CreditAccess Grameen : Shelf Prospectus (Final filed with SE)

About this update from Creditaccess Grameen Ltd.

Shelf Prospectus November 4, 2022 CREDITACCESS GRAMEEN LIMITED CreditAccess Grameen Limited (" Company " or " Issuer ") was incorporated as Sanni Collection Private Limited on June 12, 1991 at Calcutta, West Bengal, India as a private limited company under the Companies Act, 1956. Our Company's name was changed from Sanni Collection Private Limited to Grameen Financial Services Private Limited and a fresh certificate of incorporation consequent upon change of name was issued to our Company by the Registrar of Companies, West Bengal on March 14, 2008. Our Company's name was changed to Grameen Koota Financial Services Private Limited pursuant to a fresh certificate of incorporation issued by the Registrar of Companies, Bangalore on November 13, 2014. Subsequently, our Company was converted into a public limited company pursuant to a special resolution passed by our Shareholders at the EGM held on November 27, 2017 and the name of our Company was changed to Grameen Koota Financial Services Limited. A fresh certificate of incorporation consequent upon conversion to a public limited company was issued by the Registrar of Companies, Karnataka at Bengaluru (" RoC ") on December 18, 2017. Subsequently, pursuant to a resolution passed by our shareholders at the EGM held on January 2, 2018, the name of our Company was changed to CreditAccess Grameen Limited, and a fresh certificate of incorporation consequent upon change of name was issued by the RoC on January 12, 2018. Our Company is a NBFC-MFI and holds a certificate of registration dated January 19, 2018 bearing registration number B - 02.00252 issued by the Reserve Bank of India (" RBI ") to carry on the activities of a non-banking financial company without accepting public deposits under Section 45 IA of the Reserve Bank of India Act, 1934. For more information about our Company including details regarding changes in Registered Office, please see " General Information " and " History and Main Objects " on pages 53 and 162 . Registered Office and Corporate Office: New No. 49 (Old No. 725), 46th Cross, 8th Block, Jayanagar, Next to Rajalakshmi Kalyana Mantap, Bengaluru 560 071, Karnataka; Tel.: +91 80 2263 7300; Fax: +91 80 2664 3433; CIN: L51216KA1991PLC053425; PAN : AAECS7201G; Website: www.creditaccessgrameen.in; Email: [email protected] Company Secretary and Chief Compliance Officer : Mahadev Prakash Jayakumar Matada; Tel.: +91 80 2263 7300; Email: [email protected] Chief Financial Officer : S. Balakrishna Kamath; Tel : +91 80 2263 7300; Email : [email protected] PUBLIC ISSUE BY THE COMPANY OF SECURED, REDEEMABLE, NON-CONVERTIBLE DEBENTURES OF FACE VALUE ₹ 1,000 EACH ("NCDs" OR "DEBENTURES"), FOR AN AMOUNT AGGREGATING UP TO ₹1,500 CRORE ("SHELF LIMIT"), (HEREINAFTER REFERRED TO AS THE "ISSUE"). THE NCDS WILL BE ISSUED IN ONE OR MORE TRANCHES UP TO THE SHELF LIMIT, ON TERMS AND CONDITIONS INCLUDING TRANCHE ISSUE SIZE AS SET OUT IN THE RELEVANT TRANCHE PROSPECTUS FOR ANY TRANCHE ISSUE (EACH "TRANCHE ISSUE") WHICH SHOULD BE READ TOGETHER WITH THE DRAFT SHELF PROSPECTUS AND THIS SHELF PROSPECTUS (COLLECTIVELY, THE "OFFER DOCUMENTS"). THE ISSUE IS BEING MADE PURSUANT TO THE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF NON - CONVERTIBLE SECURITIES) REGULATIONS, 2021, AS AMENDED (THE "SEBI NCS REGULATIONS"), THE COMPANIES ACT, 2013 AND RULES MADE THEREUNDER AS AMENDED (THE "COMPANIES ACT, 2013") TO THE EXTENT NOTIFIED AND THE SEBI OPERATIONAL CIRCULAR. THE ISSUE IS NOT UNDERWRITTEN. OUR PROMOTER Our Promoter is CreditAccess India N.V. (formerly, CreditAccess Asia N.V.); Email : [email protected]; Tel : +31 20 808 0654. For details of our Promoter, see "Our Promoter" on page 180. GENERAL RISKS Investment in debt securities involve a degree of risk and investors should not invest any funds in such securities unless they can afford to take the risk attached to such investments. Investors are advised to take an informed decision and to read the risk factors carefully before investing in this offering. For taking an investment decision, investors must rely on their own examination of the Issuer and the Issue, including the risks involved. Specific attention of the Investors is invited to the chapters "Risk Factor" and "Material Developments" on pages 17 and 389, respectively, before making an investment in such Issue. This Shelf Prospectus has not been and will not be approved by any regulatory authority in India, including the Securities and Exchange Board of India (" SEBI "), the Reserve Bank of