DRAFT RED HERRING PROSPECTUS

Dated November 28, 2019

(This Draft Red Herring Prospectus will be updated upon filing with the RoC)
Please read section 32 of the Companies Act, 2013
Book Built Offer

Home First Finance Company India Limited

Our Company was incorporated as ‘Home First Finance Company India Private Limited’ at Bengaluru, Karnataka as a private limited company under the Companies Act, 1956, pursuant to the certificate of incorporation dated
February 3, 2010 issued by the Registrar of Companies, Karnataka at Bengaluru. Subsequently, our Company was converted to a public limited company and consequently the name of our Company was changed to ‘Home First
Finance Company India Limited’ and a fresh certificate of incorporation dated March 14, 2018 was issued by the Registrar of Companies, Maharashtra at Mumbai (“RoC”). For details in relation to the change in the registered office
of our Company, see “History and Certain Corporate Matters” beginning on page 156.
Registered and Corporate Office: 511, Acme Plaza, Andheri Kurla Road, Andheri East, Mumbai, Maharashtra 400 059, India; Telephone: +91 22 6694 0386
Contact Person: Shreyans Bachhawat, Company Secretary and Compliance Officer
E-mail: corporate@homefirstindia.com; Website: www.homefirstindia.com
Corporate Identity Number: U65990MH2010PLC240703
PROMOTERS OF OUR COMPANY: TRUE NORTH FUND V LLP AND AETHER (MAURITIUS) LIMITED
INITIAL PUBLIC OFFER OF UP TO [●] EQUITY SHARES OF FACE VALUE OF ₹ 2 EACH (“EQUITY SHARES”) OF HOME FIRST FINANCE COMPANY INDIA LIMITED (“COMPANY”) FOR CASH AT
A PRICE OF ₹ [●] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ₹ [●] PER EQUITY SHARE) (“OFFER PRICE”) AGGREGATING UP TO ₹ 15,000 MILLION COMPRISING A FRESH
ISSUANCE OF UP TO [●] EQUITY SHARES AGGREGATING UP TO ₹ 4,000 MILLION BY OUR COMPANY (“FRESH ISSUE”) AND AN OFFER FOR SALE OF UP TO [●] EQUITY SHARES AGGREGATING
UP TO ₹ 11,000 MILLION COMPRISING UP TO [●] EQUITY SHARES AGGREGATING UP TO ₹ 4,984 MILLION BY TRUE NORTH FUND V LLP (“TN V LLP”), UP TO [●] EQUITY SHARES
AGGREGATING UP TO ₹ 3,322 MILLION BY AETHER (MAURITIUS) LIMITED (“AETHER” AND TOGETHER WITH TN V LLP, THE “PROMOTER SELLING SHAREHOLDERS”), UP TO [●] EQUITY
SHARES AGGREGATING UP TO ₹ 1,764 MILLION BY BESSEMER INDIA CAPITAL HOLDINGS II LTD. (THE “INVESTOR SELLING SHAREHOLDER”), UP TO [●] EQUITY SHARES AGGREGATING
UP TO ₹ 560 MILLION BY P. S. JAYAKUMAR, UP TO [●] EQUITY SHARES AGGREGATING UP TO ₹ 359 MILLION BY MANOJ VISWANATHAN AND UP TO [●] EQUITY SHARES AGGREGATING UP
TO ₹ 11 MILLION BY BHASKAR CHAUDHRY (P. S. JAYAKUMAR, MANOJ VISWANATHAN AND BHASKAR CHAUDHRY, THE “INDIVIDUAL SELLING SHAREHOLDERS”, AND TOGETHER WITH
THE PROMOTER SELLING SHAREHOLDERS AND THE INVESTOR SELLING SHAREHOLDER, THE “SELLING SHAREHOLDERS”, AND SUCH EQUITY SHARES OFFERED BY THE SELLING
SHAREHOLDERS, THE “OFFERED SHARES”) (“OFFER FOR SALE” AND TOGETHER WITH THE FRESH ISSUE, THE “OFFER”). THE OFFER SHALL CONSTITUTE [●]% OF THE POST-OFFER
PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.
OUR COMPANY MAY CONSIDER A PRIVATE PLACEMENT OF UP TO [●] EQUITY SHARES FOR CASH CONSIDERATION AGGREGATING UP TO ₹ 1,600 MILLION, AT ITS DISCRETION, PRIOR TO
FILING OF THE RED HERRING PROSPECTUS WITH THE ROC (“PRE-IPO PLACEMENT”). IF THE PRE-IPO PLACEMENT IS UNDERTAKEN, THE AMOUNT RAISED FROM THE PRE-IPO
PLACEMENT WILL BE REDUCED FROM THE FRESH ISSUE, SUBJECT TO THE MINIMUM OFFER SIZE CONSTITUTING AT LEAST 10% OF THE POST-OFFER PAID-UP EQUITY SHARE CAPITAL
OF OUR COMPANY.
THE FACE VALUE OF EQUITY SHARES IS ₹ 2 EACH. THE OFFER PRICE IS [●] TIMES THE FACE VALUE OF THE EQUITY SHARES. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE
DECIDED BY OUR COMPANY AND THE PROMOTER SELLING SHAREHOLDERS IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS AND WILL BE ADVERTISED IN ALL EDITIONS
OF ENGLISH NATIONAL DAILY NEWSPAPER, [●], ALL EDITIONS OF HINDI NATIONAL DAILY NEWSPAPER, [●] AND MUMBAI EDITIONS OF THE MARATHI DAILY NEWSPAPER [●] (MARATHI
BEING THE REGIONAL LANGUAGE OF MAHARASHTRA, WHERE OUR REGISTERED AND CORPORATE OFFICE IS LOCATED) EACH WITH WIDE CIRCULATION, AT LEAST TWO WORKING
DAYS PRIOR TO THE BID/OFFER OPENING DATE AND SHALL BE MADE AVAILABLE TO BSE LIMITED (“BSE”) AND NATIONAL STOCK EXCHANGE OF INDIA LIMITED (“NSE”, AND TOGETHER
WITH BSE, THE “STOCK EXCHANGES”) FOR THE PURPOSE OF UPLOADING ON THEIR RESPECTIVE WEBSITES.
In case of any revision to the Price Band, the Bid/Offer Period will be extended by at least three additional Working Days following such revision of the Price Band, subject to the Bid/Offer Period not exceeding 10 Working Days.
In cases of force majeure, banking strike or similar circumstances, our Company and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers, may for reasons to be recorded in writing, extend the
Bid/Offer Period for a minimum of three Working Days, subject to the Bid/Offer Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated
by notification to the Stock Exchanges, by issuing a public notice, and also by indicating the change on the respective websites of the Book Running Lead Managers and at the terminals of the Syndicate Members and by intimation
to Self-Certified Syndicate Banks (“SCSBs”), other Designated Intermediaries and the Sponsor Bank, as applicable.
This Offer is being made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”) read with Regulation 31 of the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018, as amended (“SEBI ICDR Regulations”). The Offer is being made in accordance with Regulation 6(1) of the SEBI ICDR Regulations and through a Book Building Process wherein not more
than 50% of the Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”, and such portion, the “QIB Portion”). Our Company and the Promoter Selling Shareholders may, in
consultation with the Book Running Lead Managers, allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations (“Anchor Investor Portion”), out of which
at least one-third shall be available for allocation to domestic Mutual Funds only, subject to valid Bids being received from the domestic Mutual Funds at or above the Anchor Investor Allocation Price. Further, 5% of the Net QIB
Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders other than Anchor Investors,
including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not less than 15% of the Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less
than 35% of the Offer shall be available for allocation to RIBs (defined hereinafter) in accordance with SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. All potential Bidders, other than
Anchor Investors, are required to mandatorily utilise the Application Supported by Blocked Amount (“ASBA”) process by providing details of their respective bank account (including UPI ID (defined hereinafter) in case of RIBs)
which will be blocked by the SCSBs, to participate in the Offer. Anchor Investors are not permitted to participate in the Anchor Investor Portion through the ASBA process. For details, see “Offer Procedure” beginning on page
326.
RISKS IN RELATION TO THE FIRST OFFER
This being the first public issue of Equity Shares of our Company, there has been no formal market for the Equity Shares. The face value of each Equity Share is ₹ 2. The Floor Price, Cap Price and Offer Price (determined and
justified by our Company and the Promoter Selling Shareholders in consultation with the Book Running Lead Managers, in accordance with the SEBI ICDR Regulations, and on the basis of the assessment of market demand for
the Equity Shares by way of the Book Building Process as stated in “Basis for Offer Price” beginning on page 80) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No
assurance can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISK
Investments in equity and equity-related securities involve a degree of risk and Bidders should not invest any funds in the Offer unless they can afford to take the risk of losing their investment. Bidders are advised to read the risk
factors carefully before taking an investment decision in the Offer. For taking an investment decision, Bidders must rely on their own examination of our Company and the Offer, including the risks involved. The Equity Shares in
the Offer have neither been recommended, nor approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents of this Draft Red Herring Prospectus. Specific
attention of the Bidders is invited to “Risk Factors” beginning on page 22.
COMPANY’S AND SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company and the Offer, which is material in the context
of the Offer, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly
held and that there are no other facts, the omission of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.
Further, each of the Selling Shareholder accepts responsibility for and confirms only statements expressly made by such Selling Shareholder in this Draft Red Herring Prospectus solely in relation to itself and its respective portion
of the Offered Shares and assumes responsibility that such statements are true and correct in all material respects and not misleading in any material respect. The Selling Shareholders assume no responsibility for any other statements,
including, inter alia, any of the statements made by or relating to our Company, or the other Selling Shareholders or in relation to the Company’s business in this Draft Red Herring Prospectus.
LISTING
The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on BSE and NSE. Our Company has received ‘in-principle’ approvals from BSE and NSE for the listing of the Equity Shares pursuant to
letters dated [●] and [●], respectively. For the purposes of the Offer, the Designated Stock Exchange shall be [●]. A copy of the Red Herring Prospectus and the Prospectus shall be delivered to the RoC for filing in accordance
under Section 26(4) and Section 32 of the Companies Act. For details of the material contracts and documents available for inspection from the date of the Red Herring Prospectus up to the Bid/Offer Closing Date, see “Material
Contracts and Documents for Inspection” beginning on page 346.
BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE OFFER

Axis Capital Limited Credit Suisse Securities (India) Private ICICI Securities Limited Kotak Mahindra Capital Company Karvy Fintech Private Limited
1st Floor, Axis House Limited ICICI Centre Limited (formerly known as KCPL Advisory
C-2, Wadia International Centre 9th Floor, Ceejay House H.T. Parekh Marg 1st Floor, 27 BKC Services Private Limited)
P.B. Marg, Worli Plot F, Shivsagar Estate Churchgate Plot No. 27, “G” Block Karvy Selenium Tower B
Mumbai 400 025 Dr. Annie Besant Road Mumbai 400 020 Bandra Kurla Complex Plot 31-32, Gachibowli
Maharashtra, India Worli, Mumbai 400 018 Maharashtra, India Bandra (East) Financial District, Nanakramguda
Tel: +91 22 4325 2183 Maharashtra, India Tel: +91 22 2288 2460 Mumbai 400 051 Hyderabad 500 032
E-mail: hffl.ipo@axiscap.in Tel: +91 22 6777 3777 E-mail: hffl.ipo@icicisecurities.com Maharashtra, India Telangana, India
Website: www.axiscapital.co.in E-mail: list.hffcipo@credit-suisse.com Website: www.icicisecurities.com Tel: +91 22 4336 0000 Tel: +91 40 6716 2222
Investor grievance ID: Website: www.credit- Investor grievance ID: E-mail: hffc.ipo@kotak.com E-mail: hffcl.ipo@karvy.com
complaints@axiscap.in suisse.com/in/en/investment - customercare@icicisecurities.com Investor Grievance E-mail: Investor grievance E-mail:
Contact person: Sagar Jatakiya banking/regional-presence/asia- Contact person: Sameer Purohit/ Nidhi kmccredressal@kotak.com einward.ris@karvy.com
SEBI registration number: pacific/india/ipo.html Wangnoo Website: www.investmentbank.kotak.com Website: www.karisma.karvy.com
INM000012029 Investor grievance ID: SEBI registration number: INM000011179 Contact Person: Ganesh Rane Contact Person: M Murali Krishna
list.igcellmerbnkg@credit-suisse.com SEBI Registration No.: INM000008704 SEBI Registration No.:
Contact Person: Rishi Agrawal INR000000221
SEBI Registration Number: INM000011161
BID/OFFER PROGRAMME
BID/OFFER OPENS ON* [●]
BID/OFFER CLOSES ON** [●]
* Our Company and the Promoter Selling Shareholders may, in consultation with the Book Running Lead Managers, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations.
The Anchor Investor Bid/Offer Period shall be one Working Day prior to the Bid/Offer Opening Date.
** Our Company and the Promoter Selling Shareholders may, in consultation with the Book Running Lead Managers, consider closing the Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer
Closing Date in accordance with the SEBI ICDR Regulations.
(This page is intentionally left blank)
 TABLE OF CONTENTS

SECTION I: GENERAL ........................................................................................................................................................... 1

DEFINITIONS AND ABBREVIATIONS ............................................................................................................................... 1
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ......................... 12
FORWARD-LOOKING STATEMENTS .............................................................................................................................. 16
SUMMARY OF THE OFFER DOCUMENT ........................................................................................................................ 17
SECTION II: RISK FACTORS .............................................................................................................................................. 22
SECTION III: INTRODUCTION .......................................................................................................................................... 43
THE OFFER ........................................................................................................................................................................... 43
SUMMARY OF FINANCIAL INFORMATION .................................................................................................................. 45
GENERAL INFORMATION................................................................................................................................................. 49
CAPITAL STRUCTURE ....................................................................................................................................................... 57
OBJECTS OF THE OFFER ................................................................................................................................................... 76
BASIS FOR OFFER PRICE ................................................................................................................................................... 80
STATEMENT OF SPECIAL TAX BENEFITS ..................................................................................................................... 83
SECTION IV: ABOUT OUR COMPANY ............................................................................................................................ 87
INDUSTRY OVERVIEW...................................................................................................................................................... 87
OUR BUSINESS .................................................................................................................................................................. 132
KEY REGULATIONS AND POLICIES IN INDIA............................................................................................................. 151
HISTORY AND CERTAIN CORPORATE MATTERS ..................................................................................................... 156
OUR MANAGEMENT ........................................................................................................................................................ 161
OUR PROMOTERS AND PROMOTER GROUP............................................................................................................... 176
OUR GROUP COMPANY .................................................................................................................................................. 180
DIVIDEND POLICY ........................................................................................................................................................... 182
SELECTED STATISTICAL INFORMATION ................................................................................................................... 183
SECTION V: FINANCIAL INFORMATION..................................................................................................................... 204
RESTATED FINANCIAL INFORMATION ....................................................................................................................... 204
OTHER FINANCIAL INFORMATION .............................................................................................................................. 272
FINANCIAL INDEBTEDNESS .......................................................................................................................................... 273
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
.............................................................................................................................................................................................. 275
SECTION VII: LEGAL AND OTHER INFORMATION ................................................................................................. 298
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ........................................................................... 298
GOVERNMENT AND OTHER APPROVALS .................................................................................................................. 301
OTHER REGULATORY AND STATUTORY DISCLOSURES ....................................................................................... 303
SECTION VIII: OFFER INFORMATION ......................................................................................................................... 318
TERMS OF THE OFFER ..................................................................................................................................................... 318
OFFER STRUCTURE ......................................................................................................................................................... 323
OFFER PROCEDURE ......................................................................................................................................................... 326
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ..................................................................... 340
SECTION IX: DESCRIPTION OF EQUITY SHARES AND TERMS OF ARTICLES OF ASSOCIATION ............. 341
SECTION X: OTHER INFORMATION ............................................................................................................................. 346
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ............................................................................. 346
DECLARATION .................................................................................................................................................................... 348

(i)
 SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates or
implies, or unless otherwise specified, shall have the meaning as provided below. References to any legislations, acts,
regulations, rules, guidelines, circulars, notifications, clarifications or policies shall be to such legislations, acts, regulations,
rules, guidelines or policies as amended, updated, supplemented, re-enacted or modified, from time to time, and any reference
to a statutory provision shall include any subordinate legislation made, from time to time, under such provision.

The words and expressions used in this Draft Red Herring Prospectus, but not defined herein shall have the meaning ascribed
to such terms under the SEBI ICDR Regulations, the Companies Act, the SCRA, and the Depositories Act and the rules and
regulations made thereunder.

The terms not defined herein but used in “Statement of Special Tax Benefits”, “Industry Overview”, “Key Regulations and
Policies in India”, “Restated Financial Information”, “Outstanding Litigation and Material Developments”, “Description of
Equity Shares and Terms of Articles of Association” and “Offer Procedure” beginning on pages 83, 87, 151, 204, 298, 341, and
326, respectively, shall have the meanings ascribed to such terms in these respective sections.

General Terms

Term Description
“our Company”, “the Issuer”, Home First Finance Company India Limited, a public limited company incorporated under
“Home First”, “we”, “us” or the Companies Act, 1956 and having its registered office at 511, Acme Plaza, Andheri Kurla
“our” Road, Andheri East, Mumbai, Maharashtra 400 059, India

Company Related Terms

Term Description
Aether Aether (Mauritius) Limited
Articles of Association/AoA/ Articles of association of our Company, as amended from time to time
Articles
Audit Committee Audit committee of our Board, as described in “Our Management - Committees of the Board”
beginning on page 167
Auditors/Statutory Auditors Statutory auditors of our Company, being Walker Chandiok & Co LLP, Chartered
Accountants
Bessemer Bessemer India Capital Holdings II Ltd.
Board/Board of Directors Board of Directors of our Company or a duly constituted committee thereof
Chairman Chairman of our Company
Chief Executive Officer/ CEO Chief executive officer of our Company
Chief Financial Officer/CFO Chief financial officer of our Company
Committee(s) Duly constituted committee(s) of our Board of Directors
Compliance Officer Compliance officer of our Company
Corporate Social Responsibility Corporate social responsibility committee of our Board, as described in “Our Management -
Committee Committees of the Board” beginning on page 167
Director(s) Director(s) on the Board of our Company
Equity Shares Unless otherwise stated, equity shares of our Company bearing face value of ₹ 2 each
ESOP 2012 Employee Stock Option Scheme, 2012, as amended
ESOP II Employee Stock Option Scheme II of the Company, as amended
ESOP Schemes Collectively, the ESOP 2012 and ESOP II
Executive Director(s) Executive director(s) of our Company
Group Company Company as identified in “Our Group Company” beginning on page 180
Independent Director(s) Independent director(s) on our Board and eligible to be appointed as independent directors
under the provisions of the Companies Act and the SEBI Listing Regulations. For details of
the Independent Directors, see “Our Management” beginning on page 161
Inter-se Agreement Inter-se agreement dated November 20, 2019 between TN V LLP and Aether
IPO Committee The IPO committee of our Board
Key Managerial Personnel Key managerial personnel of our Company in terms of Regulation 2(1)(b) of the SEBI ICDR
Regulations, as described in “Our Management - Key Managerial Personnel” beginning on
page 173
Memorandum of Association/ Memorandum of association of our Company, as amended from time to time
MoA

1
 Term Description
Nomination and Remuneration Nomination and remuneration committee of our Board, as described in “Our Management -
Committee/NRC Committee Committees of the Board” beginning on page 167
Nominee Director Nominee director on our Board
Non-Executive Director(s) Non-executive Director(s) of our Company
Preference Shares Together, the Series A CCPS and Series B CCPS
Promoters Promoters of our Company, being, TN V LLP and Aether
Promoter Group Entities constituting the promoter group of our Company in terms of Regulation 2(1)(pp) of
the SEBI ICDR Regulations, as described in “Our Promoters and Promoter Group”
beginning on page 176
Registered and Corporate Registered and corporate office of our Company located at 511, Acme Plaza, Andheri Kurla
Office Road, Andheri East, Mumbai, Maharashtra – 400 059, India
Registrar of Companies/RoC Registrar of Companies, Maharashtra at Mumbai
Restated Financial Information Our restated financial statements of assets and liabilities as at and for the six months ended
September 30, 2019 and September 30, 2018 and Financial Years ended March 31, 2019,
March 31, 2018 and March 31, 2017 and our restated statements of profit and loss and cash
flow for the six months ended September 30, 2019 and September 30, 2018 and Financial
Years ended March 31, 2019, March 31, 2018 and March 31, 2017, together with the
annexures and notes thereto and the examination report, thereon, as prepared and presented
in accordance with Ind AS, in each case restated in accordance with the requirements of
Section 26 of the Companies Act, the SEBI ICDR Regulations and the Guidance Note on
“Reports in Company Prospectuses (Revised 2019)” issued by ICAI. The restated financial
statements for the years ended March 31, 2019, March 31, 2018 and March 31, 2017 has been
prepared on Proforma IND AS basis in accordance with requirements of SEBI Circular
SEBI/HO/CFD/DIL/CIR/P/2016/47 dated 31 March 2016 and the Guidance Note on “Reports
in Company Prospectuses (Revised 2019)” issued by ICAI.
Series A CCPS 1% series A compulsory convertible preference shares previously issued by our Company
Series B CCPS 1% series B compulsory convertible preference shares previously issued by our Company
Shareholder(s) Equity shareholder(s) of our Company from time to time
Shareholders’ Agreement/ SHA Shareholders’ Agreement dated March 20, 2017 between TN V LLP, Aether, our Company,
Bessemer, P. S. Jayakumar, Manoj Viswanathan and Bhaskar Chaudhry, read with the
amendment agreement dated November 26, 2019
Share Purchase and Share Share Purchase and Share Subscription Agreement dated March 20, 2017 between TN V LLP,
Subscription Agreement/ Aether, Jaithirth Rao, Jaithirth Rao and Kotak Mahindra Trusteeship Services Limited (in
SPSSA their capacity as trustees of Jaithirth Rao 2012 Trust), Bessemer, our Company, P. S.
Jayakumar, Manoj Viswanathan and Bhaskar Chaudhry
Stakeholders’ Relationship Stakeholders’ relationship committee of our Board, as described in “Our Management -
Committee Committees of the Board” beginning on page 167
TN V LLP True North Fund V LLP

Offer Related Terms

Term Description
Acknowledgement Slip The slip or document issued by the relevant Designated Intermediary(ies) to a Bidder as proof
of registration of the Bid cum Application Form
Allot, Allotment or Allotted Unless the context otherwise requires, allotment (in case of the Fresh Issue) or transfer (in
case of the Offer for Sale), of the Equity Shares pursuant to the Offer to the successful Bidders
Allotment Advice A note or advice or intimation of Allotment sent to the successful Bidders who have been or
are to be Allotted Equity Shares after the Basis of Allotment has been approved by the
Designated Stock Exchange
Allottee A successful Bidder to whom the Equity Shares are Allotted
Anchor Investor A Qualified Institutional Buyer, applying under the Anchor Investor Portion in accordance
with the requirements specified in the SEBI ICDR Regulations and the Red Herring
Prospectus and who has Bid for an amount of at least ₹ 100 million
Anchor Investor Allocation The price at which Equity Shares will be allocated to the Anchor Investors in terms of the
Price Red Herring Prospectus, which will be decided by our Company and the Promoter Selling
Shareholders, in consultation with the Book Running Lead Managers
Anchor Investor Application The application form used by an Anchor Investor to make a Bid in the Anchor Investor Portion
Form and which will be considered as an application for Allotment in terms of the Red Herring
Prospectus and the Prospectus
Anchor Investor Bid/Offer One Working Day prior to the Bid/Offer Opening Date, on which Bids by Anchor Investors
Period shall be submitted and allocation to Anchor Investors shall be completed

2
 Term Description
Anchor Investor Offer Price The final price at which the Equity Shares will be Allotted to the Anchor Investors in terms
of the Red Herring Prospectus and the Prospectus, which price will be equal to or higher than
the Offer Price but not higher than the Cap Price.

The Anchor Investor Offer Price will be decided by our Company and the Promoter Selling
Shareholders, in consultation with the Book Running Lead Managers
Anchor Investor Pay-in Date With respect to Anchor Investor(s), the Anchor Investor Bid/Offer Period, and in the event
the Anchor Investor Allocation Price is lower than the Anchor Investor Offer Price, not later
than two Working Days after the Bid/ Offer Closing Date
Anchor Investor Portion Up to 60% of the QIB Portion or up to [●] Equity Shares which may be allocated by our
Company and the Promoter Selling Shareholders, in consultation with the Book Running
Lead Managers, to the Anchor Investors on a discretionary basis in accordance with the SEBI
ICDR Regulations.

One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject
to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor
Allocation Price
Application Supported by An application, whether physical or electronic, used by ASBA Bidders, to make a Bid and
Blocked Amount or ASBA authorising an SCSB to block the Bid Amount in the ASBA Account and will include amounts
blocked by the SCSB upon acceptance of UPI Mandate Request by RIBs using the UPI
Mechanism
ASBA Account A bank account maintained by ASBA Bidder with an SCSB for blocking the Bid Amount
mentioned in the ASBA Form and will include a bank account of RIBs linked with UPI
ASBA Bidders All Bidders except Anchor Investors
ASBA Form An application form, whether physical or electronic, used by ASBA Bidders to submit Bids,
which will be considered as the application for Allotment in terms of the Red Herring
Prospectus and the Prospectus
Axis Axis Capital Limited
Banker(s) to the Offer Collectively, the Escrow Collection Bank, Refund Bank, Public Offer Bank and Sponsor
Bank
Basis of Allotment The basis on which Equity Shares will be Allotted to successful Bidders under the Offer. For
details, see “Offer Procedure” beginning on page 326
Bid An indication to make an offer during the Bid/Offer Period by an ASBA Bidder pursuant to
submission of the ASBA Form, or during the Anchor Investor Bid/Offer Period by an Anchor
Investor, pursuant to submission of the Anchor Investor Application Form, to subscribe to or
purchase the Equity Shares at a price within the Price Band, including all revisions and
modifications thereto as permitted under the SEBI ICDR Regulations and in terms of the Red
Herring Prospectus and the Bid cum Application Form. The term “Bidding” shall be
construed accordingly
Bid/Offer Closing Date Except in relation to any Bids received from the Anchor Investors, the date after which the
Designated Intermediaries will not accept any Bids, being [●].

Our Company and the Promoter Selling Shareholders, in consultation with the Book Running
Lead Managers, may consider closing the Bid/Offer Period for QIBs one Working Day prior
to the Bid/Offer Closing Date in accordance with the SEBI ICDR Regulations
Bid/Offer Opening Date Except in relation to any Bids received from the Anchor Investors, the date on which the
Designated Intermediaries shall start accepting Bids, being [●]
Bid/Offer Period Except in relation to Anchor Investors, the period between the Bid/Offer Opening Date and
the Bid/Offer Closing Date, inclusive of both days, during which Bidders can submit their
Bids, including any revisions thereof, in accordance with the SEBI ICDR Regulations,
provided that such period shall be kept open for a minimum of three Working Days.

Our Company and the Promoter Selling Shareholders, in consultation with the Book Running
Lead Managers, may consider closing the Bid/Offer Period for QIBs one Working Day prior
to the Bid/Offer Closing Date in accordance with the SEBI ICDR Regulations.
Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form and payable
by the Bidder or blocked in the ASBA Account of the ASBA Bidders, as the case maybe,
upon submission of the Bid
Bid cum Application Form Anchor Investor Application Form or the ASBA Form, as the context requires
Bid Lot [●] Equity Shares and in multiples of [●] Equity Shares thereafter

3
 Term Description
Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring
Prospectus and the Bid cum Application Form and unless otherwise stated or implied, which
includes an ASBA Bidder and an Anchor Investor
Bidding Centres The centres at which the Designated Intermediaries shall accept the Bid cum Application
Forms, being the Designated Branches for SCSBs, Specified Locations for the Syndicate,
Broker Centres for Registered Brokers, Designated RTA Locations for RTAs and Designated
CDP Locations for CDPs
Book Building Process Book building process, as provided in Schedule XIII of the SEBI ICDR Regulations, in terms
of which the Offer is being made
Book Running Lead Managers The book running lead managers to the Offer namely, Axis, Credit Suisse, I-Sec and Kotak
or BRLMs
Broker Centres The broker centres notified by the Stock Exchanges where ASBA Bidders can submit the
ASBA Forms to a Registered Broker.

The details of such Broker Centres, along with the names and the contact details of the
Registered Brokers are available on the websites of the Stock Exchanges (www.bseindia.com
and www.nseindia.com)
Cap Price The higher end of the Price Band, above which the Offer Price and Anchor Investor Offer
Price will not be finalised and above which no Bids will be accepted
Client ID The client identification number maintained with one of the Depositories in relation to demat
account
Collecting Depository A depository participant as defined under the Depositories Act, 1996, registered with SEBI
Participant or CDP and who is eligible to procure Bids from relevant Bidders at the Designated CDP Locations
in terms of SEBI circular number CIR/CFD/POLICYCELL/11/2015 dated November 10,
2015 issued by SEBI
Confirmation of Allocation A notice or intimation of allocation of the Equity Shares sent to Anchor Investors, who have
Note or CAN been allocated Equity Shares, after the Anchor Investor Bid/Offer Period
Credit Suisse Credit Suisse Securities (India) Private Limited
CRISIL CRISIL Limited
Cut-off Price The Offer Price finalised by our Company and the Promoter Selling Shareholders, in
consultation with the Book Running Lead Managers which shall be any price within the Price
Band.

Only RIBs (subject to the Bid Amount being up to ₹ 200,000) are entitled to Bid at the Cut-
off Price. QIBs (including Anchor Investors) and Non-Institutional Bidders are not entitled to
Bid at the Cut-off Price
Demographic Details The demographic details of the Bidders including the Bidders’ address, name of the Bidders’
father or husband, investor status, occupation, bank account details, PAN and UPI ID, where
applicable
Designated Branches Such branches of the SCSBs which shall collect the ASBA Forms from relevant Bidders, a
list of which is available on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35,
or at such other website as may be prescribed by SEBI from time to time
Designated CDP Locations Such locations of the CDPs where relevant ASBA Bidders can submit the ASBA Forms.
The details of such Designated CDP Locations, along with names and contact details of the
CDPs eligible to accept ASBA Forms are available on the websites of the Stock Exchanges
(www.bseindia.com and www.nseindia.com)
Designated Date The date on which the Escrow Collection Bank(s) transfer funds from the Escrow Account to
the Public Offer Account or the Refund Account, as the case may be, and the instructions are
issued to the SCSBs (in case of RIBs using UPI Mechanism, instruction issued through the
Sponsor Bank) for the transfer of amounts blocked by the SCSBs in the ASBA Accounts to
the Public Offer Account, in terms of the Red Herring Prospectus and the Prospectus,
following which the Equity Shares will be Allotted in the Offer
Designated Intermediary(ies) Collectively, the members of the Syndicate, sub-syndicate or agents, SCSBs (other than RIBs
using the UPI Mechanism), Registered Brokers, CDPs and RTAs, who are authorised to
collect Bid cum Application Forms from the relevant Bidders, in relation to the Offer
Designated RTA Locations Such locations of the RTAs where relevant ASBA Bidders can submit the ASBA Forms to
RTAs.

4
 Term Description
The details of such Designated RTA Locations, along with names and contact details of the
RTAs eligible to accept ASBA Forms are available on the websites of the Stock Exchanges
(www.bseindia.com and www.nseindia.com)
Designated Stock Exchange [●]
Draft Red Herring Prospectus or This draft red herring prospectus dated November 28, 2019 filed with SEBI and issued in
DRHP accordance with the SEBI ICDR Regulations, which does not contain complete particulars of
the price at which the Equity Shares will be Allotted and the size of the Offer, including any
addenda or corrigenda thereto
Eligible FPI(s) FPI(s) from such jurisdictions outside India where it is not unlawful to make an offer /
invitation under the Offer and in relation to whom the Bid cum Application Form and the Red
Herring Prospectus constitutes an invitation to subscribe to the Equity Shares
Eligible NRI(s) NRI(s) eligible to invest under Schedule 3 and Schedule 4 of the FEMA Rules, from
jurisdictions outside India where it is not unlawful to make an offer or invitation under the
Offer and in relation to whom the Bid cum Application Form and the Red Herring Prospectus
will constitute an invitation to purchase the Equity Shares
Escrow Account(s) The ‘no-lien’ and ‘non-interest bearing’ account(s) opened with the Escrow Collection Bank
and in whose favour the Bidders (excluding the ASBA Bidders) will transfer money through
direct credit/NEFT/RTGS/NACH in respect of the Bid Amount when submitting a Bid
Escrow Collection Bank(s) Bank(s), which are clearing members and registered with SEBI as a banker to an issue under
the SEBI BTI Regulations and with whom the Escrow Account will be opened, in this case
being, [●]
Escrow and Sponsor Bank The escrow and sponsor bank agreement to be entered into between our Company, the Selling
Agreement Shareholders, the Book Running Lead Managers, the Registrar to the Offer, the Banker(s) to
the Offer and the Syndicate Members for, inter alia, collection of the Bid Amounts from the
Anchor Investors, transfer of funds to the Public Offer Account and where applicable, refunds
of the amounts collected from the Anchor Investors, on the terms and conditions thereof, in
accordance with the UPI Circulars
First Bidder The Bidder whose name shall be mentioned in the Bid cum Application Form or the Revision
Form and in case of joint Bids, whose name also appears as the first holder of the beneficiary
account held in joint names
Floor Price The lower end of the Price Band, subject to any revision thereto, at or above which the Offer
Price and the Anchor Investor Offer Price will be finalised and below which no Bids will be
accepted
Fresh Issue Fresh issue of up to [●] Equity Shares aggregating up to ₹ 4,000 million by our Company

Our Company may consider a private placement of up to [●] Equity Shares for cash
consideration aggregating up to ₹ 1,600 million, at its discretion, prior to filing of the Red
Herring Prospectus with the RoC. If the Pre-IPO Placement is undertaken, the amount raised
from the Pre-IPO Placement will be reduced from the Fresh Issue, subject to the minimum
Offer size constituting at least 10% of the post-Offer paid-up Equity Share capital of our
Company
Fugitive Economic Offender An individual who is declared a fugitive economic offender under Section 12 of the Fugitive
Economic Offenders Act, 2018
General Information Document The General Information Document for investing in public issues, prepared and issued in
or GID accordance with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by
SEBI, suitably modified and updated pursuant to, among others, the circular
(CIR/CFD/POLICYCELL/11/2015) dated November 10, 2015, the circular
(CIR/CFD/DIL/1/2016) dated January 1, 2016, the circular
(SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016, the circular
(SEBI/HO/CFD/DIL2/CIR/P/2018/22) dated February 15, 2018, the circular
(SEBI/HO/CFD/DIL2/CIR/P/2018/138) dated November 1, 2018, the circular
(SEBI/HO/CFD/DIL2/CIR/P/2019/50) dated April 3, 2019, the circular
(SEBI/HO/CFD/DIL2/CIR/P/2019/76) dated June 28, 2019 the circular
(SEBI/HO/CFD/DIL2/CIR/P/2019/85) dated July 26, 2019 and the circular
(SEBI/HO/CFD/DCR2/CIR/P/2019/133) dated November 8, 2019, included in “Offer
Procedure” beginning on page 326
ICRA ICRA Limited
Individual Selling Shareholders Together, P. S. Jayakumar, Manoj Viswanathan and Bhaskar Chaudhry
I-Sec ICICI Securities Limited
Investor Selling Shareholder Bessemer
Kotak Kotak Mahindra Capital Company Limited

5
 Term Description
Maximum RIB Allottees The maximum number of RIBs who can be allotted the minimum Bid Lot. This is computed
by dividing the total number of Equity Shares available for Allotment to RIBs by the
minimum Bid Lot
Monitoring Agency [●]
Monitoring Agency Agreement The agreement to be entered into between our Company and the Monitoring Agency
Mutual Fund Portion 5% of the Net QIB Portion or [●] Equity Shares which shall be available for allocation to
Mutual Funds only on a proportionate basis, subject to valid Bids being received at or above
the Offer Price
Mutual Funds Mutual funds registered with SEBI under the Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996
Net Proceeds Proceeds from the Fresh Issue less our Company’s share of the Offer expenses. For further
details, see “Objects of the Offer” beginning on page 76
Net QIB Portion The portion of the QIB Portion less the number of Equity Shares Allotted to the Anchor
Investors
Non-Institutional Bidders or All Bidders that are not QIBs or RIBs and who have Bid for Equity Shares, for an amount of
NIIs more than ₹ 200,000 (but not including NRIs other than Eligible NRIs)
Non-Institutional Portion The portion of the Offer being not less than 15% of the Offer comprising [●] Equity Shares
which shall be available for allocation on a proportionate basis to Non-Institutional Bidders,
subject to valid Bids being received at or above the Offer Price
Non-Resident A person resident outside India, as defined under FEMA and includes NRIs, FPIs and FVCIs
Non-Resident Indians or NRI(s) A non-resident Indian as defined under the FEMA Rules
Offer The initial public offer of up to [●] Equity Shares of face value of ₹ 2 each for cash at a price
of ₹ [●] each (including a share premium of ₹ [●] per Equity Share), aggregating up to ₹
15,000 million, comprising the Fresh Issue and the Offer for Sale
Offer Agreement The offer agreement dated November 28, 2019 entered into between our Company, the
Selling Shareholders and the Book Running Lead Managers, pursuant to which certain
arrangements are agreed to in relation to the Offer
Offer for Sale Offer for Sale of up to [●] Equity Shares aggregating up to ₹ 11,000 million comprising up
to [●] Equity Shares aggregating up to ₹ 4,984 million by TN V LLP, up to [●] Equity Shares
aggregating up to ₹ 3,322 million by Aether, up to [●] Equity Shares aggregating up to ₹
1,764 million by Bessemer, up to [●] Equity Shares aggregating up to ₹ 560 million by P. S.
Jayakumar, up to [●] Equity Shares aggregating up to ₹ 359 million by Manoj Viswanathan
and up to [●] Equity Shares aggregating up to ₹ 11 million by Bhaskar Chaudhry
Offer Price The final price at which Equity Shares will be Allotted to ASBA Bidders in terms of the Red
Herring Prospectus. Equity Shares will be Allotted to Anchor Investors at the Anchor Investor
Offer Price in terms of the Red Herring Prospectus.

The Offer Price will be decided by our Company and the Promoter Selling Shareholders in
consultation with the Book Running Lead Managers on the Pricing Date in accordance with
the Book Building Process and the Red Herring Prospectus
Offer Proceeds The proceeds of the Offer that will be available to our Company and the Selling Shareholders.
For further details on the use of Offer Proceeds from the Fresh Issue, see “Objects of the
Offer” beginning on page 76.
Offered Shares Up to [●] Equity Shares aggregating to ₹ 11,000 million offered by the Selling Shareholders
in the Offer for Sale
Pre-IPO Placement The private placement of up to [●] Equity Shares for cash consideration aggregating up to ₹
1,600 million, which may be undertaken by our Company, at its discretion, to be completed
prior to filing of the Red Herring Prospectus with the RoC at a price as the Board may
determine in accordance with the Companies Act, and other applicable laws. In the event such
private placement is completed, the relevant details will be included in the Red Herring
Prospectus. If the Pre-IPO Placement is undertaken, the amount raised from the Pre-IPO
Placement will be reduced from the Fresh Issue, subject to the minimum Offer size
constituting at least 10% of the post-Offer paid-up Equity Share capital of our Company
Price Band The price band of a minimum price of ₹ [●] per Equity Share (Floor Price) and the maximum
price of ₹ [●] per Equity Share (Cap Price) including revisions thereof.

The Price Band and the minimum Bid Lot for the Offer will be decided by our Company and
the Promoter Selling Shareholders in consultation with the Book Running Lead Managers and
will be advertised in all editions of English national daily newspaper, [●], all editions of Hindi
national daily newspaper, [●] and Mumbai editions of the Marathi daily newspaper [●]
(Marathi being the regional language of Maharashtra, where our Registered and Corporate

6
 Term Description
Office is located) each with wide circulation, at least two Working Days prior to the Bid/Offer
Opening Date and shall be available to the Stock Exchanges for the purpose of uploading on
their respective websites.
Pricing Date The date on which our Company and the Promoter Selling Shareholders, in consultation with
the Book Running Lead Managers, will finalise the Offer Price
Promoter Selling Shareholders Together, TN V LLP and Aether
Prospectus The prospectus to be filed with the RoC on or after the Pricing Date in accordance with
Section 26 of the Companies Act and the SEBI ICDR Regulations containing, inter alia, the
Offer Price that is determined at the end of the Book Building Process, the size of the Offer
and certain other information including any addenda or corrigenda thereto
Public Offer Account The ‘no-lien’ and ‘non-interest bearing’ account opened, in accordance with Section 40(3) of
the Companies Act with the Public Offer Bank to receive monies from the Escrow Account
and the ASBA Accounts on the Designated Date
Public Offer Bank(s) Bank(s) with whom the Public Offer Account for collection of Bid Amounts from Escrow
Accounts and ASBA Accounts will be opened, in this case being [●]
QIB Portion The portion of the Offer (including the Anchor Investor Portion) being not more than 50% of
the Offer comprising [●] Equity Shares which shall be allocated to QIBs (including Anchor
Investors), subject to valid Bids being received at or above the Offer Price
QIBs, QIB Bidders or Qualified Qualified institutional buyers as defined under Regulation 2(1)(ss) of the SEBI ICDR
Institutional Buyers Regulations
Red Herring Prospectus or RHP The red herring prospectus to be issued by our Company in accordance with Section 32 of the
Companies Act, and the provisions of the SEBI ICDR Regulations, which will not have
complete particulars of the price at which the Equity Shares will be offered and the size of the
Offer, including any addenda or corrigenda thereto.

The Bid/Offer Opening Date shall be at least three Working Days after the registration of the
Red Herring Prospectus with the RoC and will become the Prospectus upon filing with the
RoC on or after the Pricing Date
Refund Account(s) The ‘no-lien’ and ‘non-interest bearing’ account opened with the Refund Bank, from which
refunds, if any, of the whole or part, of the Bid Amount to the Anchor Investors shall be made
Refund Bank(s) The Banker(s) to the Offer with whom the Refund Account(s) will be opened and in this case
being, [●]
Registered Brokers The stock brokers registered with the stock exchanges having nationwide terminals, other
than the members of the Syndicate and eligible to procure Bids from relevant Bidders in terms
of SEBI circular number CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI
Registrar Agreement The registrar agreement dated November 27, 2019 entered into between our Company, the
Selling Shareholders and the Registrar to the Offer, in relation to the responsibilities and
obligations of the Registrar to the Offer pertaining to the Offer
Registrar to the Offer or Karvy Fintech Private Limited (formerly known as KCPL Advisory Services Private Limited)
Registrar
Retail Individual Bidder(s), Resident Indian individual Bidders submitting Bids, who have Bid for the Equity Shares for
Retail Individual Investor(s), an amount not more than ₹ 200,000 in any of the bidding options in the Offer (including HUFs
RII(s) or RIB(s) applying through their Karta) and Eligible NRIs
Retail Portion The portion of the Offer being not less than 35% of the Offer comprising [●] Equity Shares,
which shall be available for allocation to RIBs in accordance with the SEBI ICDR
Regulations, subject to valid Bids being received at or above the Offer Price
Revision Form The form used by Bidders to modify the quantity of the Equity Shares or the Bid Amount in
any of their Bid cum Application Forms or any previous Revision Form(s), as applicable.

QIB Bidders and Non-Institutional Bidders are not allowed to withdraw or lower their Bids
(in terms of quantity of Equity Shares or the Bid Amount) at any stage. RIBs can revise their
Bids during the Bid/Offer Period and withdraw their Bids until Bid/Offer Closing Date
RTAs or Registrar and Share The registrar and share transfer agents registered with SEBI and eligible to procure Bids from
Transfer Agents relevant Bidders at the Designated RTA Locations in terms of SEBI circular number
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI and available
on the website of the Stock Exchanges at www.nseindia.com and www.bseindia.com
Self Certified Syndicate The banks registered with SEBI, offering services (i) in relation to ASBA (other than through
Bank(s) or SCSB(s) 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&intmId=34
or

7
 Term Description
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=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=40 or such
other website as may be prescribed by SEBI and updated from time to time
Selling Shareholders Individual Selling Shareholders, Investor Selling Shareholder and Promoter Selling
Shareholders, collectively
Share Escrow Agent The share escrow agent appointed pursuant to the Share Escrow Agreement namely, [●]
Share Escrow Agreement The share escrow agreement to be entered into between our Company, the Selling
Shareholders and the Share Escrow Agent in connection with the transfer of Equity Shares
under the Offer for Sale by the Selling Shareholders and credit of such Equity Shares to the
demat accounts of the Allottees in accordance with the Basis of Allotment
Specified Locations The Bidding centres where the Syndicate shall accept Bid cum Application Forms from
relevant Bidders, a list of which is available on the website of SEBI (www.sebi.gov.in), and
updated from time to time
Sponsor Bank [●], being a Banker to the Offer registered with SEBI, appointed by our Company to act as a
conduit between the Stock Exchanges and NPCI in order to push the mandate collect requests
and / or payment instructions of the RIBs using the UPI Mechanism, in terms of the UPI
Circulars
Syndicate or members of the The Book Running Lead Managers and the Syndicate Members
Syndicate
Syndicate Agreement The syndicate agreement to be entered into between our Company, the Selling Shareholders,
the Registrar and the members of the Syndicate in relation to collection of Bid cum
Application Forms by the Syndicate
Syndicate Members The intermediaries registered with SEBI who are permitted to carry out activities as an
underwriter, namely [●]
Underwriters [●]
Underwriting Agreement The underwriting agreement to be entered into between our Company, the Selling
Shareholders and the Underwriters, on or after the Pricing Date, but prior to filing the
Prospectus with the RoC
UPI Unified payments interface which is an instant payment mechanism, developed by NPCI
UPI Circulars SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 1, 2018, SEBI
circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/50 dated April 3, 2019, SEBI circular no.
SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28, 2019, SEBI circular no.
SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019 SEBI circular no.
SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated November 8, 2019, and any subsequent
circulars or notifications issued by SEBI in this regard
UPI Mandate Request A request (intimating the RIB by way of a notification on the UPI application and by way of
a SMS for directing the RIB to such UPI mobile application) to the RIB initiated by the
Sponsor Bank to authorise blocking of funds on the UPI application equivalent to Bid Amount
and subsequent debit of funds in case of Allotment
UPI Mechanism Process for applications by RIBs submitted with intermediaries with UPI as mode of payment,
in terms of the UPI Circulars
UPI ID ID created on the UPI for single-window mobile payment system developed by the NPCI
Wilful Defaulter A company or person, as the case may be, categorised as a wilful defaulter by any bank or
financial institution or consortium thereof, in accordance with the guidelines on wilful
defaulters issued by the RBI and includes any company whose director or promoter is
categorised as such
Working Day All days on which commercial banks in Mumbai are open for business; provided however,
with reference to (a) announcement of Price Band; and (b) Bid/Offer Period, 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/Offer Closing Date and the listing of the Equity Shares on the Stock Exchanges,
“Working Day” shall mean all trading days of the Stock Exchanges, excluding Sundays and
bank holidays, as per circulars issued by SEBI, including the UPI Circulars

Technical, Industry Related Terms or Abbreviations

Term Description
ALM Asset Liability Management
CLSS Credit-Linked Subsidy Schemes

8
 Term Description
CRAR Capital Adequacy Ratio/Capital to Risk Assets Ratio
DPD Days past due
ECB External Commercial Borrowings
EPFO Employees’ Provident Fund Organisation
EWC Economically Weaker Section
GDP Gross Domestic Product
GFCE Government Final Consumption Expenditure
GFCF Gross Fixed Capital Formation
GNPA Gross Non-Performing Assets
ITC Input Tax Credit
LAP Loan against property
LIG Lower income group
LTV Loan-to-value
MBS Mortgage backed securities
MIG Middle-income group
NIMs Net interest margins
NSSO National Sample Survey Organisation
PFCE Private Final Consumption Expenditure
PMAY Pradhan Mantri Awas Yojana
PMAY-U Pradhan Mantri Awas Yojana – Urban
PMJDY Pradhan Mantri Jan Dhan Yojana
PMJJBY Pradhan Mantri Jeevan Jyoti Bima Yojana
PMSBY Pradhan Mantri Suraksha Bima Yojana

Conventional and General Terms or Abbreviations

Term Description
₹, Rs., Rupees or INR Indian Rupees
AGM Annual general meeting
AIF Alternative Investment Fund as defined in and registered with SEBI under the SEBI AIF
Regulations
AS or Accounting Standards Accounting standards issued by the ICAI
Bn or bn Billion
BSE BSE Limited
Category I AIF AIFs who are registered as “Category I Alternative Investment Funds” under the SEBI AIF
Regulations
Category II AIF AIFs who are registered as “Category II Alternative Investment Funds” under the SEBI AIF
Regulations
Category III AIF AIFs who are registered as “Category III Alternative Investment Funds” under the SEBI AIF
Regulations
Category I FPIs FPIs who are registered as “Category I foreign portfolio investors” under the SEBI FPI
Regulations
Category II FPIs FPIs who are registered as “Category II foreign portfolio investors” under the SEBI FPI
Regulations
CAGR Compounded Annual Growth Rate
CDSL Central Depository Services (India) Limited
CERSAI Central Registry of Securitisation Asset Reconstruction and Security Interest
CIN Corporate Identity Number
Civil Code Code of Civil Procedure, 1908
CLB Company Law Board
Companies Act Companies Act, 2013, as applicable, along with the relevant rules made thereunder
Consolidated FDI Policy Consolidated Foreign Direct Investment Policy notified by the DPIIT under D/o IPP F. No.
5(1)/2017-FC-1 dated the August 28, 2017, effective from August 28, 2017
Depositories NSDL and CDSL
Depositories Act Depositories Act, 1996
DIN Director Identification Number
DP or Depository Participant A depository participant as defined under the Depositories Act
DP ID Depository Participant’s Identification

9
 Term Description
DPIIT Department for Promotion of Industry and Internal Trade, Ministry of Commerce and
Industry, Government of India (formerly known as Department of Industrial Policy and
Promotion)
EBIT Earnings before interest and taxes
EBITDA Earnings before interest, taxes, depreciation and amortisation
ECB Master Directions Master Direction – External Commercial Borrowings, Trade Credits and Structured
Obligations dated March 26, 2019 issued by the RBI
EGM Extraordinary general meeting
EPS Earnings per share
Fair Practices Code Master Circular - Fair Practices Code issued by the NHB dated July 1, 2019
FDI Foreign direct investment
FEMA The Foreign Exchange Management Act, 1999, read with rules and regulations thereunder
FEMA Rules Foreign Exchange Management (Non-debt Instruments) Rules, 2019
Financial Year, Fiscal, Fiscal Unless stated otherwise, the period of 12 months ending March 31 of that particular year
Year or FY
FIR First information report
FPI Foreign portfolio investors as defined under the SEBI FPI Regulations
FVCI Foreign venture capital investors as defined and registered under the SEBI FVCI Regulations
GAAR General anti-avoidance rules
Gazette Official Gazette of India
GDP Gross domestic product
GoI or Government or Central Government of India
Government
GST Goods and services tax
HFC Housing finance company, in terms of the NHB Directions
IBC The Insolvency and Bankruptcy Code, 2016
ICAI The Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards
Indian Penal Code The Indian Penal Code, 1860
Income Tax Act The Income-tax Act, 1961
Ind AS Indian Accounting Standards notified under the Companies (Indian Accounting Standards)
Rules, 2015
India Republic of India
Indian GAAP Generally Accepted Accounting Principles in India
IPO Initial public offering
IRDAI Insurance Regulatory and Development Authority of India
IST Indian Standard Time
IT Information Technology
KYC Know Your Customer
MCA Ministry of Corporate Affairs, Government of India
Mn or mn Million
MoHUPA Ministry of Housing and Urban Poverty Alleviation
NACH National Automated Clearing House
National Investment Fund National Investment Fund set up by resolution F. No. 2/3/2005-DD-II dated November 23,
2005 of the GoI, published in the Gazette of India
NAV Net Asset Value
NEFT National Electronic Fund Transfer
Negotiable Instruments Act The Negotiable Instruments Act, 1881
NHB National Housing Bank
NHB Act The National Housing Bank Act, 1987
NHB Act Amendments Amendments to the NHB Act included in the Finance (No. 2) Act, 2019
NHB Directions Master Circular - Housing Finance Companies (NHB) Directions, 2010 dated July 1, 2019
NHB NCD Directions Master Circular- Housing Finance Companies issuance of Non-Convertible Debentures on
private placement basis (NHB) Directions, 2014 dated July 1, 2019
NOF Net owned funds
NPA Non-performing assets, and in relation to the NHB Directions, shall have the meaning
ascribed to it in the NHB Directions
NPCI National Payments Corporation of India
NR Non-Resident

10
 Term Description
NRI A person resident outside India, who is a citizen of India or a person of Indian origin, and
shall have the meaning ascribed to such term in the Foreign Exchange Management (Deposit)
Regulations, 2000
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
OCB or Overseas Corporate A company, partnership, society or other corporate body owned directly or indirectly to the
Body extent of at least 60% by NRIs including overseas trusts, in which not less than 60% of
beneficial interest is irrevocably held by NRIs directly or indirectly and which was in
existence on October 3, 2003 and immediately before such date had taken benefits under the
general permission granted to OCBs under FEMA. OCBs are not allowed to invest in the
Offer
p.a. Per annum
P/E Ratio Price to Earnings Ratio
PAN Permanent Account Number
PAT Profit After Tax
PMLA Prevention of Money Laundering Act, 2002
RBI Reserve Bank of India
RBI Act The Reserve Bank of India Act, 1934
Regulation S Regulation S under the U.S. Securities Act
RTGS Real Time Gross Settlement
Rule 144A Rule 144A under the U.S. Securities Act
SARFAESI Act The Securitization and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002, as amended
SCRA Securities Contracts (Regulation) Act, 1956
SCRR Securities Contracts (Regulation) Rules, 1957
SEBI Securities and Exchange Board of India constituted under the SEBI Act
SEBI Act Securities and Exchange Board of India Act, 1992
SEBI AIF Regulations Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012
SEBI BTI Regulations Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994
SEBI ESOP Regulations Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014
SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019
SEBI FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations,
2000
SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018
SEBI Listing Regulations Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015
SEBI Merchant Bankers Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992
Regulations
SEBI Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011
U.S. Securities Act U.S. Securities Act of 1933, as amended
Stamp Act The Indian Stamp Act, 1899
State Government The government of a state in India
Stock Exchanges BSE and NSE
STT Securities Transaction Tax
Systemically Important NBFC Systemically important non-banking financial company as defined under Regulation 2(1)(iii)
of the SEBI ICDR Regulations
TAN Tax deduction account number
U.S., USA or United States United States of America
USD or US$ United States Dollars
VCFs Venture Capital Funds as defined in and registered with SEBI under the SEBI VCF
Regulations

11
 CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Certain Conventions

All references to “India” contained in this Draft Red Herring Prospectus are to the Republic of India and its territories and
possessions and all references herein to the “Government”, “Indian Government”, “GoI”, “Central Government” or the “State
Government” are to the Government of India, central or state, as applicable. All references to the “U.S.”, “US”, “U.S.A” or
“United States” are to the United States of America and its territories and possessions.

Unless otherwise specified, any time mentioned in this Draft Red Herring Prospectus is in Indian Standard Time (“IST”). Unless
indicated otherwise, all references to a year in this Draft Red Herring Prospectus are to a calendar year.

Unless stated otherwise, all references to page numbers in this Draft Red Herring Prospectus are to the page numbers of this
Draft Red Herring Prospectus.

Financial Data

Unless stated otherwise, the financial information and financial ratios in this Draft Red Herring Prospectus have been derived
from our Restated Financial Information. Certain other financial information pertaining to our Group Company is derived from
its respective audited financial statements, as may be available. For further information, see “Financial Information” beginning
on page 204.

Our Company’s financial year commences on April 1 and ends on March 31 of the next year. Accordingly, all references in this
Draft Red Herring Prospectus to a particular Financial Year, Fiscal or Fiscal Year, unless stated otherwise, are to the 12 month
period ended on March 31 of that particular calendar year.

Our Company’s restated financial statements of assets and liabilities as at and for the six months ended September 30, 2019 and
September 30, 2018 and Financial Years ended March 31, 2019, March 31, 2018 and March 31, 2017 and our restated statements
of profit and loss and cash flow for the six months ended September 30, 2019 and September 30, 2018 and Financial Years ended
March 31, 2019, March 31, 2018 and March 31, 2017, together with the annexures and notes thereto and the examination report,
thereon, as prepared and presented in accordance with Ind AS, in each case restated in accordance with the requirements of
Section 26 of the Companies Act, the SEBI ICDR Regulations and the Guidance Note on “Reports in Company Prospectuses
(Revised 2019)” issued by ICAI. The restated financial statements for the years ended March 31, 2019, March 31, 2018 and
March 31, 2017 has been prepared on Proforma IND AS basis in accordance with requirements of SEBI Circular
SEBI/HO/CFD/DIL/CIR/P/2016/47 dated 31 March 2016 and the Guidance Note on “Reports in Company Prospectuses
(Revised 2019)” issued by ICAI.

There are significant differences between Ind AS, Indian GAAP, U.S. GAAP and IFRS. Our Company does not provide
reconciliation of its financial information to IFRS or U.S. GAAP. Our Company has not attempted to explain those differences
or quantify their impact on the financial data included in this Draft Red Herring Prospectus and it is urged that you consult your
own advisors regarding such differences and their impact on our financial data. Accordingly, the degree to which the financial
information included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the
reader’s level of familiarity with Indian accounting policies and practices, the Companies Act, Ind AS, the Indian GAAP and the
SEBI ICDR Regulations. Any reliance by persons not familiar with Indian accounting policies and practices on the financial
disclosures presented in this Draft Red Herring Prospectus should, accordingly, be limited. For risks relating to significant
differences between Ind AS, Indian GAAP and other accounting principles, see “Risk Factors – Significant differences exist
between Ind AS and other accounting principles, such as US GAAP and IFRS, which may be material to investors’ assessments
of our financial condition” beginning on page 40.

Unless the context otherwise indicates, any percentage amounts (excluding certain operational metrics), relating to the financial
information of our Company in the “Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial
Conditional and Results of Operations” beginning on pages 22, 132 and 275, respectively, and elsewhere in this Draft Red
Herring Prospectus have been calculated on the basis of our Restated Financial Information.

Currency and Units of Presentation

All references to:

 “Rupees” or “₹” or “INR” or “Rs.” are to Indian Rupee, the official currency of the Republic of India; and

 “USD” or “US$” are to United States Dollar, the official currency of the United States.

Our Company has presented certain numerical information in this Draft Red Herring Prospectus in “million” units. One million
represents 1,000,000 and one billion represents 1,000,000,000.

12
However, where any figures that may have been sourced from third-party industry sources are expressed in denominations other
than millions, such figures appear in this Draft Red Herring Prospectus in such denominations as provided in the respective
sources.

In this Draft Red Herring Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due
to rounding off. All figures derived from our Restated Financial Information in decimals have been rounded off to the second
decimal and all percentage figures have been rounded off to two decimal places. However, where any figures may have been
sourced from third-party industry sources, such figures may be rounded off to such number of decimal places as provided in such
respective sources.

Exchange Rates

This Draft Red Herring Prospectus contains conversion of certain other currency amounts into Indian Rupees that have been
presented solely to comply with the SEBI ICDR Regulations. These conversions should not be construed as a representation that
these currency amounts could have been, or can be converted into Indian Rupees, at any particular rate.

The following table sets forth, for the periods indicated, information with respect to the exchange rate between the Rupee and
the US$ (in Rupees per US$):

(Amount in ₹, unless otherwise specified)

Currency As on September 30, As on March 29, 2019* As on March 28, 2018* As on March 31, 2017
2019*
1 US$ 70.69 69.17 65.04 64.84
(Source: www.rbi.org.in and www.fbil.org.in)
* If the RBI reference rate is not available on a particular date due to a public holiday, exchange rates of the previous working day have
been disclosed.

Industry and Market Data

Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus has been obtained or derived from
the report entitled “CRISIL Research – Industry Report on Affordable Housing Finance, November 2019” prepared by CRISIL
(“CRISIL Report”), the report entitled “ICRA’s Report on Mortgage Finance Market” dated November 2019 prepared by ICRA
(“ICRA Report”) and publicly available information as well as other industry publications and sources. The CRISIL Report and
the ICRA Report have been prepared at the request of our Company.

Industry publications generally state that the information contained in such publications has been obtained from publicly
available documents from various sources believed to be reliable but their accuracy and completeness are not guaranteed and
their reliability cannot be assured. Accordingly, no investment decisions should be based on such information. We believe the
industry and market data used in this Draft Red Herring Prospectus is reliable, however, it has not been independently verified
by our Company, the Selling Shareholders or the Book Running Lead Managers or any of their affiliates or advisors. The data
used in these sources may have been re-classified by us for the purposes of presentation. Data from these sources may also not
be comparable.

The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful depends on the reader’s
familiarity with and understanding of the methodologies used in compiling such data. There are no standard data gathering
methodologies in the industry in which business of our Company is conducted, and methodologies and assumptions may vary
widely among different industry sources.

Disclaimer of CRISIL

“CRISIL Research, a division of CRISIL Limited (“CRISIL”) has taken due care and caution in preparing this report (“Report”)
based on the Information obtained by CRISIL from sources which it considers reliable (“Data”). However, CRISIL does not
guarantee the accuracy, adequacy or completeness of the Data/Report and is not responsible for any errors or omissions or for
the results obtained from the use of Data/Report. This Report is not a recommendation to invest/disinvest in any entity covered
in the Report and no part of this Report should be construed as an expert advice or investment advice or any form of investment
banking within the meaning of any law or regulation. CRISIL especially states that it has no liability whatsoever to the
subscribers/users/transmitters/distributors of this Report. Without limiting the generality of the foregoing, nothing in the Report
is to be construed as CRISIL providing or intending to provide any services in jurisdictions where CRISIL does not have the
necessary permission and/or registration to carry out its business activities in this regard. Home First Finance Company India
Limited will be responsible for ensuring compliances and consequences of non-compliances for use of the Report or part thereof
outside India. CRISIL Research operates independently of, and does not have access to information obtained by CRISIL’s
Ratings Division/CRISIL Risk and Infrastructure Solutions Limited (“CRIS”), which may, in their regular operations, obtain
information of a confidential nature. The views expressed in this Report are that of CRISIL Research and not of CRISIL’s

13
Ratings Division/CRIS. No part of this Report may be published/reproduced in any form without CRISIL’s prior written
approval.”

While preparing its report, CRISIL has also sourced information from publicly available sources, including our Company's
financial statements prepared in accordance with Indian GAAP and available publicly. However, financial information relating
to our Company presented in other sections of this Draft Red Herring Prospectus has been prepared in accordance with Ind AS
and restated in accordance with the SEBI ICDR Regulations. Accordingly, the Indian GAAP financial information of our
Company in this section is not comparable with Ind AS financial information presented in this Draft Red Herring Prospectus.

For details of risks in relation to CRISIL Report, see “Risk Factors” – We have referred to the data derived from industry reports
commissioned from CRISIL Limited and ICRA Limited” beginning on page 36.

Disclaimer of ICRA

“All information mentioned herein and otherwise as contained in the report or rationale has been obtained by ICRA from sources
believed by it to be accurate and reliable and ICRA confirms that it has obtained requisite third party consents, if required, in
relation to any information used by ICRA in the report. Although reasonable care has been taken to ensure that the information
in the report is true, such information is provided ‘as is’ without any warranty of any kind, and in particular, makes no
representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. All
information contained herein must be construed solely as statements of opinion, and not any recommendation for investment and
further, ICRA shall not be liable for any losses incurred by users from any use of the report or its contents.”

For details of risks in relation to ICRA Report, see “Risk Factors” – We have referred to the data derived from industry reports
commissioned from CRISIL Limited and ICRA Limited” beginning on page 36.

In accordance with the SEBI ICDR Regulations, “Basis for Offer Price” beginning on page 80 includes information relating to
our peer group companies. Such information has been derived from publicly available sources, and neither have we, the Selling
Shareholders nor the Book Running Lead Managers independently verified such information. Accordingly, no investment
decision should be made solely on the basis of such information. Such industry sources and publications are also prepared based
on information as at specific dates and may no longer be current or reflect current trends. Industry sources and publications may
also base this information on estimates and assumptions that may prove to be incorrect. Such data involves risks, uncertainties
and numerous assumptions and is subject to change based on various factors, including those disclosed in “Risk Factors”
beginning on page 22.

NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED STATES

The Equity Shares have not been recommended by any U.S. federal or state securities commission or regulatory authority.
Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Draft Red Herring
Prospectus or approved or disapproved the Equity Shares. Any representation to the contrary is a criminal offence in the United
States. In making an investment decision, investors must rely on their own examination of our Company and the terms of this
Offer, including the merits and risks involved. The Equity Shares have not been and will not be registered under the U.S.
Securities Act of 1933, as amended or any other applicable law of the United States and, unless so registered, may not be offered
or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the U.S. Securities Act and applicable state securities laws. Accordingly, the Equity Shares are being offered
and sold (a) in the United States only to persons reasonably believed to be “qualified institutional buyers” (as defined in Rule
144A under the U.S. Securities Act) in transactions exempt from the registration requirements of the U.S. Securities Act and (b)
outside the United States in compliance with Regulation S and the applicable laws of the jurisdiction where those offers and
sales occur.

We intend to rely on an exception from the definition of investment company under the U.S. Investment Company Act of 1940,
as amended, in connection with this Offer.

NOTICE TO PROSPECTIVE INVESTORS IN THE EUROPEAN ECONOMIC AREA

This Draft Red Herring Prospectus has been prepared on the basis that all offers of Equity Shares will be made pursuant to an
exemption under the Prospectus Directive, as implemented in Member States of the European Economic Area (“EEA”), from
the requirement to produce a prospectus for offers of Equity Shares. The expression “Prospectus Directive” means Directive
2003/71/EC of the European Parliament and Council EC (and amendments thereto, including the 2010 PD Amending Directive
and Prospectus Regulations (EU) 2017/1129, to the extent applicable and to the extent implemented in the Relevant Member
State (as defined below)) and includes any relevant implementing measure in each Member State that has implemented the
Prospectus Directive (each a “Relevant Member State”). Accordingly, any person making or intending to make an offer within
the EEA of Equity Shares which are the subject of the placement contemplated in this Draft Red Herring Prospectus should only
do so in circumstances in which no obligation arises for our Company, the Selling Shareholders or any of the Book Running
Lead Managers to produce a prospectus for such offer. None of our Company, the Selling Shareholders and the Book Running

14
Lead Managers have authorized, nor do they authorize, the making of any offer of Equity Shares through any financial
intermediary, other than the offers made by the Book Running Lead Managers which constitute the final placement of Equity
Shares contemplated in this Draft Red Herring Prospectus.

15
 FORWARD-LOOKING STATEMENTS

This Draft Red Herring Prospectus contains certain “forward-looking statements”. These forward-looking statements generally
can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”, “objective”, “plan”,
“propose”, “project”, “will”, “will continue”, “will pursue” or other words or phrases of similar import. Similarly, statements
that describe our strategies, objectives, plans or goals are also forward-looking statements. All forward-looking statements are
subject to risks, uncertainties, expectations and assumptions about us that could cause actual results to differ materially from
those contemplated by the relevant forward-looking statement.

Actual results may differ materially from those suggested by forward-looking statements due to risks or uncertainties associated
with expectations relating to and including, regulatory changes pertaining to the industries in India in which we operate and our
ability to respond to them, our ability to successfully implement our strategy, our growth and expansion, technological changes,
our exposure to market risks, general economic and political conditions in India which have an impact on its business activities
or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign
exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in
domestic laws, regulations and taxes and changes in competition in the industries in which we operate.

Certain important factors that could cause actual results to differ materially from our expectations include, but are not limited to,
the following:

 any disruption in our sources of funding;

 non-payment or default by borrowers;

 volatility in interest rates for both our lending and treasury operations;

 reliance on information technology systems for our business and operations;

 inability to recover the full value of collateral, or amounts outstanding under defaulted loans in a timely manner, or at
all;

 asset-liability mismatches; and

 competition in the Indian housing finance industry.

For details regarding factors that could cause actual results to differ from expectations, see “Risk Factors”, “Our Business” and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages 22, 132 and
275, respectively. By their nature, certain market risk disclosures are only estimates and could be materially different from what
actually occurs in the future. As a result, actual gains or losses could materially differ from those that have been estimated.

There can be no assurance to Bidders that the expectations reflected in these forward-looking statements will prove to be correct.
Given these uncertainties, Bidders are cautioned not to place undue reliance on such forward-looking statements and not to
regard such statements to be a guarantee of our future performance.

Forward-looking statements reflect current views as of the date of this Draft Red Herring Prospectus and are not a guarantee of
future performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on
currently available information. Although we believe the assumptions upon which these forward-looking statements are based
are reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking statements based on these
assumptions could be incorrect. Neither our Company, our Directors, the Selling Shareholders, the Syndicate nor any of their
respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the
date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In
accordance with the SEBI ICDR Regulations, our Company and the Book Running Lead Managers will ensure that the Bidders
in India are informed of material developments until the time of the grant of listing and trading permission by the Stock
Exchanges for the Offer.

In accordance with requirements of SEBI and as prescribed under applicable law, each of the Selling Shareholders shall ensure
that the Bidders in India are informed of material developments, in relation to statements and undertakings specifically
undertaken or confirmed by it in relation to itself and its respective portion of the Offered Shares in the Red Herring Prospectus
until the time of the grant of listing and trading permission by the Stock Exchanges. Only statements and undertakings which are
specifically confirmed or undertaken by each Selling Shareholder, as the case may be, in this Draft Red Herring Prospectus shall
be deemed to be statements and undertakings made by such Selling Shareholder.

16
 SUMMARY OF THE OFFER DOCUMENT

The following is a general summary of the terms of the Offer and is not exhaustive, nor does it purport to contain a summary of
all the disclosures in this Draft Red Herring Prospectus or all details relevant to prospective investors. This summary should be
read in conjunction with, and is qualified in its entirety by, the more detailed information appearing elsewhere in this Draft Red
Herring Prospectus, including “Risk Factors”, “The Offer”, “Capital Structure”, “Objects of the Offer”, “Industry Overview”,
“Our Business”, “Offer Procedure”, “Outstanding Litigation and Material Developments” and “Description of Equity Shares
and Terms of Articles of Association” beginning on pages 22, 43, 57, 76, 87, 132, 326, 298 and 341, respectively.

Summary of Business

We are a technology driven affordable housing finance company targeting first time home buyers in low and middle-income
groups. We primarily offer customers housing loans for the purchase or construction of homes, which comprised 91.5% of our
Gross Loan Assets, as of September 30, 2019. Our Gross Loan Assets have grown at a CAGR of 69.8% between the financial
years 2017 and 2019 and increased from ₹ 8,473.16 million as of March 31, 2017 to ₹ 31,133.76 million as of September 30,
2019.

Summary of Industry

The Indian housing finance market experienced a healthy growth in housing loan outstanding of approximately 20% over Fiscals
2015 to 2019. CRISIL Research expects housing loans outstanding to grow to ₹ 28.4 trillion by Fiscal 2022, at 15% CAGR in
the next three years. By Fiscal 2022, CRISIL Research expects outstanding credit to increase at approximately 13% CAGR to ₹
12.4 trillion. Growth would be driven by improved supply and demand of affordable houses, Government impetus to the segment
through various incentives given to developers and first-time homebuyers and initiatives towards affordable housing such as
PMAY. (Source: CRISIL Report)

Our Promoters

Our Promoters are TN V LLP and Aether. For details, see “Our Promoters and Promoter Group” beginning on page 176.

Offer Size

Offer(1)(2)# Up to [●] Equity Shares aggregating up to ₹ 15,000 million

of which
Fresh Issue(1) Up to [●] Equity Shares aggregating up to ₹ 4,000 million
Offer for Sale(2)(3) Up to [●] Equity Shares aggregating up to ₹ 11,000 million by the Selling
Shareholders
# A Pre-IPO Placement may be undertaken by our Company for an aggregate amount not exceeding ₹ 1,600 million. The Pre-IPO Placement,
if undertaken, will be at a price to be decided by our Company and will be completed prior to filing of the Red Herring Prospectus with
the RoC. If the Pre-IPO Placement is undertaken, the amount raised from the Pre-IPO Placement will be reduced from the Fresh Issue,
subject to the minimum Offer size constituting at least 10% of the post-Offer paid-up Equity Share capital of our Company.
(1) The Fresh Issue has been authorized by a resolution of our Board dated July 31, 2019 and a resolution of our Shareholders, dated August
30, 2019.
(2) The Offer for Sale has been authorised by the Selling Shareholders as follows:
Selling Shareholder Number of Offered Shares Date of consent letter Date of corporate
authorisation/ board
resolution
Promoter Selling Shareholders
TN V LLP [●] Equity Shares aggregating up to ₹ 4,984 November 27, 2019 November 15, 2019
million
Aether [●] Equity Shares aggregating up to ₹ 3,322 November 27, 2019 November 25, 2019
million
Investor Selling Shareholder
Bessemer [●] Equity Shares aggregating up to ₹ 1,764 November 26, 2019 November 26, 2019
million
Individual Selling Shareholders
P. S. Jayakumar [●] Equity Shares aggregating up to ₹ 560 November 27, 2019 -
million
Manoj Viswanathan [●] Equity Shares aggregating up to ₹ 359 November 27, 2019 -
million
Bhaskar Chaudhry [●] Equity Shares aggregating up to ₹ 11 million November 26, 2019 -
(3)
The Equity Shares being offered by the Selling Shareholders have been held for a period of at least one year immediately preceding the
date of filing this Draft Red Herring Prospectus with SEBI, and are otherwise eligible for being offered for sale pursuant to the Offer in
terms of the SEBI ICDR Regulations. For details on the authorisation of the Selling Shareholders in relation to the Offered Shares, see
“Other Regulatory and Statutory Disclosures” beginning on page 303.

17
Objects of the Offer

Our Company proposes to utilise the Net Proceeds towards the following objects:

Particulars Amount* (in ₹ million)

Augmenting our capital base 4,000
Total 4,000
* Includes the proceeds, if any, received pursuant to the Pre-IPO Placement. Upon allotment of Equity Shares issued pursuant to the Pre-
IPO Placement, we may utilise the proceeds from such Pre-IPO Placement towards the Objects of the Offer prior to completion of the
Offer.

For details, see “Objects of the Offer” beginning on page 76.

Pre-Offer Shareholding of our Promoters, the Promoter Group and the Selling Shareholders

S. Category of Shareholders No. of Equity Shares % of total paid up Equity

No. Share capital
1. Promoters (also the Promoter Selling Shareholders)
TN V LLP 35,997,070 45.97
Aether 23,998,045 30.65
Total 59,995,115 76.62
2. Promoter Group
NIL - -
Total - -
3. Investor Selling Shareholder
Bessemer 12,744,235 16.28
Total 12,744,235 16.28
4. Individual Selling Shareholders
P. S. Jayakumar 4,037,775 5.16
Manoj Viswanathan 1,022,900 1.31
Bhaskar Chaudhry 57,750 0.07
Total 5,118,425 6.54

Summary of Restated Financial Information

(in ₹ million, other than share data)

Particulars Six months Six months Financial Year
ended ended 2019 2018 2017
September 30, September 30,
2019 2018
Equity Share Capital 156.60 126.31 126.68 103.23 103.21
Net worth 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58
Total Revenue from operations 1,838.93 1,035.13 2,598.76 1,320.92 915.77
Profit after tax 367.41 114.56 452.04 159.96 66.77
Earnings per equity share of
face value ₹ 2 each (basic and
diluted)
- Basic (in ₹) (post-split basis) 5.33 2.19 7.82 3.10 3.53
- Diluted (in ₹) (post-split basis) 5.21 2.14 7.65 3.02 3.07
Net asset value per equity share 113.58 77.36 82.59 63.01 59.37
(in ₹)
Borrowings (other than debt 22,956.31 15,069.78 19,256.41 10,198.76 6,630.45
securities)

Qualifications by the Statutory Auditors

The Restated Financial Information does not contain any qualifications by the Statutory Auditors.

Summary of Outstanding Litigation

A summary of outstanding litigation proceedings involving our Company, our Promoters, our Directors, and in case of our Group
Company, outstanding litigation proceedings involving our Group Company which have a material impact on our Company, as
on the date of this Draft Red Herring Prospectus, is provided below:

18
 Types of Proceedings Number of Cases Amount (in ₹ million)*
Litigation filed against our Company
Actions by statutory or regulatory authorities 2 0.01
Indirect tax proceedings 1 5.38
Litigation filed by our Company
Criminal proceedings 11 4.63
Total 14 10.02
Litigation filed against our Directors
Criminal proceedings 1 -
Actions by statutory or regulatory authorities 3 0.1
Total 4 0.1
* To the extent quantifiable.

For further details of the outstanding litigation proceedings, see “Outstanding Litigation and Material Developments” beginning
on page 298.

Risk Factors

For details in relation to certain risks applicable to us, see “Risk Factors” beginning on page 22.

Summary of Commitments of our Company

As of September 30, 2019, our commitments as provided for in our Restated Financial Information are as follows:

(in ₹ million)
Particulars As of September 30, 2019
Other commitments - Undisbursed amount of housing and other loans 6,094.63

For details, see “Restated Financial Information – Annexure 5” beginning on page 213.

Summary of Related Party Transactions

(in ₹ million)
Nature of Transaction Financial Year
2019 2018 2017
Remuneration 22.98 15.44 8.47
Dividend - - 0.05
Exercise of ESOP 20.03 0.19 -
ESOP exercised – perquisite 23.79 - -
Sitting fees paid 1.80 1.35 -
Reimbursement of expenses 5.78 - -
Technology fees 1.00 - -
Legal and professional fees 1.50 - -
Equity Infusion 1,500.00 - 1,500.00

For details of the related party transactions and as reported in the Restated Financial Information, see “Restated Financial
Information – Annexure 6” on page 225.

Issuances of Equity Shares made in the last one year for consideration other than cash

Our Company has not issued any Equity Shares through bonus issue or for consideration other than cash in the one year preceding
the date of this Draft Red Herring Prospectus.

Financing Arrangements

Except as disclosed below, there have been no financing arrangements whereby members of our Promoter Group, our Directors
and their relatives have financed the purchase by any other person of securities of our Company (other than in the normal course
of the business of the relevant financing entity) during a period of six months immediately preceding the date of filing of this
Draft Red Herring Prospectus.

19
 Name Financed entity Sale/ purchase/ Number of Issue Price Date of Allotment/
allotment equity shares per equity sale/ purchase of
Allotted* share (in ₹) Equity Shares
Promoter Group
Waverly Pte. Ltd. Aether Allotment 596,222 1,116.00 June 29,2019
Allotment 298,201 1,116.00 September 19, 2019
Purchase 14,480 1,116.00 October 1, 2019
* Pursuant to a resolution passed by the Shareholders in the EGM held on October 30, 2019, our Company has sub-divided its authorised
share capital, such that that 25,000,000 equity shares of ₹ 10 each aggregating to ₹ 250,000,000 were sub-divided and reclassified as
125,000,000 Equity Shares of ₹ 2 each aggregating to ₹ 250,000,000. Therefore, pursuant to the sub-division, the cumulative number of
Equity Shares acquired by Aether during a period of six months immediately preceding the date of filing of this Draft Red Herring
Prospectus which have been financed by Waverly Pte. Ltd. is 4,544,515 Equity Shares.

Weighted average price at which the Equity Shares were acquired by the Promoters and Selling Shareholders in the one
year preceding the date of this Draft Red Herring Prospectus

The weighted average price at which the Equity Shares were acquired by the Selling Shareholders in the one year preceding the
date of this Draft Red Herring Prospectus is:

S. Category of Shareholders Number of Equity Shares Weighted average price of

No. acquired acquisition per Equity Share
(in ₹)*
1. Promoters (also the Promoter Selling Shareholders)
TN V LLP 6,930,625 221.76
Aether 4,620,415 221.76
2. Investor Selling Shareholder
Bessemer 2,382,115 223.20
3. Individual Selling Shareholders
P. S. Jayakumar 754,730 223.20
Manoj Viswanathan 22,400 223.20
Bhaskar Chaudhry 7,750 223.20
* As certified by M. P. Chitale & Co., Chartered Accountants, by way of their certificate dated November 28, 2019.

Average Cost of Acquisition for Promoters and Selling Shareholders

The average cost of acquisition per Equity Share acquired by the Selling Shareholders, as on the date of this Draft Red Herring
Prospectus is:

S. Category of Shareholders Number of Equity Shares Average cost of Acquisition

No. acquired per Equity Share
(in ₹)*
1. Promoters (also the Promoter Selling Shareholders)
TN V LLP 35,997,070 140.30
Aether 23,998,045 140.30
2. Investor Selling Shareholder
Bessemer 12,744,235 82.13
3. Individual Selling Shareholders
P. S. Jayakumar 4,037,775 64.37
Manoj Viswanathan 1,022,900 6.87
Bhaskar Chaudhry 57,750 31.68
* As certified by M. P. Chitale & Co., Chartered Accountants, by way of their certificate dated November 28, 2019.

Details of Pre-IPO Placement

Our Company may consider a private placement of up to [●] Equity Shares for cash consideration aggregating up to ₹ 1,600
million, at its discretion, prior to filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is undertaken, the
amount raised from the Pre-IPO Placement will be reduced from the Fresh Issue, subject to the minimum Offer size constituting
at least 10% of the post-Offer paid-up Equity Share capital of our Company.

Split or Consolidation of Equity Shares in the last one year

Except as disclosed below, our Company has not undertaken split or consolidation of the equity shares of our Company in the
last one year preceding the date of this Draft Red Herring Prospectus.

20
Pursuant to a resolution passed by the shareholders in the EGM held on October 30, 2019, our Company has sub-divided its
authorised share capital, such that that 25,000,000 equity shares of ₹ 10 each aggregating to ₹ 250,000,000 were sub-divided and
reclassified as 125,000,000 Equity Shares of ₹ 2 each aggregating to ₹ 250,000,000. Therefore, the cumulative number of Equity
Shares pursuant to sub-division was 78,297,715 Equity Shares. For details, see “Capital Structure – Equity Share capital history
of our Company” on page 57.

21
 SECTION II: RISK FACTORS

An investment in our Equity Shares involves a high degree of risk. You should carefully consider all the information in this Draft
Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in the Equity
Shares. The risks described below are not the only ones relevant to us or our Equity Shares and the industry in which we currently
operate or propose to operate in India. Additional risks and uncertainties, not presently known to us or that we currently deem
immaterial may also impair our businesses, results of operations, financial condition and cash flows. If any of the following
risks, or other risks that are not currently known or are currently deemed immaterial, actually occur, our business, results of
operations, financial condition and cash flows could suffer, the trading price of our Equity Shares could decline, and you may
lose all or part of your investment. To obtain a complete understanding of our Company, prospective investors should read this
section in conjunction with “Industry Overview”, “Our Business”, “Selected Statistical Information” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” on pages 87, 132, 183 and 275, respectively, as well
as the financial, statistical and other information contained in this Draft Red Herring Prospectus. In making an investment
decision, prospective investors must rely on their own examination of our Company and the terms of the Offer including the
merits and risks involved. You should consult your tax, financial and legal advisors about the particular consequences to you of
an investment in our Equity Shares.

Prospective investors should pay particular attention to the fact that our Company is incorporated under the laws of India and
is subject to a legal and regulatory environment, which may differ in certain respects from that of other countries.

This Draft Red Herring Prospectus also contains forward-looking statements that involve risks, assumptions, estimates and
uncertainties. Our actual results could differ materially from those anticipated in these forward- looking statements as a result
of certain factors, including the considerations described below and elsewhere in this Draft Red Herring Prospectus. See
“Forward-Looking Statements” on page 16.

Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or other
implications of any of the risks described in this section. Unless the context requires otherwise, the financial information of our
Company has been derived from our Restated Financial Information.

The industry-related information contained in this section is derived from the CRISIL Report and ICRA Report. We commissioned
such reports for the purposes of confirming our understanding of the industry in connection with the Offer. Neither our Company,
nor any other person connected with the Offer, including the Lead Managers, have independently verified the information in
such reports or other publicly available information cited in this Draft Red Herring Prospectus.

Internal Risk Factors

Risks Relating to our Business

1. Any disruption in our sources of funding could have an adverse effect on our business, results of operations and
financial condition.

The liquidity and profitability of our business depend, in large part, on our timely access to, and the costs associated
with, raising funds. Our funding requirements historically have been met from various sources, including term loans
and working capital facilities; proceeds from direct assignment of loans; and refinancing from the NHB to meet our
capital requirements. Our business thus depends and will continue to depend on our ability to access a variety of sources
of capital.

Our ability to raise funds on acceptable terms, at competitive rates and in a timely manner, depends on various factors
including our current and future results of operations and financial condition, our risk management policies, our credit
ratings, our brand equity, the regulatory environment and policy initiatives in India and developments in the
international markets affecting the Indian economy. We cannot assure you that our business will continue to generate
sufficient cash to enable us to service our existing debt or to fund our other liquidity needs. Recently, certain NBFCs
and HFCs in India have defaulted in the repayment of their borrowings, which has adversely affected the availability of
funds to NBFCs and HFCs in general. Any such events in the future may lead to adverse perceptions about the housing
finance sector as a whole and affect our ability to obtain financing at commercially reasonable terms.

Further, changes in economic, regulatory and financial conditions or any lack of liquidity in the market could adversely
affect our ability to access funds at competitive rates, which could adversely affect our liquidity and financial condition.
Our ability to raise debt to meet our funding requirements is also restricted by the limits prescribed under applicable
regulations. For example, the NHB Directions currently permits HFCs to borrow up to 14 times their net owned funds
(“NOF”) until March 31, 2020 and after which this limit shall be further reduced to 13 times of their NOF until March
31, 2021 and subsequently to 12 times of their NOF until March 31, 2022. As of September 30, 2019, we had Total
Borrowings of ₹ 22,956.31 million, which was 2.6 times our NOF of ₹ 8,893.03 million. As of March 31, 2019, March
31, 2018 and March 31, 2017, our Total Borrowings /NOF were 3.7, 3.1 and 2.2, respectively. Since our Company’s

22
 incorporation, the highest value of our Total Borrowings /NOF at any period end was 3.7 as of March 31, 2019.
Consequently, if we are unable to obtain adequate financing in a timely manner and on commercially reasonable terms,
our business, results of operations and financial condition may be adversely affected.

2. The risk of non-payment or default by borrowers may adversely affect our business, results of operations and
financial condition.

We primarily serve salaried customers in the low and middle-income groups. As of September 30, 2019, 72.6% of our
Gross Loan Assets were from salaried customers, while 24.6% was from self-employed customers. Our customers may
default in their repayment obligations due to various reasons including loss of employment, insolvency, lack of liquidity
or personal emergencies such as the death of an income generating family member. Some of our customers may not
have credit histories supported by tax returns and other documents that would enable us to accurately assess their
creditworthiness. We may not receive updated information regarding any change in the financial condition of our
customers or may receive inaccurate or incomplete information as a result of any misrepresentation by our customers
or employees. It may therefore be difficult for us to carry out precise credit risk analysis on all of our customers.
Although we follow certain procedures to evaluate the credit profiles of our customers at the time of sanctioning a loan,
we also rely on the value of the property provided as underlying collateral.

