Draft Prospectus - India Infoline Finance Limited

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India Infoline Investment Services Limited Kamala Mills Compound, Lower Parel (W), Mumbai – 400 013 Tel: + 91 22 4080 4686 Fax: + 91 22 4080 4711 Email: ashish.aggarwal@hdfcbank.com Contact Person: Mr. Ashish Aggarwal Website: www.hdfcbank.com Punjab National Bank B.O.Worli Naka, 205, Dr. AB Road, Worli, Mumbai 400 018 Tel: + 91 22 2493 1561/2 Fax: + 91 22 2493 8352 Email: bo0564@pnb.co.in Contact Person: Mr. R.K. Sikka Website: www.pnbindia.com Impersonation Sir PM Road, Fort, Mumbai – 400 001 Tel: + 91 22 6610 7263/64 Fax: + 91 22 6610 7284/85 Email: ketan.dani@axisbank.com Contact Person: Mr. Ketan Dani Website: www.axisbank.com ICICI Bank Limited ICICI Bank Towers, Bandra Kurla Complex, Mumbai – 400 051 Tel: + 91 22 2653 8951 Fax: + 91 22 2653 1062 Email: natasha.elavia@icicibank.com Contact Person: Ms. Natasha Elavia Website: www.icicibank.com Fort, Mumbai – 400 001 Tel: + 91 22 2675 7232 Fax: + 91 22 2652 7929 Email: joseph.george@sc.com Contact Person: Mr. Joseph George Website: www.standardchartered.com Syndicate Bank First Floor, Sarojini House, 6, Bhagwan Dass Road, New Delhi – 110 001 Tel: + 91 11 2338 1937 Fax: + 91 11 2338 1943 Email: dl.9095delcorpfin@syndicatebank.co.in Contact Person: Mr. Laxmi Narayan Rao Website: www.syndicatebank.in As a matter of abundant precaution, attention of the Investors is specifically drawn to the provisions of sub-section (1) of section 68A of the Act, relating to punishment for fictitious applications. Minimum Subscription If our Company does not receive the minimum subscription of 75 % of the Base Issue, i.e. ` 2812.50 million, prior to Allotment, the entire subscription shall be refunded to the Applicants within 30 days from the date of closure of the Issue. If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to refund the subscription amount, our Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act. Credit Rating and Rating Rationale ICRA The NCDs proposed to be issued under this Issue have been rated ‘[ICRA]AA- (stable)’ by ICRA for an amount of upto `7,500 million vide its letter dated July 19, 2011. The rating of the NCDs by ICRA indicates a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. The modifier “-” (minus) reflects the comparative standing within the category. The rationale for the above-mentioned credit rating issued by ICRA is as follows: The rating upgrade (please refer to page 63 of this Draft Prospectus for past ratings by ICRA) reflects the enhanced scale and diversification of the lending book, comfortable asset quality indicators, modest gearing level, comfortable ALM profile, adequate networth for the current scale of operations and improving profitability of IIISL. The rating also factors in the parentage of IIFL, the strong integration and continued support expected from the parent – given the group’s focus in ramping up the NBFC operations, the group’s strong networth, adequate experience and established presence in retail broking and institutional broking business with improving market share, diversified business revenues, robust risk management systems and comfortable liquidity profile. The ratings are constrained by the cyclical nature of IIFL’s primary business being dependent on the domestic capital markets. The ratings remain sensitive to IIFL’s ability to profitably scale up its businesses and the support expected from its parent. CARE The NCDs proposed to be issued under this Issue have been rated ‘CARE AA-' by CARE for an amount of upto `7,500 million vide its letter dated July 19, 2011. The rating of NCDs by CARE indicates instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. The rationale for the above-mentioned credit rating issued by CARE is as follows: 5
India Infoline Investment Services Limited The rating factors in the implicit support that IIISL derives from its parent India Infoline Limited (IIFL) in terms of strong brand linkages and large retail distribution network. The rating also factors in comfortable capital adequacy position, good profitability and asset quality of the Company. The rating also reflects the presence of an experienced management team and IIISL’s focus on secured lending segments. The rating is however constrained by seasoning of loan portfolio, moderate product, diversication in the lending portfolio and relatively high concentration risk in capital market lending portfolio. IIISL’s ability to maintain its asset quality and profitability while scaling up operations in a competitive environment are the key rating sensitivities. The ratings provided by ICRA and/or CARE may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. Consents The written consents of our Promoter, Directors of our Company, Company Secretary and Compliance Officer, our Statutory Auditor, the legal advisor, the Lead Managers, the Syndicate Members*, the Registrar to the Issue, Escrow Collection Bank(s)*, Refund Bank*, Credit Rating Agencies, the Bankers to our Company, the Debenture Trustee, and the Lead Brokers* to act in their respective capacities, have been obtained and will be filed along with a copy of the Prospectus with the RoC as required under Section 58 and 60 of the Companies Act and such consents have not been withdrawn up to the time of delivery of this Draft Prospectus with Stock Exchanges. *The aforesaid will be appointed prior to filing of the Prospectus with the RoC and their consents as above would be obtained prior to the filing of the Prospectus with the RoC. Utilisation of Issue proceeds Boards of Directors of our Company certify that: all monies received out of the Issue shall be credited/transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Act; details of all monies utilised out of the Issue referred above shall be disclosed under an appropriate separate head in our balance sheet indicating the purpose for which such monies have been utilised; details of all unutilised monies out of the Issue, if any, shall be disclosed under an appropriate head in our balance sheet indicating the form in which such unutilised monies have been invested; we shall utilize the Issue proceeds only upon creation of security as stated in this Draft Prospectus in the chapter titled “Issue Structure” beginning on page 188 of this Draft Prospectus; and the Issue proceeds shall not be utilized towards full or part consideration for the purchase or any other acquisition, inter alia by way of a lease, of any property. However the proceeds may be used for advancing loans with securities as collaterals. Issue Programme The subscription list for the Issue shall remain open for subscription at the commencement of banking hours and shall close at the close of banking hours on the dates indicated below or earlier or on such date, as may be decided at the discretion of the Board of Directors or any committee of the Board of Directors of our Company subject to necessary approvals. ISSUE OPENS ON [•], 2011 ISSUE CLOSES ON [•], 2011 In the event of early closure of subscription list of the Issue, our Company shall ensure that notice of such early closure is given on the early date of closure through advertisement/s in a leading national daily newspaper. 6
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Draft Prospectus - India Infoline Finance Limited

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