India (" RBI "), any registrar of companies or any stock exchange in India nor do they guarantee the accuracy or adequacy of this document. COUPON RATE, COUPON PAYMENT FREQUENCY, REDEMPTION DATE, REDEMPTION AMOUNT & ELIGIBLE INVESTORS For details relating to Coupon Rate, Coupon Payment Frequency, Redemption Date, Redemption Amount & Eligible Investors of the NCDs, please see " Issue Related Information " on page 479. CREDIT RATING The NCDs proposed to be issued under the Issue have been rated IND AA-/Stable for an amount of ₹1500 Crores by India Ratings & Research Private Limited by way of their rating letter dated August 4, 2022 and further revalidated vide letter dated September 8, 2022. Ratings issued by India Ratings will continue to be valid for the life of the instrument unless withdrawn or reviewed India Ratings & Research Private Limited, in terms of the rating agreement dated July 19, 2022. These ratings are not a recommendation to buy, sell or hold securities and investors should take their own decisions. These ratings are subjected to a periodic review during which they may be raised, affirmed, lowered, withdrawn, or placed on Rating Watch at any time on the basis of factors such as new information. The rating should be evaluated independently of any other rating. The Credit Rating Agency's website will have the latest information on all its outstanding ratings. In case of any change in credit ratings till the listing of NCDs, our Company will inform the investors through public notices/ advertisements in all those newspapers in which pre issue advertisement has been given. For the rating, rating rationale and press release for the above ratings, see " General Information " on page 53 and Annexure A of this Shelf Prospectus. LISTING The NCDs offered through the Draft Shelf Prospectus, this Shelf Prospectus and the relevant Tranche Prospectus(es) are proposed to be listed on National Stock Exchange of India Limited (" NSE ") and BSE Limited (" BSE "). Our Company has received an 'in-principle' approval from NSE vide their letter no. NSE/LIST/D/2022/0142 dated October 3, 2022 and from BSE by way of its letter bearing reference number DCS/BM/PI-BOND/013/22-23 dated October 3, 2022. NSE shall be the Designated Stock Exchange. PUBLIC COMMENTS The Draft Shelf Prospectus dated September 23, 2022 has been filed with NSE and BSE, pursuant to the provisions of the SEBI NCS Regulations and was open for public comments for a period of seven Working Days (i.e., until 5 p.m.) from the date of filing of the Draft Shelf Prospectus with the Stock Exchanges, i.e. up to October 3, 2022 (until 5:00 p.m.). No comments were received on the Draft Shelf Prospectus till 5p.m. on October 3, 2022. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE DEBENTURE TRUSTEE KFIN Technologies Limited Catalyst Trusteeship Limited* Selenium Tower B, Plot 31-32, A.K. Capital Services Limited GDA House, Plot No. 85, Gachibowli, Financial District, Nanakramguda, Bhusari Colony (Right), Kothrud 603, 6 th Floor, Windsor, Serilingampally, Hyderabad - 500 032, Telangana Off CST Road, Kalina, Santacruz (East), Tel : +91 40 6716 2222 Pune - 411 038, Maharashtra Tel .: +91 22 4922 0555 Mumbai - 400 098, Maharashtra Email : [email protected] Email : [email protected] Tel : +91 22 6754 6500 Website : www.kfintech.com Website : www.catalysttrustee.com Email: [email protected] Contact Person : M Murali Krishna Contact Person : Umesh Salvi Website: www.akgroup.co.in Contact person: Aanchal Wagle/ Milan Soni CREDIT RATING AGENCY JOINT STATUTORY AUDITORS Deloitte Haskins & Sells PKF Sridhar & Santhanam LLP ASV N Ramana Tower, 52, T8 & T9, Third Floor India Ratings & Research Private Limited Venkatnarayana Road, Gem Plaza, 66, Infantry Road T. Nagar, Chennai - 600 017 Bangalore - 560 001, India Wockhardt Towers, 4 th Floor, West Wing, Tel : + 91 44 6688 5000 Tel : +91 80 4130 7244 Bandra Kurla Complex, Bandra,(E), Mumbai - 400 051 Email : [email protected] Email : [email protected] Tel : +91 22 4000 1700 Contact Person : G. K. Subramaniam Contact Person : Seethalakshmi M Email : [email protected] Website : www.indiaratings.co.in Contact Person : Amit Rane ISSUE PROGRAMME** Issue opens on : As specified in relevant tranche prospectus Issue Closes on : As specified in relevant tranche prospectus *Catalyst Trusteeship Limited under regulation 8 of SEBI NCS Regulations has by its letter dated June 7, 2022 given its consent for its appointment as Debenture Trustee to the Issue and for its name to be included in the Draft Shelf Prospectus, this Shelf Prospectus and relevant Tranche Prospectus and in