SEPC : Letter of Offer (Final Offer Document filed with Stock Exchanges)

LEAD MANAGER TO THE ISSUE

REGISTRAR TO THE ISSUE

SUMEDHA FISCAL SERVICES LIMITED

CAMEO CORPORATE SERVICES LIMITED

6A Geetanjali, 6th Floor,

No. 01, Club House Road, Mount Road,

8B Middleton Street, Kolkata - 700 071,

Chennai- 600 002, Tamil Nadu, India.

West Bengal, India.

Telephone: +91 44 4002 0700/ 2846 0390

Telephone: +91 332 229 8936 / 6813 5900

Facsimile: N.A.

Facsimile: N.A.

Email: [email protected]

Email id:[email protected]

Website:www.cameoindia.com

Website:www.sumedhafiscal.com

Online Investor Portal: https:// wisdom.cameoindia.com

Investor grievance: [email protected]

Investor Grievance Email id: [email protected]

Contact Person: Ajay K Laddha

Contact Person: K. Sreepriya

SEBI Registration Number: INM000008753

SEBI Registration No.: INR000003753

Validity of Registration: Permanent

Validity of Registration: Permanent

ISSUE OPENS ON

LAST DATE FOR ON MARKET RENUNCIATION*

ISSUE CLOSES ON**

FRIDAY, JULY 5, 2024

FRIDAY, JULY 12, 2024

FRIDAY, JULY 19, 2024

TABLE OF CONTENTS

SECTION I - GENERAL

2

DEFINITIONS AND ABBREVIATIONS

2

NOTICE TO INVESTORS

11

PRESENTATION OF FINANCIAL INFORMATION

14

FORWARD - LOOKING STATEMENTS

17

SUMMARY OF THIS DRAFT LETTER OF OFFER

19

SECTION II - RISK FACTORS

23

SECTION III - INTRODUCTION

81

THE ISSUE

81

GENERAL INFORMATION

83

CAPITAL STRUCTURE

89

OBJECTS OF THE ISSUE

94

STATEMENT OF TAX BENEFITS

102

SECTION IV - ABOUT THE COMPANY

106

INDUSTRY OVERVIEW

106

OUR BUSINESS

121

OUR SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

138

OUR MANAGEMENT

141

OUR PROMOTER

153

RELATED PARTY TRANSACTIONS

155

DIVIDEND POLICY

156

SECTION V - FINANCIAL INFORMATION

157

RESTATED FINANCIAL INFORMATION

157

CAPITALISATION STATEMENT

211

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF

OPERATIONS

212

MARKET PRICE INFORMATION

226

SECTION VI - LEGAL AND OTHER INFORMATION

229

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS

229

GOVERNMENT AND OTHER STATUTORY APPROVALS

239

OTHER REGULATORY AND STATUTORY DISCLOSURES

240

SECTION VII - ISSUE INFORMATION

250

TERMS OF THE ISSUE

250

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

276

SECTION VIII - STATUTORY AND OTHER INFORMATION

277

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

278

DECLARATION

280

Term

Description

"Company",

"our

SEPC Limited, a public limited company incorporated under the Companies Act,

Company",

"the

1956, having its registered office at 4th Floor, Bascon Futura SV, IT Park

Company",

"the Issuer"

Venkatanarayana Road, Parthasarathy Puram, T. Nagar Chennai - 600 017, Tamil

or "SEPC"

Nadu, India.

"we", "us", or "our"

Unless the context otherwise indicates or implies, refers to our Company and our

Subsidiaries.

Company Related Terms

Term

Description

"Annual

Consolidated

The consolidated audited financial statements of our Company and its Subsidiaries,

Audited

Financial

prepared as per Ind AS for Fiscal 2024, Fiscal 2023 and Fiscal 2022 prepared in

Statements"

line with Ind AS notified under the Companies Act, 2013, as amended read with

the Companies (Indian Accounting Standards) Rules, 2015, as amended.

"Articles" / "Articles of

Articles / Articles of Association of our Company, as amended from time to time.