Further, the self-employed customers to whom we lend are often considered to be higher credit risk customers due to
their increased exposure to fluctuations in cash flows and to adverse economic conditions. To the extent we are unable
to successfully manage the risks associated with lending to self-employed customers, it may become difficult for us to
recover outstanding amounts of such loans. We cannot assure you that our risk management controls will be sufficient
to prevent future losses on account of customer defaults, which may adversely affect our business, results of operations
and financial condition.

Our ability to manage the credit quality of our loans, which we measure in part through non-performing assets
(“NPAs”), is a key driver of our results of operations. Our total loan portfolio has grown rapidly in the last few years,
and we anticipate that the size of our loan portfolio will continue to grow in the future as we pursue our expansion
strategy. We classify NPAs in accordance with the NHB Directions and applicable Ind AS rules. Defaults by our
customers for a period of more than 90 days result in such loans being classified as ‘non-performing’. As of September
30, 2019 and 2018 and March 31, 2019, 2018 and 2017, our Stage 3 Loan Assets were ₹ 268.36 million, ₹ 129.62
million, ₹ 170.45 million, ₹ 80.68 million and ₹ 57.24 million, respectively, while our Stage 3 Loan Assets to Gross
Loan Assets was 0.9%, 0.7%, 0.7%, 0.6% and 0.7%, respectively. As of September 30, 2019 and 2018 and March 31,
2019, 2018 and 2017, our Stage 3 Loan Assets (Net) were ₹ 211.79 million, ₹ 103.81 million, ₹ 128.05 million, ₹ 64.18
million and ₹ 47.71 million, respectively, while our Stage 3 Loan Assets (Net) to Net Loan Assets was 0.7%, 0.5%,
0.5%, 0.5% and 0.6%, respectively. In addition, on account of our recent growth, a significant portion of our loan
portfolio is relatively new and was disbursed during the last 36 months. We believe that the risk of delinquency in
housing loans typically emerges 18 to 36 months from disbursement. We cannot assure you that we will be able to
maintain or reduce our current levels of NPAs in the future. As the number of our loans that become NPAs increase,
the credit quality of our loan portfolio decreases.

Further, as our loan portfolio grows, our NPAs may increase and the current level of our provisions may not adequately
cover any such increases. Negative trends or financial difficulties or general economic slowdown could unexpectedly
increase delinquency rates. We cannot assure you that there will not be a significant increase in the portion of our loans
that are classified as NPAs as our loan portfolio matures.

3. We are affected by volatility in interest rates for both our lending and treasury operations, which could cause our
net interest income to vary and consequently affect our profitability.

Our results of operations depend substantially on the level of our net interest income, which is the difference between
our interest income (mainly comprising interest income on loan portfolio, assigned portfolio, and interest income on
investments and on deposits with banks) and our finance cost. Any change in interest rates would affect our net interest
income and spreads. Any increase in our cost of funds may lead to a reduction in our spreads, or require us to increase
interest rates on loans disbursed to customers in the future to maintain our spreads. For the six months ended September
30, 2019 and 2018 and the financial years 2019, 2018 and 2017, our Spread (Average yield on Loans - Principal
outstanding Less Average Cost of Borrowings (excluding assignments)) was 2.2%, 2.1%, 4.7%, 4.4%, 3.3%,
respectively.

Interest rates are highly sensitive to many factors beyond our control, including the monetary policies of the RBI,
deregulation of the financial sector in India, domestic and international economic and political conditions and other
factors, which have historically resulted in changes in interest rates in India. Moreover, if there is an increase in the
interest rates we pay on our borrowings that we are unable to pass to our customers, we may find it difficult to compete
with our competitors, who may have access to low-cost funds or lower cost deposits. Further, to the extent our
borrowings are linked to market interest rates, we may have to pay interest at a higher rate than lenders that borrow only

23
 at fixed interest rates. An increase in general interest rates in the economy could also reduce the overall demand for
housing finance and impact our growth. In a declining interest rate environment, if our cost of funds does not decline
simultaneously or to the same extent as the yield on our interest-earning assets, it could lead to a reduction in our net
interest income and net interest margin. Some of our customers may prepay their loans to take advantage of a declining
interest rate environment. Similarly, an increase in interest rates could result in our customers, particularly those with
variable interest rate loans, prepaying their loans if less expensive loans are available from other sources.

Fluctuations in interest rates may also adversely affect our treasury operations. In a rising interest rate environment,
especially if the rise is sudden or sharp, we could be adversely affected by the decline in the market value of our
investments. In addition, while we take steps to minimize the risk of interest rate volatility, we currently do not enter
into any specific interest rate hedging instruments to protect against interest rate volatility. Our inability to effectively
and efficiently manage interest rate variations and our failure to pass on increased interest rates on our borrowings may
cause our net interest income to decline, which would decrease our return on assets and could adversely affect our
business, result of operations and financial condition.

4. Any downgrade in our credit ratings could increase our borrowing costs, affect our ability to obtain financing, and
adversely affect our business, results of operations and financial condition.

The cost and availability of capital depends in part on our short-term and long-term credit ratings. Credit ratings reflect
the opinions of ratings agencies on our financial strength, operating performance, strategic position and ability to meet
our obligations. For details of our current credit ratings, see “Our Business – Credit Ratings” on page 146. Any
downgrade in our credit ratings could increase borrowing costs and adversely affect our access to capital and debt
markets, which could in turn adversely affect our interest margins, our business, results of operations, financial condition
and cash flows. In addition, any downgrade in our credit ratings below A- at any time during the currency of certain
loans availed by us, may also trigger an event of default in such current loans borrowings. Further, any downgrade in
our credit ratings could increase the probability that our lenders impose additional terms and conditions to any financing
or refinancing arrangements we enter into in the future and adversely affect our business, results of operations and
financial condition.

5. We rely significantly on our information technology systems for our business and operations and any failure,
inadequacy or security breach in such systems could adversely affect our business, results of operations and
reputation.

We are a technology driven company and our business is dependent upon complex and interdependent information
technology systems. We use our technology platforms to assist with functions such as lead generation and management,
underwriting and risk management, collections and to perform data analytics. We have developed and use proprietary
tools, cloud services, data lake and mobility applications. We have an integrated customer relationship management
and loan management system. Our operations depend on our ability to process a high volume of transactions across our
network of branches, which are connected through computer systems and servers to our corporate office. As part of our
growth strategy, we intend to further develop and invest in our information technology systems and create an end-to-
end digital process.

The size and complexity of our computer systems may make them potentially vulnerable to breakdown, system
integration problems, malicious intrusion and computer viruses. Our financial, accounting, analytics or other data
processing systems may fail to operate adequately, or at all, as a result of events that are beyond our control, including
a disruption of electrical or communications services in markets in which we primarily operate. Our ability to operate
and remain competitive will depend in part on our ability to maintain and upgrade our information technology systems
on a timely and cost-effective basis. Although we have not experienced any significant disruptions to our information
technology systems in the past, we cannot assure you that we will not encounter disruptions in the future.

In addition, our systems are potentially vulnerable to data security breaches, whether by employees, who may have a
lack of experience with our newer information technology systems, or others, that may expose sensitive data to
unauthorized persons. Data security breaches could lead to the loss of trade secrets or other intellectual property, or
could lead to the public exposure of personal information (including sensitive financial and personal information) of
our customers and employees. Any such security breaches or compromises of technology systems could result in
institution of legal proceedings against us and potential imposition of penalties, which may have an adverse effect on
our business and reputation.

6. We may face asset-liability mismatches, which could affect our liquidity and consequently may adversely affect our
operations and profitability.

We face potential liquidity risks because our assets and liabilities mature over different periods. Assets and liability
mismatch, which represents a situation when the financial terms of an institution’s assets and liabilities do not match,
is a key financial parameter for us. We carefully monitor the contractual maturity periods of our assets and liabilities

24
 and categorize them on the basis of the number of years in which they mature. Although we had a positive asset-liability
maturity profile as of September 30, 2019, we cannot assure you that we will be able to continue to maintain a favourable
asset-liability position in the future. We meet a significant portion of our financing requirements through borrowings
from banks, refinancing from the NHB and through proceeds from direct assignment of loans. A significant portion of
our assets, such as housing loans to our customers, have maturities with longer terms than our borrowings. Any
mismatch in the maturity profile of our assets and liabilities may lead to a liquidity risk and have an adverse effect on
our business and results of operations.

7. Our operations are concentrated in the states of Gujarat and Maharashtra and any adverse developments in these
regions could have an adverse effect on our business and results of operations.

Our operations are concentrated in the states of Gujarat and Maharashtra and as of September 30, 2019 and March 31,
2019, 2018 and 2017, 40.5%, 40.8%, 38.0% and 33.0% of our Gross Loan Assets was from Gujarat, while 24.6%,
28.4%, 35.6% and 36.6% was from Maharashtra, respectively. As of September 30, 2019, of our 65 branches, 32
branches were located in the states of Gujarat and Maharashtra. For a comparison with our presence in other states, see
“Our Business – Branch Network” on page 139. The real estate and housing finance markets in these states may perform
differently from, and may be subject to market conditions that are different from, the housing finance markets in other
regions of India. Consequently, any significant social, political or economic disruption, or natural calamities or civil
disruptions in these regions, or changes in the policies of the state or local governments of these regions or the
Government of India, could disrupt our business operations, require us to incur significant expenditure and change our
business strategies. The occurrence of, or our inability to effectively respond to any such event, could have an adverse
effect on our business and results of operations.

8. Our inability to recover the full value of collateral, or amounts outstanding under defaulted loans in a timely manner,
or at all, could adversely affect our business, results of operations and financial condition.

We offer housing loans and other loans to customers, where the primary collateral is real estate. The value of the
collateral, however, may decline during the term of the loan for a variety of reasons, including due to adverse market
conditions prevalent in the real estate sector. As a result, if our customers default, we may receive less money from
liquidating collateral than is owed under the relevant financing facility, and, in turn, incur losses, even where we
successfully repossess and liquidate the collateral.

Following the introduction of the SARFAESI Act in 2002 and the extension of its application to HFCs, we may now
foreclose on collateral after 60 days’ notice to a borrower whose loan has been classified as non-performing. However,
the actual time taken for full foreclosure generally ranges between 90 to 180 days. Further, in a case before the Supreme
Court of India in 2004, while the constitutional validity of the SARFAESI Act was affirmed, the right of a defaulting
borrower to appeal to the Debt Recovery Tribunal (“DRT”) was also affirmed. The DRT has the power to issue a stay
order prohibiting the lender from selling the assets of a defaulted borrower. As a result, we cannot assure you that any
foreclosure proceedings would not be stayed by the DRT. In addition, we may be unable to realize the full value of our
collateral, as a result of factors including delays in foreclosure proceedings. Further, in case insolvency proceedings are
initiated under the IBC against a debtor to our Company, we may not have complete control over the recovery of
amounts due to us. Additionally, in cases where proceedings under the IBC are initiated against the builders or
developers of a project where the allottees of the apartments are our borrowers and if the builder or developer fails to
deliver the project, there may be a delay in recovery of amounts from such borrowers. For details, see “- The bankruptcy
code in India may affect our rights to receiver loans from our customers.” on page 35. Any failure to recover the
expected value of collateral security could expose us to a potential loss.

We may also encounter difficulties in repossessing and liquidating collateral. When a customer defaults under a
financing facility, we typically repossess and then sell the collateral through an auction. However, we cannot assure you
that we will be able to successfully repossess the collateral in the event of default under a loan agreement. We may also
face challenges in title verification of the collateral provided by the customer, as there is no central land registry in India
and title to the property can be disputed, including on account of local land records not being duly updated, or not being
maintained in a legible manner, or only being available in the local vernacular languages, as well as on account of actual
or alleged short payment of stamp duty or registration fees (which may render the title documents inadmissible in
evidence, unless stamped prior to enforcement with payment of requisite penalties). Moreover, we may also not be able
to sell the collateral at a price sufficient to cover the amount owed under the financing facility, or at all. We may face
additional delay and expense in conducting an auction to sell the collateral and may face significant delay in
repossessing collateral, as litigation against defaulting customers, even if governed by an arbitration clause, can be slow
and expensive in India. In the event of any inability or delay in the repossession and liquidation of the collateral securing
loans in default, we may incur losses, which could adversely affect our business, results of operations and financial
condition.

25
9. We have experienced significant growth in recent years and we may not be able to sustain our growth or manage it
effectively.

We have experienced considerable growth in recent years and we have significantly expanded our operations and branch
network. Our total income grew from ₹ 915.78 million for the financial year 2017 to ₹ 2,709.21 million for financial
year 2019 and was ₹ 1,937.73 million for the six months ended September 30, 2019, while our profit after tax grew
from ₹ 66.77 million for the financial year 2017 to ₹ 452.04 million for the financial year 2019 and was ₹ 367.41 million
for the six months ended September 30, 2019. Our Gross Loan Assets grew from ₹ 8,473.16 million as of March 31,
2017 to ₹ 31,133.76 million as of September 30, 2019 and the number of our branches has grown from 36 to 65 during
the same period. However, we cannot assure you that our growth strategy will continue to be successful or that we will
be able to continue to grow further, or at the same rate.

Our inability to manage our expansion effectively and execute our growth strategy in a timely manner, or within budget
estimates could have an adverse effect on our business and results of operations. We intend to continue expansion to
pursue existing and potential market opportunities and increase the number of our branches to 90 by the end of the
financial year 2021. Our ability to execute our growth strategies will depend, among other things, on our ability to
identify key target markets correctly, manage our pricing to compete effectively, and scale up and grow our network
efficiently. We will also need to manage relationships with a greater number of customers, service providers, lenders
and other parties as we expand.

In order to manage our growth effectively, we must implement, upgrade and improve our operational systems,
processes, procedures and controls on a timely basis. If we fail to implement these systems, processes, procedures and
controls on a timely basis, we may not be able to meet our customers’ needs, hire and retain new employees or operate
our business effectively. Our ability to sustain our rate of growth also depends significantly upon our ability to select
and retain key managerial personnel, maintaining effective risk management policies and training managerial personnel
to address emerging challenges. Further, a number of external factors beyond our control could also affect our ability
to continue to grow our business and loan portfolio, such as demand for housing loans in India, domestic economic
growth, the RBI’s monetary and regulatory policies, NHB / RBI regulations, inflation, competition and availability of
cost-effective debt and equity capital.

Further, we may also require additional regulatory approvals to expand to other lines of business, which we may not
receive in a timely manner, or at all. For example, in January 2015 we had applied to the RBI for a license to operate as
a small finance bank. However, our application did not qualify to receive such license.

We cannot assure you that our existing or future management, operational and financial systems, processes, procedures
and controls will be adequate to support future operations, or establish or develop business relationships beneficial to
future operations. Failure to manage growth effectively could have an adverse effect on our business and results of
operations.

10. The Indian housing finance industry is highly competitive and our inability to compete effectively could adversely
affect our business and results of operations.

The housing finance industry in India is highly competitive and we compete with banks, other HFCs, small finance
banks and NBFCs in each of the geographies in which we operate. Our competitors may have more resources, a wider
branch and distribution network, access to cheaper funding, superior technology and may have a better understanding
of and relationships with customers in these markets. This may make it easier for competitors to expand and to achieve
economies of scale to a greater extent. In addition, our competitors may be able to rely on the reach of the retail presence
of their affiliated group companies or banks. Competition in this market segment has also increased as a result of interest
rate deregulation and other liberalization measures affecting the housing finance industry in India and we expect
competition to intensify in the future.

Our ability to compete effectively will depend, in part, on our ability to maintain or increase our margins. Our margins
are affected in part by our ability to continue to secure low-cost capital, and charge optimum interest rates at which we
lend to our customers. Consequently, our ability to maintain or increase our margins will be dependent on our ability to
pass on increases in the interest rates on our interest-bearing liabilities to our customers. Moreover, any increases in the
interest rates on the loans we extend may also result in a decrease in business. We cannot assure you that we will be
able to react effectively to these or other market developments or compete effectively with new and existing players in
the increasingly competitive housing finance industry. If we are unable to compete effectively, our business and results
of operations may be adversely affected.

26
11. Our inability to meet our obligations, including financial and other covenants under our debt financing
arrangements could adversely affect our business, results of operations and financial condition.

As of September 30, 2019, our Total Borrowings were ₹ 22,956.31 million. Our ability to meet our debt service
obligations and repay our outstanding borrowings will depend primarily on the cash generated by our business. Our
financing agreements contain certain restrictive covenants that limit our ability to undertake certain types of
transactions, any of which could adversely affect our business and financial condition. We are required to obtain prior
approval from our lenders for, among other things:

 effecting any change in the ownership or control of our Company;

 effecting any change in the capital structure of our Company or any amendments to our Memorandum of
Association or Articles of Association;

 effecting changes in the shareholding pattern of the Company, including shareholding of the promoters,
directors;

 entering into any schemes of mergers, amalgamations, compromise or reconstruction;

 undertaking any guarantee obligation on behalf of any other person;

 declaring and paying dividend in the event our Company defaults or delays in debt repayment of any of the
lenders or upon the occurrence of any event of default;

 utilization of funds for any other purpose other than for which approval has been granted or agreed to be
granted;

 undertaking any activity other than activities indicated in the objects clause of the Memorandum of
Association;

 approaching capital market for mobilizing additional resources either in the form of debt or equity;

 changing the substantial nature of the business of our Company; and

 effecting any change in management and operating structure of our Company.

Under these agreements, certain lenders also require us to maintain certain financial ratios such as asset coverage ratio,
security cover ratio, interest coverage ratio and debt service coverage ratio. Some of our financing agreements also
contain cross-default and cross-acceleration clauses, which are triggered in the event of default by our Company under
the respective financing agreements. Our failure to meet our obligations under our financing agreements could have an
adverse effect on our business, results of operations and financial condition.

Further, under certain agreements in relation to the refinancing availed from the NHB, we are required to submit an
undertaking from the shareholders who hold 20% or more of the Equity Share capital to the effect that any dilution of
10% or more, requires prior approval from the NHB. In terms of such requirement, our Promoters and Bessemer have
provided such undertakings to the NHB. Further, under certain agreements in relation to the refinancing availed by us
from the NHB, P.S. Jayakumar, one of the Selling Shareholders and one of our initial founders, is required to obtain
approval of the NHB for any change in his shareholding in the Company. While our Company and such entities and
individual have applied and received such approvals from the NHB (“NHB Approvals”), in connection with the Offer,
such approvals are subject to the approval of the RBI.

Our future borrowings may also contain similar restrictive provisions. If we fail to meet our debt service obligations or
covenants provided under the financing agreements, the relevant lenders could declare us to be in default under the
terms of our agreements or accelerate the maturity of our obligations. We cannot assure you that, in the event of any
such acceleration, we will have sufficient resources to repay the borrowings.

12. Any failure or significant weakness of our internal processes or systems could cause operational errors or incidents
of fraud, which would adversely affect our business, profitability and reputation.

We are responsible for establishing and maintaining adequate internal measures commensurate with the size and
complexity of operations. Our internal audit functions make an evaluation of the adequacy and effectiveness of internal
systems on an ongoing basis so that business units adhere to our policies, compliance requirements and internal
guidelines. While we periodically test and update our internal processes and systems, we are exposed to operational

27
 risks arising from the potential inadequacy or failure of internal processes or systems, and our actions may not be
sufficient to ensure effective internal checks and balances in all circumstances.

Our management information systems and internal procedures that are designed to monitor our operations and overall
compliance may not identify every instance of non-compliance or every suspicious transaction. If internal system or
process weaknesses are identified, our actions may not be sufficient to correct such weakness. Failures or material errors
in our internal systems may lead to deal errors, pricing errors, inaccurate financial reporting, fraud and failure of critical
systems and infrastructure. Such instances may also adversely affect our reputation, business and results of operations.
Further, the NHB has, during previous inspections suggested certain improvements to our internal audit and control
procedures. We cannot assure you that that we would be able to prevent frauds in the future or that our existing internal
mechanisms to detect or prevent fraud will be sufficient. Any fraud discovered in the future may have an adverse effect
on our business, profitability and reputation.

13. Our inability to expand our business into new regions and markets in India could adversely affect our business,
results of operations, financial condition and cash flows.

As part of our growth strategy, we continue to evaluate opportunities to expand our business into new markets in India.
Factors such as competition, customer requirements, regulatory regimes, business practices and customs in these new
markets may differ from those in our existing markets, and our experience in our existing markets may not be applicable
to these new markets. In addition, as we enter new markets and geographical regions, we are likely to compete with not
only other banks and financial institutions but also the local unorganized or semi-organized private financiers, who may
be more familiar with local regulations, business practices and customs, and may have stronger relationships with target
customers.

As we plan to expand our geographic footprint, we may be exposed to additional challenges, including identifying and
collaborating with local business partners with whom we may have no previous business relations, obtaining necessary
governmental approvals, successfully marketing our brand and products in markets in which we have no familiarity;
attracting customers in a market in which we do not have significant experience or visibility; being subject to additional
local taxes; attracting and retaining new employees; expanding our technological infrastructure; maintaining
standardized systems and procedures; and adapting our marketing strategy and operations to new markets in India in
which different languages are spoken. For instance, a number of states in India such as Gujarat, Maharashtra and
Karnataka, have enacted laws to regulate money-lending transactions and there are civil and criminal penalties
prescribed for non-compliance with the relevant money lending statutes. These laws also establish a maximum rate of
interest that can be charged to customers. There is however, ambiguity on whether HFCs and NBFCs are required to
comply with provisions of these state money-lending laws. If it is judicially determined or clarified by relevant
authorities that such statutes apply to HFCs, our business in such states could be affected. To address these challenges,
we may have to make significant investments that may not yield desired results or incur costs that we may not be able
to recover. Our inability to expand our current operations or the sub-optimal performance of our new branches may
adversely affect our business, financial condition, results of operations and cash flows.

14. Our inability to maintain our capital adequacy ratio could adversely affect our business.

The NHB Directions currently require HFCs to comply with a capital to risk (weighted) assets ratio, or capital adequacy
ratio (“CRAR”), consisting of Tier I and Tier II capital. As per the NHB Directions, we are required to maintain a
minimum capital adequacy ratio, consisting of Tier I capital and Tier II capital. Regulation 30 of the NHB Directions
currently requires all HFCs to comply with a CRAR, consisting of Tier I and Tier II capital, of not less than 13.0% of
its aggregate risk weighted assets and of risk adjusted value of off-balance sheet items, on or before March 31, 2020,
14% on or before March 31, 2021 and 15% on or before March 31, 2022 and thereafter. At a minimum, Tier I capital
of an HFC, at any point of time, cannot be less than 10%. Further, we are required to ensure that the total Tier II capital
at any point of time, should not exceed 100% of Tier – I capital. For details, see “Key Regulations and Policies in India”
on page 151. As of September 30, 2019, our CRAR was 47.6%, with Tier I capital comprising 46.8% and Tier II capital
comprising 0.7%. As we continue to grow our loan portfolio and asset base we will be required to raise additional Tier
I and Tier II capital in order to remain in compliance with the applicable capital adequacy ratios. Further, the NHB may
increase its current CRAR requirements, which may require us to raise additional capital. We cannot assure you that
we will be able to raise adequate additional capital in the future on terms favorable to us, or at all, which may adversely
affect the growth of our business.

15. Our Auditor’s reports on financial statements for Financial Year 2018 and Financial Year 2019 include certain
matters required under the Companies (Auditors Report) Order, 2016 (“CARO”).

Our Auditor’s reports on the financial statements for Financial Year 2018 and Financial Year 2019 include certain
matters as required under the CARO, in terms of Section 143(11) of the Companies Act, 2013. For instance, the
Auditor’s reports identify matters such as undisputed amounts of ₹ 0.18 million due outstanding for more than six
months, including an amount of ₹ 0.14 million being outstanding towards payments of professional tax as of March 31,

28
 2019) and significant delays in deposit of statutory dues. There can be no assurance that our Auditor’s observations for
any future fiscal periods will not contain such matters, prescribed under CARO, or that such matters will not otherwise
affect our results of operations in such future periods.

16. Non-compliance with the NHB’s or RBI’s observations made pursuant to its periodic inspections and violations of
regulations prescribed by the NHB or RBI, could expose us to certain penalties and restrictions.

Prior to the notification of the NHB Act Amendments, we were subject to periodic inspection by the NHB under the
NHB Act, 1987 (the “NHB Act”), pursuant to which the NHB inspected our books of accounts and other records for
the purpose of verifying the correctness or completeness of any statement, information or particulars furnished to the
NHB or for obtaining any information, which we may have failed to furnish when called upon to do so. However,
pursuant to the NHB Act Amendments, the RBI will also have the power to conduct such inspections, in addition to the
NHB. In its past inspection reports, the NHB has identified certain non-compliances with the policy circulars and
guidelines issued by NHB, and has also observed certain shortcomings and inadequacies in some of our policies, our
KYC compliance and audit systems.

NHB has issued its inspection report for the financial year 2018, identifying certain deficiencies and observations,
including incorrect inclusion of provisions for NPAs in the computation of Tier-II capital; short provisioning being
observed in case of individual housing loans, reporting of incorrect capital adequacy ratio due to factors including wrong
risk weight assignment, pending adoption of the national disaster management guidelines issued by the NHB in our
loan policies, shortcomings in the credit policy, ALM policy and the investment policy adopted by us, certain non-
compliances with our internal policies, inadequate scope of internal audit, certain limitations in generating reports on
customized parameters with the software we use and failure to obtain independent valuation reports for project loans.
We have noted the observations, to the extent applicable, and furnished our responses and confirmed that we will ensure
compliance. We are currently in the process of addressing the limitations in generation of reports on customized
parameters with the software we use.

Further, in the event the NHB or RBI finds that our Company is in violation of regulations prescribed them, we may be
subject to penalties or investigations. For instance, the NHB has issued a show cause notice to us on January 6, 2015,
in relation to submission of annual returns in the form prescribed under the NHB Directions. Our Company has replied
to this notice on January 12, 2015, providing certain clarifications, requesting the NHB for condonation of error and
ensuring compliances in the future. No further action has been taken in relation to the show cause notice as on the date
of this draft red herring prospectus. For details, see “Outstanding Litigation and Material Developments” on page 298.
Further, the NHB has issued a show cause notice to us on June 26, 2019, in relation to non-compliance with provisions
of paragraph 2(1)(zg) and paragraph 30 of the NHB Directions in relation to incorrect inclusion of provisions for NPAs
in the computation of Tier-II capital and wrong risk weight assignment, respectively. We replied to this notice on July
4, 2019, providing certain clarifications, requesting the NHB for condonation of error and ensuring compliances in the
future. However, NHB did not accept our submissions and levied a penalty of ₹ 0.01 million by its letter dated July 30,
2019. The penalty has been duly paid and acknowledged by the NHB. For details, see “Outstanding Litigation and
Material Developments” on page 298.

While we seek to comply with all regulatory provisions applicable to us, in the event we are unable to comply with the
NHB’s or RBI’s directions at any time in the future, we could be subject to penalties and restrictions imposed by the
NHB or RBI. Imposition of any future penalty or adverse findings by the NHB or RBI, requiring corrective steps
entailing a compliance cost for us, may have an adverse effect on our business, results of operations, financial condition
and reputation.

17. We may not be able to identify, monitor and manage risks or effectively implement our risk management policies.

The effectiveness of our risk management is affected by the quality and timeliness of available data. We have devoted
resources to develop our risk management policies and procedures and aim to continue to do so in the future. We have
policies and procedures in place to measure, manage and control the various risks to which we are exposed, which
include our asset-liability management policy, credit policy, corporate governance policy, whistle blower policy,
investment policy, recovery and collections policy, and KYC and anti-money laundering policy. Our Board of Directors
and the Risk Management Committee review our risk management policies from time to time. We also depend on our
information technology systems to assist us with our risk management functions.

However, our policies and procedures to identify, monitor and manage risks may not be fully effective. For instance,
the NHB, during its inspection, had observed that the scope of the internal audit required improvement in establishing
oversight on operational risk areas like outsourcing agencies, head office functions, business and risk involvement,
business continuity planning preparedness, specifying time frame for compliance and closure processes. Some of our
risk management processes may not be automated and subject to human error. Some of our methods of managing risks
are based on the use of observed historical market behaviour and may not accurately predict future risk exposures,
which could be significantly greater than those indicated by the historical measures. In addition, as we seek to expand

29
 the scope of our operations, we also face the risk of inability to develop commensurate risk management policies and
procedures. Other risk management methods depend upon an evaluation of information regarding the markets we
operate in, the customers we service and certain other matters, which may not be accurate, complete, up-to-date or
properly evaluated in all cases. Management of operational, legal or regulatory risks requires, among other things,
policies and procedures to properly record and verify a number of transactions and events. Although we have established
these policies and procedures, they may not be fully effective.

Our earnings are dependent upon the effectiveness of our management of changes in credit quality and risk
concentrations, the accuracy of our valuation models and our critical accounting estimates and the adequacy of our
allowances for loan losses. To the extent our assessments, assumptions or estimates prove inaccurate or not predictive
of actual results, we could suffer higher than anticipated losses. If we fail to effectively implement our risk management
policies, it could have an adverse effect on our business, results of operations and financial condition.

18. Any deterioration in the performance of any pool of receivables assigned to banks and other institutions may
adversely impact our financial performance.

We assign a portion of our receivables from our loan portfolio to banks and other financial institutions. Such direct
assignment transactions are undertaken by us on the basis of our internal estimates of funding requirements, and may
vary from time to time. During the six months ended September 30, 2019 and 2018 and the financial years 2019, 2018
and 2017, we had assigned assets worth ₹ 4,746.42 million, ₹ 674.05 million, ₹ 2,920.65 million, ₹ 374.62 million and
₹ 542.41 million, respectively. As of September 30, 2019 and 2018 and March 31, 2019, 2018 and 2017, our receivables
assigned expressed as a percentage of our Gross Loan Assets were 15.2%, 3.5%, 12.0%, 2.8% and 6.4%, respectively.
Any change in RBI or other government regulations in relation to assignments/securitizations by HFCs could have an
adverse impact on our assignment/securitization program. In the event the bank or financial institution does not realize
the receivables due under loans that have been assigned, the relevant bank or institution can enforce the underlying
credit enhancements provided by our Company. Should the assignee banks or any other financial institutions seek to
enforce the underlying credit enhancements such as bank guarantees and fixed deposits, which are provided up to a
specified percentage of the underlying loans, it could have an adverse effect on our financial condition and results of
operations.

19. The Indian housing finance industry is extensively regulated and any changes in laws and regulations applicable to
HFCs could have an adverse effect on our business.

We are subject to the corporate, taxation and other laws in effect in India and the states in which we operate, which
require continuous monitoring and compliance. These regulations, apart from regulating the manner in which a company
carries out its business and internal operations, prescribe various periodical compliances and filings, including but not
limited to filing of forms and declarations with the relevant registrar of companies, the NHB and other relevant
authorities. Pursuant to the NHB Act and various regulations, circulars and guidelines issued by the NHB, HFCs are
currently required to comply with, among others, limits on borrowings, investments, interest rates and tenure on public
deposits, prudential norms for income recognition, asset classification and provisioning for standard and non-
performing assets, norms for creation of special reserves as well as minimum capital adequacy and liquidity
requirements. The regulations applicable to us also address issues such as our conduct with customers and recovery
practices, market conduct and foreign investment.

The laws and regulations governing the housing finance industry in India have become increasingly complex and cover
a wide variety of issues. Compliance with many of the regulations applicable to our operations in India, including any
restrictions on investments and other activities currently being carried out by us, involves a number of risks, particularly
in markets where applicable regulations may be subject to varying interpretations.

Further, the NHB Act Amendments have come into force on August 9, 2019. Pursuant to the NHB Act Amendments,
amongst others, (i) HFCs are required to apply to the RBI for registration under the NHB Act, in place of NHB; (ii) the
RBI has the power to determine the percentage of assets to be maintained in terms of its investments and its reserve
fund to be maintained; (iii) the RBI has the power to determine policy and issue instructions in relation to housing
finance institutions; and (iv) the RBI has the power to regulate by specifying conditions or prohibit the issue by any
HFC which is a company of any prospectus or advertisement soliciting deposits of money from the public. The NHB
Act Amendments also provide for certain powers to be exercised by the RBI concurrently with the NHB, such as the
power to conduct inspections and request for documents from the HFCs. Further, pursuant to the notification of the RBI
dated November 19, 2019 and the amendments to the ‘Master Directions - Exemptions from the RBI Act, 1934’ issued
by the RBI on November 11, 2019, certain existing exemptions available to HFCs under the RBI Act have been
withdrawn and accordingly HFCs shall also be subject to regulation and directions of the RBI. Accordingly, there may
be further scrutiny and instructions from the RBI in relation to the regulation of HFCs. If we fail to comply with such
requirements, we may be subject to penalties or compounding proceedings.

30
 Further, pursuant to recent notification dated November 18, 2019 issued by the Ministry of Corporate Affairs, certain
prescribed non-banking finance companies (which include HFCs) with asset size of ₹ 500 crore or more, as per last
audited balance sheet have been notified as a category of financial service providers (“Notified FSPs”). The Ministry
of Corporate Affairs has also issued the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of
Financial Service Providers and Application to Adjudicating Authority) Rules, 2019, in terms of which the RBI may
initiate insolvency and liquidation proceedings under the IBC against Notified FSPs (which includes our Company) for
a ‘default’ in terms of the IBC.

If the interpretation of the regulators and authorities varies from our interpretation, we may be subject to penalties and
our business could be adversely affected. Moreover, these laws and regulations can be amended, supplemented or
changed at any time such that we may be required to restructure our business and activities and incur additional expenses
to comply with such laws and regulations, which could adversely affect our business.

Additionally, we are required to make several filings with the NHB, RBI, the RoC and other relevant authorities
pursuant to the provisions of NHB regulations, the Companies Act and other regulations. We may have made
inadvertent errors in certain filings with such authorities which could attract penalties. If we fail to comply with these
requirements, or a regulator claims we have not complied with these requirements, we may be subject to penalties and
compounding proceedings. For further information on laws and regulations applicable to us, see “Key Regulations and
Policies in India” on page 151.

20. We require certain statutory and regulatory approvals for conducting our business and our inability to obtain, retain
or renew them in a timely manner, or at all, may adversely affect our operations.

Our operations are subject to extensive government regulation and we are required to obtain and maintain a number of
statutory and regulatory permits and approvals under central, state and local government rules in India, generally for
carrying out our business. We have also applied to the RBI to obtain their approval in connection with the Offer.
However, as on the date of this Draft Red Herring Prospectus, we have not received their approval. For further details,
see “Other Regulatory and Statutory Disclosures” on page 303.

Further, while we have obtained a number of approvals required for our operations, certain approvals for which we have
submitted applications are currently pending. Further, we have made an application before NHB on June 11, 2018 for
a fresh certificate of registration upon conversion to a public limited company, which is currently pending with NHB.
In addition to the above, renewal applications for certain other approvals, including professional tax enrolment and
registration certificates have been made to the relevant revenue authorities in relation to certain of our branch offices.
Further, applications for shops and establishments registrations in relation to certain of our branch offices are yet to be
made or yet to be received. We are also in the process of applying for the renewal of certain approvals that have expired.
For further details, see “Government and Other Approvals” on page 301. In addition, we may apply for more approvals,
including the renewal of approvals, which may expire from time to time, and approvals in the ordinary course of
business.

A majority of these approvals are granted for a limited duration and are subject to numerous conditions. We cannot
assure you that these approvals would not be suspended or revoked in the event of non-compliance or alleged non-
compliance with any terms or conditions thereof, or pursuant to any regulatory action. If there is any failure by us to
comply with the applicable regulations, or if the regulations governing our business are amended, we may incur
increased costs, be subject to penalties, have our approvals and permits revoked or suffer a disruption in our operations,
any of which could adversely affect our business.

21. We depend on the accuracy and completeness of information provided by our customers and certain third party
service providers and our reliance on any misleading information may affect our judgment of their credit worthiness,
as well as the value of and title to the collateral.

While deciding whether to extend credit to customers, we rely, to a significant extent, on the information furnished to
us by the customers for certain key elements of the credit assessment process, including their financial transactions and
credit history. We follow the Know Your Customer guidelines prescribed by the NHB for potential customers, verify
their place of employment and residence, as applicable, and verify details with the NHB’s caution list. We may also
rely on certain representations from customers as to the accuracy and completeness of that information. For ascertaining
the creditworthiness and encumbrances on the collateral provided, we may depend on the respective registrars and sub-
registrars of assurances, local legal agencies and lawyers, credit information companies or credit bureaus, and on
independent valuers in relation to the value of the collateral. Our reliance on any misleading information may affect our
judgement of credit worthiness of potential customers, and the value of and title to the collateral. Our risk management
measures may not be adequate to prevent or deter such activities in all cases, which may adversely affect our business,
results of operations and financial condition.

31
 Further, we target first time home buyers and such customers may not have credit histories supported by tax returns and
other documents that would enable us to accurately assess their creditworthiness. We may also not receive updated
information regarding any change in the financial condition of our customers or may receive inaccurate or incomplete
information as a result of any fraudulent misrepresentation by our customers or employees. Moreover, the availability
of accurate and comprehensive credit information on retail customers in India is more limited than for larger corporate
customers, which reduces our ability to accurately assess the credit risk associated with such lending. Although as part
of our credit policy, we conduct credit checks of all our customers, including with credit bureaus, conduct site-visits
and personal discussions, we cannot assure you that such credit information will be accurate or comprehensive.
Difficulties in assessing credit risks associated with our day-to-day lending operations may lead to an increase in the
level of our non- performing assets, which could adversely affect our business and results of operations.

22. Significant changes by the Government, the RBI or the NHB in their policy initiatives facilitating the provision of
housing and housing finance or any change in the tax incentives that the Government currently provides to HFCs
may have an adverse effect on our business, results of operations and financial condition.

The Government of India provides certain incentives to encourage providing credit to the housing industry and has
implemented policies, particularly in relation to affordable housing, that are aimed at providing low-cost, long-term
credit to the low and middle income segments in India. The NHB provides re-finance for certain qualifying loans at
reduced rates to certain qualifying HFCs through its schemes. In addition, the RBI provides certain incentives to the
housing finance industry by extending priority sector status to housing loans. Certain key measures taken by the RBI to
assist in fulfilling the Government’s objectives include the reduction in risk weights applicable for affordable housing
loans for the purpose of calculation of CRAR and allowing HFCs to raise long-term ECBs for on-lending towards
affordable housing, which the RBI defines as housing loans with a size of up to ₹ 2.50 million. However, we cannot
assure you that the Government, the RBI and the NHB will continue to provide such incentives in the future.

The Government had introduced the Credit Linked Subsidy Scheme (“CLSS”) of the Pradhan Mantri Awas Yojana
(“PMAY”) – Housing for All (Urban) which aims at expanding institutional credit flow to the housing needs of the
urban poor, by providing credit-linked subsidy on home loans taken by eligible urban poor for acquisition or
construction of houses. Individuals belonging to the economically weaker sections (“EWS”) and the low income group
(“LIG”) seeking housing loans from primary lending institutions (“PLIs”), including banks and HFCs, are eligible to
avail benefits under the scheme.

Further, pursuant to Section 36(1)(viii) of the (Indian) Income Tax Act, 1961 (the “Income Tax Act”), up to 20.00%
of profits from housing finance activities may be carried to a special reserve and will not be subject to income tax. The
balance of our special reserve as of September 30, 2019 was ₹ 254.19 million. In addition, home buyers receive tax
incentives on home loans for principal and interest payment of home loans, which has improved affordability levels of
borrowers. Principal repayment qualifies for tax deduction under section 80C of the Income Tax Act, 1961. However,
we cannot assure you that the Government will continue to make such benefits available to HFCs or home buyers.

Any significant change by the Government in its various policy initiatives facilitating provision of housing and housing
finance or any change in the tax incentives that it currently provides to HFCs and homebuyers may have an adverse
effect on our business, results of operations and financial condition.

23. We utilize the services of certain third parties for our operations and any interruption or deficiency in their services
could have an adverse effect on our business.

We utilize the services of third parties from time to time in various aspects of our operations such as sourcing of
customers, valuation of collateral and legal services. We generate customer leads from connectors who are generally
individuals such as insurance agents, tax practitioners and local shopkeepers. For the six months ended September 30,
2019 and the financial year 2019, we sanctioned 6,093 and 9,555 loans on account of leads generated through 1,431
and 1,331 connectors, respectively. However, our arrangements with connectors are on a non-exclusive basis and they
may work for our competitors in the future, which may adversely affect our ability to increase our customer base. We
also engage with local property valuers and legal advisors in the regions in which we operate. We cannot assure you
that we will be successful in continuing to receive uninterrupted and quality services from our third party service
providers. Any disruption, negligence, fraud or inefficiency in the services provided by our third party service providers
could adversely affect our business and reputation.

24. We are exposed to risks that may arise if our customers opt for balance transfers to other banks or financial
institutions, or if customers face increased difficulties in refinancing their existing housing loans from other banks
and financial institutions to our Company.

We offer our customers variable interest rate loans which are linked to our reference rate. Based on market conditions,
we price our loans at either a discount or a premium to our reference rate, which is determined primarily on the basis of
our cost of borrowings. Customers with variable interest rates on their loans are exposed to increased equated monthly

32
 instalments (“EMIs”) when the loans’ interest rate adjusts upward, to the rate computed in accordance with the
applicable index and margin. Such customers typically seek to refinance their loans through balance transfer to other
banks and financial institutions, to avoid increased EMIs that may result from an upwards adjustment of the loans’
interest rate. While refinancing of loans by other lenders could in certain circumstances be beneficial for our customers,
it results in a loss of interest income expected from such loans over the course of their tenure. In addition, all housing
finance providers in India are prohibited from charging pre-payment penalties on loans with variable interest rates,
which has led to a high incidence of balance transfer, which results in a high turnover of loan assets between lenders,
causing lenders to incur increased origination costs. In addition, increased difficulties for customers in refinancing their
existing housing loan from another bank or financial institution, may also adversely affect our balance transfer loan
originations. As competition in the housing finance sector intensifies, some of our customers with variable interest rate
loans may not be able to find balance transfer options at comparably lower interest rates or other financing alternatives.
As a result, they may be exposed to the risks associated with increases in EMIs, which may lead to increased delinquency
or default rates. Increased delinquency rates may also result in deterioration in credit quality of our loan portfolio, which
could have an adverse effect on our business, results of operations and financial condition.

25. Our Company, our Promoters and our Directors are involved in certain legal and other proceedings. Any adverse
outcome in such proceedings may have an adverse effect on our business, results of operations and financial
condition.

In the ordinary course of business, our Company is involved in certain legal proceedings, which are pending at different
levels of adjudication before various courts, tribunals and statutory, regulatory and other judicial authorities in India,
and, if determined adversely, could materially adversely affect our reputation, business, results of operations and
financial condition. We can give no assurance that these legal proceedings will be decided favorably or that any further
liability may arise from these claims in the future.

The summary of outstanding matters set out below includes details of criminal proceedings, tax proceedings, statutory
and regulatory actions and other material pending litigation involving our Company. According to the Materiality
Policy, any outstanding litigation, other than criminal proceedings, statutory or regulatory actions and taxation matters,
is considered material if the monetary amount of claim by or against the entity or person in any such pending matter is
in excess of ₹ 4.52 million or if an adverse outcome of any such litigation could materially and adversely affect our
business, prospects, operations, financial position or reputation.

Types of Proceedings Number of Cases Amount (in ₹ million)*

Litigation filed against our Company
Actions by statutory or regulatory authorities 2 0.01
Indirect tax proceedings 1 5.38
Litigation filed by our Company
Criminal proceedings 11 4.63
Total 14 10.02
Litigation filed against our Directors
Criminal proceedings 1 -
Actions by statutory or regulatory authorities 3 0.1
Total 4 0.1
* To the extent quantifiable.

Further, in the past, certain complaints have been sent to NHB and our credit rating agencies and certain queries have
been sent by the lenders in relation to our business. We have satisfactorily responded to and clarified these matters with
such agencies. We cannot assure you that such matters will not occur in the future and cause volatility in the price of
our Equity Shares.

Involvement in such proceedings could divert our management’s time and attention and consume financial resources.
Further, an adverse judgment in these proceedings could have an adverse impact on our business, results of operations
and financial condition. For details, in relation to the proceedings involving our Company and Directors, see
“Outstanding Litigation and Material Developments” on page 298.

We cannot assure you that any of the outstanding material litigation matters will be settled in our favour or in favour of
our Company, Directors or Promoters, as applicable, or that no additional liability will arise out of these proceedings.

26. We are dependent on a number of Key Managerial Personnel and our senior management, and the loss of, or our
inability to attract or retain such persons could adversely affect our business, results of operations and financial
condition.

Our performance depends largely on the efforts and abilities of our Key Managerial Personnel, senior management, and
our operational personnel. We believe that the inputs and experience of our senior management are valuable for the

33
 development of our business, operations and the strategic directions taken by our Company. Further, our underwriting
team currently comprises only four personnel and certain applications and software that we use are developed in-house
by our employees. We cannot assure you that these individuals or any other member of our senior management team
will not leave us or join a competitor or that we will be able to retain such personnel or find adequate replacements in
a timely manner, or at all. We may require a long period of time to hire and train replacement personnel when qualified
personnel terminate their employment with our Company. We may also be required to increase our levels of employee
compensation more rapidly than in the past to remain competitive in attracting employees that our business requires.
The NHB during its previous inspections has highlighted the need for our Company to put in place necessary succession
planning for the senior executives and second level functionaries. The loss of, or inability to attract or retain such persons
may have an adverse effect on our business, results of operations and financial condition.

27. Our operations could be adversely affected by strikes or increased wage demands by our employees or any other kind
of disputes with our employees.

As of September 30, 2019, we employed 738 personnel across our operations. Although we have not experienced any
material employee unrest in the past, we cannot assure you that we will not experience disruptions in work due to
disputes or other problems with our work force, which may adversely affect our ability to continue our business
operations. Any employee unrest directed against us, could directly or indirectly prevent or hinder our normal operating
activities, and, if not resolved in a timely manner, could lead to disruptions in our operations. These actions are
impossible for us to predict or control and any such event could adversely affect our business, results of operations and
financial condition.

28. Our Promoters may not have adequate experience in the business activities undertaken by our Company.

While our Company, including our operations, is managed by professionals, TN V LLP is primarily engaged in the
business of making investments and is registered with SEBI as a Category II Alternative Investment Fund, while Aether
is primarily engaged in the business of investing in Indian companies through the FDI route. Due to the nature of their
core business activities, our Promoters may not have adequate experience in the business activities undertaken by our
Company. For details, see “Our Promoters and Promoter Group” on page 176.

29. We propose to utilize the Net Proceeds of the Fresh Issue to maintain the minimum capital adequacy ratio and to
meet future capital requirements arising out of the growth in our business and not for any specified projects.

The Net Proceeds of the Fresh Issue will be utilised to increase our Company’s Tier I capital base to maintain the
minimum capital adequacy ratio in accordance with Regulation 30 of the NHB Directions and to meet our future capital
requirements which are expected to arise out of growth of our business and assets, primarily our housing loans and other
loans, and to ensure compliance with the NHB Directions. Consequently, we will not be using the Net Proceeds for any
specified projects. For details, see “Objects of the Offer” on page 76.

30. Our insurance coverage may not be sufficient or may not adequately protect us against all material hazards, which
may adversely affect our business, results of operations and financial condition.

We believe that the insurance coverage we maintain is reasonably adequate to cover the normal risks associated with
the operation of our businesses. Even if we have insurance for the incident giving rise to the loss, we may be required
to pay a significant deductible on any claim for recovery of such a loss, or the amount of the loss may exceed our
coverage for the loss. However, we cannot assure you that any claim under the insurance policies maintained by us will
be honored fully, in part or on time, or that we have obtained sufficient insurance to cover all potential losses. In
addition, our insurance coverage expires from time to time. We apply for the renewal of our insurance coverage in the
normal course of our business, but we cannot assure you that such renewals will be granted in a timely manner, or at
acceptable cost, or at all. To the extent that we suffer loss or damage, or successful assertion of one or more large claims
against us for events for which we are not insured, or for which we did not obtain or maintain insurance, or which is
not covered by insurance, exceeds our insurance coverage or where our insurance claims are rejected, the loss would
have to be borne by us and our results of operations, financial condition and cash flows could be adversely affected.

31. We conduct our business operations on leased premises, including our Registered and Corporate Office, and our
inability to renew such leases may adversely affect our operations.

As of September 30, 2019, we conducted our operations through 65 branches, of which 40 have been taken on a lease
and 25 have been taken on leave and license basis. The leave and license agreements in relation to our Registered and
Corporate Office, read with the addendums thereto, are valid until April 30, 2021. Any adverse impact on the title of
the owners from whose premises we operate, breach of the contractual terms of any agreements, or if any of the owners
of these premises do not renew the agreements under which we occupy the premises, or if they seek to renew such
agreements on terms and conditions unfavourable to us, or if they terminate our agreements, we may suffer a disruption

34
 in our operations and will have to look for alternate premises. We may be unable to relocate our offices in a timely
manner or at an acceptable cost, which may adversely affect our business and results of operations.

32. Fluctuations in the market values of our investments could adversely affect our result of operations and financial
condition.

As part of our treasury management, we have formulated a board-approved investment policy in accordance with the
NHB Directions. Our investment policy prescribes permissible investment assets such as mutual funds, fixed deposits,
non-convertible debentures, subject to restrictions prescribed by our internal policies. The value of these investments
depends on several factors beyond our control, including the domestic and international economic and political scenario,
inflationary expectations and monetary policies. Any decline in the value of these investments may have an adverse
effect on our results of operations and financial condition.

33. The bankruptcy code in India may affect our rights to recover loans from our customers.

The Insolvency and Bankruptcy Code, 2016 (“IBC”) was notified on August 5, 2016. The IBC offers a uniform and
comprehensive insolvency legislation encompassing all companies, partnerships and individuals (other than financial
firms). It allows creditors to assess the viability of a debtor as a business decision, and agree upon a plan for its revival
or a speedy liquidation. The IBC creates a new institutional framework, consisting of a regulator, insolvency
professionals, information utilities and adjudicatory mechanisms, which will facilitate a formal and time-bound
insolvency resolution and liquidation process.

In case insolvency proceedings are initiated against a debtor to our Company or a debtor files for voluntary insolvency,
we may not have complete control over the recovery of amounts due to us. Under the IBC, upon invocation of an
insolvency resolution process, a committee of creditors is constituted by the interim resolution professional, wherein
each financial creditor is given a voting share proportionate to the debts owed to it. Any decision of the committee of
creditors must be taken by a vote of not less than 75% of the voting share of all financial creditors. Any resolution plan
approved by committee of creditors is binding upon all creditors, even if they vote against it.

In case a liquidation process is opted for, the IBC provides for a fixed order of priority in which proceeds from the sale
of the debtor’s assets are to be distributed. Before sale proceeds are distributed to a secured creditor, they are to be
distributed for the costs of the insolvency resolution and liquidation processes and debts owed to workmen and other
employees. Further, under this process, dues owed to the Central and State Governments rank below the claims of
secured creditors, workmen and other employee dues and unsecured financial creditors. Further, pursuant to an
amendment to the IBC, allottees in a real estate project are considered on par with financial creditors. Specifically, in
relation to cases where we have extended construction finance to developers or builders for specific projects, allottees
in such real estate projects will be considered on par with our Company in terms of priority of repayment. Moreover,
other secured creditors may decide to opt out of the process, in which case they are permitted to realize their security
interests in priority. Additionally, in cases where proceedings under the IBC are initiated against the builders or
developers of project where the allottees of the apartments are our borrowers and if the builder or developer fails to
deliver the project, there may be delay in recovery of amounts from such borrowers.

Accordingly, if the provisions of the IBC are invoked against any of the borrowers of our Company, it may affect our
Company’s ability to recover our loans from the borrowers and enforcement of our Company’s rights will be subject to
the IBC.

34. Our inability to detect money-laundering and other illegal activities fully and on a timely basis may expose us to
additional liability and adversely affect our business and reputation.

We are required to comply with applicable anti-money-laundering (“AML”) and anti-terrorism laws and other
regulations in India. In the ordinary course of our operations, we run the risk of failing to comply with the prescribed
KYC procedures and the consequent risk of fraud and money laundering by dishonest customers and assessment of
penalties or imposition of sanctions against us for such compliance failures despite having implemented systems and
controls designed to prevent the occurrence of these risks. Further, the NHB has during a previous inspection, observed
that effective KYC implementation was not in place with proper management oversight, systems and controls and
training at our Company. Although we have responded to the NHB stating that effective KYC implementation is in
place and we believe that we have adequate internal policies, processes and systems in place to prevent and detect any
AML activity and ensure KYC compliance, we cannot assure you that we will be able to fully control instances of any
potential or attempted violation by other parties. Any inability on our part to detect such activities fully and on a timely
basis, may subject us to regulatory actions including imposition of fines and penalties and adversely affect our business
and reputation.

35
35. We have in the past entered into related party transactions and may continue to do so in the future, which may
potentially involve conflicts of interest with the equity shareholders.

We have entered into various transactions with related parties. While we believe that all such transactions have been
conducted on an arm’s length basis, in accordance with out related party transactions policy and contain commercially
reasonable terms, we cannot assure you that we could not have achieved more favorable terms had such transactions
been entered into with unrelated parties. It is likely that we may enter into related party transactions in the future.
Although all related party transactions that we may enter into post-listing, will be subject to board or shareholder
approval, as necessary under the Companies Act and the Listing Regulations, we cannot assure you that such
transactions, individually or in the aggregate, will not have an adverse effect on our financial condition and results of
operations or that we could not have achieved more favorable terms if such transactions had not been entered into with
related parties. For details of the related party transactions and as reported in the Restated Financial Information, see
“Restated Financial Information” on page 204.

36. Our Promoters, Directors and Key Managerial Personnel have interests in us other than the reimbursement of
expenses incurred and normal remuneration and benefits.

Our Promoters, Directors and Key Managerial Personnel may be deemed to be interested to the extent of Equity Shares
held by them, directly or indirectly, in our Company, as well as to the extent of any dividends, bonuses or other
distributions on such shareholding. Additionally, some of our Directors and Key Managerial Personnel may also be
regarded as interested to the extent of employee stock options granted by our Company and which may be granted to
them from time to time pursuant to the ESOP Schemes, as applicable. For details, see “Capital Structure” on page 57.

We cannot assure you that our Promoters, Directors and our Key Managerial Personnel, if they are also our shareholders,
will exercise their rights as shareholders to the benefit and best interest of our Company. For details, see “Our Promoters
and Promoter Group”, “Our Management – Interests of Directors” and “Our Management – Interests of Key
Managerial Personnel” on pages 176, 166 and 174.

37. Our ability to pay dividends in the future will depend on our earnings, financial condition, working capital
requirements, capital expenditures and restrictive covenants of our financing arrangements.

Our ability to pay dividends in the future will depend on our earnings, financial condition, cash flow, working capital
requirements, capital expenditure and restrictive covenants of our financing arrangements. Any future determination as
to the declaration and payment of dividends will be at the discretion of our Board and will depend on factors that our
Board deems relevant, including among others, our future earnings, financial condition, cash requirements, business
prospects and any other financing arrangements. Additionally, our ability to pay dividends may also be restricted by the
terms of financing arrangements that we may enter into. For details, see “Financial Indebtedness” on page 273.
Dividends distributed by us will attract dividend distribution tax at rates applicable from time to time and may be subject
to other requirements prescribed by the NHB or RBI, as the case may be. We cannot assure you that we will be able to
pay dividends in the future. For further details, see “Dividend Policy” on page 182.

38. We have had negative net cash flows in the past and may continue to have negative cash flows in the future.

The following table sets forth our cash flows for the periods indicated:

For the six months ended For the financial year

September 30,
2019 2018 2019 2018 2017
(₹ in million)
Net cash (used in) operating activities (4,427.38) (5,075.77) (7,905.70) (5,064.00) (2,728.96)
Net cash generated from / (used in) (3,365.59) (1,020.43) (1,054.86) 562.51 (140.11)
investing activities
Net cash generated from financing activities 6,995.40 6,879.54 10,587.66 3,571.83 3,798.60
Net increase / (decrease) in cash and cash (797.57) 783.34 1,627.10 (929.66) 929.53
equivalents

For further details, see “Financial Information” and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” on pages 204 and 275, respectively. We cannot assure you that our net cash flow will be
positive in the future.

39. We have referred to the data derived from industry reports commissioned from CRISIL Limited and ICRA Limited.

We have commissioned the services of independent third party research agencies CRISIL Limited and ICRA Limited
and have relied on the report titled “CRISIL Research – Industry Report on Affordable Housing Finance, November

36
 2019” and ICRA’s Report on Mortgage Finance Market for industry related data in this Draft Red Herring Prospectus.
These reports use certain methodologies for market sizing and forecasting. Neither we, nor any of the Lead Managers
have independently verified such data and therefore, while we believe them to be true, we cannot assure you that they
are complete or reliable. Accordingly, investors should read the industry related disclosure in this Draft Red Herring
Prospectus in this context. Industry sources and publications are also prepared based on information as of specific dates
and may no longer be current or reflect current trends. Industry sources and publications may also base their information
on estimates, projections, forecasts and assumptions that may prove to be incorrect. While industry sources take due
care and caution while preparing their reports, they do not guarantee the accuracy, adequacy or completeness of the
data. Accordingly, investors should not place undue reliance on, or base their investment decision solely on this
information.

40. Our Promoters and some of our Directors may have interests in entities in businesses similar to ours, which may
result in conflicts of interest with us.

Our Promoters and some of our Directors may have investments or interests in entities engaged in businesses similar to
ours, including in other geographies or across the financial services sector in general, which may, in the future, result
in conflicts of interest with us. For details, see “Our Promoters and Promoter Group” and “Our Management – Interests
of Directors” on pages 176 and 166.

41. During the last 12 months preceding the date of this Draft Red Herring Prospectus, our Company has issued Equity
Shares at a price that may be lower than the Offer Price.

We have, in the last 12 months prior to filing this Draft Red Herring Prospectus, issued Equity Shares at a price that
could be lower than the Offer Price. For details, see “Capital Structure - Equity Shares issued in the preceding one year
below the Offer Price” on page 59. The prices at which Equity Shares have been issued by us in the last one year should
not be taken to be indicative of the Price Band, Offer Price and the trading price of our Equity Shares after listing.

42. Our Promoters will continue to hold a significant equity stake in our Company after the Offer.

Following completion of the Offer, our Promoters, TN V LLP and Aether, will continue to hold a significant percentage
of our Equity Share capital. Our Promoters will therefore have the ability to influence our operations including the
ability to approve significant actions at Board and at shareholders’ meetings such as issuing Equity Shares, paying
dividends, and determining business plans and mergers and acquisitions strategies. In addition, if our Promoters do not
act together, such matters requiring shareholders’ approval may be delayed or may not occur at all, which could
adversely affect our business.

Further, upon listing of the Equity Shares on recognized stock exchanges, pursuant to the Shareholders’ Agreement, the
amendments thereto and the Articles of Association, TN V LLP and Aether shall have the right to nominate Directors
on our Board, subject to their shareholding at the time. For details in relation to rights to nominate Directors, “History
and Certain Corporate Matters - Summary of Key Agreements” beginning on page 159. The trading price of our Equity
Shares could be adversely affected if potential new investors are disinclined to invest in us because they perceive
disadvantages to a large shareholding being concentrated in our Promoters. For details of our Equity Shares held by our
Promoters, see “Capital Structure” on page 57. For details of interests of our Promoters in our Company, see “Our
Promoters and Promoter Group” on page 176.

43. We, together with our Shareholders, are required to comply with certain restrictive covenants in relation to their
shareholding, under our financing agreements.

Under certain agreements in relation to the refinancing availed from the NHB, we are required to submit an undertaking
from the shareholders who hold 20% or more of the Equity Share capital to the effect that any dilution of 10% or more,
requires prior approval from the NHB. In terms of such requirement, our Promoters and Bessemer have provided such
undertakings to the NHB. Further, under certain agreements in relation to the refinancing availed by us from the NHB,
P.S. Jayakumar, one of the Selling Shareholders and one our initial founders, is required to obtain approval of the NHB
for any change in his shareholding in the Company. While such entities and individual have applied and received such
approvals from the NHB (“NHB Approvals”) in connection with the Offer, such approvals are subject to the approval
of the RBI. Additionally, our Promoters have undertaken that they shall not affect any dilution of more than 10% without
prior approval of certain of our lenders, which have been obtained in connection with the Offer. In addition to restricting
the transferability of shareholding of such shareholders, such restrictions could discourage or prevent a change in
control, merger, consolidation, takeover or other business combination involving us, which might be beneficial to our
Shareholders.

44. Our Company will not receive any proceeds from the Offer for Sale. The Selling Shareholders are selling Equity
Shares in the Offer for Sale and will receive proceeds as part of the Offer for Sale.

37
 The Offer includes an Offer for Sale of Equity Shares by the Selling Shareholders. The proceeds from the Offer for Sale
will be paid to the Selling Shareholders, in proportion to their respective portion of the Offered Shares transferred by
each of them in the Offer for Sale, and we will not receive any such proceeds. For further details, see “Objects of the
Offer” and “Capital Structure” beginning on pages 76 and 57, respectively.

External Risk Factors

Risks Related to India

45. Political, economic or other factors that are beyond our control may have an adverse effect on our business and
results of operations.

The Indian economy and capital markets are influenced by economic, political and market conditions in India and
globally. Our Company is incorporated in India, and all of our assets and employees are located in India. As a result,
we are dependent on prevailing economic conditions in India and our results of operations are affected by factors
influencing the Indian economy. Further, the following external risks may have an adverse impact on our business and
results of operations, should any of them materialize:

 increase in interest rates may adversely affect our access to capital and increase our borrowing costs, which
may constrain our ability to grow our business and operate profitably;

 downgrade of India’s sovereign debt rating by an independent agency;

 political instability, resulting from a change in governmental or economic and fiscal policies, may adversely
affect economic conditions in India. In recent years, India has implemented various economic and political
reforms. Reforms in relation to land acquisition policies and trade barriers have led to increased incidents of
social unrest in India over which we have no control;

 civil unrest, acts of violence, terrorist attacks, regional conflicts or situations or war; and

 India has experienced natural calamities such as earthquakes, tsunamis, floods and drought in recent years.

Any slowdown or perceived slowdown in the Indian economy, or in specific sectors of the Indian economy, could
adversely affect our business, results of operations and financial condition and the price of the Equity Shares. Our
performance and the growth of our business depend on the overall performance of the Indian economy as well as the
economies of the regional markets in which we operate.

46. The growth rate of India’s housing finance industry may not be sustainable.

We expect the housing finance industry in India to continue to grow as a result of anticipated growth in India’s economy,
increases in household income and demographic changes. In addition, the Government of India is pursuing various
social welfare schemes and initiatives to create an enabling and supportive environment to both enhance the flow of
credit to the housing sector and increase home ownership in India. Various Central Government policies and initiatives
such as “Smart Cities” and the “Pradhan Mantri Awas Yojana” or the “Housing for all by 2022” scheme have reinforced
the primacy of the housing sector and the need to provide housing to all and are expected to promote affordable housing
through partnerships with private sector entities. However, it is not clear how certain trends and events, such as the pace
of India’s economic growth, the development of domestic capital markets and the on-going reform will affect India’s
housing finance industry. In addition, there can be no assurance that the Government policies and initiatives for the
housing finance industry will continue at the same or expected pace in the future. Consequently, there can be no
assurance that the growth and development of India’s housing finance industry will be sustainable.

47. Changing laws, rules and regulations and legal uncertainties, including adverse application of corporate and tax
laws, may adversely affect our business, results of operations and prospects.

The regulatory and policy environment in which we operate is evolving and subject to change. Such changes, including
the instances mentioned below, may adversely affect our business, results of operations and prospects, to the extent that
we are unable to suitably respond to and comply with any such changes in applicable law and policy. For example:

 the GAAR became effective from April 1, 2017. The tax consequences of the GAAR provisions being applied
to an arrangement could result in denial of tax benefit amongst other consequences. In the absence of any
precedents on the subject, the application of these provisions is uncertain. If the GAAR provisions are made
applicable to our Company, it may have an adverse tax impact on us; and

38
  the Government of India has implemented a comprehensive national GST regime that combines taxes and
levies by the Central and State Governments into a unified rate structure. In this regard, the Constitution (One
hundred and first Amendment) Act, 2016 enables the Government of India and state governments to introduce
GST. Any future increases or amendments may affect the overall tax efficiency of companies operating in
India and may result in significant additional taxes becoming payable. If, as a result of a particular tax risk
materializing, the tax costs associated with certain transactions are greater than anticipated, it could affect the
profitability of such transactions.

 The Finance (No. 2) Act, 2019 (the “Finance Act”), passed by the Parliament and which has received the
assent of the President of India, has introduced various amendments to legislations. Amongst others, the
Finance Act includes amendments to the NHB Act (“NHB Act Amendments”) which have transferred the
regulation authority over the housing finance sector from NHB to RBI. The NHB Act Amendments have come
into force August 9, 2019. Pursuant to the NHB Act Amendments, amongst others, (i) HFCs are required to
apply to the RBI for registration under the NHB Act, in place of NHB; (ii) the RBI has the power to determine
the percentage of assets to be maintained in terms of its investments and its reserve fund to be maintained; (iii)
the RBI has the power to determine policy and issue instructions in relation to housing finance institutions;
and (iv) the RBI has the power to regulate by specifying conditions or prohibit the issue by any housing finance
institution which is a company of any prospectus or advertisement soliciting deposits of money from the public.
However, the NHB Act Amendments, retain certain powers with the NHB, in addition to conferring such
powers on the RBI, such as power to conduct inspections and request for documents from the HFCs. This may
result in a change in policy and interpretations with respect to regulations governing HFCs.

Unfavourable changes in or interpretations of existing, or the promulgation of new, laws, rules and regulations including
foreign investment and stamp duty laws governing our business and operations could result in us being deemed to be
in contravention of such laws and may require us to apply for additional approvals. We may incur increased costs and
other burdens relating to compliance with such new requirements, which may also require significant management time
and other resources, and any failure to comply may adversely affect our business, results of operations and prospects.
Uncertainty in the application, interpretation or implementation of any amendment to, or change in, governing law,
regulation or policy, including by reason of an absence, or a limited body, of administrative or judicial precedent may
be time consuming as well as costly for us to resolve and may impact the viability of our current business or restrict our
ability to grow our businesses in the future.

48. Investors may not be able to enforce a judgment of a foreign court against our Company outside India.

Our Company is incorporated under the laws of India. Our Company’s assets are located in India and a majority of our
Company’s Directors and Key Managerial Personnel are residents of India. As a result, it may not be possible for
investors to effect service of process upon our Company or such persons in jurisdictions outside India, or to enforce
against them judgments obtained in courts outside India. Moreover, it is unlikely that a court in India would award
damages on the same basis as a foreign court if an action were brought in India or that an Indian court would enforce
foreign judgments if it viewed the amount of damages as excessive or inconsistent with Indian public policy.

India has reciprocal recognition and enforcement of judgments in civil and commercial matters with a limited number
of jurisdictions, which includes, the United Kingdom, Singapore and Hong Kong. A judgment from certain specified
courts located in a jurisdiction with reciprocity must meet certain requirements of the Civil Code. The United States
and India do not currently have a treaty providing for reciprocal recognition and enforcement of judgments in civil and
commercial matters. Therefore, a final judgment for the payment of money rendered by any federal or state court in a
non-reciprocating territory, such as the United States, for civil liability, whether or not predicated solely upon the general
securities laws of the United States, would not be enforceable in India under the Civil Code as a decree of an Indian
court.

The United Kingdom, Singapore and Hong Kong have been declared by the Government of India to be reciprocating
territories for purposes of Section 44A of the Civil Code. A judgment of a court of a country which is not a reciprocating
territory may be enforced in India only by a suit on the judgment under Section 13 of the Civil Code, and not by
proceedings in execution. Section 13 of the Civil Code provides that foreign judgments shall be conclusive regarding
any matter directly adjudicated on except (i) where the judgment has not been pronounced by a court of competent
jurisdiction, (ii) where the judgment has not been given on the merits of the case, (iii) where it appears on the face of
the proceedings that the judgment is founded on an incorrect view of international law or refusal to recognize the law
of India in cases to which such law is applicable, (iv) where the proceedings in which the judgment was obtained were
opposed to natural justice, (v) where the judgment has been obtained by fraud or (vi) where the judgment sustains a
claim founded on a breach of any law then in force in India. Under the Civil Code, a court in India shall, on the
production of any document purporting to be a certified copy of a foreign judgment, presume that the judgment was
pronounced by a court of competent jurisdiction, unless the contrary appears on record. The Civil Code only permits
the enforcement of monetary decrees, not being in the nature of any amounts payable in respect of taxes, other charges,

39
 fines or penalties. Judgments or decrees from jurisdictions which do not have reciprocal recognition with India cannot
be enforced by proceedings in execution in India. Therefore, a final judgment for the payment of money rendered by
any court in a non-reciprocating territory for civil liability, whether or not predicated solely upon the general laws of
the non-reciprocating territory, would not be enforceable in India. Even if an investor obtained a judgment in such a
jurisdiction against us, our officers or directors, it may be required to institute a new proceeding in India and obtain a
decree from an Indian court.

However, the party in whose favor such final judgment is rendered may bring a new suit in a competent court in India
based on a final judgment that has been obtained in the United States or other such jurisdiction within three years of
obtaining such final judgment. It is unlikely that an Indian court would award damages on the same basis as a foreign
court if an action is brought in India. Moreover, it is unlikely that an Indian court would award damages to the extent
awarded in a final judgment rendered outside India if it believes that the amount of damages awarded were excessive
or inconsistent with Indian practice. In addition, any person seeking to enforce a foreign judgment in India is required
to obtain the prior approval of the RBI to repatriate any amount recovered.

49. Under Indian law, foreign investors are subject to investment restrictions that limit our ability to attract foreign
investors, which may adversely affect the trading price of the Equity Shares.

Foreign ownership of Indian securities is subject to Government regulation. Under foreign exchange regulations
currently in force in India, transfer of shares between non-residents and residents are freely permitted (subject to certain
exceptions), if they comply with the pricing and reporting requirements specified by the RBI. If a transfer of shares is
not in compliance with such requirements and does not fall under any of the exceptions specified by the RBI, then the
RBI’s prior approval is required. Additionally, shareholders who seek to convert Rupee proceeds from a sale of shares
in India into foreign currency and repatriate that foreign currency from India require a no-objection or a tax clearance
certificate from the Indian income tax authorities. As provided in the foreign exchange controls currently in effect in
India, the RBI has provided that the price at which the Equity Shares are transferred be calculated in accordance with
internationally accepted pricing methodology for the valuation of shares at an arm’s length basis, and a higher (or lower,
as applicable) price per share may not be permitted. We cannot assure you that any required approval from the RBI or
any other governmental agency can be obtained on any particular term or at all. For further details, see “Restrictions on
Foreign Ownership of Indian Securities” on page 340.

50. Significant differences exist between Ind AS and other accounting principles, such as US GAAP and IFRS, which
may be material to investors' assessments of our financial condition.

The financial statements included in this Draft Red Herring Prospectus have been prepared in accordance with Ind AS.
We have not attempted to quantify the impact of US GAAP or IFRS on the financial data included in this Draft Red
Herring Prospectus, nor do we provide a reconciliation of our financial statements to those of US GAAP or IFRS. US
GAAP and IFRS differ in significant respects from Ind AS. Accordingly, the degree to which the Ind AS financial
statements, which are restated as per the SEBI ICDR Regulations included in this Draft Red Herring Prospectus, will
provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting
practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented
in this Draft Red Herring Prospectus should be limited accordingly.

51. Rights of shareholders under Indian laws may differ to those under the laws of other jurisdictions.

Indian legal principles related to corporate procedures, directors’ fiduciary duties and liabilities, and shareholders’ rights
may differ from those that would apply to a company in another jurisdiction. Shareholders’ rights including in relation
to class actions, under Indian law may not be similar to the shareholders’ rights under the laws of other countries or
jurisdictions.

Risks Related to the Offer

52. The Offer Price of the Equity Shares may not be indicative of the market price of the Equity Shares after the Offer.

The Offer Price of the Equity Shares will be determined by our Company and the Promoter Selling Shareholders in
consultation with the Lead Managers, and through the Book Building Process. This price will be based on numerous
factors, as described under “Basis for Offer Price” on page 80 and may not be indicative of the market price for the
Equity Shares after the Offer. The market price of the Equity Shares could be subject to significant fluctuations after
the Offer, and may decline below the Offer Price. We cannot assure you that the investor will be able to resell their
Equity Shares at or above the Offer Price.

40
53. The Equity Shares have never been publicly traded, and, after the Offer, the Equity Shares may experience price
and volume fluctuations, and an active trading market for the Equity Shares may not develop.

Prior to the Offer, there has been no public market for the Equity Shares, and an active trading market on the Stock
Exchanges may not develop or be sustained after the Offer. Listing and quotation does not guarantee that a market for
the Equity Shares will develop, or if developed, the liquidity of such market for the Equity Shares. The Offer Price of
the Equity Shares is proposed to be determined through a book-building process and may not be indicative of the market
price of the Equity Shares at the time of commencement of trading of the Equity Shares or at any time thereafter. The
market price of the Equity Shares may be subject to significant fluctuations in response to, among other factors,
variations in our operating results of our Company, market conditions specific to the industry we operate in,
developments relating to India, volatility in securities markets in jurisdictions other than India, variations in the growth
rate of financial indicators, variations in revenue or earnings estimates by research publications, and changes in
economic, legal and other regulatory factors.

54. Fluctuation in the exchange rate between the Indian Rupee and foreign currencies may have an adverse effect on
the value of our Equity Shares, independent of our operating results.

On listing, our Equity Shares will be quoted in Indian Rupees on the Stock Exchanges. Any dividends in respect of our
Equity Shares will also be paid in Indian Rupees and subsequently converted into the relevant foreign currency for
repatriation, if required. Any adverse movement in currency exchange rates during the time that it takes to undertake
such conversion may reduce the net dividend to foreign investors. In addition, any adverse movement in currency
exchange rates during a delay in repatriating outside India the proceeds from a sale of Equity Shares, for example,
because of a delay in regulatory approvals that may be required for the sale of Equity Shares may reduce the proceeds
received by Equity Shareholders. For example, the exchange rate between the Rupee and the U.S. dollar has fluctuated
in recent years and may continue to fluctuate substantially in the future, which may have an adverse effect on the returns
on our Equity Shares, independent of our operating results.

55. Any future issuance of Equity Shares, or convertible securities or other equity-linked securities by us may dilute your
shareholding and adversely affect the trading price of the Equity Shares.

Any future issuance of the Equity Shares, convertible securities or securities linked to the Equity Shares by us, including
through exercise of employee stock options may dilute your shareholding in our Company, adversely affect the trading
price of the Equity Shares and our ability to raise capital through an issue of our securities. In addition, any perception
by investors that such issuances or sales might occur could also affect the trading price of the Equity Shares. We cannot
assure you that we will not issue additional Equity Shares. The disposal of Equity Shares by any of our Promoters and
Promoter Group, or the perception that such sales may occur may significantly affect the trading price of the Equity
Shares. Except as disclosed in “Capital Structure” on page 57, we cannot assure you that our Promoters and Promoter
Group will not dispose of, pledge or encumber their Equity Shares in the future.

56. Holders of Equity Shares may be restricted in their ability to exercise pre-emptive rights under Indian law and
thereby suffer future dilution of their ownership position.

A public company incorporated in India must offer its equity shareholders pre-emptive rights to subscribe and pay for
a proportionate number of equity shares to maintain their existing ownership percentages prior to issuance of any new
equity shares, unless the pre-emptive rights have been waived by the adoption of a special resolution by holders of
three-fourths of the equity shares voting on such resolution.

However, if the law of the jurisdiction that you are in does not permit the exercise of such pre-emptive rights without
our filing an offering document or registration statement with the applicable authority in such jurisdiction, you will be
unable to exercise such pre-emptive rights, unless we make such a filing. If we elect not to file a registration statement,
the new securities may be issued to a custodian, who may sell the securities for your benefit. The value such custodian
receives on the sale of any such securities and the related transaction costs cannot be predicted. To the extent that you
are unable to exercise pre-emptive rights granted in respect of our Equity Shares, your proportional interests in our
Company would be diluted.

57. QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of quantity of
Equity Shares or the Bid Amount) at any stage after submitting a Bid.

Pursuant to the SEBI ICDR Regulations, QIBs and Non-Institutional Investors are not permitted to withdraw or lower
their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid. RIBs can revise
or withdraw their Bids during the Bid/Offer Period. While our Company is required to complete Allotment pursuant to
the Offer within such period as may be prescribed under applicable law, events affecting the Bidders’ decision to invest
in the Equity Shares, including adverse changes in international or national monetary policy, financial, political or
economic conditions, our business, results of operation or financial condition may arise between the date of submission

41
of the Bid and Allotment. Our Company may complete the Allotment of the Equity Shares even if such events occur,
and such events limit the Bidders’ ability to sell the Equity Shares Allotted pursuant to the Offer or cause the trading
price of the Equity Shares to decline on listing.

42
 SECTION III: INTRODUCTION

THE OFFER

The following table summarizes the Offer details:

Offer of Equity Shares of face value of ₹ 2 each#(1)(2) Up to [●] Equity Shares aggregating up to ₹ 15,000 million
of which:
(i) Fresh Issue(1) Up to [●] Equity Shares aggregating up to ₹ 4,000 million
(ii) Offer for Sale(2) Up to [●] Equity Shares aggregating up to ₹ 11,000 million by
the Selling Shareholders

of which:
A) QIB Portion(3) Not more than [●] Equity Shares
of which:
Anchor Investor Portion Up to [●] Equity Shares
Balance available for allocation to QIBs other than [●] Equity Shares
Anchor Investors (assuming Anchor Investor Portion
is fully subscribed)
of which:
Available for allocation to Mutual Funds only (5% of [●] Equity Shares
the Net QIB Portion)(3)
Balance of QIB Portion for all QIBs including Mutual [●] Equity Shares
Funds
B) Non-Institutional Portion Not less than [●] Equity Shares
C) Retail Portion Not less than [●] Equity Shares

Pre-Offer and post-Offer Equity Shares

Equity Shares outstanding prior to the Offer 78,297,715 Equity Shares

Equity Shares outstanding after the Offer [●] Equity Shares

Utilisation of Net Proceeds See “Objects of the Offer” beginning on page 76 for details
regarding the use of proceeds from the Fresh Issue. Our
Company will not receive any proceeds from the Offer for
Sale.
# A Pre-IPO Placement may be undertaken by our Company for an aggregate amount not exceeding ₹ 1,600 million. The Pre-IPO
Placement, if undertaken, will be at a price to be decided by our Company and will be completed prior to filing of the Red Herring
Prospectus with the RoC. If the Pre-IPO Placement is undertaken, the amount raised from the Pre-IPO Placement will be reduced from
the Fresh Issue, subject to the minimum Offer size constituting at least 10% of the post-Offer paid-up Equity Share capital of our Company.
(1) The Fresh Issue has been authorized by a resolution of our Board of Directors at their meeting held on July 31, 2019, and a special
resolution passed by our shareholders at their meeting held on August 30, 2019.
(2) Each of the Selling Shareholders has authorised and consented to participate in the Offer for Sale. For details on the authorisation and
consent of the Selling Shareholders in relation to their respective Offered Shares, see “Other Regulatory and Statutory Disclosures”
beginning on page 303. The Equity Shares being offered by the Selling Shareholders have been held for a period of at least one year
immediately preceding the date of filing this Draft Red Herring Prospectus with SEBI, or are otherwise eligible for being offered for sale
pursuant to the Offer in terms of the SEBI ICDR Regulations.
(3) Subject to valid bids being received at or above the Offer Price, undersubscription, if any, in any category, except in the QIB Portion,
would be allowed to be met with spill-over from any other category or combination of categories of Bidders at the discretion of our
Company and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers, and the Designated Stock
Exchange, subject to applicable laws. In case of under-subscription in the Offer, after meeting the minimum subscription requirement of
90% of the Fresh Issue, the balance subscription in the Offer will be met in the following order of priority: (i) through the sale of Offered
Shares being offered by the Selling Shareholders in the Offer for Sale on a proportionate basis; and (ii) through the issuance of balance
part of the Fresh Issue.
(4) Our Company and the Promoter Selling Shareholders may, in consultation with the Book Running Lead Managers, allocate up to 60% of
the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations. One-third of the Anchor
Investor Portion shall be reserved for domestic Mutual Funds only, subject to valid Bids being received from domestic Mutual Funds at
or above the Anchor Investor Allocation Price. In the event of under-subscription in the Anchor Investor Portion, the remaining Equity
Shares shall be added to the Net QIB Portion. For details, see “Offer Procedure” beginning on page 326.

43
Allocation to Bidders in all categories except the Anchor Investor Portion and the Retail Portion, if any, shall be made on a
proportionate basis subject to valid Bids received at or above the Offer Price. The allocation to each RIB shall not be less than
the minimum Bid Lot, subject to availability of Equity Shares in the Retail Portion, and the remaining available Equity Shares,
if any, shall be allocated on a proportional basis. For further details, see “Offer Procedure” beginning on page 326.

For details of the terms of the Offer, see “Terms of the Offer” beginning on page 318.

44
 SUMMARY OF FINANCIAL INFORMATION

The following tables provide the summary of financial information of our Company derived from the Restated Financial
Information as at and for the six months ended September 30, 2019 and September 30, 2018 and Financial Years 2019, 2018
and 2017.

The Restated Financial Information referred to above is presented under “Financial Information” beginning on page 204. The
summary of financial information presented below should be read in conjunction with the Restated Financial Information, the
notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on
page 275.

(The remainder of this page is intentionally left blank)

45
Restated statement of assets and liabilities (Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Assets
Financial assets
Cash and cash equivalents 1,059.67 1,013.48 1,857.24 230.14 1,159.80
Other bank balances 1,693.21 862.89 62.59 72.04 661.72
Loans 26,179.57 18,248.50 21,347.05 13,087.35 7,893.12
Investments 2,777.43 200.09 1,029.17 - -
Other financial assets 476.65 107.87 261.20 49.09 59.63
Total financial assets 32,186.53 20,432.83 24,557.25 13,438.62 9,774.27

Non-financial assets
Current tax assets (net) 53.19 8.06 10.25 4.66 -
Deferred tax assets (net) - 70.73 24.83 63.81 26.28
Property, plant and equipment 185.95 147.33 167.59 97.62 64.27
Capital work-in-progress 2.03 1.11 - 7.88 -
Intangible assets under development - - - 2.61 -
Other intangible assets 5.15 6.73 6.71 3.50 2.26
Other non-financial assets 43.69 28.29 53.42 30.72 22.50
Total non financial assets 290.01 262.25 262.80 210.80 115.31

Total assets 32,476.54 20,695.08 24,820.05 13,649.42 9,889.58

Liabilities and equity

Liabilities
Financial liabilities
Payables
Trade payables
- Total outstanding dues of micro enterprises and small enterprises - - - - 0.56
- Total outstanding dues of creditors other than micro enterprises and small
enterprises 1.71 7.22 13.58 5.37 32.37
Debt securities - 492.49 - - -
Borrowings (other than debt securities) 22,956.31 15,069.78 19,256.41 10,198.76 6,630.45
Other financial liabilities 475.17 149.12 238.43 130.17 119.07
Total financial liabilities 23,433.19 15,718.61 19,508.42 10,334.30 6,782.45

Non-financial liabilities
Current tax liabilities (net) - - - - 0.84
Deferred tax liabilities (net) 20.61 - - - -
Provisions 47.17 38.52 29.62 18.74 20.45
Other non-financial liabilities 82.54 52.18 50.61 44.23 22.26
Total non financial liabilities 150.32 90.70 80.23 62.97 43.55
Total liabilities 23,583.51 15,809.31 19,588.65 10,397.27 6,826.00

Equity
Share capital 156.60 126.31 126.68 103.23 103.21
Other equity 8,736.43 4,759.46 5,104.72 3,148.92 2,960.37
Total equity 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58

Total liabilities and equity 32,476.54 20,695.08 24,820.05 13,649.42 9,889.58

46
Restated statement of profit and loss
(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Revenue from operations
Interest income 1,603.82 976.48 2,319.25 1,299.58 879.93
Fees and commission income 10.99 12.54 33.38 14.45 7.47
Net gain on derecognition of financial instruments under amortised cost category 211.22 37.68 214.76 - 25.92
Other operating income 12.90 8.43 31.37 6.89 2.45
Total revenue from operations 1,838.93 1,035.13 2,598.76 1,320.92 915.77
Other income 98.80 35.20 110.45 21.45 0.01
Total income 1,937.73 1,070.33 2,709.21 1,342.37 915.78

Expenses
Finance costs 918.37 529.42 1,265.44 659.64 540.44
Impairment on financial instruments 39.46 43.43 73.13 28.74 17.37
Employee benefits expense 295.38 194.89 427.17 249.55 149.97
Depreciation and amortisation 32.36 19.42 45.77 24.63 15.55
Other expenses 149.31 108.76 245.75 137.11 88.89
Total expenses 1,434.88 895.92 2,057.26 1,099.67 812.22

Profit before tax 502.85 174.41 651.95 242.70 103.56

Tax expense:
- Current tax 89.21 66.55 160.53 120.36 48.73
- Deferred tax expense / (income) 46.23 (6.70) 39.38 (37.62) (11.94)
135.44 59.85 199.91 82.74 36.79

Profit after tax 367.41 114.56 452.04 159.96 66.77

Other comprehensive income (OCI)

Items that will not be reclassified to profit or loss
- Remeasurements of the defined benefit plans (3.12) (0.77) (1.37) 0.25 (1.33)
- Income tax relating to items that will not be reclassified to profit or loss 0.79 0.22 0.40 (0.09) 0.46
Other comprehensive income (2.33) (0.55) (0.97) 0.16 (0.87)
Total comprehensive income 365.08 114.01 451.07 160.12 65.90

Earnings per equity share

Basic earnings per share (Rs.) (Nominal value - Rs. 2) 5.33 2.19 7.82 3.10 3.53
Diluted earnings per share (Rs.) (Nominal value - Rs. 2) 5.21 2.14 7.65 3.02 3.07
Nominal value of equity share (before stock split) 10.00 10.00 10.00 10.00 10.00

47
Restated statement of cash flow
(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Cash flow from operating activities
Profit before tax 502.85 174.41 651.95 242.70 103.56
Adjusted for:
Financial asset measured at amortised cost 60.53 87.37 116.33 88.94 42.92
Financial liabilities measured at amortised cost (14.66) (6.37) (21.73) (2.86) (3.49)
Interest accrued but not due on borrowings (127.93) (14.29) (20.76) 16.04 (5.98)
Upfront gain on direct assignment (164.74) (30.06) (194.96) 14.64 (14.97)
Depreciation, amortisation and impairment 32.36 19.42 45.77 24.63 15.55
Interest income on bank deposits (34.57) (2.84) (21.64) (12.28) (15.56)
Loss on sale of property, plant and equipment (net) 0.05 - - - -
Interest on financial lease liability 3.99 3.38 7.12 4.98 3.34
Unrealised gain on investment held for trading (1.73) - (2.02) - -
Impairment on financial instruments 39.46 43.43 73.13 28.74 17.37
Dividend income - (7.32) (7.69) (4.75) -
Fair valuation of ESOPs 15.71 9.95 19.90 27.79 7.43
Actuarial gain / loss recognised in other comprehensive income (3.12) (0.77) (1.37) 0.25 (1.33)
Operating profit before working capital changes 308.20 276.31 644.03 428.82 148.84

Adjustments for working capital:

- (Increase) / decrease in loans (4,932.51) (5,291.95) (8,449.16) (5,311.91) (2,872.83)
- (Increase) / decrease in other financial assets (50.71) (28.72) (17.15) (4.10) (2.86)
- (Increase) / decrease in other non financial assets 9.73 2.43 (22.70) (8.22) (13.20)
- Increase / (decrease) in trade payables (11.87) 1.85 8.21 (27.56) 24.25
- Increase / (decrease) in other financial liabilities 332.45 6.53 79.93 (35.43) 9.80
- Increase / (decrease) in other non financial liabilities 31.93 7.95 6.38 21.97 9.43
- Increase / (decrease) in provisions 17.55 19.78 10.88 (1.71) 14.82
Cash used in from operating activities (4,295.23) (5,005.82) (7,739.58) (4,938.14) (2,681.75)
Income tax paid (net) (132.15) (69.95) (166.12) (125.86) (47.21)
Net cash used in operating activities (4,427.38) (5,075.77) (7,905.70) (5,064.00) (2,728.96)

Cash flows from investing activities:

Purchase of property, plant and equipment and other intangible assets (23.05) (39.65) (66.49) (44.20) (16.77)
Proceeds from sale of property, plant and equipment and other intangible assets 0.04 - - - -
Purchase of investments (15,327.50) (8,063.58) (19,919.50) -
Proceeds from investments 13,580.97 7,863.49 18,892.35 - -
Bank deposits [net] (1,620.58) (792.43) 7.41 590.00 (140.00)
Interest received on bank deposits 24.53 4.42 23.68 11.96 16.66
Dividend income on investments - 7.32 7.69 4.75 -
Net cash generated from / (used in) investing activities (3,365.59) (1,020.43) (1,054.86) 562.51 (140.11)

Cash flows from financing activities:

Proceeds from issuance of share capital (including share premium) 3,280.84 1,509.66 1,508.28 0.66 1,454.08
Proceeds of borrowings from banks and financial institutions 5,601.24 5,490.00 10,870.13 6,490.13 3,093.62
Repayment of borrowings from banks and financial institutions (1,886.68) (712.61) (1,790.80) (2,841.79) (797.69)
Proceeds from debt securities - 492.49 492.49 - -
Repayment of debt securities - - (492.49) - -
Proceeds / (repayment) of loans repayable on demand - 100.00 0.05 (77.17) 50.54
Payment of dividends and dividend distribution tax - - - - (1.95)
Net cash generated from financing activities 6,995.40 6,879.54 10,587.66 3,571.83 3,798.60

Net increase / (decrease) in cash and cash equivalents (797.57) 783.34 1,627.10 (929.66) 929.53
Cash and cash equivalents at the beginning of the period / year 1,857.24 230.14 230.14 1,159.80 230.27
Cash and cash equivalents at the end of the period / year 1,059.67 1,013.48 1,857.24 230.14 1,159.80

Components of cash and cash equivalents:

Cash in hand 0.35 0.13 0.61 0.05 0.25
Balances with banks
- with banks in current accounts 1,058.36 1,012.07 1,856.00 229.45 1,158.32
- held as wallet money 0.96 1.28 0.63 0.64 1.23
Cash and cash equivalents 1,059.67 1,013.48 1,857.24 230.14 1,159.80

Changes in liabilities arising from financing activities (Rs. in millions)

As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Opening balance (Borrowings and debt securities) 19,256.41 10,198.76 10,198.76 6,630.45 4,287.47
Proceeds from borrowings 5,601.24 5,490.00 10,870.13 6,490.13 3,093.62
Proceeds from debt securities - 492.49 492.49 - -
Repayments of borrowings (1,886.68) (712.61) (1,790.80) (2,841.79) (797.69)
Repayments of debt securities - - (492.49) - -
Proceeds / (repayment) of loans repayable on demand - 100.00 0.05 (77.17) 50.54
Others (14.66) (6.37) (21.73) (2.86) (3.49)
Closing balance (Borrowings and debt securities) 22,956.31 15,562.27 19,256.41 10,198.76 6,630.45

48
 GENERAL INFORMATION

Our Company was incorporated as ‘Home First Finance Company India Private Limited’ at Bengaluru, Karnataka as a private
limited company under the Companies Act, 1956, pursuant to the certificate of incorporation dated February 3, 2010 issued by
the Registrar of Companies, Karnataka at Bengaluru. Subsequently, our Company was converted to a public limited company
and consequently the name of our Company was changed to ‘Home First Finance Company India Limited’ and a fresh certificate
of incorporation dated March 14, 2018 was issued by the RoC.