all the subsequent periodical communications sent to the holders of the NCDs issued pursuant to the Issue. **The Issue shall remain open for subscription on Working Days from 10 a.m. to 5 p.m. (Indian Standard Time) during the period indicated in the relevant Tranche Prospectus, except that the Issue may close on such earlier date or extended date ( subject to a maximum period of 30 days from the date of the relevant Tranche Prospectus) as may be decided by the Board of Directors of our Company or the EBI Committee, subject to relevant approvals. In the event of an early closure or extension of the Issue, our Company shall ensure that notice of the same is provided to the prospective investors through an advertisement in an English daily national newspaper with wide circulation and a regional daily with wide circulation where the registered office of the Company is located (in all the newspapers in which pre-issue advertisement for opening of this Issue has been given on or before such earlier or initial date of Issue closure) on or before such earlier or initial date of Issue closure. On the Issue Closing Date, the Application Forms will be accepted only between 10 a.m. and 3 p.m. (Indian Standard Time) and uploaded until 5 p.m. or such extended time as may be permitted by the Stock Exchanges. Further, pending mandate requests for bids placed on the last day of bidding will be validated by 5 p.m. on one Working Day post the Issue Closing Date. For further details please see "General Information" on page 53. A copy of this Shelf Prospectus and relevant Tranche Prospectuses shall be filed with the Registrar of Companies, Karnataka at Bengaluru in terms of Section 26 and Section 31 of Companies Act, 2013, along with the endorsed/certified copies of all requisite documents. For further details, please see "Material Contracts and Documents for Inspection" on page 581. TABLE OF CONTENTS SECTION I - GENERAL................................................................................................................................................ 1 DEFINITIONS AND ABBREVIATIONS ................................................................................................................. 1 CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND CURRENCY OF PRESENTATION ............................................................................................................................................... 13 FORWARD LOOKING STATEMENTS................................................................................................................. 16 SECTION II - RISK FACTORS .................................................................................................................................. 17 SECTION III - INTRODUCTION .............................................................................................................................. 53 GENERAL INFORMATION ................................................................................................................................... 53 CAPITAL STRUCTURE.......................................................................................................................................... 62 OBJECTS OF THE ISSUE ....................................................................................................................................... 75 STATEMENT OF POSSIBLE TAX BENEFITS ..................................................................................................... 78 SECTION IV - ABOUT OUR COMPANY ................................................................................................................. 87 INDUSTRY OVERVIEW ........................................................................................................................................ 87 OUR BUSINESS .................................................................................................................................................... 131 HISTORY AND MAIN OBJECTS ........................................................................................................................ 162 OUR MANAGEMENT .......................................................................................................................................... 166 OUR PROMOTER.................................................................................................................................................. 180 RELATED PARTY TRANSACTIONS ................................................................................................................. 