution, telecoms and project management.

Kandarp Patel is the Managing Director and Chief Executive Officer of our Company. He holds a bachelor’s

degree in electrical engineering from Birla Viswakarma Mahavidhyalaya Engineering College and a post

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graduate diploma in business management in Finance from G.H. Patel PG Institute of Business Management. He

has more than 17 years of experience in the areas of power trading, fuel management, legal and regulatory and

commercial aspects of the power business.

Sagar Adani is a Non-Executive Director of our Company. He joined the Adani Group in 2015 after graduating

in economics from Brown University, United States. Having started off his career in projects, he is credited with

building the solar and wind portfolio of Adani Green Energy.

K. Jairaj is an Independent Director of our Company. He is a member of the Indian Administrative Service,

class of 1976, and has held appointments in the infrastructure, energy, transport and urban development sectors,

including acting as the Additional Chief Secretary, Energy Department and Chairman of Bangalore Electricity

Supply Company Limited, the Managing Director of Bangalore International Airport Limited, the Managing

Director of Karnataka Power Corporation Limited, the Managing Director of Karnataka State Road Transport

Corporation, the Commissioner of Bangalore City Corporation for two terms, the Commissioner for Commercial

Taxes and the Principal Secretary to the Chief Minister, Karnataka. With N.R. Narayanamurthy, Chairman

Emeritus of Infosys, K. Jairaj established Bangalore International Airport Limited, India’s first greenfield airport

on a public-private partnership basis with Siemens. K. Jairaj served with the World Bank in Washington D.C. as

a senior public sector management specialist for Africa between 2004 to 2006. K. Jairaj’s academic background

is in economics, public policy and management. He has a bachelor’s degree in arts (honours) from Bangalore

University, a master’s degree in economics from the Delhi School of Economics, a master’s degree in public

administration (“MPA”) from the Woodrow Wilson School of Public and International Affairs at Princeton

University and an MPA from the Kennedy School of Government at Harvard University, where he was the

Edward Mason fellow. K. Jairaj is active in the national management movement and has served as president of

the All India Management Association, has been the president of the Bangalore management association and a

member of the board of governors for the Indian Institute of Management in Kashipur. He was also on the board

of governors of the Indian Institute of Management in Bangalore from 2000 to 2004. He is associated with

several educational and not-for-profit institutions.

Chitra Bhatnagar is a Non-Executive Director of our Company. She is a gynecologist and obstetrician by

profession having bachelor’s degree in medicine and surgery and is a doctor of medicine from Gandhi Medical

College, Bhopal University. She practiced medicine for more than 25 years. She was also associated with

non-government organizations such as Bal Vikas Dhara, Delhi. She has been associated with the Adani

Foundation over the last 12 years, providing voluntary and honorary service to the underprivileged section of

society.

Borrowing Powers of the Board

The Articles of Association, subject to the provisions of the Companies Act, authorize the Board to borrow any

sum or sums of money as approved by shareholders of our Company. The shareholders of our Company have,

pursuant to a resolution passed at the extraordinary general meeting dated November 22, 2019, authorized the

Board to borrow monies. Such borrowings may exceed at any time, the aggregate of the paid-up share capital of

our Company, securities premium account and its free reserves by a sum not exceeding Rs. 160,000 million.

Shareholding of Directors

None of the Directors hold any Equity Shares in our Company as at date of this Offering Circular.

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Prohibition by the SEBI or Other Governmental Authorities

None of the Directors or the companies with which they are (or were) associated as promoters, directors or

persons in control are currently debarred from accessing the capital markets under any order or direction passed

by the SEBI, the stock exchanges in India or any court or tribunal.

Remuneration of Directors

Kandarp Patel, our Managing Director and CEO, did not draw any remuneration from our Company in the

financial year ended March 31, 2019.

The aggregate sitting fees that our Company paid to its Independent Directors and other Non-Executive Directors

in the financial year ended March 31, 2019 was Rs. 0.1 million.

None of the beneficiaries of loans and advances and sundry debtors are related to the Directors. Further, except

statutory benefits upon termination of their employment in our Company or retirement, no officer of our

Company, including the Directors and our key management personnel, is entitled to any benefits upon

termination of employment.

Management Organization Chart

Accounts &Finance

–

DirectTaxation

–

Budget & CostControl

–

SharedServices

–

Business–

O&M–

Regulatory–

Safety &Disaster Mgmt.

–

Marketing–

Corp Affairs–

Project–

O&M–

Regulatory–

Safety &Disaster Mgmt.

–

O&M–

Safety &Disaster Mgmt.

–

HR & IR–

Internalcommunication

–

Medical–

Admin & CSR–

IT &Digitalsolutions

–

ERPMgmt.

–

AccessControl andmgmt.

–

VIP movement–

Intelligence–

Estatemgmt.

–

AuditCell

–

Rakesh TiwaryCFO

Kapil SharmaCOO - Retail +Wires

Arvind K SharmaCOO - Transmission

Rajendra NandiCOO - Generation

Manoj SharmaHead HR

Pijush GuptaCIO

CoI V SupekarHead Security

CentralServices

Shanay ShahHead CEO Office

Mr. Kandarp PatelMD & CEO

Consumer Engagement–

Project Management Office–

Consumer Contact Cell–

Corporate Communication / Branding–

Brief Profiles of Key Management Personnel

Kandarp Patel is the Managing Director and Chief Executive Officer of our Company. He holds a bachelor’s

degree in electrical engineering from Birla Viswakarma Mahavidhyalaya Engineering College and a post

graduate diploma in business management in Finance from G.H. Patel PG Institute of Business Management. He

has more than 17 years of experience in the areas of power trading, fuel management, legal and regulatory and

commercial aspects of the power business.

Rakesh Tiwary is the Chief Financial Officer of our Company. He is a chartered accountant and has over

20 years of experience in spearheading a wide spectrum of accounts and finance roles. Certain areas that he

specializes in include fund raising and management, working capital assessment, credit control, taxation and

audit. Prior to joining our Company, he was associated with the Adani Group’s solar photovoltaic cell

manufacturing business as its chief financial officer.

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Kapil Sharma is the Chief Operating Officer (Retail and Wire) of our Company and has over 25 years of

experience in power sector handling strategic issues in the retail, wires and transmission businesses. He holds a

bachelor’s degree (honors) in electrical engineering and business management. He has handled strategic issues

including grant of transmission and distribution licenses and competition in the Mumbai and Delhi power

distribution markets. He has also handled consultancy assignments related to distribution reforms and has

participated in knowledge exchange programs with distribution utilities in the United States, the

United Kingdom, Singapore and South Asia.

Arvind Sharma is the Chief Operating Officer (Transmission) of our Company and has over 35 years of

experience in project engineering, quality systems, construction management and operation and maintenance

across various organizations such as Ministry of Power, Government of India, NTPC Limited, Power Grid

Corporation of India Limited and Reliance Infrastructure Limited. He has been associated with our Company

since 2014 working as the head of our Mumbai transmission business, responsible for all business related

activities such as project planning, project contract award and implementation and regulatory approvals from the

MERC.

Rajendra Nandi is the Chief Operating Officer (Generation) of our Company and has over 38 years of

experience across different operation related activities for thermal, hydro-electric and solar power plants of

various capacities. He has been associated with our Company for 34 years and has expertise with different facets

of the power business such as operation and maintenance and business strategy. He has received many awards

from our Company for his services. Prior to joining our Company, Mr. Nandi worked with Hindustan

Engineering Works and Gactel Turnkey Projects Limited.

Abhijit Banerjee is the Company Secretary of our Company. He is a member of the Institute of Company

Secretaries of India, a graduate in law and holds a post graduate diploma in business management. He has more

than 28 years of experience in corporate secretarial and legal matters.

None of the key management personnel of our Company hold any equity shares in our Company as of date of

this Offering Circular.

Bonus or profit-sharing plan of the Key Management Personnel

Our Company does not have any bonus or profit-sharing plan for the key management personnel of our

Company.

Interests of Key Management Personnel

The key management personnel of our Company do not have any interest in our Company other than to the

extent of the remuneration or benefits to which they are entitled to as per their terms of appointment,

reimbursement of expenses incurred by them during the ordinary course of business and the employee stock

options held, if any.

Committees of the Board

There are two Board level committees in our Company, which function within its terms of reference: (i) the

Corporate Social Responsibility Committee; and (ii) the Management Committee.

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Set out below are details of the members of these committees.

Committee Members

Corporate Social Responsibility Committee . . . . . . . . . Kandarp Patel (Chairman)

K Jairaj

Sagar Adani

Management Committee . . . . . . . . . . . . . . . . . . . . . . . . Anil Sardana (Chairman)

Kandarp Patel

Rakesh Tiwary

Kaushal Shah

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REGULATIONS AND POLICIES IN INDIA

Regulation of External Commercial Borrowings (“ECBs”)

The current laws relating to ECBs are embodied in the Foreign Exchange Management Act, 1999, the Foreign

Exchange Management (Borrowing and Lending) Regulations, 2018 and the rules and regulations issued by the

RBI in relation to ECBs including the External Commercial Borrowings Policy — New ECB framework issued

by the RBI on January 16, 2019, the Master Direction — External Commercial Borrowings, Trade Credits and

Structured Obligations issued by the RBI on March 26, 2019 and the Master Direction on Reporting under

Foreign Exchange Management Act, 1999, dated January 1, 2016, each as amended (together, the “ECBGuidelines”). ECB can be accessed under two routes:

(i) the automatic route; and

(ii) the approval route.

