Ugro Capital : U Gro Capital Limited – Prospectus (Final filed with SE)

About this update from Ugro Capital Limited

Prospectus August 26, 2022 U GRO Capital Limited (Our Company was incorporated as Chokhani Securities Private Limited under the Companies Act, 1956 on February 10, 1993 with the Registrar of Companies, Maharashtra at Mumbai. Our Company was subsequently converted to a public limited company pursuant to the fresh Certificate of Incorporation issued by the RoC on July 26, 1994. The name of the Company was subsequently changed from "Chokhani Securities Limited" to "U GRO Capital Limited" and the fresh Certificate of Incorporation was issued by RoC on September 26, 2018. The CIN of our Company is L67120MH1993PLC070739 and PAN of our Company is AAACC2069E. Our Company is also registered with RBI as Systemically Important non-deposit taking Non-Banking Finance Company with registration no. No. 13.00325. For further details about our Company, see "History and Certain Other Corporate Matters" on page 87) Registered Office : 4th Floor, Tower 3, Equinox Business Park, Off BKC, LBS Road, Kurla (West), Mumbai - 400 070, Maharashtra, India Tel.: +91 +91 22 4182 1600 Website: www.ugrocapital.com ; E-mail: [email protected] Company Secretary & Compliance Officer : Ms. Namrata Sajnani, Tel.: +91 22 4182 1600; E-mail: [email protected] Chief Financial Officer : Amit Gupta; Tel.: +91 22 4182 1600; E-mail: [email protected] Statutory Auditor : M S K A & Associates, Chartered Accountants, 602, Floor 6, Raheja Titanium, Western Express Highway, Geetanjali, Railway Colony, Ram Nagar, Goregaon (East), Mumbai - 400 063; Tel.: +91 22 6831 1600; E-mail: [email protected] , Contact Person: Mr. Swapnil Kale PROMOTER OF OUR COMPANY: POSHIKA ADVISORY SERVICES LLP ; Tel.: +91 124 4091 777; E-mail: [email protected] PUBLIC ISSUE BY U GRO CAPITAL LIMITED ("COMPANY" OR THE "ISSUER") OF RATED, SECURED, SENIOR, LISTED, TRANSFERABLE, REDEEMABLE, NON- CONVERTIBLE DEBENTURES OF FACE VALUE ₹ 1000 EACH ("NCDS") FOR AN AMOUNT UPTO ₹ 5,000 LAKHS, HEREINAFTER REFERRED TO AS "BASE ISSUE SIZE" WITH AN OPTION TO RETAIN OVER-SUBSCRIPTION UPTO ₹ 5,000 LAKHS, AGGREGATING UP TO ₹ 10,000 LAKHS, HEREINAFTER REFERRED TO AS THE "OVERALL ISSUE SIZE" (COLLECTIVELY THE "ISSUE"). 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 THE RULES MADE THEREUNDER, AS AMENDED AND THE SEBI OPERATIONAL CIRCULAR DATED AUGUST 10, 2021 AS AMENDED. THE ISSUE IS NOT PROPOSED TO BE UNDERWRITTEN. GENERAL RISK Investment in NCDs 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 examination of the issue including the risks involved in it. Specific attention of investors is invited to statement of "Risk Factors" on page 13 of this Prospectus. These risks are not, and are not intended to be, a complete list of all risks and considerations relevant to the NCDs or investor's decision to purchase such securities." ISSUER'S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Prospectus is true and correct in all material aspects and is not misleading, that the opinions and intentions expressed herein are honestly stated and that there are no other facts, the omission of which makes this Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading. 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 "Issue Structure" on page 156. CREDIT RATING Acuite Ratings and Research Limited CRISIL Ratings Limited 708, Lodha Supremus, Lodha iThink Techno Campus, Kanjurmarg CRISIL House, Central Avenue, Hiranandani Business Park, Powai, (East), Mumbai - 400 042 Mumbai 400 076 Tel: +91 22 4929 4000; E-mail: [email protected]; Contact Tel: +91 -22 4040 5800 ; E-mail: [email protected]; Person: Chitra Mohan Contact Person: Krishnan Sitaraman The NCDs proposed to be issued under the Issue have been rated "ACUITE A+ (read as ACUITE A plus) (Outlook: Stable)" for an amount of ₹ 20,000 lakhs by Acuite Ratings and Research Limited vide their rating letter dated May 19, 2022, revalidated as on July 11, 2022 and July 27, 2022 and press release for rating rationale dated May 19, 2022 and "CRISIL A- (read as CRISIL A minus) (Outlook: Stable)" for an amount of ₹ 25,000 lakhs by CRISIL Ratings Limited vide their rating letter dated May 26, 2022, (valid for 180 days) and press release for rating rationale dated May 26, 2022. The ratings provided by Acuite Ratings & Research Limited and CRISIL Ratings Limited are valid as on the date of this Prospectus and shall remain valid on date of the Issue and Allotment of NCDs and the listing of the NCDs on Stock Exchanges. The ratings provided by Acuite Ratings & Research Limited and CRISIL Ratings Limited may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. These ratings are not a recommendation to buy, sell or hold securities and Investors should take their own decisions. Please refer to Annexure II and Annexure III of this Prospectus for the rationale and press release for the above ratings. LISTING The NCDs offered through this Prospectus are proposed to be listed on BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE"). NSE shall be the Designated Stock Exchange. Our Company has received an 'in-principle' approval from BSE and NSE vide their letters dated DCS/BM/PI-BOND/010/22-23 and NSE/LIST/D/2022/0109 respectively. PUBLIC COMMENTS The Draft Prospectus dated August 12, 2022 was filed with the NSE and BSE, both on August 12, 2022, pursuant to the provisions of the SEBI NCS Regulations and to be kept open for public comments for a period of seven Working Days (i.e., until 5 p.m.) on August 23, 2022. LEAD MANAGERS TO THE ISSUE REGISTRAR TO THE ISSUE DEBENTURE TRUSTEE TO THE ISSUE * Sundae Capital Advisors Private Limited Tipsons Consultancy Services Private Link Intime India Private Limited IDBI Trusteeship Services Limited Level 11, Platina, Plot No. C - 59 Limited C 101, 247 Park B S Marg Asian Building, Ground Floor, 17, R. Kamani Marg, 'G' Block, Bandra Kurla Complex 401, Sheraton House, Opp. Ketav Petrol Vikhroli West, Mumbai - 400 083 Ballard Estate, Mumbai - 400 001 Bandra (East), Mumbai - 400 051 Pump, Polytechnic Road, Ambawadi, Telephone : +91 22 4918 6200 Telephone : +91 22 4080 7000 Telephone: +91 22 6884 1336 Ahmedabad - 380015 Email Id : Email Id : [email protected] / E-mail Id: [email protected] Telephone: +91 79 6682 8047/6682 8120 [email protected] [email protected]/ Investor grievance e-mail Id : E-mail Id: [email protected] Contact person: Shanti / [email protected] [email protected] Investor grievance e-mail Id : Gopalkrishnan Investor grievance e-mail Id : [email protected] Contact person: Ashi Sood / Ridima Gulati [email protected] Website: www.linkintime.co.in / [email protected] Website: www.sundaecapital.com Contact person: Neha Jain / Sandeep SEBI registration number: /[email protected] / [email protected] SEBI registration number: INM000012494 Bhansali INR000004058 Contact person : Mr. Nikhil Lohana/Mr. Gaurav Website: www.tipsons.com Jeswani SEBI registration number: Website: www.idbitrustee.com INM000011849 SEBI registration number: IND000000460 ISSUE PROGRAMME ** Issue Opens on Monday, September 05, 2022 Issue Closes on Thursday, September 22, 2022 IDBI Trusteeship Services Limited under Regulation 8 of SEBI NCS Regulations has by its letter dated August 10, 2022 given its consent for its appointment as Debenture Trustee to the Issue and for its name to be included in Prospectus and in all the subsequent periodical communications sent to the holders of the NCDs issued pursuant to the Issue and the same is annexed as Annexure IV in this Prospectus. 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 Prospectus, except that the Issue may close on such earlier date or extended date as may be decided by the Board of Directors of our Company or the Investment and Borrowing 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 a daily national newspaper with wide circulation on or before such earlier or initial date of Issue closure. Applications through the UPI route will be accepted, subject to compliance by the investor with the eligibility criteria and due procedure for UPI applications prescribed by SEBI. 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 Exchange. Further, pending mandate requests for bids placed on the last day of bidding will be validated by 5 PM on one Working Day post the Issue Closing Date. For further details please refer to "General Information" on page 31. A copy of the Prospectus 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 "Material Contracts and Documents for Inspection" on page 250. 1 TABLE OF CONTENTS DEFINITIONS AND ABBREVIATIONS 1 CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET 10 DATA AND CURRENCY OF PRESENTATION FORWARD LOOKING STATEMENTS 12 RISK FACTORS 13 GENERAL INFORMATION 31 CAPITAL STRUCTURE 40 OBJECTS OF THE ISSUE 47 STATEMENT OF TAX BENEFITS 50 INDUSTRY OVERVIEW 63 OUR BUSINESS 73 HISTORY AND CERTAIN CORPORATE MATTERS 87 KEY REGULATIONS AND POLICIES 90 OUR MANAGEMENT 104 OUR PROMOTER 115 FINANCIAL INFORMATION 119 KEY OPERATIONAL AND FINANCIAL PARAMETERS 120 FINANCIAL INDEBTEDNESS 122 OUTSTANDING LITIGATIONS 145 MATERIAL DEVELOPMENTS 155 ISSUE STRUCTURE 156 TERMS OF THE ISSUE 174 ISSUE PROCEDURE 189 OTHER REGULATORY AND STATUTORY DISCLOSURES 219 MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION 236 MATRIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 250 DECLARATION 252 ANNEXURE I - DAY COUNT CONVENTION 253 ANNEXURE II - ACUITE RATING LETTER AND RATIONALE 255 ANNEXURE III - CRISIL RATING LETTER AND RATIONALE 303 ANNEXURE IV - CONSENT OF THE DEBENTURE TRUSTEE 312 1 DEFINITIONS AND ABBREVIATIONS Unless the context otherwise indicates, all references in this Prospectus to "the Issuer", "our Company", "the Company" or "UCL" are to U GRO Capital Limited, a public limited company incorporated under the Companies Act, 1956, as amended and replaced from time to time, having its registered office at Equinox Business Park, Tower 3, Fourth Floor, LBS Road, Kurla Mumbai - 400 