Association" / "AoA"

"Audit Committee"

The committee of the Board of Directors constituted as our Company's audit

committee in accordance with Regulation 18 of the Securities and Exchange Board

of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as

amended ("SEBI Listing Regulations") and Section 177 of the Companies Act,

2013. For details, see "Our Management" on page 141 of this Letter of Offer.

"Auditor"

/ "Statutory

Statutory and peer review auditor of our Company, namely, M/s. M S K A &

Auditor"/

"Peer Review

Associates, Chartered Accountants.

Auditor"

"Board"

/

"Board of

Board of directors of our Company or a duly constituted committee thereof.

Directors"

"Chief Financial Officer /

Chandrasekharan Sivaprakasam Ramalingam, the Chief Financial Officer of our

CFO"

Company.

"Company Secretary and

Thiruppathi Sriraman, the Company Secretary and Compliance Officer of our

Compliance Officer"

Company.

"Compulsorily

1,75,00,000 CCD of ₹ 100/- each, issued by our Company to its lenders in lieu of

Convertible Debentures"/

existing debt of our Company with yield, which will be convertible into Equity

"CCDs"

shares at a future date for an aggregate amount up to ₹ 17,500 lakhs, in accordance

with the Resolution Plan

Term

Description

"Corporate Promoter" or

Mark A B Capital Investment LLC is the Promoter of our Company. For further

"Promoter"

details, see "Our Promoter" on page 153 of this Letter of Offer.

"Corporate

Social

The committee of the Board of directors constituted as our Company's corporate

Responsibility

social responsibility committee in accordance with Section 135 of the Companies

Committee/

CSR

Act, 2013. For details, see "Our Management" on page 141 of this Letter of Offer

Committee"

"Director(s)"

The director(s) on the Board of our Company, unless otherwise specified, as

described in the chapter titled "Our Management" on page 141 of this Letter of

Offer

"Equity Shareholder"

A holder of Equity Shares

"Equity Shares"

Equity shares of our Company of face value of ₹ 10 each, unless otherwise

specified in context thereof.

"Executive Directors"

Executive Directors of our Company.

"Independent

The Independent Director(s) of our Company, in terms of Section 2(47) and Section

Director(s)"

149(6) of the Companies Act, 2013.

"Joint Ventures" / "Joint

Shriram EPC Eurotek Environmental Private Limited, Sepc DRS ITPL JV, Mokul

Operations"

Shriram EPC JV and Larsen & Toubro Shriram EPC JV. The joint ventures are

unincorporated in nature and have been formed through a contractual arrangement

between our Company and the joint venture partners.

"Key

Management

Key Management Personnel of our Company in terms of the Companies Act, 2013

Personnel" / "KMP"

and the SEBI ICDR Regulations as described in the subsection titled "Our

Management - Key Managerial Personnel" on page 151 of this Letter of Offer.

"Memorandum

of

Memorandum of Association of our Company, as amended from time to time.

Association" / "MoA"

"Nomination

and

The committee of the Board of directors reconstituted as our Company's

Remuneration

Nomination and Remuneration Committee in accordance with Regulation 19 of

Committee"

the SEBI Listing Regulations and Section 178 of the Companies Act, 2013. For

details, see "Our Management" on page 141 of this Letter of Offer.

"Non-Convertible

1,75,00,000 NCD of ₹ 100/- each of our Company issued to the lenders in lieu of

Debentures" or "NCD"

their existing debt, for an aggregate amount up to ₹ 17,500 lakhs, in accordance

with the Resolution Plan

"Non-Executive

and

Non-Executive and Independent Directors of our Company, unless otherwise

Independent Director"

specified.

"Non-executive

Non-executive Directors of our Company.

Directors"

"Promoter Group"

Individuals and entities forming part of the promoter and promoter group in

accordance with SEBI ICDR Regulations. As on date of this Letter of Offer, Mark

AB Capital Investment India Private Limited and Mark AB Welfare Trust forms

part of our promoter and promoter group. Mark AB Capital Investment India

Private Limited does not hold any shareholding in our Company.