183 REGULATIONS AND POLICIES......................................................................................................................... 184 SECTION V - FINANCIAL STATEMENTS ........................................................................................................... 198 FINANCIAL INFORMATION .............................................................................................................................. 198 MATERIAL DEVELOPMENTS............................................................................................................................ 389 FINANCIAL INDEBTEDNESS............................................................................................................................. 391 SECTION VI - LEGAL AND OTHER INFORMATION ....................................................................................... 445 OUTSTANDING LITIGATIONS .......................................................................................................................... 445 OTHER REGULATORY AND STATUTORY DISCLOSURES.......................................................................... 453 SECTION VII - ISSUE RELATED INFORMATION............................................................................................. 479 ISSUE STRUCTURE ............................................................................................................................................. 479 TERMS OF THE ISSUE ........................................................................................................................................ 484 ISSUE PROCEDURE ............................................................................................................................................. 501 SECTION VIII - SUMMARY OF KEY PROVISIONS OF ARTICLES OF ASSOCIATION ............................ 531 SECTION IX - MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ...................................... 581 DECLARATION .......................................................................................................................................................... 583 ANNEXURE A - CREDIT RATING LETTER, RATING RATIONALE AND PRESS RELEASE................... 584 ANNEXURE B - DEBENTURE TRUSTEE CONSENT LETTER ........................................................................ 585 1 SECTION I - GENERAL DEFINITIONS AND ABBREVIATIONS This Shelf Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates or implies, shall have the meaning ascribed to such definitions and abbreviations set forth herein. References to any legislation, act, regulation, rules, guidelines, clarifications or policies shall be to such legislation, act, regulation, rules, guidelines, clarifications or policies as amended, supplemented or re-enacted from time to time until the date of this Shelf Prospectus, and any reference to a statutory provision shall include any subordinate legislation notified from time to time pursuant to such provision. Unless the context otherwise indicates, all references in this Shelf Prospectus to "we" or "us" or "our" are to our Company i.e., CreditAccess Grameen Limited. Unless the context otherwise indicates, all references in this Shelf Prospectus to "Subsidiaries" shall mean Subsidiaries of our Company namely, Madura Micro Finance Limited and CreditAccess India Foundation. The words and expressions used in this Shelf Prospectus but not defined herein shall have, to the extent applicable, the same meaning ascribed to such words and expressions under the SEBI NCS Regulations, the Companies Act, 2013, the SCRA, the Depositories Act and the rules and regulations notified thereunder. General Terms Term Description "CA Grameen" or CreditAccess Grameen Limited, a public limited company incorporated under the "Company" or "the Issuer" Companies Act, 1956, and having its Registered Office at New No. 49 (Old No. 725), 46th Cross, 8 th Block, Jayanagar, Next to Rajalakshmi Kalyana Mantap, Bengaluru 560 071, Karnataka, India. "CAI" or "Promoter" CreditAccess India N.V (formerly CreditAccess Asia N.V.) is a company with limited liability governed by the laws of the Netherlands, having its corporate seat in Amsterdam, the Netherlands, registered with the Commercial Register of the Dutch Chamber of Commerce under number 60281758 MMFL Madura Micro Finance Limited Company Related Terms Term Description Articles or Articles of Articles of Association of our Company Association or AOA Audit Committee Audit committee of the Board of Directors of our Company, constituted in accordance with applicable laws Auditors or Statutory The current