Edelweiss Financial Services LimitedNSE: EDELWEISS

Tranche III Prospectus (Final filed with SE)

Jun 27, 2023 at 10:00 PM UTC · Issued by Edelweiss Financial Services Limited

Tranche III Prospectus

June 28, 2023

EDELWEISS FINANCIAL SERVICES LIMITED

Edelweiss Financial Services Limited (the "Company" or "Issuer") was incorporated at Mumbai on November 21, 1995 as a public limited company with the name 'Edelweiss Capital Limited' under the provisions of the Companies Act, 1956. Thereafter, a certificate of commencement of business was issued to our Company by the Registrar Of Companies Maharashtra, at Mumbai, ("RoC"), on January 16, 1996. Subsequently, the name of our Company was changed to 'Edelweiss Financial Services Limited' pursuant to a fresh certificate of incorporation issued by the RoC on August 1, 2011. For more information about our Company, please refer "General Information" and "History and Main Objects" on pages 53 and 162 of the Shelf Prospectus and pages 51 and 143 of this Tranche III Prospectus.

Registered Office: Edelweiss House, Off C.S.T. Road, Kalina, Mumbai 400 098, Maharashtra, India; Tel.: +91 22 4009 4400;

Fax: +91 22 4086 3610; CIN: L99999MH1995PLC094641; PAN: AAACE1461E; Website: www.edelweissfin.com; Email: efslncd@edelweissfin.com Company Secretary and Compliance Officer: Mr. Tarun Khurana; Tel.: +91 22 4009 4400; Email: efslncd@edelweissfin.com

Chief Financial Officer: Ms. Ananya Suneja; Tel: +91 22 4009 4400; Email: efslncd@edelweissfin.com

PUBLIC ISSUE BY THE COMPANY OF SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES OF FACE VALUE OF ₹ 1,000 EACH ("NCDs") OR "DEBENTURES")

FOR AN AMOUNT OF ₹ 1,500 MILLION ("BASE ISSUE SIZE) WITH AN OPTION TO RETAIN OVERSUBSCRIPTION UP TO ₹ 1,500 MILLION AMOUNTING TO ₹ 3,000 MILLION ("TRANCHE III ISSUE LIMIT") ("TRANCHE III ISSUE") WHICH IS WITHIN THE SHELF LIMIT OF ₹ 10,000 MILLION AND IS BEING OFFERED BY WAY OF THIS TRANCHE III PROSPECTUS DATED JUNE 28, 2023 CONTAINING INTER ALIA THE TERMS AND CONDITIONS OF TRANCHE III ISSUE ("TRANCHE III PROSPECTUS"), WHICH SHOULD BE READ TOGETHER WITH THE SHELF PROSPECTUS DATED DECEMBER 27, 2022 ("SHELF PROSPECTUS") FILED WITH THE ROC, STOCK EXCHANGES AND SECURITIES AND EXCHANGE BOARD OF INDIA ("SEBI"). THE SHELF PROSPECTUS AND TRANCHE III PROSPECTUS CONSTITUTES THE PROSPECTUS ("PROSPECTUS"). THE ISSUE IS BEING MADE PURSUANT TO THE PROVISIONS OF 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 TO THE EXTENT NOTIFIED AND THE SEBI OPERATIONAL CIRCULAR. THE ISSUE IS NOT UNDERWRITTEN.

OUR PROMOTERS

Mr. Rashesh Shah; Email: efslncd@edelweissfin.com; Tel: +91 22 4009 4400, (ii) Mr. Venkatchalam Ramaswamy; Email: efslncd @edelweissfin.com; Tel: +91 22 4009 4400, (iii) Ms. Vidya Shah; Email: efslncd@edelweissfin.com; Tel: +91 22 4009 4400, and (iv) Ms. Aparna T.C; Email: efslncd@edelweissfin.com; Tel: +91 22 4009 4400. For details of our Promoters, see "Our Promoter" on page 184 of the Shelf Prospectus.