"Registered Office"

The Registered Office of our Company located at 4th Floor, Bascon Futura SV, IT

Park Venkatanarayana Road, Parthasarathy Puram, T. Nagar Chennai - 600 017,

Tamil Nadu, India.

"Registrar

of

Registrar of Companies, Tamil Nadu at Chennai having its office at Block No. 6,

Companies"/ "RoC"

B Wing, 2nd Floor, Shastri Bhawan 26, Haddows Road, Chennai - 600 034, Tamil

Nadu, India.

"Resolution Plan"

Resolution plan dated August 6, 2021, as amended, submitted by our Company

before the consortium of lenders and approved by the consortium of lenders on

March 25, 2022, in accordance with the Reserve Bank of India (Prudential

Framework for Resolution of Stressed Assets) Directions 2019. The resolution

plan was also approved by the Board of Directors in their meeting dated January

24, 2022 and by the Shareholders through postal ballot.

"Restated

Consolidated

Restated consolidated financial information of our Company and its Subsidiaries,

Financial

Statements"/

which comprises of the restated consolidated statement of assets and liabilities as

"Restated

Financial

at March 31, 2024, 2023 and 2022, the restated consolidated statements of profit

Statements"/ "Restated

and loss (including other comprehensive income), restated consolidated statement

Term

Description

Consolidated

Financial

of changes in equity and the restated consolidated statement of cash flows for the

Information"/

"Restated

years ended March 31, 2024, 2023 and 2022, and the summary of significant

Financial Information"

accounting policies and other explanatory information prepared in terms of the

requirements of Section 26 of Part 1 of Chapter III of the Companies Act, 2013,

the Securities and Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regulations, 2018, as amended; and the Guidance Note on Reports

in Company Prospectuses (Revised 2019) issued by the Institute of Chartered

Accountants of India, as amended from time to time.

"Rights

Issue

The committee of our Board constituted for purposes of the Issue and incidental

Committee"

matters thereof.

Senior Management

Senior management of our Company determined in accordance with Regulation

2(1)(bbbb) of the SEBI ICDR Regulations. For details, see "Our Management" on

page 141 of this Letter of Offer.

"Shareholders/ Equity

The Equity Shareholders of our Company, from time to time.

Shareholders"

"Stakeholders'

The committee of the Board of Directors constituted as our Company's

Relationship Committee"

Stakeholders' Relationship Committee in accordance with Regulation 20 of the

SEBI Listing Regulations. For details, see "Our Management" on page 141 of this

Letter of Offer.

"Subsidiary(ies)"

Shriram EPC FZE is the subsidiary of our Company and Shriram EPC Arkans LLC

is the step down subsidiary of our Company. A company under the name and style

of 'SEPC ARABIA LIMITED COMPANY, LLC' has been incorporated under the

laws of Saudi Arabia for the purpose of exploiting the market potential in Saudi

Arabia, however our Company is yet to make an investment of SAR 300000 in

order to make the said company a wholly-owned subsidiary of our Company.

Materiality Policy

Policy on determination of materiality of events adopted by our Company in

accordance with Regulation 30 of the SEBI Listing Regulations.

Issue Related Terms

Term

Description

2009 ASBA Circular

The SEBI circular SEBI/CFD/DIL/ASBA/1/2009/30/12 dated December 30, 2009

2011 ASBA Circular

The SEBI circular CIR/CFD/DIL/1/2011 dated April 29, 2011

Abridged Letter of Offer

Abridged letter of offer to be sent to the Eligible Equity Shareholders with respect

to the Issue in accordance with the provisions of the SEBI ICDR Regulations and

the Companies Act.

Allot/Allotment/Allotted

Allotment of Rights Equity Shares pursuant to the Issue.

Allotment Account

The account opened with the Banker(s) to the Issue, into which the Application

Money lying to the credit of the escrow account(s) and amounts blocked by

Application Supported by Blocked Amount in the ASBA Account, with respect to

successful Applicants will be transferred on the Transfer Date in accordance with

Section 40(3) of the Companies Act.