For details in relation to the change in the registered office of our Company, see “History and Certain Corporate Matters”
beginning on page 156.

Corporate Identity Number: U65990MH2010PLC240703

Company Registration Number: 240703

Registered and Corporate Office of our Company

511, Acme Plaza

Andheri Kurla Road
Andheri East
Mumbai 400 059
Maharashtra, India

Address of the RoC

Our Company is registered with the RoC, situated at the following address:
The Registrar of Companies, Maharashtra at Mumbai
Everest, 5th Floor
100 Marine Drive
Mumbai 400 002
Maharashtra, India

Board of Directors of our Company

Details regarding our Board as on the date of this Draft Red Herring Prospectus are set forth below:

Name Designation DIN Address

Deepak Satwalekar Chairman and 00009627 401, The Orchid, 12th Road, Near Madhu Park, Khar
Independent Director (West), Mumbai 400 052
Sakti Prasad Ghosh Independent Director 00183802 Block BJ 94, Sector II, Salt Lake City PS,
Bidhannagar, Kolkata 700 091
Sujatha Independent Director 05340759 Ground floor Flat, 20, Ferncroft Avenue London NW3
Venkatramanan 7PH
Divya Sehgal Nominee Director 01775308 Flat No 1307 and 1308, Wing A, 13th floor, Ashok
Tower, Dr. Ambedkar Road, Parel, Sewri, Mumbai
400 012
Maninder Singh Juneja Nominee Director 02680016 D 1002, Mayfair Meridian Ceasar Road, Amboli,
Andheri West, Mumbai 400 058
Rajagopalan Nominee Director 00025669 1805, B Wing, Lake Primrose, Lake Homes, Powai,
Santhanam Mumbai 400 076
Vishal Vijay Gupta Nominee Director 01913013 15A, D Block, Binny Crescent Apartments Nandidurga
Road, Benson Town, Bangalore 560 046
Manoj Viswanathan Director and Chief 01741612 1402, Panchatantra (1), Off Yari Road, Versova,
Executive Officer Mumbai 400 061

For further details of the Directors, see “Our Management” beginning on page 161.

Filing

A copy of this Draft Red Herring Prospectus has been filed with SEBI at Corporation Finance Department, Plot No.C4 A, ‘G’
Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051.

49
A copy of the Red Herring Prospectus, along with the documents required to be filed under Section 32 of the Companies Act
would be delivered for registration to the RoC and a copy of the Prospectus to be filed under Section 26 of the Companies Act
would be delivered for registration with RoC at the office of the RoC, 100, Everest, Marine Drive, Mumbai 400 002.

Company Secretary and Compliance Officer

Shreyans Bachhawat is our Company Secretary and Compliance Officer. His contact details are as set forth below:

Shreyans Bachhawat
Company Secretary and Compliance Officer
511, Acme Plaza
Andheri Kurla Road
Andheri East
Mumbai 400 059
Maharashtra, India
Tel: +91 22 6694 0386
E-mail: corporate@homefirstindia.com

Book Running Lead Managers

Axis Capital Limited Credit Suisse Securities (India) Private Limited

1st Floor, Axis House 9th Floor, Ceejay House
C-2 Wadia International Centre Plot F, Shivsagar Estate
Pandurang Budhkar Marg Dr. Annie Besant Road
Worli Worli, Mumbai 400 018
Mumbai 400 025 Maharashtra, India
Maharashtra, India Tel: +91 22 6777 3777
Tel: +91 22 4325 2183 E-mail: list.hffcipo@credit-suisse.com
Email: hffl.ipo@axiscap.in Investor Grievance E-mail: list.igcellmerbnkg@credit-suisse.com
Investor Grievance E-mail: complaints@axiscap.in Website:
Website: www.axiscapital.co.in www.credit-suisse.com/in/en/investment-banking/regional-
Contact person: Sagar Jatakiya presence/asia-pacific/india/ipo.html
SEBI Registration no.: INM000012029 Contact Person: Rishi Agrawal
SEBI Registration No.: INM000011161

ICICI Securities Limited Kotak Mahindra Capital Company Limited

ICICI Centre 1st Floor, 27 BKC
H.T. Parekh Marg Plot No. 27, ‘G’ Block
Churchgate Bandra Kurla Complex, Bandra (East)
Mumbai 400 020 Mumbai 400 051
Maharashtra, India Maharashtra, India
Tel: +91 22 2288 2460 Tel: +91 22 4336 0000
E-mail: hffl.ipo@icicisecurities.com E-mail: hffc.ipo@kotak.com
Investor Grievance E-mail: Investor Grievance E-mail: kmccredressal@kotak.com
customercare@icicisecurities.com Website: www.investmentbank.kotak.com
Website: www.icicisecurities.com Contact Person: Ganesh Rane
Contact Person: Sameer Purohit/ Nidhi Wangnoo SEBI Registration no.: INM000008704
SEBI Registration Number: INM000011179

Legal Advisors to the Offer

Indian Legal Counsel to our Company Indian Legal Counsel to the Book Running Lead Managers

Cyril Amarchand Mangaldas Shardul Amarchand Mangaldas & Co

5th Floor, Peninsula Chambers 24th Floor, Express Towers
Peninsula Corporate Park Nariman Point, Mumbai 400 021
Ganpatrao Kadam Marg Maharashtra, India
Lower Parel Tel.: +91 22 4933 5555
Mumbai 400 013
Maharashtra, India
Tel: +91 22 2496 4455

50
International Legal Counsel to the Book Running Indian Legal Counsel to the Promoter Selling
Shareholders, P. S. Jayakumar and Manoj Viswanathan
Lead Managers
Cyril Amarchand Mangaldas
Sidley Austin LLP 4th floor, Prius Platinum
Six Battery Road D-3, District Centre
Level 31 Saket, New Delhi 110 017
Singapore 049909 India
Tel: +65 6230 3900 Tel: +91 11 6622 9000

Indian Legal Counsel to the Investor Selling Shareholder

Khaitan & Co
Simal, 2nd Floor
7/1, Ulsoor Road
Bengaluru 560 042
Karnataka, India
Tel: +91 80 4339 7000

Registrar to the Offer

Karvy Fintech Private Limited

(formerly known as KCPL Advisory Services Private Limited)
Karvy Selenium Tower B, Plot 31 & 32
Gachibowli, Financial District
Nanakramguda,
Hyderabad 500 032
Telangana, India
Tel: +91 40 6716 2222
E-mail: hffcl.ipo@karvy.com
Investor grievance E-mail: einward.ris@karvy.com
Website: www.karisma.karvy.com
Contact Person: M Murali Krishna
SEBI Registration No.: INR000000221

Statutory Auditors to our Company

Walker Chandiok & Co LLP

16th floor, Tower II
Indiabulls Finance Centre, S B Marg
Elphinstone (West)
Mumbai 400 013, India
Tel: +91 22 6626 2600
E-mail: khushroo.panthaky@walkerchandiok.in
Peer Review Number: 011707
Firm Registration Number: 001076N/N500013

Changes in Auditors

There have been no changes in the auditors of our Company during the three years preceding the date of this Draft Red Herring
Prospectus.

Bankers to the Offer

[●]

51
Bankers to our Company

Axis Bank Limited Federal Bank

Axis House, 8th Floor C Wing, 5th floor, Laxmi Tower
Worli Bandra Kurla Complex
Mumbai 400 025 Bandra (East)
Maharashtra, India Mumbai 400 051
Tel: 022 2425 5879 Maharashtra, India
Contact person: Abhinav Kumar Tel: 022 6174 8742
Email: abhinav2.kumar@axisbank.com Contact person: Soham Ranjan
Website: www.axisbank.com Email: ccscfort@federalbank.co.in soham@federalbank.in
Website: www.federalbank.co.in

Bajaj Finance Limited The Karur Vyasa Bank

The Capital, Plot number C 70 1st floor, Gayathri Towers, 954
G Block, B Wing, 16th floor, Bandra Kurla Complex Appasaheb Marathe Marg, Prabhadevi
Mumbai 400 051 Mumbai 400 025
Maharashtra, India Maharashtra, India
Tel: 022 3950 0517 Tel: +91 70457 98343
Contact person: Deepti Shetty Contact person: Ramesh V
Email: deepti.shetty@bajajfinserv.in Email: rameshv@kvbmail.com
Website: www.bajajfinserv.in Website: www.kvb.co.in

DCB Bank Limited Central Bank of India

Peninsula Business Park, Tower A Corporate Finance Branch, 1st floor
6th Floor, Senapati Bapat Marg MMO Building, MG Road
Lower Parel, Mumbai 400 013 Fort, Mumbai 400 001
Maharashtra, India Maharashtra, India
Tel: 022 6618 7131 Tel: 022 4078 5801
Contact person: Anil Yadav Contact person: Anil Kumar
Email: anil.yadav@dcbbank.com Email: dgmcfb3007@centralbank.co.in
Website: www.dcbbank.com Website: www.centralbankofindia.co.in

IDBI Bank State Bank of India

Mittal Court, B wing, 2nd Floor 2nd Floor, N.G.N Vaidya Marg
Nariman Point, Mumbai 400 021 Horniman Circle, Fort
Maharashtra, India Mumbai 400 001
Tel: 022 6127 9201/ +91 81404 11108 Tel: 022 2266 2361
Contact person: Kailas V Shinde Contact person: Chirojeet Sarkar
Email: kv.shinde@idbi.co.in Email: c.sarkar@sbi.co.in
Website: www.idbibank.in Website: www.sbi.co.in

HDFC Bank CSB Bank

Peninsula Business Park, Tower B Head office: CSB Bhavan
4th Floor, Unit 401 & 402 P.O Box number 502, St. Mary’s College Road
Lower Parel, Mumbai 400 013 Thrissur 680 020, Kerala, India
Maharashtra, India Branch office: Ground floor, Mafatlal House
Tel: 022 3395 8046 H.T Parekh Marg, Churchgate
Contact person: Lukesh Chaudhari Mumbai 400 020, Maharashtra, India
Email: Lukesh.Chaudhari@hdfcbank.com Tel: 022 6839 5300
Website: www.hdfcbank.com Contact person: CA Purimetla Kishore
Email: purimetlakishore@csb.co.in
Website: www.csb.co.in

ICICI Bank Limited Bank of Baroda

ICICI Bank Towers, Bandra Kurla Complex 8 Meghdhoot Junction of Linking and Turner Road Bandra
Mumbai 400 051 Mumbai 400 050
Maharashtra, India Maharashtra, India
Tel: 022 4008 7425Contact person: Amit Bijalwan Tel: 022 2645 3677
Contact person: Amit Bijalwan Contact person: Dattatray Hadpadkar
Email: amit.bijalwan@icicibank.com Email: www.bankofbaroda.in
Website: www.icicibank.com Website: midbdr@bankofbaroda.com

52
Union Bank of India Bank of India
Industrial Finance Branch, 1st Floor 92-93, 9th Floor, Free Press House
239, Vidhan Bhavan Marg, Nariman Point 215, Free Press Journal Marg
Mumbai 400 021 Nariman Point, Mumbai 400 021
Tel: 022 2289 6728 Tel: 022 2204 1552
Contact person: Mallikarjuna Reddy Contact person: Gaurav Khaitan
Email: mallikarjuna.reddy@unionbankofindia.com Email: lcb.narimanpoint@bankofindia.co.in
Website: www.unionbankofindia.co.in Website: www.bankofindia.co.in

Syndicate Members

[●]

Inter-se Allocation of Responsibilities among the Book Running Lead Managers

The following table sets forth the inter-se allocation of responsibilities for various activities among the Book Running Lead
Managers:

Sr. No Activity Responsibility Co-ordinator

1. Capital structuring, positioning strategy and due diligence of the Company Axis, Credit Suisse, Axis
including its operations/management/business plans/legal etc. Drafting and I-Sec and Kotak
design of the Draft Red Herring Prospectus and of statutory advertisements
including a memorandum containing salient features of the Prospectus. The
Managers shall ensure compliance with stipulated requirements and
completion of prescribed formalities with the Stock Exchanges, RoC and
SEBI including finalisation of Prospectus and RoC filing.
2. Drafting and approval of all statutory advertisement Axis, Credit Suisse, Axis
I-Sec and Kotak
3. Drafting and approval of all publicity material other than statutory Axis, Credit Suisse, Kotak
advertisement as mentioned above including corporate advertising, brochure, I-Sec and Kotak
etc. and filing of media compliance report.
4. Appointment of Intermediaries - Registrar to the Offer, Advertising Agency, Axis, Credit Suisse, Axis
Printers to the Offer including co-ordination for agreements. I-Sec and Kotak
5. Appointment of Bankers to the Offer including co-ordination for agreements Axis, Credit Suisse, I-Sec
I-Sec and Kotak
6. Preparation of road show presentation Axis, Credit Suisse, Credit Suisse
I-Sec and Kotak
7. Preparation of FAQs for the road show team Axis, Credit Suisse, Credit Suisse
I-Sec and Kotak
8. International institutional marketing of the Offer, which will cover, inter alia: Axis, Credit Suisse, Credit Suisse
 Finalizing the list and division of international investors for one-to-one I-Sec and Kotak
meetings
 Finalizing international road show and investor meeting schedules
9. Domestic institutional marketing of the Offer, which will cover, inter alia: Axis, Credit Suisse, Axis
 Finalizing the list and division of domestic investors for one-to-one I-Sec and Kotak
meetings
 Finalizing domestic road show and investor meeting schedules
10. Conduct non-institutional marketing of the Offer, which will cover, inter-alia: Axis, Credit Suisse, Kotak
 Finalising media, marketing and public relations strategy; I-Sec and Kotak
 Formulating strategies for marketing to Non-Institutional Investors
11. Conduct retail marketing of the Offer, which will cover, inter-alia: Axis, Credit Suisse, I-Sec
 Finalising media, marketing, public relations strategy and publicity I-Sec and Kotak
budget including list of frequently asked questions at retail road shows
 Finalising collection centres
 Finalising centres for holding conferences for brokers etc.
 Follow-up on distribution of publicity and Offer material including form,
RHP/Prospectus and deciding on the quantum of the Offer material
12. Coordination with Stock-Exchanges for anchor intimation, book building Axis, Credit Suisse, Kotak
software, bidding terminals and mock trading, payment of 1% security deposit I-Sec and Kotak
to the designated stock exchange.
13. Managing the book and finalization of pricing in consultation with the Axis, Credit Suisse, Axis
Company. I-Sec and Kotak

53
 Sr. No Activity Responsibility Co-ordinator
14. Post bidding activities including management of escrow accounts, coordinate Axis, Credit Suisse, I-Sec
non-institutional allocation, coordination with Registrar, SCSBs and Banks, I-Sec and Kotak
intimation of allocation and dispatch of refund to Bidders, etc.
Post-Offer activities, which shall involve essential follow-up steps including
allocation to Anchor Investors, follow-up with Bankers to the Offer and
SCSBs to get quick estimates of collection and advising the Issuer about the
closure of the Offer, based on correct figures, finalisation of the basis of
allotment or weeding out of multiple applications, listing of instruments,
dispatch of certificates or demat credit and refunds and coordination with
various agencies connected with the post-Offer activity such as registrar to the
Offer, Bankers to the Offer, SCSBs including responsibility for underwriting
arrangements, as applicable.
Payment of the applicable securities transactions tax on sale of unlisted equity
shares by the Selling Shareholder under the Offer for Sale to the Government
and filing of the securities transactions tax return by the prescribed due date
as per Chapter VII of Finance (No. 2) Act, 2004.
Co-ordination with SEBI and Stock Exchanges for refund of 1% security
deposit and submission of all post Offer reports including the initial and final
post Offer report to SEBI

IPO Grading

No credit rating agency registered with SEBI has been appointed for grading the Offer.

Monitoring Agency

Our Company will appoint a monitoring agency prior to the filing of the Red Herring Prospectus in accordance with Regulation
41 of SEBI ICDR Regulations.

Appraising Entity

None of the objects for which the Net Proceeds will be utilised have been appraised by any agency.

Credit Rating

As this is an Offer of Equity Shares, credit rating is not required.

Trustees

As this is an Offer of Equity Shares, the appointment of trustees is not required.

Designated Intermediaries

Self Certified Syndicate Banks

The list of banks that have been notified by SEBI to act as the SCSBs (i) in relation to the ASBA (other than through UPI
mechanism) is provided on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34 or
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=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=40 or such other website as
updated from time to time. For a list of branches of the SCSBs named by the respective SCSBs to receive the ASBA Forms from
the Designated Intermediaries, refer to the above-mentioned link or any other such website as may be prescribed by SEBI from
time to time.

Syndicate SCSB Branches

In relation to Bids (other than Bids by Anchor Investor) submitted to a member of the Syndicate, the list of branches of the
SCSBs at the Specified Locations named by the respective SCSBs to receive deposits of Bid cum Application Forms from the
members of the Syndicate is available on the website of the SEBI
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35) and updated from time to time. For
more information on such branches collecting Bid cum Application Forms from the Syndicate at Specified Locations, see the
website of the SEBI at http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes as updated from time to time.

54
Registered Brokers

Bidders can submit ASBA Forms in the Offer using the stock broker network of the stock exchange, i.e. through the Registered
Brokers at the Broker Centres. The list of the Registered Brokers, including details such as postal address, telephone number and
e-mail address, is provided on the websites of the Stock Exchanges at https://www.bseindia.com and https://www.nseindia.com,
as updated from time to time.

Registrar and Share Transfer Agents

The list of the RTAs eligible to accept ASBA Forms at the Designated RTA Locations, including details such as address,
telephone number and e-mail address, is provided on the websites of the Stock Exchanges at
http://www.bseindia.com/Static/Markets/PublicIssues/RtaDp.aspx?expandable=6 and
https://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, respectively, as updated from time to time.

Collecting Depository Participants

The list of the CDPs eligible to accept ASBA Forms at the Designated CDP Locations, including details such as name and contact
details, is provided on the websites of the Stock Exchanges at
http://www.bseindia.com/Static/Markets/PublicIssues/RtaDp.aspx?expandable=6 and
http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, respectively, as updated from time to time.

Expert to the Offer

Except as disclosed below, our Company has not obtained any expert opinions:

Our Company has received written consent from our Statutory Auditors, Walker Chandiok & Co LLP, Chartered Accountants,
to include their names in this Draft Red Herring Prospectus as required under Section 26(1) of the Companies Act read with
SEBI ICDR Regulations and as “expert” as defined under Section 2(38) of the Companies Act to the extent and in their capacity
as an auditor and in respect of the examination report dated November 18, 2019 on Restated Financial Information and the
statement of special tax benefits dated November 26, 2019 and such consents have not been withdrawn as on the date of this
Draft Red Herring Prospectus. However, the term “expert” shall not be construed to mean an expert as defined under the U.S.
Securities Act.

Book Building Process

Book building, in the context of the Offer, refers to the process of collection of Bids from bidders on the basis of the Red Herring
Prospectus and the Bid Cum Application Forms and the Revision Forms within the Price Band, which will be decided by our
Company and the Promoter Selling Shareholders in consultation with the Book Running Lead Managers, and which will either
be included in the Red Herring Prospectus or will be advertised in all editions of English national daily newspaper, [●], all
editions of Hindi national daily newspaper, [●] and Mumbai editions of the Marathi daily newspaper [●] (Marathi being the
regional language of Maharashtra, where our Registered and Corporate Office is located), at least two Working Days prior to the
Bid/Offer Opening Date and shall be made available to the Stock Exchanges for the purpose of uploading on their respective
websites. The Offer Price shall be determined by our Company and the Promoter Selling Shareholders in consultation with the
Book Running Lead Managers after the Bid/Offer Closing Date. For details, see “Offer Procedure” beginning on page 326.

All Bidders (other than Anchor Investors) shall participate in this Offer mandatorily through the ASBA process by
providing the details of their respective bank accounts in which the corresponding Bid Amount will be blocked by the
SCSBs. Anchor Investors are not permitted to participate in the Offer through the ASBA process.

In terms of the SEBI ICDR Regulations, QIBs and Non-Institutional Investors are not permitted to withdraw their Bid(s)
or lower the size of their Bid(s) (in terms of the number of Equity Shares or the Bid Amount) at any stage. RIBs can
revise their Bid(s) during the Bid/ Offer Period and withdraw their Bid(s) until Bid/ Offer Closing Date. Anchor Investors
are not allowed to withdraw their Bids after the Anchor Investor Bidding Date. Except for Allocation to RIBs and the
Anchor Investors, Allocation in the Offer will be on a proportionate basis. Further, allocation to Anchor Investors will
be on a discretionary basis.

For further details, see “Terms of the Offer” “Offer Structure” and “Offer Procedure” on pages 318, 323 and 326, respectively.

The process of Book Building under the SEBI ICDR Regulations and the Bidding Process are subject to change from
time to time and the investors are advised to make their own judgment about investment through this process prior to
submitting a Bid in the Offer.

Bidder should note that, the Offer is also subject to obtaining (i) the final approval of the RoC after the Prospectus is filed with
the RoC; and (ii) final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment.

55
Underwriting Agreement

After the determination of the Offer Price and allocation of Equity Shares, but prior to the filing of the Prospectus with the RoC,
our Company and the Selling Shareholders intend to enter into an Underwriting Agreement with the Underwriters for the Equity
Shares proposed to be offered through the Offer. The Underwriting Agreement is dated [●]. Pursuant to the terms of the
Underwriting Agreement, the obligations of each of the Underwriters will be several and will be subject to certain conditions
specified therein.

The Underwriters have indicated their intention to underwrite the following number of Equity Shares:

(This portion has been intentionally left blank and will be filled in before filing of the Prospectus with the RoC.)

Name, address, telephone number and e-mail Indicative Number of Equity Amount Underwritten
address of the Underwriters Shares to be Underwritten (in ₹ million)
[●] [●] [●]
[●] [●] [●]
[●] [●] [●]
[●] [●] [●]

The aforementioned underwriting commitments are indicative and will be finalised after pricing of the Offer and actual allocation
in accordance with provisions of the SEBI ICDR Regulations.

In the opinion of our Board of Directors (based on representations made to our Company by the Underwriters), the resources of
the aforementioned Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. The
aforementioned Underwriters are registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with the
Stock Exchanges. Our Board of Directors/IPO Committee, at its meeting held on [●], approved the acceptance and entering into
the Underwriting Agreement mentioned above on behalf of our Company.

Allocation among the Underwriters may not necessarily be in proportion to their underwriting commitment set forth in the table
above.

Notwithstanding the above table, the Underwriters shall be severally responsible for ensuring payment with respect to the Equity
Shares allocated to investors respectively procured by them in accordance with the Underwriting Agreement. In the event of any
default in payment, the respective Underwriter, in addition to other obligations defined in the Underwriting Agreement, will also
be required to procure purchasers for or purchase the Equity Shares to the extent of the defaulted amount in accordance with the
Underwriting Agreement. The Underwriting Agreement has not been executed as on the date of this Draft Red Herring
Prospectus and will be executed after determination of the Offer Price and allocation of Equity Shares, but prior to the filing of
the Prospectus with the RoC.

56
 CAPITAL STRUCTURE

The Equity Share capital of our Company as at the date of this Draft Red Herring Prospectus is set forth below:

(in ₹, except share data)

Aggregate Value at Face Aggregate Value at
Value Offer Price
A AUTHORISED SHARE CAPITAL(1)
125,000,000 Equity Shares (having face value of ₹ 2 each) 250,000,000

B ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL BEFORE THE OFFER

78,297,715 Equity Shares (having face value of ₹ 2 each) 156,595,430 [●]

C PRESENT OFFER IN TERMS OF THIS DRAFT RED HERRING PROSPECTUS(2)

Offer of up to [●] Equity Shares # (2) (3) [●] [●]
of which
Fresh Issue of up to [●] Equity Shares aggregating up to ₹ 4,000
million(2)
Offer for Sale of up to [●] Equity Shares aggregating up to ₹ 11,000
million(3)

D ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL AFTER THE OFFER

[●] Equity Shares (having face value of ₹ 2 each) [●] [●]

E SECURITIES PREMIUM ACCOUNT

Before the Offer 7,550.22 million
After the Offer [●] million
# A Pre-IPO Placement may be undertaken by our Company for an aggregate amount not exceeding ₹ 1,600 million. The Pre- IPO
Placement, if undertaken, will be at a price to be decided by our Company and will be completed prior to filing of the Red Herring
Prospectus with the RoC. If the Pre-IPO Placement is undertaken, the amount raised from the Pre-IPO Placement will be reduced from
the Fresh Issue, subject to the minimum Offer size constituting at least 10% of the post-Offer paid-up Equity Share capital of our Company.
(1) For details in relation to the changes in the authorised share capital of our Company, see “History and Certain Corporate Matters –
Amendments to our Memorandum of Association” on page 156.
(2) The Fresh Issue has been authorized by a resolution of our Board of Directors at their meeting held on July 31, 2019, and a special
resolution passed by our shareholders at their meeting held on August 30, 2019. Each of the Selling Shareholders have confirmed and
authorized their respective participation in the Offer for Sale. For further details, see “Other Regulatory and Statutory Disclosures” on
page 303.
(3) The Equity Shares being offered by each Selling Shareholder have been held by them for a period of at least one year prior to the date of
filing of this Draft Red Herring Prospectus in accordance with the SEBI ICDR Regulations and accordingly, are eligible for the Offer in
accordance with the provisions of the SEBI ICDR Regulations. For details of authorisations for the Offer for Sale, see “Other Regulatory
and Statutory Disclosures” on page 303.

Notes to the Capital Structure

I. Equity Share capital history of our Company

The history of the equity share capital of our Company is set forth below:

Date of Allotment Number of Face Value per Issue Price per Nature of Allotment Nature of
of Equity Shares Equity Shares Equity Share Equity Share consideration
Allotted (in ₹) (in ₹)
February 3, 2010 10,000 10 10 Initial subscription to Cash
the Memorandum of
Association(1)
March 8, 2010 1,990,000 10 10 Further issue(2) Cash
September 20, 2010 250,000 10 10 Further issue(3) Cash
October 12, 2010 50,000 10 10 Further issue(4) Cash
January 14, 2011 10,000 10 239.13 Further issue(5) Cash
March 10, 2011 167,274 10 239.13 Further issue(6) Cash
March 14, 2012 167,274 10 239.13 Further issue(7) Cash
March 25, 2013 209,091 10 239.13 Further issue(8) Cash
November 12, 2013 10,000 10 281.13 Further issue(9) Cash
June 30, 2015 451,748 10 281.13 Preferential Cash
allotment(10)

57
 Date of Allotment Number of Face Value per Issue Price per Nature of Allotment Nature of
of Equity Shares Equity Shares Equity Share Equity Share consideration
Allotted (in ₹) (in ₹)
March 4, 2016 437,520 10 281.13 Rights issue(11) Cash
March 30, 2017 2,558,809 10 586.21 Preferential Cash
allotment(12)
4,008,815 10 586.21@ Conversion of Cash@
4,008,815 Preference
Shares into equity
shares of face value ₹
10(13)
February 19, 2018 800 10 239.13 Allotment pursuant to Cash
ESOP 2012(14)
February 28, 2018 2,000 10 239.13 Allotment pursuant to Cash
ESOP 2012(15)
August 8, 2018 33,985 10 239.13 Allotment pursuant to Cash
10,750 10 281.13 ESOP 2012(16)
September 21, 2018 2,262,682 10 662.93 Preferential Cash
allotment(17)
November 19, 2018 30,000 10 281.13 Allotment pursuant to Cash
7,150 10 586.21 ESOP 2012 and ESOP Cash
II(18)
June 29, 2019 2,030,797 10 1116.00 Preferential allotment Cash
(19)

September 19, 2019 897,348 10 1116.00 Preferential allotment Cash

(20)

28,500 10 281.13 Allotment pursuant to Cash

ESOP 2012(21)
35,000 10 239.13 Allotment pursuant to Cash
ESOP 2012(22)
October 30, 2019 Pursuant to a resolution passed by the Shareholders in the EGM held on October 30, 2019, our
Company has sub-divided its authorised share capital, such that that 25,000,000 equity shares
of ₹ 10 each aggregating to ₹ 250,000,000 were sub-divided and reclassified as 125,000,000
Equity Shares of ₹ 2 each aggregating to ₹ 250,000,000. Therefore, the cumulative number of
Equity Shares pursuant to sub-division was 78,297,715 Equity Shares.
Total 78,297,715
@ Consideration for such equity shares was paid at the time of issuance of Preference Shares
(1) Allotment of 4,950 equity shares each to Jaithirth Rao and P. S. Jayakumar and allotment of 100 equity shares to Sunil Narayan
pursuant to subscription to the Memorandum of Association.
(2) Allotment of 995,000 equity shares each to Jaithirth Rao and P. S. Jayakumar.
(3) Allotment of 250,000 equity shares to Manoj Viswanathan.
(4) Allotment of 50,000 equity shares to Bhaskar Chaudhry.
(5) Allotment of 10,000 equity shares to Bessemer.
(6) Allotment of 83,637 equity shares each to Jaithirth Rao and P. S. Jayakumar.
(7) Allotment of 83,637 equity shares each to Jaithirth Rao and P. S. Jayakumar.
(8) Allotment of 209,091 equity shares to Jaithirth Rao.
(9) Allotment of 10,000 equity shares to Alpha TC Holdings Pte Limited.
(10) Allotment of 351,154 equity shares to Jaithirth Rao and allotment of 100,594 equity shares to P. S. Jayakumar.
(11) Allotment of 366,379 equity shares to Jaithirth Rao and allotment of 71,141 equity shares to P. S. Jayakumar.
(12) Allotment of 1,535,285 equity shares to TN V LLP and allotment of 1,023,524 equity shares to Aether.
(13) Allotment of 1,167,835 equity shares to TN V LLP, allotment of 778,556 equity shares to Aether and allotment of 2,062,424
Equity Shares to Bessemer pursuant to conversion of 1,167,835 Series B CCPS held by TN V LLP, conversion of 778,556 Series
B CCPS held by Aether and conversion of 1,600,004 Series A CCPS and 462,420 Series B CCPS held by Bessemer, respectively.
(14) Allotment of 800 equity shares to Kiran Agarwal Todi.
(15) Allotment of 2,000 equity shares to Anisha B V.
(16) Allotment of 5,000 equity shares to Amod Soratur, allotment of 19,200 equity shares to Kiran Agarwal Todi, allotment of 10,000
equity shares to Kiran Agarwal Todi, allotment of 9,785 equity shares to Kiran Kumar B, allotment of 375 equity shares to
Pradyumna S G and allotment of 375 equity shares to Vinod Mukunthan..
(17) Allotment of 1,357,609 equity shares to TN V LLP and allotment of 905,073 equity shares to Aether.
(18) Allotment of 30,000 equity shares to Kiran Agarwal Todi and allotment of 7,150 equity shares to Kiran Agarwal Todi.
(19) Allotment of 894,334 equity shares to TN V LLP, allotment of 596,222 equity shares to Aether, allotment of 476,423 equity
shares to Bessemer, allotment of 4,480 equity shares to Manoj Viswanathan, allotment to 650 equity shares to Bhaskar
Chaudhry, allotment of 13,440 equity shares to Nutan Gaba Patwari, allotment of 8,960 equity shares to Ajay Khetan, allotment
of 11,648 equity shares to Gaurav Mohta, allotment of 6,720 equity shares to Vilasini Subramaniam, allotment of 13,440 equity

58
 shares to Abhijeet Jamkhindikar, allotment of 1,792 equity shares to Arun Chandra Jupalli and allotment of 2,688 equity shares
to Ramakrishna V.
(20) Allotment of 447,301 equity shares to TN V LLP, allotment of 298,201 equity shares to Aether, allotment of 150,946 equity
shares to P. S. Jayakumar and allotment of 900 equity shares to Bhaskar Chaudhry.
(21) Allotment of 7,500 equity shares to Sakti Prasad Ghosh, allotment of 7,500 equity shares to Sujatha Venkatramanan, allotment
of 12,000 equity shares to Amod Soratur and allotment of 1,500 equity shares to Rushi Trivedi.
(22) Allotment of 17,500 equity shares to Sakti Prasad Ghosh, allotment of 15,000 equity shares to Sujatha Venkatramanan and
allotment of 2,500 equity shares to Amod Soratur.

II. Preference Share capital history of our Company

The history of the preference share capital of our Company is set forth below:

Date of Allotment of Number of Face Value Issue Price Nature of Allotment Nature of
Preference Shares Preference per per consideration
Shares Preference Preference
Allotted Shares (in ₹) Shares (in ₹)
January 14, 2011 408,183 10 239.13 Further issue(1) Cash
March 14, 2012 418,183 10 239.13 Further issue(2) Cash
March 25, 2013 773,638 10 239.13 Further issue(3) Cash
November 12, 2013 1,661,825 10 281.13 Further issue(4) Cash
March 4, 2016 746,986 10 281.13 Rights issue(5) Cash
March 30, 2017 (4,008,815) 10 586.21 Conversion of 4,008,815 Cash@
Preference Shares into
Equity Shares(6)
Total NIL
@ Consideration for such equity shares was paid at the time of issuance of Preference Shares.
(1) Allotment of 408,183 Series A CCPS to Bessemer.
(2) Allotment of 418,183 Series A CCPS to Bessemer.
(3) Allotment of 773,638 Series A CCPS to Bessemer.
(4) Allotment of 1,661,825 Series B CCPS to Alpha TC Holdings Pte Limited.
(5) Allotment of 462,420 Series B CCPS to Bessemer and allotment of 284,566 Series B CCPS to Alpha TC Holdings Pte Limited.
(6) Allotment of 1,167,835 equity shares to TN V LLP, allotment of 778,556 equity shares to Aether and allotment of 2,062,424
equity shares to Bessemer pursuant to conversion of 1,167,835 Series B CCPS held by TN V LLP, conversion of 778,556 Series
B CCPS held by Aether and conversion of 1,600,004 Series A CCPS and 462,420 Series B CCPS held by Bessemer, respectively.

1. Equity Shares issued for consideration other than cash or out of revaluation reserves

Our Company has not issued Equity Shares through bonus issue or for consideration other than cash or out of revaluation
reserves.

2. Issue of Equity Shares under Sections 391 to 394 of the Companies Act, 1956 or Sections 230 to 234 of the
Companies Act

Our Company has not allotted any Equity Shares pursuant to any scheme approved under Sections 391 to 394 of the
Companies Act, 1956 or Sections 230 to 234 of the Companies Act.

3. Issue of Equity Shares under employee stock option schemes

Except for the issue of Equity Shares pursuant to the exercise of options which have been granted pursuant to the ESOP
2012 and ESOP II, our Company does not have any employee stock option schemes.

4. Equity Shares issued in the preceding one year below the Offer Price

Details of issue of Equity Shares at a price which may be lower than the Offer Price during a period of one year preceding
the date of this Draft Red Herring Prospectus are set forth in the table below.

Date of Number Face Issue Price Name of Allottees Nature of Reason of

Allotment of of Equity Value per per Equity consideration allotment
Equity Shares Equity Share (in
Shares Allotted Share (in ₹)
₹)

June 29, 2019 2,030,797 10 1,116.00 TN V LLP, Aether, Cash Preferential

Bessemer, Manoj allotment
Viswanathan, Bhaskar

59
 Date of Number Face Issue Price Name of Allottees Nature of Reason of
Allotment of of Equity Value per per Equity consideration allotment
Equity Shares Equity Share (in
Shares Allotted Share (in ₹)
₹)

Chaudhry, Nutan Gaba

Patwari, Ajay Khetan,
Gaurav Mohta, Vilasini
Subramaniam, Abhijeet
Jamkhindikar, Arun
Chandra Jupalli and
Ramakrishna V.

September 897,348 10 1,116.00 TN V LLP, Aether, P. S. Cash Preferential

19, 2019 Jayakumar, Bhaskar allotment
Chaudhry.

28,500 10 281.13 Sakti Prasad Ghosh, Sujatha Cash Allotment

Venkatramanan, Amod pursuant to
Soratur and Rushi Trivedi. ESOP 2012

35,000 10 239.13 Sakti Prasad Ghosh, Sujatha Cash Allotment

Venkatramanan, and Amod pursuant to
Soratur ESOP 2012

60
5. Shareholding Pattern of our Company

The table below presents the shareholding pattern of our Company as on the date of filing of this Draft Red Herring Prospectus:

Categor Category of Number Number Number Number Total Shareholdin Number of Voting Rights held in each Number of Shareholding, Number of Number of Number of
y shareholde of of fully of Partly of shares number of g as a % of class of securities shares as a % Locked in Shares pledged equity
(I) r sharehol paid up paid-up underlyin shares total number (IX) Underlying assuming full shares or otherwise shares held
(II) ders (III) equity equity g held of shares Outstanding conversion of (XII) encumbered in
shares shares Depositor (VII) (calculated convertible convertible (XIII) demateriali
held held y Receipts =(IV)+(V) as per Number of Voting Rights Total securities securities ( as a Numb As a Numb As a % zed form
(IV) (V) (VI) + (VI) SCRR, 1957) Class e.g.: Class Total as a % (including percentage of er (a) % of er (a) of total (XIV)
(VIII) As a Equity e.g.: of Warrants) diluted share total Shares
% of Shares Others (A+B+ (X) capital) Shares held
(A+B+C2) C) (XI)= (VII)+(X) held (b)
As a % of (b)
(A+B+C2)
(A) Promoter 2 59,995,115 - - 59,995,115 76.62 59,995,115 - 59,995,115 76.62 - - - - 59,995,115
and
Promoter
Group
(B) Public 15 18,302,600 - - 18,302,600 23.38 18,302,600 - 18,302,600 23.38 - - - - 18,302,600
(C) Non - - - - - - - - - - - - - - -
Promoter-
Non Public
(C1) Shares - - - - - - - - - - - - - - -
underlying
depository
receipts
(C2) Shares held - - - - - - - - - - - - - - -
by
employee
trusts
Total 17 78,297,715 - - 78,297,715 100.00 78,297,715 - 78,297,715 100 - - - - 78,297,715

61
6. Details of equity shareholding of the major shareholders of our Company

a) Set forth below is a list of shareholders holding 1% or more of the paid-up Equity Share capital of our
Company, as on the date of this Draft Red Herring Prospectus:

Name of the shareholder Pre-Offer

Number of Equity Percentage of the
Shares on a fully Equity Share capital
diluted basis (%) on a fully diluted
basis**
1. TN V LLP 35,997,070 42.80
2. Aether 23,998,045 28.54
3. Bessemer 12,744,235 15.15
4. P. S. Jayakumar 4,037,775 4.80
5. Manoj Viswanathan* 2,363,580 2.81
Total 79,140,705 94.10
* Includes equity shareholding and stock options in force.
** Percentage is calculated on the basis of equity share capital and all stock options in force as on the relevant date.

b) Set forth below is a list of shareholders holding 1% or more of the paid-up Equity Share capital of our
Company, as of 10 days prior to the date of this Draft Red Herring Prospectus:

Name of the shareholder Pre-Offer

Number of Equity Percentage of the
Shares on a fully Equity Share capital
diluted basis (%) on a fully diluted
basis**
1. TN V LLP 35,997,070 42.80
2. Aether 23,998,045 28.54
3. Bessemer 12,744,235 15.15
4. P. S. Jayakumar 4,037,775 4.80
5. Manoj Viswanathan* 2,363,580 2.81
Total 79,140,705 94.10
* Includes equity shareholding and stock options in force.
** Percentage is calculated on the basis of equity share capital and all stock options in force as on the relevant date.

c) Set forth below is a list of shareholders holding 1% or more of the paid-up Equity Share capital of our
Company, as of one year prior to the date of this Draft Red Herring Prospectus:

Name of the Shareholder Pre-Offer

Number of Equity Percentage of the
Shares on a fully Equity Share capital
diluted basis (%) on a fully diluted
basis**
1. TN V LLP 29,066,445 42.63
2. Aether 19,377,630 28.42
3. Bessemer 10,362,120 15.20
4. P. S. Jayakumar 3,283,045 4.82
5. Manoj Viswanathan* 2,341,180 3.43
Total 64,430,420 94.50
* Includes equity shareholding and stock options in force.
** Percentage is calculated on the basis of equity share capital and all stock options in force as on the relevant date.

d) Set forth below is a list of shareholders holding 1% or more of the paid-up Share Capital of our Company, as
of two years prior to the date of this Draft Red Herring Prospectus:

Name of the Shareholder Pre-Offer

Number of Equity Percentage of the
Shares on a fully Equity Share capital
diluted basis (%) on a fully diluted
basis**
1. TN V LLP 22,144,195 38.93
2. Aether 14,762,795 25.95

62
 Name of the Shareholder Pre-Offer
Number of Equity Percentage of the
Shares on a fully Equity Share capital
diluted basis (%) on a fully diluted
basis**
3. Bessemer 10,362,120 18.22
4. P. S. Jayakumar 3,283,045 5.77
5. Manoj Viswanathan* 2,341,180 4.12
Total 52,893,335 92.98
* Includes equity shareholding and stock options in force.
** Percentage is calculated on the basis of equity share capital and all stock options in force as on the relevant date.

7. History of the Equity Share Capital held by our Promoters

As on the date of this Draft Red Herring Prospectus, our Promoters hold in aggregate 59,995,115 Equity Shares having
face value of ₹ 2 each, constituting 76.62% of the issued, subscribed and paid-up Equity Share capital of our Company.
The details regarding our Promoters’ shareholding is set forth below.

a) Build-up of Promoters’ equity shareholding in our Company

The build-up of the equity shareholding of our Promoters since incorporation of our Company is set forth below.

Date of Nature of Number of Nature of Face Issue Price/ Percentage of Percentage of

Allotment/ Transaction equity Considera Value per Transfer the Pre- Offer the Post-
Transfer shares tion equity Price per Capital Offer Capital
Allotted/ share (₹) equity share (%) (%)
Transferred (₹)
TN V LLP
March 30, Transfer from 6,000 Cash 10 586.21 [●] [●]
2017 Alpha TC
Holdings Pte
Limited
Transfer from 125,455 Cash 10 586.21 [●] [●]
Jaithirth Rao
Transfer from 1,130,854 Cash 10 586.21 [●] [●]
Jaithirth Rao Trust
Transfer from 30,000 Cash 10 586.21 [●] [●]
Manoj
Viswanathan
Transfer from 24,000 Cash 10 586.21 [●] [●]
Bhaskar Chaudhry
Allotment 1,535,285 Cash 10 586.21 [●] [●]
Conversion of 1,167,835 Cash(2) 10 586.21 [●] [●]
1,167,835
Preference
Shares(1) to
1,167,835 equity
shares
April 5, 2017 Transfer from P. 409,410 Cash 10 586.21 [●] [●]
S. Jayakumar
August 24, Transfer from 375 Cash 10 638.97 [●] [●]
2018 Vinod Mukunthan
Transfer from 375 Cash 10 638.97 [●] [●]
Pradyumna S G
August 27, Transfer from 11,306 Cash 10 638.97 [●] [●]
2018 Kiran Agarwal
Todi
Transfer from 9,785 Cash 10 638.97 [●] [●]
Kiran Kumar
August 28, Transfer from 5,000 Cash 10 638.97 [●] [●]
2018 Amod Soratur
September Allotment 1,357,609 Cash 10 662.93 [●] [●]
21, 2018

63
 Date of Nature of Number of Nature of Face Issue Price/ Percentage of Percentage of
Allotment/ Transaction equity Considera Value per Transfer the Pre- Offer the Post-
Transfer shares tion equity Price per Capital Offer Capital
Allotted/ share (₹) equity share (%) (%)
Transferred (₹)
December 1, Transfer from 22,770 Cash 10 677.31 [●] [●]
2018 Kiran Agarwal
Todi
June 29, Allotment 894,334 Cash 10 1,116.00 [●] [●]
2019
September Allotment 447,301 Cash 10 1,116.00 [●] [●]
19, 2019
October 1, Transfer from 20 Cash 10 1,116.00 [●] [●]
2019 Amod Soratur
October 11, Transfer from 1,500 Cash 10 1,116.00 [●] [●]
2019 Rushi Trivedi
October 14, Transfer from 13,200 Cash 10 1,116.00 [●] [●]
2019 Sakti Prasad
Ghosh
October 18, Transfer from 7,000 Cash 10 1,116.00 [●] [●]
2019 Sujatha
Venkatramanan
October 30, Pursuant to a resolution passed by the Shareholders in the EGM held on October 30, 2019, our Company
2019 has sub-divided its authorised share capital, such that that 25,000,000 equity shares of ₹ 10 each
aggregating to ₹ 250,000,000 were sub-divided and reclassified as 125,000,000 Equity Shares of ₹ 2 each
aggregating to ₹ 250,000,000. Therefore, the cumulative number of Equity Shares held by TN V LLP,
pursuant to sub-division was 35,997,070 Equity Shares.
Sub-Total (A) 35,997,070
Aether
March 30, Transfer from 4,000 Cash 10 586.21 [●] [●]
2017 Alpha TC
Holdings Pte
Limited
Transfer from 83,636 Cash 10 586.21 [●] [●]
Jaithirth Rao
Transfer from 753,903 Cash 10 586.21 [●] [●]
Jaithirth Rao Trust
Transfer from 20,000 Cash 10 586.21 [●] [●]
Manoj
Viswanathan
Transfer from 16,000 Cash 10 586.21 [●] [●]
Bhaskar Chaudhry
Allotment 1,023,524 Cash 10 586.21 [●] [●]
Conversion of 778,556 Cash(2) 10 586.21 [●] [●]
778,556
Preference Shares
to 778,556 Equity
Shares(3)
April 5, 2017 Transfer from P. 272,940 Cash 10 586.21 [●] [●]
S. Jayakumar
August 29, Transfer from 17,894 Cash 10 638.97 [●] [●]
2018 Kiran Agarwal
Todi
September Allotment 905,073 Cash 10 662.93 [●] [●]
21, 2018
December 1, Transfer from 15,180 Cash 10 677.31 [●] [●]
2018 Kiran Agarwal
Todi
June 29, Allotment 596,222 Cash 10 1,116.00 [●] [●]
2019
September Allotment 298,201 Cash 10 1,116.00 [●] [●]
19, 2019

64
 Date of Nature of Number of Nature of Face Issue Price/ Percentage of Percentage of
Allotment/ Transaction equity Considera Value per Transfer the Pre- Offer the Post-
Transfer shares tion equity Price per Capital Offer Capital
Allotted/ share (₹) equity share (%) (%)
Transferred (₹)
October 1, Transfer from 14,480 Cash 10 1,116.00 [●] [●]
2019 Amod Soratur
October 30, Pursuant to a resolution passed by the Shareholders in the EGM held on October 30, 2019, our Company
2019 has sub-divided its authorised share capital, such that that 25,000,000 equity shares of ₹ 10 each
aggregating to ₹ 250,000,000 were sub-divided and reclassified as 125,000,000 Equity Shares of ₹ 2 each
aggregating to ₹ 250,000,000. Therefore, the cumulative number of Equity Shares held by Aether,
pursuant to sub-division was 23,998,045 Equity Shares.
Sub-Total (B) 23,998,045
Total (A+B) 59,995,115
(1) 1,167,835 Series B CCPS were transferred to TN V LLP on March 30, 2017 from Alpha TC Holdings Pte Limited at a price of
₹ 586.21 per Series B CCPS
(2) Consideration for such equity shares was paid at the time of issuance of Preference Shares
(3) 778,556 Series B CCPS were transferred to Aether (Mauritius) Limited on March 30, 2017 from Alpha TC Holdings Pte Limited
at a price of ₹ 586.21 per Series B CCPS

All the Equity Shares held by our Promoters were fully paid-up on the respective dates of allotment of such Equity
Shares. As of the date of this Draft Red Herring Prospectus, none of the Equity Shares held by our Promoters are subject
to any pledge.

b) Shareholding of our Promoters and Promoter Group

The details of shareholding of our Promoters and Promoter Group as on the date of this Draft Red Herring Prospectus
are set forth below:

S. Name of the Pre-Offer Percentage of the Post-Offer Number Percentage of the Post-
No. shareholder Number of Pre-Offer Equity of Equity Shares Offer Equity Share
Equity Shares Share Capital (%) Capital (%)
A. Promoters
1. TN V LLP 35,997,070 45.97 [●] [●]
2. Aether 23,998,045 30.65 [●] [●]
Total 59,995,115 76.62 [●] [●]
B. Promoter Group
1. NIL
Total 59,995,115 76.62 [●] [●]

c) Details of Promoters’ Contribution and Lock-in

In accordance with Regulation 14 and Regulation 16(a) of the SEBI ICDR Regulations, an aggregate of 20% of the
fully diluted post-Offer Equity Share capital of our Company held by our Promoters, except for the Equity Shares
offered pursuant to the Offer for Sale, shall be locked in for a period of three years from the date of Allotment and our
Promoters’ shareholding in excess of 20% shall be locked in for a period of one year from the date of Allotment.

The details of the Equity Shares held by our Promoters, which shall be locked-in for a period of three years from the
date of Allotment are set forth below.

Name of Number Date of Nature of Face Issue/ Percentage of Percentage of

Promoter of Equity Allotment/ Transaction Value Acquisition pre-Offer paid- post-Offer paid-
Shares Transfer* (₹) Price per up Equity up Equity Share
Locked- Equity Share Share Capital Capital
in(1)(2) (₹)
[●] [●] [●] [●] 2 [●] [●] [●]
* Subject to finalisation of Basis of Allotment
(1) For a period of three years from the date of Allotment
(2) All Equity Shares were fully paid-up at the time of allotment

Our Company undertakes that the Equity Shares that are being locked-in are not ineligible for computation of
Promoters’ contribution in terms of Regulation 15 of the SEBI ICDR Regulations. For details of the build-up of the
share capital held by our Promoters, see “- History of the Equity Share Capital held by our Promoters” beginning on
page 63.

65
 In this connection, we confirm the following:

(i) The Equity Shares offered for Promoters’ contribution do not include (a) Equity Shares acquired in the three
immediately preceding years for consideration other than cash or out of revaluation of assets or capitalisation
of intangible assets; (b) Equity Shares that have resulted from bonus issue by utilisation of revaluation reserves
or unrealised profits of our Company or resulted from bonus issue against Equity Shares which are otherwise
ineligible for computation of Promoters’ contribution;

(ii) The Promoters’ contribution does not include any Equity Shares acquired during the immediately preceding
year at a price lower than the price at which the Equity Shares are being offered to the public in the Offer;

(iii) Our Company has not been formed by the conversion of a partnership firm or a limited liability partnership
firm into a Company;

(iv) The Equity Shares held by the Promoters and offered for Promoters’ contribution are not subject to any pledge;
and

(v) All the Equity Shares held by the Promoters are held in dematerialised form.

d) Details of Equity Shares locked-in for one year:

In addition to 20% of the fully diluted post-Offer shareholding of our Company held by our Promoters and locked-in
for three years as specified above, in terms of Regulation 16(b) of the SEBI ICDR Regulations, the entire pre-Offer
Equity Share capital of our Company will be locked-in for a period of one year from the date of Allotment, except for
the Equity Shares sold pursuant to the Offer for Sale, any Equity Shares allotted to the employees (whether or not they
are current employees) of our Company under the ESOP 2012 and ESOP II and any other categories of shareholders
exempt under Regulation 17 of the SEBI ICDR Regulations, as applicable.

In terms of Regulation 22 of the SEBI ICDR Regulations, the Equity Shares held by the Promoters, which are locked-
in may be transferred to and amongst the members of the Promoter Group or to any new promoter or persons in control
of our Company, subject to continuation of the lock-in in the hands of the transferees for the remaining period and
compliance with the SEBI Takeover Regulations, as applicable.

The Equity Shares held by the Promoters which are locked-in for a period of one year from the date of Allotment may
be pledged only with scheduled commercial banks or public financial institutions or Systemically Important NBFCs or
housing finance companies, as collateral security for loans granted by such banks or public financial institutions or
Systemically Important NBFCs or housing finance companies in terms of Regulation 21 of the SEBI ICDR Regulations,
provided that pledge of the Equity Shares is one of the terms of the sanction of loans. The lock-in may continue pursuant
to the invocation of pledge; however, the transferee shall not be eligible to transfer the Equity Shares until the expiry of
the lock-in period.

In terms of Regulation 22 of the SEBI ICDR Regulations, the Equity Shares held by persons other than the Promoters
and locked-in for a period of one year from the date of Allotment in the Offer may be transferred to any other person
holding the Equity Shares which are locked-in, subject to continuation of the lock-in in the hands of transferees for the
remaining period and compliance with the SEBI Takeover Regulations.

Any unsubscribed portion of the Offered Shares would also be locked-in as required under the SEBI ICDR Regulations.

e) Lock-in of the Equity Shares to be Allotted, if any, to the Anchor Investors

Any Equity Shares allotted to Anchor Investors under the Anchor Investor Portion shall be locked-in for a period of 30
days from the date of Allotment.

8. Except for the issue of any Equity Shares pursuant to exercise of options granted under ESOP 2012 and ESOP II, our
Company presently does not intend or propose to alter its capital structure for a period of six months from the Bid/Offer
Opening Date, by way of split or consolidation of the denomination of Equity Shares or further issue of Equity Shares
(including issue of securities convertible into or exchangeable, directly or indirectly for Equity Shares) whether on a
preferential basis or by way of issue of bonus shares or on a rights basis or by way of further public issue of Equity
Shares or otherwise.

9. As on the date of filing of this Draft Red Herring Prospectus, the total number of shareholders of our Company is 17.

10. Except as disclosed below, our Promoters, any member of our Promoter Group, any of the Directors of our Company
or any of their relatives have not purchased or sold any securities of our Company during the period of six months
immediately preceding the date of this Draft Red Herring Prospectus.

66
 Name Promoter/ Promoter Sale/ purchase/ Number of Issue Price Date of allotment/
Group/ Director of allotment equity shares* per equity sale/ purchase
Promoter/ Directors/ share (in ₹)
Relatives of Directors
Promoter
TN V LLP Promoter Allotment 894,334 1,116.00 June 29, 2019
Aether Promoter Allotment 596,222 1,116.00
TN V LLP Promoter Allotment 447,301 1,116.00 September 19, 2019
Aether Promoter Allotment 298,201 1,116.00
TN V LLP Promoter Purchase 20 1,116.00 October 1, 2019
Aether Promoter Purchase 14,480 1,116.00
TN V LLP Promoter Purchase 1,500 1,116.00 October 11, 2019
TN V LLP Promoter Purchase 13,200 1,116.00 October 14, 2019
TN V LLP Promoter Purchase 7,000 1,116.00 October 18, 2019
Director
Manoj Director and Chief Allotment 4,480 1,116.00 June 29, 2019
Viswanathan Executive Officer
Sakti Prasad Independent Director Allotment 17,500 239.13 September 19, 2019
Ghosh 7,500 281.13
Sujatha Independent Director Allotment 15,000 239.13 September 19, 2019
Venkatramanan 7,500 281.13
Sakti Prasad Independent Director Sale 13,200 1,116.00 October 14, 2019
Ghosh
Sujatha Independent Director Sale 7,000 1,116.00 October 18, 2019
Venkatramanan
* Pursuant to a resolution passed by the Shareholders in the EGM held on October 30, 2019, our Company has sub-divided its
authorised share capital, such that that 25,000,000 equity shares of ₹ 10 each aggregating to ₹ 250,000,000 were sub-divided
and reclassified as 125,000,000 Equity Shares of ₹ 2 each aggregating to ₹ 250,000,000.

11. Except as disclosed below, there have been no financing arrangements whereby members of our Promoter Group, our
Directors and their relatives have financed the purchase by any other person of securities of our Company (other than
in the normal course of the business of the relevant financing entity) during a period of six months immediately
preceding the date of filing of this Draft Red Herring Prospectus.

Name Financed entity Sale/ purchase/ Number of Issue Price Date of Allotment/
allotment equity shares per equity sale/ purchase of
Allotted* share (in ₹) Equity Shares
Promoter Group
Waverly Pte. Ltd. Aether Allotment 596,222 1,116.00 June 29,2019
Allotment 298,201 1,116.00 September 19, 2019
Purchase 14,480 1,116.00 October 1, 2019
* Pursuant to a resolution passed by the Shareholders in the EGM held on October 30, 2019, our Company has sub-divided its
authorised share capital, such that that 25,000,000 equity shares of ₹ 10 each aggregating to ₹ 250,000,000 were sub-divided
and reclassified as 125,000,000 Equity Shares of ₹ 2 each aggregating to ₹ 250,000,000. Therefore, pursuant to the sub-division,
the cumulative number of Equity Shares acquired by Aether during a period of six months immediately preceding the date of
filing of this Draft Red Herring Prospectus which have been financed by Waverly Pte. Ltd. is 4,544,515 Equity Shares.

12. Neither our Company, nor any of our Directors have entered into any buy-back arrangements for purchase of Equity
Shares from any person. Further, the Book Running Lead Managers have not made any buy-back arrangements for
purchase of Equity Shares from any person.

13. As on the date of this Draft Red Herring Prospectus, the Book Running Lead Managers and their respective associates
(as defined under the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992) do not hold any
Equity Shares.

14. All Equity Shares transferred pursuant to the Offer will be fully paid-up at the time of Allotment and there are no partly
paid-up Equity Shares as on the date of this Draft Red Herring Prospectus.

15. Except the options granted pursuant to ESOP 2012 and ESOP II, there are no outstanding warrants, options or rights to
convert debentures, loans or other instruments into, or which would entitle any person any option to receive Equity
Shares as on the date of this Draft Red Herring Prospectus.

67
16. Any oversubscription to the extent of 1% of the Offer size can be retained for the purposes of rounding off to the nearest
multiple of minimum allotment lot while finalizing the Basis of Allotment.

17. Our Promoters and Promoter Group shall not participate in the Offer, except to the extent of the Offer for Sale.

18. Except for any exercise of options vested pursuant to ESOP 2012 and ESOP II and the Pre-IPO Placement, there will
be no further issue of Equity Shares whether by way of issue of bonus shares, preferential allotment, rights issue or in
any other manner during the period commencing from filing of this Draft Red Herring Prospectus with SEBI until the
Equity Shares have been listed on the Stock Exchanges, or all application monies have been refunded, as the case may
be.

19. Our Company shall ensure that there shall be only one denomination of the Equity Shares, unless otherwise permitted
by law.

20. No person connected with the Offer, including, but not limited to, the members of the Syndicate, our Company, the
Directors, members of our Promoter Group and the Promoters, shall offer or make payment of any incentive, direct or
indirect, in the nature of discount, commission and allowance, except for fees or commission for services rendered in
relation to the Offer, in any manner, whether in cash or kind or services or otherwise, to any Bidder for making a Bid.

21. Our Company shall ensure that transactions in the Equity Shares by our Promoter and the Promoter Group between the
date of filing of this Draft Red Herring Prospectus and the date of closure of the Offer shall be intimated to the Stock
Exchanges within 24 hours of such transaction.

22. Our Company, pursuant to the resolutions by the Board on March 14, 2012 adopted ESOP 2012 which was amended
by our Company pursuant to resolutions passed by our Board on November 28, 2013. The ESOP 2012 was ratified by
the Shareholders on September 7, 2017.

The objective of ESOP 2012 is to reward employees for their association with the Company, to motivate them to
contribute to the growth and profitability of our Company and to attract and retain talent in the Company.

As a regulatory requirement in connection with the proposed IPO, the ESOP 2012 was amended by our Company
pursuant to resolutions passed by our Board on November 18, 2019 and Shareholders on November 22, 2019, primarily
to align it with the provisions of the SEBI ESOP Regulations read with the circular number bearing reference number
CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 issued by SEBI.

The ESOP 2012 envisaged issuing a maximum of 2,908,180 options convertible into 2,908,180 Equity Shares. No
further grants are proposed to be made under the ESOP 2012.

The details of the ESOP 2012, as certified by M. P. Chitale & Co., Chartered Accountants through a certificate dated
November 28, 2019 are mentioned on post-split (from face value of ₹ 10 each to face value of ₹ 2 each) basis, are as
follows:

Particulars Total
Options granted 29,08,180
Options vested (excluding options that have been exercised) 17,73,505
Options exercised 7,05,175
Total number of Equity Shares that would arise as a result of full exercise of options granted (net 18,60,505
of cancelled options)
Options forfeited/lapsed/cancelled 3,42,500
Money realised by exercise of options 3,66,34,200
Total number of options in force 18,60,505

Particulars Fiscal 2017 Fiscal 2018 Fiscal 2019 For the period 1
April 2019 till
the date of this
Draft Red
Herring
Prospectus
Options granted Nil Nil - Nil - Nil -
Options vested (excluding options that have 11,84,705 1,50,125 76,500 -
been exercised) during the year/ period
Options exercised during the year/ period - 14,000 3,73,675 3,17,500
Exercise price of options granted (₹) during - - - -
the year/ period

68
 Particulars Fiscal 2017 Fiscal 2018 Fiscal 2019 For the period 1
April 2019 till
the date of this
Draft Red
Herring
Prospectus
Exercise price of options exercised (₹) - 14,000 shares - 1,69,925 shares - 1,75,000 shares -
during the year/ period 47.83 47.83 47.83
2,03,750 shares - 1,42,500 shares -
56.23 56.23
Total number of Equity Shares that would 28,61,305 26,14,930 21,93,005 18,60,505
arise as a result of full exercise of options
granted (net of cancelled options)
Options forfeited/lapsed/cancelled 46,875 2,32,375 48,250 15,000
Variation in terms of options NIL
Money realised by exercise of options - 6,69,564 1,95,82,880.55 1,63,81,755
Total number of options in force 28,61,305 26,14,930 21,93,005 18,60,505
Description of the pricing formula and the
method and significant assumptions used
during the year to estimate the fair values of
options, including weighted-average
information, namely, risk-free interest rate,
expected life, expected volatility, expected
dividends and the price of the underlying
share in market at the time of grant of the
option
Method of option valuation NA
Expected Volatility (%) NA NA NA NA
Dividend Yield (%) NA NA NA NA
Expected life (Years) NA NA NA NA
Risk free interest rate (%) NA NA NA NA
Weighted average exercise prices and
weighted average fair value of options
whose exercise price where:
a) Exercise price equals market price* NA NA NA NA
on the date of grant
- Fair Value of options granted (₹)
- Exercise Price (₹)
b) Exercise price is greater than market NA NA NA NA
price on the date of grant
- Fair Value of options granted (₹)
- Exercise Price (₹)
c) Exercise price is less than market NA NA NA NA
price on the date of grant
- Fair Value of options granted (₹)
- Exercise Price (₹)
* Market price represents price as per the valuation report obtained for the purpose of grant.

Employee wise details of options granted to Key Management Personnel under ESOP 2012

Name and Designation No. of options granted No. of options No. of options No. of options
during the year /period lapsed / exercised outstanding at the
cancelled end of the
year/period
Fiscal Year ending
March 2017
Manoj Viswanathan - - - 6,90,680
Kiran Agarwal Todi - - - 3,00,000
Gaurav Mohta - - - 3,25,000
Ajay Khetan - - - 3,12,500
Vilasini Subramaniam - - - 75,000

69
 Name and Designation No. of options granted No. of options No. of options No. of options
during the year /period lapsed / exercised outstanding at the
cancelled end of the
year/period
Fiscal Year ending
March 2018
Manoj Viswanathan - - - 6,90,680
Kiran Agarwal Todi - - 4,000 2,96,000
Gaurav Mohta - - - 3,25,000
Ajay Khetan - - - 3,12,500
Vilasini Subramaniam - - - 75,000

Fiscal Year ending

March 2019
Manoj Viswanathan - - - 6,90,680
Kiran Agarwal Todi - - 2,96,000 -
Gaurav Mohta - - - 3,25,000
Ajay Khetan - - - 3,12,500
Vilasini Subramaniam - - - 75,000

Period from April 1,

2019 till the date of this
Draft Red Herring
Prospectus
Manoj Viswanathan - - - 6,90,680
Gaurav Mohta - - - 3,25,000
Ajay Khetan - - - 3,12,500
Vilasini Subramaniam - - - 75,000

No options were granted to the Key Managerial Personnel during the Financial Year 2017, 2018, 2019 and in the period
from April 1, 2019 till the date of this Draft Red Herring Prospectus. Further, no employee was granted options
amounting to 5% or more of the options granted during the Financial Year 2017, 2018, 2019 and in the period from
April 1, 2019 till the date of this Draft Red Herring Prospectus. Further, no employee was granted options which
exceeded 1% of the issued capital (excluding outstanding warrants and conversions) of our Company at the time of
grant.

Particular Fiscal 2017 Fiscal 2018 Fiscal 2019 Six months

ended
September 30,
2019
Fully diluted EPS on a pre-Offer basis on exercise 3.07 3.02 7.65 5.21
of options calculated in accordance with Ind AS 33
‘Earning Per Share’ (₹) (Nominal value – ₹ 2)
Difference between employee compensation cost
calculated using the intrinsic value of stock options
and the employee compensation cost that shall have
been recognized if our Company had used fair value
of options and impact of this difference on profits
and EPS of our Company
Increase in profit/(loss) for the year (₹ million) NA NA NA NA
Revised EPS (₹) NA NA NA NA
Impact on profits and EPS of the last three years if
our Company had followed the accounting policies
specified in Regulation 15 of the SEBI SBEB
Regulations in respect of options granted in the last
three years
Increase in profit/(loss) for the year (₹ million) NA NA NA NA
Revised EPS (₹) NA NA NA NA
Intention of the existing Key Managerial Personnel Yes^
and whole-time directors to sell Equity Shares (held
currently or which are to be allotted on exercise of

70
 Particular Fiscal 2017 Fiscal 2018 Fiscal 2019 Six months
ended
September 30,
2019
options), within three months after the listing of
Equity Shares pursuant to the Offer
Intention to sell Equity Shares arising out of ESOP Nil
2012 within three months after the listing of Equity
Shares, by Directors, senior management personnel
and employees having Equity Shares arising out of
the ESOP 2012, amounting to more than 1% of the
issued capital (excluding outstanding warrants and
conversions)

23. Our Company, pursuant to the resolutions by the Board on January 30, 2018 and Shareholders on February 28, 2018,
adopted ESOP II. As a regulatory requirement in connection with the proposed IPO, the ESOP II was amended by our
Company pursuant to resolutions passed by our Board on November 18, 2019 and Shareholders on November 22, 2019,
primarily to align it with the provisions of the SEBI ESOP Regulations read with the circular number bearing reference
number CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 issued by SEBI. The ESOP II shall be subject to the
ratification by shareholders of the Company post listing of equity shares on the stock exchanges.

The ESOP II envisages for a maximum of 4,125,290 options which are convertible into 4,125,290 Equity Shares.

The vesting schedule and conditions in ESOP II are separately provided for the non-management team and the
management team. Vesting of options for the non-management team shall occur in six equal instalments. If the
Promoters exit, the options will vest in proportion to the change in the Promoters’ shareholding. Options granted to the
management team is split into two pools for the purposes of vesting. The vesting of pool I options is based on the criteria
of time and performance of the management team employee. Further, the Board may, at its discretion, accelerate the
vesting of up to 7% of the pool I options on the listing of Equity Shares pursuant to the proposed IPO. Pool II options
shall vest in three equal half yearly instalments, subject to satisfaction of certain conditions in connection with the value
of Equity Shares traded post listing and price of the Equity Shares post listing. In case there is a change of control prior
to an initial public offer of the Equity Shares, while pool II options shall vest entirely, pool I options shall vest based
on the duration for which the relevant employee has been a full-time employee in the Company.

The ESOP II is in compliance with the SEBI ESOP Regulations. The details of the ESOP II, as certified by M. P. Chitale
& Co., Chartered Accountants, through a certificate dated November 28, 2019 are mentioned on post-split (from face
value of ₹ 10 each to face value of ₹ 2 each) basis, are as follows:

Particulars Total
Options granted 44,13,265*
Options vested (excluding options that have been exercised) 5,42,235
Options exercised 35,750
Total number of Equity Shares that would arise as a result of full exercise of options granted 39,40,780
(net of cancelled options)
Options forfeited/lapsed/cancelled 4,36,735
Money realised by exercise of options 41,91,402
Total number of options in force 39,40,780
* Includes 2,87,975 options lapsed in ESOP II, which were reissued.

Particulars Fiscal 2017 Fiscal 2018 Fiscal 2019 For the period 1
April 2019 till the
date of this Draft
Red Herring
Prospectus
Options granted - 24,22,220 2,91,795 16,99,250
Options vested (excluding options that - - 2,97,765 2,88,425
have been exercised)
Options exercised - - 35,750 -
Exercise price of options granted (₹) - 117.24 117.21 16,58,500 shares -
139.30
40,750 shares -
223.20
Exercise price of options exercised (₹) - - 117.24 -

71
 Particulars Fiscal 2017 Fiscal 2018 Fiscal 2019 For the period 1
April 2019 till the
date of this Draft
Red Herring
Prospectus
-Total number of Equity Shares that - 24,22,220 23,40,740 39,40,780
would arise as a result of full exercise
of options granted (net of cancelled
options)
Options forfeited/lapsed/cancelled - - 3,37,525 99,210
Variation in terms of options NA NIL
Money realised by exercise of options - - 41,91,402 -
Total number of options in force - 24,22,220 23,40,740 39,40,780
Description of the pricing formula and
the method and significant
assumptions used during the year to
estimate the fair values of options,
including weighted-average
information, namely, risk-free interest
rate, expected life, expected volatility,
expected dividends and the price of the
underlying share in market at the time
of grant of the option
Method of option valuation NA Black Scholes Valuation Model
Expected Volatility (%) NA 30.00% 30.00% 16,58,500 shares -
31.29%
40,750 shares –
1st year- 24.47%
2nd year- 21.59%%
3rd year- 20.95%
4th year- 20.88%
5th year- 22.31%
6th year- 22.14%
Dividend Yield (%) NA - - -
Expected life (Years) NA - - -
Risk free interest rate (%) NA 1st year-6.63% 1st year- 6.79% 16,58,500 shares -
2nd year- 2nd year- 7.33% 1st year- 6.43%
6.66% 3rd year- 7.57% 2nd year- 6.52%
3rd year- 6.79% 4th year- 7.74% 3rd year- 6.66%
4th year- 6.93% 5th year- 7.78% 4th year- 6.85%
5th year- 7.05% 6th year- 7.89% 5th year- 6.93%
6th year- 6.92% 6th year- 7.17%
7th year- 7.08%
40,750 shares –
1st year- 5.49%
2nd year- 5.71%
3rd year- 5.92%
4th year- 6.10%
5th year- 6.27%
6th year- 6.42%

Weighted average exercise prices and

weighted average fair value of options
whose exercise price where:
d) Exercise price equals market
price on the date of grant
- Fair Value of options NA 1st year - 17.6 1st year - 17.8 16,58,500 shares -
granted (₹) 2nd year - 26.6 2nd year - 27.4 1st year - 21.4
3rd year - 34.2 3rd year - 35.4 2nd year - 32.4
4th year - 41 4th year - 42.6 3rd year - 41.4
5th year - 47 5th year - 48.8 4th year - 49.6

72
 Particulars Fiscal 2017 Fiscal 2018 Fiscal 2019 For the period 1
April 2019 till the
date of this Draft
Red Herring
Prospectus
6th year - 52 6th year - 54.4 5th year - 56.6
- 7th year - 57 6th year - 63.6

-
- 117.24 117.21 139.30
- Exercise Price (₹)
e) Exercise price is greater than
market price* on the date of
grant NA - - 40,750 shares –
- Fair Value of options 1st year- 27.0
granted (₹) 2nd year- 38.8
3rd year- 50.4
4th year- 61.8
5th year- 74.4
6th year- 84.4

- - - 223.20
- Exercise Price (₹)
f) Exercise price is less than
market price on the date of
grant NA - - -
- Fair Value of options - - - -
granted (₹)
- Exercise Price (₹)
* Market price represents price as per the valuation report obtained for the purpose of grant.

Employee wise details of options granted to Key Management Personnel under ESOP II

Name and Designation No. of options No. of options No. of options No. of options
granted lapsed / exercised outstanding at the
during the cancelled end of the
year /period year/period
Fiscal Year ending March 2017
- NA NA NA NA

Fiscal Year ending March 2018

Manoj Viswanathan 6,50,000 - - 6,50,000
Kiran Agarwal Todi 3,25,000 - - 3,25,000
Gaurav Mohta 3,25,000 - - 3,25,000
Ajay Khetan 3,50,000 - - 3,50,000
Vilasini Subramaniam 2,50,000 - - 2,50,000

Fiscal Year ending March 2019

Manoj Viswanathan - - - 6,50,000
Kiran Agarwal Todi - 2,89,250 35,750 -
Gaurav Mohta - - - 3,25,000
Ajay Khetan - - - 3,50,000
Vilasini Subramaniam - - - 2,50,000
Abhijeet Jamkhindikar 1,25,000 - - 1,25,000
Arun Jupalli 1,25,000 - - 1,25,000
Shreyans Bachhawat 10,235 - - 10,235

Period from April 1, 2019 till the

date of this Draft Red Herring
Prospectus
Manoj Viswanathan - - - 6,50,000
Gaurav Mohta - - - 3,25,000

73
 Name and Designation No. of options No. of options No. of options No. of options
granted lapsed / exercised outstanding at the
during the cancelled end of the
year /period year/period
Ajay Khetan - - - 3,50,000
Vilasini Subramaniam - - - 2,50,000
Nutan Gaba Patwari 3,25,000 - - 3,25,000
Abhijeet Jamkhindikar - - - 1,25,000
Arun Jupalli - - - 1,25,000
Shreyans Bachhawat 15,750 - - 25,985

List of Employees who received a grant in any one year of options amounting to 5% or more of the options
granted during the year
Name No. of No. of options No. of options No. of options
options lapsed / exercised during outstanding
granted cancelled the year/ period
during the during the
year/ period year/ period
Fiscal Year ending March 2017
- - - - -

Fiscal Year ending March 2018

Manoj Viswanathan 6,50,000 - - 6,50,000
Kiran Agarwal Todi 3,25,000 - - 3,25,000
Gaurav Mohta 3,25,000 - - 3,25,000
Ajay Khetan 3,50,000 - - 3,50,000
Vilasini Subramaniam 2,50,000 - - 2,50,000

Fiscal Year ending March 2019

Abhijeet Jamkhindikar 1,25,000 - - 1,25,000
Arun Jupalli 1,25,000 - - 1,25,000
Sunil Anjana 21,325 - - 21,325

Period from April 1, 2019 till the

date of this Draft Red Herring
Prospectus
Nutan Gaba Patwari 3,25,000 - - 3,25,000
Ramakrishna V 1,50,000 - - 1,50,000

Identified employees who are granted options, during any one year equal to or exceeding 1% of the issued
capital (excluding outstanding warrants and conversions) of our Company at the time of grant
Name Grant Period No. of Options No. of Options No. of Options No. of
Granted lapsed / Exercised options
cancelled outstanding
Manoj Viswanathan Fiscal Year ending 6,50,000 - - 6,50,000
March 2018

Particular Fiscal 2017 Fiscal 2018 Fiscal 2019 Six months

ended
September 30,
2019
Fully diluted EPS on a pre-Offer basis on exercise of 3.07 3.02 7.65 5.21
options calculated in accordance with Ind AS 33
‘Earning Per Share’ (₹) (Nominal value – ₹ 2)
Difference between employee compensation cost
calculated using the intrinsic value of stock options
and the employee compensation cost that shall have
been recognized if our Company had used fair value
of options and impact of this difference on profits and
EPS of our Company
Increase in profit/(loss) for the year (₹ million) NA NA NA NA

74
 Particular Fiscal 2017 Fiscal 2018 Fiscal 2019 Six months
ended
September 30,
2019
Revised EPS (₹) NA NA NA NA
Impact on profits and EPS of the last three years if our
Company had followed the accounting policies
specified in Regulation 15 of the SEBI SBEB
Regulations in respect of options granted in the last
three years
Increase in profit/(loss) for the year (₹ million) NA NA NA NA
Revised EPS (₹) NA NA NA NA
Intention of the existing Key Managerial Personnel Yes^
and whole-time directors to sell Equity Shares (held
currently or which are to be allotted on exercise of
options), within three months after the listing of
Equity Shares pursuant to the Offer
Intention to sell Equity Shares arising out of ESOP II Nil
within three months after the listing of Equity Shares,
by Directors, senior management personnel and
employees having Equity Shares arising out of the
ESOP II, amounting to more than 1% of the issued
capital (excluding outstanding warrants and
conversions)

^Intention to sell by Key Management Personnel (collectively, ESOP Scheme 2012 and ESOP Scheme II)

Particulars No. of Equity Shares /Stock options

Ajay Khetan 3,00,000
Gaurav Mohta 5,00,000
Shreyans Bachhawat 10,000
Abhijeet Jamkhindikar 50,000
Vilasini Subramaniam 75,000
Arunchandra Jupalli 50,000
Nutan Gaba Patwari 1,00,000

75
 OBJECTS OF THE OFFER

The Offer comprises the Fresh Issue by our Company and an Offer for Sale by the Selling Shareholders.

The Offer for Sale

Each of the Selling Shareholders will be entitled to the proceeds of the Offer for Sale, net of their proportion of Offer-related
expenses and the relevant taxes thereon. Our Company shall not receive any proceeds from the Offer for Sale. Except for listing
fees which shall be solely borne by our Company, all Offer related expenses will be shared, as mutually agreed in the Offer
Agreement and in accordance with applicable law.

The Fresh Issue

Our Company proposes to utilise the Net Proceeds (as set out below) towards augmenting its capital base to meet our future
capital requirements, arising out of the growth of our business and assets.

In addition, our Company expects to receive the benefits of listing of the Equity Shares on the Stock Exchanges, including
enhancement of our Company’s brand name and creation of a public market for our Equity Shares in India.

The objects clause of our Memorandum of Association enables us to undertake the activities for which the funds are being raised
by us in the Fresh Issue.

Net Proceeds

The details of the proceeds of the Fresh Issue are summarized in the table below:

S. No. Particulars Amount (in ₹

million)
1. Gross Proceeds of the Fresh Issue(1) 4,000
2. (Less) Estimated Offer-related expenses in relation to the Fresh Issue(2)(3) [●]
Net Proceeds [●]
(1) Includes the proceeds, if any, received pursuant to the Pre-IPO Placement. Upon allotment of Equity Shares issued pursuant to the Pre-
IPO Placement, we may utilise the proceeds from such Pre-IPO Placement towards the Objects of the Offer prior to completion of the
Offer.
(2) To be finalized upon determination of Offer Price.
(3) For details, see “- Offer related Expenses” on page 77.

Utilization of Net Proceeds

The Net Proceeds of the Fresh Issue are proposed to be utilised for augmenting our capital base to meet future capital
requirements. For further details, see “Risk Factors – We propose to utilize the Net Proceeds of the Fresh Issue to maintain the
minimum capital adequacy ratio and to meet future capital requirements arising out of the growth in our business and not for
any specified projects.” on page 34.

Proposed Schedule of Implementation and Deployment of Funds

The Net Proceeds are proposed to be deployed in the Financial Year 2020.

The fund deployment indicated above is based on current circumstances of our business and we may have to revise our estimates
from time to time on account of various factors, such as financial and market conditions, competition, interest rate fluctuations
and other external factors, which may not be within the control of our management. This may entail rescheduling the proposed
utilisation of the Net Proceeds and changing the allocation of funds from its planned allocation at the discretion of our
management, subject to compliance with applicable laws.

Means of Finance

We propose to fund the requirements of the objects detailed above entirely from the Net Proceeds. Accordingly, Paragraph 9 C
of Part A of Schedule VI of the SEBI ICDR Regulations (which requires firm arrangements of finance to be made through
verifiable means towards at least 75% of the stated means of finance, excluding the amount to be raised through the Fresh Issue
and existing identifiable internal accruals) does not apply.

Details of the Objects of the Fresh Issue

The details in relation to objects of the Fresh Issue are set forth herein below.

76
Augment our capital base

We are a housing finance company in India and are registered with the NHB and are a notified financial institution under the
SARFAESI Act. We primarily offer customers home loans for the purchase or construction of homes. For details, see “Our
Business” on page 132.

As per the NHB Directions, we are required to maintain a minimum capital adequacy ratio, consisting of Tier I capital and Tier
II capital. Regulation 30 of the NHB Directions currently requires all HFCs to comply with a CRAR, consisting of Tier I and
Tier II capital, of not less than 13% of its aggregate risk weighted assets and of risk adjusted value of off-balance sheet items,
on or before March 31, 2020, 14% on or before March 31, 2021 and 15% on or before March 31, 2022 and thereafter. At a
minimum, Tier I capital of an HFC cannot be less than 10%. Further, we are required to ensure that the total Tier II capital at
any point of time, should not exceed 100% of Tier – I capital. For details, see “Key Regulations and Policies in India” on page
151.

As of September 30, 2019, our Company’s CRAR - Tier I capital, in accordance with the Restated Financial Information, was
46.8%. The Net Proceeds are proposed to be utilized for increasing our capital base. We anticipate that the Net Proceeds will be
sufficient to satisfy our Company’s Tier- I capital requirements for Financial Year 2020.

The Net Proceeds will be utilised to increase our Company’s Tier I capital base to meet our future capital requirements which
are expected to arise out of growth of our business and assets, primarily our housing loans and other mortgage loans, and to
ensure compliance with the NHB Directions.

Accordingly, the Net Proceeds are proposed to be utilized for increasing our Company’s capital base which will be utilized
towards our Company’s business and growth including towards onwards lending, payment of operating expenditure, purchase
of assets and repayment of outstanding loans and interest thereon as part of our business activities.

Offer related expenses

The total expenses of the Offer are estimated to be approximately ₹ [●] million. The expenses of this Offer include, among
others, listing fees, underwriting fees, selling commission, fees payable to the Book Running Lead Managers, fees payable to
legal counsel, fees payable to the Registrar to the Offer, Escrow Collection Bank to the Offer, processing fee to the SCSBs for
processing ASBA Forms, brokerage and selling commission payable to Registered Brokers, Collecting RTAs and CDPs, printing
and stationery expenses, advertising and marketing expenses and all other incidental and miscellaneous expenses for listing the
Equity Shares on the Stock Exchanges.