The automatic route does not require a borrower to obtain any RBI approvals whereas the approval route requires

prior RBI approval. The ECB Guidelines classify ECBs under two categories: (i) foreign currency denominated

ECBs (“FCY ECB”) and (ii) Rupee denominated ECBs (“INR ECB”).

In accordance with the ECB Guidelines, all entities that are eligible to receive foreign direct investment are

classified as eligible borrowers for availing ECBs. Additionally, the ECB Guidelines also allows (i) port trusts;

(ii) units in a special economic zone; (iii) Small Industries Development Bank of India; and (iv) Export Import

Bank of India; (iv) registered not for profit companies; (v) registered societies/trusts//cooperatives and;

(vi) non-government organizations to raise FCY ECBs.

An entity raising FCY ECB is required to follow hedging guidelines issued, if any, by the concerned sectoral or

prudential regulator in respect of foreign currency exposure. Infrastructure space companies are required to have

a board approved risk management policy and are required to mandatorily hedge 70% of their ECB exposure in

case the average maturity of the ECB is less than 5 years. The designated AD Category-I bank shall verify that

the 70% hedging requirement is complied with during the tenor of the ECB and report the position to RBI

through Form ECB 2 returns.

Pursuant to the ECB Guidelines any resident of a Financial Action Task Force or International Organization of

Securities Commissions compliant country will qualify as a recognized lender or investors eligible to provide

ECBs to Indian entities. Additionally, multilateral and regional financial institutions where India is a member

country will also be considered as recognized lenders or investors. Further, the ECB Guidelines permit

individuals as ECB lenders if they are foreign equity holders or if the ECB is raised by way of bonds or

debentures which are listed abroad.

Foreign branches and subsidiaries of Indian banks are permitted to participate as lenders for only FCY ECBs

(except foreign currency convertible bonds and foreign currency exchangeable bonds) and are subject to further

restrictions based on the end use of the ECBs raised.

The ECB Guidelines permit refinancing of existing ECB by fresh ECB provided that the outstanding maturity of

the original borrowing is not reduced and all-in-cost of fresh ECB is lower than the all-in-cost of existing ECB.

Further Indian banks’ foreign branches and subsidiaries are permitted to participate in refinancing of existing

ECB, only for highly rated corporates (AAA) and for Maharatna/Navratna public sector undertakings.

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In relation to the utilization of the ECB proceeds, the negative list for both FCY ECB and INR ECB includes:

(i) real estate activities; (ii) investment in capital market; and (iii) equity investment. Additionally, except in the

cases detailed below, proceeds from an ECB cannot be utilized for (i) working capital purposes; (ii) general

corporate purposes; and (iii) repayment of Rupee loans except from a foreign equity holder. Additionally, save

for the exception below, for all ECBs, on-lending for any of the abovementioned activities is prohibited under the

ECB Guidelines. However, the RBI, by way of circular dated July 30, 2019, has liberalized the ECB framework

and has relaxed the end-use restrictions. Accordingly, eligible borrowers are now permitted to raise ECBs from

recognized lenders, except foreign branches/ overseas subsidiaries of Indian banks, for the following purposes:

(i) working capital, general corporate or repayment of Rupee loans, if raised from foreign equity holders;

(ii) working capital purposes, general corporate purposes or on lending by non-banking financial companies

for the same purposes, subject to the minimum average maturity period being 10 years;

(iii) repayment of Rupee loans availed domestically for capital expenditure or on lending by non-banking

financial companies for the same purposes, subject to the minimum average maturity period being seven

years; and

(iv) repayment of Rupee loans availed domestically for purposes other than capital expenditure or on lending

by non-banking financial companies for the same purposes, subject to the minimum average maturity

period being 10 years.

Further, the maximum amount which can be raised every financial year under the automatic route is

U.S.$750 million or its equivalent. Additionally, an eligible borrowing entity will also be governed by the

guidelines on debt equity ratio issued, if any, by the relevant sectoral or prudential regulator of such eligible

borrowing entity.

The all-in cost (which includes rate of interest, other fees and expenses in foreign currency or Rupees but does

not include commitment fees, payments for withholding tax in Rupees), for both FCY ECB and INR ECB is set

at the benchmark rate plus 450 basis points spread. As per the ECB Guidelines, various components of all-in-cost

have to be paid by the ECB borrower without taking recourse to the drawdown of ECB, i.e. ECB proceeds cannot

be used for payment of interest or charges. Prepayment charge or penal interest, if any, for default or breach of

covenants, should not be more than 2% over and above the contracted rate of interest on the outstanding principal

amount and will be outside the all-in-cost ceiling.

Approval route

All ECBs falling outside the automatic route limits are considered by the RBI through the Authorized Dealer

Banks (“AD Bank”) under the approval route.

Creation of Security

Security can be created by Indian borrowers or obligors over immovable or movable property, shares and other

securities, in favor of a non-resident lender/security trustee and as a condition to the grant of such security, the

Indian borrower is required to obtain a ‘no-objection’ certificate from their designated AD Bank (and the

borrower’s existing lenders if applicable).

An AD Bank can issue no-objection certificates to Indian borrowers or obligors provided inter alia, the following

conditions are satisfied: (i) the ‘no objection’ certificate shall be granted only to an Indian resident borrower or

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other obligor; (ii) the period of the charge has to be the same as the loan maturity; in case of immovable assets:

the ‘no objection’ certificate is not to be construed as a permission to acquire immovable asset (property) in

India, by a non-resident lender or security trustee; and (iii) in the event of enforcement of the charge or other

security interest, the immovable asset (property) cannot be transferred to a non-resident and has to be sold only to

a person resident in India and the sale proceeds used to repay the outstanding loan.

Creation of Charge on Movable Assets

In the event of enforcement of the charge over movable assets, the claim of the lender, whether the lender takes

possession over the movable asset or otherwise, will be restricted to the outstanding claim against the ECB.

Filing and regulatory requirements in relation to issuance of Notes

An ECB borrower is required to obtain a loan registration number (“LRN”) from the RBI before an issuance of

Notes is affected. To obtain this, ECB borrowers are required to submit a completed Form ECB certified by a

company secretary or a chartered accountant to the AD Bank of the ECB borrower. The AD Bank is then

required to forward the completed Form ECB to the RBI.

Any ECB borrower is required to submit an ECB-2 return on a monthly basis through its AD Bank to the RBI (to

report actual ECB transactions within seven days of the month to which it is related).

Procedure in relation to any change to the Terms and Conditions of the Notes

Changes in ECB parameters in consonance with the ECB norms, including reduced repayment by mutual

agreement between the lender and borrower, should be reported to the Department of Statistics and Information

Management of the RBI through revised Form ECB at the earliest, in any case not later than seven days from the

changes effected. Such changes may be approved by the AD Bank to the extent of delegation provided for in the

ECB Guidelines or by the RBI if so required. Certain changes such as a change in the name of borrower or

lender, transfer of ECB and any such other parameters may be approved by the AD Bank, provided the revised

terms comply with extant ECB norms and are with the consent of lender. Any redemption of the Notes prior to

their stated maturity, including on the occurrence of an event of default or change of control trigger event or for

taxation reasons (as further described in the Terms and Conditions of the Notes) will require the prior approval of

the RBI.

Recovery of Debts and Bankruptcy

Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

(“Securitization Act”)

The Securitization Act provides that if any borrower who is under a liability to a secured creditor makes any

default in repayment of secured debt and his account is classified as a non-performing asset, then the secured

creditor may require the borrower, by notice in writing, to discharge in full his liabilities within 60 days from the

date of notice, failing which the secured creditor shall be entitled to exercise all or any of the following rights.

The secured creditor may take possession of the secured assets or take over, directly or indirectly, the

management of the business of the borrower, including the right to transfer by way of lease, assignment or sale

for realizing the secured asset. Further, in the case of financing of a financial asset by more than one secured

creditor or joint financing of a financial asset by secured creditors, no secured creditor shall be entitled to

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exercise any right unless the exercise of such right is agreed upon by the secured creditors representing not less

than 60.0% in value of the amount outstanding as of a record date as determined by the secured creditors and

such action shall be binding on all the secured creditors.

The Securitization Act also provides for the setting up of asset reconstruction companies regulated by the RBI to

acquire assets from banks and financial institutions by issuing a debenture or bond, or any other security in the

nature of debenture, for consideration agreed upon between such company and the bank or financial institution or

by entering into an agreement with such bank or financial institution for transfer of such financial assets on such

terms and conditions as may be agreed upon between them.