Allotment Advice

Note, advice or intimation of Allotment sent to each successful Applicant who has

been or is to be Allotted the Rights Equity Shares pursuant to the Issue.

Allotment Date

Date on which the Allotment is made pursuant to the Issue.

Allottee(s)

Person(s) who are Allotted Rights Equity Shares pursuant to the Allotment.

Applicant(s) / Investor(s)

Eligible Equity Shareholder(s) and/or Renouncee(s) who make an application for

the Rights Equity Shares pursuant to the Issue in terms of the Letter of Offer,

including an ASBA Investor.

Application

Application made through submission of the Application Form or plain paper

Application to the Designated Branch of the SCSBs or online/ electronic

application through the website of the SCSBs (if made available by such SCSBs)

under the ASBA process, to subscribe to the Rights Equity Shares at the Issue

Price.

Application Form

Unless the context otherwise requires, an application form (including online

application form available for submission of application though the website of the

SCSBs (if made available by such SCSBs) under the ASBA process) used by an

Term

Description

Applicant to make an application for the Allotment of Rights Equity Shares in this

Issue.

Application Money

Aggregate amount payable in respect of the Rights Equity Shares applied for in

the Issue at the Issue Price.

Application Supported by

Application (whether physical or electronic) used by ASBA Applicants to make

Blocked Amount/ASBA

an Application authorizing a SCSB to block the Application Money in the ASBA

Account

ASBA Account

Account maintained with a SCSB and specified in the Application Form or plain

paper application, as the case may be, for blocking the amount mentioned in the

Application Form or the plain paper application, in case of Eligible Equity

Shareholders, as the case may be.

ASBA Applicant / ASBA

As per the SEBI Master Circular, all investors (including renouncee) shall make an

Investor

application for a rights issue only through ASBA facility.

ASBA Bid

A Bid made by an ASBA Bidder including all revisions and modifications thereto

as permitted under the SEBI ICDR Regulations.

Banker to the Issue

The Escrow Collection Bank and the Refund Bank to the Issue, being Axis Bank

Limited.

Banker

to

the Issue

Agreement dated June 19, 2024 entered into by and among our Company, the

Agreement

Registrar to the Issue, the Lead Manager and the Bankers to the Issue for collection

of the Application Money from Applicants/Investors, transfer of funds to the

Allotment Account and where applicable, refunds of the amounts collected from

Applicants/Investors, on the terms and conditions thereof.

Basis of Allotment

The basis on which the Rights Equity Shares will be Allotted to successful

applicants in the Issue and which is described in "Terms of the Issue" on page 250.

Consolidated Certificate

The certificate that would be issued for Rights Equity Shares Allotted to each folio

in case of Eligible Equity Shareholders who hold Equity Shares in physical form.

Controlling

Branches/

Such branches of SCSBs which coordinate Bids under the Issue with the LM, the

Controlling

Branches

of

Registrar and the Stock Exchange, a list of which is available on the website of

the SCSBs

SEBI at http://www.sebi.gov.in.

Demographic

Details of Investors including the Investor's address, name of the Investor's father/

Details

husband, investor status, occupation and bank account details, where applicable.

Designated SCSB

Such branches of the SCSBs which shall collect the ASBA Forms submitted by

Branches

ASBA Bidders, a list of which is available on the website of SEBI at

http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&in

tmId=35, updated from time to time, or at such other website as may be prescribed

by SEBI from time to time.

Designated Stock

BSE Limited

Exchange

Depository(ies)

NSDL and CDSL or any other depository registered with SEBI under the

Securities and Exchange Board of India (Depositories and Participants)

Regulations, 2018 as amended from time to time read with the Depositories Act,

1996.

Draft

Letter

of

The draft letter of offer dated April 17, 2024 filed with SEBI and the Stock

Offer/DLoF/DLOF

Exchanges.

Escrow Account

One or more no-lien and non-interest-bearing accounts opened with the Escrow

Collection Bank for the purposes of collecting the Application Money from

resident investors-eligible equity shareholders as on record date making an

Application through the ASBA facility.