GENERAL RISKS

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 Factors" on page 18 of this Tranche III Prospectus, before making an investment in such Issue. This Tranche III 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 Indian or 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 refer to the section titled "Issue Related Information" on page 207 of this Tranche III Prospectus.

CREDIT RATING

The NCDs proposed to be issued under the Issue have been rated "CRISIL AA-/Negative (pronounced as CRISIL double A minus rating with Negative outlook)" for an amount of ₹ 10,000 million by CRISIL vide rating letter dated December 02, 2022, revalidated vide their letters dated February 6, 2023 and June 22, 2023 with rating rationale dated December 01, 2022 and June 22, 2023 and "ACUITE AA-/ Negative (pronounced as ACUITE double A minus)" for an amount of ₹ 10,000 million by Acuité vide their rating letter dated December 07, 2022, revalidated vide there letter dated February 13, 2023 and June 14, 2023 with rating rationale dated December 07, 2022. The ratings given by the Credit Rating Agencies are valid as on the date of this Tranche III Prospectus and shall remain valid until the ratings are revised or withdrawn. The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The rating agency has a right to suspend or withdraw the rating at any time on the basis of factors such as new information. These ratings are not a recommendation to buy, sell or hold securities and Investors should take their own decisions. Please refer to Annexure A and Annexure B of this Tranche III Prospectus for the rating letter, rationale, revalidation and press release of the above rating.

LISTING

The NCDs offered through the Draft Shelf Prospectus, the Shelf Prospectus and this Tranche III Prospectus are proposed to be listed on BSE Limited ("BSE") and BSE shall be the Designated Stock Exchange. Our Company has received an 'in-principle' approval from BSE vide their letter no. DCS/BM/PI-BOND/017/22-23 dated December 20, 2022.

PUBLIC COMMENTS

The Draft Shelf Prospectus dated December 12, 2022 was filed with the BSE, pursuant to the provisions of the SEBI NCS Regulations and was kept open for public comments for a period of seven Working Days (i.e., until 5 p.m.) on December 19, 2022. No comments were received on the Draft Shelf Prospectus until 5p.m. on December 19, 2022

LEAD MANAGER TO THE ISSUE	REGISTRAR TO THE ISSUE		DEBENTURE TRUSTEE TO THE ISSUE
EQUIRUS CAPITAL PRIVATE LIMITED	KFIN TECHNOLOGIES LIMITED			BEACON TRUSTEESHIP LIMITED*
12th Floor, C Wing,	Selenium Tower-B,			4 C&D, Siddhivinayak Chambers,
Marathon Futurex, N.M. Joshi Marg,	Plot 31 & 32 Gachibowli,			Gandhi Nagar, Opp. MIG Cricket Club
Lower Parel, Mumbai 400 013	Financial District, Nanakramguda,			Bandra (East), Mumbai 400 051
Tel: +91 22 4332 0736	Serilingampally, Hyderabad - 500 032, Telangana			Tel.: +91 22 26558759
Fax: +91 22 4332 0750	Tel: +91 40 6716 2222			Email: compliance@beacontrustee.co.in
Email: efsl.ncd@equirus.com	Email:efsl3.ncdipo@kfintech.com			Website: www.beacontrustee.co.in
Website: www.equirus.com	Website: www.kfintech.com			Contact Person: Kaustubh Kulkarni
Contact person: Malay Shah	Contact Person: M Murali Krishna