The costs, fees and expenses with respect to the Offer shall be borne by our Company and each of the Selling Shareholders in
proportion to the Equity Shares issued or transferred by them, respectively in the Offer and as mutually agreed in the Offer
Agreement and in accordance with applicable law. The break up for the estimated Offer expenses is as follows:

Activity Estimates As a % of total As a % of the

expenses(1) (in estimated Offer total Offer
₹ million) expenses(1) size(1)
Book Running Lead Managers fees and commissions (including [●] [●] [●]
any underwriting commission, brokerage and selling commission)
Commission/processing fee for SCSBs, Sponsor Bank and Bankers [●] [●] [●]
to the Offer. Brokerage and selling commission and bidding
charges for Members of the Syndicate, Registered Brokers, RTAs
and CDPs(2) (3)(4)
Fees payable to Registrar to the Offer [●] [●] [●]
Others [●] [●] [●]
- other advisors to the Offer [●] [●] [●]
- fees payable to the Auditors
- regulatory filing fees, book building software fees, listing [●] [●] [●]
fees, etc.)
- printing and stationery [●] [●] [●]
- fee payable to legal counsels [●] [●] [●]
- advertising and marketing [●] [●] [●]
- miscellaneous [●] [●] [●]
Total estimated Offer expenses [●] [●] [●]
(1)
Offer expenses include applicable taxes, where applicable. Offer expenses will be incorporated at the time of filing of the Prospectus.
Offer expenses are estimates and are subject to change.
(2) Selling commission payable to the SCSBs on the portion for RIBs and Non-Institutional Bidders which are directly procured by the SCSBs,
would be as follows:
Portion for RIBs* [●]% of the Amount Allotted (plus applicable taxes)

77
 Portion for Non-Institutional Bidders* [●]% of the Amount Allotted (plus applicable taxes)
* Amount Allotted is the product of the number of Equity Shares Allotted and the Offer Price.
Selling Commission payable to the SCSBs will be determined on the basis of the bidding terminal id as captured in the Bid Book of BSE
or NSE.
(3) No processing fees shall be payable by our Company and the Selling Shareholders to the SCSBs on the applications directly procured by
them.
Processing fees payable to the SCSBs on the portion for RIBs and Non-Institutional Bidders which are procured by the members of the
Syndicate/sub-Syndicate/Registered Broker/RTAs/ CDPs and submitted to SCSB for blocking, would be as follows:
Portion for RIBs* ₹ [●] per valid application (plus applicable taxes)
Portion for Non-Institutional Bidders* ₹ [●] per valid application (plus applicable taxes)
(4) Selling commission on the portion for RIBs, Non-Institutional Bidders which are procured by members of the Syndicate (including their
sub-Syndicate Members), Registered Brokers, RTAs and CDPs would be as follows:
Portion for RIBs [●]% of the Amount Allotted* (plus applicable taxes)
Portion for Non-Institutional Bidders [●]%of the Amount Allotted* (plus applicable taxes)
* Amount Allotted is the product of the number of Equity Shares Allotted and the Offer Price.
The Selling Commission payable to the Syndicate / Sub-Syndicate Members will be determined on the basis of the application form number
/ series, provided that the application is also bid by the respective Syndicate / Sub-Syndicate Member. For clarification, if a Syndicate
ASBA application on the application form number / series of a Syndicate / Sub-Syndicate Member, is bid by an SCSB, the Selling
Commission will be payable to the SCSB and not the Syndicate / Sub-Syndicate Member.
Bidding Charges payable to members of the Syndicate (including their sub-Syndicate Members), RTAs and CDPs on the portion for RIBs
and Non-Institutional Bidders which are procured by them and submitted to SCSB for blocking, would be as follows: ₹ [●] plus applicable
taxes, per valid application bid by the Syndicate (including their sub-Syndicate Members), RTAs and CDPs.
The selling commission and bidding charges payable to Registered Brokers the RTAs and CDPs will be determined on the basis of the
bidding terminal id as captured in the Bid Book of BSE or NSE.
Bidding charges payable to the Registered Brokers, RTAs/CDPs on the portion for RIBs and Non Institutional Bidders which are directly
procured by the Registered Broker or RTAs or CDPs and submitted to SCSB for processing, would be as follows:
Portion for RIBs* ₹ [●] per valid application (plus applicable taxes)
Portion for Non-Institutional Bidders* ₹ [●] per valid application (plus applicable taxes)
* Based on valid applications
Processing fees for applications made by RIBs using the UPI Mechanism would be as under:
Members of the Syndicate / RTAs / CDPs ₹ [●] per valid application (plus applicable taxes)
Sponsor Bank ₹ [●] per valid application (plus applicable taxes)
The Sponsor Bank shall be responsible for making payments to the
third parties such as remitter bank, NPCI and such other parties as
required in connection with the performance of its duties under
applicable SEBI circulars, agreements and other Applicable Laws
All such commissions and processing fees set out above shall be paid as per the timelines in terms of the Syndicate Agreement and Escrow
and Sponsor Bank Agreement.

Interim use of Net Proceeds

Our Company, in accordance with the policies established by our Board from time to time, will have the flexibility to deploy the
Net Proceeds. Pending utilization of the Net Proceeds for the purposes described above, our Company may temporarily deposit
the Net Proceeds with in one or more scheduled commercial banks included in the Second Schedule of Reserve Bank of India
Act, 1934 as may be approved by our Board. In accordance with Section 27 of the Companies Act, our Company confirms that
it shall not use the Net Proceeds for any buying, trading or otherwise dealing in any equity or equity linked securities of any
listed company or for any investment in the equity market.

Bridge Loans

Our Company has not raised any bridge loans which are required to be repaid from the Net Proceeds.

Monitoring of Utilization of Funds

In terms of Regulation 41 of the SEBI ICDR Regulations, our Company will appoint a monitoring agency to monitor the
utilization of the Net Proceeds prior to filing of the Red Herring Prospectus. Our Company undertakes to place the report(s) of
the Monitoring Agency on receipt before the Audit Committee without any delay. Our Company will disclose the utilization of
the Net Proceeds, including interim use under a separate head in its balance sheet for such fiscal periods as required under the
SEBI ICDR Regulations, the SEBI Listing Regulations and any other applicable laws or regulations, clearly specifying the
purposes for which the Net Proceeds have been utilized. Our Company will also, in its balance sheet for the applicable fiscal
periods, provide details, if any, in relation to all such Net Proceeds that have not been utilized, if any, of such currently unutilized
Net Proceeds.

Pursuant to Regulation 18(3) of the SEBI Listing Regulations, our Company shall on a quarterly basis disclose to the Audit
Committee the uses and application of the Net Proceeds. The Audit Committee shall make recommendations to our Board for
further action, if appropriate. Our Company shall, on an annual basis, prepare a statement of funds utilised for purposes other
than those stated in this Draft Red Herring Prospectus and place it before our Audit Committee. Such disclosure shall be made

78
only until such time that all the Net Proceeds have been utilised in full. The statement shall be certified by the Statutory Auditor.
Further, in accordance with Regulation 32 of the SEBI Listing Regulations, our Company shall furnish to the Stock Exchanges
on a quarterly basis, a statement indicating (i) deviations, if any, in the utilisation of the Net Proceeds from the objects of the
Offer as stated above; and (ii) details of category wise variations in the utilisation of the Net Proceeds from the objects of the
Offer as stated above. In accordance with Regulation 47 of the SEBI ICDR Regulations, this information will also be published
in newspapers simultaneously with the interim or annual financial results of our Company, after placing such information before
our Audit Committee and its explanation in the Directors’ report.

Variation in Objects of the Offer

In accordance with Sections 13(8) and 27 of the Companies Act and Regulation 59 and Schedule XX of the SEBI ICDR
Regulations, our Company shall not vary the Objects of the Offer unless our Company is authorized to do so by way of a special
resolution of its Shareholders and our Company shall include the requisite explanation in the director’s report in relation to such
variation. In addition, the notice issued to the Shareholders in relation to the passing of such special resolution shall specify the
prescribed details and be published in accordance with the Companies Act. Pursuant to the Companies Act, the Promoters or
controlling Shareholders will be required to provide an exit opportunity to the Shareholders who do not agree to such proposal
to vary the objects, subject to the provisions of the Companies Act and in accordance with such terms and conditions, including
in respect of pricing of the Equity Shares, in accordance with the Companies Act, and Regulation 59 and Schedule XX of the
SEBI ICDR Regulations.

Appraising Agency

None of the Objects of the Offer for which the Net Proceeds will be utilized have been appraised by any agency.

Other Confirmations

No part of the Net Proceeds will be utilized by our Company as consideration to the Promoter, members of the Promoter Group,
the Directors, the Group Company or Key Managerial Personnel. Our Company has not entered into or is not planning to enter
into any arrangement/ agreements with the Promoter, the Directors, the Key Managerial Personnel or the Group Company in
relation to the utilization of the Net Proceeds of the Offer. Further, except in the ordinary course of business, there is no existing
or anticipated interest of such individuals and entities in the objects of the Fresh Issue as set out above.

79
 BASIS FOR OFFER PRICE

The Offer Price will be determined by our Company and the Promoter Selling Shareholders, in consultation with the Book
Running Lead Managers, on the basis of assessment of market demand for the Equity Shares offered through the Book Building
Process and on the basis of quantitative and qualitative factors as described below. The face value of the Equity Shares is ₹ 2
each and the Offer Price is [●] times the face value at the lower end of the Price Band and [●] times the face value at the higher
end of the Price Band.

Bidders should read “Our Business”, “Risk Factors”, “Restated Financial Information” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” beginning on pages 132, 22, 204 and 275, respectively, to have an
informed view before making an investment decision.

Qualitative Factors

We believe that some of the qualitative factors which form the basis for computing the Offer Price are as follows:

(a) Technology driven company with scalable operating model

(b) Customer centric organizational commitment

(c) Deep penetration in the largest housing finance markets with diversified sourcing channels

(d) Centralized, data science backed underwriting process

(e) Technology driven collections system

(f) Well-diversified and cost-effective financing profile

(g) Experienced management team with qualified operational personnel and marquee investors

For further details, see “Our Business – Our Competitive Strengths” on page 134.

Quantitative Factors

Certain information presented below, relating to our Company, is based on the Restated Financial Information. For details, see
“Restated Financial Information” beginning on page 204.

Some of the quantitative factors which may form the basis for computing the Offer Price are as follows:

1. Basic and Diluted Earnings Per Share (“EPS”), as adjusted for changes in capital:

As per the Restated Financial Information:

Financial Period Basic EPS (in ₹) Diluted EPS (in ₹) Weight

Six months ended September 30, 2019 5.33 5.21
(not annualised)
Financial Year 2019 7.82 7.65 3
Financial Year 2018 3.10 3.02 2
Financial Year 2017 3.53 3.07 1
Weighted Average 5.53 5.34
Notes:
(1) Weighted average = Aggregate of year-wise weighted EPS divided by the aggregate of weights i.e. (EPS x Weight) for each
year/Total of weights
(2) The figures disclosed above are based on the Restated Financial Information of our Company, as adjusted for the stock split.
(3) The face value of each Equity Share is ₹ 2.
(4) Earnings per Share (₹)= Profit after tax excluding exceptional items before other comprehensive income attributable to equity
shareholders for the year/Weighted Average No. of equity shares
(5) Basic EPS and Diluted EPS calculations are in accordance with the relevant accounting standard.
(6) The above statement should be read with Significant Accounting Policies and the Notes to the Restated Financial Information
as appearing in “Restated Financial Information” beginning on page 204.

2. Price/Earning (“P/E”) ratio in relation to Price Band of ₹ [●] to ₹ [●] per Equity Share:

Particulars P/E at the lower end of P/E at the higher end of

Price Band (no. of times) Price Band (no. of times)
Based on Basic EPS for Financial Year 2019 [●] [●]

80
 Particulars P/E at the lower end of P/E at the higher end of
Price Band (no. of times) Price Band (no. of times)
Based on Diluted EPS for Financial Year 2019 [●] [●]

Industry P/E ratio

P/E Ratio Name of the company Face value of equity

shares (₹)
Highest 65.80 Aavas Financiers Limited 10
Lowest 65.80 Aavas Financiers Limited 10
Industry Composite 65.80
Notes:
(1) The industry high and low has been considered from the industry peer set provided later in this chapter. The industry composite
has been calculated as the arithmetic average P/E of the industry peer set disclosed in this section. For further details, see “–
Comparison of Accounting Ratios with Listed Industry Peers” on page 81.
(2) P/E figures for the peer are computed based on closing market price as on November 8, 2019 at NSE, divided by Diluted EPS
(on consolidated basis) based on the annual report of the company for the Financial Year 2019.

3. Average Return on Net Worth (“RoNW”)

As per the Restated Financial Information of our Company:

Particulars RoNW % Weight

Six months ended September 30, 2019 (not annualised) 4.13%
Financial Year 2019 8.64% 3
Financial Year 2018 4.92% 2
Financial Year 2017 2.18% 1
Weighted Average 6.32%
Notes:
(1) Return on Net Worth (%) = Net Profit after Tax before other comprehensive income (as restated) divided by Net worth at the
end of the year/period.
(2) Net worth has been computed as sum of paid up share capital and other equity.

4. Net Asset Value per Equity Share of face value of ₹ 2 each (post-split basis)

Net Asset Value per Equity Share (₹)

As on September 30, 2019 113.58
After the Offer [●]
Notes:
(1) Net Asset Value Per Equity Share = Net worth as per the restated financial information
Number of equity shares outstanding as at the end of year/period adjusted for stock split

5. Comparison of Accounting Ratios with Listed Industry Peers

Name of Face Closing price on Revenue, for EPS (₹) NAV(4) P/E(2) RoNW(3)
Company Value November 8, 2019 Financial Year Basic Diluted(1) (₹ per (%)
(₹ Per (₹) 2019 share)
Share) (in ₹ million)
Home First 2 N.A. 2,598.76 7.82 7.65 82.59 N.A. 8.64
Peer Group
Aavas 10 1,520.00 7,101.71 23.66 23.10 235.19 65.80 9.58
Financiers
Limited
Source: All the financial information for listed industry peer mentioned above is on a consolidated basis and is sourced from the
annual report of the company for the year ended March 31, 2019.
Source for Home First: Based on the Restated Financial Information for the year ended March 31, 2019 adjusted for stock split.
Notes:
(1) Diluted EPS refers to the Diluted EPS sourced from the annual report of the company for the year ended March 31, 2019
(2) P/E Ratio has been computed based on the closing market price of equity shares on NSE on November 8, 2019, divided by the
Diluted EPS provided under Note 1 above.
(3) RoNW is computed as net profit after tax (including profit attributable to non-controlling interest) divided by closing net worth.
Net worth has been computed as sum of paid-up share capital and other equity
(4) NAV is computed as the closing net worth divided by the closing outstanding number of equity shares

81
The Offer Price of ₹ [●] has been determined by our Company and the Promoter Selling Shareholders, in consultation
with the Book Running Lead Managers, on the basis of assessment of market demand from investors for Equity Shares
through the Book Building Process, and is justified in view of the above qualitative and quantitative parameters. Bidders
should read the above mentioned information along with “Risk Factors”, “Our Business”, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and “Restated Financial Information” beginning on
pages 22, 132, 275 and 204, respectively, to have a more informed view. The trading price of Equity Shares could
decline due to factors mentioned in “Risk Factors” beginning on page 22 and you may lose all or part of your
investments.

82
 STATEMENT OF SPECIAL TAX BENEFITS

To
The Board of Directors
Home First Finance Company India Limited
(formerly known as Home First Finance Company India Private Limited)
511, Acme Plaza
Andheri Kurla Road
Chakala, Andheri (East)
Mumbai – 400 059

Proposed initial public offering of equity shares of face value of ₹ 2 each (the “Equity Shares”) of Home First Finance
Company India Limited (the “Issuer” or “Company” and such offering, the “Offer”)

1. This report is issued in accordance with the terms of our engagement letter dated 10 June 2019.

2. The accompanying Statement of possible special tax benefits available to the Company and its shareholders (hereinafter
referred to as the “Statement”) under the Income Tax Act, 1961 (read with Income Tax Rules, circulars, notifications),
as amended under the Finance Act, 2019 and Finance (No. 2) Act, 2019 and Taxation Law (Amendment) Ordinance,
2019 dated 20 September 2019, the Central Goods and Services Tax Act, 2017 / the Integrated Goods and Services Tax
Act, 2017 (hereinafter referred to as “GST Act”), presently in force in India, (collectively referred as “Tax Laws”), has
been prepared by the management of the Company in connection with the proposed Offer, which we have initialed for
identification purposes.

Management’s Responsibility

3. The preparation of this Statement as of the date of our report, which is to be included in the DRHP is the responsibility
of the management of the Company and has been approved by the Board of directors of the Company (the “Board”),
at its meeting held on 18 November 2019 for the purpose set out in paragraph 9 below. The management’s responsibility
includes designing, implementing and maintaining internal control relevant to the preparation and presentation of the
Statement, and applying an appropriate basis of preparation; and making estimates that are reasonable in the
circumstances. The management is also responsible for identifying and ensuring that the Company complies with the
laws and regulations applicable to its activities.

Auditor’s Responsibility

4. Our work has been carried out in accordance with Standards on Auditing, the Guidance Note on Reports or Certificates
for Special Purposes (Revised 2016) and other applicable authoritative pronouncements issued by the Institute of
Chartered Accountants of India.

5. Pursuant to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations
2018, as amended (the “SEBI ICDR Regulations”) and the Companies Act, 2013, along with the rules thereunder, as
amended (collectively, the “Companies Act”), it is our responsibility to report whether the Statement prepared by the
Company, presents, in all material respects, the possible special tax benefits available to the Company, the shareholders
of the Company, in accordance with the Tax Laws, presently in force in India as on the date of our report.

6. Our work was performed solely to assist you in meeting your responsibilities in relation to your compliance with the
Companies Act and the SEBI ICDR Regulations in connection with the Offer.

Inherent Limitations

7. We draw attention to the fact that the Statement includes certain inherent limitations that can influence the reliability of
the information provided herein.

Several of the benefits mentioned in the Statement are dependent on the Company or its shareholders fulfilling the
conditions prescribed under the relevant provisions of the tax laws. Hence, the ability of the Company or its shareholders
to derive the tax benefits is dependent upon fulfilling such conditions, which may or may not be fulfilled. The benefits
discussed in the Statement are not exhaustive.

The Statement is only intended to provide general information to the investors and is neither designed nor intended to
be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing
tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications
arising out of their participation in the Offer.

83
 Further, we give no assurance that the revenue authorities/ Courts will concur with our views expressed herein. Our
views are based on the existing provisions of law and its interpretation, which are subject to change from time to time.
We do not assume responsibility to update the views consequent to such changes

Opinion

8. In our opinion, the Statement prepared by the Company presents, in all material respects, the possible special tax benefits
available to the Company and its shareholders, in accordance with the Tax Laws, as on the date of our report.

Considering the matter referred to in paragraph 5 above, we are unable to express any opinion or provide any assurance
as to whether:

(i) The Company or its shareholders will continue to obtain the benefits as per the Statement in future; or

(ii) The conditions prescribed for availing the benefits as per the Statement have been/ would be met with.

Restriction on Use

9. This report is addressed to and is provided to enable the Board of Directors of the Company to include this report in the
DRHP, prepared in connection with the Offer to be filed by the Company with the Securities and Exchange Board of
India and the concerned stock exchanges.

For Walker Chandiok & Co LLP

Chartered Accountants
Firm Registration No. 001076N/N500013

Khushroo B. Panthaky
Partner
Membership No.: 042423
UDIN No: 19042423AAAAGJ4194

Place: Mumbai
Date: 26 November 2019

84
STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS AVAILABLE TO HOME FIRST FINANCE COMPANY
INDIA LIMITED (THE “COMPANY”) AND ITS SHAREHOLDERS

UNDER THE INCOME-TAX ACT, 1961 (hereinafter referred to as the ‘Act’)

1. Special tax benefits available to the Company under the Act

 The Company is registered as a Housing Finance Company (HFC) and hence, as per the provisions of section
36(1)(viia) of the Act, the Company could claim a deduction of provision created for bad and doubtful debts
in its books of accounts to the extent of five per cent of its total income (computed before making any deduction
under this section and Chapter VI-A), subject to certain conditions, while computing its income under the head
“Profits and gains of business or profession”.

 As per section 36(1)(vii) of the Act, where the Company has claimed deduction under section 36(1)(viia) of
the Act, then subsequent claim of deduction of actual bad debts under section 36(1)(vii) of the Act would be
reduced to the extent of deduction already claimed under section 36(1)(viia) of the Act.

Further, as per section 41(4) of the Act, where any deduction has been claimed by the Company in respect of a bad debt
under Section 36(1)(vii) of the Act, then any amount subsequently recovered on any such debt is greater than the
difference between such debt and the amount so allowed as a deduction under section 36(1)(vii) of the Act, the excess
shall be deemed to be business income of the year in which it is recovered.

 Subject to certain specified conditions, the Company is eligible to claim a deduction under section 36(1)(viii)
of the Act, in respect of an amount not exceeding 20 per cent of the profits derived from an eligible business,
provided such amount is transferred to a special reserve account created and maintained for this purpose.
However, where the aggregate of the amounts carried to such reserve account from time to time exceeds twice
the amount of the paid-up share capital and general reserves, no further deduction shall be allowable in respect
of such excess.

Further, as per section 41(4A) of the Act, where deduction has been allowed in respect of any special reserve created
and maintained under Section 36(1)(viii) of the Act, any amount subsequently withdrawn from the said reserve would
be deemed to be income of the year in which it is withdrawn.

 Section 43D of the Act provides that in case of public company being a housing finance company the interest
income in relation to such bad or doubtful debts as may be prescribed in the guidelines issued by the National
Housing Bank, would be chargeable to income-tax in the hands of the Company in the year in which such
interest income is credited or actually received by the Company, whichever is earlier.

2. Special tax benefits available to the shareholders under the Act

There are no special tax benefits available to the shareholders of the Company.

UNDER the Central Goods and Services Tax Act, 2017 / the Integrated Goods and Services Tax Act, 2017 (hereinafter
referred to as the ‘GST Act’)

1. Special tax benefits available to the Company under the GST Act

There are no special tax benefits available to the Company.

2. Special tax benefits available to the Shareholders under the GST Act

There are no special tax benefits applicable in the hands of the shareholders for investing in the shares of the Company.

Notes:-

1. These special tax benefits are dependent on the Company fulfilling the conditions prescribed under the relevant
provisions of the Act. Hence, the ability of the Company to derive the tax benefits is dependent upon fulfilling such
conditions, which based on the business imperatives, the Company may or may not choose to fulfil.

2. The special tax benefits discussed in the Statement are not exhaustive, but just indicative. Further, the special tax
benefits discussed in this statement are only intended to provide general information to the investors and hence, is
neither designed nor intended to be a substitute for professional tax advice, which the investors may wish to take before
making any investments. In view of the individual nature of the tax consequences accompanied with the changing tax
laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications
arising out of their participation in the issue.

85
3. The Statement is prepared on the basis of information available with the Management of the Company and there is no
assurance that:

i. the Company or its shareholders will continue to obtain these benefits in future;

ii. the conditions prescribed for availing the benefits have been/ would be met with; and

iii. the revenue authorities/courts will concur with the view expressed herein.

4. The above views are based on the existing provisions of law and our interpretation of the law, which are subject to
change from time to time and are not binding on the income-tax department or on its officials / authorities or on any
other Regulator.

5. The Statement has been prepared on the basis that the shares of the Company are listed on a recognized stock exchange
in India and the Company will be issuing shares.

For and on behalf of Home First Finance Company India Limited

Manoj Vishwanathan
CEO & Director

Place: Mumbai
Date: 18 Nov 2019

86
 SECTION IV: ABOUT OUR COMPANY

INDUSTRY OVERVIEW

The information contained in this section is taken from the report titled “CRISIL Research – Industry Report on Affordable
Housing Finance, November 2019” prepared by CRISIL (the “CRISIL Report”) and the report entitled “ICRA’s Report on
Mortgage Finance Market” dated November 2019 prepared by ICRA. Neither we, nor any other person connected with the Offer
has independently verified this information. Industry sources and publications generally state that the information contained
therein has been obtained from sources generally believed to be reliable, but their accuracy, completeness and underlying
assumptions are not guaranteed and their reliability cannot be assured. Industry publications are also prepared based on
information as of specific dates and may no longer be current or reflect current trends.

While preparing its report, CRISIL has also sourced information from publicly available sources, including our Company's
financial statements prepared in accordance with Indian GAAP and available publicly. However, financial information relating
to our Company presented in other sections of this Draft Red Herring Prospectus has been prepared in accordance with Ind AS
and restated in accordance with the SEBI ICDR Regulations. Accordingly, the Indian GAAP financial information of our
Company in this section is not comparable with Ind AS financial information presented in this Draft Red Herring Prospectus.

Overview of the Indian Economy

India’s gross domestic product (“GDP”), at constant 2011-2012 prices, has grown at a CAGR of 7.5% over the past five years.
Private consumption and investment drove India’s GDP growth from Fiscal 2014 to Fiscal 2019. Low inflation, benign interest
rates and revision in salaries of government employees as per the Seventh Pay Commission recommendations strengthened
growth in private consumption. Investments saw a gradual pick-up in the last few years, most of which was led by government
spending either through budgetary resources or by pushing public sector enterprises to take on capital expenditure. Exports,
which had briefly picked up in 2017 and the first half of 2018 with recovering global growth, lost momentum since the second
half of 2018 as rising US-China trade tensions slowed global growth. While slowdown in fixed investment, private consumption
and export growth weighed down growth in the last quarter of Fiscal 2019, higher government consumption and slow import
growth provided support.

The following graph sets our GDP growth over Fiscals 2014 to 2024 (constant 2011-2012 prices):

Rs trillion

250 8.0% 8.2% 9.0%

7.4% 7.2% 6.3% 199 8.0%
200 6.8%
6.4% 7.0%
141 150 6.0%
150 123 132
114 5.0%
98 105
4.0%
100
3.0%
50 2.0%
1.0%
0 0.0%
FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY24P

GDP (Constant 2011-12 prices) GDP Growth

Note: E-Provisional estimates, P-Projected

According to CRISIL, GDP growth shall remain subdued in Fiscal 2020 on account of weakening global momentum, and weak
first quarter performance indicated by high frequency data. GDP growth in the first quarter of Fiscal 2020 estimate at 5.0%,
which is the slowest in 25 quarters, on account of decline in domestic private consumption demand and manufacturing, halving
of merchandise exports growth, and a high-base effect from the previous year. Growth may pick up in the second half of Fiscal
2020, supported by softer interest rates and budgetary measures to push consumption. Under the assumption that the second
quarter will see some mild pick-up in growth that will continue through the year, CRISIL Research have forecasted growth for
Fiscal 2020 at 6.3%. An easing monetary policy, improved transmission of rate cuts, and the Government’s minimum income
support scheme to farmers would also feed into consumption.

The following graph sets forth growth trend of nominal per capita GDP for the periods indicated below:

87
 (In Rs. '000)
250 235
213
192
200 174
157
143
150 130
118

100

50

0
FY17 FY18 FY19 FY20 P FY21 P FY22 P FY23 P FY24 P

The prospects for the Indian economy are good in the long term. As per the International Monetary Fund forecast in October
2019, India’s GDP is expected to grow at a CAGR of 7.3% over the next five years, higher than many emerging economies such
as Brazil, Russia, and China. This growth in GDP will be supported by factors including, reform measures by the Government,
benign inflation, rising consumer aspirations and needs, increasing urbanisation, key structural reforms such as implementation
of the Goods and Services Tax (“GST”) and the Insolvency and Bankruptcy Code, 2016 (“IBC”), increasing digitalisation will
improve the efficiency in the Indian economy leading to faster growth, and policies aimed towards greater formalisation of the
Indian economy. (Source: CRISIL Report)

Sector Wise GDP Growth Rates in the First Quarter of Fiscal 2020

Growth of India’s GDP (at constant 2011-2012 prices) declined sharply to a 25-quarter low 5.0% in the first quarter of Fiscal
2020 in year-on-year terms from 8.0% in the first quarter of Fiscal 2019. This unfavourable GDP print reflected the subdued
expansion in private final consumption expenditure (+3.1%; a 28-quarter low), and gross fixed capital formation (+4.0%), which
together accounted for approximately 88% of the India’s GDP in the first quarter of Fiscal 2020. Moreover, the pace of growth
of GDP displayed a substantial sequential decline in the first quarter of Fiscal 2020 relative to the pace of 5.8%, in the fourth
quarter of Fiscal 2019 (Source: ICRA Report).

The following table sets out growth of India’s GDP and their components over the periods indicated below (in %, constant 2011-
2012 prices, year-on-year):

Q1 Fiscal Q2 Fiscal Q3 Fiscal Q4 Fiscal Q1 Fiscal

2019 2019 2019 2019 2020
Private Final Consumption Expenditure (“PFCE”) 7.3% 9.8% 8.1% 7.2% 3.1%
Government Final Consumption Expenditure (“GFCE”) 6.6% 10.9% 6.5% 13.1% 8.8%
Exports 10.2% 12.7% 16.7% 10.6% 5.7%
less Imports 11.0% 22.9% 14.5% 13.3% 4.2%
Gross Fixed Capital Formation (“GFCF”) 13.3% 11.8% 11.7% 3.6% 4.0%
GDP 8.0% 7.0% 6.6% 5.8% 5.0%
Note: After disaggregating GDP into its expenditure components, such as PFCE, GFCE and GFCF, the residual component that remains is
termed as Discrepancies. The latter can vary from positive to negative in various years. Fluctuation in the discrepancies figure from one year
to the next can affect the growth of the various subcomponents of GDP.
(Source: ICRA Report)

State Wise GDP Contribution

GDP growth has been varied across states with Andhra Pradesh growing at the fastest rate of 11.2% CAGR (over Fiscals 2015
to 2019), followed by Karnataka (11.0%), Telangana (10.4%), Gujarat (10.4%) and Odisha (9.6%). As per the Ministry of
Statistics and Programme Implementation, India’s overall GDP per capita at constant prices stood at ₹ 105,688 in Fiscal 2019.
Compared with this, states such as Delhi, Haryana and Karnataka have significantly higher real per capita income (“PCI”) than
other states as well as the PCI of India, as illustrated below:

States Real GDP (Fiscal GDP growth - CAGR Contribution to Real per capita income
2019) - ₹ billion (Fiscals 2015-2019) India's GDP (Fiscal 2019) - ₹
Maharashtra* 19,428 7.6% 13.8% 141,152
Tamil Nadu 12,075 7.8% 8.6% 138,805
Gujarat* 10,903 10.4% 7.7% 144,090
Uttar Pradesh 11,094 7.4% 7.9% 43,102

88
 States Real GDP (Fiscal GDP growth - CAGR Contribution to Real per capita income
2019) - ₹ billion (Fiscals 2015-2019) India's GDP (Fiscal 2019) - ₹
Karnataka 11,366 11.0% 8.1% 154,809
West Bengal 8,009 8.7% 5.7% 73,202
Rajasthan 6,793 6.8% 4.8% 78,785
Andhra Pradesh 6,803 11.2% 4.8% 117,261
Telangana 6,185 10.4% 4.4% 145,082
Delhi 6,027 8.9% 4.3% 279,601
Kerala* 5,183 6.5% 3.7% 136,364
Madhya Pradesh 5,354 8.7% 3.8% 58,706
Haryana 5,261 9.2% 3.7% 168,209
Chhattisgarh 2,318 5.7% 1.6% 71,429
Note: (*) – As of Fiscal 2018, Contribution to India’s GDP is calculated by calculating state GDP as a percentage of India’s total GDP
(Source: CRISIL Report)

Trends in Housing Savings

The following table sets forth trends in household savings (current prices, year-on-year):

Indicator Year-On-Year Growth

Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018
Household Saving 8.2% 2.2% 6.7% 1.5% 6.0% 12.0%
Gross Financial Saving 14.1% 11.9% 5.6% 19.0% -3.9% 30.0%
Saving in Physical Assets 5.4% -3.3% 6.8% -12.9% 22.0% 10.0%
Saving in Gold and Silver Ornaments 9.0% 0.4% 23.9% 12.0% -0.5% -10.8%
Financial Liabilities 13.9% 8.6% 5.1% 2.3% 21.6% 58.0%
Net Financial Saving of Household Sector 14.2% 13.4% 5.8% 26.2% -12.7% 16.4%
(Source: ICRA Report)

Growth Trends of Gross Fixed Capital Formation by Indian Household Sector in Dwellings, Other buildings and Structures

The growth trends of gross fixed capital formation (“GFCF”) by the Indian household sector, particularly in dwellings, other
buildings and structures (at constant 2011-2012 prices), has displayed considerable volatility in the recent years. After contracting
by 5.3% in Fiscal 2013, GFCF by households in dwellings, other buildings and structures (at constant 2011-2012 prices)
rebounded to a year-on-year growth of 2.4% in Fiscal 2014. However, the following two fiscals witnessed a reversal in this trend,
with household GFCF in dwellings, other buildings and structures contracting by 0.2% and a steep 20.1%, respectively, in Fiscals
2015 and 2016. Subsequently, GFCF by households in dwellings, other buildings and structures recovered to a muted expansion
of 0.1% in Fiscal 2017 (Source: ICRA Report).

Key Structural Reforms: Long-Term Positives for Indian Economy

Financial Inclusion. The Government has two key schemes to increase financial inclusion – the Pradhan Mantri Jan Dhan Yojana
(“PMJDY”) and Pradhan Mantri Jeevan Jyoti Bima Yojana (“PMJJBY”). The PMJDY’s mission is to ensure that every
household in India has a bank account, can access their account from anywhere and has affordable access to all financial services
such as savings and deposit accounts, remittance, credit and insurance. PMJDY focuses on household coverage as against earlier
schemes that focused on coverage of villages. As on June 26, 2019, 360 million new accounts have been opened, of which 59%
are in rural and semi-urban areas with total deposits of ₹ 996 billion. The PMJJBY is a one-year life insurance scheme that offers
a life cover of ₹ 0.2 million at a premium of ₹ 330 per annum per member, which can be renewed every year. More than 100
million people have registered for these two social security schemes. The Government also has an accident insurance scheme,
the Pradhan Mantri Suraksha Bima Yojana (“PMSBY”), which offers ₹ 0.2 million cover for death and full disability at a
premium of ₹ 12 annually.

Implementation of GST. Introduced on July 1, 2017, GST is an indirect tax regime that subsumed multiple cascading taxes levied
by the Central and State Governments. Its implementation has resulted in structural changes in the supply chain and logistics
network in India.

Thrust on Affordable Housing. The Government has launched an affordable housing initiative called the Pradhan Mantri Awas
Yojana – Urban (“PMAY-U”) that promises houses for all by 2022. As part of the scheme, the Government has been giving
incentives to developers to build houses that the poor can afford. The scheme also offers homebuyers’ credit-linked subsidy
schemes (“CLSS”).

IBC. IBC is a reform that structurally strengthens identification and resolution of stressed assets in India. It enhances the credit
enforcement structure and provides certainty to the timelines for resolution of insolvency. It attempts to simplify legal processes,

89
preserves value for creditors and provides them with greater certainty of outcome. The code is a strong message to borrowers to
adhere to credit discipline. The effective implementation of the IBC is expected to enhance investors’ confidence in India.

Reduction in Tax Rates for Domestic Companies and New Manufacturing Companies. On September 20, 2019, the Finance
Minister announced the Taxation Laws (Amendment) Ordinance 2019 to make certain amendments in the Income Tax Act, 1961
to allow any domestic company an option to pay income tax at the rate of 22% subject to condition that they will not avail any
exemption or incentive. The effective tax rate for these companies shall be 25.17% inclusive of surcharge and cess. Also, such
companies shall not be required to pay minimum alternate tax. In order to attract fresh investment in manufacturing and thereby
provide boost to ‘Make-in-India’ initiative of the Government, another new provision has been inserted in the Income Tax Act
with effect from Fiscal 2020, which allows any new domestic company incorporated on or after October 1, 2019 making fresh
investment in manufacturing, an option to pay income tax at the rate of 15%. This benefit is available to companies which do
not avail any exemption or incentive and commences their production on or before March 31, 2023. The effective tax rate for
these companies shall be 17.01% inclusive of surcharge and cess. Also, such companies shall not be required to pay minimum
alternate tax. Further, in order to provide relief to companies that continue to avail exemptions or incentives, the rate of minimum
alternate tax has been reduced from existing 18.5% to 15.0%. (Source: CRISIL Report)

Digitisation: Catalyst for the Next Growth Cycle

Technology is expected to play a pivotal role in taking the financial sector to the next level of growth, by helping surmount the
challenges stemming from India’s vast geography, which makes physical footprints in smaller locations commercially unviable.
With increasing smartphone penetration and faster data speeds, consumers are now embracing digitisation as they find it more
convenient.

Mobile and internet penetration: Higher mobile penetration, improved connectivity and faster and cheaper data speed have
helped India begin its shift from being a cash-dominated economy to a digital one, supported by the Aadhaar and bank account
penetration. India has approximately 1.2 billion mobile users, of which, 41% use smartphones. CRISIL Research expects the
share of smartphones to increase significantly in the coming years. The total number of internet users in the country is more than
400 million.

The following graph sets forth increased adoption of smartphones:

(%)
100% 5% 7% 11%
90% 18% 25% 30% 35%
80% 41% 49%
70% 57%
66%
60%
50% 95% 93%
40% 89% 82% 75% 70%
30% 65% 59% 51%
20% 43%
34%
10%
0%
2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19E

2019-20P

2020-21P

2021-22P

Feature phone installed base Smartphone installed base

The following graph sets forth data subscribers as a proportion of overall subscribers:

60% 52%
46%
50%
38% 41%
37%
40% 34%
29% 31%
30% 26%
17%
20% 13%
10%

0%
2017-18
2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2018-19P

2019-20P

2020-21P

2021-22P

90
(Source: CRISIL Report)

Rise in 4G penetration and smartphone usage: Digital revolution has paved the way for digital payments. India had more than
1.2 billion wireless subscribers as of March 2018, and the number is growing at a decent pace every year. The reach of mobile
network, internet and electricity is also helping digital payments expand to remote areas. Mobile data consumption in India has
grown approximately 25 times in the past five fiscals. CRISIL Research expects the number to double to more than 900 million
by Fiscal 2024, given the low penetration.

According to NITI Aayog report of January 2017, digital payments and per capita transactions in India are amongst the lowest
(11 non-cash transactions per capita per annum) compared to China (26), Mexico (32), South Africa (70), Brazil (142), UK (355)
and Singapore (728).

CRISIL Research expects the share of mobile banking and prepaid payment instruments to increase drastically in the coming
years. Improved data connectivity, lower digital payment penetration and proactive Government measures are expected to drive
digital adoption in India. Players with better mobile and digital platforms are expected to draw more customers and emerge as
winners in the long term.

The Housing Scenario in India

As per Census of India, 2011, the number of households increased from 192 million in 2001 to 247 million in 2011, at a CAGR
of 1.3%. During the same period, housing stock increased from 187 million (2001) units to 245 million (2011). Out of these 245
million houses, approximately 61 million houses are obsolescent or congested or non-serviceable.

The Housing Shortage in India

Despite the constant focus on the housing segment, housing in India is far from adequate. The GoI, in its Twelfth Five Year Plan
(2012 to 2017), accorded this issue utmost importance and focused on increasing the amount of housing units available both in
the urban as well as the rural sector. As per the estimates of the Twelfth Five Year Plan, the shortage of housing in the urban
segment stood at 18.78 million. The economically weaker section (“EWS”) accounts for three-fourths of the shortage and the
lower income group (“LIG”) approximately accounts for a quarter of housing shortage.

As per the estimates of the Twelfth Five Year Plan, 10 states accounted for approximately 76% of the urban housing shortage.
Uttar Pradesh has a housing shortage of over three million, followed by Maharashtra (1.94 million), West Bengal (1.33 million),
Andhra Pradesh (1.27 million) and Tamil Nadu (1.25 million).

The following graph sets out state-wise urban housing shortage:

(In Mn)

3.50 3.07 ~76% of the total urban housing

3.00 shortage is contributed by 10
2.50 states
1.94
2.00
1.33 1.27 1.25 1.19 1.15
1.50 1.10 1.02 0.99
1.00 0.63 0.54 0.49 0.42
0.41 0.39 0.35 0.28 0.21
0.50 0.16
0.00
Jharkhand

Haryana
West Bengal

Tamil Nadu

Chhattisgarh
Punjab

Assam
Uttar Pradesh

Bihar

Rajasthan

Gujarat

Odisha

Uttarakhand
Kerala

Delhi
Karnataka

Nagaland
Maharashtra

Andhra Pradesh

Madhya Pradesh

Note: The data above is as of 2012, when Telangana was not a separate state and was a part of Andhra Pradesh
(Source: CRISIL Report)

Household Sizes and Number of Dwelling Rooms

With increased urbanisation, India is also moving towards higher nuclearisation leading to smaller family sizes. This is also
reflected in the steady reduction in average household size from 5.5 members per household as of 1991 to 5.3 members in 2001
to 4.8 members, as per Census 2011. Furthermore, according to the Census of India, 2011, majority of the Indian households
live in a one-room or two-room house. According to the National Sample Survey Organisation (“NSSO”) Survey on Housing
Conditions conducted in 2012, the average floor area of a dwelling unit was 40.03 sq. m in rural India and 39.20 sq. m in urban
India during 2012. The average household size in India was 4.5. It was 4.8 in rural India and 4.2 in urban India. The states of

91
Uttar Pradesh and Jammu and Kashmir had the highest average household size of 5.9 and 5.6 respectively, whereas in the states
of Andhra Pradesh and Tamil Nadu, the average household size was 4.1 and 4.0 respectively.

The following graph sets out state-wise average household size:

7.0 5.9
5.6 5.5 5.4 5.4 5.3 5.2 5.2
6.0 5.1 5.1 5.1 5.0 5.0 5.0 4.9 4.9 4.9 4.7 4.7
4.7 4.7 4.6 4.5 4.5 4.4 4.3 4.3
5.0 4.1 4.0
4.0
3.0
2.0
1.0
0.0

Himachal…
Jammu &…

Arunachal…
Jharkhand
Haryana

Assam

Chhattisgarh
West Bengal

Tamil Nadu
Bihar

Punjab

Mizoram
Rajasthan

Manipur

Uttarakhand

Sikkim

Odisha

Tripura
Kerala

Goa
Uttar Pradesh

Meghalaya

Gujarat

Karnataka
Nagaland

Andhra Pradesh
Madhya Pradesh

Maharashtra
(Source: CRISIL Report) NCT of Delhi

India’s Mortgage Penetration Lower than Other Economies

As of March 2019, the total outstanding retail housing loans in India was ₹ 18.7 trillion, translating into a mortgage-to-GDP ratio
of 12.4%. While the ratio has improved over the last few years, it is still lower than several other emerging and developed
economies. CRISIL Research analysis indicates the mortgage penetration in India is 9 to 11 years behind other regional emerging
markets such as China. Going forward, CRISIL Research expects a steady and gradual increase in mortgage penetration due to
various structural drivers, such as a young population, smaller family sizes, increased urbanisation and rising income levels.

The following graph sets forth Mortgage-to-GDP ratio in India compared with other countries (2017):

80.0%
67.0%
70.0% 62.6%
60.0%
50.0% 44.2%
40.0%
30.0% 26.4%
21.4%
20.0% 12.4%
10.0% 2.8%
0.0%
Indonesia^ India* South Africa China Malaysia USA UK
Note: (*) – As of calendar year 2019, (^) As of calendar year 2016

The following table sets forth trend in Mortgage-to-GDP ratio of different countries:

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Indonesia 1.6% 1.8% 2.0% 2.2% 2.4% 2.4% 2.7% 2.8% 2.8% NA
India 6.2% 6.6% 6.1% 5.5% 6.3% 6.6% 6.9% 7.7% 7.5% 8.7%
South Africa 45.4% 33.2% 29.7% 23.3% 24.0% 21.3% 21.2% 18.1% 22.0% 21.4%
China 11.6% 11.8% 14.5% 14.1% 14.1% 15.5% 16.6% 18.4% 22.6% 26.4%
Malaysia 28.2% 35.0% 33.9% 31.7% 34.7% 35.0% 36.1% 33.6% 42.0% 44.2%
USA 82.7% 75.9% 80.1% 72.8% 68.8% 66.3% 63.8% 62.7% 62.9% 62.6%
UK 78.2% 80.2% 77.1% 74.2% 73.3% 71.3% 69.0% 68.7% 67.2% 67.0%
Rise in Per Capita Income to Drive the Growth of Mortgage Penetration in India

The mortgage penetration in China is correlated to the GDP per capita of the country. The GDP-to-mortgage ratio of China has
grown from 12% in 2008 to 26% in 2017. The per capita income of the country has increased from USD 7,900 to USD 15,300
during the same period. India has gone through a similar trajectory with mortgage penetration in the country increasing from 6%
in 2008 to 9% in 2017 that is correlated to the increase in per capita income of the country from USD 3,900 in 2008 to USD
6,500 in 2017. CRISIL Research expects that India will continue on this trajectory to reach mortgage penetration of 15% by
Fiscal 2024.

92
The following graph sets forth mortgage penetration levels (2008-2017):

30% 18.0
15.3
14.4 26% 16.0
25% 13.5
12.7 23% 14.0
11.9
20% 11.1 12.0
10.4
9.5 18%
8.6 17% 10.0
15% 7.9 16%
14% 14% 14%
6.5 8.0
12% 12% 5.7 6.1
4.8 5.1 5.4
10% 4.2 4.5 4.6 6.0
3.9 8% 9%
7% 7% 7% 7% 4.0
6% 6% 6% 6%
5%
2.0
0% 0.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

China GDP per capita in PPP terms (In '000 USD) India GDP per capita in PPP terms (In '000 USD)
China Mortgage to GDP (%) India Mortgage to GDP (%)

(Source: CRISIL Report)

India’s Mortgage Penetration Expected to Touch 15% by 2024

In Fiscal 2019, India's mortgage-to-GDP ratio stood at 12.4%. Though low compared with other developing countries, it has
significantly improved from 6.5% in Fiscal 2009. The factors that contributed to the improvement are rising incomes, improving
affordability, growing urbanisation and nuclearisation of families, emergence of tier-II and tier-III cities, ease of financing, tax
incentives, and widening reach of financiers. Given the expected steady growth, CRISIL Research projects the ratio at 15.2% by
Fiscal 2024.

The following graph sets forth trend in Mortgage-to-GDP ratio in India (2005-2024P):

16.0% 15.2%

14.0% 12.4%
12.0%
10.0%
8.0% 6.5% 6.8%
6.0% 5.3%

4.0%
2.0%
0.0%
2005 2009 2014 2019 2024 P
(Source: CRISIL Report)

Factors Affecting Mortgage-to-GDP Ratio in India

Mortgage penetration in India is lower than other emerging economies owing to lower per capita income and higher proportion
of informal employment in the country. However, CRISIL Research believes rising urbanisation, growing disposable income,
and favourable demographics will lead to higher mortgage penetration going forward.

Low per capita GDP in India: An analysis by CRISIL Research indicates that housing loan penetration increases at relatively
higher levels of per capita GDP. In other words, India’s lower per capita income acts as a constraint to deeper mortgage
penetration.

Relatively high house prices: Housing demand has a direct relationship with affordability of homes and annual income. Though
affordability of homes has improved in the last few years due to real estate prices remaining stagnant and rising incomes, home
prices are obstinately high in several parts of the country. Affordability is arrived at dividing home price with average annual
income.

93
High percentage of population in informal employment: Higher proportion of informal employment makes income assessment
difficult and increases credit risk premiums, thereby impacting the mortgage market growth. According to a report by the
International Labour Organisation (“ILO”), the overall proportion of informal workers in total employment is nearly 92% in
India based on a survey conducted in 2011 to 2012. These informal workers includes workers in the unorganised sector and
informal workers in organised sector (i.e. workers without access to social security).

Information asymmetry in smaller cities: Data availability in India has improved with access to a number of online property
portals and databases. However, information asymmetry persists, especially in smaller cities, where reliable valuation is also
generally difficult to obtain.

Inadequate legal infrastructure: According to the World Bank’s Ease of Doing Business index, India ranks low in registering
property. A country’s legal and regulatory support that ensures ease in dealing with property-related matters and cost-effective
foreclosure of loans in a timely manner is critical for development of the housing loan market. However, India lags behind in
this respect. (Source: CRISIL Report)

State-Wise Mortgage Penetration in India

The mortgage-to-GDP ratio as of March 2018 varies widely for the top 15 states ranging between 5.7% and 15.6%. Maharashtra
has the highest mortgage penetration with the ratio at 15.6% followed by Karnataka (12.4%), Telangana (12.0%), Tamil Nadu
(11.1%) and Delhi (10.5%).

The following table sets forth state-wise Mortgage-to-GDP ratio (Fiscal 2018):

States Per Capita Income (₹ '000) Home mortgage loan outstanding as a % of GDP
Maharashtra 176 15.6%
Karnataka 188 12.4%
Telangana 181 12.0%
Tamil Nadu 172 11.1%
Delhi 329 10.5%
Haryana 203 10.0%
Kerala 184 8.3%
Andhra Pradesh 144 8.2%
Gujarat 175 7.9%
Uttar Pradesh 55 7.6%
Rajasthan 99 6.7%
Uttarakhand 182 6.7%
Madhya Pradesh 83 6.1%
Punjab 143 5.8%
Chhattisgarh 90 5.7%
Note: Figures for Gujarat, Kerala, Haryana, Madhya Pradesh and Punjab are based on Fiscal 2017 reported numbers. Figures for other
states are based on Fiscal 2018 numbers.
(Source: CRISIL Report)

CRISIL Research’s analysis indicates a direct correlation between a state’s mortgage penetration and its per capita income.

Trends on Affordability for Major Cities

Housing demand has a direct relationship with affordability of homes and annual income. Though affordability of homes has
improved in the last few years due to real estate prices remaining stagnant and rising incomes, home prices are obstinately high
in several parts of the country. Affordability is arrived at dividing home price with average income.

The following graph depicts improvement in affordability for major cities:

94
 16 14.4
14
11.5 11.4
12 10.6 10.6
9.7 9.5
10 9 8.7 8.2 8.8 8.3
7.5 7.6
8 6.9 6.5
5.6 6.1
6 4.6 4.2 5.1 4.7
4 4.4
4
2
0
MMR Pune NCR Bengaluru Hyderabad Chennai

CY2016 CY2017 CY2018 CY2019

Note: Affordability = Home Price/Average Income

(Source: CRISIL Report)

Indian Housing Finance Market

The Indian housing finance market experienced a healthy growth in housing loan outstanding of approximately 20% over Fiscals
2015 to 2019 on account of a rise in disposable income, healthy demand and a greater number of players entering the segment.
CRISIL Research expects housing loans outstanding to grow to ₹ 28.4 trillion by Fiscal 2022, at 15% CAGR in the next three
years. With ticket sizes expected to remain stagnant, the growth in home loans is expected to be entirely volume-driven. First-
time borrowers, who currently account for around 60% of the market by value and 70% by volume, would continue to drive the
growth.

The following graphs set forth growth in housing loan disbursement and credit outstanding over periods indicated below:

Growth in housing loan disbursement Growth in credit outstanding

In Rs. Trillion In Rs. Trillion

8.0 7.5 30 28.4

7.0
5.8 25
6.0
20 18.7
5.0
3.8
4.0 15
3.0 9.1
10
2.0
1.0 5

0.0 0
FY15 FY19 FY22P FY15 FY19 FY22P

95
The home loan disbursements in the first quarter of Fiscal 2020 observed a de-growth of 4% on year because of the tight liquidity
conditions faced by NBFCs and HFCs. Over the same period, the credit outstanding grew by 18%, as illustrated by the following
graphs:

Rs. trillion Rs. trillion

1.80 25.0
1.55
1.60 1.46 1.48
1.35 18.8 19.4
1.40 1.30 20.0 17.4 18.2
16.5
1.20
15.0
1.00
0.80
10.0
0.60
0.40
5.0
0.20
0.00 0.0
Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1FY20 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1FY20

(Source: CRISIL Report)

Market Share of Various Players in Housing Finance

The following graphs set forth market share of various players based on housing loan outstanding and housing loan disbursement:

Market share based on housing loan outstanding Market share based on housing loan disbursement

5% 5% 5% 4% 4% 8% 7% 7% 5% 5%
100% 100%
2% 2% 2% 2% 2% 2% 1% 2% 2% 2%
16% 16% 16% 15% 15% 15% 15% 15% 15% 15%
80% 80%

60% 35% 37% 40% 39% 60% 38% 36% 40% 43% 41%
38%

40% 40%

43% 20% 37% 41% 36% 35% 37%

20% 41% 39% 39% 40%
0%
0%
FY15 FY16 FY17 FY18 FY19
FY15 FY16 FY17 FY18 FY19
PSBs HFCs PSBs HFCs
New Private Banks Old Private Bank New Private Banks Old Private Bank
Others Others

Note: The above classification of player groups is done as per the RBI. Others primarily include foreign banks, non-banking financing
companies, regional rural banks, and cooperative banks.

Although public sector banks lead in terms of value, in terms of volume, housing finance companies (“HFCs”) have the highest
market share compared with other lending institutions. The market share of HFCs, in terms of volume, have increased from 35%
in Fiscal 2015 to 47% in Fiscal 2019, which can be attributed to rising focus of HFCs on lower ticket size loans and their
relatively stronger market presence in this category compared with banks. (Source: CRISIL Report)

Market Share Growth of HFCs Loses Momentum due to Liquidity Crisis

With tightened liquidity post the Infrastructure Leasing and Financial Services (“IL&FS”) default in September 2018, HFCs
have encountered structural challenges in the form of increased refinancing risk and asset-liability mismatch, which slowed down
disbursements in Fiscal 2019. HFCs' access to funds from the debt capital markets has also declined considerably, especially for
those companies with high negative asset liability management (“ALM”) mismatches. Consequently, several players in the
industry have been focusing on managing ALM rather than growing their book. Resultantly, overall credit growth in housing
loans for HFCs declined 8% on-year in Fiscal 2019. Hence, of the total amount of home loan outstanding of ₹ 18.7 trillion as of
March 2019, HFCs accounted for 39% share.

96
 100%

80%
65% 63% 62% 60% 61%
60%

40%

20% 35% 37% 38% 40% 39%

0%
FY15 FY16 FY17 FY18 FY19
HFCs Banks
Note: Market share is based on retail finance-housing outstanding,

(Source: CRISIL Report)

Share of Top 15 States in Housing Loan Outstanding and Loan Disbursement

The housing loan market remains fairly concentrated in top 15 states which account for approximately 93% of the loan
outstanding as of March 2019. Maharashtra tops with the overall share of 23% followed by Karnataka (10%), Tamil Nadu (9%),
Gujarat (8%) and Telangana (6%). Cumulatively, the top four states account for over half the housing loans outstanding.

The following table sets forth the share of few states in housing loan outstanding and housing loan disbursement:

Housing Loan Outstanding Housing Loan Disbursement

States Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal Fiscal Fiscal Fiscal Fiscal
2015 2016 2017 2018 2019
Maharashtra 24% 24% 24% 24% 23% 24% 24% 24% 25% 24%
Karnataka 10% 10% 10% 10% 10% 11% 10% 10% 9% 9%
Tamil Nadu 11% 11% 10% 10% 9% 7% 7% 8% 9% 8%
Gujarat 7% 7% 7% 8% 8% 9% 8% 9% 8% 8%
Uttar Pradesh 6% 6% 7% 6% 6% 5% 6% 6% 6% 6%
Telangana 6% 6% 5% 6% 6% 7% 6% 6% 6% 6%
Delhi 5% 5% 5% 4% 4% 5% 5% 5% 5% 6%
Andhra Pradesh 4% 4% 4% 4% 4% 3% 4% 4% 4% 4%
Haryana 5% 4% 4% 4% 4% 5% 4% 4% 4% 4%
Rajasthan 3% 3% 3% 3% 4% 4% 4% 4% 4% 4%
Madhya Pradesh 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%
Chhattisgarh 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%
(Source: CRISIL Report)

Growth Drivers for Housing Finance

Higher transparency in the sector, increasing affordability and urbanisation, and government incentives is expected to push up
the housing finance market over the next five years.

Rising Urbanisation. The share of urban population in relation to the total population has been consistently rising over the years.
The urban population was 377 million in 2011, marking a CAGR of 2.8%; rural population was 833 million, up at a CAGR of
1.16%. Urbanisation levels rose from 28% in 2001 to about 31% in 2011. A United Nations report, World Urbanization
Prospects: The 2011 Revision, expects nearly 36% of the country's population to live in urban areas by 2020. This percentage is
expected to increase further in the years to come, thereby translating into higher demand for housing and related amenities in the
urban areas.

97
The following graph sets forth the urban and rural growth over the period indicated:

100%
80%
743 833 920 890-910
60%
40%
20% 377 505 590-610
286
0%
2001 2011 2021-22P 2031P

Urban Rural

(Source: CRISIL Report)

The following graph sets forth urban population as a percentage of total population:

45% 39-40%
40% 35%
35% 31%
28%
30% 26%
23%
25% 20%
17% 18%
20% 14%
15% 11% 11% 12%
10%
10%
5%
0%
1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011 2021P 2031P
(Source: CRISIL Report)

The following table sets forth state-wise urban population as a percentage of total population:

States Urban population as a percentage States Urban population as a percentage

of total population of total population
Chandigarh 97% Nagaland 29%
NCT of Delhi 97% Madhya Pradesh 28%
Goa 62% Jammu and Kashmir 27%
Mizoram 52% Tripura 26%
Kerala 48% Rajasthan 25%
Tamil Nadu 48% Sikkim 25%
Maharashtra 45% Jharkhand 24%
Gujarat 43% Arunachal Pradesh 23%
Karnataka 39% Chhattisgarh 23%
Punjab 37% Uttar Pradesh 22%
Haryana 35% Meghalaya 20%
Andhra Pradesh 33% Orissa 17%
West Bengal 32% Assam 14%
Uttarakhand 31% Bihar 11%
Manipur 30% Himachal Pradesh 10%
(Source: CRISIL Report)

Favourable demographics: Currently, India has one of the largest young population in the world, with a median age of 28 years.
CRISIL Research expects that approximately 90% of Indians will be below the age of 60 years by 2020, of which 63% will be
between 15 and 59 years. Comparatively, as of 2012, US, China and Brazil had 74%, 62% and 78% of their population below
the age of 60 years.

98
The following graph sets forth India’s demographic dividend (2001-2031P):

100% 7% 9% 10% 13%

80% 30% 33% 37% 40%
60%
27% 28%
40% 26% 24%
20% 35% 31% 27% 24%
0%
2001 2011 2021 P 2031 P

0-14 15-29 30-59 60+

Rising Nuclearisation. Nuclearisation refers to formation of multiple single families out of one large joint family. Each family
lives in a separate house, while the ancestral house may be retained or partitioned to buy new houses. Nuclearisation in urban
areas is primarily driven by changing lifestyle of people, individualism, changing social/cultural attitudes, and increased mobility
of labour in search of better employment opportunities. These trends are expected to continue in future. Average household size
has fallen from 5.5 in 1991 to 5.3 in 2001 and 4.8 in 2011, as per Census 2011.

Changing Floor Space Requirement. Floor space requirement is dependent on the family size as well as affordability determined
by income levels. With increasing nuclearisation, the per capita floor space area required reduces as the family size shrinks. As
income rises, people shift to bigger houses, thus increasing demand. For lower income groups, floor space required is marginally
higher in rural areas than in urban areas. This may be attributed to lower prices in rural areas.

Rising Demand for Independent Houses. Indians traditionally prefer to live in independent houses. However, the increase in
population density, especially in urban areas, has increased the demand for flats. This will continue to drive the demand for such
homes, which are often self-constructed, especially in the smaller cities.

Declining Age of Home Loan Borrowers. Average age of borrowers has been declining over the years and was estimated at 33-
34 years in Fiscal 2018. CRISIL Research expects this figure to decline further to 30 years in Fiscal 2024 with growth in salaries
and people's strengthening preference for accumulating assets, both for investment purpose and tax benefits. (Source: CRISIL
Report)

Government Initiatives

The Government’s scheme to provide housing for all by 2022 and various steps taken to implement it are expected to boost sales
of affordable and low-cost housing units. This is expected to, consequently, increase the demand for loans. Under the “Housing
for All” mission, the Government has introduced CLSS as a demand-side intervention in order to expand institutional credit flow
and meet the urban demand.

Affordable Housing. Under the PMAY-U, the target was to construct 10 million houses over Fiscals 2016 to 2022. Of this, 8.4
million have been sanctioned as of July 2019. Of the sanctioned houses, 2.6 million have been constructed and 2.2 million are
under construction. The flow of funds from the Government remains crucial for the scheme’s success.

Interest Subsidy under PMAY. Under the “Housing for All” scheme, in order to expand institutional credit flow to the urban
population, the Government has introduced the CLSS as a demand-side intervention. The subsidy will be provided on home
loans for eligible urban population to acquire and construct houses. For loans of up to ₹ 0.6 million for EWS and LIG
beneficiaries, the interest subsidy has been fixed at 6.5% for eligible borrowers buying a home of up to 60 sq. m carpet area. In
case the beneficiary takes a loan higher than ₹ 0.6 million, no subsidy would be available on the additional amount.

In February 2017, the CLSS was extended to include middle-income group (“MIG”) households with incomes ranging in ₹ 0.6
to 1.8 million per annum. This move is expected to boost the loan disbursements over the coming fiscals.

Category Annual Household Income (₹) Loan Amount (₹) Interest Subsidy Size of the proposed house
(carpet area; sq. mt)
EWS and LWG Up to 0.6 million 0.6 million 6.5% 60
MIG 1 Between 0.6 – 1.2 million 0.9 million 4% 160
MIG 2 Between 1.2 – 1.8 million 1.2 million 3% 200

Last Mile Affordable Housing Funding Package and Relaxation of External Commercial Borrowings Guidelines. The
Government has announced ₹ 100 billion special window to provide last-mile funding for the completion of ongoing housing

99
projects that are non-NPA, non-NCLT and are net worth positive in affordable and middle-income category. The Government
will contribute about ₹ 100 billion and outside investors, such as Life Insurance Corporation of India, private capital and
sovereign wealth funds and development finance institutions, will contribute roughly the same amount. The objective of this
move is to focus on the construction of unfinished units, and this move is expected to benefit roughly 0.35 million projects in
India. The Government also announced that the guidelines of External Commercial Borrowings (“ECB”) would be relaxed to
facilitate financing of home buyers. This will be carried out in consultation with the RBI to help identify eligible beneficiaries
under PMAY. The relaxation to be provided will be in addition to the existing norms for the ECB for affordable housing.

Tax Incentives. The Government has traditionally used tax concessions to promote the housing and housing finance sectors. In
the Union Budget for Fiscal 2020, the Government enhanced interest deduction on loans taken until March 31, 2020, for purchase
of houses valued up to ₹ 4.5 million to ₹ 0.35 million from ₹ 0.2 million. Other tax benefits available for home loan consumers
include: (i) annual interest payments of up to ₹ 200,000 (₹ 300,000 for senior citizens) on housing loans can be claimed as a
deduction from taxable income; (ii) principal repayments of up to ₹ 150,000 on a housing loan are allowed as a deduction from
gross total income; and (iii) an additional deduction in respect of interest of ₹ 50,000 per annum has been provided exclusively
for first-time home buyers, given the property value is up to ₹ 5 million and the loan is up to ₹ 3.5 million.

Real Estate (Regulation and Development) Act, 2016. The implementation of the Real Estate (Regulation and Development) Act
(the “RERA Act”) in 2016 had a direct impact on the supply-demand dynamics in the sector. The RERA Act is expected to
improve transparency, timely delivery, and organized operations over time. The RERA Act does not permit developers to launch
new projects unless they are registered with the real estate authority. The RERA Act also puts an end to fund diversion across
projects as it mandates 70% of the funds collected from customers for a specific project to be maintained in a separate escrow
account, and used only for the same project.

GST. GST is expected to bring in transparency and simplicity on account of the availability of input tax credit (“ITC”) paid on
inputs, capital goods and input services. A drastic 700 bps reduction in GST from 8% to 1% for under-construction affordable
housing projects (effective rate after deducting one-third for land cost) and from 12% to 5% for other under-construction housing
projects (effective rate after deducting one-third for land cost) with effect from April 2019 has reduced the differential between
GST for ready possession and under-construction properties, and is likely to increase end-user demand.

Facility of Corpus Withdrawal by Employees' Provident Fund Organisation. To promote the “Housing for All” by 2022 scheme,
the Government has streamlined and eased various related means for people to avail benefits and, in turn, promote the housing
sector. In a similar effort, the Employees' Provident Fund Organisation (“EPFO”), in 2017, allowed its members to withdraw up
to 90% of their provident fund accumulations (if it is less than the cost of the property) to make down payment for a house. To
help boost the housing sector, only fresh purchases are allowed this facility and not purchases from the secondary market. EPFO
has also allowed its members to use their provident fund contributions to pay monthly equated monthly instalments for home
loans. (Source: CRISIL Report)

Regulator Initiatives

Regulatory Authority on HFCs Shifted from NHB to the RBI. The Union Budget 2019-2020 announced the transfer of regulatory
power on HFCs from NHB to the RBI. This is expected to result in more streamlined regulations and implementation as well as
better risk management framework for HFCs. The RBI Act will be amended to give the central bank powers to regulate HFCs.
This move is expected to ensure there is greater parity in regulations for NBFCs and HFCs.

Increase in Public Sector Lending Eligibility. The RBI has increased (under the notification released in June 2018) the eligibility
for public sector lending (“PSL”) in housing loans with a view to converge PSL guidelines with PMAY. The eligibility has been
increased from ₹ 2.8 million to ₹ 3.5 million for metropolitan centres and from ₹ 2 million to ₹ 2.5 million for other centres. The
cost of dwelling unit has been capped at ₹ 4.5 million in metropolitan centres and at ₹ 3 million in other centres.

Low Risk Weight and Standard Assets Provisioning on Home Loans. Since 2013, risk weight for housing loans has been
continuously reduced in a progressive manner. As of August 2019, the risk weight for housing loans with a loan-to-value
(“LTV”) ratio lower than or equal to 80% is 35% for home loans up to ₹ 7.5 million, while for home loans greater than ₹ 7.5
million with LTV less than or equal to 75%, the risk weight is 50%. In case the LTV for loans up to ₹ 3.0 million is greater than
80%, the risk weight is 50%. The steep reduction in risk weights, from 75% to 125% prior to 2013, indicates the superior
experience with the asset quality of housing loans and the comfort of the regulators with the asset class. Lower risk weight has
enabled HFCs and banks to lend more against their capital. Furthermore, in June 2017, the RBI lowered the standard assets
provisioning on individual housing loans to 0.25% from 0.4% earlier.

NHB’s Refinance Schemes to Aid Borrowing Cost for HFCs Catering to Affordable Housing Segment. While access to the debt
markets allows large HFCs to mobilise resources at competitive rates, niche HFCs have benefited from the NHB’s refinance
schemes. The NHB runs various schemes under which it refinances banks and HFCs.

Increased Refinancing Limits. NHB has raised refinancing target from ₹ 240 billion in July 2018 to ₹ 300 billion for July 2019.
Further, the RBI has increased the celling for lending to a single NBFC from 10% to 15% until December 2019. The RBI has

100
also reduced the minimum holding requirement for NBFCs raising funds through securitisation of loans of original maturity
above five years. The NBFCs will now be allowed to securitise loans after showing six months of repayments against the earlier
requirement of 12 months.

Access to SARFAESI Helps HFCs Accelerate Recoveries. Securitisation and Reconstruction of Financial Assets and
Enforcement of Securities Interest (“SARFAESI”) Act, 2002, allows lenders in India auction commercial or residential
properties to recover loans. For HFCs, SARFAESI recovery is allowed for all loans of greater than ₹ 0.10 million ticket size.
Over time, SARFAESI has proved to be an effective tool in the lender’s hands and has acted as a deterrent against wilful
defaulters. (Source: CRISIL Report)

Government’s Thrust to Housing Sector through PMAY

PMAY-U, for ensuring housing for all in urban areas, was launched on June 25, 2015, to be implemented during 2015 to 2022.
The mission provides central assistance to implementing agencies through states/union territories and central nodal agencies for
providing houses to all eligible families/beneficiaries.

Eligibility for CLSS and CRISIL Research’s Analysis

Eligibility for CLSS

Parameters EWS LIG MIG- I MIG- II
Annual household income: Up to ₹ 0.3 Between Between Between
million ₹ 0.3 million and ₹ ₹ 0.6 million and ₹ ₹ 1.2 million and ₹
(Up to 5 0.6 million 1.2 million) 1.8 million
thousand)
Eligible housing loan amount for interest ₹ 0.6 million ₹ 0.9 million ₹ 1.2 million
subsidy (₹)
Interest subsidy (% p.a.) 6.5% 4.0% 3.0%
Maximum loan tenure 20 years
Dwelling unit carpet area Up to 60 sq. MT Up to 60 sq. MT Up to 160 sq. MT Up to 200 sq. MT
CRISIL Research's assessment
Discount rate for NPV calculation of 9.0%
interest subsidy (%)
Home loan rate assumed for EMI savings 8.65%
calculation
Effective reduction in housing loan ₹ 267,000 ₹ 235,000 ₹ 230,000
principal amount
Per month EMI saving ₹ 2,345 ₹ 2,062 ₹ 2,019
Aspiration property value ₹ 1.2 million ₹ 2.4 million ₹ 6.0 million ₹ 9.0 million
(4X annual (4X annual (5X annual (5X annual
household household income) household income) household income)
income)
CLSS benefit as % of property value 22% 11% 4% 3%
Note: The per-month EMI saving is on account of the upfront payment of subsidy to the beneficiary. The subsidy will be credited to the
borrower’s account upfront, and the borrower will pay the EMI as per agreed rates on the remainder of the principal.

PMAY-U: Status

PMAY-U was launched with a target of building 12 million houses in urban areas across the country over seven years from 2015
to 2022. As of July 29, 2019, the progress of PMAY-U is represented below:

Houses sanctioned 8.5 million

Houses grounded 4.8 million
Houses completed 2.6 million
Total investment ₹ 4,960 billion
Central assistance released ₹ 514 billion

PMAY-U Housing Demand and Targets

As per the publicly available documents, under PMAY-U, demand reported so far by states/union territories is around 11.2
million. As on July 29, 2019, the number of houses sanctioned is 8.5 million and the number of houses where construction is
completed is 2.6 million, which adds to 23% of the reported demand. To achieve the target, 8.6 million houses still need to be
constructed. According to a statement of the Housing and Urban Affairs Minister in June, all the houses will be sanctioned by

101
the first quarter of next year. The construction of houses and delivery of houses is expected to be completed by 2022. (Source:
CRISIL Report)

Government Expenditure on PMAY-U

To achieve the target for housing for all by 2022, the Central Government needs to contribute a whopping ₹ 1.5 trillion in seven
fiscals through 2022, at an average ₹ 0.15 million per house. As on July 29, 2019, the Government has already sanctioned ₹ 1.32
trillion. However, the central assistance released is about ₹ 0.52 trillion, which amounts to only one-third of the required
assistance. Approximately₹ 1 trillion still needs to be released from the Government to achieve the target by 2022.

Budgetary Allocation of Funds under PMAY-U

The following graph sets out the budgetary allocation under PMAY-U:

250

60 65 69
51
15

FY16 FY17 FY18 FY19 FY20 B

Budget Outlay (Rs billion) Internal and Extra Budgetary resources (Rs billion)

Note: B-Budgeted, P-Projected, IEBR may include bonds raised through entities such as Housing and Urban Development Corporation
Limited. (Source: CRISIL Report)

Momentum in Implementation of PMAY-U

The implementation of PMAY-U gained momentum last year. Project investment of about ₹ 3,327 billion was approved from
January 2018 to March 2019. Also, the number of housing units sanctioned and completed were the highest in the above period.
A major driver for this progress is the extra budgetary resources of ₹ 250 billion provided by the Government.

PMAY-U Offers High Potential for HFCs

The scheme’s massive scale has supported growth in allied industries such as cement, steel and also housing finance
disbursements. For example, in Fiscal 2019, aggregate disbursements by financiers under PMAY was ₹ 153 billion, accounting
for approximately 3% of the total housing loans disbursed during the fiscal. Over the next few years as well, the scheme offers
huge potential for growth for HFCs, given the quantum of construction activity envisaged. Most beneficiaries under the scheme
would have relatively low-income levels, and, therefore, financiers focusing on this class of borrowers would benefit the most.

The following graph depicts that HFCs account for majority share in overall PMAY disbursement:

100% 1% 2% 2% 2% 1% 1%
11% 12% 11% 15%
80% 29% 33%

60%

40% 87% 86% 87% 83%

70% 66%
20%

0%
Oct 17 - Dec 17 Jan 17 - Mar 17 Apr 18- Jun 18 Jul 18 - Sep 18 Oct 18 - Dec 18 Jan 19 - Mar 19

HFC PUB PVT

Note: HFC – Housing Finance Companies, PUB – Public Sector Banks, PVT – Private Sector Banks
(Source: CRISIL Report)

102
Distribution of Housing Demand

Faster growth in smaller districts and muted demand for high-ticket housing in metros have led to increased share of smaller
districts (tier-II and below cities) in housing loans over the last couple of years. The top 50 districts in the country account for
72% of the housing demand in the country for the fiscal year 2019. Share of smaller districts in the home loan disbursements has
grown in the last two years, as illustrated in the graph below. CRISIL Research expects the trend to continue going forward.

The following graph sets out district-wise share in housing loans:

100% 7% 7% 7% 8% 8%
90% 9% 9% 9% 10% 10%
80% 9% 10% 10% 10% 10%
70% 9% 10% 10% 9% 9%
60%
19% 18% 19% 18% 18%
50%
40%
30%
20% 47% 46% 45% 45% 45%
10%
0%
FY15 FY16 FY17 FY18 FY19
Top 8 districts Next 20 districts Remaining districts in top 50
Next 51-100 districts Next 100-200 districts Other districts
1) The districts have been classified on the basis of home loan disbursements in Fiscal 2019.
2) Mumbai Metropolitan Region (“MMR”), National Capital Region (“NCR”), Bengaluru and Kanpur have each been considered as one
district.
3) MMR includes Thane and Mumbai, NCR includes Delhi, Gurugram, Gautam Buddha Nagar, Ghaziabad and Faridabad, Bengaluru
includes Bengaluru Urban and Bengaluru Rural, Kanpur includes Kanpur Nagar and Kanpur Dehat.

Healthy Housing Finance Market Growth

The housing loan market grew at approximately 18% CAGR between Fiscals 2014 and 2019. The share of the higher ticket
segment increased from 44% in Fiscal 2015 to 54% in Fiscal 2019. The expansion in share was driven by increased housing
project launches in the premium segment. The market of share of higher ticket size segment is slowly increasing in terms of
volume but more than 80% of the market share still lies with the lower ticket size segment (less than ₹ 2.5 million).

The following graph sets forth the ticket size-wise loan outstanding mix in value and volume terms:

Ticket size-wise loan outstanding mix: Value terms Ticket size-wise loan outstanding mix: Volume terms

3% 3% 4% 4% 4%
20% 10% 11% 12% 12%
23% 24% 25% 26% 13%

24% 25% 26% 27% 28% 56%

59% 58% 56% 56%

49%
48% 47% 45% 43%
32% 27% 27% 28% 26%
7% 4% 3% 3% 3%
FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19

<0.5 mn 0.5-2.5 mn 2.5-5 mn >5 mn <0.5 mn 0.5-2.5 mn 2.5-5 mn >5 mn

(Source: CRISIL Report)

Top 15 States Comprising Bulk of the Share across Loan Buckets

103
Top 15 states, Maharashtra, Madhya Pradesh, Gujarat, Kerala, Tamil Nadu, Rajasthan, Uttar Pradesh, Karnataka, West Bengal,
Andhra Pradesh, Telangana, Punjab, Chhattisgarh, Odisha and Haryana, comprise bulk of the share across loan buckets.

In ticket size less than ₹ 0.5 million, these top 15 states contribute to 93% of the loan outstanding. Maharashtra tops in the list,
accounting for 18% share, followed by Madhya Pradesh (14%), Gujarat (8%), Kerala (8%), and Tamil Nadu (7%).

In ticket size between ₹ 0.5 to 2.5 million, the top 15 states comprise 92% share of loan outstanding. Maharashtra tops in the list
again with a 19% share, followed by Gujarat (10%), Tamil Nadu (10%), Uttar Pradesh (7%), and Karnataka (7%).

Ticket size between ₹ 0.5 and 2.5 million

19%

10% 10%
7% 7% 6% 5% 5% 5% 4% 4% 3% 2% 2% 1%
Pradesh

West Bengal

Pradesh

Haryana

Punjab

Chhattisgarh
Tamil Nadu

Kerala

Rajasthan
Telangana
Gujarat

Uttar Pradesh

Delhi
Karnataka
Maharashtra

Madhya
Andhra

In ticket size between ₹ 2.5 to 5.0 million, the above 15 states contribute 94% share of loan outstanding. Maharashtra tops in the
list with 23% share, followed by Karnataka (13%), Tamil Nadu (11%), Telangana (8%), and Uttar Pradesh (7%). In ticket size
greater than ₹ 5.0 million, the above 15 states comprise 97% of the loan outstanding. Maharashtra once again tops in the list with
33% share, followed by Karnataka (13%), Delhi (9%), Tamil Nadu (8%), and Haryana (6%). (Source: CRISIL Report)

The following table sets forth the market size of home loans in certain cities in India, in terms of origination, in the bucket size
of ₹ 500,000 to ₹ 2,500,000, for the periods indicated:

(in ₹ million)
Location Market size during Q1 FY18 Market size during Q1 FY20
Jaipur 7,883.04 7,923.18
Ahmedabad 11,117.83 11,721.23
Surat 16,800.86 11,371.41
Indore 4,926.55 5,294.09
Nagpur 3,222.41 3,295.07
Raipur 2,508.95 2,662.92
Hyderabad 14,068.72 13,070.87
Bengaluru 12,483.72 12,248.18
Chennai 8,373.23 7,598.05
(Source: CRISIL Report)

HFCs are Transitioning their Product Mix Towards Higher-Yielding Assets

CRISIL Research estimates that housing loans account for approximately 60% of the HFCs’ total loan portfolio. Loan against
property (“LAP”), the fastest growing product in the HFC portfolio, comprised approximately 20% of the HFCs’ loan portfolio
as of Fiscal 2019, up significantly from 12% share four years ago. The share of developer loans and other corporate loans
remained relatively stable at approximately 20%. Over the next two to three years, with HFCs increasingly looking at conserving
liquidity and getting cautious on funding developers, CRISIL Research expect the share of developer loans in the overall
outstanding loans to come down. The growth in the LAP portfolio of HFCs is also likely to moderate, given growing concerns
on asset quality. (Source: CRISIL Report)

HFCs’ Asset Quality Better than Overall Market

As compared with the asset quality in housing loans of all financiers, the asset quality of loans extended by the HFCs is better,
with 1.8% of gross non-performing assets (“GNPAs”) as a proportion of advances in the housing loan segment, and 3.3% of
GNPAs in the LAP segment, as of March 2019. However, the GNPAs for HFCs have been rising through the past three years; a
similar trend was visible in all player groups, including public sector banks, private banks, and NBFCs.

The following graph compares asset quality across lenders, as of March 2019:

104
 GNPA Ratio
8.0% 7.1%
6.1% 6.2%
6.0% 5.4%

4.0% 3.3%
2.7%
2.4%
1.8%
2.0% 1.3%
1.0%

0.0%
Private Sector HFCs Public Sector Banks Small finance banks NBFCs
Banks Housing Loan LAP
Note: The above classification of player groups is done as per the RBI
(Source: CRISIL Report)

Roll Rates Indicate Improving Asset Quality

An analysis of roll rate for the industry in Fiscal 2019 indicates a significant decrease of loans rolled forward in each bucket. For
example, the percentage of loans rolled forward from 1 to 29 days past due (“DPD”) bucket to 30-59 DPD bucket decreased
from 19.7% in April 2018 to 13.6% in March 2019. In other buckets as well, such a trend was observed indicating a steady
improvement in the asset quality scenario. Also, the roll forward rates came down steadily, indicating an improvement in the
asset quality scenario. The movement in the roll backward rates suggest an improvement in asset quality as well. For example,
the percentage of loans rolled backward from 60 to 89 DPD bucket to 30 to 59 DPD bucket rose from 5.5% in April 2018 to
10.6% in March 2019. A similar trend was observed in most other buckets as well.

The following table sets our roll rates for the industry in Fiscal 2019:

(in %)
Apr- May- Jun- Jul-18 Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar-
18 18 18 18 18 18 18 18 19 19 19
Roll Forward
Current to 1-29 dpd 2.2 1.8 1.0 1.7 1.1 1.2 1.6 1.4 1.5 1.1 1.2 1.4
1-29 to 30-59 dpd 19.7 18.2 7.7 13.0 9.9 10.3 14.6 9.6 11.8 11.8 8.1 13.6
30-59 to 60-89 dpd 36.8 25.2 15.3 20.3 19.6 17.9 22.8 19.6 16.5 19.7 14.8 12.9
60-89 to 90+ dpd 14.5 9.7 6.0 10.2 5.3 5.5 8.1 4.8 6.4 7.1 5.3 4.9
(Source: CRISIL Report)

HFCs and NBFCs Weather Strong Headwinds

Following demonetisation in November 2016, the GNPA ratio of NBFCs and HFCs gradually rose, from 1.42% in the second
quarter of Fiscal 2017 to 1.86% in third quarter of Fiscal 2018. Financiers, though, did not face any major impact on disbursement
after the event of demonetisation.

The following graph sets forth GNPA% for NBFCs and HFCs in home loans:

2.50% 2.37%
2.06% 1.98%
1.86% 1.94% 1.93%
2.00% 1.75% 1.80% 1.70%
1.59%
1.42% 1.43%
1.50%

1.00%

0.50%

0.00%
Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20

However, the liquidity crisis following a series of defaults by IL&FS in September 2018 had a considerable impact on NBFCs
and HFCs. Access to funds was hugely impacted, which led to higher cost of funds. Disbursements declined 17% on-quarter in
the third quarter of Fiscal 2019, immediately after being hit by the liquidity crisis, thereafter recovering with 11% on-quarter

105
growth in the last quarter of Fiscal 2019. Moreover, several NBFCs and HFCs increased their interest rates post the event. Due
to the liquidity crunch in the market, which led to the contraction of credit supply, the disbursements declined 11% on-quarter
in the first quarter of Fiscal 2020.

The following graph sets forth disbursement growth of HFCs and NBFCs (on-quarter):

35%
30% 28%
25%
18%
20%
13%
15% 11%
10% 5% 5%
3%
5% 1%
0%
-5% Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20
-10%
-15% -11% -11% -11%
-20% -17%

Non-banks are expected to reduce their dependence on short-term funding sources post the recent liquidity crunch, which was
primarily owing to improper asset-liability maturity management. Because of limited access to funds, HFCs and NBFCs shifted
towards securitisation as a mechanism to raise funds to meet their liquidity requirements. In fact, the securitisation and direct
assignment of mortgages more than doubled to approximately ₹ 930 billion in Fiscal 2019, from approximately ₹ 357 billion the
previous fiscal. (Source: CRISIL Report)

State-Wise Analysis of HFC Groups in Overall Housing Finance Industry

HFCs have seen steady growth in the past four years with a CAGR of 23% in overall housing finance industry. But there are
wide variations across states and districts within the state that indicate the intensity of the presence of the HFCs and their impact.
In the overall housing finance industry, the credit extended by HFCs is approximately ₹ 7.3 trillion, as of March 2019. The top
15 states have a market share of 89% in terms of credit outstanding of HFCs in the industry. Maharashtra is at the top with a
market share of 25%, followed by Tamil Nadu (10%), Karnataka (9%), Uttar Pradesh (7%) and Gujarat (7%).

The following table sets out the state and district wise assessment of HFCs housing loans within overall housing loans (as of
March 2019):

State No. of Credit HFC Share of Growth in Top 5 districts Concentration

districts outstanding Groups HFC Groups Credit on the basis of of overall
of HFCs in in overall outstanding of credit housing credit
overall housing HFC Groups outstanding outstanding of
housing credit (four-year HFCs in top 5
industry (₹ outstanding CAGR – districts
billion) Fiscals 2015-
2019)
Maharashtra 34 1818 Large 81% 19% Thane, Pune, 88%
Medium 13% 30% Mumbai, Nashik, 83%
Small 6% 86% Raigarh 65%
Affordable 9% 49% 62%
Tamil Nadu 32 754 Large 84% 9% Chennai, 69%
Medium 7% 46% Kancheepuram, 70%
Small 9% 17% Madurai, 57%
Affordable 4% 76% Tiruvallur, 59%
Coimbatore
Karnataka 31 638 Large 81% 17% Bangalore, 89%
Medium 14% 57% Mysore, Dakshin 93%
Small 5% 37% Kannada, Udipi, 80%
Affordable 5% 51% Hubli 86%
Uttar Pradesh 72 528 Large 89% 21% Ghaziabad, 64%
Medium 9% 61% Lucknow, 86%
Small 2% 80% Gautam Buddha 77%
Affordable 4% 188% 80%

106
 State No. of Credit HFC Share of Growth in Top 5 districts Concentration
districts outstanding Groups HFC Groups Credit on the basis of of overall
of HFCs in in overall outstanding of credit housing credit
overall housing HFC Groups outstanding outstanding of
housing credit (four-year HFCs in top 5
industry (₹ outstanding CAGR – districts
billion) Fiscals 2015-
2019)
Nagar, Agra,
Kanpur Nagar
Gujarat 26 522 Large 70% 30% Surat, 77%
Medium 21% 27% Ahmedabad, 76%
Small 9% 125% Vadodra, Rajkot, 79%
Affordable 17% 31% Valsad 64%
Telangana 9 439 Large 82% 17% Hyderabad, K.V. 92%
Medium 13% 62% Rangareddy, 97%
Small 5% 34% Medak, 88%
Affordable 4% 124% Warangal, Karim 95%
Nagar
Haryana 19 320 Large 88% 14% Gurgaon, 80%
Medium 10% 57% Faridabad, 88%
Small 2% 66% Panchkula, 81%
Affordable 4% 144% Karnal, Sonipat 86%
Delhi 8 312 Large 76% 18% South West 84%
Medium 19% 64% Delhi, North 85%
Small 5% 61% West Delhi, East 82%
Affordable 9% 153% Delhi, West 81%
Delhi, South
Delhi
Rajasthan 32 242 Large 79% 20% Jaipur, Jodhpur, 67%
Medium 12% 41% Ajmer, Kota, 77%
Small 9% 123% Udaipur 65%
Affordable 13% 59% 60%
Madhya Pradesh 50 239 Large 68% 21% Indore, Bhopal, 76%
Medium 22% 33% Gwalior, 56%
Small 10% 169% Jabalpur, Ujjain 56%
Affordable 24% 48% 48%
Andhra Pradesh 14 203 Large 76% 24% Visakhapatnam, 61%
Medium 14% 85% Krishna, East 73%
Small 10% 29% Godavari, 72%
Affordable 6% 151% Guntur, West 62%
Godavari
Chhattisgarh 18 61 Large 89% 20% Raipur, Durg, 90%
Medium 8% 38% Bilaspur, Korba, 82%
Small 2% 129% Raigarh 90%
Affordable 4% 44% 80%

As can be seen in the table above, Affordable HFCs have grown between 31% to 188% CAGR during Fiscals 2015 to 2019, in
the above states. (Source: CRISIL Report)

Affordable Housing Finance (Ticket Size of ₹ 2.5 Million and Below)

India’s mortgage market can broadly be divided into two segments by ticket size of the housing loan at the time of disbursement
- loans with ticket size of more than ₹ 2.5 million, and loans with ticket size of ₹ 2.5 million and below. The former can be
defined as “normal mortgage loans”, which is prominent in the metro and urban areas, and the latter, which generally includes
outskirts of these areas and semi-urban and rural areas, can be defined as “affordable housing loans”.