Escrow Collection Bank

Bank which is a clearing member and registered with SEBI as banker to an issue

and with whom Escrow Account(s) will be opened, in this case being Axis Bank

Limited.

Eligible

Equity

Existing Equity Shareholders as on the Record Date. Please note that the investors

Shareholders

eligible to participate in the Issue exclude certain overseas shareholders. For

further details, see "Notice to Investors" on page 11.

Issue / Rights Issue

Issue of up to 15,38,46,153* Equity Shares of face value of ₹ 10 each of our

Company for cash at a price of ₹ 13/- per Rights Equity Share (including a

Term

Description

premium of ₹ 3/- per Rights Equity Share) aggregating up to ₹ 20,000 lakhs on a

rights basis to the Eligible Equity Shareholders of our Company in the ratio of six

(06) Rights Equity Shares for every fifty-five (55) fully paid-up Equity Shares held

by the Eligible Equity Shareholders of our Company on the Record Date, i.e.,

Tuesday, June 25, 2024.

*Assuming full subscription. Subject to finalisation of the Basis of Allotment.

Issue Agreement

Issue Agreement dated April 17, 2024 between our Company and the Lead

Manager, pursuant to which certain arrangements are agreed to in relation to the

Issue.

Issue Closing Date

Friday, July 19, 2024

Issue Opening Date

Friday, July 5, 2024

Issue Period

The period between the Issue Opening Date and the Issue Closing Date, inclusive

of both days, during which Applicants/Investors can submit their Applications, in

accordance with the SEBI ICDR Regulations.

Issue Material

Collectively, the Abridged Letter of Offer, the Common Application Form and

Rights Entitlement Letter.

Issue Price

₹ 13/- per Rights Equity Share.

Issue Proceeds

Gross proceeds of the Issue.

Issue Size

Amount aggregating up to ₹ 20,000 lakhs.

Lead Manager

Sumedha Fiscal Services Limited

Letter of Offer/LOF

This letter of offer dated June 27, 2024 which has been filed with the Stock

Exchanges and SEBI, after incorporating observations received on the Draft Letter

of Offer, including any addenda or corrigenda thereto.

Monitoring Agency

Monitoring Agency appointed for the purpose of the Issue namely Infomerics

Valuation and Rating Private Limited

Monitoring

Agency

Agreement dated June 19, 2024 entered into between our Company and the

Agreement

Monitoring Agency in relation to monitoring of Issue Proceeds.

Net Proceeds

Proceeds of the Issue less our Company's share of Issue related expenses. For

further information about the Issue related expenses, see "Objects of the Issue" on

page 94 of this Letter of Offer.

Non-ASBA

Investor/

Investors other than ASBA Investors who apply in the Issue otherwise than

Non-ASBA Applicant

through the ASBA process comprising Eligible Equity Shareholders holding

Equity Shares in physical form or who intend to renounce their Rights Entitlement

in part or full and Renouncees.

Non-Institutional Bidders

An Investor other than a Retail Individual Investor or Qualified Institutional Buyer

or NIIs

as defined under Regulation 2(1)(jj) of the SEBI ICDR Regulations.

Off Market Renunciation

The renunciation of Rights Entitlements undertaken by the Investor by transferring

them through off market transfer through a depository participant in accordance

with the SEBI Master Circular and the circulars issued by the Depositories, from

time to time, and other applicable laws.

On Market Renunciation

The renunciation of Rights Entitlements undertaken by the Investor by trading

them over the secondary market platform of the Stock Exchange through a

registered stock broker in accordance with the SEBI Master Circular and the

circulars issued by the Stock Exchanges, from time to time, and other applicable

laws, on or before Friday, July 12, 2024.

QIBs

or

Qualified

Qualified institutional buyers as defined under Regulation 2(1)(ss) of the SEBI

Institutional Buyers

ICDR Regulations.

Record Date

Designated date for the purpose of determining the Equity Shareholders eligible to

apply for Rights Equity Shares, being Tuesday, June 25, 2024.