CREDIT RATING AGENCY		STATUTORY AUDITOR
					S. R. BATLIBOI & CO. LLP
					12th Floor, The Ruby
ACUITÉ RATINGS & RESEARCH LIMITED	CRISIL Ratings Limited			29 Senapati Bapat Marg
		Dadar (West),
708, Lodha Supremus,	CRISIL House,
		Mumbai 400 028
Lodha iThink Techno Campus,	Central Avenue, Hiranandani Business Park,
		Maharashtra, India
Kanjurmarg (East), Mumbai 400 042	Powai, Mumbai 400076
		Tel: + 91 22 6819 8000
Tel: + 91 22 4929 4000	Tel: + 91 22 3342 3000
		Email: srbc@srb.in
Email: chitra.mohan@acuite.in	Fax: +91 22 4040 5800
		Contact Person: Shrawan Jalan
Website: www.acuite.in	Email: crisilratingdesk@crisil.com

Contact Person: Chitra Mohan	Website: www.crisilratings.com
	Contact Person: Krishna Sitaraman
	TRANCHE III ISSUE PROGRAMME**
TRANCHE III ISSUE OPENS ON: TUESDAY JULY 4, 2023	TRANCHE III ISSUE CLOSES ON: MONDAY JULY 17, 2023

*Beacon Trusteeship Limited under regulation 8 of SEBI NCS Regulations has by its letter dated December 9, 2022 given its consent for its appointment as Debenture Trustee to the Issue and for its name to be included in this Tranche III Prospectus and in all the subsequent periodical communications sent to the holders of the NCDs issued pursuant to the Issue.

This Tranche III Issue shall remain open for subscription on Working Days from 10 a.m. to 5 p.m. (Indian Standard Time) during the period indicated above, except that this Tranche III Issue may close on such earlier date or extended date as may be decided by the Board of Directors of our Company or the Debenture Fund Raising Committee. Pursuant to Regulation 33A of the SEBI NCS Regulations, (i) the Tranche III Issue shall be kept open for a minimum of three working days and a maximum of ten working days, (ii) in case of a revision in the price band or yield, the Company shall extend the Tranche III Issue Period for a minimum period of three working days, provided that it shall not exceed the maximum number of days, as provided above in (i), and (iii) in case of force majeure, banking strike or similar circumstances, the Company may, for reasons to be recorded in writing, extend the Tranche III Issue Period, provided that it shall not exceed the maximum number of days, as provided above in (i). In the event of an early closure or extension of this Tranche III Issue, our Company shall ensure that notice of the same is provided to the prospective investors through an advertisement in a daily national newspaper with wide circulation on or before such earlier or initial date of Tranche III Issue closure. On this Tranche III 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 Exchange. For further details please refer to the section titled "General Information" on page 51.

A copy of this Tranche III Prospectuses shall be filed with the Registrar of Companies, Maharashtra at Mumbai in terms of Section 26 of Companies Act, 2013, along with the endorsed/certified copies of all requisite documents. For further details, please refer to the section titled "Material Contracts and Documents for Inspection" on page 273 of this Tranche III Prospectus.

TABLE OF CONTENTS
SECTION I - GENERAL	3
DEFINITIONS AND ABBREVIATIONS	3
CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND
CURRENCY OF PRESENTATION	15
FORWARD LOOKING STATEMENTS	17

SECTION II - RISK FACTORS	18
SECTION III - INTRODUCTION	51
GENERAL INFORMATION	51
CAPITAL STRUCTURE	61
OBJECTS OF THE ISSUE	69
STATEMENT OF POSSIBLE TAX BENEFITS	72

SECTION IV - ABOUT OUR COMPANY	85
INDUSTRY OVERVIEW	85
OUR BUSINESS	121
MATERIAL DEVELOPMENTS	143

SECTION V - FINANCIAL INFORMATION	154
FINANCIAL STATEMENTS	154
FINANCIAL INDEBTEDNESS	155
SECTION VI - LEGAL AND OTHER INFORMATION	166
OUTSTANDING LITIGATIONS	166
OTHER REGULATORY AND STATUTORY DISCLOSURES	191
SECTION VII - ISSUE RELATED INFORMATION	207
ISSUE STRUCTURE	207
TERMS OF THE ISSUE	215
ISSUE PROCEDURE	235
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION	273
DECLARATION	276
ANNEXURE A - CRISIL RATING, RATING RATIONALE, PRESS RELEASE AND
REVALIDATION LETTER	277
ANNEXURE B - ACUITE RATING, RATING RATIONALE, PRESS RELEASE AND
REVALIDATION LETTER	278
ANNEXURE C - DEBENTURE TRUSTEE CONSENT LETTER	279
ANNEXURE D - ILLUSTRATIVE CASHFLOWS	280