The following graphs set forth share of affordable housing in outstanding housing loans (in volume terms) and credit outstanding:

Share of affordable housing in outstanding housing Share of affordable housing in credit outstanding (June 2019) loans (in
volume terms)

107
 50% 48% 46% 45%
56% 52%

88% 86% 85% 84% 82% 82%

50% 52% 54% 55%

44% 48%
12% 14% 15% 16% 18% 18%

FY15 FY16 FY17 FY18 FY19 Q1

FY20 FY15 FY16 FY17 FY18 FY19 Q1 FY20

Normal Housing Affordable housing Normal Housing Affordable housing

(Source: CRISIL Report)

Overall, disbursement of the affordable segment grew at 5% CAGR between Fiscals 2015 and 2019, to ₹ 2.1 trillion. Home loan
disbursement saw slight volatility owing to demonetisation in Fiscal 2017 and the recent liquidity crisis post September 2018.
Up to Fiscal 2020, CRISIL Research projects disbursements to grow at 8% CAGR to ₹ 2.7 trillion. During Fiscals 2015 to 2019,
affordable housing outstanding credit grew at a healthy 14% CAGR to ₹ 8.6 trillion, mainly driven by increase in penetration of
financiers majorly in rural and semi-urban areas (with some financiers in outskirts of urban areas as well), Government push to
promote “Housing for All” by 2022, and improved affordability of borrowers. In terms of volume, the number of loans
outstanding in the affordable housing segment grew from 7.3 million in Fiscal 2015 to 11.9 million in Fiscal 2019. By Fiscal
2022, CRISIL Research expects outstanding credit to increase at approximately 13% CAGR to ₹ 12.4 trillion. Growth would be
driven by improved supply and demand of affordable houses, Government impetus to the segment through various incentives
given to developers and first-time homebuyers, Government initiatives towards affordable housing such as PMAY, increased
number of financiers with strong growth and deeper penetration across geographies and improving buyer affordability because
of expected rise in income levels.

The following graphs set out growth of disbursement and outstanding credit of affordable housing segment:

Growth in affordable housing industry disbursement Growth in affordable housing industry outstanding
credit

In Rs. Tn In Rs. Tn

3.0 2.7 14.0 12.4

2.5 2.2 2.1 12.0
2.0 1.8 10.0 8.6
2.0 1.7 7.8
8.0 6.1 6.4
1.5 5.1
6.0
1.0 4.0
0.5 2.0
0.0 0.0
FY15 FY16 FY17 FY18 FY19 FY22P FY15 FY16 FY17 FY18 FY19 FY22P

Affordable housing disbursement saw a de-growth of …translating into outstanding credit growth of 15%
11% in Q1 Fiscal 2020 over Q1Fiscal 2019

108
 Rs. billion Rs. trillion
-11%
600 540 560 10.0
514 8.6 8.8
502 9.0 8.1 8.4
500 455 7.6
8.0
400 7.0
6.0
300 5.0
4.0
200
3.0
100 2.0
1.0
0 0.0
Q1 Q2 Q3 Q4 Q1FY20 Q1 Q2 Q3 Q4 Q1FY20
FY19 FY19 FY19 FY19 FY19 FY19 FY19 FY19

(Source: CRISIL Report)

Increasing Market Share of HFCs

As a result of their faster growth, HFCs have been able to increase their share in the market from 34% in Fiscal 2015 to 39% in
Fiscal 2019 in terms of outstanding affordable home loans. Moreover, in terms of disbursement, the share of HFCs have increased
from 37% in Fiscal 2015 to 45% in Fiscal 2019.

The following graphs set out market share split based on outstanding affordable housing loans and disbursement in affordable
housing industry:

Market share split based on outstanding in affordable Market share split based on disbursement in
housing industry affordable housing industry

2% 2% 3% 2% 4% 5% 4% 5% 5% 4%
2% 2% 2% 2% 2% 2% 2% 2% 2%
10% 10% 9% 2%
10% 9% 8% 9% 8% 8% 9%

34% 36% 37% 40% 37% 36%

39% 41% 45% 45%

53% 50% 48% 47% 47% 47% 49% 44% 40% 39%

FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19

Public Banks HFCs Public Banks HFCs

New Private Banks Old Private Banks New Private Banks Old Private Banks
Others Others
Note: The above classification of player groups is done as per the RBI.
(Source: CRISIL Report)

HFCs have been able to garner this share because of reasons including, strong origination skills and focused approach; creation
of niche in catering to particular categories of customers; relatively superior customer service and diverse channels of business
sourcing; strong focus on specific geographies; and rapid expansion in branch network and deepening market presence in smaller
cities.

The following graph depicts rising distribution of affordable housing players over the last five years:

109
 Number of branches

1,000
809
800 721
607
600 454
347
400
200
-
FY15 FY16 FY17 FY18 FY19
Note: Above graph includes aggregated data for Gruh Finance, Aavas Financiers, Aptus Value Housing Finance, Aspire Home Finance
Corporation, Shriram Housing Finance, Home First Finance Company

CRISIL Research expects that the above fundamental strengths will help HFCs maintain a strong market presence in the future
as well.

Affordable Housing Loans Outstanding of HFCs to Grow at 17% CAGR

While overall affordable loan disbursements have grown at a modest 5% CAGR between Fiscals 2015 and 2019, HFCs have
managed to grow their affordable housing loan portfolio at a faster 11% CAGR on account of deeper reach, focused approach,
and expertise in this niche segment. This period from 2015 to 2019 saw two macro events, demonetisation and the NBFC liquidity
crisis which had a higher impact on affordable HFCs as compared to normal HFCs because of their different target customer
segments. Over the next three fiscals, CRISIL Research forecasts disbursements to grow at 11% CAGR. In terms of credit
outstanding, HFCs registered a healthy growth of 18% CAGR in affordable housing loans over the past five years, driven by
strong disbursements. CRISIL Research expects this trend to continue, with HFCs’ affordable housing loans book projected to
reach ₹ 5.3 trillion by Fiscal 2022, which is a 17% CAGR. Overall disbursement volume in Fiscal 2019 under affordable housing
category was 2.0 million units.

The following graphs set out growth of disbursement and outstanding credit of affordable housing segment of HFCs:

Growth in HFCs affordable housing disbursement Growth in HFCs affordable housing outstanding credit

Although the demand side fundamentals have remained robust, the credit supply the contraction in credit supply has led to lower
disbursements in Q1 Fiscal 2020 compared to Q1 Fiscal 2019. The disbursement de-growth is more pronounced for housing
finance companies as they faced strong headwinds because of the liquidity crunch in the system.

HFCs affordable disbursement observed an on-year …leading to a growth of 9% in HFC’s affordable credit
de-growth of 23% in Q1 Fiscal 2020… outstanding over the same period

110
 Rs. billion Rs. trillion
300 4.0
253 262 3.4
3.4 3.3
250 229 3.5 3.2 3.2
211
194 3.0
200
2.5
150
2.0
100 1.5

50 1.0
0.5
0
Q1 Q2 Q3 Q4 Q1FY20 0.0
FY19 FY19 FY19 FY19 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1FY20
(Source: CRISIL Report)

Affordable vs Normal Housing Finance Players

The type of borrower’s profile and higher risk-taking ability of affordable housing players lead these financiers to charge higher
yields in comparison to that charged by normal housing players.

Difference in Operational Parameters for Affordable Housing Finance Players and Normal Housing Finance Players

CRISIL Research estimates the proportion of direct sales teams (“DSTs”) in sourcing business for affordable housing at
approximately 70% in comparison with approximately 60% for normal housing players. In terms of customer profile, affordable
players have higher share of self-employed customers (45%) in comparison to normal housing players (40%), which makes their
portfolio relatively riskier (due to uncertainty of cash inflows for self-employed customers). This also leads to lower approval
rates and lower loan-to-value ratio.

Parameters Affordable housing finance players Normal housing finance players

Sourcing mix DSTs: 70%, DSAs: 20%, Branch walk-ins and DSTs: 60%, DSAs: 30%, Branch walk-ins and
others: 10% others: 10%
Average turnaround 8-10 Working days 9-11 Working days
time
Loan to value Average: 68% Average: 75%
Customer profile mix Salaried: 55%, Self-employed: 45% Salaried: 60%, Self-employed: 40%
Approval rates Average: 73% Average: 83%
Note: DSTs - Direct Sales Teams, DSAs – Direct Selling Agents

Critical Success Factors in Affordable Housing Finance

Understanding of Micro-Markets: Given the target borrower’s profile, players need to have a clear and deeper understanding of
the micro-markets and develop a strong local network. The strong network helps players to source business from niche customer
category by having references from their existing customers. It is observed that successful players in the segment generally focus
on a few geographies where they have a good understanding and scale up gradually to manage costs and asset quality better.

Customer Risk: Customers in the affordable housing finance segment are generally in formal sector jobs with low incomes, or
are self-employed (carpenter, plumber, vegetable vendor, driver), or are people who may not have income proofs. Given the lack
of income proofs, the underwriting process typically requires detailed personal discussion with the borrower as well as
acquaintances and neighbours in order to assess the source of income and pattern of cash inflows and outflows as well as the
stability and habits of the customer. Given the nature of the process, operating costs are typically very high; therefore, players
who are, over a period of time, able to achieve a fair degree of standardisation in the process by building models revolving around
specific customer profiles and/or geographies are likely to better manage operating costs.

Collateral Risk Assessment: Properties under the affordable housing segment sometimes lack proper property titles, especially
in the outskirts of large cities, semi-urban and rural areas. With better availability of information and due diligence by the
technical team, players can mitigate the risk. While lenders do take appropriate due diligence measures to safeguard against this
risk while sanctioning the loan, there have been instances of borrowers mortgaging the same property with multiple lenders. As
of now, registration of charge on underlying property is undertaken by lenders on selective basis (high-ticket loans or in case of
corporate borrowers) only. The RBI directive to register the charge on the underlying property with a central registry instead of
the currently followed process will help mitigate this risk to a large extent.

111
Collection Efficiency: Given that players in the segment typically cater to the lower income customer segment, many of whom
may not be financially literate, a strong focus on collections and monitoring risk of default at customer level is vital to manage
asset quality. It is observed that events that impact the economy as a whole (such as demonetisation) and local factors (natural
calamities or other events in the place of employment/work of the borrower) have a disproportionate impact on asset quality in
the segment. Therefore, players are increasingly using analytical and monitoring tools enabled by technology to better predict
default risk. In addition, there is an increasing focus on pushing customers to make EMI payment through ECS. (Source: CRISIL
Report)

Technology Usage in Affordable Housing Finance Industry

Players in the affordable housing finance industry have increased their focus on adoption of technological in different segments
of the lending value chain to increase operating efficiency. In order to assess the intensity of technology usage across the industry,
CRISIL Research carried out an analysis based on eight unique parameters encompassing the entire customer journey starting
from sourcing, loan application and approval, data capture, collections and engaging with customers digitally. As per CRISIL
Research analysis, the Indian affordable housing finance industry is still at a fairly modest stage as far as technological evolution
and adoption, is concerned. While players have made progress in areas such as existence of paperless lead to approval process,
third party data integration, cashless and digital collections, tracking of customer loan status on real time basis and presence over
social media, they still lag behind on empowering all relevant stakeholders with mobility solutions and intensity of data capture
through digital medium. The proportion of leads generated through digital channels is still very low (less than 10%), and even
amongst leads generated, conversion is below the 10% mark.

Furthermore, the usage of cloud for data capture and processing, concepts such as data lake (a central repository where data
stored in its natural/raw format) and usage of machine learning algorithms (to predict early warnings and likelihood of customer
default) is still at a very nascent stage in India as compared to players in developed markets such as the US and UK. While
entities are leveraging their data and using analytics for branch and portfolio performance tracking, and customer-level behaviour
tracking, they may still not be in a position to optimally apply data analytics on a real-time basis in the absence of a data lake.

The following table assesses the intensity of technology usage in affordable housing finance industry:

Parameters Objective Measures used Intensity of

technology usage
Digital loan To understand the  Existence of paperless leads to approval process Medium
approval magnitude of paperless  Availability of scanning facility for data and
process process in the industry documents from field for credit evaluation
 Facility to view the data centrally
Data capture To understand the intensity  Number of data points captured for each Low
of customer data capture customer for each loan transaction and is it
through digital channels in digitally captured
the industry  Access to all the data captured on a real time
basis
Third party data To understand intensity of  Existence of API integration with third party Medium
integration API integration with third aggregators
party aggregators and public  Number of third party, aggregators tie ups
databases in the industry
Tech enabled To understand how many  Intensity of technology usage in different stages Medium
processes processes are tech-enabled of loan processing such as credit approval,
in the lifecycle of a loan sanction, disbursal, fraud check, collections and
query resolutions
E-payments and To understand mechanisms  ACH/ECS penetration in EMI repayment Medium
NACH in place for cashless and  Cash, Cheque and NEFT penetration in
digital payments processing fee collection
 Penetration of electronic mode in field collection
Mobility To evaluate if any mobility  Existence of mobile application for customers, Low
solutions solutions exist for various employees and channel partners
stakeholders  Intensity of customer application usage
Customer 360° To understand if customer  Complete access to customer information on an Medium
view information is available to ongoing basis
all the employees on real-  Real time tracking of current loan stage of any
time and need-to-know customer
basis  Real time tracking of loan status of all customers
Digital To identify existence of any  Presence on social media websites Medium
marketing digital presence and loan  Intensity of presence on social media

112
 Parameters Objective Measures used Intensity of
technology usage
origination through digital  Website ranking analysis through Google and
channels Alexa
 Proportion of total leads originated through
digital channels
 Proportion of total leads converted through
digital channels
(Source: CRISIL Report)

Asset Quality in Affordable Housing

In the affordable housing segment, the GNPAs are higher than that in the normal housing segment. Higher share of surrogate
usage, difficulty in credit profile assessment and higher share of self-employed customers lead to a higher GNPA ratio of 2.7%
as of June 2019 in this segment compared with 1.9% as of June 2019 in the normal housing segment.

The following graph compares the asset quality in normal and affordable housing segment:

3.0% 2.7%
2.4%
2.5% 2.2% 2.1%
1.8% 1.9%
2.0% 1.8% 1.8%
1.5%
1.4%
1.5% 1.2%
1.1%
1.0%

0.5%

0.0%
FY15 FY16 FY17 FY18 FY19 Q1 FY20

Normal Housing Affordable Housing

(Source: CRISIL Report)

Asset Quality has Worsened in the Last Few Years, but Significant Variation in Player-Level NPAs

The GNPA ratio of overall HFCs is 1.8%, as of March 2019, which is lower than 2.1% of GNPAs as a proportion of advances
in the overall housing finance industry. The GNPA ratio of HFCs has increased gradually from 1.2%, as of March 2015, to 1.8%,
as of March 2019. Among the HFCs, there is a fair amount of variation in the asset quality of various HFC groups. The GNPA
ratio is the least for large HFCs, followed by medium HFCs. Small HFCs have the highest amount of GNPA as a proportion of
total advances (6.0% as of March 2019), majorly due to high penetration in the low-income group segment where credit
assessment is a challenge. For affordable HFCs, GNPA stood at 4.1% of average advances, as of March 2019.

In the affordable housing loans segment as well, the GNPA ratio of all player groups has increased over a period of time. The
GNPAs for the HFCs as a whole stood at 1.9%, as of March 2019, up from 1.3%, as of March 2015. Among the HFCs, large
HFCs have the least GNPA as a proportion of total advances in this segment as well, followed by medium HFCs. Small HFCs
have the highest GNPA ratio of 6.5%, as of March 2019, up from 3.9%, as of March 2015. The GNPA ratio of the affordable
HFC group was 4.8%, as of March 2019, which is lower than that for smaller HFCs.

While asset quality for the industry as a whole has deteriorated, there is a significant variation in GNPA across players. For
example, while GNPAs for affordable HFCs was 4.1%, as of March 2019, a number of players reported asset quality much better
than the industry average. Even when looking at asset quality on a two-year lagged basis (current year GNPA divided by the
portfolio two years back), some affordable HFCs reported significantly better asset quality than the overall player group-level
NPAs. Conversely, a few players reported much inferior asset quality vis-a-vis the industry.

Player Group-Wise Trend in Asset Quality in Affordable Housing Loans

The following graph sets out player group-wise trend in asset quality in affordable housing loans:

113
 3.0% 2.7% 2.7%
2.5% 2.6%
2.5% 2.3% 2.6%
2.1% 2.7%
2.1%
1.9% 2.3% 2.3%
2.0%
1.9% 1.5%
1.3% 1.9%
1.5% 1.4% 1.8%
1.0% 1.2% 1.2% 1.2% 1.3%
1.3% 1.1%
0.5%
0.0%
FY15 FY16 FY17 FY18 FY19 Q1 FY20

Public sector banks HFCs New Private banks Old private banks

As demand for home loans largely comes from first-time buyers, who stay in property purchase, asset quality in this segment
has remained healthy historically. However, due to the seasoning of portfolios of rapidly growing HFCs, many of which are
focused on relatively riskier customers compared with the prime, salaried segment, delinquency rates have depicted an upward
trend. Moreover, due to their presence in a few geographies, small and affordable HFCs are more susceptible to local events and
developments that impact the repayment behaviour compared with their larger counterparts. CRISIL Research believes that the
ability to manage credit costs by appropriately leveraging information availability as also technology and data analytics will be
a key differentiator among players in the affordable-housing finance segment. (Source: CRISIL Report)

State-Wise Analysis of Affordable Housing Segment

The affordable housing segment has been growing steadily with a four-year CAGR of 14%. However, there are wide variations
across states and within various districts in the same state as well, which indicates latent opportunity for offering loans to
unserved or underserved customers. Based on the home loans outstanding in the affordable housing segment, the top 15 states
account for over 90% of the market size in this segment for Fiscal 2019. Maharashtra tops the list with the highest share of 19%,
followed by Gujarat (10%), Tamil Nadu (10%), Uttar Pradesh (7%) and Karnataka (7%).

Punjab Chhattisgarh Others

2% 1% 8%
Delhi
2%
Haryana
3% Maharashtra
19%
West Bengal
4%
Madhya Pradesh Gujarat
5% 10%

Rajasthan
5%
Telangana Tamil Nadu
5% 10%
Andhra Pradesh Uttar Pradesh
5% Kerala Karnataka
7%
6% 7%
(Source: CRISIL Report)

State-Wise Affordable Housing Credit Outstanding

State No. of Total Share of Growth in Top 5 districts Share of top 5 Share of top 5
districts affordable affordable affordable based on districts in districts in
housing loans housing housing affordable affordable affordable
outstanding as loans outstanding housing loans housing loans housing loans
of March 2019 outstanding loans (4- outstanding outstanding outstanding
(₹ tn) in total year in value terms in volume
housing CAGR: (March 2019) terms (March
loans as of FY15- 2019)
March 2019 FY19)
Maharashtra 34 1.63 37% 12% Thane, Pune, 72% 63%
Mumbai, Nashik,
Raigarh

114
 State No. of Total Share of Growth in Top 5 districts Share of top 5 Share of top 5
districts affordable affordable affordable based on districts in districts in
housing loans housing housing affordable affordable affordable
outstanding as loans outstanding housing loans housing loans housing loans
of March 2019 outstanding loans (4- outstanding outstanding outstanding
(₹ tn) in total year in value terms in volume
housing CAGR: (March 2019) terms (March
loans as of FY15- 2019)
March 2019 FY19)
Gujarat 26 0.87 59% 20% Surat, Ahmedabad, 70% 66%
Vadodara, Rajkot,
Valsad
Tamil Nadu 32 0.81 46% 10% Chennai, 52% 48%
Kancheepuram,
Madurai,
Tiruvallur,
Coimbatore
Uttar 72 0.60 50% 16% Ghaziabad, 51% 46%
Pradesh Lucknow, Gautam
Buddha Nagar,
Agra, Kanpur
Nagar
Karnataka 31 0.56 30% 10% Bengaluru, 65% 59%
Mysuru, Dakshina
Kannada, Udipi,
Hubli
Andhra 14 0.46 57% 16% Visakhapatnam, 60% 60%
Pradesh Krishna, East
Godavari, Guntur,
West Godavari
Telangana 9 0.43 39% 11% Hyderabad, KV 83% 79%
Rangareddy,
Medak, Warangal,
Karim Nagar
Rajasthan 32 0.41 60% 17% Jaipur, Jodhpur, 56% 52%
Ajmer, Kota,
Udaipur
Madhya 50 0.40 68% 18% Indore, Bhopal, 55% 33%
Pradesh Gwalior, Jabalpur,
Ujjain
Haryana 19 0.21 30% 11% Gurgaon, 59% 56%
Faridabad,
Panchkula, Karnal,
Sonipat
Delhi 8 0.20 24% 8% South West Delhi, 84% 83%
North West Delhi,
East Delhi, West
Delhi, South Delhi
Chhattisgarh 18 0.12 62% 16% Raipur, Durg, 81% 81%
Bilaspur, Korba,
Raigarh
(Source: CRISIL Report)

State-Wise Affordable Housing Disbursements

The following graph sets forth state-wise affordable housing disbursements along with four year CAGR:

115
 (Rs bn)
400 1.5
350
364 11.7
300 %

250 5.4%
260 7.3%
200
8.3 -1.5%
150 189 % 6.9 6.1 3.0
157 4.3 9.4
% % %
100 125 123 % % 5.2
114 104 103 2.8 1.2 10.2
98 90 %
% %
50 %
59 48 47 32
0

Pradesh

Haryana

Punjab
Tamil Nadu

Rajasthan

Kerala

West Bengal

Chhattisgarh
Telangana
Gujarat

Uttar Pradesh

Delhi
Karnataka
Maharashtra

Andhra Pradesh

Madhya
Note: The numbers mentioned above in the boxes represent 4-year CAGR (Fiscals 2015-2019) of disbursements in respective states. (Source:
CRISIL Report)

District-Wise Affordable Housing Disbursements

Based on the district-level analysis, the top 50 districts contributed to 57% of affordable housing loan disbursements in fiscal
2019 and 59% of credit outstanding in the affordable housing industry. The top 100 districts contributed to 70% of the
disbursements and 73% of the credit outstanding. The share of top eight districts in the affordable housing segment decreased
from 27% as of March 2015 to 22% as of March 2019, as the industry has penetrated deeper into smaller towns.

The following graphs set out district-wise disbursement mix and loan outstanding mix for affordable housing industry:

Disbursement mix for affordable housing industry Loan outstanding mix for affordable housing industry

12% 12% 12% 13% 13% 9% 10% 11% 11% 12%

13% 13% 14%
14% 15% 15% 15% 14% 15%
15%
13% 13%
13% 14% 13% 14% 14%
14% 14% 15%
11% 12%
12% 12% 12%
12% 12% 12% 12%
12%
22% 21%
19% 18% 19% 21% 20%
19% 19% 20%

30% 29% 28% 27% 26% 32% 31% 29% 29% 27%

FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19
Other districts Other districts
Next 100-200 districts Next 100-200 districts
Next 51-100 districts Next 51-100 districts
Remaining districts in top 50 Remaining districts in top 50
Next 20 districts Next 20 districts
Top 8 districts Top 8 districts

Note:
1) The districts have been classified on the basis of home loan disbursements in Fiscal 2019 for disbursement mix and home loan credit
outstanding as of March 2019 for outstanding mix.
2) MMR, NCR, Bengaluru and Kanpur have each been considered as one district.

116
3) MMR includes Thane and Mumbai, NCR includes Delhi, Gurugram, Gautam Buddha Nagar, Ghaziabad and Faridabad, Bengaluru
includes Bengaluru Urban and Bengaluru Rural, Kanpur includes Kanpur Nagar and Kanpur Dehat.

State-Wise Asset Quality of Affordable Housing Segment

The overall GNPA ratio in the affordable housing segment was 2.4% as of March 2019. Among the top 15 states based on credit
outstanding in affordable housing, Madhya Pradesh had the highest GNPA ratio of 4.6% as of Fiscal 2019, followed by Punjab
(4.0%) and Uttar Pradesh (3.1%), and Rajasthan had the least GNPA ratio of 1.0%, followed by Gujarat (1.4%) and Chhattisgarh
(1.4%). In Madhya Pradesh, the top five districts in terms of poorest asset quality have a cumulative GNPA ratio of 14%
compared with 4.4% in rest of the state. However, these five districts contribute to only 2.2% of the total credit portfolio of the
state. Whereas in Telangana, five districts with the poorest asset quality that account for approximately 87% of the state’s GNPA
have a cumulative GNPA of 1.6% compared with 1.0% in rest of the state.

In most of the states, the cumulative GNPA ratio for the top five districts based on outstanding credit is lower than the cumulative
GNPA ratio in rest of the state. In Madhya Pradesh, the contribution of these five districts is significantly lower with a cumulative
GNPA ratio of 2.8% compared with 6.9% in rest of the state. However, in the state of West Bengal, the top five districts that
contribute to approximately 65% of the state’s portfolio have a GNPA ratio of 3.5%, which is higher than 2.1% in rest of the
state.

The following table sets out state wise variation in asset quality, based on credit outstanding:

State GNPA ratio of the state (Mar GNPA ratio of the state (Mar GNPA ratio of the state (Mar
2019) 2018) 2017)
Maharashtra 2.5% 2.1% 1.8%
Gujarat 1.5% 1.1% 1.2%
Tamil Nadu 2.0% 2.1% 2.8%
Uttar Pradesh 3.1% 2.4% 2.4%
Karnataka 2.0% 2.3% 2.2%
Andhra Pradesh 1.6% 1.8% 2.1%
Telangana 1.5% 2.0% 2.1%
Rajasthan 1.3% 1.1% 1.1%
Madhya Pradesh 4.6% 2.5% 2.5%
Haryana 2.2% 1.9% 1.8%
Delhi 2.7% 2.4% 2.3%
Chhattisgarh 1.6% 1.4% 1.6%
(Source: CRISIL Report)

Analysis of Housing Finance Companies

HFCs Account for 39% of Retail Housing Loans Outstanding

The credit outstanding of HFCs accounted for 39% of the ₹ 18.7 trillion housing finance market, as of March 2019. This was a
decline from 41%, as of March 2018, on account of the liquidity crisis that occurred after the IL&FS default in September 2018.
However, over a longer timeframe of four years, HFCs have been able to increase their market share.

As per CRISIL Research analysis, the variation in performance of HFCs on the basis of assets under management (including
home loans, loan against property, developer loans and any other loans by the HFC) as well as focus segment in terms of ticket
size. Accordingly, the HFCs have been classified as large HFCs, medium HFCs and small HFCs, based on the book size of the
company. HFCs have also been classified as affordable HFCs, based on higher share of housing loans with ticket size less than
₹ 2.5 million in their portfolio. According to Experian data, the entities included in our analysis together account for 96% of the
outstanding retail home loans given by HFCs.

Categorisation of HFCs used based on AUM Size:

The following table details the categorisation of HFCs used for the analysis based on AUM size:

Category HFCs Included

Large HFCs Dewan Housing Finance Corporation Limited, Housing Development Finance Corporation
Limited, Indiabulls Housing Finance Limited., LIC Housing Finance Limited, PNB
(AUM more than ₹ 250 billion, as Housing Finance Limited, Piramal Capital and Housing Finance Limited
of March 2019)

117
 Category HFCs Included

Medium HFCs Can Fin Homes Limited, GIC Housing Finance Limited, ICICI Home Finance Company
Limited, L&T Housing Finance Limited, India Infoline Housing Finance Limited, Reliance
(AUM between ₹ 100 billion and Home Finance Limited, REPCO Home Finance Limited, Tata Capital Housing Finance
₹ 250 billion, as of March 2019) Limited, Bajaj Housing Finance Limited, Gruh Finance Limited

Small HFCs Edelweiss Housing Finance Limited, Magma Housing Finance, Aadhar Housing Finance
Limited, AAVAS Financiers Limited, Aditya Birla Housing Finance Limited, Akme Star
(AUM less than ₹ 100 billion, as Housing Finance Limited, Aptus Value Housing Finance India Limited, Aspire Home
of March 2019) Finance Corporation Limited, Capital First Home Finance Private Limited, Capri Global
Housing Finance Limited, Centrum Housing Finance Limited, Fullerton India Home
Finance Company Limited, IND Bank Housing Limited, India Home Loans Limited,
Indostar Home Finance Private Limited, JM Financial Home Loans Limited, Mahindra
Rural Housing Finance Limited, Manappuram Home Finance Private Limited, Manipal
Housing Finance Syndicate Limited, MAS Rural Housing and Mortgage Finance Limited,
Micro Housing Finance Corporation Limited, Muthoot Homefin India Limited, Muthoot
Housing Finance Company Limited, Sahara Housingfina Corporation Limited, Sewa Grih
Rin Limited, Shriram Housing Finance Limited, Shubham Housing Development Finance
Company Limited, SRG Housing Finance Limited, Sundaram BNP Paribas Home Finance
Limited, DMI Housing Finance Private Limited, Home First Finance Company India
Private Limited, India Shelter Finance Corporation Limited, Khush Housing Finance
Private Limited, Mentor Home Loans India Limited, Mentor Home Loans India Limited,
National Trust Housing Finance Limited, New Habitat Housing Finance And Development
Limited, Vastu Housing Finance Corporation Limited, Bee Secure Home Finance Private
Limited

Affordable HFCs Gruh Finance Limited, India Infoline Housing Finance Limited, Aadhar Housing Finance
Limited, AAVAS Financiers Limited, Akme Star Housing Finance Limited, Aptus Value
(Companies having high share of Housing Finance India Limited, Aspire Home Finance Corporation Limited, Capital First
housing loans with ticket size (at Home Finance Private Limited, Capri Global Housing Finance Limited, Fullerton India
the time of disbursement) less Home Finance Company Limited, IND Bank Housing Limited, India Home Loans Limited,
than ₹ 1.5 million in their Indostar Home Finance Private Limited, JM Financial Home Loans Limited, Mahindra
portfolio) Rural Housing Finance Limited, Manappuram Home Finance Private Limited, Manipal
Housing Finance Syndicate Limited, MAS Rural Housing and Mortgage Finance Limited,
Micro Housing Finance Corporation Limited, Muthoot Homefin India Limited, Muthoot
Housing Finance Company Limited, Sahara Housingfina Corporation Limited, Sewa Grih
Rin Limited, Shriram Housing Finance Limited, Shubham Housing Development Finance
Company Limited, SRG Housing Finance Limited, DMI Housing Finance Private Limited,
Home First Finance Company India Private Limited, India Shelter Finance Corporation
Limited, Khush Housing Finance Private Limited, Mentor Home Loans India Limited,
National Trust Housing Finance Limited, New Habitat Housing Finance And Development
Limited, Vastu Housing Finance Corporation Limited, Bee Secure Home Finance Private
Limited

(Source: CRISIL Report)

HFC Category-Wise Retail Home Loan Growth Trend

The following graph sets forth four-year CAGR (Fiscals 2015-2019) of HFC groups in overall housing finance industry:

60% 53%
50% 47%
38%
40%
30% 23%
19%
20%
10%
0%
Large HFCs Medium HFCs Small HFCs Afforfable HFCs Overall HFCs

118
(Source: CRISIL Report)

HFC Category-Wise Market Share

On account of their faster growth, HFCs increased their market share from 36%, as of March 2015, to 39%, as of March 2019,
in terms of credit outstanding. With respect to disbursements, the HFCs were able to garner market share of 41% in Fiscal 2019,
up from 38% in Fiscal 2015.

The following graph sets forth four-year CAGR (Fiscals 2015-2019) of HFC groups in affordable housing finance industry:

70%
59%
60%
48%
50%
40% 32%
30%
20% 16%
12%
10%
0%
Large HFCs Medium HFCs Small HFCs Affordable Overall HFCs

Smaller HFCs, most of whom have a larger focus on affordable home loans, have outperformed the other player groups, clocking
59% CAGR in loans in this category over the last four years ending Fiscal 2019. As against this, the overall market for HFCs in
this segment clocked 16% CAGR from Fiscal 2015 to 2019. (Source: CRISIL Report)

Competitive Landscape among HFCs in Affordable Housing Finance Space

The market share of HFCs in affordable housing finance increased from 37% in Fiscal 2015 to 45% in Fiscal 2019 in terms of
home loan disbursements. The credit outstanding of HFCs also increased over the last four years, leading their market share to
increase from 34%, as of March 2015, to 39%, as of March 2019.

The following graphs set forth the market share of HFC groups based on disbursements and loan outstanding in the affordable
housing segment:

Market share of HFC groups, based on disbursements Market share of HFC groups, based on loan outstanding
of affordable home loans of affordable home loans

100% 100% 2% 4% 9% 10% 9%

10% 13% 16% 15% 9%
90% 17% 90% 15%
17% 80% 17% 16% 15%
80% 19% 18% 18% 19%
70% 70%
60% 60%
50% 50%
89%
40% 40% 80% 74% 75% 76%
74% 68%
30% 66% 65% 66% 30%
20% 20%
10% 10%
0% 0%
FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19
Large HFCs Medium HFCs Small HFCs Large HFCs Medium HFCs Small HFCs

The following graphs set forth the market share of affordable HFC groups based on disbursements and loan outstanding in the
affordable housing segment:

Market share of affordable HFCs, based on disbursements Market share of affordable HFCs, based on credit
of affordable home loans outstanding of affordable home loans

119
 20% 18% 19% 14% 13%
18% 12%
18% 16% 11%
12%
16%
14% 10%
12% 11%
8% 7%
10%
8% 6% 5%
6% 4%
4%
2% 2%
0% 0%
FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19

(Source: CRISIL Report)

Portfolio Mix of HFC Groups

Among the HFC groups, the affordable HFC group has the highest share of mortgages in its portfolio contribution to 91% as of
March 2019 indicating the focus of affordable HFCs on the home loan segment. Although this share has been decreasing over
the years, this trend is common in other HFC groups as well.

The following graphs set forth the portfolio mix of HFC groups:

Portfolio mix of large HFCs Portfolio mix of medium HFCs

100% 3% 3% 3% 4% 6% 100%
9% 8% 8% 4% 3% 3% 3% 3% 3%
90% 98% 4%
8% 8% 8% 11% 10%
80% 96%
70% 94% 6%
60% 9%
92% 8% 10% 10%
50%
90%
40% 80% 81% 81% 81% 81%
88%
30%
20% 86% 91%
10% 84% 88% 87% 88% 87%
0% 82%
FY15 FY16 FY17 FY18 FY19 80%
FY15 FY16 FY17 FY18 FY19
Mortgages Developer Loans
Corporate Loans Rental Discounting Mortgages Corporate Loans Others

Portfolio mix of small HFCs Portfolio mix of affordable HFCs

100% 100% 1% 2% 4% 5% 5%
3% 8%
90% 13% 17% 15% 90% 3% 3% 3% 3% 3%
80% 80%
70% 70%
60% 60%
50% 97% 50% 96% 95%
92% 87% 85% 93% 92% 91%
40% 83% 40%
30% 30%
20% 20%
10% 10%
0% 0%
FY15

FY16

FY17

FY18

FY19

FY15

FY16

FY17

FY18

FY19

Mortgages Others Mortgages Developer Loans Others

(Source: CRISIL Report)

120
Higher Loan Outstanding Per Average Branches for Large HFCs

The following graph sets forth the loan outstanding per branch for the HFC groups:

In Rs. bn

8.0
5.7 5.5
6.0 5.2 5.2
4.7
4.0

2.0 0.8 0.9 1.0 1.1 1.2

0.2 0.3 0.2 0.4 0.3 0.4 0.3 0.4 0.3 0.4
0.0
FY15 FY16 FY17 FY18 FY19

Large HFCs Medium HFCs Small HFCs Affordable HFCs

Note:
1) Large HFCs include data for Housing Development Finance Corporation Limited, Indiabulls Housing Finance Limited, LIC Housing
Finance Limited and PNB Housing Finance Limited.
2) Medium HFCs include data for Can Fin Homes Limited, ICICI Home Finance Limited, L&T Housing Finance Limited, TATA Capital
Housing Finance Limited and Gruh Finance Limited.
3) Small HFCs include data for Magma Housing Finance, Aptus Value Housing Finance India Limited, MAS Rural Housing and Mortgage
Finance Limited, Micro Housing Finance Corporation Limited, Shriram Housing Finance Limited and Sundaram BNP Paribas Home
Finance Limited, Aavas Financiers, Home First Finance Company, Aspire Housing Finance Corporation and Aditya Birla Housing
Finance Limited.
4) Affordable HFCs include data for Aavas Financiers, Aptus Value Housing Finance India Limited, Aspire Housing Finance Corporation,
Mahindra Rural Housing finance, MAS Rural Housing and Mortgage Finance Limited, Micro Housing Finance Corporation Limited,
Shriram Housing Finance Limited, Gruh Finance Limited and Home First Finance Company.

Borrowing Mix of HFC Groups

HFCs have a well-diversified and stable resource base, comprising fixed deposits, bank borrowings, debentures, bonds and
foreign currency borrowings. This lends flexibility to their borrowings, allowing them to manage costs.

Over the past few years, the Government's focus on affordable housing and rural housing has raised the budgetary support for
NHB. CRISIL Research believes that this will continue boosting the prospects of HFCs focused on affordable housing.

The following graphs set forth the borrowing mix of HFC groups:

Borrowing mix of large HFCs Borrowing mix of medium-sized HFCs

100% 6% 6% 6% 100%
8% 8%
90% 90% 23%
20% 19% 17% 18% 33% 29% 29%
80% 19% 80% 38%
1%
70% 8% 8% 11% 8% 70% 4% 1% 11%
10% 4% 11%
60% 60% 5% 7% 10%
18% 17% 12% 14% 18% 9%
50% 50% 22%
26% 21% 40%
40% 40% 23%
30%
30%
49% 49% 51% 52% 48% 20% 35% 37%
20% 25% 30% 25%
10%
10%
0%
0%
FY15

FY16

FY17

FY18

FY19
FY15

FY16

FY17

FY18

FY19

Bonds / NCDs Bank Borrowings Bonds / NCDs Bank Borrowings

Commercial Paper Fixed Deposits Commercial Paper Fixed Deposits
Others Others
Note:
1) Large HFCs include data for Housing Development Finance Corporation Limited, Indiabulls Housing Finance Limited, LIC Housing
Finance Limited and PNB Housing Finance Limited.

121
2) Medium HFCs include data for Can Fin Homes Limited, ICICI Home Finance Limited, L&T Housing Finance Limited, TATA Capital
Housing Finance Limited and Gruh Finance Limited.

Borrowing mix of smaller HFCs Borrowing mix of affordable HFCs

100% 100%
16% 13%
32% 29% 25% 4% 33% 31% 28%
80% 4% 7% 80% 34% 36%
6% 7%
7% 2%
8% 6% 8% 7%
60% 6% 60% 11% 9% 1% 5%
7% 1%
48% 53% 40%
40% 29% 40% 37% 40% 29%
40%
40% 46%
20% 20%
25% 19% 25% 24% 23% 30% 29%
21%
0% 9% 10%
0%
FY15

FY16

FY17

FY18

FY19

FY15

FY16

FY17

FY18

FY19
Bonds / NCDs Bank Borrowings Bonds / NCDs Bank Borrowings
Commercial Paper Fixed Deposits Commercial Paper Fixed Deposits
Others Others
Note:
1) Small HFCs include data for Magma Housing Finance, Aptus Value Housing Finance India Limited, MAS Rural Housing and Mortgage
Finance Limited, Micro Housing Finance Corporation Limited, Shriram Housing Finance Limited and Sundaram BNP Paribas Home
Finance Limited, Aavas Financiers, Home First Finance Company, Aspire Housing Finance Corporation and Aditya Birla Housing
Finance Limited.
2) Affordable HFCs include data for Aavas Financiers, Aptus Value Housing Finance India Limited, Aspire Housing Finance Corporation,
Mahindra Rural Housing finance, MAS Rural Housing & Mortgage Finance Limited, Micro Housing Finance Corporation Limited,
Shriram Housing Finance Limited, Gruh Finance Limited and Home First Finance Company.
(Source: CRISIL Report)

HFCs Resort to Securitisation Post-Liquidity Crisis

The non-banks are expected to reduce their dependence on short-term funding sources post the recent liquidity crunch that
occurred majorly because of improper asset-liability maturity management. Because of limited access to funds, the HFCs and
NBFCs shifted towards securitisation as a mechanism to raise funds to meet their liquidity requirements. In fact, the securitisation
and direct assignment of mortgages more than doubled on-year in Fiscal 2019.

The following graph sets out the volume of mortgage backed securities (“MBS”) for HFCs:

MBS Volume (In Rs. trillion)

1 0.9
0.8
0.6
0.4 0.4
0.4 0.3
0.2
0
2015-16 2016-17 2017-18 2018-19
(Source: CRISIL Report)

Analysis of HFC Groups in Affordable Housing Segment

State-Wise Analysis of HFC Groups in Affordable Housing Finance Industry

In the affordable-housing segment, HFCs have seen a steady growth in the past four years with a CAGR of 16%. But there are
wide variations across states and districts within the state that indicate the intensity of the presence of the HFCs and their impact.
In the overall housing finance industry, credit extended by HFCs is approximately ₹ 3.3 trillion as of March 2019. Top 15 states
have a market share of 87% in terms of credit outstanding of HFCs in the industry for Fiscal 2019. Maharashtra is at the top with
a market share of 21% followed by Tamil Nadu (10%), Gujarat (10%), Uttar Pradesh (8%) and Karnataka (5%).

122
The following chart sets forth % share of overall; credit outstanding of HFCs in top 10 states, as of March 2019:

Others Maharashtra
Haryana 24% 21%
3% Tamil Nadu
Andhra Pradesh 10%
3%
Rajasthan Gujarat
5% 10%
Madhya Pradesh
5% Telangana Karnataka Uttar Pradesh
5% 5% 8%

The following table sets out state and district-wise assessment of affordable-housing loans, as of March 2019:

State No. of Affordable HFC % of credit Growth in Top 5 districts Concentration

districts housing Groups outstanding Credit of credit
outstanding for HFC outstanding of outstanding in
of HFCs in Groups HFC Groups the top 5
the state (in ₹ (four-year districts
billion) CAGR –
FY15-FY19)

Maharashtra 34 698 Large 72% 9% Thane, Pune, 78%

Medium 17% 20% Mumbai, 72%
Small 11% 151% Nashik, Raigarh 55%
Affordable 18% 46% 54%
Tamil Nadu 32 341 Large 81% 5% Chennai, 57%
Medium 8% 49% Kancheepuram, 59%
Small 11% 18% madurai, 46%
Affordable 6% 87% Tiruvallur, 49%
Coimbatore
Gujarat 26 331 Large 65% 22% Surat, 73%
Medium 24% 24% Ahmedabad, 69%
Small 11% 174% Vadodra, 76%
Affordable 24% 29% Rajkot, Valsad 61%
Uttar Pradesh 72 275 Large 88% 17% Ghaziabad, 53%
Medium 9% 66% Lucknow, 83%
Small 3% 116% Gautam Buddha 70%
Affordable 4% 210% Nagar, Agra, 70%
Kanpur Nagar
Karnataka 31 167 Large 73% 8% Bangalore, 74%
Medium 19% 48% Mysore, 86%
Small 8% 39% Dakshin 70%
Affordable 9% 45% Kannada, Udipi, 76%
Hubli
Telangana 9 167 Large 77% 11% Hyderabad, 69%
Medium 16% 6% K.V. 20%
Small 7% 70% Rangareddy, 37%
Affordable 4% 136% Medak, 89%
Warangal,
Karim Nagar
Madhya Pradesh 50 165 Large 63% 17% Indore, Bhopal, 74%
Medium 25% 34% Gwalior, 47%
Small 12% 191% Jabalpur, Ujjain 51%
Affordable 30% 46% 42%
Rajasthan 32 152 Large 76% 13% 62%

123
 State No. of Affordable HFC % of credit Growth in Top 5 districts Concentration
districts housing Groups outstanding Credit of credit
outstanding for HFC outstanding of outstanding in
of HFCs in Groups HFC Groups the top 5
the state (in ₹ (four-year districts
billion) CAGR –
FY15-FY19)

Medium 12% 45% Jaipur, Jodhpur, 69%

Small 12% 150% Ajmer, Kota, 61%
Affordable 16% 72% Udaipur 53%
Andhra Pradesh 14 106 Large 72% 13% Visakhapatnam, 59%
Medium 16% 89% Krishna, East 73%
Small 12% 28% Godavari, 68%
Affordable 8% 167% Guntur, West 59%
Godavari
Haryana 19 99 Large 86% 10% Gurgaon, 63%
Medium 12% 71% Faridabad, 84%
Small 2% 66% Panchkula, 64%
Affordable 3% 155% Karnal, Sonipat 79%
Delhi 8 89 Large 73% 6% South West 83%
Medium 22% 86% Delhi, North 83%
Small 5% 77% West Delhi, 79%
Affordable 12% 189% East Delhi, 81%
West Delhi,
South Delhi
Chhattisgarh 18 36 Large 73% 14% Raipur, Durg, 89%
Medium 19% 33% Bilaspur, 75%
Small 8% 118% Korba, Raigarh 86%
Affordable 19% 38% 74%
(Source: CRISIL Report)

The following graph sets forth the market share of HFC groups in top 15 states in terms of disbursement by HFCs in affordable-
housing finance industry in Fiscal 2019:

100% 7% 7% 5% 7% 6% 3% 7% 4%
14% 12% 16% 14% 14% 9% 12%
90% 13% 15% 10% 15% 4% 11%
80% 9% 15% 26% 17%
25% 14% 15% 17%
70% 21%
60%
50%
40% 81% 79% 84% 82% 87% 85%
77% 77% 71% 71% 76% 71%
30% 63% 68% 64%
20%
10%
0%
Haryana

West Bengal

Chhattisgarh
Kerala

Punjab
Tamil Nadu

Rajasthan
Gujarat

Uttar Pradesh

Telangana

Delhi
Karnataka
Maharashtra

Andhra Pradesh
Madhya Pradesh

Large HFCs Medium HFCs Small HFCs

The following graph sets forth the market share of affordable HFC groups in top 15 states in terms of disbursement by affordable
HFCs in affordable-housing finance industry in Fiscal 2019:

124
 40% 37%
35% 31% 30%
30% 26% 26%
25% 22% 21%
15% 18%
20% 14%
15% 11% 9% 10%
10% 7% 5%
5%
0%

Pradesh

Pradesh
Haryana

Chhattisgarh
Tamil Nadu

West Bengal

Kerala

Punjab
Telangana

Rajasthan
Gujarat

Uttar Pradesh

Delhi
Karnataka
Maharashtra

Madhya

Andhra
(Source: CRISIL Report)

District Wise Disbursements by HFC Groups in the Affordable Housing Industry

In terms of district wise disbursements by HFC groups in the affordable housing industry, the penetration of HFCs in districts
other than top 50 districts is higher due to the ticket size of the segment, which is less than ₹ 2.5 million.

The following graph sets forth district-wise disbursement mix in affordable housing finance industry for Fiscal 2019:

100% 7% 9%
11% 10%
11% 15% 15%
80% 14%
11%
14% 9% 16% 15%
60%
11% 19% 11% 9%
40% 21% 19% 17%

20% 43% 33%

28% 30%
0%
Large HFCs Medium HFCs Small HFCs Affordable HFCs
Top 8 districts Next 20 districts Remaining districts in top 50

Next 51-100 districts Next 100-200 districts Other districts

Note:
1) The districts have been classified on the basis of home loan disbursements in affordable industry in Fiscal 2019.
2) MMR, NCR, Bangalore and Kanpur have been considered as one district.
3) MMR includes Thane and Mumbai, NCR includes Delhi, Gurugram, Gautam Buddha Nagar, Ghaziabad and Faridabad, Bangalore
includes Bangalore Urban and Bangalore Rural, Kanpur includes Kanpur Nagar and Kanpur Dehat.

Profitability Analysis

Higher Returns and Lesser Competition Compared with Traditional Home Loan Market makes the Affordable Housing Segment
Attractive for HFCs

Housing loans are considered to be a safer asset class compared with other asset classes such as vehicle loans, construction
equipment loans and personal loans, as borrowing is usually for a self-occupied residential property of the borrower, where the
propensity of default is relatively lower. Among the peer group set (large, medium, small and affordable), affordable HFCs have
highest profitability (“RoA”). The higher RoA of affordable HFCs, 2.2% in Fiscal 2019, as opposed to 2.0% for the HFCs as a
whole, can be attributed to their relatively higher net interest margins (“NIMs”), despite higher cost of funds, given the higher
interest rates charged. All the player groups reported a decline in RoA in Fiscal 2019 compared with the previous year, because
of an increase in interest expenses following the default by IL&FS. For medium and smaller HFCs, higher credit costs along
with a contraction in NIMs led to lower profitability, while for affordable HFCs, the decline in profitability is due to increase in
opex and higher credit costs.

CRISIL Research expects the industry’s profitability to gradually improve. The cost of funds, which has shot up since the second
half of Fiscal 2019, is expected to gradually normalise, once risk aversion wanes and capital availability for better-performing
HFCs improves. Additionally, for players in the affordable-housing finance category, opex too would moderate, as business
volumes increase and the level of standardisation in credit assessment increases.

125
The following graphs set forth RoA across player groups:

3.0%
2.5% 2.4% 2.5%
2.5% 2.3%
2.3% 2.2%
2.4% 2.4%
2.0% 2.2%
1.8% 1.7% 2.1%
2.0% 1.9%
1.5% 1.7% 1.6%
1.5% 1.5% 1.5%
1.0% 1.3%
0.5%
0.0%
FY15 FY16 FY17 FY18 FY19

Large HFCs Medium HFCs Small HFCs Affordable HFCs

Profitability Parameters – Fiscal 2018 Profitability Parameters – Fiscal 2019

5.9%
7.0% 7.0%

5.8%
5.8%
5.4%

6.0% 6.0%

5.0% 5.0%
3.5%

3.0%

3.0%
3.0%

4.0% 4.0%
2.6%

2.6%
2.6%

2.5%

2.5%
2.4%

2.2%
2.1%
3.0% 3.0%
1.7%

1.6%
1.5%

1.3%
1.0%

1.0%

1.0%
1.0%

0.9%

2.0% 2.0%
0.7%
0.6%
0.5%

0.4%

0.4%
0.4%

0.0%

1.0% 1.0%

0.0% 0.0%
Large Medium Small Affordable Large HFCs Medium Small HFCs Affordable
HFCs HFCs HFCs HFCs HFCs HFCs
NIMs Opex Credit costs RoA NIMs Opex Credit costs RoA
Note:
1) Large HFCs include data for Housing Development Finance Corporation Limited, Indiabulls Housing Finance Limited, LIC Housing
Finance Limited and PNB Housing Finance Limited.
2) Medium HFCs include data for Can Fin Homes Limited, ICICI Home Finance Limited, L&T Housing Finance Limited, TATA Capital
Housing Finance Limited and Gruh Finance Limited.
3) Small HFCs include data for Magma Housing Finance, Aptus Value Housing Finance India Limited, MAS Rural Housing and Mortgage
Finance Limited, Micro Housing Finance Corporation Limited, Shriram Housing Finance Limited and Sundaram BNP Paribas Home
Finance Limited, Aavas Financiers, Home First Finance Company, Aspire Housing Finance Corporation and Aditya Birla Housing
Finance Limited.
4) Affordable HFCs include data for Aavas Financiers, Aptus Value Housing Finance India Limited, Aspire Housing Finance Corporation,
Mahindra Rural Housing finance, MAS Rural Housing & Mortgage Finance Limited, Micro Housing Finance Corporation Limited,
Shriram Housing Finance Limited, Gruh Finance Limited and Home First Finance Company.
5) RoA has been calculated as PAT/ Average Assets.
(Source: CRISIL Report)

Higher Capital Adequacy Ratio for Affordable HFCs amongst Other Peer Groups

According to peer group set analysed, affordable HFCs have a higher capital adequacy ratio of 34.2%, followed by small HFCs
(33.1%), medium-sized HFCs (18.2%), and large HFCs with 17.2%, in fiscal 2019. In terms of tier-1 capital, affordable housing
has the highest tier-1 capital with 31.5%. This is followed by small HFCs (28.9%), medium-sized HFCs (15.8%), and large HFCs
(15.3%).

126
Capital Adequacy Ratio Tier 1 Capital

40.0% 35.0% 31.5%

35.0% 32.2% 33.1% 30.0% 27.6%
30.8% 26.1%
30.0% 26.9% 32.4%34.2% 22.2% 23.1% 28.9%
25.6% 25.0% 27.5%
29.7%
25.0% 25.4% 25.0%
22.8% 20.0% 21.1% 21.9%
18.7% 17.2% 15.4% 15.2% 15.6% 15.3%
20.0% 17.8% 18.9% 18.6% 14.7%
15.0%
15.0% 16.1% 17.1% 16.5% 17.9%18.2% 15.7%
10.0% 13.7% 13.7% 15.8
12.6%
10.0% %
5.0%
5.0%
0.0% 0.0%
FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19
Large HFCs
Large HFCs
Medium HFCs
Medium HFCs
Small HFCs Small HFCs
Affordable HFCs Affordable HFCs
Note:
1) Large HFCs include data for Housing Development Finance Corporation Limited, Indiabulls Housing Finance Limited, LIC Housing
Finance Limited and PNB Housing Finance Limited.
2) Medium HFCs include data for Can Fin Homes Limited, ICICI Home Finance Limited, L&T Housing Finance Limited, TATA Capital
Housing Finance Limited and Gruh Finance Limited.
3) Small HFCs include data for Magma Housing Finance, Aptus Value Housing Finance India Limited, MAS Rural Housing & Mortgage
Finance Limited, Micro Housing Finance Corporation Limited, Shriram Housing Finance Limited and Sundaram BNP Paribas Home
Finance Limited, Aavas Financiers, Home First Finance Company, Aspire Housing Finance Corporation and Aditya Birla Housing
Finance Limited.
4) Affordable HFCs include data for Aavas Financiers, Aptus Value Housing Finance India Limited, Aspire Housing Finance Corporation,
Mahindra Rural Housing finance, MAS Rural Housing & Mortgage Finance Limited, Micro Housing Finance Corporation Limited,
Shriram Housing Finance Limited, Gruh Finance Limited and Home First Finance Company.
(Source: CRISIL Report)

Peer Benchmarking

Consideration of Peer Set: Gruh Finance, Aspire Home Finance, Aadhar Housing Finance, Aavas Financiers, Aptus Value
Housing Finance and Home First Finance Company (“Home First”). These companies have been selected on the basis of average
ticket size of housing loans in the range of ₹ 0.7 million and ₹ 1.2 million.

Based on peer comparison of the above mentioned companies, Aspire Home Finance has registered the highest AUM growth
over four fiscals (FY15-19) as well as highest disbursement growth over the same period. In terms of profitability, Aptus Value
Housing Finance has the highest RoA compared to other peers during Fiscal 2019. In terms of operational parameters, Home
First leads with highest disbursement per branch and disbursement per employee during Fiscal 2019. Aadhar Housing Finance
has the strongest distribution network among the peers. In terms of the customers’ profile the companies cater to, Home First
has the least risky profile with highest proportion of salaried customers. Home First also has the highest share of NHB refinance
(37%) in its borrowings mix leading to comparatively lower cost of funds for the company.

The overall loan book of Aspire Home Finance grew at 87% CAGR (Fiscals 2015-2019), which is the highest among peers.
Other peers such as Aadhar Housing Finance, Aspire Home Finance and Home First registered healthy CAGR growth over the
past four fiscals. With a strong focus on the affordable segment and keen focus on the salaried segment, Home First registered
the second-highest CAGR in disbursement (65% CAGR over Fiscals 2015-2019) after Aspire Home Finance (105% CAGR).
(Source: CRISIL Report)

The following table sets forth the business scale of the companies:

FY19 AUM AUM AUM Loans Advances Disbursements Disbursement Total Profit Total
(₹ Growth Growth outstanding growth (₹ billion) growth income after Net
billion) (CAGR – (CAGR – (₹ billion) (YoY) FY19 (CAGR – (₹ tax (₹ Worth
FY19 FY15-19) FY17-19) FY19 FY15-19) billion) billion) (₹
FY19 FY19 billion)
FY19
Gruh 174* 18%* 15%* 174 12% 49 10% 20 4.47 19
Finance

127
 FY19 AUM AUM AUM Loans Advances Disbursements Disbursement Total Profit Total
(₹ Growth Growth outstanding growth (₹ billion) growth income after Net
billion) (CAGR – (CAGR – (₹ billion) (YoY) FY19 (CAGR – (₹ tax (₹ Worth
FY19 FY15-19) FY17-19) FY19 FY15-19) billion) billion) (₹
FY19 FY19 billion)
FY19
Aadhar 100 79% 77% 80 10% 32 57% 12 1.62 86
Housing
Finance
Aavas 59 63% 49% 47 42% 27 49% 7 1.76 18
Financiers
Aspire Home 44 87% 3% 42 -11% 3 105% 6 -1.37 8
Finance
Home First 24 67% 76% 21 63% 16 65% 3 .42 5
Aptus Value 22 58% 63% 20 48% 11 61% 3 1.03 69
Housing
Finance
Note: (*) Loan Assets include only on-book AUM.
In September 2019, the merger of Gruh Finance Limited with Bandhan Bank Limited has been approved by National Company Law Tribunal,
Ahmedabad and National Company Law Tribunal, Kolkata. Pursuant to the said orders Gruh Finance Limited would be merged with Bandhan
Bank Limited and would cease to exist from the effective date October 17, 2019.

As per CRISIL peer set analysis, Aptus Value Housing Finance had the highest return on assets, with an RoA of 5.5% in Fiscal
2019, followed by Aavas Financiers (3.6%) and Gruh Finance (2.6%). In terms of net interest margins (NIMs), Aptus Value
Housing Finance had the highest NIMs (9.2%), followed by Aavas Financiers (7.0%), Aspire Housing Finance and Home First
(5.0%). The significantly high RoA and NIMs of Aptus Value Housing Finance and Aavas Financiers can be attributed to the
low leverage levels of these entities.

The following tables set forth financial ratios for the Fiscals 2019, 2018 and 2017:

Fiscal 2019 RoA RoE NIM Yield on Cost of Opex Leverage

advances borrowings (Times)
Gruh Finance* 2.6% 25.9% 3.9% 11.3% 8.5% 0.8% 8.9
Aspire Home Finance* -2.9% -17.2% 5.0% 14.0% 10.4% 2.2% 4.8
Aadhar Housing Finance* 1.9% 20.6% 4.5% 14.0% 9.1% 2.6% 9.9
Aavas Financiers* 3.6% 11.6% 7.3% 13.9% 7.9% 3.6% 2.0
Aptus Value Housing Finance* 5.5% 16.1% 9.2% 16.6% 9.2% 3.4% 1.9
Home First 2.2% 9.8% 4.9% 12.8% 8.3% 3.8% 3.4
Note: (1) *For calculating financial ratios of Fiscal 2019, the financial statements of Fiscals 2019 and 2018 as per Ind AS has been considered.
(2) Operating Expense includes Employee benefit expense, depreciation expense and other expenses.
In September 2019, the merger of Gruh Finance Limited with Bandhan Bank Limited has been approved by National Company Law Tribunal,
Ahmedabad and National Company Law Tribunal, Kolkata. Pursuant to the said orders Gruh Finance Limited would be merged with Bandhan
Bank Limited and would cease to exist from the effective date October 17, 2019.

Fiscal 2018 RoA RoE NIM Yield on Cost of Opex Leverage

Advances borrowings (Times)
Gruh Finance* 2.8% 28.8% 4.5% 11.3% 7.6% 0.7% 9.3
Aspire Home Finance* 0.4% 2.8% 4.7% 14.4% 10.6% 3.6% 5.7
Aadhar Housing Finance* 2.5% 26.6% 3.7% 11.8% 8.6% 2.4% 8.8
Aavas Financiers* 2.8% 10.3% 6.0% 14.1% 8.4% 4.9% 2.6
Aptus Value Housing 5.8% 12.1% 11.6% 17.0% 9.3% 4.2% 1.0
Finance*
Home First 2.1% 7.9% 5.1% 12.1% 7.9% 3.3% 2.6
Note: (1) *For calculating financial ratios of Fiscal 2018, the financial statements of Fiscals 2018 and 2017 as per Ind AS has been considered.
(2) Operating Expense includes Employee benefit expense, depreciation expense and other expenses.
In September 2019, the merger of Gruh Finance Limited with Bandhan Bank Limited has been approved by National Company Law Tribunal,
Ahmedabad and National Company Law Tribunal, Kolkata. Pursuant to the said orders Gruh Finance Limited would be merged with Bandhan
Bank Limited and would cease to exist from the effective date October 17, 2019.

Fiscal 2017 RoA RoE NIM Yield on Cost of Opex Leverage

Advances borrowings (Times)
Gruh Finance* 2.4% 30.5% 4.2% 11.6% 8.2% 0.8% 11.4
Aspire Home Finance* 2.4% 16.7% 2.4% 12.7% 11.2% 2.4% 5.8
Aadhar Housing Finance* 1.6% 22.8% 3.9% 12.9% 8.5% 3.4% 13.0
Aavas Financiers* 2.8% 15.0% 6.3% 15.0% 9.6% 6.0% 3.8

128
 Fiscal 2017 RoA RoE NIM Yield on Cost of Opex Leverage
Advances borrowings (Times)
Aptus Value Housing 5.5% 10.1% 11.4% 17.0% 11.6% 5.0% 0.8
Finance*
Home First 1.1% 3.9% 4.0% 13.2% 9.9% 3.8% 2.4
Note: (1) *For calculating financial ratios of Fiscal 2017, the financial statements of Fiscals 2017 and 2016 as per Indian GAAP has been
considered. (2) Operating Expense includes Employee benefit expense, depreciation expense and other expenses.
In September 2019, the merger of Gruh Finance Limited with Bandhan Bank Limited has been approved by National Company Law Tribunal,
Ahmedabad and National Company Law Tribunal, Kolkata. Pursuant to the said orders Gruh Finance Limited would be merged with Bandhan
Bank Limited and would cease to exist from the effective date October 17, 2019.

(Source: CRISIL Report)

Cost of borrowing of Home First is in line with larger HFCs

Housing Finance Company AUM (Fiscal 2019) (₹ Credit Rating Cost of Borrowing
billion)
Home First Finance Company 24 ICRA A+ (28 August 2019) 8.3%
Limited
HDFC Limited 4,619 CRISIL AAA (7 August 2019) 8.1%
PNB Housing 847 CRISIL AA+ (23 September 8.0%
2019)
CanFin Homes Limited 184 ICRA AA+ (27 September 2019) 7.6%
Gruh Finance 174 CRISIL AAA (1 October 2019) 8.5%
Aadhar Housing Finance 100 CARE AA (16 July 2019) 9.1%
Aavas Financiers 59 CRISIL A+ (31 August 2019) 7.9%
(Source: CRISIL Report)

The following tables set forth the changes in the ICRA credit ratings of certain HFCs, for the periods indicated:

Aavas Financiers LimitedHome First Finance Company HDFC Limited

India Limited
As on Long Short AUM Long Term Short AUM (₹ Long Term Short Term AUM (₹
Term Term (₹ Rating Term billion) Rating Rating billion)
Rating Rating billion) Rating
March 31, [ICRA]A - 27 NA 8 [ICRA]AAA [ICRA]A1+ 3,385
2017 (Positive) (Stable)
March 31, [ICRA]A+ [ICRA]A1+ 41 [ICRA]A+ [ICRA]A1+ 14 [ICRA]AAA [ICRA]A1+ 4,029
2018 (Stable) (Stable) (Stable)
March 31, [ICRA]A+ [ICRA]A1+ 59 [ICRA]A+ [ICRA]A1+ 24 [ICRA]AAA [ICRA]A1+ 4,619
2019 (Positive) (Stable) (Stable)
(Source: ICRA Report)

PNB Housing CanFin Homes Gruh Finance

As on Long Term Short AUM Long Term Short AUM Long Term Short Term AUM
Rating Term (₹ Rating Term (₹ Rating Rating (₹
Rating billion) Rating billion) billion)
March [ICRA]AA+ NA 415 [ICRA]AAA [ICR]A1+ 133 [ICRA]AAA [ICRA]A1+ 132
31, 2017 (Stable) (Negative) (Stable)
March [ICRA]AA+ NA 623 [ICRA]AAA [ICR]A1+ 157 [ICRA]AAA [ICRA]A1+ 156
31, 2018 (Stable) (Negative) (Stable)
March [ICRA]AA+ NA 847 [ICRA]AAA [ICR]A1+ 184 ICRA]AAA@ [ICRA]A1+ 174
31, 2019 (Stable) (Negative)
(Source: ICRA Report)

Aadhar Housing Finance

As on Long Term Rating Short Term Rating AUM (₹ billion)
March 31, 2017 NA [ICRA]A1+ 46
March 31, 2018 NA [ICRA]A1+ 80
March 31, 2019 NA [ICRA]A1+& 100
(Source: ICRA Report)

129
Healthy disbursement in Fiscal 2019, coupled with the lower number of branches, has resulted in Home First having the highest
disbursement per branch amongst peers. As per CRISIL peer set analysis, Home First has second-highest average AUM per
employee and the highest disbursement per employee in Fiscal 2019.

The following table sets forth operational ratios for the Fiscal 2019:

Fiscal 2019 Average Average Average Average Disbursemen Disbursemen

employees employee AUM per AUM per ts per branch ts per
per branch cost per branch (₹ employee (₹ (₹ million) employee (₹
employee (₹ million) million) million)
million)
Gruh Finance ^ 3.5 0.95 895 254 254 72
Aspire Home Finance 10.7 0.52 374 36 25 2
Aadhar Housing Finance* 7.6 0.77 345 51 110 18
Aavas Financiers 17.0 0.46 317 24 143 11
Aptus Value Housing Finance 10.3 0.39 174 19 85 9
Home First 13.2 0.77 479 46 308 30
Note: *Only on-roll employees are considered; (^) Loan asset in place of AUM is used for calculation; In September 2019, the merger of Gruh
Finance Limited with Bandhan Bank Limited has been approved by National Company Law Tribunal, Ahmedabad and National Company
Law Tribunal, Kolkata. Pursuant to the said orders Gruh Finance Limited would be merged with Bandhan Bank Limited and would cease to
exist from the effective date October 17, 2019.
(Source: CRISIL Report)

The following table sets forth number of branches and employees for the Fiscal 2019:

Fiscal 2019 Number of branches Number of employees

Gruh Finance ** 195 677
Aspire Home Finance 113 1,243
Aadhar Housing Finance* 311 2,217
Aavas Financiers 210 3,190
Aptus Value Housing Finance 143 1,325
Home First 60 675
Note: (*) Only on-roll employees are considered; (**) Excluding HDFC Sales employee numbers.
In September 2019, the merger of Gruh Finance Limited with Bandhan Bank Limited has been approved by National Company Law Tribunal,
Ahmedabad and National Company Law Tribunal, Kolkata. Pursuant to the said orders Gruh Finance Limited would be merged with Bandhan
Bank Limited and would cease to exist from the effective date October 17, 2019.
(Source: CRISIL Report)

The following table sets forth capitalisation and asset quality:

Fiscal 2019 Capital Tier -1 capital Gross non- Net non- Credit cost
adequacy ratio performing performing
assets assets
Gruh Finance 20.3% 19.3% 0.7% 0.4% -0.1%
Aspire Home Finance 29.2% 27.5% 9.3% 7.2% 2.9%
Aadhar Housing Finance 18.3% 15.6% 1.2% 0.9% 0.4%
Aavas Financiers 67.8% 64.3% 0.5% 0.4% 0.2%
Aptus Value Housing Finance 43.6% 43.2% 0.4% 0.3% 0.1%
Home First 38.0% 37.4% 0.7% 0.6% 0.3%
In September 2019, the merger of Gruh Finance Limited with Bandhan Bank Limited has been approved by National Company Law Tribunal,
Ahmedabad and National Company Law Tribunal, Kolkata. Pursuant to the said orders Gruh Finance Limited would be merged with Bandhan
Bank Limited and would cease to exist from the effective date October 17, 2019.
(Source: CRISIL Report)

The table below sets forth customer profile and average ticket size for Fiscal 2019:

Fiscal 2019 Customer profile Average ticket size (₹

million)
Salaried Non-Salaried
Gruh Finance 59% 41% NA
Aspire Home Finance 52% 48% 0.85
Aadhar Housing Finance 66% 34% 0.84
Aavas Financiers 35% 65% 0.86
Aptus Value Housing Finance 22% 78% 0.70

130
 Fiscal 2019 Customer profile Average ticket size (₹
million)
Salaried Non-Salaried
Home First 73% 27% 0.85*
Note: (*) As of Fiscal 2018; NA- Not Available.
In September 2019, the merger of Gruh Finance Limited with Bandhan Bank Limited has been approved by National Company Law Tribunal,
Ahmedabad and National Company Law Tribunal, Kolkata. Pursuant to the said orders Gruh Finance Limited would be merged with Bandhan
Bank Limited and would cease to exist from the effective date October 17, 2019.
(Source: CRISIL Report)

The following table sets forth the mix of advances during Fiscal 2019:

Home Loans LAP Developer Non-housing Others***

loans loans**
Gruh Finance 83% 10% 5% - 2%
Aspire Home Finance 90% 5% - - 5%
Aadhar Housing Finance 81% - - 18% 1%
Aavas Financiers 75% - - 25%
Aptus Value Housing 61% 39% - - -
Home First 91% - - 9%^ -
Note: (**) Non-housing loans include LAP and other non-housing loans; (***) Others include Composite Loans, Individual NRP Loans, and
Project Plan Loans; (^) Include LAP, Developer Loans and Loan against commercial property.
In September 2019, the merger of Gruh Finance Limited with Bandhan Bank Limited has been approved by National Company Law Tribunal,
Ahmedabad and National Company Law Tribunal, Kolkata. Pursuant to the said orders Gruh Finance Limited would be merged with Bandhan
Bank Limited and would cease to exist from the effective date October 17, 2019.
(Source: CRISIL Report)

The following table sets forth resources mix for the Fiscal 2019:

Bonds/NCDs Loans from Deposits Commercial ECBs Refinance from Others

banks and FIs paper NHB
Gruh Finance 29% 25% - 1% - 25% 20%
Aspire Home 57% 42% - - - - 1%
Finance
Aadhar Housing 21% 64% 2% 1% - 10% 2%
Finance
Aavas Financiers 15% 80% - - - - 5%
Aptus Value 45% 41% - - - 9% 5%
Housing Finance
Home First - 63% - - - 37% -
In September 2019, the merger of Gruh Finance Limited with Bandhan Bank Limited has been approved by National Company Law Tribunal,
Ahmedabad and National Company Law Tribunal, Kolkata. Pursuant to the said orders Gruh Finance Limited would be merged with Bandhan
Bank Limited and would cease to exist from the effective date October 17, 2019.
(Source: CRISIL Report)

The following table sets forth the formulas used in this section:

Parameters Formula
Return on assets Return on Assets is calculated as the Profit After Tax (excluding Other Comprehensive
Income) for the relevant year or period as a percentage of Average Total Assets as of such
year or period.
Return on equity Return on Assets is calculated as the Profit After Tax (excluding Other Comprehensive
Income) for the relevant year or period as a percentage of Average Total net worth as of such
year or period.
Net interest margin Net Interest Margin represents the Net Interest Income (total Interest income minus interest
expended) for the relevant year or period divided by Average Total Assets as of the last day
of such year or period.
Yield on advances Yield on advances is calculated as interest income on loans and advances as a percentage of
average loan outstanding as of such year or period.
Cost of borrowings Cost of borrowings is calculated as overall interest paid on borrowings as a percentage of
average borrowings of such year or period.
Leverage Leverage is defined as the average of borrowings (Long term plus short term) as a percentage
of average assets of such year or period.

131
 OUR BUSINESS

We have included various operational and financial performance indicators in this Draft Red Herring Prospectus, including
certain non-Ind AS (and non-generally accepted accounting principles) financial measures, some of which may not be derived
from our Restated Financial Statements or otherwise subjected to an audit or review by our auditors. The manner in which such
operational and financial performance indicators are calculated and presented, and the assumptions and estimates used in such
calculation, may vary from that used by other companies.

The industry-related information contained in this section is derived from the CRISIL Report and ICRA Report. We commissioned
such reports for the purposes of confirming our understanding of the industry in connection with the Offer. Neither our Company,
nor any other person connected with the Offer, including the Lead Managers, have independently verified the information in
such reports or other publicly available information cited in this Draft Red Herring Prospectus.

Overview

We are a technology driven affordable housing finance company that targets first time home buyers in low and middle-income
groups. We primarily offer customers housing loans for the purchase or construction of homes, which comprised 91.5% of our
Gross Loan Assets, as of September 30, 2019. Our Gross Loan Assets have grown at a CAGR of 69.8% between the financial
year 2017 and the financial year 2019 and increased from ₹ 8,473.16 million as of March 31, 2017 to ₹ 31,133.76 million as of
September 30, 2019.

We serve salaried and self-employed customers. Salaried customers account for 72.6% of our Gross Loan Assets and self-
employed customers account for 24.6% of Gross Loan Assets. We serviced 37,086 active loan accounts, as of September 30,
2019. We also offer other types of loans comprising loans against property, developer finance loans and loans for purchase of
commercial property, which comprised 4.7%, 2.8% and 1.1% of our Gross Loan Assets, as of September 30, 2019, respectively.
As of the same date, 35.9% of our Gross Loan Assets were from customers who were new to credit. The average ticket size of
our housing loans was ₹ 1.02 million, with an average loan-to-value on Gross Loan Assets of 58.4%, as of September 30, 2019.
As of September 30, 2019 and March 31, 2019, our Stage 3 Loan Assets expressed as a percentage of our Gross Loan Assets
were 0.9% and 0.7%, respectively.

As of September 30, 2019, we had a network of 65 branches covering over 60 districts in 11 states and a union territory in India,
with a significant presence in urbanized regions in the states of Gujarat, Maharashtra, Karnataka and Tamil Nadu. We have
increased the scale of our operations and grown our branches by adopting a strategy of contiguous expansion across regions and
have strategically expanded to geographies where there is substantial demand for housing finance. According to the CRISIL
Report, the 11 states and union territory in which we are present accounted for approximately 79% of the affordable housing
finance market in India during the financial year 2019. We utilize a diverse range of lead sourcing channels such as connectors,
architects, contractors, affordable housing developers, in addition to conducting loan camps and micro marketing activities, and
utilizing employee and customer referrals and branch walk-in customers.

We have leveraged technology in various facets of our business such as processing loan applications, managing customer
experience and risk management. We have developed a paperless process to onboard customers efficiently and our well-trained
front-end teams appraise customers by conducting home and workplace visits and ensure minimal disruption to a customer’s
daily routine. We offer mobility solutions through dedicated mobile applications for our customers to enable quick and
transparent loan related transactions. We have an integrated customer relationship management and loan management system
set up on a leading cloud based customer relationship platform providing us with a holistic view of all our customers. We utilize
proprietary machine learning customer scoring models to assist us with our centralized credit underwriting process, which has
led to consistent and accurate credit evaluation with quick turn around times. During the six months ended September 30, 2019
and the last three financial years, we invested ₹ 146.65 million in our information technology systems (comprising software
license fees, technology fees and other intangible assets).

As of September 30, 2019, our Total Borrowings were ₹ 22,956.31 million and we did not have any outstanding debt securities.
We typically obtain long-term funding from a variety of sources including private and public sector banks, the NHB and through
assignment transactions. According to the CRISIL Report, we had the highest share of NHB refinance (37%) among our peers
in our borrowing mix as of March 31, 2019. We have improved our credit ratings from ‘CARE A-’ as of March 31, 2017 to
‘CARE A+’ as of September 30, 2019 and also currently have an ‘A+ (stable) rating from ICRA Limited.

Our Company was founded by Jaithirth Rao, P. S. Jayakumar and Manoj Viswanathan and we commenced our operations in
August 2010. We are a company managed by professionals and our Promoters are True North Fund V LLP and Aether (Mauritius)
Limited. Further, Bessemer has invested in our Company. We have and expect to continue to benefit from strong capital
sponsorship and professional expertise of our marquee shareholders. In addition to assisting us with capital raising, our
shareholders have assisted us in implementing strong corporate governance, which we believe have been critical to the growth
of our operations.

132
The following table sets forth certain key financial and operational information, as of and for the periods indicated:

Metric As of and for the six months ended As of and for the financial year ended March 31,
September 30,
2019 2018 2019 2018 2017
Gross Loan Assets 1 (₹ million) 31,133.76 19,089.71 24,435.74 13,559.32 8,473.16
Growth rate of Gross Loan 63.1 - 80.2 60.0 54.7
Assets2 (%)
Disbursements (₹ million) 8,857.53 7,168.35 15,728.21 7,455.29 4,243.57
Growth rate of Disbursements3 23.6 - 111.0 75.7 53.5
(%)
Total Income (₹ million) 1,937.73 1,070.33 2,709.21 1,342.37 915.78
Profit after Tax (₹ million) 367.41 114.56 452.04 159.96 66.77
Net Worth4 (₹ million) 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58
Stage 3 Loan Assets5 / Gross 0.9 0.7 0.7 0.6 0.7
Loan Assets (%)
Stage 3 Loan Assets (Net)6 / Net 0.7 0.5 0.5 0.5 0.6
Loan Assets 7 (%)
Average Yield on Loans - 13.1
Principal Outstanding8 (%) 6.5 6.2 13.2 12.1
Average Cost of Borrowing
4.3 4.0 8.5 7.7 9.8
(excluding assignments)9 (%)
Net Interest Margin10 (%) (Net 2.2 2.6 5.4 5.3 4.0
Interest Income / Average total
Assets11)
Operating Expenses12 / Average 1.7 1.9 3.8 3.6 3.3
Total Assets (%)
Cost to Income Ratio13 47.5 60.4 50.3 61.0 68.4
(Operating Expenses / Net
Total Income)
CRAR (%) 47.6 43.8 38.5 43.0 68.5
Number of Branches 65 54 60 42 36
Active Loan Accounts 37,086 21,689 29,372 15,723 9,747
Figures disclosed in the table above, except Total Income and Profit after Tax are not measures of financial position, operating performance
or liquidity defined by Ind AS or generally accepted accounting principles and may not be comparable to similarly titled measures presented
by other companies.
1 Gross Loan Assets represents the aggregate of current principal outstanding and overdue principal outstanding, if any, for all loan assets
under management which includes loan assets held by our Company as of the last day of the relevant year or period as well as loan assets
which have been transferred by our Company by way of assignment and are outstanding as of the last day of the relevant year or period.
2 Growth Rate of Gross Loan Assets represents percentage growth in Gross Loan Assets as of the last day of the relevant year or period
over Gross Loan Assets as of the last day of corresponding immediately prior period.
3 Growth Rate of Disbursements represents the percentage growth in disbursements for the relevant year or period over disbursements of
the corresponding immediately prior period.
4 Net Worth is the aggregate of the paid-up share capital, reserves and surplus (excluding revaluation reserve) as reduced by the aggregate
of miscellaneous expenditure (to the extent not adjusted or written off) and the debit balance of the profit and loss account.
5 Stage 3 Loan Assets represents closing balance of loan assets overdue for 90 days or more as of the last day of the relevant year or period.
6 Stage 3 Loan Assets (Net) represents Stage 3 loan assets less Impairment loss allowance on Stage 3 loan assets as at the end of the
relevant year or period as per our restated financial statements.
7 Net Loan Assets represents Gross Loan Assets less impairment loss allowance excluding impairment loss allowance on undisbursed
commitments as of the last day of the relevant year or period.
8 Average Yield on Loans - Principal outstanding represents (Interest on term loans/ Average loans – principal outstanding) for the relevant
year or period as per restated financial statements. Average loans – principal outstanding represents the simple average of loans –
principal outstanding as of the last day of the relevant year or period and loans – principal outstanding as of the last day of the immediately
prior year.
9 Average Cost of Borrowing excluding assignments represents (Interest on borrowings and Interest on debt securities)/ Average
borrowings (including debt securities) for the relevant year or period as per our restated financial statements. Average (borrowings
including debt securities) represents the simple average borrowings including debt securities as of the last day of the relevant year or
period and borrowings including debt securities as of the last day of the immediately prior year.
10 Net Interest Margin represents the Net Interest Income for the relevant year or period divided by Average Total Assets as of the last day
of such year or period. Net Interest Income represents interest income on term loans minus Interest on borrowings and Interest on debt
securities for the relevant year or period as per our restated financial statements. Interest Income represents Interest Income on loans.
11 Average Total Assets represents the simple average of Total Assets outstanding as of the last day of the relevant year or period and Total
Assets outstanding as of the last day of the immediately prior year or corresponding immediately prior period as shown in our restated
financial statements.

133
12 Operating Expenses is the sum of employee benefits expenses, depreciation and amortisation, interest on lease liability, bank charges and
others and other expenses for the relevant year or period as per our restated financial statements.
13 Cost to Income ratio represents Operating Expenses as a percentage of net Total Income (i.e., Total Income less interest on borrowings
and interest on debt securities).

Our Competitive Strengths

Our principal competitive strengths are as follows:

Technology Driven Company with Scalable Operating Model

We are a technology driven affordable housing finance company and have built a scalable operating model, which enables us to
expand our operations and drive growth in revenue with lower incremental costs. We have established a differentiated technology
framework with customized systems and tools, enhancing convenience for our customers as well as increasing operational
efficiency. During the six months ended September 30, 2019 and the last three financial years, we invested ₹ 146.65 million in
our information technology systems.

We are able to digitally capture over 100 data points of a customer in addition to credit bureau data, observations of our front
end teams and feedback from our underwriting and management teams. We capture and store all our data on a cloud services
platform. We have entered into arrangements with third party service providers through whom we obtain additional information
such as fraud related data, banking, investment and taxation related data, and vehicle ownership of customers, which enables us
with underwriting, and to identify areas of concern and take quick and accurate decisions. Our integrated customer relationship
management and loan management system provides us with a holistic view of our customers and ensures connectivity and
uniformity across our branches. We have also deployed proprietary machine learning customer-scoring models to assist us with
effective credit underwriting. The seamless integration and availability of data across platforms and users enables us to process
loans in a paperless manner and with quick turn around times.

We offer mobility solutions through dedicated mobile applications for our customers to enable quick and transparent loan related
transactions, as well as for our sales channels to facilitate easy capture of leads and access to real time status of loans.

We use a data lake, to store the data from all our different applications. This expedites data consolidation, visualization, machine
learning model development, and model implementation. The data lake also facilitates detailed analytics leading to better
operational decisions.

Our information technology systems allow us to leverage economies of scale to increase productivity and reduce turn around
times and transaction costs. Our systems are designed to facilitate a sanction within an average turn-around-time of 48 hours,
which we calculate from the time we collate all customer information in our database to the sanctioning of the loan. In addition,
our digital service delivery mechanisms and operating model brings uniformity in our operations, increases customer satisfaction
and positions us well to expand our business in geographies that offer growth opportunities.

Customer Centric Organizational Commitment

We are a customer centric organization and have developed strong relationships with our customers by addressing their key
concerns in availing housing finance. We target first time home buyers who find it difficult to disrupt their work routines to
apply for a loan and comprehend the terms of a loan transaction. In order to address such concerns, we have set up an easy and
customer friendly process right from the loan application stage to disbursement of the loan. Our front-end teams, which comprise
our relationship managers, customer service managers and branch managers are well educated, trained and able to effectively
assess all sources of a customer’s income and guide them on aspects of obtaining financing. We also review documents relating
to assets of the customer such as property deeds, life insurance policies, vehicle ownership and business ownership for the
purpose of credit evaluation. We have set up a paperless process to onboard customers efficiently and our managers’ conduct
home and workplace visits to ensure minimal disruption to a customer’s daily routine. We believe that these initiatives have
assisted us in establishing a strong reputation as a customer friendly organization and growing our business and Gross Loan
Assets at a rapid pace.

We maintain high levels of transparency in our interactions with customers and this has helped us increase customer satisfaction
and loyalty as reflected in our net promoter scores. We conduct mandatory counselling sessions at our branches to educate
customers on the key terms of their loan agreements and to familiarize them with the entire loan disbursement and repayment
process. We have a dedicated mobile application for customers where they can carry out a number of functions, including
accessing their loan statements, prepaying loans without any prepayment charges and raising service requests. As of September
30, 2019, our customer mobile application, ‘Home First Customer Portal’ had approximately 16,200 active registrations
comprising approximately 44% of our customer base and currently has a rating of 4.1 on the Google Play Store.

We aim to maintain high levels of customer service and we have mapped each customer to a dedicated service manager and a
relationship manager. We send regular updates to customers on the status of their loan applications and remind them of their
payment schedules through automated calls and text messages. We have a centralized repository of all the queries posted by our

134
existing and potential customers and these are mapped to their respective loan accounts. We endeavor to address a significant
majority of customer queries within 24 hours. Our customer centric approach has been a key driver of our growth and helped us
differentiate ourselves from competition and achieve superior net promoter scores.

Deep Penetration in the Largest Housing Finance Markets, with Diversified Sourcing Channels

We commenced our operations in August 2010 and as of September 30, 2019, we had a network of 65 branches covering over
60 districts in 11 states and a union territory in India. We have successfully adopted a strategy of contiguous expansion across
regions over the years and have strategically expanded to relevant geographies by evaluating areas with high economic growth
and substantial demand for affordable housing finance, along with industry portfolio-at-risk levels and socio economic risk
profile. Before setting up a new branch in a district, we conduct an in-depth study of the micro markets around the branch to
assess potential demand for housing finance and target regions with increasing urbanization and housing projects. We also engage
with property valuers and legal advisors to obtain a better understanding of local markets and the quality of the underlying
collateral. We believe that our management team’s understanding of the local characteristics of these micro geographies has
allowed us to address the needs of our customers and penetrate deeper into such markets. According to the CRISIL Report, the
60 districts in the 11 states and union territory in which we are present accounted for approximately 48% of the affordable
housing finance market in India and have a high per capita income with rising levels of urbanization. Our widespread network
of full service branches allows us to service our existing customers, attract new customers and apply best practices developed in
one region to other regions.

We have demonstrated our ability to successfully identify new regions to set up branches and grow our market share in such
regions. For example, during the last three financial years, we identified Jaipur, Ahmedabad, Surat, Indore, Nagpur, Raipur,
Hyderabad, Bengaluru and Chennai to set up our branches and as of September 30, 2019, 62.2% of our Gross Loan Assets were
from such branches. The following table reflects the improvement in our market share, in terms of origination of home loans in
the bucket size of ₹ 500,000 to ₹ 2,500,000, for the periods indicated:

Branch Location Our market share during Q1 FY18 Our market share during Q1 FY20
Jaipur 0.1% 2.6%
Ahmedabad 1.7% 3.5%
Surat 1.7% 6.5%
Indore 0.2% 2.7%
Nagpur 0.9% 2.6%
Raipur 0.3% 1.7%
Hyderabad 0.2% 1.4%
Bengaluru 0.2% 2.3%
Chennai 1.0% 2.2%
For details of the market size of home loans in the cities above, see “Industry Overview – Indian Housing Finance Market – Healthy Housing
Finance Market Growth” beginning on page 103. Our market share represents the percentage of the origination of our home loans over the
market size in such cities, as provided in the CRISIL Report.