Refund Bank

The Banker to the Issue with whom the Refund Account(s) will be opened, in this

case being Axis Bank Limited.

"Registrar

to

the

Cameo Corporate Services Limited

Company" / "Registrar to

the Issue"

Term

Description

Registrar Agreement

Agreement dated February 23, 2024 entered into among our Company and the

Registrar in relation to the responsibilities and obligations of the Registrar to the

Issue pertaining to the Issue.

Renouncee(s)

Person(s) who has/have acquired the Rights Entitlement from the Eligible Equity

Shareholders on renunciation.

Renunciation Period

The period during which the Investors can renounce or transfer their Rights

Entitlements which shall commence from the Issue Opening Date. Such period

shall close on Friday, July 12, 2024 in case of On Market Renunciation. Eligible

Equity Shareholders are requested to ensure that renunciation through off-market

transfer is completed in such a manner that the Rights Entitlements are credited to

the demat account of the Renouncee on or prior to the Issue Closing Date.

Retail Individual

An individual Investor (including an HUF applying through Karta) who has

Bidders(s)/Retail

applied for Rights Equity Shares and whose Application Money is not more than

Individual

Investor(s)/

₹ 200,000 in the Issue as defined under Regulation 2(1)(vv) of the SEBI ICDR

RII(s)/RIB(s)

Regulations.

RE ISIN

ISIN for Rights Entitlement i,e, INE964H20030

Rights Entitlement

The number of Rights Equity Shares that an Eligible Equity Shareholder is entitled

to in proportion to the number of Equity Shares held by the Eligible Equity

Shareholder on the Record Date, being six (06) Rights Equity Shares for every

fifty-five (55) fully paid-up Equity Shares held on Tuesday, June 25, 2024.

The Rights Entitlements with a separate ISIN: INE964H20030 will be credited to

your demat account before the date of opening of the Issue, against the equity

shares held by the Equity Shareholders as on the record date.

Rights Entitlement Letter

Letter including details of Rights Entitlements of the Eligible Equity Shareholders.

Rights Equity Shares

Equity Shares of our Company to be Allotted pursuant to this Issue.

SEBI Master

Master circular dated June 21, 2023 issued by the Securities and Exchange Board

Circular

of India in order to enable the stakeholders to have access to all circulars/directions

issued under the relevant provisions of the SEBI ICDR Regulations, 2018 at one

place.

The

SEBI

circular,

bearing

reference

number

SEBI/HO/CFD/DIL2/CIR/P/2020/13 dated January 22, 2020 has been rescinded

pursuant to the SEBI Master Circular.

Self-Certified

Syndicate

The banks registered with SEBI, offering services (i) in relation to ASBA (other

Banks" or "SCSBs

than through UPI mechanism), a list of which is available on the website of SEBI

at

https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&i

ntmId=34

or

https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&i

ntmId=35, as applicable, or such other website as updated from time to time, and

(ii) in relation to ASBA (through UPI mechanism), a list of which is available on

the

website

of

SEBI

at

https://sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId

=40or such other website as updated from time to time

Stock Exchanges

Stock Exchange where the Equity Shares are presently listed, being BSE and NSE.

Transfer Date

The date on which the amount held in the escrow account(s) and the amount

blocked in the ASBA Account will be transferred to the Allotment Account, upon

finalization of the Basis of Allotment, in consultation with the Designated Stock

Exchange.

Wilful Defaulter and

A wilful defaulter or a fraudulent borrower, as defined under the SEBI ICDR

Fraudulent Borrower

Regulations

Working Day

All days other than second and fourth Saturday of the month, Sunday or a public

holiday, on which commercial banks in Mumbai are open for business; provided

however, with reference to (a) announcement of Price Band; and (b) Bid/Issue

Period, Term Description the term Working Day shall mean all days, excluding

Saturdays, Sundays and public holidays, on which commercial banks in Mumbai

are open for business; and (c) the time period between the Bid/Issue Closing Date

and the listing of the Equity Shares on the Stock Exchange. "Working Day" shall