joint statutory auditors of our Company, Deloitte Haskins & Sells and PKF Auditors or Joint Auditors or Sridhar & Santhanam LLP for Fiscal 2022. Joint Statutory Auditors Board or Board of Directors Board of Directors of our Company or any duly constituted committee thereof. or our Board or our Board of Directors Corporate Social Corporate social responsibility committee of the Board of Directors of our Company, Responsibility Committee constituted in accordance with applicable laws Committee A committee constituted by the Board, from time to time. Directors Directors of our Company EBI Committee Executive, Borrowings & Investment Committee of the Board of Directors of our Company, constituted by Board of Directors of the Company Equity Shares Equity shares of the Company of face value of ₹10 each ESOPs Employee stock options Group Company(ies) Scimergent Analytics and Education Private Limited and Scisphere Analytics India Private Limited Gross Book Total assets under management Independent Director(s) The independent director(s) on our Board, in terms of Section 2(47) and Section 149(6) of the Companies Act, 2013 and 16(1)(b) of the SEBI Listing Regulations 1 Term Description India Ratings India Ratings & Research Private Limited JLG Joint Liability Group KMP / Key Managerial Key managerial personnel of our Company as disclosed in this Shelf Prospectus and Personnel appointed in accordance with Section 203, as defined under Section 2(51) of the Companies Act, 2013 Limited Review Financials / The Unaudited Standalone Financial Results and Unaudited Consolidated Financial Limited Review Financial Results for the quarter and half year ended September 30, 2022 prepared in accordance Results/ Unaudited Interim with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Financial Results Standards) Rules, 2015 (as amended from time to time) and notified under Section 133 of the Companies Act, 2013 and presented in accordance with the requirements of the SEBI LODR Regulations. Loan Book Loan book containing loans and advances to the borrowers. Loans Book (Net) Loan Book net of expected credit loss allowance. "MoA" or "Memorandum" Memorandum of association of our Company or "Memorandum of Association" Nomination and Nomination and remuneration committee of the Board of Directors of our Company, Remuneration Committee constituted in accordance with applicable laws Networth As defined in Section 2(57) of the Companies Act, 2013, as follows: " Networth means the aggregate value of the paid-up share capital and all reserves created out of the profits, securities premium account and debit or credit balance of profit and loss account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet but does not include reserves created out of revaluation of assets, write back of depreciation and amalgamation. " Promoter Group Includes such persons and entities constituting the promoter group of our Company pursuant to Regulation 2(1)(pp) of the SEBI ICDR Regulations. Reformatted Financial Collectively, Reformatted Standalone Financial Information and Reformatted Information Consolidated Financial Information Reformatted Standalone The reformatted standalone statement of assets and liabilities of our Company as at March Financial Information 31, 2022, March 31, 2021 and March 31, 2020 and the reformatted standalone statement of profit and loss for the year ended March 31, 2022, March 31, 2021 and March 31, 2020 and the reformatted standalone statement of changes in equity for the year ended March 31, 2022, March 31, 2021 and March 31, 2020 and the reformatted standalone statement of cash flows for the year ended March 31, 2022, March 31, 2021 and March 31, 2020 and the related summary statement of significant accounting policies, as examined by our Joint Statutory Auditors. Our audited standalone financial statements as at and for the year ended March 31, 2022, March 31, 2021 and March 31, 2020 form the basis for such Reformatted Standalone Financial Information Reformatted Consolidated The reformatted consolidated statement of assets and liabilities of our Company for the Financial Information year ended March 31, 2022, March 31, 2021 and March 31, 2020 and the reformatted consolidated statement of profit and loss for the year ended March 31, 2022, March 31, 2021 and March 31, 2020 and the reformatted consolidated statement of changes in equity for the year ended March 31, 2022, March 31, 2021 and March 31, 2020 and the reformatted consolidated statement of cash flows for the year ended March 31, 2022, March 31, 2021 and March 31, 2020 and the related summary statement of significant