We utilize a diverse range of lead sourcing channels such as connectors, architects, contractors, affordable housing developers,
in addition to conducting loan camps and micro marketing activities, and utilizing employee and customer referrals and branch
walk-in customers. Connectors are third-parties who provide us with customer leads on a commission basis paid only when a
loan is disbursed and they do not assist in the loan application process. Our connectors are generally individuals such as insurance
agents, tax practitioners and local shopkeepers. Our network of connectors has increased from over 470 active connectors as of
March 31, 2018 to over 1,000 active connectors as of September 30, 2019, and we manage their leads effectively through our
connector application. For the six months ended September 30, 2019 and the financial year 2019, we sanctioned 6,093 and 9,555
loans on account of leads generated through 1,431 and 1,331 connectors, respectively. We have also entered into arrangements
with certain digital lead aggregators and other digital players within the housing and real estate ecosystem, which helps us source
leads with embedded customer data.

Our presence in relevant housing finance markets in India, diversified lead sourcing channels and our ability to build up our
market share has resulted in an increase in the Gross Loan Assets and disbursements over the last three financial years.

Centralized, Data Science Backed Underwriting Process

We serve salaried customers in low and middle-income groups which account for 72.6% of our Gross Loan Assets, and self-
employed customers account for 24.6% of our Gross Loan Assets, as of September 30, 2019. We believe that having a large
customer base of salaried customers has led to low Stage 3 Loan Assets as a result of predictability of their cash flows. Our
salaried customers are typically employed by small firms or work in junior positions in larger companies, while our self-
employed customers are generally small business owners. We spend considerable time to understand the formal and informal
income sources of such customers as well as that of their family members, stability of their employment, savings capacity and
repayment track record with their formal and informal borrowings to take an informed decision to approve or decline a housing
loan after collating all customer information in our database. We have employed well-trained and educated front-end teams to

135
visit a customer’s residence and workplace and gather detailed information to enable us to make right decision on several
parameters, including the size of the loan. We believe that having a centralized team of underwriters ensures consistency in
implementing our underwriting principles. Hence, we have set up a centralized data science backed underwriting process.

Our customer relationship management system is integrated with our loan management system, which is set up on a leading
cloud based customer relationship platform. An integrated system enables us to have a holistic view of our customers through
the entire lifecycle of the loan. This system acts as a single portal for all internal and external customer related interactions and
data. Our technology platforms enable us to digitally capture over 100 data points of a customer such as photographs, videos,
scanned collateral documents, taxation documents and vehicle ownership details from the inception of the lead. We have also
entered into arrangements with third party database service providers through which we obtain additional information of
customers. The integration of such data helps us derive a holistic view of our customers, carry out fraud checks and effectively
assess the credit worthiness of customers. Further, we utilize proprietary machine learning and customer scoring models to assist
us with our credit assessment process.

All our financed properties are geo-tagged and we use a machine learning backed property price predictor, which has helped us
reduce our turn around time for approving loans, as well as achieve a higher accuracy in determining the loan-to-value ratio. Our
systems are designed to facilitate a sanction within an average turn-around-time of 48 hours, which we calculate from the time
we collate all customer information in our database to sanctioning the loan. A majority of the housing finance loans that we
disburse are for affordable houses that fall within the purview of the Pradhan Mantri Awas Yojana where buyers are entitled to
certain government subsidies, which further reduces our loan-to-value ratio once the PMAY subsidy gets disbursed. Our housing
loans, loans against property, developer finance loans and loans for purchase of commercial property had an average loan-to-
value at the time of the sanctioning of the loan of 73.8%, 33.4%, 39.0% and 59.8%, as of September 30, 2019, respectively. As
part of our credit policy, we limit our exposure to properties that are under construction, which we believe helps in maintaining
our asset quality. As of September 30, 2019, completed homes comprised 85.3% of our Gross Loan Assets, while properties
under construction accounted for 14.7% of our Gross Loan Assets. Our robust underwriting and loan approval process have
helped us reduce bounce rates from 14.9% for the first quarter of the financial year 2017 to 10.0% for the second quarter of the
financial year 2020.

Technology Driven Collections System

We have set up a robust collections management system wherein substantially all of our collections for the financial year 2019
were non-cash based, which eases stress on monitoring financial transactions and reduces our cash management risk. All our
borrowers register for an automated debit facility and we track the status of installments collected on a real time basis through a
collection module in our system. We employ a structured collection process wherein we remind our customers of their payment
schedules and to maintain adequate balance in their account on the due date, through automated calls and text messages. We
perform predictive analytics to predict the probability of default, which helps us in obtaining early signals of potential defaults
and initiate appropriate action to mitigate risks. Our collections process is completely managed by our branch teams and a
significant portion of our front end team incentives are also dependent on collections.

We initiate recovery action immediately after a customer defaults in their monthly payment and the severity of our action
increases as the number of days past due increase. At one day past due, our front end teams call customers and visit them to
understand reasons for the default and for recovery of the dues. At 30 days past due, while our employees continue to engage
with the customer, we send them a default notice. At 60 days past due, we send a loan recall letter and our employees reiterate
the repercussions of loan default to the customer. Thereafter, we seek to resolve cases by initiating legal action through
SARFAESI at 90 days past due. As of September 30, 2019, our 30 days past due was at 1.5% of our Gross Loan Assets and 90
days past due was at 0.9% of our Gross Loan Assets.

Our effective credit risk management is reflected in our portfolio quality indicators such as high repayment rates, and low rates
of Stage 3 Loan Assets and Stage 3 Loan Assets (Net) across economic cycles and events such as demonetization and the
implementation of RERA. As of September 30, 2019 and March 31, 2019, 2018 and 2017, our Stage 3 Loan Assets expressed
as a percentage of our Gross Loan Assets were 0.9%, 0.7%, 0.6% and 0.7%, while our Stage 3 Loan Assets (Net) expressed as
a percentage of our Net Loan Assets were 0.7%, 0.5%, 0.5% and 0.6%, respectively.

Well-Diversified and Cost-Effective Financing Profile

We believe that we are able to access borrowings at a competitive cost due to our stable credit history, superior credit ratings,
conservative risk management policies and strong brand equity. The following table sets forth certain details of our borrowing
profile for the periods indicated:

As of and for the six months ended As of and for the financial year ended
September 30, March 31,
2019 2018 2019 2018 2017
Number of banks borrowed from 14 10 14 10 10
Private sector banks 7 4 7 4 3

136
 As of and for the six months ended As of and for the financial year ended
September 30, March 31,
2019 2018 2019 2018 2017
Public sector banks 7 6 7 6 7
Amount borrowed 22,956.31 15,562.27 19,256.41 10,198.76 6,630.45
(Borrowings + Debt securities) (₹
million)
Private sector banks (₹ million) 8,205.90 2,983.18 4,447.04 2,144.93 375.48
Public sector banks (₹ million) 8,916.93 8,290.43 8,941.74 5,598.82 5,666.98
Other parties 364.67 - - - -
NHB loans (₹ million) 5,468.81 4,288.66 5,867.63 2,455.01 587.99
Average Cost of Borrowings 4.3% 4.0% 8.5% 7.7% 9.8%
(excluding assignments)
Total Equity 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58
Debt to Equity ratio* 2.58 3.19 3.68 3.14 2.16
CRAR 47.6% 43.8% 38.5% 43.0% 68.5%
* Debt represents Borrowings (including debt securities) as of the last day of the relevant year or period as per our restated financial
statements. Equity means the aggregate value of the paid-up share capital of our Company and all reserves created out of profits and
securities premium account as per our restated financial statements.

We have improved our credit ratings from ‘CARE A-’ as of March 31, 2017 to ‘CARE A+’ as of September 30, 2019 and also
currently have an ‘A+ (stable) rating from ICRA Limited. As of September 30, 2019, our Total Borrowings were ₹ 22,956.31
million and we did not have any outstanding debt securities. During the six months ended September 30, 2019, we had proceeds
of borrowings from banks and financial institutions of ₹ 5,601.24 million. We carefully monitor the contractual maturity periods
of our assets and liabilities and categorize them on the basis of the number of years in which they mature. As of September 30,
2019, the effective tenure of our Gross Loan Assets was 94.00 months, while the closing tenure of our outstanding borrowings
and assignment was 91.35 months.

Experienced Management Team with Qualified Operational Personnel and Marquee Investors

We have a professional and experienced management team, led by our CEO and founder, Manoj Viswanathan, who has over 23
years of experience in the consumer lending industry. In addition, Ajay Khetan, Gaurav Mohta and Vilasini Subramaniam joined
our founding team over five years ago. Our management team has extensive experience in the financial services sector and is
supported by qualified operational personnel who have an in-depth understanding of the geographic regions in which we operate,
our loan products and types of collateral. We have a distinguished Board comprising industry professionals with significant
experience in the financial services industry.

We primarily employ people who have obtained their engineering or management degrees and we hire them directly from
campuses instead of hiring them from other organizations. We have an elaborate year long training and development program
for all our new hires, which comprises of classroom-training sessions, on the job training and a buddy program. We also have a
distance-learning program in association with a leading business school for our employees who have obtained their bachelor of
technology degree. As of September 30, 2019, approximately 67% of our employees had obtained a post-graduation in business
administration or management and approximately 47% had a bachelor in technology degree or a bachelor in engineering degree.
We are a young and diverse organization with a median age of 25 years, and approximately 32% of our employees are women,
as of September 30, 2019. Our hiring and training procedures have helped us achieve superior employee productivity with an
average disbursement of ₹ 29.76 million per employee for the financial year 2019 and resulted in a consistent improvement in
disbursement per employee, while maintaining asset quality.

Our Promoters are True North Fund V LLP and Aether (Mauritius) Limited. Further, Bessemer has invested in our Company
since January 2011. We have and expect to continue to benefit from strong capital sponsorship and professional expertise of our
marquee shareholders. In addition to assisting us with capital raising and strategic business advice, our shareholders have assisted
us in implementing strong corporate governance, which we believe have been critical to the growth of our business.

Our Strategies

We intend to continue to scale up our business and improve our operational efficiency and profitability through the following
key strategies:

Leverage Technology to Grow Business and Drive Operational Efficiency

We seek to leverage technology to enhance our lead sourcing and customer fulfilment process. We intend to launch a customer
self-onboarding application through which a customer can make a loan application and upload relevant documents. We have
also entered into arrangements with certain digital lead aggregators and other digital companies in the housing and real estate

137
ecosystem such as Homelane, Paisa Bazaar, Quikr India, Credit Mantri and Aapka Painter, which helps us source leads embedded
with customer data.

We intend to further strengthen and invest in technology to accelerate our growth, improve customer experience and continue to
achieve industry-leading turn around times in our operations. We are focused on creating an end-to-end digital process for
housing loans encompassing digital marketing, exhaustive customer data capture through API integrations with third-party
databases such as Hunter and Perfios, automated underwriting via machine learning algorithms and instant approvals through
mobility solutions. We will continue to invest in systems to capture and collate data and development of analytics tools.

We aim to upgrade and automate our existing loan application processing and credit assessment systems by developing advanced
underwriting algorithms. We will further enhance our mobility solutions to improve customer experience and sales productivity.
As a result of our technology platforms and initiatives, we believe that we will be able to increase the scale and effectiveness of
our operations without a proportionate increase in our operational expenses.

Expand Our Branch Network in Large Affordable Housing Markets

We intend to expand our business in a contiguous manner into regions with increasing urbanization, growing commercial activity
and rising household incomes. Before setting up new branches, we will continue to conduct in-depth studies and market research
to assess potential demand for our products and engage with local property valuers and legal advisors. We currently operate 65
branches covering 11 states and a union territory in India, of which we had set up 29 branches between April 1, 2017 and
September 30, 2019 and we expect our future growth to be from such branches as we continue to gain market share. We also
intend to increase the number of our branches to 90 by the end of the financial year 2021, in order to achieve deeper penetration
in our existing 11 states and union territory. Our new branches will be set up to increase presence in existing districts as well as
cover 20 new districts that have high growth potential. We believe that this high-density model would allow us to grow our
business with lower costs and increase our profitability.

Grow the Productivity of Our Existing Branches

We focus on increasing the productivity of our existing branches to drive our growth. We categorize our branches into large
branches, mid-sized branches and small branches, on the basis of the Gross Loan Assets of each branch, and we track key
performance indicators such as growth in Gross Loan Assets and disbursements per branch to determine branch productivity.
While some of our branches currently operate at optimum levels, we intend to focus on improving productivity at our newer
branches. As of September 30, 2019, we had 19 large branches operating with average Gross Loan Assets of ₹ 983.44 million,
19 mid-sized branches operating with average Gross Loan Assets of ₹ 471.54 million, and 27 small branches operating with
average Gross Loan Assets of ₹ 129.23 million. We believe that we have set up a scalable operating model, which will assist us
in expanding our operations with lower incremental costs to drive efficiency and profitability.

Diversify Sources of Borrowings to Optimize Borrowing Costs

We have historically secured funding from private and public sector banks, the NHB and through assignment transactions. As
of September 30, 2019, we did not have any outstanding debt securities. As we continue to increase the scale of our operations,
we intend to diversify the sources of our funding to reduce dependence on term loans and optimize our capital costs. To diversify
sources of capital, we seek to obtain funding through the issuance of non-convertible debentures and external commercial
borrowings. We also intend to continue to further increase our lender base, which has grown from 10 as of March 31, 2017 to
14 as of September 30, 2019. We have been able to reduce our average cost of borrowings (excluding assignments) from 9.8%
as of March 31, 2017 to 8.5% as of March 31, 2019, due to factors including an improvement in our credit ratings and our
financial performance.

We are focused on improving our asset and liability management to ensure that we continue to have a positive asset-liability
position. We believe that this will help us improve our credit ratings further and reduce the average cost of our borrowings.

Focus on Enhancing Our Risk Management Framework

As we increase the scale of our operations and expand into new geographies, we intend to focus on enhancing our risk
management framework to maintain the credit quality of our loan portfolio. Our risk management initiatives will include
obtaining a better understanding of the geographies in which we are present and the ones where we intend to expand to, improving
the credit scoring models and algorithms that we have currently deployed, improving our collection techniques and our property
underwriting procedures.

Credit assessment is crucial to our operations since several of our customers are new to credit or belong to low and middle-
income groups. Our strength in credit assessment is derived from our well-educated and trained front-end teams who spend time
with our prospective customers and provide a detailed assessment of their income sources, employment stability, savings and
repayment capacity. We will continue to invest in hiring and training people to ensure that we maintain our proficiency in credit
assessment.

138
We also intend to continue serving salaried customers in the 11 states and a union territory in which we are currently present. As
of September 30, 2019, 72.6% of our Gross Loan Assets came from salaried customers. We believe that salaried customers are
more resilient from a credit quality perspective and this will help us build a robust loan portfolio.

Description of Our Business

We primarily offer customers housing loans for the purchase or construction of homes, which comprised 91.5% of our Gross
Loan Assets, as of September 30, 2019. We also offer other loans comprising loans against property, developer finance loans
and loans for purchase of commercial property, which comprised 4.7%, 2.8% and 1.1% of our Gross Loan Assets, as of
September 30, 2019, respectively.

The following table sets forth details of our Gross Loan Assets, disbursements and average ticket size for our housing loans and
other loans, for the periods indicated:

(₹ in million, except CAGR)

Metric As of and for the six months ended As of and for the financial year ended CAGR
September 30, March 31, 2017- 2019
2019 2018 2019 2018 2017
Gross Loan Assets:
Housing Loans 28,475.49 17,653.35 22,486.95 13,022.14 8,196.78 66%
Other Loans
Loans against property 1,463.94 483.12 858.27 287.40 233.96 92%
Developer finance loans 866.08 802.67 840.66 175.92 - -
Loans for purchase of 328.25 150.57 249.86 73.86 42.42 143%
commercial property
Disbursements:
Housing Loans 7,871.80 6,156.16 13,858.78 7,115.37 4,086.45 84%
Other Loans
Loans against property 646.17 228.52 645.32 109.05 127.69 125%
Developer finance loans 246.46 701.60 1,032.31 178.00 - -
Loans for purchase of 93.10 82.07 191.80 52.87 29.43 155%
commercial property
Average Ticket Size on Gross Loan Assets (on the basis of the sanctioned amounts):
Housing Loans 1.02 1.02 1.02 1.02 1.03
Other Loans
Loans against property 0.90 0.86 0.88 0.82 0.87
Developer finance loans 68.18 61.16 61.44 36.14 -
Loans for purchase of 0.87 0.82 0.84 0.81 0.82
commercial property

Branch Network

As of September 30, 2019, we had a network of 65 branches covering over 60 districts in 11 states and a union territory in India.
According to the CRISIL Report, the 11 states and union territory in which we are present accounted for approximately 79% of
the affordable housing finance market in India during the financial year 2019.

139
The following map sets forth our branch network in India:

Note: Based on Experian data for affordable housing

The following table sets forth details of our branch network as of September 30, 2019:

State Number of Branches Number of Districts Percentage of Gross

Loan Assets
Gujarat 19 10 40.5%
Maharashtra 13 13 24.6%
Tamil Nadu 9 8 9.2%
Karnataka 4 1 8.8%
Rajasthan 6 4 4.5%
Telangana 3 2 4.0%
Madhya Pradesh 5 3 3.2%
Uttar Pradesh 1 3 2.4%
National Capital Region and Haryana 1 10 1.2%
Chhattisgarh 1 3 0.9%
Andhra Pradesh 3 3 0.8%
Total 65 60 100.0%

Before setting up a new branch in a district, we conduct an in-depth study of the micro markets around the branch to assess
potential demand for housing finance and target regions with increasing urbanization and housing demand. We have increased
the scale of our operations and grown our branches by adopting a strategy of contiguous expansion across regions and we set up
branches strategically to be accessible to customers. For example, in Chennai, we commenced our operations in 2012 in the

140
Tambaram area where our first branch is located. Thereafter, we set up our second branch at Avadi in 2016 and added two more
branches at Perambur and Tiruvallur to be closer to customers and we currently have four branches catering to the Chennai
market. The following map illustrates the growth of our branch network in Chennai over the years:

Map not to scale.

We categorize our branches into large branches, mid-sized branches and small branches, on the basis of the Gross Loan Assets
of each branch, and track key performance indicators such as growth of Gross Loan Assets and disbursements per branch to
determine branch productivity. As of September 30, 2019, we had 19 large branches operating with average Gross Loan Assets
of ₹ 983.44 million, 19 mid-sized branches operating with average Gross Loan Assets of ₹ 471.54 million, and 27 small branches
operating with average Gross Loan Assets of ₹ 129.23 million.

The following table sets forth the vintage wise details of our branches:

As of September 30, 2019

Average Vintage Number of Gross Loan Gross Loan Assets
(in months) Branches Assets (₹ in per branch (₹ in
million) million)
Top 30% Branches (Large branches) 51.71 19 18,685.36 983.44
Next 30% Branches (Mid-sized branches) 40.41 19 8,959.18 471.54
Bottom 40% Branches (Small branches) 26.73 27 3,489.22 129.23

Our branches typically comprise three to four relationship managers, two customer service managers and one branch manager.
Our relationship managers are responsible for business development and enrolling diverse origination channels, sales, capture
customer information and collections. They visit a customer’s home and place of work to verify and record customer related
information and are responsible for collections from their branch portfolio. Our customer service managers are responsible for
counselling customers, disbursals, cross selling and customer service functions. They educate a customer on the loan process
and documentation required. They also manage relationships with builders and customers during the disbursal process. They act
as the initial point of contact for any customer complaints or queries. Our branch managers are responsible for the overall
functioning of the branch and act as the CEO of the branch. They oversee functions such as business development, sales, our
processes, collections and handle escalations in builder and customer service functions.

Origination Channels

We utilize a diverse range of lead sourcing channels such as connectors, architects, contractors, affordable housing developers,
in addition to conducting loan camps, micro marketing activities, employee and customer referrals and branch walk-in customers.
Our network of connectors has increased from over 470 connectors as of March 31, 2018 to over 1,000 connectors as of

141
September 30, 2019, and we manage their leads effectively through our connector mobile application. For the six months ended
September 30, 2019 and the financial year 2019, we sanctioned 6,093 and 9,555 loans on account of leads generated through
1,431 and 1,331 connectors, respectively.

Customer Base and Customer Service

We serviced 37,086 active loan accounts as of September 30, 2019. We serve salaried customers who accounted for 72.6% of
our Gross Loan Assets as of September 30, 2019, while self-employed customers accounted for 24.6% of our Gross Loan Assets.
Customers from the low and middle-income groups accounted for 71.0% of our Gross Loan Assets, while 35.9% of our Gross
Loan Assets were from customers were new to credit, as of September 30, 2019.

The following table sets forth certain details of our customer base as of the dates indicated:

September 30, September 30, March 31, 2019 March 31, 2018 March 31, 2017
2019 2018
Number of total loan 37,086 21,689 29,372 15,723 9,747
accounts
Salaried loan 74.4 74.6 74.5 72.7 68.5
accounts (%)
Self-employed loan 25.6 25.4 25.5 27.3 31.5
accounts (%)
New to Credit loan 44.1 47.1 45.8 48.1 49.8
accounts* (%)
* Indicates the percentage of loan accounts that did not have a credit score at the time of the sanction of the loan.

Our salaried customers are typically employed by small firms or work in junior positions in larger companies, while our self-
employed customers are small business owners. Our customers find it difficult to disrupt their work routines to apply for a loan
and comprehend the terms of a loan transaction. Our customers typically face difficulties in disrupting their work routines in
order to apply for a loan and comprehending the terms of a loan agreement. To address such concerns, we have set up a customer
friendly process right from the loan application stage to disbursement of the loan. Our front-end teams, which comprise our
relationship managers, customer service managers and branch managers are well educated, trained and able to holistically assess
their sources of income and effectively guide customers on all aspects of a housing loan. We have set up a paperless process to
onboard customers efficiently and our managers conduct home and workplace visits to ensure minimal disruption to a customer’s
daily routine. We conduct a detailed evaluation of all formal and informal sources of our customer’s income to determine the
right size of the loan. We also review documents relating to assets of the customer such as life insurance policies, property deeds,
vehicle ownership and ownership of the business, for the purpose of credit evaluation.

We have an integrated customer relationship management and loan management system, which serves as a single portal for all
internal and external customer related interactions. Our systems are designed to facilitate a sanction within an average turn-
around-time of 48 hours, which we calculate from the time we collate all customer information in our database to sanctioning
the loan.

We maintain high levels of transparency in our interactions with customers and conduct mandatory counselling sessions to
educate our customers on the key terms of their loan agreements. We offer mobility solutions through dedicated mobile
applications for our customers to enable quick and transparent loan related transactions. As of September 30, 2019, our customer
mobile application ‘Home First Customer Portal’ had approximately 16,200 active registrations comprising approximately 44%
of our customer base and currently has a rating of 4.1 on the Google Play Store. Through our mobile application, customers can
also prepay loans without any prepayment charges.

All our customers are mapped to a dedicated relationship manager, backed by a customer service manager and all customer
queries are recorded on our system and linked to respective customer loan accounts to provide an omni-channel view on the
customer. We endeavor to address a significant majority of customer queries within 24 hours.

As a result of our expertise, experience, business model and a customer centric approach, we are able to effectively serve
customers and achieve superior net promoter scores. We have commissioned Ormax Consultants Private Limited (“Ormax”) to
determine our net promoter score with effect from January 2018. Ormax determines our net promoter scores on a periodic basis
through telephonically administered questionnaires by selecting recent customers from our database on a random basis.

Case Studies

Case Study Type: Formal Salaried

Borrower: At the time of sanctioning the loan, our customer was a 44-year old school teacher in Bengaluru who had several
years of teaching experience. She also offered private home tuitions for several students at her residence. Private tuitions were a

142
steady way of earning additional income to support her family, which included her husband and two children who were pursuing
higher education. Her monthly income was ₹ 19,348. She also received additional income from conducting private tuitions. Her
husband worked as a maintenance officer in an aerospace laboratory and earned approximately ₹ 13,000 per month.

Her story: This customer had received a plot from her parents through a gift deed and started the construction of the home. By
the time the construction of the first floor was completed, she was short of funds and needed a loan to continue the work.

How did we assist her: The valuation report specified the property value to be approximately ₹ 4 million and she required a loan
of ₹ 1.5 million for construction. She was introduced to our Company by one of our connectors, who passed on the lead to a
relationship manager. The relationship manager counselled the couple over the phone on their loan eligibility, made them aware
of the easy monthly prepayment facilities and made an appointment to visit their home. The relationship manager verified her
employment at the school and made a visit to her residence to verify the home tuition classes. On obtaining relevant verification,
he scanned all the original KYC and other important documents available and logged in the case for the final approval.

Unlike traditional institutions that rely only on the salary income, we were able to assess her creditworthiness based on her total
income sources (salary, private tuition, and husband’s income). The total assessed income was ₹ 49,000 per month and we were
able to sanction a loan of ₹ 1.5 million for a tenure of 20 years at a rate of interest of 13%, which resulted in an EMI of ₹ 17,574.
The LTV in this case was 37.6%. We believe the couple were satisfied with our prompt service and continue to use our mobile
application for matters related to their loan.

Case Study Type: Informal Salaried

Borrower: At the time of sanctioning the loan, our customer was a 32-year old diamond polisher in Surat with over a decade of
work experience. He received a salary of ₹ 20,000 per month, which we had verified with his employer. His wife also worked
as a diamond polisher and received a salary of ₹ 9,000 per month. Both salaries were paid in cash.

His story: This customer wanted to purchase his own house worth ₹ 1 million and was introduced to our Company by one of our
connectors.

How did we assist them: We obtained a third party valuation report, which determined the value of the property to be
approximately ₹ 1 million and the couple required a loan of ₹ 0.8 million to purchase the property. Our relationship manager
spoke to the couple to counsel them on the process of obtaining a loan from our Company and informed them of the easy monthly
prepayment facilities as well as the Pradhan Mantri Awas Yogna - Credit Linked Subsidy Scheme. Our relationship manager
conducted a workplace visit for the couple. He also visited their place of residence, scanned original KYC and other documents
available and logged in the opportunity in our cloud based CRM for final approval.

Unlike traditional institutions that rely only on the documented income, we were able to assess the couple’s creditworthiness
holistically. Their total assessed income was ₹ 29,000 per month and we sanctioned a loan of ₹ 0.8 million for a tenure of 20
years at a rate of interest of 13.5%, which resulted in an EMI of ₹ 9,659. We also assisted them in applying for the PMAY
subsidy of ₹ 267,280, which would reduce their EMIs by ₹ 3,500 per month.

Case Study Type: Self Employed

Borrower: At the time of sanctioning the loan, our customer was a 36-year old iron fabricator and ran his own fabrication unit
in Chennai having developed his welding business over several years. He fabricated items such as iron gates, rolling shutters and
window grills and had employed other people in his workshop. He also worked on orders from corporate customers. His business
had a turnover of approximately ₹ 1.50 million per month, which we verified through purchase orders, bulk order invoices and
bank statements. After deducting his business expenses, he had a documented income of ₹ 40,000 per month.

His story: This customer was living with his family in a rented house with a monthly rental of ₹ 8,000. The customer’s wife was
a homemaker and the couple had two children who were studying in school. Although the borrower had only completed his
education until the tenth grade, he had a keen business sense. He was looking for a ready possession property in the range of ₹ 1
million to ₹ 1.2 million. He was introduced to our Company by someone from the builder’s office.

How did we assist him: We obtained a third party valuation report, which determined the value of the property to be
approximately ₹ 1.2 million. The borrower required the maximum loan that was possible to purchase the property. Our
relationship manager visited the borrower’s workshop to understand the scale of his business and verified the stock at the
workshop. The borrower appeared to be technology savvy and was using online directory services to generate more leads for his
business. Our relationship manager also visited his residence and then logged in the opportunity in our cloud based CRM for
final approval, along with the KYC documents, shop ownership license and other investment documents. We were able to
sanction the borrower a loan of ₹ 0.93 million within four hours from the receipt of all necessary documentation and submission
of the case for approval. The loan was for a tenure of 20 years at a rate of interest of 14.5%, which resulted in an EMI of ₹ 11,904.

143
Case Study Type: Formal Salaried

Borrower: At the time of sanctioning the loan, our customer was a 33-year old quality analyst, who had completed his graduation
and worked at a business process outsourcing company for nine years. He received a monthly salary of ₹ 30,000, which was
evidenced by his salary slips and bank account statements. The borrower had a wife and a toddler and lived in a rented house in
suburban Mumbai.

His story: The borrower lived in a small house with very basic amenities and shared toilets. He wanted to purchase a small house
in the urban peripheries of Mumbai, which would at least have a clean toilet for his family to use. He had saved ₹ 224,000 to be
used as a down payment and was looking for a ready possession property worth ₹ 1 million with the help of a home loan. While
booking his property, the builder’s sales representative referred him to our Company for a home loan.

How did we assist him: Upon receiving the lead, our relationship manager spoke to the borrower and counseled him on the
process of obtaining a loan from our Company. The borrower was also informed of our easy monthly prepayment facilities and
Pradhan Mantri Awas Yojana - Credit Linked Subsidy Scheme. Our relationship manager checked all the borrower’s documents
and educated him on the dos and don'ts of a home loan since he was a first time borrower. Our relationship manager then scanned
all the relevant documentation and logged in the opportunity in our cloud based CRM for final approval. We were able to sanction
the borrower a loan of ₹ 0.89 million for a property, which was valued by a third party valuer at ₹ 1.16 million, within four hours
from the receipt of all necessary documentation and submission of the case for approval. The loan was for a tenure of 20 years
at a rate of interest of 11.9%, which resulted in an EMI of ₹ 9,760. We also assisted the borrower with applying for a PMAY
subsidy of ₹ 214,756, which reduced his EMIs by ₹ 2,000 per month.

Loan-to-Value (LTV) Ratio, EMI and Tenure of Housing Loans

The NHB Directions prescribe the maximum permissible parameters of the loan amount that can be provided to housing loan
customers. A property with market value of up to ₹ 3.00 million is permitted to have a maximum LTV ratio of up to 90.0%,
property with market value between ₹ 3.00 million and ₹ 7.50 million is permitted to have maximum LTV ratio of up to 80.0%
and property with market value above ₹ 7.50 million is permitted to have maximum LTV ratio of up to 75.0%.

We set an LTV ratio range for each of our loan products that is within the relevant range prescribed by the regulatory authorities.
Our housing loans, loans against property, developer finance loans and loans for purchase of commercial property had an average
loan-to-value on Gross Loan Assets of 58.4%, 31.7%, 21.4% and 54.0%, as of September 30, 2019, respectively.

The amount and LTV of the loan is subject to our credit assessment of the customer and factors including value of the collateral
and regulatory limits. Loans are required to be repaid in equated monthly installments (“EMIs”) over an agreed period. The size
of the EMI depends on the size of loan, interest rate and tenure of loan.

The tenure of our housing loans, loans against property, developer finance loans and loans for purchase of commercial property
can be for a period up to 25, 15, 3 and 15 years, respectively, and vary according to the purpose of the loan, the customer’s age
and the customer segment.

Interest Rates, Fees and Collateral for Housing Loans

We offer customers housing loans at variable interest rates. We determine our reference rate from time to time based on market
conditions and price our loans at either a discount or a premium to our reference rate, adjusted for the risk of each customer’s
profile.

We require our customers to pay certain processing fees and charges prior to the disbursement of the loans at different stages of
the loan application to cover the initial cost of underwriting the loan. These fees and charges are subject to periodic changes
based on market conditions and regulatory requirements. We provide our housing loan customers the option to prepay their loans
without any prepayment charges through our auto-prepay feature on our mobile application. Auto-prepay enables customers to
prepay their loans from amounts starting as low as ₹ 500 on a monthly basis. This feature was introduced with the initiative to
facilitate pre-payments in a manner that would benefit customers in the long-term by reducing their overall loan tenure and
interest payable. Auto-prepay is an auto-debit service where customers can set their monthly pre-payment amount that would be
deducted from their bank account. This amount would be in addition to their EMI. We also provide easy balance transfer options
with no pre-payment charges for our housing loan customers.

The underlying collateral for a loan is the property towards which the loan is provided. The security for loans is created either
through an equitable mortgage by way of deposit of title deeds or a registered mortgage of immovable property.

Credit Approval and Disbursement

We have set up a robust credit approval process comprising the following stages:

144
Initial Screening and Pre-Sanction Check

Fresh customer leads are logged into our system by our relationship managers. All customer interaction and scanning and review
of customer documents are done by our in-house team of well-educated and trained relationship managers. We do not employ
intermediaries or third-parties for customer interaction or loan documentation. Each lead is checked against KYC, credit bureau
and other third-party databases to establish customer credentials. We have set up an efficient paperless process to onboard and
verify customers and determine eligibility. Our relationship managers conduct home and workplace visits to verify living
conditions, employment and income of potential customers.

The completed digital loan application is submitted by our relationship managers along with their commentary on residence and
workplace visits and personal discussion with the customer. This is cross checked by our underwriting and operations team for
a number of factors including completeness of application form, KYC, eligibility, fraud check, credit bureau, income assessment,
loan-to-value, value of collateral, bank statements, debt burden and third party databases for income and asset ownership.

Customer Credit Underwriting

We have a centralized underwriting team assisted by data science backed customer-scoring model to evaluate a customer’s ability
to repay the loan and maintain consistency in underwriting procedures across branches and regions. We have an integrated
customer relationship management and loan management system, which serves as a single platform for all internal and external
customer related interactions and allow sour underwriters to conduct the credit appraisal process in a quick and efficient manner.
Our technology platform enables us to digitally capture over 100 data points of a customer from inception of the lead. We have
also integrated our systems with third-party databases to obtain additional customer data points. This helps us gather data to
assess credit worthiness of the customers and conduct a fraud check in case of any discrepancies. Further, we utilize proprietary
machine learning credit scoring models to assist us with our credit assessment process. The model bifurcates customers into
different categories based on the level of risk, which is then reviewed by our underwriters to make a final decision.

Property Underwriting and Disbursement Process

We assess the value of the collateral at the time of sanctioning the loan and conduct additional checks before disbursing the loan
and giving final approval of the property. Our teams initiate a legal and technical assessment through third party vendors to
verify the authenticity of the technical documents, legal title to the collateral property and its market value. We use an application
for geo tagging of properties and a proprietary machine learning backed property price predictor to initially determine the value
of the collateral property, which helps us to reduce our turnaround time for approving loans, as well as improve our accuracy in
determining the loan to value ratio.

Before disbursement, our teams obtain original documents, legal and technical reports and further information pertaining to
disbursal from the property developer or the customer. We further verify the stage of construction, legal and technical reports
and other documents including demand letter, no-objection certificate and possession letter from the developer. Thereafter, we
seek consent from the customer to disburse the loan amount to the builder.

Loan Collection and Monitoring

We have set up a robust and tiered, collections management system with prescribed collection action at each stage of severity of
default. All our borrowers register for an automated debit facility, which reduces our cash management risk, and we track the
status of installments collected on a real time basis through a collections module. Approximately 94% of our collections for the
financial year 2019 were non-cash based. We employ a structured collection process wherein we remind our customers of their
payment schedules through text messages and automated calls to maintain adequate balance in their account on the due date. We
also use our proprietary machine learning model to predict probability of bounce, which helps us in obtaining early signals of
potential bounce and initiate action such as pre-emptive reminder calls made by branch teams. Our collection process is
completely managed by our branch teams and a significant portion of our employee incentives are dependent on collections.

We initiate recovery action immediately after the customer defaults in their monthly payment and the severity of our action
increases as the number of days past due increase. At one day past due, our front-end field teams call customers and initiative
visits to understand reasons for default and recovery of the dues. At 30 days past due, while our employees continue to engage
with the customer, we send a default notice or loan recall notice depending upon the severity of the case. At 60 days past due,
we send a pre-SARFAESI notice and our employees increase the visit frequency and reiterate the repercussions of the loan
default to the customer. Thereafter, at 90 days past due, we seek to resolve cases by initiating legal action through SARFAESI.
As of September 30, 2019, our 30 days past due was at 1.5% of our Gross Loan Assets and 90 days past due was at 0.9% of our
Gross Loan Assets.

Capital Adequacy Ratios

The NHB Directions require HFCs to comply with a capital to risk (weighted) assets ratio, or CRAR, consisting of Tier I and
Tier II capital. Under these requirements, an HFC’s Tier I and Tier II capital may not be less than 13% on or before March 31,

145
2020; 14% on or before March 31, 2021 and 15% on or before March 31, 2022 of the sum of the HFC’s risk-weighted assets and
the risk-adjusted value of off-balance sheet items, as applicable, with a minimum requirement of Tier I capital of 10.0% on risk-
weighted assets. Further, the NHB Directions require that the Tier II capital may not exceed the Tier I capital.

The following table sets forth certain details of our CRAR in accordance with NHB guidelines, as of the dates indicated:

As of
September 30, September 30, March 31, 2019 March 31, 2018 March 31, 2017
2019 2018
CRAR (%) 47.5 43.7 38.0 42.6 66.7
CRAR - Tier I capital (%) 46.9 42.8 37.4 41.9 66.0
CRAR - Tier II capital (%) 0.6 0.8 0.6 0.7 0.7

The following table sets forth certain details of our CRAR in accordance with our restated Ind AS financial information, as of
the dates indicated:

As of
September 30, September 30, March 31, 2019 March 31, 2018 March 31, 2017
2019 2018
CRAR (%) 47.6 43.8 38.5 43.0 68.5
CRAR - Tier I capital (%) 46.8 42.9 37.7 42.3 67.5
CRAR - Tier II capital (%) 0.7 0.9 0.8 0.8 1.0

Credit Ratings

Our current credit ratings are set forth below:

Rating Agency Instrument Credit Ratings

CARE Ratings ₹ 4.51 billion Term Loans A+ (stable)
ICRA Limited ₹ 32 billion Term Loans A+ (stable)
₹ 2 billion Non-Convertible Debenture Programme A+ (stable)
₹ 1 billion Commercial Paper Programme A1+
India Ratings & Research ₹ 3 billion Commercial Paper Programme A1+

Risk Management Framework

In order to address the risks that are inherent to our business, we have developed a risk governance structure that includes
monitoring by our Board through committees including the Audit Committee, the Risk Management Committee, the Asset and
Liability Management Committee, the Credit Committee, the IT Committee and the Grievance Redressal Committee.

Audit Committee. Our Audit Committee is authorized to review and establish accounting policies, review reports of the statutory
and the internal auditors and meet with them to discuss their findings, suggestions and other related matters. It also evaluates
internal financial controls and risk management systems and procedures periodically.

Risk Management Committee. The Risk Management Committee was formed to assess the Company’s risk profile and key areas
of risk, recommend to the Board the adoption of risk assessment and rating procedures with acceptable levels of risk, articulate
the Company’s policy for oversight and management of business risk, develop and implement a risk management framework
and internal control system, conduct special investigations into areas of corporate risk and breakdowns in internal controls,
review management’s response to our auditor’s recommendations and verify whether such recommendations were adopted.

Asset and Liability Management Committee: The Asset and Liability Management Committee was formed to monitor and
manage our liquidity position by identifying short-term liquidity gaps and implementing immediate actions to correct such gaps,
diversifying our sources of funding to facilitate flexibility in meeting our funding requirements, and maintaining strong capital
adequacy.

Credit Committee: The Credit Committee was formed to ensure effective credit risk management and health of our portfolio
through a process of monitoring adherence to the credit policy, comprehensive credit risk assessment, monitoring portfolio
quality, credit limits and policy recommendations, collateral quality and credit exposure limits and imparting training on credit
evaluation.

IT Committee: The IT Committee was formed to ensure that our management has an effective IT strategic planning process
aligned with our business strategy, ensure that investments in IT represent a balance of risks and benefits for sustaining our
growth and within the acceptable costs, monitor IT resources required to achieve strategic goals and provide high-level direction

146
for sourcing and use of IT resources, to oversee implementation of processes and practices and ensuring that maximum value is
delivered to business, to approve IT strategy and policy documents, define and ensure effective implementation of standards of
IT governance, business continuity and data governance, ensure that there is an appropriate framework of information security
risk assessment, ensure effective due diligence, oversight and management of outsourcing and accountability for all outsourcing
decisions, ensure that a comprehensive risk assessment of our Company’s IT systems is carried out on a yearly basis.

Grievance Redressal Committee: The Grievance Redressal Committee was formed to manage reputation risk, address customer
complaints in a timely manner, to ensure that customers are aware of ways to escalate their grievances within our Company and
their rights to alternate remedies, to ensure service quality by dealing with all complaints efficiently and fairly and adherence to
company policies by our employees.

Risk Management

Risk management forms an integral part of our business. As a lending institution, we face financial and non-financial risks. We
have established a risk management and audit framework to identify, assess, monitor and manage various types of internal and
external risks. We conduct regular training of our staff members with respect to risk related matters, as part of our risk
management process.

Credit Risk

We manage credit risks by using a set of credit procedures and guidelines, laid down in our credit policy, to ensure effective
credit risk management and health of our portfolio. The adherence to the policy and various process is monitored and appraised
in credit committee meetings on a quarterly basis. The policy is amended periodically and to ensure compliance with the
guidelines of NHB as well as other regulatory bodies.

We have implemented a structured credit approval process, including multi-step customer verification and comprehensive credit
risk assessment, which encompasses analysis of relevant quantitative and qualitative information to ascertain the credit
worthiness of a potential customer. As part of our multi-step customer verification, we have established a process by which
separate set of verifications are conducted by a relationship manager and customer service officer to ensure the quality of
customers acquired.

Portfolio quality, credit limits, collateral quality and credit exposure limits are regularly monitored at various levels. Our staff
also undergoes regular training on credit evaluation as part of our risk management process.

Portfolio Concentration Risk

We manage portfolio concentration risk by maintaining a diversified portfolio of loans across various states, cities, products,
developers and projects. We have diversified our presence to 11 states and a union territory as of September 30, 2019, and offer
customers loans for the purchase of homes, loans against property, developer finance loans and loans for purchase of commercial
property. We have a process of defining and monitoring loan exposure to developers and projects. In addition, we utilize a diverse
range of lead sourcing channels, which comprise home loan connectors, walk-in customers at our branches, builders, contractors,
our marketing initiatives, and employee and customer referrals.

Market Risk

We manage market risk by only investing in liquid funds or fixed deposits of banks, in line with our investment policy. Our
strategy for managing market risk involves implementing stringent controls and limits, regular reporting of positions, regular
independent review of all controls and limits, and testing and auditing of all pricing, risk management and accounting systems.

Liquidity Risk

Liquidity risk arises primarily due to asset-liability mismatch caused by a difference in the maturity profile of our assets and
liabilities. This risk may arise from the unexpected increase in the cost of funding on asset portfolio at the appropriate maturity
and the risk of being unable to liquidate a position in a timely manner and at a reasonable price.

We monitor liquidity risk through our Asset and Liability Management Committee. Monitoring liquidity risk involves
categorizing all assets and liabilities into different maturity profiles and evaluating them for any mismatches in any particular
maturities, particularly in the short-term. We actively monitor our liquidity position to ensure that we can meet all borrower and
lender-related funding requirements.

We have an Asset Liability Management Policy in place, to manage the liquidity risk, which provides for several risk
management measures including short term liquidity forecasts which is done to identify any short-term liquidity gaps and
implementing immediate actions to correct such gaps, diversifying our sources of funding to facilitate flexibility in meeting our
funding requirements, and maintaining strong capital adequacy.

147
Operational Risk

We have an operational risk management policy in place, which sets out processes and controls that are required to be monitored
at different points of time in relation to people, systems and processes. The policy is amended from time to time in order to be
compliant with the guidelines of NHB as well as other regulatory bodies. We also attempt to mitigate operational risk by
maintaining a comprehensive system of internal controls, establishing systems and procedures to monitor transactions,
conducting employee rotation, maintaining key back-up procedures, undertaking contingency planning and maintaining a
comprehensive insurance cover. We have implemented a whistle blower policy to encourage our employees to report non-
compliances of our processes and controls. We also have a recovery system and staff accountability formats for following up of
defaulting loan accounts and recovery through SARFAESI.

In addition, we have appointed independent audit firms to conduct internal and process audits at a number of our offices to assess
adequacy of and compliance with our internal controls, procedures and processes, as well as all applicable statutory and
regulatory guidelines. Reports of the internal auditors as well as the action taken on the matters reported upon are discussed and
reviewed in the Audit Committee meetings.

Compliance Risk

Non-compliance with regulatory and statutory requirements, including the NHB and RBI regulations could result in stringent
actions and penalties from the regulatory and statutory authorities. We have a robust corporate governance process in place to
ensure that we are compliant with all the applicable laws, rules, regulations and guidelines.

Reputation Risk

We manage reputation risk by training and instructing our employees to adhere to our Fair Practices Code. We also have a
grievance redressal mechanism in place, to address any customer complaints, which is communicated to all our customers. In
addition, we have established a central service team, who pro-actively reach out to customers, to ensure service quality as well
as adherence to company policies by our branch employees.

Information Technology Risk

We have a well-established IT infrastructure that ensures performance stability and flexibility as well as IT security. We have an
elaborate IT policy in place, which sets out processes and controls that are required to be maintained in relation to the IT systems.
The policy is amended from time to time in order to be compliant with the guidelines of NHB as well as other regulatory bodies.
In addition, we conduct an IT audit once every two years with effect from the financial year 2019, to determine issues and process
level gaps, if any.

As part of our IT risk management process, we consider the information (in IT assets or IT systems) at risk, determine the
consequence of compromise of such information, identify threat, recommend appropriate security controls and safeguards, and
determine the reduced residual risk remaining after the controls and safeguards are implemented. We also train our new and
existing staff in our IT policies, procedures and codes of conduct.

Information Technology

We have established a differentiated technology framework with customized systems and tools, enhancing convenience for our
customers, increasing operational efficiency as well as reducing turnaround times and transaction costs. During the six months
ended September 30, 2019 and the last three financial years, we invested ₹ 146.65 million in our information technology systems.

We capture and store all our data on a cloud services platform, which helps in usability and accessibility of such data, results in
cost savings and improved underwriting practices. We have integrated our systems with third-party databases to obtain additional
customer data.

Our integrated customer relationship management and loan management system provides us with a holistic view of all our
customers and ensures connectivity and uniformity across our branches. We utilize proprietary machine learning and customer
scoring models to assist us with our credit assessment process. The integration of such data across platforms enables us to process
loans in a paperless manner and with low turn around times.

We offer mobility solutions through dedicated mobile applications for our customers to enable quick and transparent loan related
transactions, as well as for connectors who generate leads for us. As of September 30, 2019, our customer mobile application
had approximately 16,200 monthly active users comprising approximately 44% of our customer base. We use a data lake, which
helps us with all stages of the data life cycle of loan consolidation, visualization, machine learning model development, and
model implementation. We can perform real-time analytics to generate customized reports and make better operational decisions.

We also use an application for the geo tagging of properties and a machine learning backed property price predictor, which has
helped us reduce our turnaround time for approving loans, as well as improve our accuracy in determining the loan-to-value ratio.

148
Intellectual Property

We own a combination of trademarks to establish and protect our brands, logos, marketing designs and internet domain names.
As at September 30, 2019, we have registered five trademarks, each under class 36 granted by the Registrar of Trademarks under
the Trademarks Act, 1999 including “Home First”, “HFFC,” “Auto prepay”, “HFFC We’ll take you home” and “No Anxiety On
Loans” and one pending trademark application under class 36 to be granted by the Registrar of Trademarks under the Trademarks
Act, 1999 for “Homefirst We’ll take you home”.

Marketing

Our marketing initiatives include placing advertisements on hoardings, regional newspapers and distribution of leaflets and
posters. We conduct customer referral programs and loan melas to spread awareness of our products. We also run lead generation
campaigns on social media platforms.

Competition

The housing finance industry in India is highly competitive. We face competition from other HFCs, NBFCs small finance banks,
as well as scheduled commercial banks. We generally compete on the basis of the range of product offerings, interest rates, fees
and customer service, as well as for skilled employees, with our competitors. Our primary competitors include Aavas Financiers
Limited, Aspire Home Finance Corporation Limited, Aadhar Housing Finance Limited and Aptus Value Housing Finance India
Limited.

See “Risk Factors – Internal Risk Factors – The Indian housing finance industry is highly competitive and our inability to
compete effectively could adversely affect our business and results of operations.” on page 26.

Insurance

We maintain insurance policies that we believe are customary for companies operating in our industry. Our principal types of
coverage include insurance for burglary, engineering, portable equipment, electronic equipment, standard fire and special peril
insurance, group personal accident insurance, group health insurance, public liability insurance, fidelity insurance, machine
breakdown insurance, package insurance policy and directors’ and officers’ liability insurance. In addition, we have a money
insurance policy pertaining to cash in safes and in transit.

See “Risk Factors – Internal Risk Factors – Our insurance coverage may not be sufficient or may not adequately protect us
against all material hazards, which may adversely affect our business, results of operations and financial condition.” on page
34.

Employees

As of September 30, 2019, we had 738 permanent employees. We are a young and diverse organization with a median age of 25
years, and approximately 32% of our employees are women, as of September 30, 2019.

We primarily hire employees who have obtained their engineering or management degrees. We hire them directly from campuses
instead of lateral hires. We have an elaborate one-year training and development program for all our new hires, which comprises
classroom-training sessions, on the job training and a buddy program. We also have a distance-learning program in association
with a leading business school for our employees who have obtained their bachelor of technology degree. In addition, we have
entered into arrangements with Manipal Global Academy of BFSI, a division of Manipal Global Education Services Private
Limited, to educate and provide training to 500 fresh candidates hired by us from time to time for functions including customer
service, corporate governance, product mix, risk monitoring and management and business development. Candidates who
complete their training will be awarded with a certificate from Manipal Global Education Services Private Limited. As of
September 30, 2019, approximately 67% of our employees had obtained a post-graduation in business administration or
management and approximately 47% had a bachelor in technology degree or a bachelor in engineering degree.

We have established a well-defined career development path for our employees. Employees who have obtained their engineering
degree join our Company as graduate management associates in the sales function and then proceed to become a relationship
manager at their branch, while employees who have obtained their management degrees join directly as relationship managers.
After a few years, our relationship managers are eligible to apply for the position of a branch manager designate and are then
promoted to the position of a branch manager. Our branch managers may proceed to become regional managers or be assigned
a senior head office role.

Our front-end teams comprise relationship managers, who are responsible for business development, sales and loan collections;
customer service managers, who are responsible for customer counselling and service; and branch managers who are responsible
for the functioning of the branch. Our front-end teams are well educated, trained and able to effectively guide customers on
aspects of obtaining financing and assess their sources of income.

149
The following table sets forth the function wise split of our employees as of September 30, 2019:

Particulars Number of Employees

Central collections coordination 4
Corporate 8
Credit 11
Finance 11
Human resources 5
IT 13
Administration, legal and secretarial 4
Marketing 8
Operations 11
Product 10
Sales 484
Service 168
Strategic alliances 1
Total 738

In addition to compensation that includes both salary and allowances (including performance linked bonuses), we provide our
employees other benefits which include insurance coverage, medical reimbursements and employee stock options. As of
September 30, 2019, 128 employees are covered under our ESOP program.

Corporate Social Responsibility

We have adopted a Corporate Social Responsibility (“CSR”) policy in compliance with the requirements of the Companies Act
2013 and the Companies (Corporate Social Responsibility) Rules, 2014 notified by the Central Government. Our CSR initiatives
are part of our overall strategy of engaging with communities and our initiatives are aimed towards promoting preventive
healthcare and sanitation facilities, providing employment through enhancing vocational skills, promoting gender equality,
contribution to the funds set up by the Central Government for socio-economic development, promoting environmental
sustainability and providing safe drinking water.

We have made contributions to the Prime Minister’s National Relief Fund for promoting socio-economic development, and relief
and welfare of the scheduled castes, the scheduled tribes, other backward classes, minorities and women.

Properties

Our registered and corporate office located at 511, Acme Plaza, Andheri Kurla Road, Andheri East, Mumbai, 400059, has been
obtained on a leave and license basis and is valid till April 30, 2021. In addition, our Company has other administrative offices
in Mumbai.

As of September 30, 2019, we had a network of 65 branches and the premises of all our branches have been taken on lease or
leave and license basis.

150
 KEY REGULATIONS AND POLICIES IN INDIA

Given below is a summary of certain sector specific laws and regulations in India, which are applicable to us. The information
detailed in this chapter has been obtained from various statutes, regulations and/or local legislations and the bye laws of relevant
authorities that are available in the public domain. This description may not be exhaustive, and is only intended to provide
general information to investors, and is neither designed, nor intended as a substitute for professional legal advice. Judicial and
administrative interpretations are subject to modification or clarification by subsequent legislative, judicial or administrative
decisions. For details see, “Government and other Approvals” on page 301.

The statements below are based on the current provisions of Indian law, and the judicial and administrative interpretations
thereof, which are subject to change or modification by subsequent legislative, regulatory, administrative or judicial decisions.

Introduction - Registration as an HFC and generally applicable regulations

Our Company is a HFC with a certificate of registration granted by the NHB pursuant to which our Company was allowed to
commence and carry on the business of a housing finance institution without accepting public deposits. Our Company is primarily
engaged in the business of providing loans and advances for housing activities.

The NHB was set up pursuant to the NHB Act, as a principal agency to promote housing finance institutions and to provide
financial and other support to such institutions. In terms of the NHB Act, the primary objectives of the NHB are (i) to facilitate
finance and other resources for development of housing and create a framework for institutions for enhancing the quality of
credit and affordability; and (ii) to regulate and supervise the activities of HFCs. In line with these objectives and in terms of the
NHB Act, the NHB has issued the NHB Directions, which amongst others, set out matters relating to acceptance of deposits by
HFCs, prudential norms for income recognition, accounting standards, provision for bad and doubtful assets, capital adequacy
and concentration of credit and investments to be observed by the HFCs and matters ancillary and incidental thereto.

Pursuant to the Finance (No. 2) Act, 2019, the NHB Act has been amended, pursuant to the NHB Act Amendments, to transfer
the regulating authority for the housing finance sector from NHB to RBI. Accordingly, amongst others, (i) HFCs are now required
to apply to the RBI for registration under the NHB Act, in place of the NHB; and (ii) the RBI has now been conferred the power
(a) to determine the percentage of assets to be maintained in terms of its investments and its reserve fund to be maintained; and
(b) to regulate, by specifying conditions or prohibit the issue by any HFC of any prospectus or advertisement soliciting deposits
of money from the public. However, the NHB Act Amendments, retain certain powers with the NHB, in addition to conferring
such powers on the RBI, such as power to conduct inspections and request for documents from the HFCs.

Further, pursuant to the notification of the RBI dated November 19, 2019 and the amendments to the ‘Master Directions -
Exemptions from the RBI Act, 1934’ issued by the RBI on November 11, 2019, the provisions of Chapter IIIB of the RBI Act
are applicable to NBFCs which are housing finance institutions (other than the provisions of Section 45 –IA of the RBI Act).
Chapter IIIB of the RBI Act, amongst others, confers on the RBI powers to determine policy and issue directions in relation to
NBFCs and in terms of such chapter, NBFCs (including our Company) are bound to follow the policy so determined and the
directions so issued.

Accordingly, activities of HFCs, are primarily regulated by the RBI and the NHB, including various aspects of our business such
as capital adequacy, sourcing of funds, on-boarding of customers, credit approval and risk management and asset classification
and provisioning. Certain other generally applicable legislations as set out below also regulate other aspects of our business such
as recovery of debt and taxation.

Capital adequacy

As per the NHB Directions, we are required to maintain a minimum capital adequacy ratio, consisting of tier I capital and tier II
capital. Currently HFCs are required to comply with a CRAR, consisting of tier I and tier II capital, of not less than 13% of its
aggregate risk weighted assets and of risk adjusted value of off-balance sheet items, on or before March 31, 2020, 14% on or
before March 31, 2021 and 15% on or before March 31, 2022 and thereafter. At a minimum, tier I capital of HFCs cannot be
less than 10%. Further, the total tier II capital at any point of time, should not exceed 100% of tier – I capital.

Source of funds

HFCs can generally raise funds though borrowing or by raising equity. The sourcing of funds by HFCs are subject to regulation
primarily by the NHB and the RBI. The limits on borrowings by HFCs are primarily governed by the NHB Directions. The NHB
Directions currently permit HFCs to borrow up to 14 times their NOF until March 31, 2020 and after which this limit shall be
further reduced to 13 times of their NOF until March 31, 2021 and subsequently to 12 times of their NOF until March 31, 2022.
Further, the NHB NCD Directions require HFCs to have in place a board approved policy for resource planning and accordingly,
the resource raising activities of our Company are primarily governed by our internal resource planning policy which aims to
ensure a strategic and smooth management of interest rate risk and liquidity risk.

151
Term Loans:

In terms of the Master Circular – Housing Finance dated July 1, 2015 issued by the RBI, banks are permitted to grant term loans
to HFCs taking into account (long-term) debt-equity ratio, track record, recovery performance and other relevant factors
including the other applicable regulatory guidelines.

NHB Refinance:

NHB offers refinance assistance to primary lending institutions (“PLIs”) in respect of their housing loans to individuals, and
also for their loans to other institutions for housing finance and construction finance for affordable housing. HFCs registered
with the NHB, being a PLI, are eligible to obtain refinance from the NHB in respect of their direct lending for up to 100% of the
housing loan sanctioned and disbursed by HFCs for acquisition or construction of new housing units and for upgradation or
major repairs, in accordance with the Refinance Scheme. The NHB provides such refinance assistance in terms of its various
refinance schemes such as the Regular Refinance Scheme, Special Urban Housing Refinance Scheme for Low Income
Households and the Affordable Housing Fund, each of which set out certain restrictions applicable to loans provided by the
HFCs in terms of their loan size, tenure, location of property and the ultimate borrower in some cases. The terms of the re-finance
assistance, such as the tenure and interest rate applicable is subject to eligibility of the loans under the respective schemes. For
instance, while the Regular Refinance Scheme provides for refinance assistance in respect of housing loans extended by HFCs
for, amongst others, construction and purchase of dwelling units with no restrictions on loan size, location and the ultimate
borrowers of such loans, the Affordable Housing Fund includes eligibility conditions based on the annual household income of
the borrowers depending on the location of the property being in urban or rural areas, as prescribed thereunder.

However, in terms of the NHB Act, the NHB may require the HFCs to discharge in full their liabilities to the NHB in certain
instances, such as if there is a reasonable apprehension that the HFC is unable to pay its debts or if the NHB thinks it is necessary
to protect the interests of the NHB. Further, in terms of the NHB Act, in entering into such borrowing arrangements with HFCs,
the NHB may impose such conditions as it may think necessary or expedient for protecting the interests of the NHB.

Other borrowings:

Further, in the future, we may also raise funds by way of issue of NCDs on a private placement basis. Such issue of NCDs is
regulated by the NHB NCD Directions, which amongst others, includes eligibility requirements and conditions in relation to the
credit rating and maturity of such NCDs.

External commercial borrowings (“ECB”) are commercial loans raised by eligible resident entities from recognised non-resident
entities in terms of the ECB Master Directions. While availing of such ECBs, HFCs are required to conform to parameters such
as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling set out in the ECB Master Directions.

Raising Equity:

In addition to raising funds though borrowings, HFCs may also raise funds by way of issue of its equity shares. In terms of the
Housing Finance Companies - Approval of Acquisition or Transfer of Control (NHB) Directions, 2016 dated July 1, 2019 issued
by the NHB, HFCs are required to comply with restrictions on, amongst others, change in shareholding or management of the
HFC. The prior written permission of the NHB would be required

for any change in shareholding, including progressive increases over time, which would result in acquisition or transfer of
shareholding of 26% (10%, in case of HFCs, accepting or holding public deposits) or more of the paid-up equity capital. No such
prior approval would be required in case such change is caused by buyback of shares or reduction in capital, which has been
approved by a competent court and subsequently, reported to the NHB not later than one month from the date of its occurrence

On-boarding of customers and marketing

Advertising, Marketing and Sales:

The Guidelines on Fair Practices Code dated July 1, 2019 issued by the NHB (“Fair Practices Code”), seeks to promote good
and fair practices by setting minimum standards in dealing with customers, increase transparency, encourage market forces to
achieve higher operating standards and promote fair and cordial relationship between customer and HFCs, and foster confidence
in the housing finance system. HFCs are required to ensure that advertising and promotional material is clear and not misleading
and that privacy and confidentiality of the customers’ information is maintained. Further, whenever loans are given, HFCs should
explain to the customer the repayment process, including the amount, tenure and periodicity of repayment.

The Fair Practices Code also prescribes certain requirements applicable at the time of applications for loans, loan appraisal and
disbursement of loans. For instance, HFCs are required to include in the loan application forms all necessary information so that
the applicant may make a meaningful comparison with the terms offered by other HFCs, to devise a system of giving
acknowledgement for receipt of all loan applications and to communicate in writing the reasons for rejection of the application.

152
KYC and AML:

In terms of the provisions of the PMLA and the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, HFCs
are required to follow certain customer identification procedures while undertaking a transaction either by establishing an account
based relationship or otherwise by monitoring their transactions. Further, the guidelines on ‘Know Your Customer’ & ‘Anti-
Money Laundering Measures’ for HFCs issued by the NHB by way of its circular dated March 11, 2019, require HFCs to frame
a policy on ‘Know Your Customer’ and ‘Anti Money Laundering Measures’ (“KYC-AML Policy”) duly approved by its board
of directors. Further, such KYC-AML Policy is required to include four key elements (i) customer acceptance policy, which
includes requirements applicable at the time of opening of the account by the customers and client due diligence requirements;
(ii) risk management, which requires risk categorization of customers, anti money laundering measures, proper management
oversight and implementation of appropriate internal systems and controls; (iii) customer identification procedures, when
commencement of an account based relationship, when there is a doubt about the authenticity or adequacy of the customer
identification data or when selling third party products; and (iv) client due diligence procedures, which involves obtaining certain
identification documents (such as PAN or Aadhaar number) from the individual when he establishes an account based
relationship or when dealing with the individual who is the ‘beneficial owner’, authorised signatory or power of attorney holder
related to the legal entity.

Credit Approval and Disbursement

The granting of housing loans and disbursements of such loans by HFCs is primarily governed by the directions and circulars
issued by the NHB, such as the NHB Directions and the Fair Practices Code. In terms of the NHB Directions, amongst others,
(i) no HFC may grant housing loans to individuals of up to ₹ 3 million with an LTV ratio exceeding 90%, of between ₹ 3 million
to ₹ 7.50 million with LTV ratio exceeding 80%, and above ₹ 7.50 million with LTV ratio exceeding 75%; (ii) no HFC shall
lend to any single borrower an amount exceeding 15% of its owned fund, and to any single group of borrowers, an amount
exceeding 25% of its owned fund; and (iii) all HFCs must ensure that disbursement of housing loans sanctioned to individuals
should be closely linked to the stages of construction of the housing projects/ houses and upfront disbursal should not be made
in cases of incomplete/ under-construction/ greenfield housing projects/ houses. Further, the Fair Practices Code requires HFCs
to convey certain terms and conditions at the time of sanction of loans such as the annualised interest rate, EMI structure and
prepayment charges. Further, our internal Credit Policy lays down parameters, procedures and systems for providing finance to
individuals and persons for construction, repair and development of a house for residential purposes and to builders in respect of
their projects for constructing residential and commercial properties.

Further, in terms of the Master Direction - Priority Sector Lending - Targets and Classification dated July 7, 2016 issued by the
RBI, priority sector advances and loans granted by scheduled commercial banks regulated by the RBI to HFCs approved by
NHB for the purpose of refinance, for on-lending for purchase, construction or reconstruction of individual dwelling units or for
slum clearance and rehabilitation of slum dwellers, are subject to an aggregate loan limit of ₹ 2 million per borrower.

Asset classification, Provisioning and Income Recognition

In terms of circulars issued by the NHB, HFCs are required to comply with the provisions of Ind AS, as notified by the MCA
from time to time, including the date of implementation notified by the MCA by its notification dated March 30, 2016.
Accordingly, the financial reporting of financial assets, financial liabilities, provisioning and income recognition is primarily
governed by Indian Accounting Standard (Ind AS) 109. For further details, see “Management’s Discussion and Analysis of
Financial Conditional and Results of Operations” beginning on page 275.

However, for regulatory and supervisory purposes, including various kinds of reporting to the NHB, HFCs are required to follow
the relevant provisions of NHB Act and NHB Directions including framework on prudential norms and other related circulars
issued in this regard by the NHB from time to time. Every HFC is required to, after taking into account the degree of well-defined
credit weaknesses and extent of dependence on collateral security for realization, classify its lease or hire purchase assets, loans
and advances and any other forms of credit into standard assets, sub-standard assets, doubtful assets, and loss assets. Further,
every HFC is required to make provisions against sub-standard assets, doubtful assets and loss assets in accordance with
provisioning requirements after taking into account the time lag between an account becoming NPA, its recognition as such, the
realization of the security, and the erosion over time in the value of security charged.

The NHB Directions require that income recognition be based on recognized accounting principles. Amongst others, income
including interest, discount or any other charges on NPA shall be recognized only when it is actually realised. Any such income
recognized before the asset became NPA and remaining unrealized shall be reversed.

Risk Management Framework

Asset Liability Management:

The NHB has, by way of its circular dated October 11, 2010, prescribed guidelines for asset liability management system in
HFCs (“ALM Guidelines”). In terms of the ALM Guidelines, HFCs are exposed to several major risks in the course of their

153
business - credit risk, interest rate risk, equity/commodity price risk, liquidity risk and operational risk. In terms of the ALM
guidelines, the asset liability management (“ALM”) process involves, amongst others, (i) ALM information systems, which
includes management information systems and availability of information and accuracy, adequacy and expediency thereof; (ii)
ALM organisation, which includes involvement of top level management; and (iii) identification, measurement and management
of risks and having in place risk policies and tolerance levels. Further, the scope of the ALM function of the HFC includes,
amongst others, liquidity risk management, management of market risks, funding and capital planning, profit planning and
growth projection, forecasting and analysing ‘what if scenario’ and preparation of contingency plans.

Corporate Governance:

The Master Circular - Housing Finance Companies – Corporate Governance (NHB) Directions, 2016 dated July 1, 2019 (the
“Corporate Governance Directions”) issued by the NHB apply to every non-public deposit accepting HFC with assets size of
₹ 500 million and above, as per the last audited balance sheet, and all public deposit accepting / holding HFCs (“Applicable
HFC”). Applicable HFCs are required to constitute, amongst others, an audit committee, an asset liability management
committee and a risk management committee. The audit committee must ensure that an information system audit of the internal
systems and processes is conducted at least once in two years to assess operational risks faced.

At regular intervals, as may be prescribed, the progress made in putting in place a progressive risk management system and risk
management policy and strategy followed by the Applicable HFC must be placed before the board of directors. The Applicable
HFCs are also required to adhere to certain other norms in connection with disclosure, transparency and rotation of partners of
the statutory audit firm. The Applicable HFCs are also required to frame internal guidelines on corporate governance standards
which are also to be put up on their website for information of various stakeholders.

Further, the NHB Master Circular - Miscellaneous Instructions to all Housing Finance Companies dated July 1, 2019 consolidates
all extant instructions applicable to HFCs including, among others, provisions relating to maintenance of registers, filing of
monthly returns, compliance with information technology framework, default of regulatory requirements etc.

Recovery of dues

In the event customers do not adhere to the repayment schedule for loans provided by HFCs, the Fair Practices Code requires
HFCs and its members and staff to follow the defined process provided under the applicable law during collection and security
repossession. In the event, the HFC hires recovery agents for this purpose, they are required to comply with guidelines issued by
the NHB in this regard by its circular dated July 14, 2008, which includes requirements such as due diligence while hiring such
recovery agents, training of recovery agents and regulating the methods employed by such recovery agents.

SARFAESI Act:

The SARFAES1 Act, read with the Security Interest Enforcement Rules, 2002, as amended, governs securitization of assets in
India. Any securitization or reconstruction company may acquire assets of a bank or financial institution, including HFCs, by
either entering into an agreement with such bank or financial institution for transfer of such assets to the company or by issuing
a debenture or bond or other security in the nature of debentures, for consideration, as per such terms and conditions as may be
mutually agreed. If a bank or financial institution is a lender in relation to financial assets acquired by the
securitization/reconstruction company, such company shall be deemed to be the lender in relation to those financial assets. For
HFCs, SARFAESI recovery is allowed for all loans of greater than ₹ 0.10 million ticket size.

Further, the SARFAESI Act provides for the enforcement of security interest without the intervention of the courts. Under the
provisions of the SARFAESI Act, a secured creditor, such as an HFC, can recover dues from its borrowers by taking any of the
measures as provided therein, including (i) taking possession of the secured assets or (ii) taking over the management of the
secured assets. Rights, with respect to the enforcement of security interest, under the SARFAESI Act cannot be enforced unless
the account of the borrower has been classified as a non performing asset in the books of account of the secured creditor in
accordance with the directions or guidelines issued by the RBI or any other applicable regulatory authority. In the event that the
secured creditor is unable to recover the entire sum due by exercise of the remedies under the SARFAESI Act in relation to the
assets secured, such secured creditor may approach the relevant court for the recovery of the balance amounts. A secured creditor
may also simultaneously pursue its remedies under the SARFAESI Act.

Recovery of Debts due to Banks and Financial Institutions Act, 1993 (“DRT Act”)

Under the DRT Act, the procedures for recovery of debt have been prescribed and time frames have been fixed for speedy
disposal of cases. The DRT Act prescribes the rules for establishment of DRTs, procedure for making application to Debt
Recovery Tribunals (“DRTs”), powers of DRTs and modes of recovery of debts determined by DRTs, including attachment and
sale of movable and immovable properties of defendants, arrest of defendants, defendants’ detention in prison and appointment
of receivers for management of the movable or immovable properties of defendants. The DRT Act also provides that a bank or
public financial institution, such as an HFC, having a claim to recover its debt may join an ongoing proceeding filed by some

154
other bank or public financial institution against its debtor at any stage of the proceedings before the final order is passed by
making an application to the DRT.

Insolvency and Bankruptcy Code, 2016, as amended (the “IBC”)

The IBC empowers creditors, whether secured, unsecured, domestic, international, financial or operational, to trigger resolution
processes, enables resolution processes to start at the earliest sign of financial distress, provides for a single forum to oversee
insolvency and liquidation proceedings, enables a calm period where new proceedings do not derail existing ones, provides for
replacement of the existing management during insolvency proceedings while maintaining the enterprise as a going concern,
offers a finite time limit within which the debtor’s viability can be assessed and prescribes a linear liquidation mechanism.

Miscellaneous

CLSS and Pradhan Mantri Awas Yojana:

The CLSS aims at expanding institutional credit flow to the housing needs of the urban poor, by providing credit-linked subsidy
on home loans taken by eligible urban poor for acquisition or construction of houses. The scheme is governed by the PMAY –
Housing for All (Urban) issued by the MoHUPA, GoI in March 2016. Individuals belonging to the economically weaker sections
(“EWS”) and the low income group (“LIG”) seeking housing loans from PLIs, including banks and HFCs, are eligible to avail
benefits under the scheme. EWS and LIG households are defined as households having an annual income up to ₹0.3 million, and
annual income between ₹0.3 million and ₹0.6 million, respectively. NHB been nominated by the MoHUPA as a Central Nodal
Agency under the CLSS, to channelize the subsidy to PLIs and to monitor the progress of the scheme and furnish utilization
certificates to the MoHUPA. The CLSS has been implemented through four verticals, namely, (i) “In situ” slum redevelopment;
(ii) affordable housing through credit linked subsidy; (iii) affordable housing in partnership; and (iv) subsidy for beneficiary-led
individual house construction or enhancement.

Inspection:

In terms of the NHB Act, the NHB has the power to direct housing finance institutions which are companies, to furnish to the
NHB and the RBI such statements, information or particulars as may be specified by the NHB. The NHB may, or on being
directed to do so by the RBI shall, cause an inspection to be made of any deposit accepting HFC for the purpose of verifying the
correctness or completeness of any statement, information or particulars furnished to the NHB or for the purpose of obtaining
any information or particulars which the HFC has failed to furnish on being called upon to do so.

Reporting:

In addition to the financial reporting requirements, such as submissions of copies of balance sheet and accounts together with
the directors’ report to the NHB, as prescribed under the NHB Directions, pursuant to circulars issued by the NHB, HFCs are
also required to comply with reporting requirements in relation to monitoring of frauds in the HFCs and information on wilful
defaults, pursuant to NHB circular dated February 5, 2019 and December 31, 2015.

Foreign Investments in HFCs:

Foreign investment in our Company is governed primarily by the FEMA, the rules made thereunder, read with the Consolidated
FDI Policy and the SEBI (Foreign Portfolio Investors) Regulations, 2019. Up to 100% foreign investment under the automatic
route is currently permitted in “Other Financial Services”, which refers to financial services activities regulated by financial
sector regulators, including the NHB, as notified by the Government of India, subject to conditions specified by the concerned
regulator (in our case, the NHB and the RBI), if any.

Other applicable laws:

In addition to the above, we are required to comply with the Companies Act, labour laws, various tax-related legislations,
intellectual property related legislations and other applicable laws, in the ordinary course of our day-to-day operations.

155
 HISTORY AND CERTAIN CORPORATE MATTERS

Brief History of our Company

Our Company was incorporated as ‘Home First Finance Company India Private Limited’ at Bengaluru, Karnataka as a private
limited company under the Companies Act, 1956, pursuant to the certificate of incorporation dated February 3, 2010 issued by
the Registrar of Companies, Karnataka at Bengaluru. Subsequently, our Company was converted to a public limited company
and consequently the name of our Company was changed to ‘Home First Finance Company India Limited’ and a fresh certificate
of incorporation dated March 14, 2018 was issued by the RoC.

As of the date of this Draft Red Herring Prospectus, our Company has 17 Shareholders. For details, see ‘Capital Structure’
beginning on page 57.

Changes in our registered office

The details of changes in our registered office are set forth below.

Date of change Details of the address of registered office Reason

November 8, 2010 Change in registered office from 94 G, II Floor, Mittal Park View, 9th Administrative convenience
Cross, Rajmahal Vilas Extension, Sadashivnagar, Bengaluru,
Karnataka 560 080 to Unit no. 6, Cears Plaza, 136, Residency Road,
Bengaluru, Karnataka 560 025
December 17, 2012 Change in registered office from Unit no. 6, Cears Plaza, 136, Administrative convenience
Residency Road, Bangalore, Karnataka 560 025 to 511, Acme Plaza,
Andheri Kurla Road, Andheri East, Mumbai 400 059

Main Objects of our Company

The main objects contained in the Memorandum of Association are set forth below.

1. “To carry on the business of providing long term finance to any person or persons, company or corporation, society or
association and enabling such borrower to construct or purchase a house or flat for residential purposes, upon such
security and such terms and conditions as the company may deem fit and the same shall be subject to the rules and
regulations of the National Housing Bank and the Reserve Bank of India.”

2. “To provide long-term finance to persons engaged in the business of construction of houses or flats for residential
purpose to be sold by them of hire purchase or on deferred payment or other similar basis upon such terms and
conditions as the Company may think fit and proper and the same shall be subject to the rules and regulations of the
National Housing Bank and the Reserve Bank of India.”

The main objects as contained in our Memorandum of Association enable our Company to carry on business presently being
carried out.

Amendments to our Memorandum of Association in the last ten years

The following table set forth details of the amendments to our Memorandum of Association, in the last ten years:

Date of Shareholders’ Nature of Amendment

Resolution
September 16, 2010 Clause V of our Memorandum of Association was amended to reflect increase in the authorised share
capital of our Company from ₹ 20,000,000 divided into 2,000,000 equity shares of ₹10 each into ₹
100,000,000 divided into 10,000,000 equity shares of ₹10 each.
November 11, 2010 Clause V of our Memorandum of Association was amended to reflect re-classification in the
authorised share capital of our Company from ₹ 100,000,000 divided into 10,000,000 equity shares
of ₹10 each to ₹ 100,000,000 divided into 2,000,000 series A preference shares of ₹10 each 8,000,000
equity shares of ₹10 each.
January 18, 2011 Clause III(A) of our Memorandum of Association was amended to reflect addition of ‘National
Housing Bank’ in the main objects clause.
Clause III(C) of our Memorandum of Association was amended to reflect deletion of the clause in
relation to real estate activities in the other objects clause.
August 11, 2011 Clause III(C) of our Memorandum of Association was amended to reflect the other objects clause as
follows:

156
Date of Shareholders’ Nature of Amendment
Resolution
4. To act as corporate agents, representatives, surveyors, sub-insurance agents, franchisees,
consultants, advisors, collaborators, group insurance holders for life and general insurance
and engage in the activity of distribution/ sales of insurance products.
5. To engage in the activity of distribution, origination, servicing and collection of financial
products including housing loans in the capacity of a franchisee/distributor/agent etc.
March 14, 2012 Clause II of our Memorandum of Association was amended to reflect change in the registered office
of our Company from Karnataka to Maharashtra.
June 3, 2013 Clause III(C) of our Memorandum of Association was amended to reflect the other objects clause as
follows:
4. To act as corporate agents, representatives, surveyors, sub-insurance agents, franchisees,
consultants, advisors, collaborators, group insurance holders for life and general insurance
and engage in the activity of promotion, distribution, sales, advertising and marketing of
insurance products.
5. To engage in the activity of promotion, distribution, origination, advertising, marketing,
servicing and collection of financial products including housing loans in the capacity of a
franchisee/distributor/agent/representative/marketer/advertiser etc.
August 20, 2013 The amendment in clause III(C) pursuant to resolution passed by the Shareholders on June 3, 2013
was revoked. Further, the existing clause III(C) of our Memorandum of Association was amended to
reflect the other objects clause as follows:
4. To act as corporate agents, representatives, surveyors, sub-insurance agents, franchisees,
consultants, advisors, collaborators, group insurance holders for life and general insurance
and engage in the activity of promotion, distribution, sales, advertising and marketing of
insurance products.
5. To engage in the activity of promotion, distribution, originating, advertising, marketing,
servicing and collection of financial products including housing loans in the capacity of a
franchisee/distributor/agent/representative/marketer/advertiser.
September 23, 2013 Clause V of our Memorandum of Association was amended to reflect re-classification in the
authorised share capital of our Company from 2,000,000 series A preference shares of ₹10 each
8,000,000 equity shares of ₹10 each into ₹ 100,000,000 divided into 2,000,000 series A preference
shares of ₹10 each, 2,000,000 series B preference shares of ₹10 each and 6,000,000 equity shares ₹10
each.
January 27, 2016 Clause V of our Memorandum of Association was amended to reflect re-classification in the
authorised share capital of our Company from ₹ 100,000,000 divided into 2,000,000 series A
preference shares of ₹10 each, 2,000,000 series B preference shares of ₹10 each and 6,000,000 equity
shares ₹10 each into ₹ 100,000,000 divided into 1,700,000 series A preference shares of ₹10 each,
2,500,000 series B preference shares of ₹10 each and 5,800,000 equity shares ₹10 each.
March 3, 2017 Clause V of our Memorandum of Association was amended to reflect:
(i) re-classification in the authorised share capital of our Company from ₹ 100,000,000 divided
into 1,700,000 series A preference shares of ₹10 each, 2,500,000 series B preference shares
of ₹10 each and 5,800,000 equity shares ₹10 each into ₹ 100,000,000 divided into 1,600,004
series A preference shares of ₹10 each, 2,408,811 series B preference shares of ₹10 each and
5,991,185 equity shares ₹10 each.
(ii) increase in the authorised share capital of our Company from ₹ 100,000,000 divided into
1,600,004 series A preference shares of ₹10 each, 2,408,811 series B preference shares of
₹10 each and 5,991,185 equity shares ₹10 each into ₹ 150,000,000 divided into 1,600,004
series A preference shares of ₹10 each, 2,408,811 series B preference shares of ₹10 each and
10,991,185 equity shares ₹10 each.
February 28, 2018 Clause I of our Memorandum of Association was amended to reflect the change in the name of our
Company from ‘Home First Finance Company India Private Limited’ to ‘Home First Finance
Company India Limited’, consequent upon conversion from a private limited company to a public
limited company.
July 7, 2018 Clause V of our Memorandum of Association was amended to reflect re-classification in the
authorised share capital of our Company from ₹ 150,000,000 divided into 1,600,004 series A
preference shares of ₹10 each, 2,408,811 series B preference shares of ₹10 each and 10,991,185 equity
shares ₹10 each into ₹ 150,000,000 divided into 15,000,000 equity shares of ₹10 each.
September 20, 2018 Clause III(B) of our Memorandum of Association was amended to reflect deletion of the following
clause 24 in the clause of objects incidental or ancillary to the attainment of the main objects:
‘24. To amalgamate, enter into partnership or into any arrangement for sharing profits or losses,
union of interests, co-operation, joint venture or reciprocal concession, or for limiting competition
with any person or company engaged in, or about to carry on or engage in, any business or

157
 Date of Shareholders’ Nature of Amendment
Resolution
transaction which the Company is authorized to carry on or engage in or which can be carried on in
conjunction therewith and to accept by way of consideration for any of the acts or things aforesaid
or property so acquired, any shares, debentures, debenture-stock or securities that may be agreed
upon, and to hold and retain, or sell, mortgage and deal with any shares, debentures, debenture-stock
or securities so received.’
June 12, 2019 Clause V of our Memorandum of Association was amended to reflect increase in the authorised share
capital of our Company from ₹ 150,000,000 divided into 15,000,000 equity shares of ₹ 10 each into
₹ 250,000,000 divided into 25,000,000 equity shares of ₹ 10 each.
October 30, 2019 Clause V of our Memorandum of Association was amended to reflect the split in the authorised share
capital of our Company from ₹ 250,000,000 divided into 25,000,000 equity shares of ₹ 10 each to ₹
250,000,000 divided into 125,000,000 equity shares of ₹ 2 each.

Major events and milestones in relation to our Company

Some of the key events in the history of our Company are set forth below:

Calendar Year Event

2010  Incorporation of our Company
 Obtained certificate of registration from NHB with Jaithirth Rao and P. S. Jayakumar as the
promoters of our Company
2011  Investment by Bessemer in our Company
2012  Change of our registered office to Mumbai
 Expanded operations in Gujarat and Tamil Nadu
2013  Approved 1,000 loans, and Gross Loan Assets of our Company became ₹ 689.5 million
 CARE Credit Rating for long term bank facilities was BBB-
 Investment by Alpha TC Holdings Pte Limited in our Company
2014  Company became profitable with Gross Loan Assets of ₹ 1,629.1 million
 CARE Credit Rating for long term bank facilities improved to BBB+
2015  Company had customer base of 5,000 with Gross Loan Assets of ₹ 3,368.3 million
2016  Customer base crossed over 10,000 spread across over 25 cities and Gross Loan Assets of our
Company touched ₹ 5,477.4 million
 Further investment by Bessemer in our Company and Alpha TC Holdings Pte Limited
 CARE Credit Rating for long term bank facilities improved to A-
2017  Investment by TN V LLP and Aether in our Company
 ICRA Credit Rating for long term bank facilities improved to A+ and CARE Credit Rating for
long term bank facilities improved to A
 Gross Loan Assets became ₹ 8,473.2 million
 Exit of Alpha TC Holdings Pte Limited
2018  Net worth of our Company crossed ₹ 5,000 million and Gross Loan Assets became ₹ 13,559.3
million
 Declassification of Jaithirth Rao as the promoter of our Company
2019  Customer base crossed over 30,000 with Gross Loan Assets touching ₹ 24,435.7 million
 Approved over 55,000 housing loans
 Declassification of P. S. Jayakumar as the promoter of our Company

Our Holding Company

As of the date of this Draft Red Herring Prospectus, our Company does not have a holding company.

Our Subsidiary, Associate and Joint Venture

As of the date of this Draft Red Herring Prospectus, our Company does not have any subsidiary, associate or joint venture.

Material Acquisitions or Divestments of Business/Undertakings, Mergers, Amalgamations or Revaluation of Assets, in

the last ten years

Our Company has not undertaken any material acquisitions or divestments of business/undertakings, mergers, amalgamations or
revaluation of assets in the last ten years.

Defaults or rescheduling of borrowings with financial institutions/ banks and conversion of loans into equity

158
There have been no defaults or rescheduling of borrowings with financial institutions in respect of our current borrowings from
lenders.

Time and cost overruns

There have been no time and cost overruns pertaining to our business operations.

Significant financial and strategic partnerships

Our Company does not have any financial or strategic partners as of the date of this Draft Red Herring Prospectus.

Summary of Key Agreements

1. Shareholders’ Agreement dated March 20, 2017 (the “Existing SHA”) and the amendment agreement dated
November 26, 2019 to the SHA between True North Fund V LLP (“TN V LLP”), Aether (Mauritius) Limited
(“Aether”), our Company, Bessemer India Capital Holdings II Ltd. (“Bessemer” and collectively along with TN V
LLP and Aether, the “Investors”), P. S. Jayakumar, Manoj Viswanathan and Bhaskar Chaudhry (the “Amendment
Agreement” and collectively, the “SHA”), and the Share purchase and share subscription agreement dated March
20, 2017 between the Investors, Jaithirth Rao, Jaithirth Rao and Kotak Mahindra Trusteeship Services Limited (in
their capacity as trustees of Jaithirth Rao 2012 Trust) and our Company, P. S. Jayakumar, Manoj Viswanathan and
Bhaskar Chaudhry (the “SPSSA”)

Pursuant to the SPSSA, (i) TN V LLP and Aether subscribed to 1,535,285 equity shares of face value ₹ 10 each and
1,023,524 equity shares of face value ₹ 10 each, for an aggregate consideration of ₹ 899.99 million and ₹ 600 million,
respectively; (ii) TN V LLP and Aether purchased 1,316,309 equity shares of face value ₹ 10 each and 87,359 equity
shares of face value ₹ 10 each for an aggregate consideration of ₹ 1,008.12 million and ₹ 672.08 million, respectively,
by a secondary transaction; and (iii) 1,167,835 Series B CCPS and 778,556 Series B CCPS transferred by Alpha TC
Holdings Pte. Limited to TN V LLP and Aether, respectively, were converted to 1,167,835 equity shares of face value
₹ 10 each and 778,556 equity shares of face value ₹ 10 each on March 30, 2017.

Further, the Existing SHA, inter alia, sets out the rights and obligations amongst the parties thereto, and provides certain
rights, subject to certain terms and conditions, including the right to nominate directors, pre-emptive rights in the event
of transfer of all or any part of the securities held by them, tag along and drag along rights in the event any transfer of
securities and certain information rights.