The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment)

Act, 2016

The GoI has passed the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous

Provisions (Amendment) Act, 2016 (the “Securitization Act Amendment Act”), which is effective from

September 1, 2016. The Securitization Act Amendment Act has inter alia:

(i) made certain amendments to the Securitization Act, the Debts Recovery Act, the Indian Stamp Act, 1899

and the Depositories Act, 1996;

(ii) quickened the process for enforcement of security interest created over collateral;

(iii) enabled banks to take over management of defaulting companies after conversion of debt to equity;

(iv) created a central registry to record transactions which pertain to secured assets (including record of creation

of security interest, which are a pre-requisite for a secured creditor to enforce such security interest); and

(v) given certain powers to the RBI regulate the activities of asset reconstruction companies.

Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (“Debts Recovery Act”)

The Debts Recovery Act provides for establishment of Debt Recovery Tribunals (“DRT”) for expeditious

adjudication and recovery of debts due to any bank or public financial institution or to a consortium of banks and

public financial institutions. Under the Debts Recovery Act, the procedures for recoveries of debt have been

simplified and time frames have been fixed for speedy disposal of cases. Upon establishment of the DRT, no

court or other authority can exercise jurisdiction in relation to matters covered by the Debts Recovery Act except

the Supreme Court and High Court exercising jurisdiction under Articles 226 and 227 of the Constitution of

India, in relation to matters specified in Section 17 of the Debts Recovery Act. The Enforcement of Security

Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 effective from

September 1, 2016 amended the Debts Recovery Act. It authorized a bank or a financial institution to take

proceedings under Debts Recovery Act before a tribunal in whose jurisdiction where the defaulted account is

maintained or located, upon service of summons under the Debts Recovery Act, is restricted from transferring the

secured assets or other assets.

The Insolvency and Bankruptcy Code, 2016

The Insolvency and Bankruptcy Code, 2016 (the “Bankruptcy Code”) came into force with effect from

August 5, 2016. The Bankruptcy Code primarily consolidates and amends the existing insolvency laws, inter

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alia, relating to companies and bodies corporate with the objective of providing clarity and consistency in the

treatment of all the stakeholders in the insolvency process. The Bankruptcy Code establishes an Insolvency and

Bankruptcy Board of India (the “Board”) which, inter alia, functions as a regulator to oversee functioning of

insolvency professionals, insolvency professional agencies and information utilities. The Board exercises a range

of legislative, administrative and quasi-judicial functions. The Bankruptcy Code classifies creditors into, inter

alia, financial creditors (i.e., creditors who have disbursed debt along with interest (if any) against the

consideration for time value of money) and operational creditors (i.e., creditors who have a claim in respect of

the provision of goods or services including employment or payment in respect of statutory dues). The

Bankruptcy Code proposes to appoint specialized insolvency professionals tasked with the duty to oversee and

facilitate the entire corporate insolvency resolution process for companies and bodies corporate. The Bankruptcy

Code provides a 180 day timeline for insolvency resolution in cases of companies, which may be extended by

90 days. As part of the corporate insolvency resolution process, the resolution plan submitted by prospective

resolution applicant(s) has to be approved by 66% of unrelated financial creditors and further by the adjudicating

authority and, if rejected, the adjudicating authority will pass an order for liquidation. The National Company

Law Tribunal is the adjudicating authority with jurisdiction over companies and limited liability entities.

However, the provisions and sections under the Bankruptcy Code are being notified in a staggered manner and

some provisions and sections are not effective yet. To the extent notified, the Bankruptcy Code has amended

relevant provisions of, inter alia, the Companies Act, 2013 and the other laws as specified therein.

The Insolvency and Bankruptcy Code (Amendment) Act, 2019 (“Amendment”) that was notified on August 6,

2019 has inter alia, mandated that the corporate insolvency resolution process be completed within an overall

timeline of 330 days from the insolvency commencement date. The Amendment has also clarified that a

resolution plan under the Bankruptcy Code may include provisions for restructuring of the corporate debtor,

including by way of mergers, amalgamations and demergers.

Non-Banking Finance Companies

Under RBI regulations, if (a) financial assets of a company constitute more than 50% of its total assets and

(b) more than 50% of the gross income of the company is derived from such financial assets, then the company

may be treated as an NBFC, and would have to comply with various regulations applicable to NBFCs.

Environmental Laws

The Environment (Protection) Act, 1986 (“EPA”) vests the GoI with the power to take any measure it deems

necessary or expedient for protecting and improving the quality of the environment and preventing and

controlling environmental pollution, including the power to prescribe standards for emission of environmental

pollutants or handling of hazardous substances, inspection of any premises, plant, equipment or machinery, and

examination of manufacturing processes and materials likely to cause pollution. There are also provisions with

respect to furnishing of information to the authorities in certain cases, establishment of environment laboratories

and appointment of GoI analysts. The Ministry of Environment, Forest and Climate Change (“MoEF&CC”)

issued notifications under the EPA in 1994, 1999 and 2006 (collectively, the “EIA Notifications”), prescribing

the procedure with respect to environmental impact assessment for the commencement, expansion or

modernization of industrial or mining operations. In April 2019, the MoEF&CC circulated a zero draft of the

Environmental Impact Assessment, 2019 to states for their feedback and approval. The draft envisages

amendments to environmental impact assessment for industrial operations but is yet to be notified. While the

EPA and the EIA Notifications do not generally require environmental clearance to be obtained for electrification

and laying of new transmission lines, such environmental clearance is mandated in respect of certain areas of the

Aravali Range in the districts of Alwar in Rajasthan and Gurgaon and Mewat in Haryana, pursuant to a

notification dated May 7, 1992 issued by the MoEF&CC.

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Penalties for violation of the EPA include a fine of up to Rs. 0. 1 million or imprisonment of up to five years, or

both. Further, in cases where operations involve clearance of forest land, the Forest (Conservation) Act, 1980

(“Forest Conservation Act”) requires prior clearance of the GoI, through the MoEF&CC. The penalties for

non-compliance under the EPA and the Forest Conservation Act range from closure or prohibition of operations,

as well as monetary penalties on and imprisonment of the persons in charge of the conduct of our business.

Right of Way and Land Procurement

Transmission licensees must adhere to all GoI and state government laws and regulations in the construction,

operation and maintenance of transmission lines. Under the Indian Telegraph Act, 1885 (the “Telegraph Act”),

the GoI has the exclusive right to construct, operate and maintain transmission lines. However, under the

Electricity Act, this right may be conferred to a transmission licensee. Once a transmission licensee is granted

this right, it may begin to construct a transmission corridor through private land, although it must cause the least

amount of damage possible and must pay full compensation to landowners for having caused such damage.

Transmission licensees must pay compensation to landowners in connection with their use of a transmission line

corridor that runs through the landowner’s property. Compensation for damage to property is set at the higher of

the value under a government resolution or market rates for the property. The compensation amount will be

payable only for transmission lines supported by a tower base of 66 KV and above and not for sub transmission

and distribution lines below 66 KV. Owners of property in a right of way corridor that experiences a decline in

value may be compensated for up to 15% of the value of the property.

Transmission lines are required be laid in a manner that involves the least amount of tree felling, and the

maximum width of transmission line corridors is set by regulation. The Ministry of Environment and Forests on

May 5, 2014 issued guidelines for laying transmission lines through forest areas which must be adhered to. The

relevant state government forest department or the MoEF&CC, as applicable, must grant permission to the

licensee for the cutting, felling and pruning of trees and the stringing of equipment through forest areas. If any

tree or structure located near an installed transmission line interferes with the functioning of such line, then the

appropriate authority may allow the felling of the tree or removal of the structure after the licensee has paid due

compensation for such felling or removal.

Labor Laws

The Employees (Provident Fund and Miscellaneous Provisions) Act, 1952 (“EPF Act”) applies to factories

employing more than 20 employees and such other establishments and industrial undertakings as notified by the

GoI from time to time. It requires all such establishments to be registered with the state provident fund

commissioner, and requires such employers and their employees to contribute, in equal proportion, to the

employees’ provident fund the prescribed percentage of basic wages and dearness and other allowances payable

to employees. The EPF Act also requires the employer to maintain registers and submit a monthly return to the

state provident fund commissioner.

The Industrial Disputes Act, 1947 provides the procedures for the investigation and settlement of industrial

disputes. When a dispute exists or is apprehended, the appropriate government may refer the dispute to a labor

court, tribunal or arbitrator, to prevent the occurrence or continuance of the dispute, or a strike or lock-out while

a proceeding is pending. The labor courts and tribunals may grant appropriate relief, including ordering

modification of contracts of employment or reinstatement of workmen. The Industrial Disputes (Amendment)

Act, 2010 was notified on August 18, 2010 and provides, among other things, provide direct access for workmen

to labor courts or tribunals, in case of individual disputes, expand the scope of qualifications of presiding officers

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of labor courts or tribunals, constitute grievance settlement machineries in any establishment having 20 or more

workmen, and vest industrial tribunals-cum-labor courts with the powers of a civil court in respect of

enforcement of their decrees.

The Employee’s Compensation Act, 1923 (“Employee’s Compensation Act”) requires an employer to pay

compensation for personal injury or death due to such personal injury caused by accident during employment,

except in certain cases, for instance, where such employee was, at the time of injury, under the influence of drugs

or alcohol, or willfully disobeyed safety rules.