070, Maharashtra, India. Unless the context otherwise indicates, all references in this Prospectus to "we" or "us" or "our" are to our Company. Unless the context otherwise indicates or implies, the following terms have the following meanings in this Prospectus, and references to any legislation, act, regulation, rules, guidelines or policies shall be to such legislation, act, regulation, rules, guidelines or policies as amended from time to time. COMPANY RELATED TERMS Term Description "we" or "us" or "our" Unless the context otherwise indicates or implies, refers to our Company ₹ / Rs. / INR / Rupees / The lawful currency of the Republic of India Indian Rupees Articles / Articles of Articles of Association of our Company Association / AoA Assets Liability Assets Liability Committee as constituted by the Board of Directors Committee or ALCO Audit Committee Audit committee as constituted by the Board of Directors Board/ Board of Board of Directors of our Company or a duly constituted committee thereof Directors Company Secretary and The company secretary and compliance officer of our Company, Ms. Namrata Compliance Officer Sajnani Corporate Social Corporate Social Responsibility Committee as constituted by the Board of Directors Responsibility Committee Director(s) Director of our Company, unless otherwise specified Equity Shares Equity shares of our Company of face value of ₹10 each Investment and Investment and Borrowing Committee as constituted by the Board of Directors Borrowing Committee / IBC Independent Director A Non-Executive, Independent Director as per the Companies Act, 2013 and the SEBI LODR Regulations, who are currently on the Board of our Company Key Managerial The Key Managerial Personnel of the Company appointed in accordance with the Personnel provisions of SEBI ICDR Regulations and the Companies Act, 2013 Memorandum / Memorandum of Association of our Company Memorandum of Association / MoA Nomination and Nomination and remuneration committee as constituted by the Board of Directors Remuneration Committee Promoter Poshika Advisory Services LLP Promoter Group Includes such persons and entities constituting the promoter group of our Company pursuant to Regulation 2 of the SEBI ICDR Regulations Reformatted Financial The Reformatted Statement of Assets and Liabilities of the Company as at March Information 31, 2022, March 31, 2021 and March 31, 2020 and Reformatted Statement of Profit and Loss, the Reformatted Statement of Cash Flows and Reformatted Statement of change in equity for the year ended March 31, 2022, March 31, 2021 and March 31, 2020 Risk Management Risk management committee as constituted by the Board of Directors Committee Registered Office Equinox Business Park, Tower 3, Fourth Floor, LBS Road, Kurla Mumbai - 400 070, Maharashtra, India RoC Registrar of Companies, Maharashtra at Mumbai 1 Term Description Shareholder(s) The holder(s) of Equity Shares of our Company, unless otherwise specified in the context thereof Stakeholders' The stakeholders' relationship committee as constituted by the Board of Directors Relationship Committee Statutory Auditor The current statutory auditors of our Company, M S K A & Associates, Chartered Accountants ISSUE RELATED TERMS Term Description Abridged Prospectus The memorandum containing the salient features of the Prospectus Acknowledgement The slip or document issued by the Designated Intermediary to an Applicant as proof Slip of registration of the Application Form Acuité/ Acuite Acuité Ratings & Research Limited Allotment/ Allot/ The issue and allotment of the NCDs to successful Applicants pursuant to the Issue Allotted Allotment Advice The communication sent to the Allottees conveying details of NCDs allotted to the Allottees in accordance with the Basis of Allotment Allottee(s) The successful Applicant to whom the NCDs are Allotted, either in full or part, pursuant to the Issue Applicant / Investor / A person who applies for the issuance and Allotment of NCDs pursuant to the terms ASBA Applicant of, the Prospectus, the Abridged Prospectus and the Application Form through ASBA process or through UPI Mechanism Application An application to subscribe to the NCDs (whether physical or electronic) offered pursuant to the Issue by submission of a valid Application Form and payment of the Application Amount by any of the modes as prescribed under the Prospectus Application Amount The aggregate value of the NCDs applied for as indicated in the Application Form for the Issue Application Form/ The form in terms of which the Applicant shall make an offer to subscribe to the ASBA Form NCDs 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 Prospectus "ASBA" or An application (whether physical or electronic) to subscribe to the NCDs offered "Application pursuant to the Issue by submission of a valid Application Form and authorising an Supported by Blocked SCSB to block the Application Amount in the ASBA Account or to block the Amount" or "ASBA Application Amount using the UPI Mechanism, where