SECTION I - GENERAL

DEFINITIONS AND ABBREVIATIONS

This Tranche III 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 Tranche III Prospectus, and any reference to a statutory provision shall include any subordinate legislation notified from time to time pursuant to such provision.

The words and expressions used in this Tranche III 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
Associates	Associate would mean associates of our Company as at and for the relevant
	financial year/period as applicable.
"EFSL" or "Company" or	Edelweiss Financial Services Limited, a public limited company incorporated
"the Issuer"	under the Companies Act, 1956, and having its Registered Office at Edelweiss
	House, Off C.S.T. Road, Kalina, Mumbai 400 098, Maharashtra, India.
"we" or "us" or "our"	Unless the context otherwise requires, this refers to Edelweiss Financial Services
	Limited together with its Subsidiaries, Associates and Trusts for the relevant
	financial year/period as applicable.
Subsidiaries	Subsidiary would mean subsidiaries of our Company as at and for the relevant
	financial year/period as applicable. For the details of the subsidiaries of our
	Company, as on March, 31, 2023, see "Material Developments - History and Main
	Objects" on page 143 of this Tranche III Prospectus.
Trusts	Trust would mean trusts of our Company as at and for the relevant financial
	year/period as applicable. For the details of the trusts of our Company, as on March
	31, 2023, see "Material Developments - History and Main Objects" on page 143 of
	this Tranche III Prospectus.
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
Auditors or Statutory	The current statutory auditors of our Company, M/s. S. R. Batliboi & Co. LLP,
Auditors	Chartered Accountants
Board or Board of	Board of Directors of our Company or any duly constituted committee thereof.
Directors or our Board or
our Board of Directors
Corporate Social	Corporate Social Responsibility Committee of the Board of Directors
Responsibility Committee
Committee	A committee constituted by the Board, from time to time.
Debenture Fund Raising	Debenture Fund Raising Committee as constituted by the Board of Directors
Committee
Directors	Directors of the Company
Equity Shares	Equity shares of the Company of face value of ₹ 1 each
ESOPs	Employee stock options
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 SEBI Listing Regulations
KMP / Key Managerial	Key managerial personnel of our Company as disclosed in the Shelf Prospectus
Personnel	and this Tranche III Prospectus and appointed in accordance with Key Managerial
	Personnel, as defined under Section 2(51) of the Companies Act, 2013.