The Employee’s Compensation (Amendment) Bill, 2016 (“Employees Bill”) was passed by the lower house of

the Indian Parliament on August 9, 2016 and was notified on April 12, 2017 (the “Amendment Act”). The

Amendment Act seeks to amend the Employee’s Compensation Act. The Employees Bill create an obligation

upon an employer to inform their employees of their right to compensation under the Employee’s Compensation

Act and the failure to do discharge such obligation may be penalized with a fine of up to `100,000. The

Employee’s Compensation Act permits appeal against orders in relation to compensation, distribution of

compensation and awards of penalty if the dispute concerns an amount of `10,000 and above.

The Contract Labor (Regulation and Abolition) Act, 1970 (“CLR Act”), regulates the employment of contract

labor in establishments, and provides for ensuring welfare and health of contract laborers. The CLR Act requires

establishments that employ, or employed on any day in the previous 12 months, 20 or more workmen as contract

labor to be registered and prescribes certain obligations with respect to the welfare and health of contract labor.

To ensure the welfare and health of the contract labor, the CLR Act imposes certain obligations on the contractor

in relation to the establishment of canteens, restrooms, drinking water, washing facilities, first aid, other facilities

and payment of wages. However, if the contractor fails to provide these amenities, the principal employer is

under an obligation to provide these facilities.

The Employees’ State Insurance Act, 1948 (“ESI Act”) provides for certain benefits to employees, in case of

sickness, maternity and employment injury. Every employee who receives wages of up to `15,000 per month,

whether employed directly or through a contractor, is entitled to be insured under the ESI Act. The ESI Act

imposes an obligation on the employer to make certain contributions in relation thereto. In addition, the

establishment is also required to register itself under the ESI Act and maintain prescribed records and registers.

The Act applies to apprentices, except those appointed under the Apprentices Act, 1961, and to factories having

at least 10 employees, regardless of whether it was running with or without power, among other amendments.

The ESIA contemplates payment of a contribution by the principal employer and each employee to the Employee

State Insurance Corporation of India. Penalties for failure to make contributions under the ESIA include

imprisonment for a term which may extend to three years (which shall not be less than (i) one year in case of

failure to pay the employee’s contribution which has been deducted by him from the employee’s wages, or

(ii) six months in any other case) and a fine.

The Code on Wages, 2019 (“the Wages Code”) has been passed in both houses of parliament in India and was

enforced with effect from August 8, 2019. It subsumes and repeals the following four laws: (i) the Payment of

Wages Act, 1936, (ii) the Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal

Remuneration Act, 1976. The Code applies to employees in the organized and unorganized sectors. State

governments under the Code are entrusted with making regulations for employment in private sector

establishments. The Wages Code restricts discrimination of any kind in the grounds of gender, payment of

employee wages less than the minimum rate of wages notified by the appropriate government. The Wages Code

also provides for payment of bonus to every employee by his employer, who has put in at least thirty days work

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in an accounting year, calculated at the rate of 8.33 %. The benefits under the Wages Code has been extended to

all kinds of employees including people performing skilled, semi-skilled, unskilled, manual, operational,

supervisory, managerial, administrative, technical or clerical work.

Health and Safety Laws

The Central Electricity Authority (Measures Relating to Safety and Electrical Supply) Regulations, 2010 set out

regulations for the use of standardized products, regular inspections, record keeping and making the public aware

of the hazards associated with transmission lines. The Central Electricity Authority (Installation and Operation of

Meters) Regulations, 2006 govern the manner in which meters will be installed and maintained, the standard of

equipment to be used and the measures to be taken against the breaking down or malfunction of these meters or

equipment. The Central Electricity Authority (Grid Standards) Regulations, 2010 specify the standards for

operation and maintenance of transmission lines, the procedures for cooperation amongst different entities,

maintenance of adequate records and establishment of contingency plans in the event of a malfunction. The

Central Electricity Authority (Technical Standards for Connectivity to Grid) Regulations, 2007 provide for the

safe operation of the grid, and for specific security and quality of the grid as per the CEA (Grid Standards for

Operation and Maintenance of Transmission Lines) Regulations, 2010.

Tax Regulation

Income Tax Act, 1961

The Income Tax Act, 1961 is applicable to every domestic and foreign company whose income is taxable

depending upon its “residential status” and “type of income” involved.

Goods and Services Tax (“GST”)

GST is a tax on supply of goods or services or both. Inter-state supply of goods and services attract integrated

GST under the Integrated Goods and Services Tax Act, 2017 (“GST Act”). For this purpose, inter-state supply

includes: (i) supply of goods and services between two different states within India; and (ii) supply of goods and

services imported into India and exported out of India. Supply of goods and services within a state or union

territory in India attracts central GST under the Central Goods and Services Tax Act, 2017 and state GST or

union territory GST levied under the GST Act of the state or union territory in question.

The applicable rate of GST depends upon the nature of the goods and services in question. The general rates of

GST are provided in notifications issued by the central government and the State/Union Territory governments.

Concessional tax rates/exemptions have also been notified for certain categories of goods and services. An input

tax credit mechanism is available, in terms of which the GST incurred on goods and services purchased by a

taxpayer can be taken as input tax credit (“ITC”). ITC can be used to offset the GST payable on the taxpayer’s

output of goods and services.

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PRINCIPAL SHAREHOLDERS

The controlling shareholder of our Company is ATL. The shareholding pattern of our Company as of December

31, 2019 is as indicated in the table below.

Name of Shareholders

Number of

Equity Shares Held

Percentage of

Total Paid-up

Equity Capital (%)

Adani Transmission Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,400,049,994 100.00

Nitin Ranchoddbhai Patel (Nominee of Adani Transmission

Limited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0.00

Jaladhi Atulchandra Shukla (Nominee of Adani Transmission

Limited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0.00

Jay K Ambani (Nominee of Adani Transmission Limited) . . . . 1 0.00

Bibhudatta Sarangi (Nominee of Adani Transmission

Limited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0.00

Pritesh M Shah (Nominee of Adani Transmission Limited) . . . 1 0.00

Mukesh Kumar Heda (Nominee of Adani Transmission

Limited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0.00

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,400,050,000 100.00

Note: Upon closing of the QIA Transaction, ATL will hold 74.9% of the equity share capital of our Company

and Qatar Holding LLC (a subsidiary of Qatar Investment Authority) will hold 25.1% of the equity share capital

of our Company on a fully diluted basis. For further details, see “Business – Recent Developments”.

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DESCRIPTION OF THE ADANI GROUP

Overview

The Adani Group is the leading energy and infrastructure conglomerate in India. Its diverse businesses include

electricity transmission, renewable energy, thermal energy, transport and logistics. For example, ATL is India’s

leading transmission company that owns, maintains and operates a total of 11,478 ckms of electric transmission

lines. ATL is also building six additional transmission systems that will expand its transmission network to

approximately 14,617 ckms and through its subsidiary, AEML, ATL distributes electricity to 3 million

households (approximately 12 million consumers). AGEL, another Adani group company, is India’s leading

renewable player with a capacity of 5,290 MW, Adani Power is India’s leading thermal player with a capacity of

12,450 MW and Adani Port and Special Economic Zone is India’s leading ports operator having installed

capacity of 395 MMT cargo per annum. The Adani Group is the private rail network owner and operator of a

312 km railway line across India.

The following diagram presents the structure of the Adani Group, as of September 30, 2019, and the market

capitalization of its key listed verticals, as of December 31, 2019

Adani

AELIncubator

ATLT&D

APLIPP

AGELRenewable

AWLWater

ARTLRoads

AAHLAirports

Listed En�ty

DataCentres

AEML OG**

AGLGas

DisCom

Integrated U�lity

Transport & Logis�cs Por�olio U�lity & Power Por�olio

APSEZport &

Logis�csAAPTPort

100%100%

100% 100% 100%

100%

75% 75%75%75%

75%

100%

62.3%

SRPCLRail

˜ U.S.$28.1 bn*

Market leader in Ports, T&D and IPP (Thermal and Renewables) in India

Independent ver�cals with independent boards - Integra�ng ESG into value crea�on

Addressable u�lity market- 12 million consumers in ATL & ~ 10 million in AGL

Addressable market in Airports ~ 125 million customers

* Market capitalization as of December 31, 2019 as per BSE Limited; Exchange rate: 1 U.S.$ – Rs. 71.36

** The bonds are not guaranteed by ATL or any other Adani group members

ESG — Environment, Social and Governance; AEL — Adani Enterprises Limited; APSEZ — Adani Ports and Special Economic ZoneLimited; AAPT — Adani Abbot Point Terminal Pty Ltd; SRPCL — Sarguja Rail Corridor Private Limited; ATL — Adani TransmissionLimited; T&D — Transmission and Distribution; APL — Adani Power Limited; IPP — Independent Power Producer; AGEL — Adani GreenEnergy Limited; AGL — Adani Gas Limited; DisCom — Distribution Company; AAHL — Adani Airports Holdings Limited; ARTL —Adani Roads Transport Limited; AWL — Adani Water Limited; OG — Obligor Group.