Subsequently, in accordance with the terms of the Amendment Agreement, the Existing SHA including the special
rights of the Investors under the SHA shall automatically stand terminated, without any further action by any party on
the date on which the Equity Shares list and commence trading on the Stock Exchanges pursuant to the Offer, except
for inter alia, the right of the Investors to nominate directors subject to certain terms and conditions such that:

a. Until TN V LLP holds 15% or more of the total paid-up Equity Share capital of our Company, on a fully
diluted basis, TN V LLP shall be entitled to nominate up to three directors (including the CEO);

b. Until Aether holds 10% or more of the total paid-up Equity Share capital of our Company, on a fully diluted
basis, Aether shall be entitled to nominate up to two directors on our Board;

c. Without prejudice to (a) above, until TN V LLP continues to remain the Promoter (where the term ‘promoter’
shall have the meaning set forth in the SEBI ICDR Regulations) of our Company, TN V LLP shall be entitled
to nominate up to two directors (including the CEO);

d. Without prejudice to (b) above, until Aether continues to remain the Promoter (where the term ‘promoter’ shall
have the meaning set forth in the SEBI ICDR Regulations) of our Company, Aether shall be entitled to
nominate up to one director on our Board;

e. Without prejudice to (a) and (c) above, until such time that TN V LLP has nominated at least one director on
our Board, the audit committee and nomination and remuneration committee of the Board shall each include
at least one director nominated by TN V LLP;

f. Until Bessemer holds 10% or more of the total paid-up Equity Share capital of our Company, on a fully diluted
basis, Bessemer shall have the right to nominate up to one director on our Board.

g. The presence of at least one director nominated by TN V LLP, provided it has exercised its rights to appoint
at least one director, at the beginning and throughout the meeting shall be necessary for the purpose of forming
a valid quorum for a Board meeting.

159
 The right of the Investors shall be subject to such rights being approved by the members of our Company through a
special resolution at the first general meeting of our Company held post listing of Equity Shares on the Stock Exchanges
in accordance with the provisions of the Companies Act and the SEBI Listing Regulations. The Amendment Agreement
shall immediately and automatically terminate without any further action by any Party, if the listing of the Equity Shares
on the Stock Exchanges is not completed on or prior to the date 15 months from the date of the Amendment Agreement,
or such other extended date as may be mutually agreed to amongst the parties thereto.

2. Inter-se agreement dated November 20, 2019 between True North Fund V LLP (“TN V LLP”) and Aether
(Mauritius) Limited (“Aether”) (the “Inter-se Agreement”)

The Inter-se Agreement shall become effective on the date of listing of the Equity Shares pursuant to the Offer. Pursuant
to the Inter-se Agreement, in case TN V LLP proposes to sell any of its securities held in our Company to any person
other than an affiliate (as defined in the Inter-se Agreement), Aether shall have a tag along right on such sale. Further,
TN V LLP shall have a drag along right against Aether in case TN V LLP proposes to sell any of its securities held in
our Company. The Inter-se Agreement shall automatically terminate without any further act or deed required on the
part of any party, upon earlier of the following: (i) by the mutual written agreement of the parties to the Inter-Se
Agreement; (ii) when either party ceases to own any securities of our Company; and (iii) the date on which our Company
is wound up.

Agreements with Key Managerial Personnel, Directors or any other employee

There are no agreements entered into by our Key Managerial Personnel or Directors or any other employee of our Company,
either by themselves or on behalf of any other person, with any shareholder or any other third party with regard to compensation
or profit sharing in connection with dealings in the securities of our Company.

Guarantees given by Promoter Selling Shareholders

The Promoters Selling Shareholders have not provided any guarantees on behalf of our Company.

160
 OUR MANAGEMENT

In terms of the Articles of Association, our Company shall have up to nine Directors. As on the date of this Draft Red Herring
Prospectus, our Board comprises eight Directors, including three Independent Directors (of which one is a woman Director), one
executive Director and four Nominee Directors.

Details regarding our Board as on the date of this Draft Red Herring Prospectus are set forth below:

S. Name, DIN, designation, term/period of directorship, Other Directorships

No. address, occupation, date of birth and age

1. Deepak Satwalekar  Asian Paints Limited;

Designation: Chairman and Independent Director  Franklin Templeton Asset Management

(India) Private Limited;
Term: Five years with effect from October 23, 2019; not liable to
retire by rotation  Germinait Solutions Private Limited
Period of Directorship: Director since October 23, 2019  Piramal Enterprises Limited; and
Address: 401, The Orchid, 12th Road, Near Madhu Park, Khar  Piramal Capital and Housing Finance
(West), Mumbai 400 052 Limited.
Occupation: Retired

Date of Birth: November 14, 1948

DIN: 00009627

Age: 71

2. Sakti Prasad Ghosh  Balrampur Chini Mills Limited;

Designation: Independent Director  Bengal Ambuja Housing Development

Limited;
Term: Five years with effect from July 7, 2018 until the
conclusion of AGM to be held in 2023  Bengal Shristi Infrastructure Development
Limited; and
Period of Directorship: Director since January 14, 2011
 Shristi Infrastructure Development
Address: Block BJ 94, Sector II, Salt Lake City PS, Bidhannagar, Corporation Limited.
Kolkata 700 091

Occupation: Retired

Date of Birth: October 2, 1939

DIN: 00183802

Age: 80

3. Sujatha Venkatramanan Nil

Designation: Independent Director

Term: Five years with effect from July 7, 2018 until the
conclusion of AGM to be held in 2023

Period of Directorship: Director since August 16, 2012

Address: Ground floor Flat, 20, Ferncroft Avenue London NW3

7PH

Occupation: Service

161
S. Name, DIN, designation, term/period of directorship, Other Directorships
No. address, occupation, date of birth and age

Date of Birth: June 13, 1965

DIN: 05340759

Age: 54

4. Divya Sehgal  Fincare Business Services Limited;

Designation: Nominee Director*  Trivitron Healthcare Private Limited; and

Term: Liable to retire by rotation  V-Link Automotive Services Private

Limited.
Period of Directorship: Director since June 10, 2017

Address: Flat No 1307 and 1308, Wing A, 13th floor, Ashok

Tower, Dr. Ambedkar Road, Parel, Sewri, Mumbai 400 012

Occupation: Service

Date of Birth: October 20, 1972

DIN: 01775308

Age: 47

5. Maninder Singh Juneja  Actify Data Labs Private Limited;

Designation: Nominee Director*  Fedbank Financial Services Limited;

Term: Liable to retire by rotation  Fincare Business Services Private Limited;

Period of Directorship: Director since May 26, 2017  Indifi Technologies Private Limited;
Address: D 1002, Mayfair Meridian Ceasar Road, Amboli,  Infinity Fincorp Solutions Private Limited;
Andheri West, Mumbai 400 058 and
Occupation: Service  Riviera Investors Private Limited.
Date of Birth: January 31, 1966

DIN: 02680016

Age: 53

6. Rajagopalan Santhanam  Meru Mobility Tech Private Limited;

Designation: Nominee Director*  Degustibus Hospitality Private Limited;

Term: Liable to retire by rotation  Integrace Private Limited;

Period of Directorship: Director since March 30, 2017  Robo Silicon Private Limited;
Address: 1805, B Wing, Lake Primrose, Lake Homes, Powai,  Sesa Care Private Limited;
Mumbai 400 076
 True North Enterprise Private Limited; and
Occupation: Service
 True North Ventures Private Limited.
Date of Birth: April 25, 1965

DIN: 00025669

Age: 54

162
 S. Name, DIN, designation, term/period of directorship, Other Directorships
No. address, occupation, date of birth and age

7. Vishal Vijay Gupta  91 Streets Media Technologies Private

Limited;
Designation: Nominee Director**
 Anunta Technology Management Services
Term: Liable to retire by rotation Limited;
Period of Directorship: Director since February 28, 2018  Applied Solar Technologies (India) Private
Limited;
Address: 15A, D Block, Binny Crescent Apartments Nandidurga
Road, Benson Town, Bangalore 560 046  BVP India Investors Private Limited;
Occupation: Service
 Hungama Digital Media Entertainment
Date of Birth: September 24, 1977 Private Limited;

DIN: 01913013  Innoviti Payment Solutions Private Limited;

Age: 42  Livspace Pte Limited;

 Medi Assist Healthcare Services Limited;

 Nephrocare Health Services Private

Limited;

 Perfios Software Solutions Private Limited;

 Phasorz Technologies Private Limited;

 Sanghvi Beauty and Technologies Private

Limited;

 Supermarket Grocery Supplies Private

Limited; and

 UrbanClap Technologies India Private

Limited.

8. Manoj Viswanathan NIL

Designation: Director and Chief Executive Officer

Term: Five years with effect from April 1, 2018; not liable to
retire by rotation

Period of Directorship: Director since June 28, 2010

Address: 1402, Panchatantra (1), Off Yari Road, Versova,

Mumbai 400 061

Occupation: Service

Date of Birth: April 4, 1970

DIN: 01741612

Age: 49

* Nominee of TN V LLP

** Nominee of Bessemer

Relationship between our Directors and our Key Managerial Personnel

None of our Directors are related to each other or to any of the Key Managerial Personnel.

163
Brief Biographies of Directors

Deepak Satwalekar is the Chairman and Independent Director of our Company. He holds a bachelor’s degree in mechanical
engineering from Indian Institute of Technology, Bombay and a master’s degree in business administration from the American
University. Previously, he was associated with Housing Development Finance Corporation Limited as a director and HDFC
Standard Life Insurance Company Limited as the managing director and chief executive officer. He has also been recognised as
a distinguished alumnus by the Indian Institute of Technology, Bombay. He was appointed as an Independent Director on the
Board of our Company with effect from October 23, 2019.

Sakti Prasad Ghosh is an Independent Director of our Company. He holds a master’s degree in commerce from University of
Calcutta, a certificate in financial management from University of Mumbai (earlier known as University of Bombay) and a
certificate in industrial finance from the Indian Institute of Bankers. He has over 39 years of experience in banking and financial
services institutions. Previously, he was associated with Reserve Bank of India as joint manager, National Housing Bank as
executive director, Unit Trust of India as deputy general manager, Hometrust Housing Finance Company as managing director
and Asian Development Bank as consultant. He was appointed as an Independent Director on the Board of our Company with
effect from January 14, 2011.

Sujatha Venkatramanan is an Independent Director of our Company. She holds a bachelor’s degree in economics (honours)
from University of Delhi and a master’s degree in business administration from University of Delhi. She has over 24 years of
experience in retail banking functions particularly credit risk including credit risk policy, analytics and operations, mergers and
acquisitions due diligence, portfolio management, risk advisory, project monitoring, product development, business development
and marketing. Previously, she was associated with Citibank as group credit policy head for the central eastern Europe, Middle
East, Africa and India, AurionPro Solutions as a consultant and Experian Singapore Pte Limited as consulting director in decision
analytics for Asia Pacific. Presently, she is associated with HSBC Group Management Limited as global head of credit bureau
management. She was appointed as an Independent Director on the Board of our Company with effect from August 16, 2012.

Divya Sehgal is a Nominee Director. He holds a bachelor’s of technology degree in electrical engineering from Indian Institute
of Technology, Delhi and a post graduate diploma in management from Indian Institute of Management, Bengaluru. He has over
22 years of experience in the financial sector. Previously, he was associated with Mc Kinsey & Company as associate, ANZ
Grindleys Bank, E Medlife.com Limited as director and Apollo Health Street Limited as chief operating officer. Currently, he is
associated with True North Managers LLP as a partner. He was appointed as a Nominee Director on the Board of our Company
with effect from June 10, 2017.

Maninder Singh Juneja is a Nominee Director. He holds a bachelor’s degree in civil engineering from Maharaja Sayajirao
University of Baroda and a post graduate diploma in management from Indian Institute of Management Society, Lucknow. He
has over 25 years of experience in the banking industry. Prior to joining our Company, he was associated with Godrej and Boyce
Manufacturing Company Limited as management trainee, Godrej GE Appliances Limited, SRF Finance Limited as business
manager of corporate finance, DGP Windsor India Limited, Whirlpool of India Limited as business manager, ICICI Bank
Limited as group executive and National Bulk Handling Corporation Private Limited as managing director and chief executive
officer. Currently, he is associated with True North Managers LLP as a partner. He was appointed as a Nominee Director on the
Board of our Company with effect from May 26, 2017.

Rajagopalan Santhanam is a Nominee Director. He holds a bachelor’s degree in commerce from University of Delhi. He is a
certified chartered accountant from the Institute of Chartered Accountants of India. He has over 27 years of experience in finance,
accounting and treasury management. Previously, he was associated with ITC Limited and Monsanto (India) Limited as chief
financial officer. Currently, he is associated with True North Managers LLP as managing director. He was appointed as a
Nominee Director on the Board of our Company with effect from March 30, 2017.

Vishal Vijay Gupta is a Nominee Director. He has passed the final examination of bachelor’s degree in commerce from Nagpur
University and holds a post graduate diploma in management from Indian Institute of Management, Calcutta. He is a certified
chartered accountant from the Institute of Chartered Accountants of India. He has over 14 years of experience in investments in
consumer internet, financial technology and healthcare technology. Previously, he was associated with DSL Software Limited
as a senior management trainee. Currently, he is associated with Bessemer Venture Partners India Investors Private Limited as
the managing director. He was appointed as a Nominee Director on the Board of our Company with effect from February 28,
2018.

Manoj Viswanathan is a Director and the Chief Executive Officer of our Company. He holds a bachelor’s degree in electrical
and electronics engineering from the Birla Institute of Technology and Science, Pilani and a post graduate diploma in business
management from XLRI, Jamshedpur. He has over 23 years of experience in consumer lending. Previously, he was associated
with Computer Garage Private Limited, Asian Paints India Limited, Citibank and CitiFinancial Consumer Finance India Limited
as vice president of personal loans. He joined our Company as a Director with effect from June 28, 2010.

164
Confirmations

None of our Directors is or was a director of any listed company during the five years immediately preceding the date of this
Draft Red Herring Prospectus, whose shares have been or were suspended from being traded on any stock exchange.

None of our Directors is or was a director of any listed company which has been or was delisted from any stock exchange.

Other than (i) Rajagopalan Santhanam, Divya Sehgal, Maninder Juneja Singh, nominated by TN V LLP pursuant to the SHA;
and (ii) Vishal Vijay Gupta nominated by Bessemer pursuant to the SHA, there is no arrangement or understanding with the
major shareholders, customers, suppliers or others, pursuant to which any of our Directors were appointed on the Board. For
details, see “History and Certain Corporate Matters – Summary of Key Agreements” beginning on page 159.

Further, none of our Directors have been identified as wilful defaulters as defined under the SEBI ICDR Regulations.

Terms of Appointment of our executive Director

Manoj Viswanathan

Pursuant to the resolution passed by the Board on February 18, 2010, Manoj Viswanathan was appointed as the Chief Executive
Officer of the Company. Further, pursuant to resolutions passed by the Board on June 28, 2010 and the Shareholders on
September 17, 2010, he was appointed as a Director on the Board. He was re-appointed as a Director pursuant to resolution
passed by the Board on May 28, 2018 and by the Shareholders held on July 7, 2018 with effect from April 1, 2018, for a term of
five years. In terms of the employment agreement dated October 9, 2013 read with the amended and restated employment
agreement dated March 27, 2017, Manoj Viswanathan is entitled to employee stock options as determined by the Board,
performance linked bonus as may be determined by the Board, allowances as per the policies of the Company, reimbursement
of travel and other business related expenses based on actuals and the salary which includes the Company provident fund
contribution. For details of the number employee stock options currently held by our executive Director, see “Capital Structure”
on page 57. Pursuant to the resolution passed by the Board on May 28, 2018 and the Shareholders on July 7, 2018, his
remuneration was fixed at ₹ 8.16 million with annual increment in remuneration as may be approved by the Board. Pursuant to
the resolution passed by the Board on March 4, 2019, the overall remuneration payable to Manoj Viswanathan was capped at
5% of the net profit as calculated in accordance with Section 198 of the Companies Act and the Board approved a remuneration
of ₹ 10.49 million for the Financial Year 2019 as follows:

Particulars Amount (in ₹ million)

Basic salary 2.14
House rent allowance 1.07
Other allowances 4.35
Mobile and insurance 0.04
Variable pay 2.63*
Provident fund 0.26
* The variable amount to be paid may vary according to the performance of our Company.

Payment or benefit to Directors of our Company

Details of the sitting fees/other remuneration paid to our Directors in Financial Year 2019 are set forth below.

Remuneration to our executive Director

Details of the remuneration paid to our executive Director in Financial Year 2019 are set forth below:

S. No. Name of executive Director Remuneration (in ₹ million)

1. Manoj Viswanathan 9.40(1)(2)
(1) Includes an amount of ₹ 2.1 million as performance linked incentive for the Financial Year 2018 which was paid in Financial Year 2019.
(2) Business promotion allowance is also payable to our executive Director. Business promotion allowance is capped at ₹ 0.42 million as
per the policy of our Company, applicable until Financial Year 2019.

Remuneration to our Non-Executive Directors

(a) Independent Directors

Our Independent Directors are entitled to receive sitting fees of ₹ 0.1 million per sitting and for every meeting of the
Board or any Committee that they attend. Details of the sitting fees paid to the Independent Directors of our Company
in Financial Year 2019 are set forth below.

165
 S. No. Name of Non-Executive Director Number of meetings attended Sitting Fees, including commission
(in ₹ million)
1. Sakti Prasad Ghosh 11 1.1
2. Sujatha Venkatramanan 7 0.7
3. Deepak Satwalekar Nil* Nil*
* Pursuant to the resolution by the Board, Deepak Satwalekar was appointed as an additional Director in the capacity of a non-
executive Independent Director with effect from October 23, 2019. Further, he was regularized as an Independent Director
pursuant to the resolution by the Shareholders at their meeting held on October 30, 2019. Accordingly, no sitting fee has been
paid to him for the Financial Year 2019.

(b) Nominee Directors

The Nominee Directors are not entitled to any sitting fees for attending meetings of the Board and its Committees.

Bonus or Profit Sharing Plan of the Directors

Except the commission that certain of our Independent Directors may receive based on the performance of our Company and the
performance bonus component of the remuneration of Manoj Viswanathan, none of our Directors are party to any bonus or profit
sharing plan of our Company.

Remuneration paid to Directors of our Company by our Subsidiaries or our Associates

As on the date of this Draft Red Herring Prospectus, our Company does not have any Subsidiaries or Associates.

Shareholding of Directors in our Company

As on the date of this Draft Red Herring Prospectus, none of our Directors hold any Equity Shares, except as disclosed below.

Name of the Director Number of Equity Shares Held

Manoj Viswanathan 1,022,900
Sakti Prasad Ghosh 59,000
Sujatha Venkatramanan 77,500

Our Articles of Association do not require our Directors to hold any qualification shares.

Interests of Directors

(a) All our Directors may be deemed to be interested to the extent of remuneration and reimbursement of expenses, if any,
payable to them by our Company as well as sitting fees, if any, payable to them for attending meetings of our Board or
Committees thereof. Some of our Directors hold positions as directors on the board of directors of our Promoter. For
further details, see “ – Terms of Appointment of our Executive Director”, “ – Payment or benefit to Directors of our
Company”, each on page 165.

(b) None of our Directors have any interests in the promotion or formation of our Company.

(c) None of our Directors have any interest in any property acquired or proposed to be acquired of our Company or by our
Company in the preceding three years.

(d) Further, none of our Directors have any interest in any transaction by our Company for acquisition of land, construction
of building or supply of machinery.

(e) No consideration in cash or shares or otherwise has been paid or agreed to be paid to any of our Directors or to the firms
or companies in which any of our Directors are interested, by any person, either to induce him to become, or to qualify
him as, as a Director, or otherwise for services rendered by our Directors or by the firm or company in which they are
interested, in connection with the promotion or formation of our Company.

(f) Except to extent of Equity shares held by our Directors as disclosed in “ - Shareholding of Directors in our Company”,
none of our Directors have any interest in our business.

(g) Our nominee Directors may be deemed to be interested to the extent of the shareholding in our Company of the entities
nominating them.

(h) Our Directors may also be interested to the extent of Equity Shares, if any (together with dividends and other
distributions in respect of such Equity Shares), held by them or held by the entities in which they are associated as
promoters, directors, partners, proprietors or trustees or held by their relatives. Our Directors (excluding Independent

166
 Directors) may be deemed to be interested to the extent of options granted to them pursuant to ESOP 2012. Except
Manoj Viswanathan who holds 1,340,680 employee stock options, none of our Directors hold options pursuant to ESOP
2012 and ESOP II as on the date of this Draft Red Herring Prospectus. For details, see “Capital Structure” beginning
on page 57.

(i) No loans have been availed by our Directors from our Company.

Changes in our Board in the last three years

Details of the changes in our Board in the last three years are set forth below.

Name Date of Change Reason

Deepak Satwalekar October 30, 2019 Appointment as Independent Director
Manoj Viswanathan July 7, 2018 Re-appointment as Director
Sakti Prasad Ghosh July 7, 2018 Re-appointment as Independent Director
Sujatha Venkatramanan July 7, 2018 Re-appointment as Independent Director
Vishal Vijay Gupta February 28, 2018 Appointment as Nominee Director
Rajiv Sabharwal January 16, 2018 Cessation as Nominee Director
Aakash Goel December 7, 2017 Cessation as Nominee Director
Divya Sehgal June 10, 2017 Appointment as Nominee Director
Maninder Singh Juneja May 26, 2017 Appointment as Nominee Director
Rajiv Sabharwal April 18, 2017 Appointment as Nominee Director
Jaithirth Rao March 31, 2017 Cessation as Director
Rajagopalan Santhanam March 30, 2017 Appointment as Nominee Director
Akhil Awasthi March 29, 2017 Cessation as Nominee Director

Borrowing Powers of Board

Pursuant to resolution passed by our shareholders in the AGM held on June 12, 2019, the Board is authorised to borrow from
time to time all such sum(s) of money together with the money(s) already borrowed by our Company (apart from the temporary
loans obtained or to be obtained from our Company's bankers in the ordinary course of business), may exceed the aggregate of
the paid-up capital and free reserves of our Company (reserves not set apart for any specific purposes), provided that the total
amount up to which money(s) may be borrowed by the Board and which shall remain outstanding at any given point of time
shall not exceed ₹ 50,000 million.

Corporate Governance

The provisions of the SEBI Listing Regulations with respect to corporate governance will be applicable to us immediately upon
the listing of our Equity Shares with the Stock Exchanges. We are in compliance with the requirements of the applicable
regulations, including the SEBI Listing Regulations, the Companies Act and other applicable regulations of SEBI, in respect of
corporate governance including in respect of the constitution of the Board and Committees thereof, and formulation and adoption
of policies. Our Board has been constituted in compliance with the Companies Act and the SEBI Listing Regulations.

As on the date of this Draft Red Herring Prospectus, our Board comprises eight Directors, including three Independent Directors
(of which one is a Chairman and one is a woman Director), one executive Director and four Nominee Directors. In compliance
with Section 152 of the Companies Act, not less than two thirds of the Directors (excluding Independent Directors) are liable to
retire by rotation.

Our Company undertakes to take all necessary steps to continue to comply with all the requirements of SEBI Listing Regulations
and the Companies Act.

Committees of the Board

Details of the Committees are set forth below. In addition to the Committees detailed below, our Board of Directors may, from
time to time constitute Committees for various functions.

Audit Committee

The members of the Audit Committee are:

1. Sujatha Venkatramanan, Chairman;

2. Sakti Prasad Ghosh; and

167
3. Rajagopalan Santhanam.

The Audit Committee was constituted pursuant to resolution passed by our Board in its meeting held on May 21, 2013 and last
reconstituted pursuant to resolution passed by our Board in its meeting held on November 18, 2019. The scope and functions of
the Audit Committee are in accordance with Section 177 of the Companies Act and the SEBI Listing Regulations and its terms
of reference as stipulated pursuant to resolution passed by our Board in its meeting held on November 18, 2019 are set forth
below.

a) Overseeing the Company’s financial reporting process and disclosure of its financial information to ensure that its
financial statements are correct, sufficient and credible;

b) Recommending to the Board the appointment, remuneration and terms of appointment of the statutory auditor of the
Company;

c) Reviewing and monitoring the statutory auditor’s independence and performance, and effectiveness of audit process;

d) Approving payments to statutory auditors for any other services rendered by the statutory auditors;

e) Reviewing, with the management, the annual financial statements and auditor’s report thereon before submission to the
Board for approval, with particular reference to:

i. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report
in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act;

ii. Changes, if any, in accounting policies and practices and reasons for the same;

iii. Major accounting entries involving estimates based on the exercise of judgment by management;

iv. Significant adjustments made in the financial statements arising out of audit findings;

v. Compliance with listing and other legal requirements relating to financial statements;

vi. Disclosure of any related party transactions; and

vii. Modified opinion(s) in the draft audit report.

f) Laying down the criteria for granting omnibus approval in accordance with the Company ‘policy on related party
transactions and such approval shall be applicable in respect of transactions which are repetitive in nature;

g) Reviewing, with the management, the quarterly, half-yearly and annual financial statements before submission to the
Board for approval;

h) Reviewing, with the management, the statement of uses/ application of funds raised through an issue (public issue,
rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer
document/ prospectus/ notice and the report submitted by the monitoring agency monitoring the utilization of proceeds
of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter. This
also includes monitoring the use/application of the funds raised through the proposed initial public offer by the
Company;

i) Approval or any subsequent modifications of transactions of the Company with related parties provided that the audit
committee may take omnibus approval for related party transactions proposed to be entered into by the Company subject
to such conditions as may be prescribed;

j) Scrutinizing of inter-corporate loans and investments;

k) Valuing of undertakings or assets of the Company, wherever it is necessary;

l) Evaluating of internal financial controls and risk management systems;

m) Establishing a vigil mechanism for directors and employees to report their genuine concerns or grievances

n) Reviewing, with the management, the performance of statutory and internal auditors, and adequacy of the internal
control systems;

168
o) Reviewing the adequacy of internal audit function if any, including the structure of the internal audit department,
staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal
audit;

p) Discussing with internal auditors on any significant findings and follow up there on;

q) Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud
or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;

r) Discussing with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit
discussion to ascertain any area of concern;

s) Looking into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in
case of non-payment of declared dividends) and creditors;

t) Reviewing the functioning of the whistle blower mechanism;

u) Approving the appointment of the chief financial officer or any other person heading the finance function or discharging
that function after assessing the qualifications, experience and background, etc. of the candidate;

v) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee and any other terms
of reference as may be decided by the Board and/or specified/provided under the Companies Act or the Listing
Regulations or by any other regulatory authority; and

w) Reviewing the utilization of loans and/ or advances from/investment by the holding company in the subsidiary
exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans /
advances / investments existing as on the date of coming into force of this provision i.e. April 1, 2019, and henceforth.

Nomination and Remuneration Committee

The members of the Nomination and Remuneration Committee are:

1. Sakti Prasad Ghosh, Chairman;

2. Sujatha Venkatramanan; and

3. Maninder Singh Juneja.

The Nomination and Remuneration Committee was constituted pursuant to resolution passed by our Board in its meeting held
on March 20, 2017 and last reconstituted pursuant to resolution passed by our Board in its meeting held on November 18, 2019.
The scope and functions of the Nomination and Remuneration Committee are in accordance with Section 178 of the Companies
Act and the SEBI Listing Regulations and its terms of reference as stipulated pursuant to resolution passed by our Board in its
meeting held on November 18, 2019 are set forth below.

a) Formulating the criteria for determining qualifications, positive attributes and independence of a director and
recommending to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other
employees;

b) Formulating of criteria for evaluation of the performance of the independent directors and the Board;

c) Devising a policy on Board diversity;

d) Identifying persons who qualify to become directors or who may be appointed in senior management in accordance
with the criteria laid down, recommending to the Board their appointment and removal, and carrying out evaluations of
every director’s performance;

e) Determining whether to extend or continue the term of appointment of the independent director, on the basis of the
report of performance evaluation of independent directors;

f) Analyzing, monitoring and reviewing various human resource and compensation matters;

g) Determining the company’s policy on specific remuneration packages for executive directors including pension rights
and any compensation payment, and determining remuneration packages of such directors;

h) Determining compensation levels payable to the senior management personnel and other staff (as deemed necessary),
which shall be market-related, usually consisting of a fixed and variable component;

169
i) Reviewing and approving compensation strategy from time to time in the context of the then current Indian market in
accordance with applicable laws;

j) Performing such functions as are required to be performed by the compensation committee under the Securities and
Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, as amended;

k) Framing suitable policies and systems to ensure that there is no violation, by an employee of any applicable laws in
India or overseas, including:

(i) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended;
and

(ii) The Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to
the Securities Market) Regulations, 2003.

l) Performing such other activities as may be delegated by the Board and/or specified/provided under the Companies Act
or the Listing Regulations, or by any other regulatory authority”;

m) Recommend to the board, all remuneration, in whatever form, payable to senior management; and

n) Performing such other functions as may be required for the performance of any of the above duties.

Stakeholders’ Relationship Committee

The members of the Stakeholders’ Relationship Committee are:

1. Sakti Prasad Ghosh, Chairman;

2. Maninder Singh Juneja; and

3. Manoj Viswanathan.

The Stakeholders’ Relationship Committee was constituted pursuant to resolution passed by our Board in its meeting held on
November 18, 2019. The scope and functions of the Stakeholder Relationship Committee are in accordance with Section 178 of
the Companies Act and the SEBI Listing Regulations and its terms of reference as stipulated pursuant to resolution passed by
our Board in its meeting held on November 18, 2019 are set forth below.

a) Consider and resolve grievances of security holders of the Company, including complaints related to transfer of shares,
non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings,
etc.;

b) Review of measures taken for effective exercise of voting rights by shareholders.

c) Review of adherence to the service standards adopted by the Company in respect of various services being rendered by
the Registrar and Share Transfer Agent.

d) Review of the various measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends
and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the Company.

e) Formulation of procedures in line with the statutory guidelines to ensure speedy disposal of various requests received
from shareholders from time to time;

f) To approve, register, refuse to register transfer or transmission of shares and other securities;

g) To sub-divide, consolidate and or replace any share or other securities certificate(s) of the Company;

h) Allotment and listing of shares;

i) Approval of transfer or transmission of shares, debentures or any other securities;

j) To authorize affixation of common seal of the Company;

k) To issue duplicate share or other security(ies) certificate(s) in lieu of the original share/security(ies) certificate(s) of the
Company;

l) To approve the transmission of shares or other securities arising as a result of death of the sole/any joint shareholder;

170
m) To dematerialize or rematerialize the issued shares;

n) Ensure proper and timely attendance and redressal of investor queries and grievances;

o) Carrying out any other functions contained in the Companies Act, the SEBI Listing Regulations and/or equity listing
agreements (if applicable), as and when amended from time to time; and

p) To further delegate all or any of the power to any other employee(s), officer(s), representative(s), consultant(s),
professional(s), or agent(s).

Corporate Social Responsibility Committee

The members of the Corporate Social Responsibility Committee are:

1. Sakti Prasad Ghosh;

2. Rajagopalan Santhanam; and

3. Manoj Viswanathan.

The Corporate Social Responsibility Committee was constituted pursuant to resolution passed by our Board in its meeting held
on June 20, 2016 and last reconstituted pursuant to resolution passed by our Board in its meeting held on February 28, 2018. The
scope and functions of the Corporate Social Responsibility Committee are in accordance with Section 135 of the Companies Act
and its terms of reference as stipulated pursuant to resolution passed by our Board in its meeting held on November 18, 2019 are
set forth below.

a) To formulate and recommend to the Board of Directors, the CSR Policy, indicating the CSR activities to be undertaken,
as prescribed under applicable law;

b) To recommend the amount of expenditure to be incurred on the CSR activities, which is to be at least 2% of the average
net profit of the Company in the three immediately preceding financial years;

c) To monitor the CSR Policy and its implementation by the Company from time to time; and

d) To perform such other functions or responsibilities and exercise such other powers as may be conferred upon the CSR
Committee in terms of the provisions of Section 135 of the Companies Act and the rules framed thereunder.

171
Management Organisation Structure

172
Key Managerial Personnel

The details of the Key Managerial Personnel, in terms of the Companies Act, as of the date of this Draft Red Herring Prospectus
are as follows:

Manoj Viswanathan is the Chief Executive Officer and Director of our Company. For details, see “- Brief Biographies of
Directors” beginning on page 164. For details of compensation paid to him during Financial Year 2019, see “- Payment or benefit
to Directors of our Company – Remuneration to our Executive Director” on page 165.

Nutan Gaba Patwari is the Chief Financial Officer of our Company. She has passed the final examination of bachelor’s degree
in commerce from University of Calcutta. She is a certified chartered accountant from the Institute of Chartered Accountants of
India. She joined our Company with effect from January 1, 2019 and was appointed as the Chief Financial Officer with effect
from March 4, 2019. She has over 13 years of experience in finance. Prior to joining our Company, she was associated with True
North as a vice president – finance, Hindustan Unilever Limited as an operations manager in supply management, ITC Limited
as assistant finance and Philip Morris Asia Limited as manager of planning. Presently, she heads the accounts, finance and
treasury, budget and analytics functions of our Company. During Financial Year 2019, she received a remuneration of ₹ 1.99
million.

Shreyans Bachhawat is the Company Secretary of our Company. He has passed the final examination of bachelor’s degree in
commerce from University of Calcutta and has passed the final examination of bachelor’s degree in law from Fakir Mohan
University. He is a certified associate of the Institute of Company Secretaries. He has over 7 years of experience in corporate
secretarial compliances. He joined our Company as the Company Secretary with effect from August 17, 2017 and was appointed
as the Company Secretary with effect from September 7, 2017. Prior to joining our Company, he was associated with SREI
Capital Markets Limited as senior vice president, India Power Corporation (Haldia) Limited as assistant manager (secretarial),
Gretex Corporate Services Private Limited as an assistant company secretary and Tata Value Homes Limited as a deputy manager
in the finance group. During Financial Year 2019, he received a remuneration of ₹ 1.79 million.

In addition to the above, the details of the senior management who have been identified as Key Managerial Personnel in terms
of the SEBI ICDR Regulations, are as follows:

Ajay Khetan is the Chief Operating Officer and Head-Risk of our Company. He holds a bachelor’s degree in mechanical
engineering from the University of Allahabad and a post graduate diploma in management from Xavier Institute of Management,
Bhubaneswar. He joined our Company with effect from March 14, 2012. He has over 18 years of experience in consumer finance
and risk management. Prior to joining our Company, he was associated with Macquarie Finance (India) Private Limited as a
senior manager, Hewlett Packard Financial Services (India) Private Limited, CitiFinancial Consumer Finance India Private
Limited as assistant vice president, MIRC Electronics Limited as a management trainee and The Tata Engineering and
Locomotive Company Limited as a graduate engineer trainee.

Gaurav Mohta is the Head – Sales and Marketing of our Company. He holds a bachelor’s degree in mechanical engineering
from Nagpur University and a post graduate diploma in business administration from ICFAI Business School. He joined our
Company with effect from March 23, 2011. He has over 16 years of experience in consumer lending and product management.
Prior to joining our Company, he was associated with Kotak Mahindra Bank Limited as an associate vice president, CitiFinancial
Consumer Finance India Limited as a manager of personal loans-sales and Foodworld Supermarkets Limited as an assistant
manager in operations.

Vilasini Subramaniam is the Head – Strategic Alliances of our Company. She holds a bachelor’s degree in commerce from
University of Madras. She has passed the final examination of chartered accountancy from the Institute of Chartered Accountants
of India. She joined our Company with effect from August 1, 2014. She has over 15 years of experience in consumer finance.
Prior to joining our Company, she was associated with Citibank India as Global Consumer Group, Janalakshmi Financial
Services as head of product development and marketing and Micro Housing Finance Corporation Limited as general manager in
credit and finance.

Abhijeet Jamkhindikar is the Head – Developer Finance of our Company. He holds a bachelor’s degree in civil engineering
from Nagpur University. He joined our Company with effect from November 1, 2017. He is a member of Institution of Valuers
and has completed the foundation course in property valuation of the Royal Institute of Chartered Surveyors India Property
Valuation. He has 18 years of experience in construction finance (for developers), finance, valuations, technical appraisals and
business development. Prior to joining our Company, he was associated with C-Net Solutions India Private Limited as a network
specialist and Housing Development Finance Corporation Limited as senior officer.

Arunchandra Jupalli is the Head - Loan Against Property of our Company. He has passed the final examination of bachelor’s
degree in commerce from Osmania University. He holds a master’s degree in business studies from Bharati Vidyapeeth. He
joined our Company with effect from February 20, 2018. He has over 16 years of experience in consumer lending business. Prior
to joining our Company, he was associated with Atlantic Duncans International (P) Limited as a management trainee, India
Office Solutions Private Limited as a management trainee, CitiFinancial Consumer Finance India Limited as an officer, Net

173
Ambit Value First Services Limited as the vice president, Karvy Financial Services Limited as vice president, divisional head
(south) and Small Business FinCredit India Private Limited as vice president.

Ramakrishna Vyamajala is the Head – Human Resources of our Company. He holds a post graduate diploma in management
from T.A. Pai Management Institute. He joined our Company with effect from November 29, 2018. He has over 14 years of
experience in human resources, rewards and recognition, compensation and benefits. Prior to joining our Company, he was
associated with Sterlite Technologies Limited, a group company of Vedanta Resources Plc, as a deputy manager in human
resources and IDFC Bank Limited as the senior director in human resources.

The aggregate remuneration paid to the Key Managerial Personnel (other than the Key Managerial Personnel in terms of the
Companies Act), in Fiscal 2019 is ₹ 31.58 million.

All our Key Managerial Personnel are permanent employees of our Company.

There is no arrangement or understanding with the major shareholders, customers, suppliers or others, pursuant to which any of
our Key Managerial Personnel have been appointed.

Shareholding of Key Managerial Personnel in our Company

Except as disclosed below, none of our Key Managerial Personnel hold any Equity Shares as on the date of this Draft Red
Herring Prospectus.

Name of Key Managerial Personnel Number of Equity Shares held

Manoj Viswanathan 1,022,900
Nutan Gaba Patwari 67,200
Ajay Khetan 44,800
Gaurav Mohta 58,240
Vilasini Subramaniam 33,600
Abhijeet Jamkhindikar 67,200
Arunchandra Jupalli 8,960
Ramakrishna Vyamajala 13,440

Relationship between our Key Managerial Personnel

None of our Key Managerial Personnel are related to each other.

Interests of Key Managerial Personnel

None of the Key Managerial Personnel of our Company have any interests in our Company other than to the extent of the
remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred
by them during the ordinary course of business. There is no contingent or deferred compensation accrued for the year payable to
the Key Managerial Personnel, even if the compensation is payable at a later date.

Further, the Key Managerial Personnel may be regarded as interested in the Equity Shares held by them, if any, (together with
dividends and any other distributions in respect of such Equity Shares). For details, see “- Shareholding of Key Managerial
Personnel in our Company” on page 174.

Except Gaurav Mohta and Ramakrishna Vyamajala who have received advances from our Company aggregating to ₹ 2.1 million
and ₹ 0.25 million, respectively, of which ₹ 1.85 million and ₹ 0.2 million, respectively, are outstanding as on the date of this
Draft Red Herring Prospectus, no loans have been availed by our Key Managerial Personnel from our Company.

Changes in our Key Managerial Personnel in the three immediately preceding years

Details of the changes in our Key Managerial Personnel in the three immediately preceding years are set forth below.

Name Date of change Reason for change

Nutan Gaba Patwari March 4, 2019 Appointment as Chief Financial Officer
Kiran Agarwal Todi November 30, 2018 Cessation as Chief Financial Officer
Kiran Agarwal Todi February 28, 2018 Appointment as Chief Financial Officer
Shreyans Bachhawat September 7, 2017 Appointment as Company Secretary
Trupti Bolke April 18, 2017 Cessation as Company Secretary

174
Payment or benefit to officers of our Company

Except statutory entitlements for benefits upon termination of their employment in our Company or retirement, no officer of our
Company, including our Directors, Key Managerial Personnel, is entitled to any benefits upon termination of employment under
any service contract entered into with our Company. Except as stated otherwise in this Draft Red Herring Prospectus and any
statutory payments made by our Company, no amount or benefit has been paid or given, in the two years preceding the date of
this Draft Red Herring Prospectus, or is intended to be paid or given to any of our Company’s officers except remuneration for
services rendered as Directors, officers or employees of our Company.

Bonus or profit sharing plans for our Key Managerial Personnel

Other than the performance bonus component of their remuneration, our Key Managerial Personnel are not parties to any bonus
or profit sharing plan of our Company.

Employee stock option plan and employee stock purchase plan

For details of our employee stock option plans, see “Capital Structure” on page 57.

175
 OUR PROMOTERS AND PROMOTER GROUP

True North Fund V LLP and Aether (Mauritius) Limited are the Promoters of our Company. As on the date of this Draft Red
Herring Prospectus, our Promoters hold an aggregate of 59,995,115 Equity Shares, comprising 76.62% of the pre-Offer issued,
subscribed and paid-up Equity Share capital of our Company. For details of shareholding of our Promoters in our Company,
please see “Capital Structure” on page 57.

The details of our Promoters are provided below:

True North Fund V LLP (“TN V LLP”)

Generic Details of the Fund

TN V LLP, a limited liability partnership (“LLP”), was incorporated on December 20, 2016 under the Limited Liability
Partnership Act, 2008, with LLP identification number AAI-0542. Its registered office is located at Rocklines House, Ground
Floor, 9/2, Museum Road, Bangalore 560 001. TN V LLP is primarily engaged in the business of financial intermediation (other
than insurance and pension funding) and is registered with SEBI as a Category II Alternative Investment Fund with registration
number IN/AIF2/16-17/0303, as per the certificate of registration granted under the SEBI AIF Regulations.

TN V LLP and its affiliates have raised six funds from 1999 until the date of this Draft Red Herring Prospectus, having a
collective corpus in excess of USD 2 billion.

As on the date of this Draft Red Herring Prospectus, TN V LLP holds 35,997,070 Equity Shares constituting 45.97% of the pre-
Offer Equity Share capital of our Company. For details in relation to the purchase of Equity Shares by TN V LLP of our
Company, please see “History and Certain Corporate Matters” and “Capital Structure” on pages 156 and 57, respectively.

Our Company confirms that the PAN, bank account number(s) and LLP identification number of TN V LLP and the address of
the registrar of companies where TN V LLP is registered, shall be submitted to the Stock Exchanges at the time of filing this
Draft Red Herring Prospectus.

The designated partners of TN V LLP are:

(a) Surendra Ambalal Dave, a nominee of TNEPL, the manager of TN V LLP; and

(b) Suresh Narsappa Talwar, a nominee of True North Managers LLP, the sponsor of TN V LLP.

The key persons of TN V LLP are:

1. Vishal Nevatia; and

2. Pramod Kabra.

The core team at TN V LLP comprises 28 investment management and business management professionals. These professionals
provide management support across the Finance, Human Resources and Technology functions to companies in which TN V LLP
and its affiliates have investments.

Details of the Fund Manager

As per the provisions of the SEBI AIF Regulations, True North Enterprise Private Limited (“TNEPL”) is the manager of TN V
LLP. TNEPL was incorporated on August 18, 2015 under the Companies Act with corporate identification number
U74900KA2015PTC082342. Its registered office is located at Rocklines House, Ground Floor, 9/2, Museum Road, Bangalore
560 001.

Details of the Sponsor

As per the provisions of the SEBI AIF Regulations, True North Managers LLP is the sponsor of TN V LLP. True North Managers
LLP was incorporated on June 28, 2010 under the Limited Liability Partnership Act, 2008 with LLP identification number AAA-
1685. Its registered office is located at Suite F9C, Grand Hyatt Plaza, Santacruz East, Mumbai 400 055.

Details of Investors in the Fund

There are five investors who have contributed to the capital of TN V LLP as on the date of this Draft Red Herring Prospectus.
Further, in terms of the limited liability partnership agreement dated December 28, 2016, out of the five investors, only Indium
V (Mauritius) Holdings Limited has made capital commitments in excess of 15% of the total capital commitment. For details of
Indium V (Mauritius) Holdings Limited, see, “- Aether (Mauritius) Limited - Shareholding pattern” on page 178.

176
The details of the total capital commitments of TN V LLP as on the date of this Draft Red Herring Prospectus are provided
below:

Type of Investor (Institutional, Corporate, Individual) Percentage of Capital

Commitments (%)
Institutional 6.93
Corporate 93.07
Individual Nil
Total 100%

Details of Investments of the Fund

The details of the investments made by TN V LLP are provided below:

Particulars Details
Total number of entities funded 17
Distribution of such entities - country wise Investments in India – 16
Investments in British Virgin Islands – one
Distribution of such entities - holding Holding period Number of entities held for such
period wise period
0 – 12 months 2
13 – 24 months 3
25 – 36 months 12

Distribution of such entities - sector wiseHealthcare – five

Financial services – five
Hospitality – one
Agri Products – one
Consumer products – two
Infrastructure – one
Investment – one
Data analytics – one
Number of entities under the control of TN Six, excluding the Company
V LLP, directly or indirectly
Companies where TN V LLP has offered Nil
its shares for lock-in as part of minimum
promoter’s contribution
Average holding period of TN V LLP’s 24 months
investments
Sector focus/core specialization of TN V Financial services, healthcare and consumer products
LLP, if applicable

Details of change in control

There has been no change in the control of TN V LLP in the last three years preceding the date of this Draft Red Herring
Prospectus.

Aether (Mauritius) Limited (“Aether”)

Corporate Information

Aether, a company limited by shares, was incorporated on August 19, 2016 under the Companies Act, 2001 of the Republic of
Mauritius, with corporate identification number 140975 C1/GBL. Its registered office is located at 201, 2nd Floor, Sterling Tower,
14 Poudriere Street, Port Louis, Mauritius. Aether holds a Category 1 Global Business License under the Financial Services Act
2007 of the Republic of Mauritius and is primarily engaged in the business of investing in Indian companies through the FDI
route. Aether does not have investments in any entity other than our Company as on the date of this Draft Red Herring Prospectus.

As on the date of this Draft Red Herring Prospectus, Aether holds 23,998,045 Equity Shares constituting 30.65% of the pre-
Offer Equity Share capital of our Company. For details in relation to the purchase of Equity Shares by Aether of our Company,
please see “History and Certain Corporate Matters” and “Capital Structure” on pages 156 and 57, respectively.

177
Our Company confirms that the PAN, bank account number(s) and corporate identification number of Aether and the address of
the registrar of companies in Mauritius where Aether is registered, shall be submitted to the Stock Exchanges at the time of filing
this Draft Red Herring Prospectus.

Shareholding pattern

100% of Class A equity shares of Aether carrying 100% of the voting rights and control are held by Indium V (Mauritius)
Holdings Limited, a company incorporated in Mauritius, which is controlled by Global Opportunity Advisors (Mauritius)
Limited. Aether has also issued Class B equity shares, which do not carry any voting rights, to Waverly Pte. Ltd., a company
incorporated in Singapore, which is a wholly-owned indirect subsidiary of GIC (Ventures) Pte. Ltd., a company incorporated in
Singapore. There is no natural person holding 15% or more of the voting rights of Aether.

The board of directors of Indium V (Mauritius) Holdings Limited comprises:

1. Ashraf Ramtoola; and

2. Kamalam Pillay Rungapadiachy.

Board of directors

As on the date of this Draft Red Herring Prospectus, the board of directors of Aether comprises of:

1. Ashraf Ramtoola; and

2. Kamalam Pillay Rungapadiachy.

Details of change in control

There has been no change in the control of Aether in the last three years preceding the date of this Draft Red Herring Prospectus.
For details of the shareholding of Aether please see “Aether (Mauritius) Limited (“Aether”) – Shareholding pattern” on page
178.

Change in control of our Company

TN V LLP and Aether are not the original promoters of our Company and first invested in the Company pursuant to the SPSSA
and SHA, each dated March 20, 2017. For details of our original promoters, see ‘History and Certain Corporate Matters – Major
events and milestones in relation to our Company’ on page 158. The Company received requests from TN V LLP and Aether
dated July 23, 2019 and July 22, 2019, respectively, for reclassification of their shareholding from public to promoter and the
Board pursuant to resolution dated July 31, 2019 took on record that TN V LLP and Aether shall be identified as Promoters. For
details in relation to the purchase of Equity Shares and acquisition of control of our Company by TN V LLP and Aether, please
see “History and Certain Corporate Matters” and “Capital Structure” on pages 156 and 57, respectively.

Experience of our Promoters in the business of our Company

Due to the nature of their respective core business activities, our Promoters may not have adequate experience in the business
activities undertaken by our Company. Please see “Risk Factors – Our Promoters may not have adequate experience in the
business activities undertaken by our Company” on page 34.

Interest of our Promoters

(a) Our Promoters are interested in our Company to the extent that they are promoters of our Company and to the extent of
their shareholding in our Company, the Directors nominated by them on the Board and the dividends payable, if any,
and any other distributions in respect of the Equity Shares held by them in our Company. For details of the Promoters’
shareholding in our Company and aforementioned Directors nominated on the Board, see “Capital Structure” and “Our
Management” beginning on pages 57 and 161, respectively.

(b) None of our Promoters have any interest in any property acquired by our Company in the preceding three years or
proposed to be acquired by our Company, as on the date of this Draft Red Herring Prospectus.

(c) Our Promoters are not interested as a member of a firm or a company (other than our Company) and no sum has been
paid or agreed to be paid to any of our Promoters or to any firm or company in which our Promoters are members, in
cash or shares or otherwise by any person for services rendered by them in connection with the promotion or formation
of our Company.

178
(d) None of our Promoters have any interest in any transaction by our Company for acquisition of land, construction of
building or supply of machinery.

Payment or benefits to our Promoters

Except as disclosed in “Financial Information” beginning on page 204, our Company has not entered into any contract,
agreements or arrangements in the preceding two years in which our Promoters are directly or indirectly interested, nor does our
Company propose to enter into any such contract, arrangement or agreements in which our Promoters are directly or indirectly
interested and no payments or benefits are intended to be made to the Promoters and the members of the Promoter Group or have
been made to them in respect of the contracts, agreements or arrangements which are proposed to be entered into with them.

Material Guarantees

Our Promoters have not given any material guarantees to any third parties with respect to the Equity Shares, as on the date of
this Draft Red Herring Prospectus.

Disassociation by our Promoters in the three immediately preceding years

Except as disclosed below, our Promoters have not disassociated themselves from any companies or firms during the three
immediately preceding years:

S. Name of disassociated Promoter who has Reasons and circumstances Date of

No. entity disassociated leading to the disassociation disassociation
and terms of disassociation
1. Integrace Private Limited TN V LLP Transfer of shares to True January 24, 2019
North Fund VI LLP

Promoter Group

Details of the Promoter Group of our Company in terms of Regulation 2(1)(pp) of the SEBI ICDR Regulations (excluding our
Promoters) are provided below:

Entities forming part of Promoter Group

1. Indium V (Mauritius) Holdings Limited;

2. Waverly Pte. Ltd.;

3. Actify Data Labs Private Limited;

4. DeGustibus Hospitality Private Limited;

5. Metaffinity Private Limited;

6. Seedworks International Private Limited;

7. Sesa Care Private Limited;

8. Threpsi Care LLP;

9. Condis India Healthcare Limited;

10. KIMS Healthcare Holding Company Limited; and

11. Kids Clinic India Private Limited.

The abovementioned entities Actify Data Labs Private Limited, DeGustibus Hospitality Private Limited, Metaffinity Private
Limited, Seedworks International Private Limited, Sesa Care Private Limited, Threpsi Care LLP, Condis India Healthcare
Limited, KIMS Healthcare Holding Company Limited and Kids Clinic India Private Limited have been identified as part of the
Promoter Group solely on account of the direct shareholding of our Promoter, TN V LLP in them.

179
 OUR GROUP COMPANY

In terms of the SEBI ICDR Regulations, the term “Group Company” includes such companies (other than promoters and
subsidiaries) with which there were related party transactions as disclosed in the Restated Financial Information, as covered
under the applicable accounting standards, and also other companies as considered material by our Board. Pursuant to
resolution of our Board dated November 18, 2019, for the purposes of disclosure in connection with the Offer, the companies
which shall be disclosed as a ‘Group Company’ are: (i) the companies (other than promoters) with which there were related
party transactions as per the Restated Financial Information; (ii) the companies (other than promoters) with which there were
related party transactions for the period beginning September 30, 2019; and (iii) such other companies considered material by
our Board.

Accordingly, in terms of the materiality policy adopted by our Board for determining group companies, our Board has identified
Actify Data Labs Private Limited, as a Group Company, as on the date of this Draft Red Herring Prospectus.

A. Details of our Group Company

Actify Data Labs Private Limited (“Actify”)

Corporate Information

Actify was incorporated on January 1, 2018 under the Companies Act at Bengaluru as a private limited company. Actify
is engaged in the business of providing data driven insights, predictive analytics, machine learning and artificial
intelligence solutions and services in India and abroad, including but not limited to offering consulting services, training
of personnel, carrying out research and development activities, setting up innovation centers, developing software,
hosting software solutions, supporting solution implementation and augmenting resources, which may involve
importing, exporting, selling, licensing, purchasing, distributing, hosting or otherwise dealing in various owned and
third-party software products, platform and packages and establishing partnerships with other organizations (including
academic institutions) for activities including but not limited to training, consulting, co-developing software and
conducting joint research and development. The corporate identity number of Actify is U74999KA2018PTC109083
and its registered office is located at Rocklines House, Ground Floor, 9/2 Muesum Road, Bengaluru 560 001, Karnataka,
India.

Financial Information

(₹ in million except per share data)

Particulars Financial Year 2019*
Equity Capital 58.10
Reserves (excluding revaluation reserves) and surplus (40.16)
Sales/Turnover 21.13
Profit/(Loss) after tax (40.16)
Earnings per share of face value ₹ 10 each (basic) (in ₹) (9.90)
Earnings per share of face value ₹ 10 each (diluted) (in ₹) (9.90)
Net asset value per share 3.09
* The financial data relates to the period between January 1, 2018 and March 31, 2019. No financial data available for prior
periods as Actify was incorporated on January 1, 2018.

There are no significant notes of the auditors in relation to the above-mentioned financial information for the last three
Financial Years.

B. Litigation

Our Group Company is not party to any pending litigation which has a material impact on our Company.

C. Loss making Group Company

Our Group Company incurred a loss of ₹ 40.16 million for the period between January 1, 2018 and March 31, 2019.

D. Group Company which is a sick industrial company

Our Group Company is not a sick company and does not fall under the definition of sick companies under the erstwhile
Sick Industrial Companies (Special Provisions) Act, 1985.

180
E. Group Company under winding up/insolvency proceedings

Our Group Company is not under any winding up and no insolvency proceedings has been initiated against it under
applicable law.

F. Defunct Group Company

During the five years immediately preceding the date of this Draft Red Herring Prospectus, our Group Company has
not become defunct and no application has been made to the relevant registrar of company for striking off its name.

G. Nature and Extent of Interest of Group Company

In the promotion of our Company

Our Group Company does not have any interests in the promotion of our Company.

In the properties acquired by our Company in the past three years prior to filing this Draft Red Herring
Prospectus or proposed to be acquired by it

Our Group Company is not interested in the properties acquired by our Company in the three years preceding the filing
of this Draft Red Herring Prospectus or proposed to be acquired by it.

In transactions for acquisition of land, construction of building, supply of machinery, etc.

Our Group Company is not interested in any transactions for the acquisition of land, construction of building or supply
of machinery, etc.

H. Common Pursuits between our Group Company and our Company

Our Group Company is not engaged in activities similar to that of our Company.

I. Related business transactions within our Group Company and significance on the financial performance of our
Company

Other than the transactions disclosed in “Restated Financial Information” and “Summary of the Offer Document -
Summary of Related Party Transactions” on pages 204 and 19, respectively, there are no other related business
transactions between the Group Company and our Company.

J. Business interests or other interests

Our Group Company does not have any business interest in our Company.

K. Other Confirmations

The equity shares of our Group Company are not listed on any stock exchange. For further details, see “Other
Regulatory and Statutory Disclosures” on page 303.

181
 DIVIDEND POLICY

Our Company has no formal dividend policy as on date of this Draft Red Herring Prospectus. The declaration and payment of
dividends on our Equity Shares, if any, will be recommended by our Board and approved by our Shareholders, at their discretion,
subject to the provisions of the Articles of Association and the Companies Act. We may retain all our future earnings, if any, for
use in the operations and expansion of our business. As a result, we may not declare dividend in the foreseeable future. The
dividend, if any, will depend on a number of factors, including but not limited to our Company’s profits, capital requirements,
overall financial condition, contractual restrictions and other factors considered relevant by our Board. Our Company may also,
from time to time, pay interim dividends. For details in relation to risks involved in this regard, see “Risk Factors – Our ability
to pay dividends in the future will depend on our earnings, financial condition, working capital requirements, capital
expenditures and restrictive covenants of our financing arrangements” on page 36.

In addition, our ability to pay dividends may be impacted by a number of factors, including restrictive covenants under the loan
or financing arrangements our Company is currently availing of or may enter into to finance our fund requirements for our
business activities. For further details, see “Financial Indebtedness” on page 273.

We have not declared any dividends on the Equity Shares in any of the three Financial Years preceding the filing of this Draft
Red Herring Prospectus.

182
 SELECTED STATISTICAL INFORMATION

The following information should be read in conjunction with our “Restated Financial Information” on page 204 as well as
“Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 132
and 274, respectively.

Certain non-Ind AS (and non-generally accepted accounting principles) financial measures and certain other statistical
information relating to our operations and financial performance have been included in this section and elsewhere in this Draft
Red Herring Prospectus. We compute and disclose such financial measures and such other statistical information relating to
our operations and financial performance as we consider such information to be useful measures of our business and financial
performance, and because such measures are frequently used by securities analysts, investors and others to evaluate the
operational performance of financial services businesses, many of which provide such financial measures and other statistical
and operational information when reporting their financial results. Such financial measures and such other statistical
information relating to our operations and financial performance may not be computed on the basis of any standard methodology
that is applicable across the industry and therefore may not be comparable to financial measures and statistical information of
similar nomenclature that may be computed and presented by other financial services companies. Such measures should be read
together with the nearest Ind AS measure.

Financial Ratios

Particulars As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages)
Gross Loan Assets1 31,133.76 19,089.71 24,435.74 13,559.32 8,473.16
Growth Rate of Gross Loan Assets2 63.1% 80.2% 60.0% 54.7%
Average Gross Loan Assets3 27,784.75 16,324.52 18,997.53 11,016.24 6,975.29
Assigned Assets 4 4,746.42 674.05 2,920.65 374.62 542.41
Loans – Principal Outstanding 26,329.46 18,339.56 21,466.74 13,144.09 7,928.97
Total Assets 32,476.54 20,695.08 24,820.05 13,649.42 9,889.58
Disbursements5 8,857.53 7,168.35 15,728.21 7,455.29 4,243.57
Disbursements Growth Rate6 23.6% 111.0% 75.7% 53.5%
Total Outstanding Loan Accounts7 37,086 21,689 29,372 15,723 9,747
Revenue from Operations 1,838.93 1,035.13 2,598.76 1,320.92 915.77
Other Income 98.80 35.20 110.45 21.45 0.01
Total Income (Revenue from 1,937.73 1,070.33 2,709.21 1,342.37 915.78
operations + Other Income)
Interest on borrowings and Interest on 904.07 520.06 1,248.83 647.11 532.85
debt securities
Operating expenses8 491.35 332.43 735.30 423.82 262.00
Net total Income9 1,033.66 550.27 1,460.38 695.26 382.93
Operating Expenses / Total Income 25.4% 31.1% 27.1% 31.6% 28.6%
Cost to Income Ratio (Operating 47.5% 60.4% 50.3% 61.0% 68.4%
Expenses / Net Total Income)
Impairment loss allowance10 149.89 91.06 119.69 56.74 35.85
Stage 3 loan assets 11 268.36 129.62 170.45 80.68 57.24
Stage 3 loan assets / Gross Loan 0.9% 0.7% 0.7% 0.6% 0.7%
Assets
Impairment loss allowance on Stage 3 56.57 25.81 42.40 16.50 9.53
loan assets 12
Stage 3 loan assets (Net) 13 211.79 103.81 128.05 64.18 47.71
Net Loan Assets14 30,983.87 18,998.65 24,316.05 13,502.58 8,437.31
Stage 3 loan assets (Net) / Net loan 0.7% 0.5% 0.5% 0.5% 0.6%
assets
Assigned Assets/ Gross Loan Assets 15.2% 3.5% 12.0% 2.8% 6.4%
Notes:
1. Gross Loan Assets represents the aggregate of current principal outstanding and overdue principal outstanding, if any, for all loan
assets under management which includes loan assets held by the Company as of the last day of the relevant year or period as well as
loan assets which have been transferred by the Company by way of assignment and are outstanding as of the last day of the relevant
year or period.
2. Growth Rate of Gross Loan Assets represents percentage growth in Gross Loan Assets as of the last day of the relevant year or period
over Gross Loan Assets as of the last day of corresponding immediately prior period.

183
3. Average Gross Loan Assets represents the simple average of gross loan assets as of the last day of the relevant year or period and gross
loan assets as of the last day of the immediately prior year.
4. Assigned Assets represents the aggregate of current principal outstanding and overdue principal outstanding, if any, for all loan assets
which have been transferred by the Company by way of assignment as of the last day of the relevant year or period. The Assigned Assets
represent the direct assignments and not pass through certificate.
5. Disbursements represents the aggregate of all loan amounts disbursed to our customers in the relevant year or period.
6. Disbursements Growth Rate represents the percentage growth in disbursements for the relevant year or period over disbursements of the
corresponding immediately prior period.
7. Total Outstanding Loan Accounts represents the aggregate number of loan accounts outstanding as of the end of the relevant year or
period. Number of loans excludes Insurance and Top up loan cases. Top up loan is an additional credit facility offered to existing
customers after evaluating their repayment track record and Insurance loan is a loan provided to the customer to fund the insurance
premium for life or general insurance availed by the customer.
8. Operating Expenses is the sum of Employee Benefits Expenses, Depreciation and Amortization, Interest on lease liability, Bank charges
and others and other Expenses for the relevant year or period as per restated financial statements.
9. Net Total Income represents total income minus interest on borrowings and interest on debt securities for the relevant year or period as
per restated financial statements.
10. Impairment loss allowance represents expected credit loss on loans excluding impairment loss allowance on undisbursed commitments
as of the last day of the relevant year or period as per restated financial statements.
11. Stage 3 loan assets represents closing balance of loan assets overdue for 90 days or more as of the last day of the relevant year or period.
12. Impairment loss allowance on Stage 3 loan assets represents impairment loss allowance on Stage 3 loan assets as at the end of the
relevant year or period as per the restated financial statements.
13. Stage 3 loan assets (Net) represents Stage 3 loan assets less Impairment loss allowance on Stage 3 loan assets as at the end of the relevant
year or period as per the restated financial statements.
14. Net Loan Assets represents Gross Loan Assets less impairment loss allowance excluding impairment loss allowance on undisbursed
commitments as of the last day of the relevant year or period.
15. Percentages for September 2018 and September 2019 have not been annualised. They are not comparable.

Return on Equity Tree

Particulars As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages and ratios)
Total assets 32,476.54 20,695.08 24,820.05 13,649.42 9,889.58
Average total assets1 28,648.30 17,172.25 19,234.74 11,769.50 7,908.26
Equity or Net worth2 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58
Average Equity or Average net 7,062.22 4,068.96 4,241.78 3,157.87 2,301.06
worth3
Interest Income on term loans 1,548.37 970.44 2,289.15 1,274.47 851.78
Interest on borrowings and Interest 904.07 520.06 1,248.83 647.11 532.85
on debt securities
Net Interest Income 4 644.30 450.38 1,040.32 627.36 318.93
Non-Interest Income5 389.36 99.89 420.06 67.90 64.00
Operating Expenses6 491.35 332.43 735.30 423.82 262.00
Credit Cost 7 39.46 43.43 73.13 28.74 17.37
Profit before tax 502.85 174.41 651.95 242.70 103.56
Tax expense 135.44 59.85 199.91 82.74 36.79
Profit after tax 367.41 114.56 452.04 159.96 66.77
Note:
1. Average total assets represent the simple average of total assets as of the last day of the relevant year or period and total assets as of the
last day of the immediately prior year.
2. Equity or Net worth means the aggregate value of the paid-up share capital of the Company and all reserves created out of profits and
securities premium account as per restated financial statements.
3. Average equity or average net worth represents the simple average of our equity as of the last day of the relevant year or period and our
equity as of the last day of the immediately prior year.
4. Net Interest Income represents interest income on term loans minus Interest on borrowings and Interest on debt securities for the relevant
year or period as per the restated financial statements.
5. Non-interest income represents total income minus interest income on term loans for the relevant year or period as per restated financial
statements.
6. Operating Expenses is the sum of Employee Benefits Expenses, Depreciation and Amortization, Interest on lease liability, Bank charges
and others and other Expenses for the relevant year or period as per restated financial statements.
7. Credit cost represents impairment on financial instruments for the relevant year or period as per the restated financial statements.
8. Percentages for September 2018 and September 2019 have not been annualised. They are not comparable.

184
Return on Equity Tree (Percentages)

Particulars As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages and ratios)
Total assets 32,476.54 20,695.08 24,820.05 13,649.42 9,889.58
Average total assets1 28,648.30 17,172.25 19,234.74 11,769.50 7,908.26
Equity or Net worth2 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58
Average Equity or Average net 7,062.22 4,068.96 4,241.78 3,157.87 2,301.06
worth3
Interest Income on term loans/ 5.4% 5.7% 11.9% 10.8% 10.8%
Average total assets
Interest on borrowings and Interest 3.2% 3.0% 6.5% 5.5% 6.7%
on debt securities / Average total
assets
Net Interest Income 4 / Average total 2.2% 2.6% 5.4% 5.3% 4.0%
assets
Non-Interest Income5 / Average total 1.4% 0.6% 2.2% 0.6% 0.8%
assets
Operating Expenses6 / Average total 1.7% 1.9% 3.8% 3.6% 3.3%
assets
Credit Cost7 / Average total assets 0.1% 0.3% 0.4% 0.2% 0.2%
Profit before tax / Average total 1.8% 1.0% 3.4% 2.1% 1.3%
assets
Tax expense/ Average total assets 0.5% 0.3% 1.0% 0.7% 0.5%
Profit after tax on average total assets 1.3% 0.7% 2.4% 1.4% 0.8%
(ROA)
Leverage (Average total 4.06 4.22 4.53 3.73 3.44
assets/average Equity or average Net-
worth)
Profit after tax on average equity or 5.2% 2.8% 10.7% 5.1% 2.9%
average Net-worth (ROE)
Note:
1. Average total assets represent the simple average of total assets as of the last day of the relevant year or period and total assets as of the
last day of the immediately prior year.
2. Equity or Net worth means the aggregate value of the paid-up share capital of the Company and all reserves created out of profits and
securities premium account as per restated financial statements.
3. Average equity or average Net worth represents the simple average of our equity as of the last day of the relevant year or period and
our equity as of the last day of the immediately prior year.
4. Net Interest Income represents interest income on term loans minus Interest on borrowings and debt securities for the relevant year or
period as per the restated financial statements.
5. Non-interest income represents total income minus interest income on term loans for the relevant year or period as per restated
financial statements.
6. Operating Expenses is the sum of Employee Benefits Expenses, Depreciation and Amortization, Interest on lease liability, Bank charges
and others and other Expenses for the relevant year or period as per restated financial statements.
7. Credit cost represents impairment on financial instruments for the relevant year or period as per the restated financial statements.
8. Percentages for September 2018 and September 2019 have not been annualised. They are not comparable.

Yields, Spreads and Margins

Particulars As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages)
Interest Earning Assets1 28,022.67 19,202.45 21,529.33 13,216.13 8,590.69
Average Interest Earning Assets 2 24,776.00 16,209.29 17,372.73 10,903.41 7,107.79
Average total assets 28,648.30 17,172.25 19,234.74 11,769.50 7,908.26
Interest Bearing Liabilities 3 22,956.31 15,562.27 19,256.41 10,198.76 6,630.45
Average Interest-Bearing Liabilities 4 21,106.36 12,880.52 14,727.59 8,414.61 5,458.96
Average Interest Earning Assets as 86.5% 94.4% 90.3% 92.6% 89.9%
percentage of Average Total Assets

185
 Particulars As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages)
Average Interest-bearing liabilities as 73.7% 75.0% 76.6% 71.5% 69.0%
percentage of Average Total Assets
Average Interest Earning Assets as 117.4% 125.8% 118.0% 129.6% 130.2%
percentage of Average Interest-Bearing
Liabilities
Average Yield on Loans - Principal 6.5% 6.2% 13.2% 12.1% 13.1%
Outstanding 5
Average Cost of Borrowing (excluding 4.3% 4.0% 8.5% 7.7% 9.8%
assignments)6
Spread7 2.2% 2.1% 4.7% 4.4% 3.3%
Average Yield on Disbursement 8 13.2% 12.0% 12.6% 11.7% 12.9%
Average cost of Incremental 9.0% 7.9% 8.6% 7.5% 9.7%
borrowings9
Notes:
1. Interest Earning Assets represents term loans (gross) (Loans – Principal outstanding) and other bank balances (fixed deposits placed
with banks) for the relevant year or period as per restated financial statements.
2. Average interest earning assets represents simple average of our Interest Earning Assets as of the last day of the relevant year or period
and our Interest-Earning Assets as of the last day of the immediately prior year.
3. Interest bearing liabilities represents borrowings (including debt securities) as per restated financial statements.
4. Average Interest-Bearing Liabilities represents simple average of our Interest-Bearing Liabilities as of the last day of the relevant year
or period and our Interest-Bearing Liabilities as of the last day of the immediately prior year.
5. Average Yield on Loans - Principal outstanding represents (Interest on term loans/ Average loans – principal outstanding) for the relevant
year or period as per restated financial statements. Average loans – principal outstanding represents the simple average of loans –
principal outstanding as of the last day of the relevant year or period and loans – principal outstanding as of the last day of the immediately
prior year.
6. Average Cost of Borrowing excluding assignments represents (Interest on borrowings and Interest on debt securities)/ Average
borrowings (including debt securities) for the relevant year or period as per restated financial statements. Average (borrowings including
debt securities) represents the simple average borrowings including debt securities as of the last day of the relevant year or period and
borrowings including debt securities as of the last day of the immediately prior year.
7. Spread represents Average yield on Loans - Principal outstanding Less Average Cost of Borrowings (excluding assignments).
8. Average Yield on disbursement represents weighted average yield on Disbursement, weights being disbursed amount of each loan
disbursed during the relevant year or period.
Formula - Loan account wise sum product of ((Interest rate at which the loan is disbursed * Disbursal amount for corresponding loan
account)/ Total disbursal amount during a year/ period)
9. Average yield on Incremental borrowings represents weighted average cost of borrowings raised during the period, weights being
borrowings amount for each drawdown during the relevant year or period.
10. Percentages for September 2018 and September 2019 have not been annualised. They are not comparable.

Details of Borrowings

Particulars As of and for the six As of and the year ended March 31,
months ended
September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages and ratios)
Number of banks borrowed from 14 10 14 10 10
Private sector banks 7 4 7 4 3
Public sector banks 7 6 7 6 7
Amount borrowed 22,956.31 15,562.27 19,256.41 10,198.76 6,630.45
(Borrowings + Debt securities)
Private sector banks 8,205.90 2,983.18 4,447.04 2,144.93 375.48
Public sector banks 8,916.93 8,290.43 8,941.74 5,598.82 5,666.98
Other parties 364.67 - - - -
NHB loans 5,468.81 4,288.66 5,867.63 2,455.01 587.99
Average Cost of Borrowings (excluding assignments) 4.3% 4.0% 8.5% 7.7% 9.8%
Debt1 22,956.31 15,562.27 19,256.41 10,198.76 6,630.45
Equity2 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58
Debt to equity ratio 2.58 3.19 3.68 3.14 2.16
CRAR (%)3 47.6% 43.8% 38.5% 43.0% 68.5%
Note:

186
1. Debt represents the Borrowings (including debt securities) as of the last day of the relevant year or period as per restated financial
statements.
2. Equity means the aggregate value of the paid-up share capital of the Company and all reserves created out of profits and securities
premium account as per restated financial statements.
3. Reported CRAR presented in accordance with restated Ind AS financial information.
4. Percentages for September 2019 and September 2018 have not been annualised. They are not comparable.

Borrowings sanctioned

Particulars As of and for the period September 30, As of and the year March 31,
2019 2018 2019
(₹ in million)
Bank loans 5,900.00 1,000.00 4,650.00
NHB 2,400.00 3,900.00 3,900.00
Total 8,300.00 4,900.00 8,550.00

Assignments during the year/ period

Particulars As of and for the period September 30, As of and the year March 31,
2019 2018 2019
(₹ in million)
Direct assignment 1,513.40 - 3,008.80
Total 1,513.40 - 3,008.80

Bifurcation of loan accounts:

Particulars As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(Count in number, except percentages)
Number of total loan accounts 37,086 21,689 29,372 15,723 9,747
Salaried loan accounts 74.4% 74.6% 74.5% 72.7% 68.5%
Self-employed loan accounts 25.6% 25.4% 25.5% 27.3% 31.5%
New to Credit loan accounts1 44.1% 47.1% 45.8% 48.1% 49.8%
Have Credit History 55.9% 52.9% 54.2% 51.9% 50.2%
Number of Active Customer Accounts2 36,763 21,437 29,085 15,533 9,587
Note:
1. New to credit represents loan where the customers do not have a credit history or where the credit history is too recent for CIBIL to
give credit scores to the customers.
2. Active customer accounts represent customers who have a loan existing with the Company.
3. Loan accounts are classified as salaried and self-employed, new to credit and have credit history at the time of sanction of loan.

Product wise Gross Loan Assets by segment (Retail and Corporate)

Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages)
Retail 30,267.68 18,287.04 23,595.08 13,383.40 8,473.16
Housing Loan 28,475.49 17,653.35 22,486.95 13,022.14 8,196.78
Loans for Purchase of Commercial Property 328.25 150.57 249.86 73.86 42.42
Loans Against Property 1,463.94 483.12 858.27 287.40 233.96
Corporate 866.08 802.67 840.66 175.92 -
Developer Finance 866.08 802.67 840.66 175.92 -
Total 31,133.76 19,089.71 24,435.74 13,559.32 8,473.16
Retail 97.2% 95.8% 96.6% 98.7% 100.0%
Corporate 2.8% 4.2% 3.4% 1.3% -
Note:
Top up and Insurance loans have been mapped to their respective parent loans. Top up loan is an additional credit facility offered to existing
customers after evaluating their repayment track record and Insurance loan is a loan provided to the customer to fund the insurance premium
for life or general insurance availed by the customer

187
Product Wise Gross Loan Assets (Number of loans)

Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(counts)
Housing Loan 34,919 20,849 27,959 15,224 9,408
Loans for Purchase of Commercial Property 426 209 337 110 62
Developer Finance 34 27 32 7 0
Loans Against Property 1,707 604 1,044 382 277
Total 37,086 21,689 29,372 15,723 9,747
Note:
Number of loans excludes Insurance and Top up loan cases. Top up and Insurance loans have been mapped to their respective parent loans.
Top up loan is an additional credit facility offered to existing customers after evaluating their repayment track record and Insurance loan is a
loan provided to the customer to fund the insurance premium for life or general insurance availed by the customer

Interest yield on Gross Loan Assets by Product (Based on Closing Balance)

Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(percentages)
Housing Loan 12.8% 11.9% 12.3% 12.2% 13.0%
Loans for Purchase of Commercial Property 15.5% 15.0% 15.1% 15.7% 16.1%
Developer Finance 14.5% 13.2% 13.9% 12.8% 0.0%
Loans Against Property 15.9% 15.4% 15.4% 15.9% 16.1%
Total 13.0% 12.1% 12.5% 12.3% 13.1%
Note:
Formula - Sum Product of (Closing interest rate loan account wise* Closing Gross Loan Assets for corresponding loan account / Closing
Gross Loan Assets).

Gross Loan Assets by nature of occupation

Occupation As of and for the six months ended As of and the year ended March 31,
September 30,
2019 2018 2019 2018 2017
Amount % Share Amount % Share Amount % Share Amount % Share Amount %
Share
(₹ in million, except percentages)
Salaried 22,609.29 72.6% 13,956.93 73.1% 17,780.09 72.8% 9,982.35 73.6% 5,879.67 69.4%
Self Employed 7,658.39 24.6% 4,330.11 22.7% 5,814.99 23.8% 3,401.05 25.1% 2,593.49 30.6%
Corporate 866.08 2.8% 802.67 4.2% 840.66 3.4% 175.92 1.3% - -
Total 31,133.76 100.0% 19,089.71 100.0% 24,435.74 100.0% 13,559.32 100.0% 8,473.16 100.0%
Note: Loan accounts are classified as Salaried, Self-employed and Corporate at the time of sanction of loans.

Percentage Stage 3 Loan Assets by occupation and associated closing yield

Occupation As of and for the six months ended As of and the year ended March 31,
September 30,
2019 2018 2019 2018 2017
% Stage 3 Yield % Stage 3 Yield % Stage 3 Yield % Stage 3 Yield % Stage 3 Yield
Loan Assets Loan Assets Loan Assets Loan Assets Loan Assets
(percentages)
Salaried 0.6% 12.7% 0.4% 11.6% 0.5% 12.2% 0.3% 11.8% 0.4% 12.7%
Self Employed 1.8% 14.0% 1.6% 13.2% 1.4% 13.5% 1.5% 13.5% 1.4% 14.0%
Corporate 0.0% 14.5% 0.0% 13.2% 0.0% 13.9% 0.0% 12.8% 0.0% -
Total 0.9% 13.0% 0.7% 12.1% 0.7% 12.5% 0.6% 12.3% 0.7% 13.1%
Note:
1. Loan accounts are classified as Salaried, Self-employed and Corporate at the time of sanction of loans.
2. Formula: Loan account wise sum product of closing Gross Loan Assets for the respective occupation and corresponding closing Interest
rate for the respective loan account/ Total closing Gross Loan Assets for the respective occupation

188
Gross Loan Assets by credit history

Credit History As of and for the six months ended As of and the year ended March 31,
September 30,
2019 2018 2019 2018 2017
Amount % Share Amount % Share Amount % Share Amount % Share Amount % Share
(₹ in million, except percentages)
New to Credit1 11,165.03 35.9% 7,407.31 38.8% 9,047.18 37.0% 5,664.80 41.8% 3,788.10 44.7%
With Credit History 19,968.73 64.1% 11,682.40 61.2% 15,388.56 63.0% 7,894.52 58.2% 4,685.06 55.3%
Total 31,133.76 100.0% 19,089.71 100.0% 24,435.74 100.0% 13,559.32 100.0% 8,473.16 100.0%
Note:
1. New to credit represents loans in value where the customers do not have a credit history or where the credit history is too recent for
CIBIL to give credit scores to the customers.
2. Loan accounts are classified as new to credit and with credit history at the time of sanction of loans.

Percentage Stage 3 Loan Assets by credit history and associated closing yield

Credit History As of and for the six months ended As of and the year ended March 31,
September 30,
2019 2018 2019 2018 2017
% Stage 3 Yield % Stage 3 Yield % Stage 3 Yield % Stage 3 Yield % Stage 3 Yield
Loan Assets Loan Assets Loan Assets Loan Assets Loan Assets
(percentages)
New to credit 1.0% 13.1% 0.6% 12.2% 0.6% 12.6% 0.5% 12.4% 0.5% 13.1%
With credit history 0.8% 13.0% 0.7% 11.9% 0.7% 12.4% 0.7% 12.0% 0.8% 13.1%
Total 0.9% 13.0% 0.7% 12.1% 0.7% 12.5% 0.6% 12.3% 0.7% 13.1%
Note:
1. New to credit represents loan where the customers do not have a credit history or where the credit history is too recent for CIBIL to give
credit scores to the customers.
2. Formula: Loan account wise sum product of closing Gross Loan Assets for the respective credit history and corresponding closing Interest
rate for the respective loan account/ Total closing Gross Loan Assets for the respective Credit History
3. Loan accounts are classified as new to credit and with credit history at the time of sanction of loans.

189
Gross Loan Assets by Average Ticket Size (Sanctioned Amount)

Ticket size bracket As of and for the six months ended September 30, As of and the year ended March 31,
2019 2018 2019 2018 2017
(₹ in million, except percentages)
Retail Loans
Up to 500,000 1,077.27 3.6% 725.43 4.0% 881.69 3.7% 407.51 3.0% 276.17 3.3%
500,000 to 1 million 10,573.53 34.9% 6,378.16 34.9% 8,183.66 34.7% 4,740.79 35.4% 2,750.01 32.5%
1 million to 1.5 million 9,695.16 32.0% 5,874.69 32.1% 7,472.53 31.7% 4,518.03 33.8% 3,094.97 36.5%
1.5 million to 2 million 4,391.47 14.5% 2,772.27 15.2% 3,487.12 14.8% 2,121.10 15.8% 1,343.76 15.9%
2 million to 2.5 million 1,920.21 6.3% 1,130.33 6.2% 1,496.76 6.3% 804.43 6.0% 558.36 6.6%
Above 2.5 million 2,610.04 8.6% 1,406.16 7.7% 2,073.32 8.8% 791.54 5.9% 449.89 5.3%
Sub Total Retail Sector 30,267.68 100.0% 18,287.04 100.0% 23,595.08 100.0% 13,383.40 100.0% 8,473.16 100.0%
(A)
Developer Finance
5 million to 100 million 866.08 - 802.67 - 840.66 - 175.92 - - -
Sub Total Developer 866.08 - 802.67 - 840.66 - 175.92 - - -
finance (B)
Total (A + B) 31,133.76 - 19,089.71 - 24,435.74 - 13,559.32 - 8,473.16 -
Note:
1. Retail Loans includes Housing loans, Loans against property and loans for purchase of commercial property.
2. The table represents Gross Loan Assets as of the end of the relevant year or period categorised into buckets based on the size of sanctioned loan amount.

190
Gross Loan Assets by States / Territories

States / As of and for the six months ended As of and the year ended March 31,
Territories September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages)
Gujarat 12,598.96 40.5% 7,612.88 39.9% 9,959.86 40.8% 5,157.99 38.0% 2,799.90 33.0%
Maharashtra 7,644.32 24.6% 6,227.73 32.6% 6,943.49 28.4% 4,824.80 35.6% 3,098.04 36.6%
Tamil Nadu 2,879.65 9.2% 1,580.39 8.3% 2,087.32 8.5% 1,175.71 8.7% 803.84 9.5%
Karnataka 2,731.70 8.8% 1,403.69 7.4% 2,004.13 8.2% 951.40 7.0% 762.72 9.0%
Rajasthan 1,386.53 4.5% 622.20 3.3% 931.39 3.8% 408.47 3.0% 252.98 3.0%
Telangana 1,244.82 4.0% 397.00 2.1% 766.24 3.1% 136.69 1.0% 89.17 1.1%
Madhya Pradesh 1,003.34 3.2% 406.52 2.1% 643.71 2.6% 211.08 1.6% 126.84 1.5%
Uttar Pradesh 736.52 2.4% 358.89 1.9% 482.32 2.0% 276.49 2.0% 187.41 2.2%
Haryana 377.15 1.2% 298.28 1.6% 326.30 1.3% 273.37 2.0% 288.34 3.4%
Chhattisgarh 266.98 0.9% 165.68 0.9% 203.90 0.8% 132.63 1.0% 63.92 0.8%
Andhra Pradesh 263.79 0.8% 16.45 0.1% 87.08 0.4% 10.69 0.1% - 0.0%
Total 31,133.76 100.0% 19,089.71 100.0% 24,435.74 100.0% 13,559.32 100.0% 8,473.16 100.0%

191
Gross Loan Assets by Income Group

Income Group As of and for the six months ended September 30, As of and the year ended March 31,
2019 2018 2019 2018 2017
(₹ in million, except percentages)
Retail Loans
Economically Weaker Section1 8,017.01 26.5% 5,117.62 28.0% 6,408.18 27.2% 3,825.93 28.6% 2,641.08 31.2%
Low Income Group2 15,345.80 50.7% 9,512.71 52.0% 11,962.06 50.7% 7,122.02 53.2% 4,137.43 48.8%
Middle Income Group3 6,130.16 20.3% 3,188.26 17.4% 4,606.26 19.5% 2,149.23 16.1% 1,458.83 17.2%
High Income Group4 774.71 2.6% 468.45 2.6% 618.58 2.6% 286.22 2.1% 235.82 2.8%
Sub Total Retail Loans (A) 30,267.68 100.0% 18,287.04 100.0% 23,595.08 100.0% 13,383.40 100.0% 8,473.16 100.0%
Developer Finance
Developer Finance 866.08 - 802.67 - 840.66 - 175.92 - - -
Sub Total Developer finance (B) 866.08 - 802.67 - 840.66 - 175.92 - - -
Total (A + B) 31,133.76 - 19,089.71 - 24,435.74 - 13,559.32 - 8,473.16 -
Note:
1. Economically Weaker Section comprises borrowers with income up to ₹ 0.3 million per annum.
2. Low Income Group comprises borrowers with income above ₹ 0.3 million per annum but less than ₹ 0.6 million per annum
3. Middle Income Group comprises borrowers with income above ₹ 0.6 but less than ₹ 1.8 million per annum.
4. High Income Group comprises borrowers with income above ₹ 1.8 million per annum.
5. Retail Loans includes Housing loans, Loans against property and loans for purchase of commercial property.

192
Product wise Stage 3 loan assets

Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million)
Housing Loan 264.72 126.68 168.30 78.71 56.25
Loans for Purchase of Commercial Property 0 0 0 0 0.99
Developer Finance 0 0 0 0 0
Loans Against Property 3.64 2.94 2.15 1.97 0
Total 268.36 129.62 170.45 80.68 57.24
Note:
Stage 3 loan assets represents closing balance of loan assets overdue for 90 days or more as of the last day of the relevant year or period.

Product wise Stage 3 loan assets (Number of loans) - excluding Insurance cases

Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(counts)
Housing Loan 219 113 149 73 52
Loans for Purchase of Commercial Property - - - - 1
Developer Finance - - - -
Loans Against Property 4 3 2 2 -
Total 223 116 151 75 53
Note:
1. Stage 3 loan assets represents closing balance of loan assets overdue for 90 days or more as of the last day of the relevant year or period.
2. Multiple loans to one customer are considered as one loan.
3. Insurance loans represents insurance given on parent loans where the insurance premium is funded by the Company and collected from
the customer over the parent loan term

Percentage Stage 3 loan assets to Gross Loan Assets

Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(Percentages)
Housing Loan 0.9% 0.7% 0.7% 0.6% 0.7%
Loans for Purchase of Commercial Property 0.0% 0.0% 0.0% 0.0% 2.3%
Developer Finance 0.0% 0.0% 0.0% 0.0% 0.0%
Loans Against Property 0.2% 0.6% 0.3% 0.7% 0.0%
Total 0.9% 0.7% 0.7% 0.6% 0.7%
Note:
Stage 3 loan assets represents closing balance of loan assets overdue for 90 days or more as of the last day of the relevant year or period.

Lagged Stage 3 loan assets on Gross Loan Assets (GLA)

Particulars As of and the year ended March 31,

2019 2018 2017
(Percentages)
1 Year lagged Stage 3 loan assets on GLA 1 1.3% 1.0% 1.0%
2 Year lagged Stage 3 loan assets on GLA 2 2.0% 1.5%
Note:
1. 1-year lagged Stage 3 loan assets on Gross Loan Assets is current year/period Stage 3 loan assets over Gross Loan Assets of the
immediately prior year.
2. 2-year lagged Stage 3 loan assets on Gross Loan Assets is current year/period Stage 3 loan assets over Gross Loan Assets of the year
immediately preceding the prior year.
3. Stage 3 loan assets represents closing balance of loan assets overdue for 90 days or more as of the last day of the relevant year or period.