the Bid Amount will be Application" blocked upon acceptance of UPI Mandate Request by retail individual investors which will be considered as the application for Allotment in terms of the Prospectus ASBA Account A bank account maintained by an ASBA Bidder with an SCSB, as specified in the ASBA Form submitted by ASBA Applicants for blocking the Bid Amount mentioned in the ASBA Form and will include a bank account of a retail individual investor linked with UPI, for retail individual investors submitting application value upto ₹ 5,00,000 ASBA Circular Circular no. CIR/DDHS/P/121/2018 issued by SEBI on August 16, 2018 Banker(s) to the Issue Collectively, the Public Issue Account Bank, Sponsor Bank and the Refund Bank Base Issue Size ₹ 5,000 lakhs Basis of Allotment The basis on which NCDs will be allotted to successful Applicants under the Issue and which is described in "Issue Procedure" on page 189. 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 Location for RTA and Designated CDP Locations for CDPs Broker Centres Broker Centres notified by the Stock Exchanges where Applicants can submit the ASBA Forms to a Registered Broker. The details of such Broker Centres, along with the names and contact details of the Trading Members are available on the website of the Stock Exchanges at www.bseindia.com and www.nseindia.com BSE BSE Limited 2 Term Description Category I - • Public financial institutions, scheduled commercial banks, and Indian Institutional Investors multilateral and bilateral development financial institutions which are authorised to invest in the NCDs; Provident funds and pension funds with minimum corpus of ₹25 crore, and superannuation funds and gratuity funds, which are authorised to invest in the NCDs; Alternative Investment Funds subject to investment conditions applicable to them under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, as amended; Resident Venture Capital Funds registered with SEBI; Insurance Companies registered with IRDA; State industrial development corporations; Insurance funds set up and managed by the army, navy, or air force of the Union of India; Insurance funds set up and managed by the Department of Posts, the Union of India; National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of the Government of India published in the Gazette of India; Systemically important non-banking financial companies being non-banking financial companies registered with the Reserve Bank of India and having a net worth of more than ₹ 50,000 Lakhs as per its last audited financial statements; and Mutual Funds registered with SEBI Category II - Non- • Companies within the meaning of Section 2(20) of the Companies Act, 2013; Institutional Investors • Statutory bodies/ corporations and societies registered under the applicable laws in India and authorised to invest in the NCDs; • Co-operative banks and regional rural banks; • Public/private charitable/ religious trusts which are authorised to invest in the NCDs; • Scientific and/or industrial research organisations, which are authorized to invest in the NCDs; • Partnership firms in the name of the partners; • Limited liability partnerships formed and registered under the provisions of the Limited Liability Partnership Act, 2008 (No. 6 of 2009); • Association of Persons; and • Any other incorporated and/ or unincorporated body of persons Category III - High High Net-worth individuals which include Resident Indian individuals or Hindu Net-Worth Individuals Undivided Families through the Karta applying for an amount aggregating to above ₹ 10 Lakh across all series of NCDs in Issue Category IV - Retail Resident Indian individuals or HUFs applying through the Karta, for NCDs for an Individual Investors amount aggregating up to and including ₹ 10 Lakh, across all series of NCDs in the Issue and shall include Retail Individual Investors, who have submitted bid for an amount not more than ₹ 500,000 in any of the bidding options in the Issue (including HUFs applying through their Karta and does not include NRIs) through UPI Mechanism Client ID Client identification number maintained with one of the Depositories in relation to the demat account CDP / Collecting A depository participant, as defined under the Depositories Act, 1996, as amended, Depository Participant and registered under Section 12(1A) of the SEBI Act and who is eligible to procure Applications at the Designated CDP Locations in terms of the SEBI Operational Circular Collecting Registrar Registrar and share transfer agents registered with SEBI and eligible to procure and Share Transfer Applications, at the Designated RTA Locations Agents or CRTAs Coupon / Interest Rate The aggregate rate of interest payable in connection with the NCDs in accordance with this Prospectus. Please see the section titled "Issue Structure" on page 156. 3 This is an excerpt of the original content. To continue reading it, access the original document here .

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