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The Adani Group is the largest energy player in India with an integrated value chain. The followingdiagram presents the Adani Group’s repeatable, robust and proven model to deliver return on equity:

– Analysis & market intelligence

Envisaging evolutionof sector e.g. AdaniTransmission

Complexdevelopments ontime & budget e.g.Adani Green

Robust networkarchitecture withhigh supplyreliability e.g. AEML

– Site acquisition

– Sourcing & quality levels– Equity & debt funding at project

– Life cycle O&M planning

– Engineering & design

– Asset Management plan

– Optimal capital structure– Focus on cost of capital & RoCE– Strategic Partnerships (TOTAL, QIA)

Ops phase fundingconsistent withasset life

AEML, APSEZ, ATL& AGEL - onlyPrivate sectorInfrastructure IGissuers in India

– Concessions & regulatory agreements

Redefining thespace - e.g. MundraPort

– Viability analysis– Strategic value

– Investment case development

Phase

Activity

Performance

Origination Development Construction Operations Post Operations

Capital MgmtOperationEPC & FundingPipelineOpportunity

EPC — Engineering, Procurement and Construction, IG — Investment Grade, O&M — Operations & Maintenance, RoCE — Return onCapital Employed

Adani Group’s Competitive Strengths

We believe that the Adani Group’s competitive strengths are as follows:

Large-scale businesses delivering consistent growth

The Adani Group has delivered consistent growth over the years through various large-scale business assets it

owns such as the Mundra port, India’s largest commercial port, the Mudra-Mohindergarh transmission system,

which is one of the longest private high-voltage direct current electric power transmission system in Asia, with

1,980 ckms of transmission line, the Mundra station, India’s largest private thermal power station and a solar

power plant located in Tamil Nadu with a capacity of 648 MW, which is the largest single location solar power

plant in India.

Unmatched timely and cost-effective execution capabilities

The Adani Group has demonstrated its execution capabilities by constructing and commissioning a large-scale

solar project in Tamil Nadu with capacity of 648 MW within nine months. The Adani Group has maintained

competitive capital expenditure per MW in thermal energy businesses.

Strong operational efficiencies

APSEZ has achieved an EBITDA margin of 65% during the period of 12 months ended on March 31, 2019,

which is the highest among the peers in the world. Similarly, ATL has achieved an EBITDA margin of 90.75%

during the same period which is very much comparable to its peers. However, ATL has been able to maintain an

availability of 99.84% during the same period for the year ended March 31, 2019, which is the highest amongst

its peers.

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Within the power generation assets of the Adani Group, thermal assets housed under APL have been able to

achieve an EBITDA margin of 28% along with billed availability of 89% for FY19 and the renewable assets

housed under AGEL have been able to achieve an EBITDA margin of 90% during the year ended March 31,

2019.

The below diagram illustrates key business attributes of the Adani Group which have been applied consistently

across businesses to drive value.

Key Business ModelAttributes Successfully Applied Across Infrastructure and Utility Platform

Development atscale and within timeand budget

Excellence in O&Mleading to superiorreturns

Diverse financingsources - only Indianinfrastructureportfolio with fourInvestment Grade(IG) issuers

Longest Private HVDCLine in Asia

India’s LargestCommerical Port

648 MW Ultra MegaSolar Power Plant

Largest Single LocationPrivate Thermal IPP

One of the largest Privateintegrated Utility

APSEZ

Highest marginamong peers in

the world

65%(1),(2)

EBITDA margin

March 2016 September 2019Bonds

14%

PrivateBanks31%

Private Banks31%

Bonds31%

ATL

Highest availabilityamong peers

91%(1),(3)

EBITDA margin

AGEL

Technology enabledplant performance

optimizationRONC Centre

90%(1),(4)

EBITDA margin

APL

High Billed availabilityacross plants

Billed availability: 89%

AEML

Consistently high supplyreliability of 99.99%,

Distribution loss - 7.85%in FY19

PSU55%

PSU38%

1. Data for FY19, 2. Excludes foreign exchange gains or losses, 3. EBITDA = Profit Before Tax + Depreciation + Net Finance Costs – OtherIncome, 4. EBITDA Margin represents EBITDA earned from power sales and excludes other items, RONC — Remote Operations and NerveCenter

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DESCRIPTION OF MATERIAL INDEBTEDNESS

The following summary of certain provisions of our loan facilities and other indebtedness does not purport to be

complete and is subject to, and qualified in its entirety by reference to, the underlying credit agreements and

other documentation.

As of September 30, 2019, the Company’s total outstanding borrowings were Rs. 96,475.4 million (excluding

unamortized financing costs). PDSL was incorporated on December 6, 2019 and has no outstanding borrowings

as of the date of this Offering Circular.

As of September 30, 2019, of our Company’s total outstanding borrowings, Rs. 7,748.2 million were short-term

borrowings. Rs. 4,202.5 million of such short-term borrowings are loans from ATL, with interest rates of 11%

per year, and on terms which are customary for short-term loans of this nature.

EBITDA as used in this section is different from the definitions of “Combined EBITDA” and “EBITDA” for

purposes of the Common Terms Deed. See Appendix — Glossary of Defined Terms.

Rupee Bank Loans

Our Company is a party to facility agreements under which it has arranged rupee term loans (“Rupee BankLoans”, and each a “Rupee Bank Loan”) with various financial institutions. As of September 30, 2019, the

aggregate amount of the Company’s Rupee Bank Loans aggregated Rs. 88,727.2 million (excluding unamortized

financing costs).

The Rupee Bank Loans generally accrue interest at floating rates calculated with reference to the base rate of

State Bank of India except for Regulatory Assets Loans which are linked to the base rate of the relevant

Regulatory Assets Lenders. Interest payments are generally payable on a monthly basis and principal payments

are generally payable on a fortnightly and quarterly basis. As of September 30, 2019, the interest rate on the

Rupee Bank Loans ranged from 8.55% per annum to 9.45% per annum.

The following is a description of certain material terms of the Rupee Bank Loans.

Refinancing Facility

State Bank of India, Bank of India, ICICI Bank Limited, HDFC Bank Limited, Bank of Baroda and UnionBank of India

The Company entered into a facility agreement dated August 21, 2018, with YES Bank Limited; as facility agent

and lender; and State Bank of India, ICICI Bank Limited, HDFC Bank Limited, Bank of Baroda and Union Bank

of India as lenders; for an amount not exceeding Rs. 85,000,000,000 for among others, meeting the purchase

consideration, other than equity, for the generation, transmission and distribution business, repayment of entire

outstanding amounts due to the then existing lenders of the then existing facilities, meeting transaction cost

(other than equity), financing expenses and other costs including cost of such repayment and/or prepayment, if

any. The interest is payable on a monthly basis and the principal is to be repaid in 61 structured quarterly

installments. The amount outstanding under this Rupee Bank Loan as of September 30, 2019 was Rs. 81,171.1

million (excluding unamortized financing cost). This Rupee Bank Loan is secured by, among others, a first

ranking pari passu charge on, the immovable properties and movable assets of the generation, transmission and

distribution business of our Company, a pledge over 51% of the entire paid up equity and preference share capital

of our Company and the assignment of the transmission and distribution license of our Company, subject to

approval from the MERC.

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By way of master deed of accession dated November 21, 2019, State Bank of India has replaced YES Bank

Limited as the facility agent under this Rupee Bank Loan.

Capital Expenditure Loans

State Bank of India

Our Company entered into a facility agreement dated August 21, 2018, with YES Bank Limited; as facility agent

and lender; and State Bank of India as lender for an amount not exceeding Rs. 4,250,000,000 with a sub-limit by

way of letters of credit for funding the ongoing capital expenditure of the generation, transmission and

distribution business of our Company. The interest is payable on a monthly basis and the principal is to be repaid

in 56 equal quarterly installments commencing from December 31, 2019 and ending on September 30, 2033. The

amount outstanding due under this Rupee Bank Loan, as of September 30, 2019, was Rs. 2,101.5 million

(excluding unamortized financing cost). This Rupee Bank Loan is secured by, among others, a first ranking pari

passu charge on, the immovable properties and movable assets of the generation, transmission and distribution

business of our Company, a pledge over 51% of the entire paid up equity and preference share capital of our

Company and the assignment of the transmission and distribution license of our Company, subject to approval

from the MERC.

By way of master deed of accession dated November 21, 2019, State Bank of India has replaced YES Bank

Limited as the facility agent under this Rupee Bank Loan. By way of various accession documents, YES Bank

Limited has exited the consortium of lenders under this facility which presently comprises of State Bank of India

only.

Aditya Birla Finance Limited

Our Company entered into a facility agreement dated September 20, 2019, with Aditya Birla Finance Limited as

facility agent and as lender for fund-based limits not exceeding Rs. 2,500,000,000 for the purposes of funding its

ongoing capital expenditure and reimbursement of capital expenditure previously incurred in relation to the

generation, transmission and distribution business of AEML and transaction related costs and expenses. The

interest is payable on a monthly basis and the principal is to be repaid in 56 equal quarterly installments

commencing from December 31, 2020. The amount outstanding under this Rupee Bank Loan as of

September 30, 2019 was Rs. 1,954.7 million (excluding unamortized financing cost). This Rupee Bank Loan is

secured by, amongst others, a first ranking pari passu charge on, the immovable properties and movable assets of

the generation, transmission and distribution business of our Company, pledge over 51% of the entire paid up

equity and preference share capital of our Company and the assignment of the transmission and distribution

license of our Company, subject to approval from the MERC.