accounting policies. Our audited consolidated financial statements for the year ended March 31, 2022, March 31, 2021 and March 31, 2020 form the basis for such Reformatted Consolidated Financial Information Registered Office / The registered office and corporate office of our Company is situated at New No. 49 (Old Corporate Office No. 725), 46th Cross, 8th Block, Jayanagar, Next to Rajalakshmi Kalyana Mantap, Bengaluru 560 071, Karnataka, India. Risk Management Risk Management Committee of the Board of Directors Committee 2 Term Description RoC/ Registrar of Companies Registrar of Companies, Karnataka at Bengaluru Shareholders The holders of the Equity Shares of the Company from time to time Stakeholders' Relationship Stakeholders' relationship committee as constituted by the Board of Directors, constituted Committee in accordance with applicable laws Total Borrowing(s)/ Total Debt securities plus borrowings (other than debt securities), subordinated liabilities and Debt deposits. Issue Related Terms Term Description Abridged Prospectus A memorandum containing the salient features of this Shelf Prospectus and relevant Tranche Prospectus Acknowledgement Slip/ The slip or document issued by the Designated Intermediary to an Applicant as proof of Transaction Registration registration of the Application Form Slip/ TRS A. K. Capital/ Lead A. K. Capital Services Limited Manager Allotment Advice The communication sent to the Allottees conveying the details of NCDs allotted to the Allottees in accordance with the Basis of Allotment "Allotment", "Allot" or Unless the context otherwise requires, the issue and allotment of NCDs to the successful Allotted Applicants pursuant to the Issue Allottee(s) The successful Applicant to whom the NCDs are Allotted either in full or part, pursuant to the Issue "Applicant" or "Investor" Any person who applies for issuance and Allotment of NCDs through ASBA process or through UPI Mechanism pursuant to the terms of this Shelf Prospectus, the relevant Tranche Prospectus, the Abridged Prospectus and the Application Form for any Tranche Issue. "Application" or "ASBA An application (whether physical or electronic) to subscribe to the NCDs offered pursuant Application" or "ASBA" to the Issue by submission of a valid Application Form and authorising an SCSB to block the Application Amount in the ASBA Account or to block the Application Amount using the UPI Mechanism, where the Bid Amount will be blocked upon acceptance of UPI Mandate Request by retail investors for an Application Amount of upto ₹ 500,000 which will be considered as the application for Allotment in terms of this Shelf Prospectus and the relevant Tranche Prospectus. Application Amount The aggregate value of the NCDs applied for, as indicated in the Application Form for the respective Tranche Issue Application Form / ASBA Form in terms of which an Applicant shall make an offer to subscribe to NCDs through Form the ASBA process or through the UPI Mechanism and which will be considered as the Application for Allotment of NCDs in terms of Shelf Prospectus and the relevant Tranche Prospectus. ASBA Account An account maintained with a SCSB and specified in the Application Form which will be blocked by such SCSB to the extent of the Application Amount mentioned in the Application Form by an Applicant and will include a bank account of a retail individual investor linked with UPI, for retail individual investors submitting application value upto ₹ 500,000 ASBA Applicant Any Applicant who applies for NCDs through the ASBA process ASBA Circular Circular no. CIR/DDHS/P/121/2018 issued by SEBI on August 16, 2018 Banker(s) to the Issue Collectively Public Issue Account Bank, Refund Bank and Sponsor Bank Base Issue Size As specified in the relevant Tranche Prospectus for each Tranche Issue. Basis of Allotment The basis on which NCDs will be allotted to applicants as described in " Issue Procedure - Basis of Allotment " on page 530. Bidding Centres Centres at which the Designated Intermediaries shall accept the Application Forms, i.e., Designated Branches of SCSB, Specified Locations for Members of the Syndicate, Broker Centres for Registered Brokers, Designated RTA Locations for RTAs and Designated CDP Locations for CDPs Broker Centres Broker centres notified by the Stock Exchange where Applicants can submit the ASBA Forms (including ASBA Forms under UPI in case of UPI Investors) to a Registered Broker. The details of such Broker Centres, along with the names and contact details of 3 This is an excerpt of the original content. 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