Term	Description
LAP	Loan against property
"MoA" or "Memorandum"	Memorandum of Association of our Company
or "Memorandum of
Association"
Nomination and	Nomination and Remuneration Committee of the Board of Directors
Remuneration Committee
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."
Preference Shares	Preference Shares of the Company having face value of ₹5 each.
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, 2018.
Promoters or our Promoter	The promoters of our Company are Mr. Rashesh Shah, Mr. Venkatchalam
	Ramaswamy, Ms. Vidya Shah and Ms. Aparna T.C.
Public Issue 1	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹2,000 million pursuant to the prospectus dated
	December 17, 2020.
Public Issue 2	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹4,000 million pursuant to the prospectus dated March
	26, 2021.
Public Issue 3	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹ 4,000 million pursuant to the prospectus dated
	August 9, 2021.
Public Issue 4	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹ 5,000 million pursuant to the tranche I prospectus
	dated November 29, 2021.
Public Issue 5	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹ 4,000 million pursuant to the tranche II Prospectus
	dated September 26, 2022.
Public Issue 6	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹ 4,000 million pursuant to the tranche I prospectus
	dated December 27, 2022.
Public Issue 7	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹ 4,000 million pursuant to the tranche II prospectus
	dated March 31, 2023.
Reformatted Financial	Reformatted Consolidated Financial Information and Reformatted Standalone
Information	Financial Information.
Reformatted Consolidated	The reformatted consolidated statement of assets and liabilities as at March 31,
Financial Information	2023, March 31, 2022, March 31, 2021, the reformatted consolidated statement of
	profit and loss for the year ended 2023, 2022, 2021, the reformatted consolidated
	statement of cash flows for the year ended 2023, 2022, 2021, the reformatted
	consolidated statement of changes in equity for the year ended 2023, 2022, 2021.
	Our audited consolidated financial statements as at and for the year ended March
	31, 2023, March 31, 2022 and March 31, 2021 form the basis of such reformatted
	Consolidated Financial Information.
Reformatted Standalone	The reformatted standalone statement of assets and liabilities of our Company as
Financial Information	at March 31, 2023, March 31, 2022, March 31, 2021, the reformatted standalone
	statement of profit and loss for the year ended 2023, 2022, 2021, the reformatted
	standalone statement of cash flows for the year ended 2023, 2022, 2021, the
	reformatted standalone statement of changes in equity for the year ended 2023,
	2022, 2021.

Term	Description
	Our audited standalone financial statements as at and for the year ended March 31,
	2023, March 31, 2022, and March 31, 2021 form the basis of such reformatted
	Standalone Financial Information.
Registered Office	The registered office of our Company is situated at Edelweiss House, Off C.S.T.
	Road, Kalina, Mumbai 400 098, Maharashtra, India.
Risk Committee	Risk Committee of the Board of Directors.
RoC/ Registrar of	Registrar of Companies, Maharashtra at Mumbai.
Companies
Shareholders	The holders of the Equity Shares from time to time.
Stakeholders' Relationship	Stakeholders' Relationship Committee as constituted by the Board of Directors.
Committee
Total Borrowing(s)/ Total	Debt securities plus borrowings (other than debt securities), subordinated
Debt	liabilities and deposits.
ZGIL	Zuno General Insurance Company (formerly known as Edelweiss General
	Insurance Company)

Issue Related Terms

Term	Description
Abridged Prospectus	A memorandum containing the salient features of the Shelf Prospectus and this
	Tranche III Prospectus.
Acknowledgement Slip/	The slip or document issued by the Designated Intermediary to an Applicant as
Transaction Registration	proof of registration of the Application Form.
Slip/ TRS
Acuité/ Acuite	Acuité Ratings & Research Limited.
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 allotment of NCDs to the successful
Allotted	Applicants pursuant to the Tranche III Issue.
Allottee(s)	The successful Applicant to whom the NCDs are Allotted either in full or part,
	pursuant to the Tranche III 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 the Shelf Prospectus,
	this Tranche III Prospectus, the Abridged Prospectus and the Application Form.
"Application" or "ASBA	An application (whether physical or electronic) to subscribe to the NCDs offered
Application"	pursuant to the Tranche III 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 the Shelf Prospectus and this Tranche III
	Prospectus.
Application Amount	The aggregate value of the NCDs applied for, as indicated in the Application Form
	for this Tranche III Issue.
Application Form / ASBA	Form in terms of which an Applicant shall make an offer to subscribe to NCDs
Form	through the ASBA process or through the UPI Mechanism and which will be
	considered as the Application for Allotment of NCDs in terms of the Shelf
	Prospectus and this Tranche III 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.
Banker(s) to the Issue	Collectively Public Issue Account Bank, Refund Bank and Sponsor Bank.
Base Issue Size	₹ 1,500 million
Basis of Allotment	The basis on which NCDs will be allotted to applicants under specified in this
	Tranche III Prospectus for Tranche III Issue and which is described in "Issue
	Procedure - Basis of Allotment" on page 269 of this Tranche III Prospectus.
	5

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