Axis Bank Limited

Our Company entered into a facility agreement dated December 26, 2019, with Axis Bank Limited as facility

agent and as lender for fund-based limits and non-fund-based limits not exceeding Rs. 2,000,000,000 to fund its

capital expenditure including reimbursement of expenses incurred by our Company since April 1, 2019. The

interest is payable on a monthly basis and the principal is to be repaid in 52 equal quarterly installments

commencing from December 31, 2020 and ending on September 30, 2033. This Rupee Bank Loan is secured by,

among others, a first ranking pari passu charge on, the immovable properties and movable assets of the

generation, transmission and distribution business of our Company, a pledge over 51% of the entire paid up

equity and preference share capital of our Company and the assignment of the transmission and distribution

license of our Company, subject to approval from the MERC.

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Regulatory Assets Loans

Barclays Bank PLC

Our Company entered into a facility agreement dated December 12, 2018, with Barclays Bank PLC as lender for

fund-based limits not exceeding Rs. 2,500,000,000 which have been raised against security of approved

regulatory assets as approved by the MERC pursuant to an order dated September 12, 2018 in relation to

approval of multi-year tariff for the financial year 2018-2019 and the financial year 2019-2020 (the “MERCOrder”). The interest is payable on a monthly basis and the principal is to be repaid in 20 fortnightly installments

commencing from May 15, 2019 and ending on February 29, 2020. The amount outstanding under this Rupee

Bank Loan as of September 30, 2019 was Rs. 1,250.0 million. This Rupee Bank Loan is secured by, among

others, an exclusive charge on the approved regulatory assets in terms of the MERC Order and the bank account

maintained by our Company with Barclays Bank PLC wherein approved regulatory assets are deposited.

HDFC Bank Limited

Our Company entered into a facility agreement dated February 16, 2019, with HDFC Bank Limited as lender for

fund-based limits not exceeding Rs. 4,500,000,000 which have been raised against security of approved

regulatory assets, as approved by the MERC pursuant to the MERC Order. The interest is payable on a

fortnightly basis and the principal is to be repaid in 20 fortnightly installments commencing from May 15, 2019

and ending on February 29, 2020. The amount outstanding under this Rupee Bank Loan as of September 30,

2019 was Rs. 2,250.0 million. This Rupee Bank Loan is secured by, among others, a first ranking pari passu

charge on the approved regulatory assets and the bank account maintained by our Company with HDFC Bank

Limited wherein approved regulatory assets are deposited.

Working Capital Agreements

YES Bank Limited, State Bank of India, DBS Bank India Limited and HDFC Bank Limited

Our Company entered into a facility agreement dated August 21, 2018, with YES Bank Limited as facility agent

and lender, and State Bank of India as lender, for fund and non-fund-based limits not exceeding Rs.

8,690,000,000 to fund its working capital requirements. The amount outstanding due under this Rupee Bank

Loan as of September 30, 2019 was Rs. 3,331.2 million. This Rupee Bank Loan is secured by, among others, a

first ranking pari passu charge on, the immovable properties and movable assets of the generation, transmission

and distribution business of our Company, pledge over 51% of the entire paid up equity and preference share

capital of our Company and the assignment of the transmission and distribution license of our Company, subject

to approval from the MERC.

By way of master deed of accession dated November 21, 2019, State Bank of India has replaced YES Bank

Limited as facility agent under this Rupee Bank Loan By way of various Supplemental financing documents

dated November 22, 2019, DBS Bank India Limited and HDFC Bank Limited were inducted into the consortium

of working capital lenders under this Rupee Bank Loan.

Covenants

The Rupee Bank Loans include covenants customary for facilities of this nature, including covenants which

require the prior consent of the lenders for, among other things, the following:

‰ incurring additional indebtedness other than as permitted;

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‰ creating encumbrances other than as permitted;

‰ repaying loans taken from promoters;

‰ repaying subordinated debt;

‰ making additional investments or undertaking expansions except as permitted;

‰ issuing guarantees or undertaking long-term contractual obligations;

‰ a change of control;

‰ using the loan proceeds for purposes other than as permitted; and

‰ amending project-related documents.

The relevant loan agreements also impose certain financial covenants, including those which require us to

maintain:

‰ a minimum gross debt service coverage ratio;

‰ a minimum interest coverage ratio;

‰ a minimum fixed asset coverage ratio; and

‰ a maximum debt to EBITDA ratio.

The relevant loan agreements include customary event of default provisions wherein the lenders are entitled to,

among other things, terminate their respective agreements, demand immediate repayment of the loans and any

accrued interest and/or foreclose on secured assets under the respective agreements.

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LEGAL PROCEEDINGS

We are involved in certain legal proceedings from time to time that are incidental to the normal conduct of our

business and the nature of our industry. Our Company is currently involved in a number of legal proceedings

mostly arising in the ordinary course of their business including criminal proceedings, civil proceedings, tax

proceedings, writ proceedings, environmental proceedings and land related disputes. Our Company believes that

the number of proceedings and disputes in which our Company is involved, is not unusual for a company of our

size in the context of doing business in India.

Except as disclosed below, our Company is not involved in any pending: (i) civil and/or tax proceedings which

are quantifiable and have a pecuniary implication of, or in excess of, Rs. 764,321,000 (being 1.00% of the

revenue for Financial Year 2019 of our Company); (ii) land related proceedings, civil writ petitions, criminal

proceedings and/or regulatory proceedings; or (iii) any legal proceedings which our Company believes could

have a material adverse effect on the business, financial condition, results of operation or reputation of our

Company; and (iv) any legal proceedings involving our Company’s Directors which our Company believes could

have a material adverse effect on the business, financial condition, results of operation or reputation of our

Company.

I. Litigation Relating to Directors

There are no outstanding cases against the Directors of our Company which could have a material adverse

effect on the business, financial condition, results of operation or reputation of our Company.

II. Litigation involving our Company

Civil cases

1. Dhana Devi Ramagya Yadav and others (the “Petitioners”) have filed a writ petition number 9027 of

2017 before the High Court of Judicature at Bombay (the “Hon’ble Court”) against R-Infra and

others (the “Respondents”) alleging that the Reliance Energy Limited has failed to provide

electricity connection at Sainath Chawl Committee, Rajaram Gupta Chawl, Appa Pada, Sainath

Anmol Naga, Malad (East), Mumbai 400 097, despite the Petitioners obtaining a no objection

certificate from the concerned forest department. The Petitioners prayed to the Hon’ble Court to,

among others, direct R-Infra to produce the papers and proceedings pertaining to the complaints and

applications dated January 13, 2012 and April 13, 2017, submitted to the General Manager, Reliance

Energy Limited by the Petitioners, regarding establishing a new connection and pass necessary

directions and orders against R-Infra and issue a writ of mandamus or any other writ to direct R-Infra

to install electric meters on the premises of the Petitioners viz. Sai Nath Chawl Committee, Rajaram

Gupta Chawl, Appa Pada, Sainath Anmol Nagar, Malad (East), Mumbai — 400 097, and for interim

and ad-interim reliefs to be passed in terms of the above. The matter is currently pending.

2. Pragya Tools and Dies Limited (the “Petitioner”) filed a civil writ petition number 11000 of 2014,

before the High Court of Judicature at Bombay (the “Hon’ble Court”) against the Assessing Officer,

R-Infra (the “Respondent”) on November 12, 2014. The Petitioner had lodged a complaint regarding

a burnt electric meter, which was attended to by the inspection team of the electricity board

department, which issued a report on March 28, 2011. The Respondent, thereafter, issued a bill for

the assessment period from November 24, 2008 to March 28, 2011, after which a supplementary bill

was given dated August 19, 2011 amounting to approximately Rs. 0.49 million, which the Petitioner

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refused to pay. The Petitioner wrote to the Respondent through letter dated April 18, 2012, to request

carrying out a testing of the meter to understand its accuracy. The Respondent passed the final

assessment order in conformity with the provisions under the Electricity Act 2003 on November 26,

2011, against which an appeal under Section 127 of the Electricity Act 2003 was filed by the

Petitioner before the Superintending Engineer, Mumbai Region Electrical Circle, Public Works

Department, Mumbai, acting as the appellate authority. The appellate authority rejected the appeal of

the Petitioner by way of its order dated July 14, 2014. Thereafter, the Petitioner through the writ

petition dated, November 12, 2014 prayed, among others, for the Hon’ble Court to quash and set

aside the order passed by the Assessing Officer, to refund the amount of approximately Rs.

0.49 million paid by the Petitioner along with interest of 12% till repayment. Thereafter, through

order dated July 25, 2019, the petition was dismissed for non-prosecution. The matter is currently

pending.

3. The Estate Investment Company Private Limited (the “Petitioner”) filed a civil application ST

number 25859 of 2017 before the High Court of Judicature at Bombay, against Reliance Energy

Limited (“REL”), the Bombay Suburban Electric Supply Limited (“BSES Limited”), and multiple

other individuals (collectively, with BSES Limited, the “Respondents”). The dispute pertains to

lands admeasuring 52,453 square meters situated at Ghodbunder, Thane (the “Suit Property”). The

Petitioner has alleged that these lands were purchased by BSES Limited from a total of 23 individual

owners during 1992-1994 and is currently in our Company’s possession, on which a 220 KV

transmission station and the staff quarters have been constructed without obtaining adequate

permission. The Petitioner had filed a suit in 1998 before the Civil Court at Thane against BSES

Limited and the others from whom BSES Limited had purchased the land. The Petitioner has claimed

ownership of land and prayed for declaring the sale in favor of BSES Limited illegal. The Petitioner

has also requested, amongst others, for the demolition of the constructions, handing over the

possession of land to the Petitioner and that pending the hearing and final disposal of the said appeal,

the respondents, either on their own or through their family members, agents or servants should be

restrained from disposing off, encumbering, parting with possession or creating any third party rights

in respect of the Suit Property. The matter is currently pending.

4. Rakesh Rajmal Kothari and Shailesh Rajmal Kothari (the “Petitioners”) filed a notice of motion in

short cause suit number 1108 of 2019 at the Bombay City Civil Court at Dindoshi, Goregaon,

Mumbai (the “Court”) against Vishal Tower Co-operative Housing Society Limited and our

Company (the “Defendants”) on April 24, 2019 alleging that, our Company has failed to provide

electricity connection, and Vishal Tower Co-operative Housing Society Ltd. has caused unwanted

obstruction in obtaining such electricity connection, at the premises owned and in possession of the

Petitioners (the “Suit Property”). The Petitioner is seeking a permanent order restraining, (i) Vishal

Tower Co-operative Housing Society Ltd. from causing any obstructions in the Petitioners obtaining

necessary electricity connection from our Company at the Suit Property, and (ii) a mandatory order

and directions directing our Company to grant electricity connection to the premises of the

Petitioners along with ad interim and interim reliefs in terms of the above. The matter is currently

pending.

5. Meera Sadanand Kamath (the “Petitioner”) filed a public interest litigation against the State of

Maharashtra, Municipal Corporation for Greater Mumbai (the “MCGM”), R-Infra and others (the

“Respondents”) before the High Court of Judicature at Bombay (the “High Court”) under Article

226 of the Constitution of India, for quashing the letter of intent granted by MCGM to Srinivas

Developer (the “Respondent Number 12”) for developing a plot of land situated at Borbhat Pada,

near Ganesh Mandir, Kastur Park, Borivali (West), Mumbai 400 092, reserved for a college (the

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“Property”), for issuing further directions to, among others, the Commissioner of Police and Senior

Inspector of Police, Borivali Police Station, to prevent fraud and misuse of public money by the other

Respondents and for demolishing the entire construction carried out on the Property. The Petitioner

alleged that R-Infra issued bogus electricity bills to persons, who, posing as slum dwellers, have

availed benefits from the Slum Rehabilitation Authority (the “SRA”) schemes, and that the hutments

constructed on the Property have been declared as eligible on the basis of these bogus bills. The

Petitioner has prayed, amongst other things, that R-Infra be held liable since they have participated in

criminal act by issuing such bogus bills. Subsequently, based on the direction of the High Court, the

Petitioner had filed an appeal before the High-Powered Committee (the “HPC”) against the

Respondents. The HPC through order dated May 21, 2011, vacated all the previous orders passed by

the HPC, directed the SRA to grant necessary permissions to Respondent Number 12 to carry out and

complete the construction of the remaining rehabilitation and sale component as per the sanctioned

plan. Further, the HPC directed the Appellate Authority, i.e., the Secretary of the SRA to procure the

relevant reports from MCGM dealing with said project and decide eligibility of the slum dwellers

affected by the same. The HPC also approved of the construction of the college building and directed

Respondent Number 12 to ensure rehabilitation of all eligible slum dwellers by allotting them

permanent alternate accommodation in newly constructed buildings and handover the balance tenants

to SRA/MCGM. Our Company is a formal party for verification of the bills. The matter is currently

pending.

6. Laxmi Industrial Estate (the “Petitioner”) filed suit number 109 of 2015 at the Court of Small

Causes at Mumbai (Bandra Division) (the “Hon’ble Court”) on January 6, 2015, for a declaration

against R-Infra (the “Defendants”) to vacate and hand over possession of property located at survey

number 41 CTS 627 Laxmi Industrial Estate (the “Suit Property”) situated at Andheri West. In

1980, Bombay Suburban Electric Supply Limited (“BSES”) had leased out an area of land

admeasuring approximately 2000 square meters. through a lease deed dated August 27, 1980 to the

Petitioner for the purpose of installing a main switching/transforming station for the supply of

electricity. The Petitioner has also alleged that the Defendants have supplied electricity to, and laid

cables in and around the Suit Property without prior permission of the Petitioner. The current suit

filed prays for, among others, the declaration of: violation of the lease deed in matters of payment of

annual rent, the purpose for usage of the land, and for the Petitioner to be paid damages/mesne profits

amounting to approximately Rs. 69.76 million, based on the valuation report prepared by M/s Dalal

Joshi and Associates. The Petitioner has prayed for the Hon’ble Court to order the Defendants to

vacate and hand over the Suit Property, and for the Petitioner to be granted damages/mesne profits at

the monthly rate as the Hon’ble Court may fix after making due inquiry under Order 20, Rule 12 of

the Code of Civil Procedure at the market rate from the date of filing of suit till possession is handed

over to the Petitioner and such amount be deposited with the Hon’ble Court, which the Petitioner

may be at liberty to withdraw, pending the hearing and final disposal of the suit. The Petitioner has

prayed for interim and ad-interim reliefs in terms of the prayers mentioned above. The matter is

currently pending.

7. Amir Ahmed Shaikh (the “Petitioner”) has filed writ petition (L) number 652 of 2016 before the

High Court of Judicature at Bombay (the “Hon’ble Court”), under Articles 226 and 227 of the

Constitution of India against R-Infra, the State of Maharashtra and the MERC (the “Respondents”)

aggrieved by the final assessment order dated January 13, 2007, issued by R-Infra under Section 126

of the Electricity Act 2003 (the “Impugned Order”), alleging that officials of R-Infra visited the

premises of the Petitioner located at flat number 201, B-Wing, Nazrana Apartment, Shantawadi

Lane, Gavthan Lane, Andheri West, Mumbai — 400 058 and issued notice for the unauthorized use

of electricity under Section 126(1) of the Electricity Act, 2003. The Petitioner further alleged that the

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R-Infra issued a provisional assessment order of approximately Rs. 0.12 million for assessment

period from August 1, 2003 until June 28, 2005 on September 20, 2005 and subsequently, converted

the provisional assessment order to a final assessment order of approximately Rs. 0.10 million on

January 13, 2007. The Petitioner filed an appeal under Section 127 of the Electricity Act, 2003 before

the Appellate Authority to challenge the provisional assessment order on November 24, 2006, which

is currently pending before the Appellate Authority. Subsequently, on February 17, 2016, R-Infra

issued disconnection notice under Section 56(1) and demanded payment of approximately Rs.

0.11 million. On February 27, 2016, the Petitioner informed the Appellate Authority and the Higher

Authority Supdt. Engineer, PWD requesting that the appeal filed by the Petitioner be heard or pass

necessary order as R-Infra has issued notice to disconnect the electricity supply. The Petitioner has

prayed for the Hon’ble Court to, among others, direct R-Infra to quash Impugned Order and

withdraw the disconnection notice dated February 17, 2016, direct the Appellate Authority to hear

and consider the appeal filed by the Petitioner under Section 127 of the Electricity Act, 2003 and

dispose the same on merit, pending the hearing and final disposal of the Petition; order the refund of

an amount of approximately Rs. 0.13 million recovered by R-Infra since 2007; and restrain R-Infra

from disconnecting the supply of electricity to the premises viz. flat number 201 at Nazarana

Apartment, 2nd Floor, “B” Wing, Shantawadi, J.P. Road, Andheri (West), Mumbai — 400 058. The

matter is currently pending.

8. Cyril Edmond Henriques and Ryberg Cyril Henriques (the “Petitioners”) filed writ petition number

1920 of 2019 in the High Court of Judicature at Bombay against the MCGM, the District Collector,

MH Coastal Zone Management, the Department of Forestry, our Company and others (the

“Respondents”) under Articles 226 and 227 of the Constitution of India. The Petitioners have

alleged that some of the Respondents have illegally constructed structures, high walls and iron gate

entrances on private property / land bearing Survey Nos. 93 to 95; CTS Nos. 103 to 109, situated at

Culvem Village, Gorai Taluka, Borvali, which lies in the No Development Zone and Coastal

Regulation Zone area without permission or valid permit or approval from the concerned government

authorities. The Petitioners have further alleged that such illegal dwellings are used as occasional

weekend resorts. The Petitioners has, among others, prayed for action against the Respondents, such

as (a) demolition of the said illegal structures in the Culvem-Gorai areas, (b) filing of criminal

complaints against some of the Respondents under the MRTP Act, (c) the Respondents should be

restrained from destroying the trees or shrubs on the said plots of land without valid approval and

prior permission from the concerned government authorities, and for interim and ad-interim reliefs to

be passed in terms of the above. Our Company is the primary electricity supplier to Culvem village,

Gorai Taluka, in Borivali, but there is no prayer against our Company specifically. The matter is

currently pending.

9. Siddhant Sunil Mantri (the “Petitioner”) has filed a writ petition before the High Court of Judicature

at Bombay (the “Hon’ble Court”) bearing number WPL/298/2019, against, amongst others, the

State of Maharashtra through the MERC and our Company (collectively, the “Respondents”),

having been aggrieved by acts of our Company of not supplying electricity and not installing an

electric meter on the Petitioner’s premises. The Petitioner has prayed that (i) the Hon’ble Court

declare the acts of the Respondents in not supplying electricity as illegal, arbitrary, and in violation

of the Petitioner’s statutory rights. (ii) the Hon’ble Court issue a writ of mandamus or any other writ

directing, among others, our Company to install the electricity meter and supply electricity. The

matter is currently pending.

10. Deepak Balaram Dalvi (the “Plaintiff”) has filed short cause suit number 1580 of 2019 against our

Company and Raju Narsu Nalli (the “Defendants”) before the City Civil Court at Dindoshi, Borivali

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Division, Goregaon, Mumbai (the “City Civil Court”) alleging that our Company has violated

Section 43(1) of the Electricity Act, 2003 and Article 21 of the Constitution of India since it has

failed to provide a new electricity connection at Room Number 13, situated at CTS number 473,

473/1 to 473/9 of Village Ekasar, Taluka Borivali, Mumbai Suburban District, Anant Bistur Patil

Chawl, Shimpoli Village, Borivali (W), Mumbai — 400 092 (the “Suit Premises”), in lieu of the old

electricity connection, without providing any satisfactory reply for such failure. The Plaintiff has

prayed that the City Civil Court pass, amongst others, (a) a declaratory order, judgement and decree

in his favor stating that the legal notice issued by the Plaintiff to our Company on June 6, 2019 for

providing a new electricity connection to the Suit Premises, in lieu of the earlier electricity

connection is valid, legal and subsisting and (b) interim and ad-interim reliefs in relation thereto be

granted. The Plaintiff has moved an application for notice of motion before the City Civil Court

against the Defendants. Our Company has been served a notice of the same. The matter is currently

pending.

11. S.G.P Barnes (the “Petitioner”) has filed a public interest litigation, bearing number 26 of 2008

against inter alia the Assistant Commissioner, Brihanmumbai Municipal Corporation, the Reliance

Energy consumer department, now operated under our Company, before the High Court of Judicature

at Bombay (the “Hon’ble Court). The Petitioner has prayed (i) for the removal of all construction

material before his house that is allegedly blocking natural light and air, (ii) the setting up of a garden

for public use, and (iii) the setting up of a police chowky in said garden area to monitor noise

pollution caused by children. The Reliance consumer department, now operated under our Company,

will be the electricity provider to the garden and public street lighting system in the area. The matter

is currently pending.

12. Shantilal Asdhir Chheda & others (the “Petitioners), has filed a special leave petition before the

Supreme Court of India (the“ Supreme Court”) bearing civil suit number 20311 of 2019, against,

among others, the Municipal Corporation of Greater Mumbai (the “MCGM”) and our Company,

having being aggrieved by the impugned judgment of the High Court of Judicature at Bombay (the

“Hon’ble Court”) of dismissal of a writ petition by the Petitioners on the grounds that the Hon’ble

Court failed to take into consideration the fact that the notice dated November 30, 2010 issued under

Section 354 of the Mumbai Municipal Corporation Act 1888 (the “MMC Act”) to demolish the

Nagarwala Building, situated opposite G.P.I Cigarette Factory, Chakala, Sahar Road, Andheri (East),

Mumbai — 400 099 (“Suit Property”) was vitiated by mala fide and has considered the factual

aspects that the Suit Property was not structurally connected to the adjacent building. The Petitioners

had filed a writ petition before the Hon’ble Court, against MCGM, challenging the decision delivered

by the MCGM of demolition of Suit Property under Section 354 of the Mumbai Municipal

Corporation Act, 1888. MCGM had ordered for the demolition as it was in an irreparable condition

and a deplorable state, and thus unsafe for habitation. This was also confirmed by structural

engineers. The Petitioners also contended for the restoration of electricity and water supply to the

building. Our Company has been made a respondent in the matter as the electricity provider. The

matter is currently pending.

13. Fakira Gyanba Ukande (the “Petitioner”) has filed a writ petition, bearing number 35912 of 2017

before the High Court of Judicature at Bombay (the “Hon’ble Court”) against, amongst others, the

State of Maharashtra, Reliance Energy, R-Infra, now renamed as our Company and the Electric

Inspector, Santacruz Inspection Division (the “Respondents”), having been aggrieved by the by acts

of our Company, requesting a writ of mandamus directing, among others, our Company, to continue

the electricity connection to the Petitioner’s house. The matter is currently pending.

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14. Vile Parle Kelvani Mandal and others (the “Petitioners”) filed a writ petition number 2961 of 2018

before the High Court of Judicature at Bombay (the “Hon’ble Court”) against, among others, the

State of Maharashtra, Tata Power Company Limited, R-Infra and our Company (the

“Respondents”), challenging the electricity duty levied on the Petitioners and their educational

institutions (that are run and managed by public charitable trusts under the Maharashtra Public Trusts

Act, 1960) in relation to the electricity connection for these institutions under the Maharashtra

Electricity Duty Act, 2016. The Petitioners have also challenged the letter dated June 4, 2018 issued

by the Industries, Energy and Labor Department, Mantralaya to various electricity distributing

companies (which provided that the electricity duty exemption granted to educational institutions

registered under the Bombay Public Trusts Act, 1950 has been revoked with effect from

September 1, 2016), and the electricity bills raised by, and the disconnection notices issued by some

Respondents. The Hon’ble Court directed the Petitioners to pay the bills raised on them for the

consumption or supply of energy but has exempted the Petitioners from the levy and recovery of the

electricity duty, through order dated February 28, 2019 (“Impugned Order”) and also made the rule

absolute.

The Respondents appealed against the order before the Supreme Court of India (the “SupremeCourt”), under Special Leave Petition bearing number 13510 of 2019, praying for rejection of the

Impugned Order against the final judgment and order dated February 28, 2019 passed by the Hon’ble

Court, and an interim ex-parte stay to the said order. The Supreme Court has stayed the operation and

implementation of order dated February 28, 2019 in writ petition no-2961 of 2018 passed by the

Hon’ble Court. The matter is currently pending. The State of Maharashtra has directed our Company

on October 15, 2019 directing for collection of electricity duty from the Petitioners, under the

Maharashtra Electricity Duty Act, 2016. The matter is currently pending.

15. Clover Grove Co-op Housing Society Limited (the “Plaintiff”) filed a suit before the Bombay Civil

Court, Mumbai at Dindoshi (the “Civil Court”) against R-Infra, MCGM and Kanti Builder Private

Limited (the “Builder”), along with R-Infra and MCGM (the “Defendants”), alleging that the

Builder leased out to R-infra for 99 years, a parcel of land admeasuring 300 square meters which was

reserved for parking cars belonging to the Plaintiff, for construction of a 33/11 kV sub-station. The

Plaintiff prayed before the Civil Court that, amongst others, R-Infra is restrained from entering upon,

or doing any act in relation to, the construction of the said sub-station and direct MGCM to remove

the wall separating an open space into two parts. The Civil Court, by its order dated April 20, 2015

(the “Order”), refused to grant any ad-interim relief to the Plaintiff and directed that the registration

of the notice of motion be allowed. Subsequently, the Plaintiff filed an appeal before the High Court

of Judicature at Bombay (the “Hon’ble Court”) challenging the Order.

Subsequently, the Hon’ble Court, by its order dated March 1, 2016, directed that the order dated

May 6, 2015 providing ad-interim relief to the Plaintiff will continue till the disposal of the notice of

motion and two weeks thereafter and stated that the civil application is disposed-off. The Civil Court

passed a stay order dated February 6, 2017 (the “Order”), restricting R-Infra from conducting any

development or construction activity on the said land. Aggrieved by the Order, R-Infra challenged

the said Order before the Hon’ble Court. R-Infra had requested for Chamber Summon dated

December 14, 2017, at the Civil Court, for amending the Written Statement, deciding as to the cost

and any other relief. The matter is currently pending.

16. Kamala Jaywant Patil and others (the “Plaintiffs”) filed a suit against R-Infra (the “Respondent”)

before the Small Causes Court, Bandra (the “Small Causes Court”), in relation to immovable

property leased by the Respondent (the “Property”). Pursuant to the lease of the Property, the

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