193
1 day past due percentage on Loans on day of presentation of EMI - Bounce Rate

Particulars As of and for the As of and the year ended March 31,
six months ended
September 30,
2019 2019 2018 2017
Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
No of cases Presented 1,03,993 91,074 77,611 66,599 56,804 47,733 41,670 36,768 32,749 28,512 26,062 23,514 20,321 17,508
No of cases bounced 10,401 8,689 7,102 6,817 6,141 5,589 5,131 5,111 4,515 4,029 3,561 3,221 3,011 2,610
Bounce Rate 10.0% 9.5% 9.2% 10.2% 10.8% 11.7% 12.3% 13.9% 13.8% 14.1% 13.7% 13.7% 14.8% 14.9%
Note:
Number of cases presented and bounced excludes Insurance cases where Insurance loans represents insurance given on parent loans where the insurance premium is funded by the Company and collected from
the customer over the parent loan term.

194
Gross Loan Assets- Pre EMI, Early EMI and EMI

Particulars As of and for the six months ended As of and the year ended March 31,
September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages)
EMI1 26,570.10 85.3% 15,405.57 80.7% 20,276.69 83.0% 10,581.26 78.0% 6,279.51 74.1%
Pre – EMI2 4,244.78 13.7% 3,435.95 18.0% 3,847.17 15.7% 2,782.85 20.5% 2,034.93 24.0%
Early EMI3 318.88 1.0% 248.19 1.3% 311.88 1.3% 195.21 1.5% 158.72 1.9%
Total 31,133.76 100.0% 19,089.71 100.0% 24,435.74 100.0% 13,559.32 100.0% 8,473.16 100.0%
Note:
1. EMI are loans where the construction is completed hence loan is fully disbursed and EMI on loan is being collected.
2. Pre – EMI are loans where property is under construction hence loans are partially disbursed accordingly only interest is being
collected from the customer. EMI collection will start full disbursements happen.
3. Early EMI are loans where property is under construction hence loans are partially disbursed however EMI has started on request of
customers.

Loan Assets – Days Past Due (DPD) 30+ and Days Past Due (DPD) 90+

Particulars As of and for the six months ended As of and the year ended March 31,
September 30,
2019 2018 2019 2018 2017
(₹ in million)
DPD 30+ 1 471.38 298.87 364.12 182.47 161.05
DPD 90+ 2 268.36 129.62 170.45 80.68 57.24
Note:
1. DPD 30+ represents addition of Stage 2 loan assets and Stage 3 loan assets at the end of the relevant year or period as per restated
financial statements.
2. DPD 30+ represents Stage 3 loan assets at the end of the relevant year or period as per restated financial statements.

Product wise Loan Assets – Days Past Due (DPD) 30+ and Days Past Due (DPD) 90+

Particulars As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million)
Housing Loan DPD 30+ 1 444.22 291.70 356.71 175.20 158.62
DPD 90+ 2 264.72 126.68 168.30 78.71 56.25
Loans for Purchase of DPD 30+ 1 1.40 0.75 - - 0.99
Commercial Property DPD 90+ 2 - - - - 0.99
Developer Finance DPD 30+ 1 10.73 - - - -
(Construction Finance) DPD 90+ 2 - - - - -
Loans Against Property DPD 30+ 1 15.03 6.42 7.41 7.27 1.44
DPD 90+ 2 3.64 2.94 2.15 1.97 -
Note:
1. DPD 30+ represents addition of Stage 2 loan assets and Stage 3 loan assets at the end of the relevant year or period as per restated
financial statements.
2. DPD 90+ represents Stage 3 loan assets at the end of the relevant year or period as per restated financial statements.

Loan to Value (LTV)

Particulars As of and for the six months ended September 30,

2019 2018
Based on Sanction value Based on Gross Loan Based on Sanction value Based on Gross
Assets Loan Assets
(₹ in million, except percentages)
Less than 50% 6,122.74 19.7% 9,010.46 28.9% 2,957.10 15.5% 4,496.73 23.6%
50-80% 10,208.88 32.8% 15,761.14 50.6% 5,925.26 31.0% 8,539.90 44.7%
Above 80% 14,802.14 47.5% 6,362.16 20.5% 10,207.35 53.5% 6,053.08 31.7%
Total 31,133.76 100.0% 31,133.76 100.0% 19,089.71 100.0% 19,089.71 100.0%

195
 Particulars As of and the year ended March 31,
2019 2018 2017
Based on Sanction Based on Gross Based on Sanction Based on Gross Based on Based on Gross
value Loan Assets value Loan Assets Sanction value Loan Assets
(₹ in million, except percentages)
Less than 4,234.10 17.3% 6,647.82 27.2% 1,522.77 11.2% 2,555.68 18.8% 741.46 8.8% 1,371.98 16.2%
50%
50-80% 7,722.22 31.6% 12,578.20 51.5% 4,414.27 32.6% 6,393.99 47.2% 3,075.81 36.3% 4,102.89 48.4%
Above 80% 12,479.42 51.1% 5,209.72 21.3% 7,622.28 56.2% 4,609.65 34.0% 4,655.89 54.9% 2,998.29 35.4%
Total 24,435.74 100.0% 24,435.74 100.0% 13,559.32 100.0% 13,559.32 100.0% 8,473.16 100.0% 8,473.16 100.0%

Product wise Loan to Value (LTV)

Product As of and for the six months ended As of and the year ended March 31,
September 30,
2019 2018 2019 2018 2017
Based on Based Based on Based Based on Based Based on Based Based on Based
sanction on sanction on sanction on sanction on sanction on
value Gross value Gross value Gross value Gross value Gross
Loan Loan Loan Loan Loan
Assets Assets Assets Assets Assets
(Percentages)
Housing Loan 73.8% 58.4% 75.8% 63.4% 75.0% 58.7% 76.1% 64.0% 77.2% 66.0%
Loans for Purchase 59.8% 54.0% 58.7% 52.7% 59.6% 54.1% 58.2% 50.6% 56.8% 48.5%
of Commercial
Property
Developer Finance 39.0% 21.4% 42.3% 22.4% 40.8% 21.2% 40.0% 23.7% 0.0% 0.0%
Loans Against 33.4% 31.7% 33.4% 31.2% 33.3% 31.2% 32.0% 29.7% 35.6% 33.6%
Property
Total 71.7% 57.1% 74.4% 62.3% 73.3% 57.6% 74.9% 63.1% 75.9% 64.9%
Note:
1. LTV is calculated product wise.
2. LTV on sanction value is calculated as simple average of all customer code wise sanction value of the loans to that customer / collateral
value of the loans to that customer.
3. LTV on Gross Loan Assets is calculated as simple average of all customer code wise Gross Loan Assets of the loans to that customer /
collateral value of the loans to that customer.
4. Collateral value excludes collateral value of Insurance loan and Top up loans where the principal loan is active as the collateral value
for those loans are included in the collateral value of the principal loan account.
5. Total LTV (based on Sanction value and Gross Loan Assets) is calculated as product wise {(sum product of (LTV (based on Sanction
value and Gross Loan Assets) of that product * number of loan accounts active for the product))/ total number of loan accounts active}.
Number of loan accounts excludes Insurance loans and Top up loans where the principal loan is active.
6. Top up loan is an additional credit facility offered to existing customers after evaluating their repayment track record and Insurance loan
is a loan provided to the customer to fund the insurance premium for life or general insurance availed by the customer.

Product wise contracted tenure (in Months, on Origination)

Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(in months)
Housing Loan 230.51 230.64 232.1 235.23 233.44
Loans for Purchase of Commercial Property 151.19 142.09 147.02 126.98 122.32
Developer Finance 26.94 18.04 26.25 29.43 0.00
Loans Against Property 157.41 149.70 155.66 147.64 151.79
Total 225.96 227.15 228.07 232.08 230.13
Note: Includes tenure of Top up Loans. Top up loan is an additional credit facility offered to existing customers after evaluating their repayment
track record.

Product wise Average ticket size on Sanctioned amount

Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million)
Housing Loan 1.02 1.02 1.02 1.02 1.03

196
 Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million)
Loans for Purchase of Commercial Property 0.87 0.82 0.84 0.81 0.82
Loans Against Property 0.90 0.86 0.88 0.82 0.87
Total 1.01 1.01 1.01 1.01 1.02
Developer Finance 68.18 61.16 61.44 36.14 -
Note:
1. Sanctioned amount includes Insurance and top up loans. Top up loan is an additional credit facility offered to existing customers after
evaluating their repayment track record and Insurance loan is a loan provided to the customer to fund the insurance premium for life or
general insurance availed by the customer.
2. All sanctions to one customer are considered as one case for the purpose of calculation.

Sanctions during the year/ period

Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million)
Housing Loan 9,238.14 7,189.85 16,375.90 8,663.72 4,539.83
Loans for Purchase of Commercial Property 101.71 81.26 223.50 73.73 24.62
Developer Finance 185.01 1,272.40 1,354.90 611.00 0.00
Loans Against Property 778.61 300.88 780.78 118.62 104.61
Total 10,303.47 8,844.39 18,735.08 9,467.07 4,669.06
Note: Includes Insurance and Top up loan Sanctions. Top up loan is an additional credit facility offered to existing customers after evaluating
their repayment track record and Insurance loan is a loan provided to the customer to fund the insurance premium for life or general insurance
availed by the customer.

Fresh Sanctions during the year/ period (Number of cases)

Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(counts)
Housing Loan 8,816 7,165 16,148 8,539 4,787
Loans for Purchase of Commercial Property 99 97 257 97 30
Developer Finance 5 21 25 13 0
Loans Against Property 844 328 867 160 142
Total 9,764 7,611 17,297 8,809 4,959
Note: Excludes Insurance and Top up loans cases. Top up loan is an additional credit facility offered to existing customers after evaluating
their repayment track record and Insurance loan is a loan provided to the customer to fund the insurance premium for life or general insurance
availed by the customer.

Disbursements by segments

Product As of and for the six As of and the year ended March 31,
months ended September
30,
2019 2018 2019 2018 2017
(₹ in million)
Housing Loan 7,871.80 6,156.16 13,858.78 7,115.37 4,086.45
Loans for Purchase of Commercial Property 93.10 82.07 191.80 52.87 29.43
Developer Finance 246.46 701.60 1,032.31 178.00 -
Loans Against Property 646.17 228.52 645.32 109.05 127.69
Total 8,857.53 7,168.35 15,728.21 7,455.29 4,243.57
Note: Includes Insurance and Top up loan Sanctions. Top up loan is an additional credit facility offered to existing customers after evaluating
their repayment track record and Insurance loan is a loan provided to the customer to fund the insurance premium for life or general insurance
availed by the customer.

Disbursements Yield

197
 Product As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(Percentages)
Housing Loan 13.1% 11.7% 12.4% 11.6% 12.8%
Loans for Purchase of Commercial Property 14.7% 14.4% 14.7% 15.5% 16.1%
Developer Finance 14.2% 13.3% 13.8% 12.8% 0.0%
Loans Against Property 15.4% 14.8% 15.1% 15.5% 16.2%
Total 13.2% 12.0% 12.6% 11.7% 12.9%
Note:
Formula - Loan account wise sum product of ((Closing interest rate at which the loan is disbursed * Disbursal amount for corresponding loan
account)/ Total disbursal amount during a year/ period)

Sources of Funds

Particulars As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million)
Term Loans – Secured
National Housing Bank 5,468.81 4,288.66 5,867.63 2,455.01 587.99
Banks 17,022.78 10,681.12 13,388.73 7,743.75 5,965.29
Other parties 364.67 - - - -
Working capital loan 100.00 - - - -
Loans repayable on demand
Banks 0.05 100.00 0.05 - 77.17
Debt Securities - Commercial Paper – Unsecured
Banks - 492.49 - - -
Total 22,956.31 15,562.27 19,256.41 10,198.76 6,630.45

Types of Borrowing

Type of As of and for the six months ended As of and the year ended March 31,
Borrowing September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages)
Fixed Rate 2,561.96 11.2% 3,435.06 22.1% 2,743.50 14.2% 1,754.53 17.2% 547.32 8.3%
Borrowings
Floating Rate 20,394.35 88.8% 12,127.21 77.9% 16,512.91 85.8% 8,444.23 82.8% 6,083.13 91.7%
Borrowings
Total 22,956.31 100.0% 15,562.27 100.0% 19,256.41 100.0% 10,198.76 100.0% 6,630.45 100.0%
Borrowings
(Borrowings
+ Debt
securities)

Average cost of borrowings and closing tenure of borrowings and assignments

Particulars As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(Percentages, except tenure in months)
Average cost of Borrowings and Tenure
Closing tenure of borrowings (Months) 1 60.67 64.91 67.45 69.09 51.24
Closing tenure of borrowings and 91.35 69.81 90.59 72.91 61.85
assignments (Months)2
Average Cost of Borrowing (excluding 4.3% 4.0% 8.5% 7.7% 9.8%
assignments) 3
Note:
1. Closing tenure of borrowings in months is calculated by dividing the sum product of closing borrowings amount with its corresponding
remaining tenure by total closing borrowings.
2. Closing tenure of borrowings and assignments in months is calculated by dividing the sum product of closing borrowing amount and
assignments amount with its corresponding remaining tenure by total closing borrowings and assignments.

198
3. Average Cost of Borrowing excluding assignments represents (Interest on borrowings and Interest on debt securities)/ Average
borrowings (including debt securities) for the relevant year or period as per restated financial statements. Average (borrowings including
debt securities) represents the simple average borrowings including debt securities as of the last day of the relevant year or period and
borrowings including debt securities as of the last day of the immediately prior year.
4. Percentages for September 2019 and September 2018 have not been annualised. They are not comparable.

Balance Transfer In during the year/ period

Particulars As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages)
Balance Transfer In 111.44 222.93 345.11 207.18 37.59
Disbursement 8,857.53 7,168.35 15,728.21 7,455.29 4,243.57
% Balance Transfer in 1.3% 3.1% 2.2% 2.8% 0.9%

Balance Transfer Out during the year/ period

Particulars As of and for the six months ended As of and the year ended March 31,
September 30,
2019 2018 2019 2018
(₹ in million)
Balance Transfer Out 304.17 349.75 624.52 867.00

Asset Quality

Particulars As of and for the six months ended As of and the year ended March 31,
September 30,
2019 2018 2019 2018 2017
(₹ in million)
Loans – Principal Outstanding1
Stage 14 25,858.08 18,040.69 21,102.62 12,961.62 7,767.92
Stage 25 203.02 169.25 193.67 101.79 103.81
Stage 36 268.36 129.62 170.45 80.68 57.24
Loans - Principal Outstanding1 26,329.46 18,339.56 21,466.74 13,144.09 7,928.97
Impairment loss allowance2
Stage 14 76.27 50.64 61.13 32.64 18.33
Stage 25 17.05 14.61 16.16 7.60 7.99
Stage 36 56.57 25.81 42.40 16.50 9.53
Total Impairment loss allowance2 149.89 91.06 119.69 56.74 35.85
Loans – Principal Outstanding (net
of Impairment loss allowance)3
Stage 14 25,781.81 17,990.05 21,041.49 12,928.98 7,749.59
Stage 25 185.97 154.64 177.51 94.19 95.82
Stage 36 211.79 103.81 128.05 64.18 47.71
Loans – Principal Outstanding (net 26,179.57 18,248.50 21,347.05 13,087.35 7,893.12
of Impairment loss allowance) 3
Note:
1. Loans – Principal outstanding represents gross principal outstanding of loans as of the last day of the relevant period or year as per the
restated financial statements.
2. Impairment loss allowance represents expected credit loss on loans as of the last day of the relevant period or year as per the restated
financial statements.
3. Loans – Principal outstanding (net of Impairment loss allowance) represents gross principal outstanding less impairment loss allowance
excluding impairment loss allowance on undisbursed commitments as of the last day of the relevant period or year as per the restated
financial statements.
4. Exposures with days past due of less than or equal to 29 days are classified as stage 1.
5. Exposures with days past due equal to 30 days but less than or equal to 89 days are classified as stage 2.
6. Exposure with overdue of 90 days or more are classified as Stage 3.

199
Capital to Risk Assets Ratio (CRAR)

Particulars As of and for the six months ended As of and the year ended March 31,
September 30,
2019 2018 2019 2018 2017
(₹ in million, except percentages and ratios)
Tier I Capital 8,887.88 4,879.04 5,224.69 3,246.04 3,061.32
Tier II Capital 140.47 103.75 106.89 58.98 46.79
Total Capital 9,028.35 4,982.79 5,331.58 3,305.02 3,108.11
Total Risk Weighted Assets 18,987.20 11,380.52 13,837.20 7,672.56 4,526.23
CRAR (Total Capital / Total Risk 47.6% 43.8% 38.5% 43.0% 68.5%
Weighted Assets)
CRAR - Tier I Capital 46.8% 42.9% 37.7% 42.3% 67.5%
CRAR - Tier II Capital 0.7% 0.9% 0.8% 0.8% 1.0%
Net Worth2 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58
Total Assets to Net Worth Ratio 3.65 4.24 4.74 4.20 3.23
Gross Loan Assets to Net Worth Ratio 3.50 3.91 4.67 4.17 2.77
Note:
1. Reported CRAR is in accordance with restated Ind AS financial information.
2. Net worth means the aggregate value of the paid-up share capital of the Company and all reserves created out of profits and securities
premium account as per restated financial statements.

Product wise effective tenure of loan

Product Gross Loan Assets as at Prepayment rate Effective tenure

September 30, 2019 per month (considering
(₹ in million) prepayment rate)
(in months)
Housing Loan 28,475.49 0.72% 102
Total Loans (housing loans, loans against property,
developer finance loans and loans for purchase of
commercial property) 31,133.76 0.85% 94
Note:
1. Per month prepayment rates are based on historical trend for the year ended March 31, 2019. CLSS subsidy has not been considered in
the calculation of prepayment rate.
2. Effective tenure of loans is calculated by considering the following variables: contracted tenure of loans (housing: 230.51 months and
total loans: 225.96 months), product wise closing yield on Gross Loan Assets (housing: 12.82% and total loans: 13.03 %) and prepayment
rate.

200
Asset Liability Management

As of and for the year ended 30 September 2019

Time Bucket 0-3 Months 3 Months to 6 Months 6 Months to 1 Year 1 Year to 3 Years 3 Years to 5 Years Over 5 Years Total
(₹ in million)
Inflows 6,915.55 3,518.26 5,135.54 15,999.02 10,976.89 12,878.89 55,424.14
Outflows 5,030.11 3,175.31 4,695.26 12,592.73 7,849.36 11,785.51 45,128.27
Gap 1,885.44 342.95 440.27 3,406.30 3,127.53 1,093.38 10,295.86
Note: Asset liability management shown above is the Structural Liquidity Statement submitted with NHB on a half yearly basis and includes undisbursed portion of committed loans and borrowings and estimated
interest flows. Further, classification of assets and liabilities under different maturity buckets is based on the estimates and assumptions to capture the behavioural pattern of the past data.

Net Promoter Score (NPS)

Particulars For the period

July 2019 – Aug May 2019 –Jun Feb 2019– Apr Dec 2018- Jan Oct 2018 – Nov Aug 2018– Sep June 2018 –July Apr 2018 - May Jan 2018-
2019 2019 2019 2019 2018 2018 2018 2018 March 2018
(percentages)
NPS 49.0% 48.0% 54.0% 47.0% 54.0% 60.0% 49.0% 47.0% 47.0%
Note:
1. Net Promoter Score is measured by subtracting the percentage of detractors from the percentage of promoters.
2. The Company has commissioned Ormax Consultants Private Limited to determine our net promoter score with effect from January 2018. Ormax determines our net promoter scores on a periodic basis
through telephonically administered questionnaires by selecting recent customers from our database on a random basis.

201
State-wise distribution of branches and districts

States Number of Branches Number of Districts Percentage of Gross Loan Assets

as on September 30, 2019
Gujarat 19 10 40.5%
Maharashtra 13 13 24.6%
Tamil Nadu 9 8 9.2%
Karnataka 4 1 8.8%
Rajasthan 6 4 4.5%
Telangana 3 2 4.0%
Madhya Pradesh 5 3 3.2%
Uttar Pradesh 1 3 2.4%
Haryana and National Capital 1 10 1.2%
Region
Chhattisgarh 1 3 0.9%
Andhra Pradesh 3 3 0.8%
Total 65 60 100.0%

City Wise market Share Build Up (Housing Loans)

The following table reflects the improvement in our market share, in terms of origination of home loans in the bucket size of ₹
500,000 to ₹ 2,500,000, for the periods indicated:

Branch Location Our market share during Q1 FY18 Our market share during Q1 FY20
Jaipur 0.1% 2.6%
Ahmedabad 1.7% 3.5%
Surat 1.7% 6.5%
Indore 0.2% 2.7%
Nagpur 0.9% 2.6%
Raipur 0.3% 1.7%
Hyderabad 0.2% 1.4%
Bengaluru 0.2% 2.3%
Chennai 1.0% 2.2%
For details of the market size of home loans in the cities above, see “Industry Overview – Indian Housing Finance Market –
Healthy Housing Finance Market Growth” beginning on page 103. Our market share represents the percentage of the
origination of our home loans over the market size in such cities, as provided in the CRISIL Report.

Branch and Employee Productivity

Particulars As of and for the six months As of and the year ended March 31,
ended September 30,
2019 2018 2019 2018 2017
(₹ in million, except counts)
Number of Branches 65 54 60 42 36
Number of Employees 738 538 675 382 200
Gross Loan Assets / Branch1 498.14 397.70 479.13 347.67 292.18
Disbursements / Branch2 141.72 149.34 308.40 191.16 146.33
Gross Loan Assets / Employee3 44.07 41.50 46.24 46.60 48.98
Disbursements / Employee4 12.54 15.58 29.76 25.62 24.53
Note:
1. Gross Loan Assets /Branch represents Gross Loan Assets as at the end of the relevant year or period divided by average branches as of
the last day of the relevant year or period. Average branches represents average of branches as of the last day of the relevant year or
period and branches as of the last day of the immediately prior year.
2. Disbursements / Branch represents Gross Loan Assets as at the end of the relevant year or period divided by average branches as of the
last day of the relevant year or period. Average branches represent average of branches as of the last day of the relevant year or period
and branches as of the last day of the immediately prior year.
3. Gross Loan Assets / Employee represents Gross Loan Assets as at the end of the relevant year or period divided by average employees as
of the last day of the relevant year or period. Average employees represents average of employees as of the last day of the relevant year
or period and employees as of the last day of the immediately prior year.
4. Disbursements / Employee represents disbursements for the relevant year or period divided by average employees as of the last day of
the relevant year or period. Average employees represents average of employees as of the last day of the relevant year or period and
employees as of the last day of the immediately prior year.

202
Branch-wise Productivity

Particulars As of and for the six months ended September 30, 2019
Average Vintage Number of Gross Loan Assets Gross Loan Assets
(in months) Branches per branch
(₹ in million, except counts)
Top 30% Branches (Large branches) 51.71 19 18,685.36 983.44
Next 30% Branches (Mid-sized 40.41 19 8,959.18 471.54
branches)
Bottom 40% Branches (Small 26.73 27 3,489.22 129.23
branches)
Note:

Top 30% branches. Next 30% branches and Bottom 30% branches are ranked on the basis of size of their Gross Loan Assets as on September
30, 2019.

Sourcing Channel Split

Particulars As of and for the six months ended As of and for the year ended March
September 30, 2019 31, 2019
Number of Sanctions Percentage Number of Sanctions Percentage
(Count in numbers, except percentages)
Branch 1,008 9.5% 1,501 7.9%
Builder Ecosystem 2,143 20.2% 5,948 31.3%
Connector 6,093 57.3% 9,555 50.3%
Construction Community 319 3.0% 261 1.4%
Digital 188 1.8% 152 0.8%
Marketing 671 6.3% 1,272 6.7%
Micro Connector 209 2.0% 318 1.7%
Strategic Alliances 3 0.0% - -
Total 10,634 100.0% 19,007 100.0%

203
 SECTION V: FINANCIAL INFORMATION

RESTATED FINANCIAL INFORMATION

(The remainder of this page is intentionally left blank)

204
INDEPENDENT AUDITOR’S EXAMINATION REPORT ON RESTATED FINANCIAL
INFORMATION

The Board of Directors

Home First Finance Company India Limited
(formerly known as Home First Finance Company India Private Limited)
511, Acme Plaza, Andheri-Kurla Road,
Andheri East
Mumbai - 400 059

Dear Sirs,

1. We have examined the attached restated financial information of Home First Finance
Company India Limited (formerly known as Home First Finance Company India Private
Limited) (the “Issuer” or “Company”) , comprising the Restated Statement of Assets and
Liabilities as at September 30, 2019, September 30, 2018, March 31, 2019, March 31, 2018
and March 31, 2017, the Restated Statements of Profit and Loss (including other
comprehensive income), the Restated Statement of Changes in Equity, the Restated Cash
Flow Statement for the six month period ended September 30, 2019 and September 30,
2018 and for the years ended March 31, 2019, March 31, 2018 and March 31, 2017, the
Summary of Significant Accounting Policies, and other explanatory information
(collectively, the “Restated Financial Information”), as approved by the Board of
Directors of the Company (the “Board”) at their meeting held on 18 November 2019 for
the purpose of inclusion in the Draft Red Herring Prospectus (“DRHP”), prepared by the
Company in connection with its proposed Initial Public Offer of equity shares (“IPO”)
(the Offer), prepared in terms of the requirements of:

a. Section 26 of Part I of Chapter III of the Companies Act, 2013 (the “Companies
Act");
b. The Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018, as amended ("ICDR Regulations"); and
c. The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued
by the Institute of Chartered Accountants of India (“ICAI”), as amended from
time to time (the “Guidance Note”).

2. The Board is responsible for the preparation of the Restated Financial Information for the
purpose of inclusion in the DRHP to be filed with Securities and Exchange Board of India
(the “SEBI”) and National Stock Exchange of India Limited and BSE Limited, where the
Equity Shares are proposed to be listed (the “Stock Exchanges”) in connection with the
Offer. The Restated Financial Information have been prepared by the management of the
Company on the basis of preparation stated in Annexure 5, note 1.1 to the Restated
Financial Information. The responsibility of the Board includes designing, implementing
and maintaining adequate internal control relevant to the preparation and presentation of
the Restated Financial Information. The Board is also responsible for identifying and
ensuring that the Company complies with the Companies Act, ICDR Regulations and the
Guidance Note.

205
3. We have examined such Restated Financial Information taking into consideration:
a. The terms of reference and terms of our engagement agreed upon with you, in
accordance with our engagement letter dated 10 June 2019 in connection with the
Offer;
b. The Guidance Note, which also requires that we comply with the ethical
requirements of the Code of Ethics issued by the ICAI;
c. Concepts of test checks and materiality to obtain reasonable assurance based on
verification of evidence supporting the Restated Financial Information; and
d. The requirements of Section 26 of the Companies Act and the ICDR Regulations.
Our work was performed solely to assist you in meeting your responsibilities in
relation to your compliance with the Act, the ICDR Regulations and the Guidance
Note in connection with the Offer.

4. These Restated Financial Information have been compiled by the management from:
a. Audited special purpose interim Indian Accounting Standard (the “Ind AS”)
financial statements of the Company, as at and for the six month period ended
September 30, 2019 and September 30, 2018, prepared in accordance with Ind AS
34 "Interim Financial Reporting", specified under Section 133 of the Companies
Act and other accounting principles generally accepted in India (the “Special
Purpose Interim Ind AS Financial Statements”), which have been approved by
the Board at their meeting held on 18 November 2019.

b. The Restated Financial Information also contains the proforma Ind AS financial
information as at and for the year ended March 31, 2019, March 31, 2018 and
March 31, 2017. The proforma Ind AS financial information have been prepared
by making Ind AS adjustments to the audited Indian generally accepted accounting
principles (the “Indian GAAP”) financial statements as at and for the year ended
March 31, 2019, March 31, 2018 and March 31, 2017, which have been approved
by the Board at their meeting held on 13 May 2019, 29 May 2018 and 26 May
2017 respectively, as described in Annexure 5, note 1.1 to the Restated Financial
Information.

5. For the purpose of our examination, we have relied on:

a. Auditors’ reports issued by us, dated 18 November 2019, 18 November 2019, 13

May 2019, 29 May 2018 and 26 May 2017 on the financial statements as at and
for the six month period ended September 30, 2019 and September 30, 2018 and
as at and for the year ended March 31, 2019, March 31, 2018 and March 31, 2017,
as referred in Paragraph 4 above.

6. Based on our examination and according to the information and explanations given to us,
we report that the Restated Financial Information:

a. have been prepared after incorporating adjustments for the changes in accounting
policies, material errors and regrouping/reclassifications retrospectively in the
financial years ended March 31, 2019, March 31, 2018 and March 31, 2017 and
six month period ended September 30, 2018 to reflect the same accounting
treatment as per the accounting policies and grouping/classifications followed as
at and for the six month period ended September 30, 2019;

206
 b. as of and for the financial years ended March 31, 2019, March 31, 2018 and March
31, 2017 have been prepared after incorporating proforma Ind AS adjustments to
the audited Indian GAAP financial statements, as described in Annexure 5, note
1.1 to the Restated Financial Information;

c. have been prepared in accordance with the Companies Act, ICDR Regulations and
the Guidance Note.

7. The Restated Financial Information do not reflect the effects of events that occurred
subsequent to the respective dates of the reports on the special purpose interim Ind AS
financial statements and audited financial statements mentioned in paragraph 4 above.

8. This report should not in any way be construed as a reissuance or re-dating of any of the
previous audit reports issued by us nor should this report be construed as a new opinion on
any of the financial statements referred to herein.

9. We have no responsibility to update our report for events and circumstances occurring
after the date of the report.

10. Our report is intended solely for use of the Board for inclusion in the DRHP to be filed
with SEBI and the Stock Exchanges in connection with the Offer. Our report should not
be used, referred to, or distributed for any other purpose, except with our prior consent in
writing. Accordingly, we do not accept or assume any liability or any duty of care for any
other purpose or to any other person to whom this report is shown or into whose hands it
may come without our prior consent in writing.

For Walker Chandiok & Co LLP

Chartered Accountants
Firm Registration No: 001076N/N500013

Khushroo B. Panthaky
Partner
Membership No: 042423

UDIN No. 19042423AAAAGA4877

Place: Mumbai
Date: 18 November 2019

207
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 1 - Restated statement of assets and liabilities (Rs. in millions)

As at As at As at As at As at
Notes
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Assets
Financial assets
Cash and cash equivalents 2 1,059.67 1,013.48 1,857.24 230.14 1,159.80
Other bank balances 3 1,693.21 862.89 62.59 72.04 661.72
Loans 4 26,179.57 18,248.50 21,347.05 13,087.35 7,893.12
Investments 5 2,777.43 200.09 1,029.17 - -
Other financial assets 6 476.65 107.87 261.20 49.09 59.63
Total financial assets 32,186.53 20,432.83 24,557.25 13,438.62 9,774.27

Non-financial assets
Current tax assets (net) 7 53.19 8.06 10.25 4.66 -
Deferred tax assets (net) 26 - 70.73 24.83 63.81 26.28
Property, plant and equipment 8 185.95 147.33 167.59 97.62 64.27
Capital work-in-progress 2.03 1.11 - 7.88 -
Intangible assets under development - - - 2.61 -
Other intangible assets 8 5.15 6.73 6.71 3.50 2.26
Other non-financial assets 9 43.69 28.29 53.42 30.72 22.50
Total non financial assets 290.01 262.25 262.80 210.80 115.31

Total assets 32,476.54 20,695.08 24,820.05 13,649.42 9,889.58

Liabilities and equity

Liabilities
Financial liabilities
Payables
Trade payables 10
- Total outstanding dues of micro enterprises and small enterprises
- - - - 0.56
- Total outstanding dues of creditors other than micro enterprises and small
enterprises 1.71 7.22 13.58 5.37 32.37
Debt securities 11 - 492.49 - - -
Borrowings (other than debt securities) 12 22,956.31 15,069.78 19,256.41 10,198.76 6,630.45
Other financial liabilities 13 475.17 149.12 238.43 130.17 119.07
Total financial liabilities 23,433.19 15,718.61 19,508.42 10,334.30 6,782.45

Non-financial liabilities
Current tax liabilities (net) 14 - - - - 0.84
Deferred tax liabilities (net) 26 20.61 - - - -
Provisions 15 47.17 38.52 29.62 18.74 20.45
Other non-financial liabilities 16 82.54 52.18 50.61 44.23 22.26
Total non financial liabilities 150.32 90.70 80.23 62.97 43.55
Total liabilities 23,583.51 15,809.31 19,588.65 10,397.27 6,826.00

Equity
Share capital 17 156.60 126.31 126.68 103.23 103.21
Other equity 18 8,736.43 4,759.46 5,104.72 3,148.92 2,960.37
Total equity 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58

Total liabilities and equity 32,476.54 20,695.08 24,820.05 13,649.42 9,889.58

The accompanying notes form an integral part of the restated financial

information
This is the restated statement of asset and liabilities referred to in our report
of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors
Chartered Accountants
Firm registration no.: 001076N/N500013

Khushroo B. Panthaky Manoj Viswanathan Rajagopalan Santhanam

Partner Director and Chief Executive Officer Director
Membership No.: 042423 DIN No : 01741612 Din No : 00025669
Place: Mumbai Place: Mumbai Place: Mumbai
Date: 18 November 2019 Date: 18 November 2019 Date: 18 November 2019

Nutan Gaba Patwari Shreyans Bachhawat

Chief Financial Officer Company Secretary
Place: Mumbai Place: Mumbai
Date: 18 November 2019 Date: 18 November 2019

208
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 2 - Restated statement of profit and loss

(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
Notes 1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Revenue from operations
Interest income 19 1,603.82 976.48 2,319.25 1,299.58 879.93
Fees and commission income 10.99 12.54 33.38 14.45 7.47
Net gain on derecognition of financial instruments under amortised cost category 211.22 37.68 214.76 - 25.92
Other operating income 20 12.90 8.43 31.37 6.89 2.45
Total revenue from operations 1,838.93 1,035.13 2,598.76 1,320.92 915.77
Other income 21 98.80 35.20 110.45 21.45 0.01
Total income 1,937.73 1,070.33 2,709.21 1,342.37 915.78

Expenses
Finance costs 22 918.37 529.42 1,265.44 659.64 540.44
Impairment on financial instruments 23 39.46 43.43 73.13 28.74 17.37
Employee benefits expense 24 295.38 194.89 427.17 249.55 149.97
Depreciation and amortisation 8 32.36 19.42 45.77 24.63 15.55
Other expenses 25 149.31 108.76 245.75 137.11 88.89
Total expenses 1,434.88 895.92 2,057.26 1,099.67 812.22

Profit before tax 502.85 174.41 651.95 242.70 103.56

Tax expense:
- Current tax 26 89.21 66.55 160.53 120.36 48.73
- Deferred tax expense / (income) 26 46.23 (6.70) 39.38 (37.62) (11.94)
135.44 59.85 199.91 82.74 36.79

Profit after tax 367.41 114.56 452.04 159.96 66.77

Other comprehensive income (OCI)

Items that will not be reclassified to profit or loss
- Remeasurements of the defined benefit plans (3.12) (0.77) (1.37) 0.25 (1.33)
- Income tax relating to items that will not be reclassified to profit or loss 0.79 0.22 0.40 (0.09) 0.46
Other comprehensive income (2.33) (0.55) (0.97) 0.16 (0.87)
Total comprehensive income 365.08 114.01 451.07 160.12 65.90

Earnings per equity share 27

Basic earnings per share (Rs.) (Nominal value - Rs. 2) 5.33 2.19 7.82 3.10 3.53
Diluted earnings per share (Rs.) (Nominal value - Rs. 2) 5.21 2.14 7.65 3.02 3.07
Nominal value of equity share (before stock split) 10.00 10.00 10.00 10.00 10.00

The accompanying notes form an integral part of the restated financial information
This is the restated statement of profit and loss referred to in our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors
Chartered Accountants
Firm registration no.: 001076N/N500013

Khushroo B. Panthaky Manoj Viswanathan Rajagopalan Santhanam

Partner Director and Chief Executive Officer Director
Membership No.: 042423 DIN No : 01741612 Din No : 00025669
Place: Mumbai Place: Mumbai Place: Mumbai
Date: 18 November 2019 Date: 18 November 2019 Date: 18 November 2019

Nutan Gaba Patwari Shreyans Bachhawat

Chief Financial Officer Company Secretary
Place: Mumbai Place: Mumbai
Date: 18 November 2019 Date: 18 November 2019

209
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 3 - Restated statement of cash flow

(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Cash flow from operating activities
Profit before tax 502.85 174.41 651.95 242.70 103.56
Adjusted for:
Financial asset measured at amortised cost 60.53 87.37 116.33 88.94 42.92
Financial liabilities measured at amortised cost (14.66) (6.37) (21.73) (2.86) (3.49)
Interest accrued but not due on borrowings (127.93) (14.29) (20.76) 16.04 (5.98)
Upfront gain on direct assignment (164.74) (30.06) (194.96) 14.64 (14.97)
Depreciation, amortisation and impairment 32.36 19.42 45.77 24.63 15.55
Interest income on bank deposits (34.57) (2.84) (21.64) (12.28) (15.56)
Loss on sale of property, plant and equipment (net) 0.05 - - - -
Interest on financial lease liability 3.99 3.38 7.12 4.98 3.34
Unrealised gain on investment held for trading (1.73) - (2.02) - -
Impairment on financial instruments 39.46 43.43 73.13 28.74 17.37
Dividend income - (7.32) (7.69) (4.75) -
Fair valuation of ESOPs 15.71 9.95 19.90 27.79 7.43
Actuarial gain / loss recognised in other comprehensive income (3.12) (0.77) (1.37) 0.25 (1.33)
Operating profit before working capital changes 308.20 276.31 644.03 428.82 148.84

Adjustments for working capital:

- (Increase) / decrease in loans (4,932.51) (5,291.95) (8,449.16) (5,311.91) (2,872.83)
- (Increase) / decrease in other financial assets (50.71) (28.72) (17.15) (4.10) (2.86)
- (Increase) / decrease in other non financial assets 9.73 2.43 (22.70) (8.22) (13.20)
- Increase / (decrease) in trade payables (11.87) 1.85 8.21 (27.56) 24.25
- Increase / (decrease) in other financial liabilities 332.45 6.53 79.93 (35.43) 9.80
- Increase / (decrease) in other non financial liabilities 31.93 7.95 6.38 21.97 9.43
- Increase / (decrease) in provisions 17.55 19.78 10.88 (1.71) 14.82
Cash used in from operating activities (4,295.23) (5,005.82) (7,739.58) (4,938.14) (2,681.75)
Income tax paid (net) (132.15) (69.95) (166.12) (125.86) (47.21)
Net cash used in operating activities (4,427.38) (5,075.77) (7,905.70) (5,064.00) (2,728.96)

Cash flows from investing activities:

Purchase of property, plant and equipment and other intangible assets (23.05) (39.65) (66.49) (44.20) (16.77)
Proceeds from sale of property, plant and equipment and other intangible assets 0.04 - - - -
Purchase of investments (15,327.50) (8,063.58) (19,919.50) -
Proceeds from investments 13,580.97 7,863.49 18,892.35 - -
Bank deposits [net] (1,620.58) (792.43) 7.41 590.00 (140.00)
Interest received on bank deposits 24.53 4.42 23.68 11.96 16.66
Dividend income on investments - 7.32 7.69 4.75 -
Net cash generated from / (used in) investing activities (3,365.59) (1,020.43) (1,054.86) 562.51 (140.11)

Cash flows from financing activities:

Proceeds from issuance of share capital (including share premium) 3,280.84 1,509.66 1,508.28 0.66 1,454.08
Proceeds of borrowings from banks and financial institutions 5,601.24 5,490.00 10,870.13 6,490.13 3,093.62
Repayment of borrowings from banks and financial institutions (1,886.68) (712.61) (1,790.80) (2,841.79) (797.69)
Proceeds from debt securities - 492.49 492.49 - -
Repayment of debt securities - - (492.49) - -
Proceeds / (repayment) of loans repayable on demand - 100.00 0.05 (77.17) 50.54
Payment of dividends and dividend distribution tax - - - - (1.95)
Net cash generated from financing activities 6,995.40 6,879.54 10,587.66 3,571.83 3,798.60

Net increase / (decrease) in cash and cash equivalents (797.57) 783.34 1,627.10 (929.66) 929.53
Cash and cash equivalents at the beginning of the period / year 1,857.24 230.14 230.14 1,159.80 230.27
Cash and cash equivalents at the end of the period / year 1,059.67 1,013.48 1,857.24 230.14 1,159.80

Components of cash and cash equivalents:

Cash in hand 0.35 0.13 0.61 0.05 0.25
Balances with banks
- with banks in current accounts 1,058.36 1,012.07 1,856.00 229.45 1,158.32
- held as wallet money 0.96 1.28 0.63 0.64 1.23
Cash and cash equivalents 1,059.67 1,013.48 1,857.24 230.14 1,159.80

210
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 3 - Restated statement of cash flow

Changes in liabilities arising from financing activities (Rs. in millions)

As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Opening balance (Borrowings and debt securities) 19,256.41 10,198.76 10,198.76 6,630.45 4,287.47
Proceeds from borrowings 5,601.24 5,490.00 10,870.13 6,490.13 3,093.62
Proceeds from debt securities - 492.49 492.49 - -
Repayments of borrowings (1,886.68) (712.61) (1,790.80) (2,841.79) (797.69)
Repayments of debt securities - - (492.49) - -
Proceeds / (repayment) of loans repayable on demand - 100.00 0.05 (77.17) 50.54
Others (14.66) (6.37) (21.73) (2.86) (3.49)
Closing balance (Borrowings and debt securities) 22,956.31 15,562.27 19,256.41 10,198.76 6,630.45

The accompanying notes form an integral part of the restated financial information
This is the restated statement of cash flow referred to in our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors
Chartered Accountants
Firm registration no.: 001076N/N500013

Khushroo B. Panthaky Manoj Viswanathan Rajagopalan Santhanam

Partner Director and Chief Executive Officer Director
Membership No.: 042423 DIN No : 01741612 Din No : 00025669
Place: Mumbai
Date: 18 November 2019

Nutan Gaba Patwari Shreyans Bachhawat

Chief Financial Officer Company Secretary
Place: Mumbai Place: Mumbai
Date: 18 November 2019 Date: 18 November 2019

211
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 4 - Statement of changes in equity

Share capital (Rs. in millions)

Preference share capital Equity share capital
No. of shares Amount No. of shares Amount
Balance as at 1 April 2016 4,008,815 40.09 3,752,907 37.53
Changes in share capital during the year (4,008,815) (40.09) 6,567,624 65.68
Balance at 31 March 2017 - - 10,320,531 103.21
Changes in share capital during the year - - 2,800 0.02
Balance at 31 March 2018 - - 10,323,331 103.23
Changes in share capital during the period - - 2,307,417 23.08
Balance at 30 September 2018 - - 12,630,748 126.31
Changes in share capital during the year* - - 2,344,567 23.45
Balance at 31 March 2019 - - 12,667,898 126.68
Changes in share capital during the period - - 2,991,645 29.92
Balance at 30 September 2019 - - 15,659,543 156.60
* The balances/amounts represent the change during the year ended 31 March 2019

Other equity (Rs. in millions)

Reserves and surplus
Stock option
Statutory Securities Retained Total
outstanding
reserves premium earnings
account
Balance as at 1 April 2016 24.39 1,373.97 26.54 36.01 1,460.91
Profit for the year - - - 66.77 66.77
Other comprehensive income for the year - - - (0.87) (0.87)
Dividends and dividend distribution tax - - - (1.95) (1.95)
Transfer to statutory reserve 17.80 - - (17.80) -
Deferred tax liability on statutory reserve - - - (0.41) (0.41)
Premium received on allotment of equity shares - 1,428.49 - - 1,428.49
Stock options lapsed - - (0.45) 0.45 -
Expenses on employee stock options scheme - - 7.43 - 7.43
Balance as at 31 March 2017 42.19 2,802.46 33.52 82.20 2,960.37
Profit for the year - - - 159.96 159.96
Other comprehensive income for the year - - - 0.16 0.16
Expenses on employee stock options scheme - - 27.79 - 27.79
Transfer to statutory reserve 52.00 - - (52.00) -
Exercise of stock options outstanding - 0.18 (0.18) - -
Premium received on allotment of equity shares - 0.64 - 0.64
Stock options lapsed - - (0.38) 0.38 -
Balance as at 31 March 2018 94.19 2,803.28 60.75 190.70 3,148.92
Profit for the for the half year ended 30 September 2018 - - - 114.56 114.56
Other comprehensive income for the half year ended 30 September 2018 - - - (0.55) (0.55)
Expenses on employee stock options scheme for the half year ended 30 September 2018 - - 9.95 - 9.95
Transfer to statutory reserve 37.70 - - (37.70) -
Exercise of stock options outstanding - 3.22 (3.22) - -
Premium received on allotment of equity shares - 1,488.08 - - 1,488.08
Share issue expense - (1.50) - - (1.50)
Stock options lapsed - - (1.66) 1.66 -
Balance as at 30 September 2018 131.89 4,293.08 65.82 268.67 4,759.46
Profit for the year - - - 452.04 452.04
Other comprehensive income for the year - - - (0.97) (0.97)
Expenses on employee stock options scheme - - 19.90 - 19.90
Transfer to statutory reserve 85.00 - - (85.00) -
Exercise of stock options outstanding - 6.46 (6.46) - -
Premium received on allotment of equity shares - 1,639.83 - - 1,639.83
Share issue expense - (155.00) - - (155.00)
Stock options lapsed - - (1.85) 1.85 -
Balance as at 31 March 2019* 179.19 4,294.57 72.34 558.62 5,104.72
Profit for the for the half year ended 30 September 2019 - - - 367.41 367.41
Other comprehensive income for the half year ended 30 September 2019 - - - (2.33) (2.33)
Expenses on employee stock options scheme for the half year ended 30 September 2019 - - 15.71 - 15.71
Transfer to statutory reserve 75.00 - - (75.00) -
Exercise of stock options outstanding - 4.73 (4.73) - -
Premium received on allotment of equity shares - 3,254.28 - - 3,254.28
Share issue expense - (3.36) - - (3.36)
Balance as at 30 September 2019 254.19 7,550.22 83.32 848.70 8,736.43

* The balances/amounts represent the change during the year ended 31 March 2019

The accompanying notes form an integral part of the restated financial information
This is the restated statement of statement of changes in equity referred to in our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors
Chartered Accountants
Firm registration no.: 001076N/N500013

Khushroo B. Panthaky Manoj Viswanathan Rajagopalan Santhanam

Partner Director and Chief Executive Officer Director
Membership No.: 042423 DIN No : 01741612 Din No : 00025669
Place: Mumbai Place: Mumbai Place: Mumbai
Date: 18 November 2019 Date: 18 November 2019 Date: 18 November 2019

Nutan Gaba Patwari Shreyans Bachhawat

Chief Financial Officer Company Secretary
Place: Mumbai Place: Mumbai
Date: 18 November 2019 Date: 18 November 2019

212
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

Company information
Home First Finance Company India Limited (Formerly known as Home First Finance Company India Private
Limited) (the 'Company') is a Housing Finance Company founded on 3 February 2010 with offices across various
cities in India. It’s registered and corporate office is located at 511, Acme Plaza, Andheri Kurla Road, Andheri East,
Mumbai – 400 059. The Company obtained its license to carry on the business of a housing finance institution from
National Housing Bank (‘NHB’) on 11 August 2010. The Company was converted to a public limited Company
with effect from 14 March 2018.
The Company is primarily engaged in the business of lending of housing loans, loans for the purpose of purchasing
commercial property, loan against property and construction finance.

1. Summary of significant accounting policies

1.1 Basis of preparation of restated financial information

The restated Ind AS financial information comprise of the restated Ind AS statement of assets and liabilities as at 30
September 2019 and 30 September 2018, the restated Ind AS statement of profit and loss (including Other
Comprehensive Income), the restated Ind AS statement of cash flows and the restated Ind AS statement of changes
in equity for the six month period ended 30 September 2019 and 30 September 2018 and the statement of notes to
the restated Ind AS financial information (hereinafter collectively referred to as “restated Ind AS financial
information”).

The restated financial information for the years ended 31 March 2019, 31 March 2018 and 31 March 2017 has been
prepared on Proforma basis (i.e. “Proforma Ind AS financial information”) in accordance with requirements of SEBI
Circular SEBI/HO/CFD/DIL/CIR/P/2016/47 dated 31 March 2016 (“SEBI Circular”) and Guidance note on reports
in company prospectuses issued by ICAI. For the purpose of Proforma Ind AS financial information for the year
ended 31 March 2019, 31 March 2018 and 31 March 2017, the Company has followed the same accounting policy
and accounting policy choices (both mandatory exceptions and optional exemptions availed as per Ind AS 101) as
initially adopted on transition date i.e. 1 April 2018. Accordingly, suitable restatement adjustments (both
remeasurements and reclassifications) in the accounting heads are made to the Proforma Ind AS financial
information as of and for the years ended 31 March 2019, 31 March 2018 and 31 March 2017 following accounting
policies and accounting policy choices (both mandatory exceptions and optional exemptions) consistent with that
used at the date of transition to Ind AS (i.e. 1 April 2018).

The restated financial information (including restated Ind AS financial information for the six month period ended
30 September 2019 and 30 September 2018 and restated Proforma Ind AS financial information for the year ended
31 March 2019, 31 March 2018 and 31 March 2017) have been compiled by the Company from the Audited
Financial Statements of the Company for the six month period ended 30 September 2019 and 30 September 2018
prepared under Ind AS and for the years ended 31 March 2019, 31 March 2018 and 31 March 2017 prepared under
the previous generally accepted accounting principles followed in India (‘Previous GAAP or Indian GAAP’).

In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard, the Company has presented a
reconciliation from the presentation of restated financial information under Accounting Standards notified under
Previous GAAP to Ind AS of restated balance sheet as at 30 September 2019, 30 September 2018, 31 March 2019,
31 March 2018 and 31 March 2017 and of the restated Statement of profit and loss and other comprehensive income
for the half year ended 30 September 2019 and 30 September 2018 and year ended 31 March 2019, 31 March 2018
and 31 March 2017. Refer note 39(C) and note 39(D) in Annexure 6 for the reconciliation.

213
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

The restated Financial Information has been specifically prepared by the management for inclusion in the document
to be filed by the Company with the Securities and Exchange Board of India (“SEBI”) and National Stock Exchange
of India Limited and BSE Limited, where the Equity Shares are proposed to be listed (the “Stock Exchanges”) in
connection with the proposed Initial Public Offer (‘IPO’) of equity shares of the Company (referred to as the
“Issue”), in accordance with the requirements of:

• Section 26 of Part I of Chapter III of the Companies Act, 2013, as amended (the “Act");
• The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,
2018 ("ICDR Regulations"), as amended from time to time, in pursuance of provisions of Securities and
Exchange Board of India Act, 1992; and
• The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered
Accountants of India (“ICAI”), as amended from time to time (the “Guidance Note”).

The financial statements were approved by the Company’s Board of Directors and authorised for issue on 18
November 2019.

As required by Division III issued under Schedule III of the act, the company has presented the assets and liabilities
in the balance sheet in the order of liquidity.

The restated financial information is presented in Indian Rupees (INR) and all values are rounded to the nearest
millions, expect where otherwise indicated.

Basis of measurement

The restated financial information has been prepared on the historical cost basis except for certain financial
instruments which are measured at fair values.

1.2 Use of estimates

The preparation of financial information requires the management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent
liabilities, at the end of the reporting period. Although these estimates are based on the management’s best
knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the
outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Examples
of these estimates include useful lives of property, plant and equipment, expected credit loss allowance, future
obligations under employee retirement benefit plans, income taxes, etc. Actual results could differ from these
estimates. Any revisions to accounting estimates are recognised in the period in which such revisions are made.

1.3 Financial instruments

i) Financial assets
Initial recognition and measurement
Financial assets are recognised when the Company becomes a party to the contractual provisions of the financial
instrument and are measured initially at fair value adjusted for transaction costs, except for those financial assets
classified as at FVTPL. Transaction costs directly attributable to the acquisition of financial assets classified as
FVTPL are recognised immediately in Statement of profit and loss.

214
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

Classification

The Company classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income, or through statement
of profit or loss), and
• those measured at amortised cost.

Subsequent measurement
Financial instruments at amortised cost – the financial instrument is measured at the amortised cost if both the
following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual cash
flows, and
• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective
interest rate (EIR) method. All the debt instruments of the Company are measured at amortised cost.
Financial instruments at FVTPL/FVOCI - For assets measured at fair value, gains and losses will either be
recorded in statement of profit and loss or other comprehensive income. Investments in equity instruments are
classified as FVTPL unless the Company irrevocably elects at initial recognition to present subsequent changes in
fair value through other comprehensive income for investments in equity instruments which are not held for trading.

Reclassifications within classes of financial assets

A change in the business model would lead to a prospective re-classification of the financial asset and accordingly
the measurement principles applicable to the new classification will be applied. During the current financial year
and previous accounting period there was no change in the business model under which the Company holds financial
assets and therefore no reclassifications were made.

Impairment of financial assets

The measurement of impairment losses across all categories of financial assets requires judgement, in particular, the
estimation of the amount and timing of future cash flows and collateral values when determining impairment losses
and the assessment of a significant increase in credit risk. These estimates are driven by a number of factors, changes
in which can result in different levels of allowances.

The Company’s ECL calculations are outputs of complex models with a number of underlying assumptions
regarding the choice of variable inputs and their interdependencies.

The measurement of ECL is calculated using three main components:

(i) probability of default (PD)
(ii) loss given default (LGD) and
(iii) the exposure at default (EAD).

215
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

The 12-month ECL is calculated by multiplying the 12-month PD, LGD and the EAD. The 12 month and lifetime
PDs represent the PD occurring over the next 12 months and the remaining maturity of the instrument respectively.
The EAD represents the expected balance at default, taking into account the repayment of principal and interest
from the balance sheet date to the default event together with any expected drawdowns of committed facilities. The
LGD represents expected losses on the EAD given the event of default, taking into account, among other attributes,
the mitigating effect of collateral value at the time it is expected to be realised and the time value of money.

The Company applies a three-stage approach to measure ECL on financial assets accounted for at amortised cost
and FVTOCI. Assets migrate through the following three stages based on the change in credit quality since initial
recognition.

The Company has provided ECL on the undisbursed loan commitments classified under Stage 1.

Stage 1: 12-months ECL

For exposures where there has not been a significant increase in credit risk since initial recognition and that are not
credit impaired upon origination, the portion of the lifetime ECL associated with the probability of default events
occurring within the next 12 months is recognised. Exposures with days past due (DPD) less than or equal to 29
days are classified as stage 1. The Company has identified zero bucket and bucket with DPD less than or equal to
29 days as two separate buckets.
Stage 2: Life time ECL – not credit impaired

For credit exposures where there has been a significant increase in credit risk since initial recognition but that are
not credit impaired, a lifetime ECL is recognised. Exposures with DPD equal to 30 days but less than or equal to 89
days are classified as stage 2. At each reporting date, the Company assesses whether there has been a significant
increase in credit risk for financial asset since initial recognition by comparing the risk of default occurring over the
expected life between the reporting date and the date of initial recognition. The Company has identified cases with
DPD equal to or more than 30 days and less than or equal to 59 days and cases with DPD equal to or more than 60
days and less than or equal to 89 days as two separate buckets.

Stage 3: Lifetime ECL – credit impaired

Financial asset is assessed as credit impaired when one or more events that have a detrimental impact on the
estimated future cash flows of that asset have occurred. For financial asset that have become credit impaired, a
lifetime ECL is recognised on principal outstanding as at period end. Exposures with DPD equal to or more than 90
days are classified as stage 3.

Exposures are considered to have resulted in a significant increase in credit risk and are moved to Stage 2 when the
accounts are overdue for more than 30 days Accounts that are overdue for 90 days or more are moved to Stage 3.

Inputs, assumptions and estimation techniques used for estimating ECL: Refer Annexure 6 - note 4.

De-recognition of financial assets

A financial asset is derecognised only when
• The Company has transferred the rights to receive cash flows from the financial asset or
• retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation
to pay the cash flows to one or more recipients.

216
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all
risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the
entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is
not derecognised.

Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the
financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to
the extent of continuing involvement in the financial asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount (measured at the
date of derecognition) and the consideration received (including any new asset obtained less any new liability
assumed) shall be recognised in the statement of profit or loss.

On derecognition of a part of financial asset in its entirety, the previous carrying amount of the larger financial asset
shall be allocated between the part that continues to be recognised and the part that is derecognised, on the basis of
the relative fair values of those parts on the date of the transfer. For this purpose, a retained servicing asset shall be
treated as a part that continues to be recognised. The difference between the carrying amount (measured at the date
of derecognition) allocated to the part derecognised and the consideration received for the part derecognised
(including any new asset obtained less any new liability assumed) shall be recognised in the statement of profit or
loss.

Write offs
Impaired loans and receivables are written off, against the related allowance for loan impairment on completion of
the Company’s internal processes and when the Company concludes that there is no longer any realistic prospect of
recovery of part or all of the loan. For loans that are individually assessed for impairment, the timing of write off is
determined on a case by case basis. A write-off constitutes a de-recognition event. The Company has a right to apply
enforcement activities to recover such written off financial assets. Subsequent recoveries of amounts previously
written off are credited to the income statement.

ii) Financial liability

A financial liability is a contractual obligation to deliver cash or another financial asset or to exchange financial
assets or financial liabilities with another entity under conditions that are potentially unfavourable to the Company
or a contract that will or may be settled in the Company’s own equity instruments and is a non-derivative contract
for which the Company is or may be obliged to deliver a variable number of its own equity instruments, or a
derivative contract over own equity that will or may be settled other than by the exchange of a fixed amount of cash
(or another financial asset) for a fixed number of the Company’s own equity instruments.

Classification

The Company classifies its financial liability as "Financial liability measured at amortised cost" except for those
classified as financial liabilities measured at fair value through profit and loss (FVTPL).

Initial recognition and measurement

Financial liability is recognised initially at cost of acquisition net of transaction costs and incomes that is attributable
to the acquisition of the financial liability. Cost equates the fair value on acquisition.

217
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

De-recognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged,
cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and
the consideration paid and payable is recognised in the statement of profit or loss.

Fair value of financial instruments

The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction in the principal (or most advantageous) market at the measurement date under current
market conditions (i.e., an exit price) regardless of whether that price is directly observable or estimated using
another valuation technique. When the fair values of financial assets and financial liabilities cannot be derived from
active markets, they are determined using a variety of valuation techniques that include the use of valuation models.
The inputs to these models are taken from observable markets where possible, but where this is not feasible,
estimation is required in establishing fair values. Judgements and estimates include considerations of liquidity and
model inputs related to items such as credit risk (both own and counterparty), funding value adjustments, correlation
and volatility. For further details about determination of fair value please see Note 30.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset
and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and
must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the
Company or the counterparty.

1.4 Property, plant and equipment and other intangible assets and depreciation /amortisation
Property, plant and equipment and Intangible assets are stated at cost less accumulated depreciation, amortisation
and impairment losses. Cost includes purchase price, inward freight, taxes and expenses incidental to acquisition
and installation, up to the point the asset is ready for its intended use.
Cost of property, plant and equipment and intangible assets not ready for their intended use before such date is
disclosed under Capital work-in-progress.
Depreciation in respect of assets is provided on the straight-line method as per the over the useful life of the assets.
The Company has used the following useful lives to provide depreciation /amortisation on its property, plant and
equipment and intangible asset:
Property, plant and equipment Estimated useful life (In years)
Furniture and fixtures 10
Office equipment 5
Computers 3
Leasehold improvements Over the lease period
Intangible assets
Computer software 3
Licenses 3
Scoring algorithm 3

Property, plant and equipment purchased/ sold during the year are depreciated on a pro-rata basis.

218
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

1.5 Revenue recognition

i) Interest income
Interest income is recorded using the effective interest rate (EIR) method. EIR is the rate that exactly discounts the
estimated future cash flows over the expected life of the financial instrument or a shorter year, where appropriate,
to the gross carrying amount of the financial asset. The calculation takes into account all contractual terms of the
financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly
attributable and are an integral part of the EIR, but not future credit losses. The Company calculates interest income
by applying the EIR to the gross carrying amount of financial assets other than credit-impaired assets. When a
financial asset becomes credit-impaired and is, therefore, regarded as ‘Stage 3’, the Company calculates interest
income by applying the effective interest rate to the net amortised cost of the financial asset (Gross Value less ECL
provision). If the financial assets cures and is no longer credit-impaired, the Company reverts to calculating interest
income on a gross basis.

ii) Fee and other revenue

Project appraisal fees and other ancillary fees is recognised on the basis of actual receipt. Display income is
accounted on accrual basis.

iii) Dividend income

Dividend are recognised in statement of profit and loss only when the right to receive payment is established, it is
probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the
dividend can be measured reliably.

1.6 Taxes on income

Income tax expense comprises current tax expenses and net change in the deferred tax assets or liabilities during
the year. Current and deferred taxes are recognised in the Statement of profit and loss, except when they relate to
item that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred
tax are also recognised in other comprehensive income or directly in equity respectively.
The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on
the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end
of the reporting period.
Deferred income tax is recognised using balance sheet approach. Deferred income tax assets and liabilities are
recognised for deductible and taxable temporary differences arising between the tax base of an assets and liabilities
and their carrying amount in the financial statements, except when the deferred income tax arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting
nor taxable profit or loss at the time of recognition.

Deferred tax asset is recognised to the extent that sufficient taxable profit will be available against which the
deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the
end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled. The carrying amount of deferred tax assets are reviewed at each reporting
date and reduced to the extent that it is no longer probable sufficient taxable profit will be available to allow or part
of deferred income tax assets to be utilised. At each reporting date, the Company re-assesses unrecognised deferred
tax assets. It recognises unrecognised deferred tax asset to the extent that it has become reasonably certain, as the
case may be, that sufficient future taxable income will be available against which such deferred tax assets can be
realised.

219
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India which is
likely to give future economic benefit in the form of availability of setoff against future income tax liability.
Accordingly, MAT is recognised as deferred tax assets in the balance sheet when the assets can be measured reliably
and it is probable that the future economic benefit associated with the asset will be realised.

1.7 Leases: Company as a lessee

The Company’s leased assets primarily consist of leases for buildings. The Company assesses whether a contract
contains lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys
the right to control the use of an identified asset, the Company assesses whether:
i. the contract involves the use of an identified asset;
ii. the Company has substantially all of the economic benefits from use of the asset through the period of the
lease; and
iii. the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognises a right-of-use asset (ROU) and a corresponding
lease liability for all lease arrangements in which it is a lessee, except for leases with a lease term of twelve months
or less (short-term leases) and low value leases.

For these short-term and low value leases, the Company recognises the lease payments as an operating expense on
a straight-line basis over the term of the lease.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs
less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment
losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease
term and useful life of the underlying asset.
The lease liability is initially measured at the present value of the fixed lease payments including variable lease
payments that depend on an index or a rate. The lease payments are discounted using the interest rate implicit in the
lease or, if not readily determinable, using the incremental borrowing rate of the Company.
Lease liability and ROU asset have been separately presented in the balance sheet and lease payments have been
classified as financing cash flows.

220
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

1.8 Foreign currency transactions

The functional currency of the Company is Indian rupee.

Transactions in foreign currency are recorded at exchange rate prevailing on the date of transaction. Foreign currency
denominated monetary assets and liabilities are translated at the exchange rate prevailing on the balance sheet date
and exchange gain or loss arising on their settlement and restatement are recognised in the statement of profit and
loss.
Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not
retranslated.

1.9 Impairment of non-financial assets

The carrying amount of the non-financial assets are reviewed at each balance sheet date if there is any indication of
impairment based on internal /external factors. An impairment loss is recognised whenever the carrying amount of
an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount of the assets (or where
applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling
price and its value in use. Impairment loss is recognised in the statement of profit and loss.
After impairment, depreciation / amortisation is provided on the revised carrying amount of the asset over its
remaining useful life.
A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However,
the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging
usual depreciation / amortisation if there were no impairment.

1.10 Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities
of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.

1.11 Provisions, contingent liabilities and contingent assets

A provision is recognised when the Company has a present obligation as a result of past events and it is probable
that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be
made. Provisions are measured at the present value of management's best estimate of the expenditure required to
settle the present obligation at the end of the reporting period. The discount rate used to determine the present value
is a pre-tax rate that reflects the current market assessments of time value of money and the risks specific to the
liability. The increase in the provision due to passage of time is recognised as interest expense. The provisions are
reviewed at each balance sheet date and adjusted to reflect the current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence
would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the Company.
Contingent assets are not recognised in the financial statements. However, it is disclosed only when an inflow of
economic benefits is probable.

221
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

1.12 Employee benefits

a) Short term employee benefits: All employee benefits which are due within twelve months of rendering the
services are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated
absences, etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders
the related service. All short-term employee benefits are accounted on undiscounted basis during the accounting
year based on services rendered by employees.

b) Post-employment benefits
The Company makes contribution to statutory provident fund in accordance with Employees Provident Fund and
Miscellaneous Provisions Act, 1952 which is a defined contribution plan and contribution paid or payable is
recognised as an expense in the year in which services are rendered by the employees.
The Company’s gratuity benefit scheme is an unfunded defined benefit plan. The Company’s obligation in respect
of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned
in return for their services in the current and prior periods recognised as a liability at the present value of the defined
benefit obligations at the balance sheet date based on an actuarial valuation carried out by an independent actuary
using the Projected Unit Credit Method. The discount rates used for determining the present value of the obligations
under the defined benefit plan are based on the market yields on government bonds as at the balance sheet date.
Actuarial gains or losses on such valuation are recognised immediately in the other comprehensive income.

1.13 Share-based payments

Equity-settled share-based payments to employees and others providing similar services are measured at the fair
value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-
settled share-based payments transactions are set out in Annexure 6, note 35.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line
basis over the vesting year, based on the Company`s estimate of equity instruments that will eventually vest, with a
corresponding increase in equity. At the end of each reporting year, the Company revises its estimate of the number
of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in
statement of profit and loss such that the cumulative expenses reflects the revised estimate, with a corresponding
adjustment to the share based payments reserve.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted
earnings per share.

1.14 Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss (excluding other comprehensive income)
for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during
the year. The weighted average number of equity shares outstanding during the year is adjusted for events such as
bonus issue, bonus element in a right issue, shares split and reserve share splits (consolidation of shares) that have
changed the number of equities shares outstanding, without a corresponding change in resources. For the purpose
of calculating diluted earnings per share, the net profit or loss (excluding other comprehensive income) for the year
attributable to equity shareholders and the weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.

1.15 Share issue expense

Share issue expenses are adjusted from share premium account in terms of section 52 of the Companies Act, 2013.

222
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

1.16 Critical estimates and judgements

The preparation of financial statements in conformity with Ind AS requires estimates and assumptions to be made
by the management of the Company that affect the reported amounts of assets and liabilities on the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Differences
between actual results and estimates are recognised in the period in which the results are known.
The management believes that these estimates are prudent and reasonable and are based upon the management’s
best knowledge of current events and actions. Actual results could differ from these estimates and differences
between actual results and estimates are recognised in the periods in which the results are known or materialised.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items
which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than
those originally assessed.
Examples of such estimates include the useful life of property, plant and equipment, provision for doubtful
debts/advances, future obligation in respect of retirement benefit plans, provision for inventory obsolescence,
impairment of investments/assets, etc.
i) Business model assessment
The Company determines its business model at the level that best reflects how it manages groups of financial assets
to achieve its business objective.

The Company considers the frequency, volume and timing of sales in prior years, the reason for such sales, and its
expectations about future sales activity. However, information about sales activity is not considered in isolation, but
as part of a holistic assessment of how Company's stated objective for managing the financial assets is achieved and
how cash flows are realised. Therefore, the Company considers information about past sales in the context of the
reasons for those sales, and the conditions that existed at that time as compared to current conditions.

Based on this assessment and future business plans of the Company, the management has measured its financial
assets at amortised cost as the asset is held within a business model whose objective is to collect contractual cash
flows, and the contractual terms of the financial asset give rise to cash flows that are solely payments of principle
and interest (‘the ‘SPPI criterion’)."

ii) Effective interest rate method

The Company’s EIR methodology, recognises interest income using a rate of return that represents the best estimate
of a constant rate of return over the expected behavioural life of loans and recognises the effect of potentially
different interest rates charged at various stages and other characteristics of the product life cycle (including
prepayments and penalty interest and charges). This estimation, by nature, requires an element of judgement
regarding the expected behaviour and life-cycle of the instruments, as well expected changes to the Company’s base
rate and other fee income/expense that are integral parts of the instrument.

iii) Income tax:

The Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in
estimates may differ from actual outcome which could lead to an adjustment to the amounts reported in the financial
statements.

223
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 5- Summary of Significant accounting policies and other explanatory information

iv) Contingencies:
Management has estimated the possible outflow of resources at the end of each annual reporting financial year, if
any, in respect of contingencies/claim/litigations against the Company as it is not possible to predict the outcome of
pending matters with accuracy.

v) Impairment of financial assets:

The measurement of impairment losses on loan assets and commitments, requires judgement, in estimating the
amount and timing of future cash flows and recoverability of collateral values while determining the impairment
losses and assessing a significant increase in credit risk. The Company’s Expected Credit Loss (ECL) calculation is
the output of a complex model with a number of underlying assumptions regarding the choice of variable inputs and
their interdependencies. Elements of the ECL model that are considered accounting judgements and estimates
include:

The Company’s criteria for assessing if there has been a significant increase in credit risk
- The segmentation of financial assets when their ECL is assessed on a collective basis
- Development of ECL model, including the various formulae and the choice of inputs
- Selection of forward-looking macroeconomic scenarios and their probability weightings, to derive the economic
inputs into the ECL model

The measurement of all expected credit losses for financial assets held at the reporting date are based on historical
experience, current conditions and reasonable and supportable forecasts. The measurement of ECL involves
increased complexity and judgement, including estimation of PDs, LGD, a range of unbiased future economic
scenarios, estimation of expected lives and estimation of EAD and assessing significant increases in credit risk.

It has been the Company’s policy to regularly review its model in the context of actual loss experience and adjust
when necessary (refer note 4 and 32)

vi) Share based payments

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation
model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the
most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend
yield and making assumptions about them.

1.17 Finance costs

Borrowing costs primarily includes interest on amounts borrowed for the revenue operations of the Company. These
are expensed to the Statement of profit and loss using the EIR.

224
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

2 Cash and cash equivalents

(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Cash on hand 0.35 0.13 0.61 0.05 0.25
Balances with banks in current accounts 1,058.36 1,012.07 1,856.00 229.45 1,158.32
Balances with banks held as wallet money 0.96 1.28 0.63 0.64 1.23
1,059.67 1,013.48 1,857.24 230.14 1,159.80

3 Other bank balances

(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Deposits with maturity of more than 3 months but less than 12 months* 1,620.00 800.00 - - 610.00
Deposits with maturity of more than 12 months* 73.21 62.89 62.59 72.04 51.72
1,693.21 862.89 62.59 72.04 661.72

*Bank deposits of Rs. 13.17 millions (30 September 2018: Rs. 12.89 millions; 31 March 2019: Rs. 12.59 millions; 31 March 2018: Rs. 12.04 millions; 31 March 2017: Rs 10.00 millions)
held as security against the bank guarantee. Also, bank deposits of Rs. 50.00 millions (30 September 2018: Rs. 50.00 millions; 31 March 2019: Rs. 50.00 millions; 31 March 2018: Rs. 50.00
millions; 31 March 2017: Rs. 50.00 millions) held as security against the bank overdraft.

4 Loans
(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Secured
Loans carried at amortised cost
Term loans (gross)* 26,329.46 18,339.56 21,466.74 13,144.09 7,928.97
Total gross 26,329.46 18,339.56 21,466.74 13,144.09 7,928.97
Less- Impairment loss allowance (149.89) (91.06) (119.69) (56.74) (35.85)
Total term loans (net) 26,179.57 18,248.50 21,347.05 13,087.35 7,893.12

*The term loans are secured by tangible assets. Further, all the term loans are disbursed in India to parties other than public sector.

(This page has been intentionally left blank)

225
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

4.1(a) An analysis of changes in the gross carrying amount and the corresponding ECL allowances is as follows:
(Rs. in millions)
30 September 2019 30 September 2018 31 March 2019
Home loan
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Gross carrying amount - opening balance 19,181.23 188.41 168.30 19,537.94 12,438.05 96.49 78.71 12,613.25 12,438.05 96.49 78.71 12,613.25
New assets originated 7,697.50 11.30 10.48 7,719.28 6,002.66 9.84 4.01 6,016.51 11,642.09 24.38 20.81 11,687.28
Assets derecognised or repaid (3,470.64) (42.89) (47.51) (3,561.04) (1,665.43) (21.63) (20.00) (1,707.06) (4,680.05) (39.68) (42.86) (4,762.59)
Transfers from Stage 1 (185.80) 138.62 47.18 - (171.35) 143.24 28.11 - (243.93) 156.16 87.77 -
Transfers from Stage 2 24.99 (121.70) 96.71 - 22.86 (62.92) 40.06 - 23.45 (48.94) 25.49 -
Transfers from Stage 3 4.68 5.76 (10.44) - 4.21 - (4.21) - 1.62 - (1.62) -
Gross carrying amount - closing balance 23,251.96 179.50 264.72 23,696.18 16,631.00 165.02 126.68 16,922.70 19,181.23 188.41 168.30 19,537.94

(Rs. in millions)
31 March 2018 31 March 2017
Home loan
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Gross carrying amount - opening balance 7,498.08 102.37 56.25 7,656.70 4,857.64 80.22 17.99 4,955.85
New assets originated 6,717.53 12.59 9.99 6,740.11 3,768.04 13.32 5.61 3,786.97
Assets derecognised or repaid (1,727.36) (26.09) (30.11) (1,783.56) (1,037.25) (33.19) (15.68) (1,086.12)
Transfers from Stage 1 (114.98) 76.73 38.25 - (116.18) 77.84 38.34 -
Transfers from Stage 2 53.56 (69.11) 15.55 - 24.24 (37.23) 12.99 -
Transfers from Stage 3 11.22 - (11.22) - 1.59 1.41 (3.00) -
Gross carrying amount - closing balance 12,438.05 96.49 78.71 12,613.25 7,498.08 102.37 56.25 7,656.70

(Rs. in millions)
30 September 2019 30 September 2018 31 March 2019
Home loan
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
ECL allowance - opening balance 42.90 15.75 41.77 100.42 27.75 7.21 16.02 50.98 27.75 7.21 16.02 50.98
New assets originated/ significant increase
in credit risk 17.23 11.73 21.01 49.97 14.14 13.03 10.62 37.79 25.52 14.46 32.26 72.24
Assets derecognised or repaid (10.44) (3.23) (13.73) (27.40) (6.31) (1.80) (3.96) (12.07) (11.75) (2.84) (8.21) (22.80)
Transfers from Stage 1 (1.26) 0.61 0.65 - (0.66) 0.50 0.16 - (0.86) 0.53 0.33 -
Transfers from Stage 2 2.01 (9.86) 7.85 - 1.49 (4.57) 3.08 - 1.69 (3.61) 1.92 -
Transfers from Stage 3 1.00 1.10 (2.10) - 0.89 - (0.89) - 0.55 - (0.55) -
ECL allowance - closing balance 51.44 16.10 55.45 122.99 37.30 14.37 25.03 76.70 42.90 15.75 41.77 100.42

(Rs. in millions)
31 March 2018 31 March 2017
Home loan
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
ECL allowance - opening balance 15.88 7.99 9.38 33.25 9.78 7.23 2.94 19.95
New assets originated/ significant increase
in credit risk 15.92 6.48 12.21 34.61 8.91 6.81 7.50 23.22
Assets derecognised or repaid (9.59) (2.26) (5.03) (16.88) (5.00) (2.92) (2.00) (9.92)
Transfers from Stage 1 (0.31) 0.19 0.12 - (0.32) 0.17 0.15 -
Transfers from Stage 2 3.99 (5.19) 1.20 - 2.21 (3.57) 1.36 -
Transfers from Stage 3 1.86 - (1.86) - 0.30 0.27 (0.57) -
ECL allowance - closing balance 27.75 7.21 16.02 50.98 15.88 7.99 9.38 33.25

226
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

4.1(a) An analysis of changes in the gross carrying amount and the corresponding ECL allowances is as follows (cont..):
(Rs. in millions)
30 September 2019 30 September 2018 31 March 2019
Loan against property
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Gross carrying amount - opening balance 843.15 5.26 2.15 850.56 274.57 5.30 1.97 281.84 274.57 5.30 1.97 281.84
New assets originated 638.43 0.13 0.09 638.65 225.58 0.05 0.12 225.75 629.72 0.03 0.18 629.93
Assets derecognised or repaid (37.59) (0.32) - (37.91) (29.62) (1.05) - (30.67) (59.20) (2.01) - (61.21)
Transfers from Stage 1 (9.02) 8.81 0.21 0.00 (3.53) 2.68 0.85 - (4.84) 4.84 - -
Transfers from Stage 2 1.30 (2.49) 1.19 - 3.50 (3.50) - - 2.90 (2.90) - -
Transfers from Stage 3 - - - - - - - - - - - -
Gross carrying amount - closing balance 1,436.27 11.39 3.64 1,451.30 470.50 3.48 2.94 476.92 843.15 5.26 2.15 850.56

(Rs. in millions)
31 March 2018 31 March 2017
Loan against property
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Gross carrying amount - opening balance 228.76 1.44 - 230.20 123.50 0.71 - 124.21
New assets originated 103.83 0.04 0.13 104.00 120.45 0.20 - 120.65
Assets derecognised or repaid (51.99) (0.37) - (52.36) (13.92) (0.74) - (14.66)
Transfers from Stage 1 (6.23) 4.39 1.84 - (1.27) 1.27 - -
Transfers from Stage 2 0.20 (0.20) - - - - - -
Transfers from Stage 3 - - - - - - - -
Gross carrying amount - closing balance 274.57 5.30 1.97 281.84 228.76 1.44 - 230.20

(Rs. in millions)
30 September 2019 30 September 2018 31 March 2019
Loan against property
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
ECL allowance - opening balance 7.99 0.41 0.63 9.03 2.51 0.39 0.48 3.38 2.51 0.39 0.48 3.38
New assets originated/ significant increase
in credit risk 6.21 0.38 0.41 7.00 2.15 0.14 0.29 2.58 6.06 0.32 0.15 6.53
Assets derecognised or repaid (0.45) (0.02) - (0.47) (0.44) (0.16) - (0.60) (0.67) (0.21) - (0.88)
Transfers from Stage 1 (0.09) 0.09 - - (0.03) 0.02 0.01 - (0.04) 0.04 - -
Transfers from Stage 2 0.09 (0.17) 0.08 - 0.16 (0.16) - - 0.13 (0.13) - -
Transfers from Stage 3 - - - - - - - - - - - -
ECL allowance - closing balance 13.75 0.69 1.12 15.56 4.35 0.23 0.78 5.36 7.99 0.41 0.63 9.03

(Rs. in millions)
31 March 2018 31 March 2017
Loan against property
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
ECL allowance - opening balance 2.06 - - 2.06 1.31 - - 1.31
New assets originated/ significant increase
in credit risk 1.00 0.35 0.47 1.82 1.08 - - 1.08
Assets derecognised or repaid (0.50) - - (0.50) (0.32) (0.01) - (0.33)
Transfers from Stage 1 (0.05) 0.04 0.01 - (0.01) 0.01 - -
Transfers from Stage 2 - - - - - - - -
Transfers from Stage 3 - - - - - - - -
ECL allowance - closing balance 2.51 0.39 0.48 3.38 2.06 - - 2.06

227
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

4.1(a) An analysis of changes in the gross carrying amount and the corresponding ECL allowances is as follows (cont..):
(Rs. in millions)
30 September 2019 30 September 2018 31 March 2019
Commercial loan
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Gross carrying amount - opening balance 243.27 - - 243.27 74.57 - - 74.57 74.57 - - 74.57
New assets originated 91.42 0.02 - 91.44 79.54 - - 79.54 181.67 - - 181.67
Assets derecognised or repaid (14.74) - - (14.74) (7.75) - - (7.75) (12.97) - - (12.97)
Transfers from Stage 1 (1.38) 1.38 - - (0.75) 0.75 - - - - - -
Transfers from Stage 2 - - - - - - - - - - - -
Transfers from Stage 3 - - - - - - - - - - - -
Gross carrying amount - closing balance 318.57 1.40 - 319.97 145.61 0.75 - 146.36 243.27 - - 243.27

(Rs. in millions)
31 March 2018 31 March 2017
Commercial loan
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Gross carrying amount - opening balance 41.08 - 0.99 42.07 21.03 0.98 - 22.01
New assets originated 48.02 - - 48.02 25.33 - 0.01 25.34
Assets derecognised or repaid (14.53) - (0.99) (15.52) (5.28) - - (5.28)
Transfers from Stage 1 - - - - - - - -
Transfers from Stage 2 - - - - - (0.98) 0.98 -
Transfers from Stage 3 - - - - - - - -
Gross carrying amount - closing balance 74.57 - - 74.57 41.08 - 0.99 42.07

(Rs. in millions)
30 September 2019 30 September 2018 31 March 2019
Commercial loan
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
ECL allowance - opening balance 2.31 - - 2.31 0.72 - - 0.72 0.72 - - 0.72
New assets originated/ significant increase
in credit risk 0.87 0.15 - 1.02 0.77 - - 0.77 1.73 - - 1.73
Assets derecognised or repaid (0.15) - - (0.15) (0.08) - - (0.08) (0.14) - - (0.14)
Transfers from Stage 1 (0.01) 0.01 - - (0.01) 0.01 - - - - - -
Transfers from Stage 2 - - - - - - - - - - - -
Transfers from Stage 3 - - - - - - - - - - - -
ECL allowance - closing balance 3.02 0.16 - 3.18 1.40 0.01 - 1.41 2.31 - - 2.31

(Rs. in millions)
31 March 2018 31 March 2017
Commercial loan
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
ECL allowance - opening balance 0.39 - 0.15 0.54 0.22 0.01 - 0.23
New assets originated/ significant increase
in credit risk 0.46 - - 0.46 0.24 - 0.14 0.38
Assets derecognised or repaid (0.13) - (0.15) (0.28) (0.07) - - (0.07)
Transfers from Stage 1 - - - - - - - -
Transfers from Stage 2 - - - - - (0.01) 0.01 -
Transfers from Stage 3 - - - - - - - -
ECL allowance - closing balance 0.72 - - 0.72 0.39 - 0.15 0.54

228
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

4.1(a) An analysis of changes in the gross carrying amount and the corresponding ECL allowances is as follows (cont..):
(Rs. in millions)
30 September 2019 30 September 2018 31 March 2019
Construction finance
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Gross carrying amount - opening balance 834.97 - - 834.97 174.43 - - 174.43 174.43 - - 174.43
New assets originated 186.66 0.10 - 186.76 620.40 - - 620.40 689.60 - - 689.60
Assets derecognised or repaid (159.72) - - (159.72) (1.25) - - (1.25) (29.06) - - (29.06)
Transfers from Stage 1 (10.63) 10.63 - - - - - - - - - -
Transfers from Stage 2 - - - - - - - - - - - -
Transfers from Stage 3 - - - - - - - - - - - -
Gross carrying amount - closing balance 851.28 10.73 - 862.01 793.58 - - 793.58 834.97 - - 834.97

(Rs. in millions)
31 March 2018 31 March 2017
Construction finance
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Gross carrying amount - opening balance - - - - - - - -
New assets originated 174.43 - - 174.43 - - - -
Assets derecognised or repaid - - - - - - - -
Transfers from Stage 1 - - - - - - - -
Transfers from Stage 2 - - - - - - - -
Transfers from Stage 3 - - - - - - - -
Gross carrying amount - closing balance 174.43 - - 174.43 - - - -

(Rs. in millions)
30 September 2019 30 September 2018 31 March 2019
Construction finance
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
ECL allowance - opening balance 7.93 - - 7.93 1.66 - - 1.66 1.66 - - 1.66
New assets originated/ significant increase
in credit risk 1.75 - - 1.75 5.94 - - 5.94 6.55 - - 6.55
Assets derecognised or repaid (1.52) - - (1.52) (0.01) - - (0.01) (0.28) - - (0.28)
Transfers from Stage 1 (0.10) 0.10 - - - - - - - - - -
Transfers from Stage 2 - - - - - - - - - - - -
Transfers from Stage 3 - - - - - - - - - - - -
ECL allowance - closing balance 8.06 0.10 - 8.16 7.59 - - 7.59 7.93 - - 7.93

(Rs. in millions)
31 March 2018 31 March 2017
Construction finance
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
ECL allowance - opening balance - - - - - - - -
New assets originated/ significant increase
in credit risk 1.66 - - 1.66 - - - -
Assets derecognised or repaid - - - - - - - -
Transfers from Stage 1 - - - - - - - -
Transfers from Stage 2 - - - - - - - -
Transfers from Stage 3 - - - - - - - -
ECL allowance - closing balance 1.66 - - 1.66 - - - -

229
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

4.1(b) An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to loan commitments is as follows:
(Rs. in millions)
30 September 2019 30 September 2018 31 March 2019
Loan commitments
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Gross carrying amount - opening balance 5,705.61 22.80 24.60 5,753.01 3,764.28 8.77 16.30 3,789.35 3,764.28 8.77 16.30 3,789.35
New commitments originated 4,541.48 - - 4,541.48 4,317.11 - - 4,317.11 5,195.02 - - 5,195.02
Assets derecognised or repaid (4,195.88) (2.75) (1.23) (4,199.86) (2,560.30) (4.37) - (2,564.67) (3,213.34) (12.04) (5.98) (3,231.36)
Transfers from Stage 1 (23.43) 20.32 3.11 - (32.72) 31.02 1.70 - (49.24) 33.07 16.17 -
Transfers from Stage 2 1.17 (16.56) 15.39 - 2.49 (5.42) 2.93 - 4.10 (7.00) 2.90 -
Transfers from Stage 3 - 0.44 (0.44) - 4.42 - (4.42) - 4.79 - (4.79) -
Gross carrying amount - closing balance 6,028.95 24.25 41.43 6,094.63 5,495.28 30.00 16.51 5,541.79 5,705.61 22.80 24.60 5,753.01

(Rs. in millions)
31 March 2018 31 March 2017
Loan commitments
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Gross carrying amount - opening balance 1,916.23 23.67 9.40 1,949.30 1,715.96 8.61 2.91 1,727.48
New commitments originated 3,224.05 0.90 - 3,224.95 1,388.45 0.33 - 1,388.78
Assets derecognised or repaid (1,377.34) (6.05) (1.51) (1,384.90) (1,160.09) (5.41) (1.46) (1,166.96)
Transfers from Stage 1 (24.35) 13.05 11.30 - (29.95) 23.08 6.87 -
Transfers from Stage 2 19.46 (22.80) 3.34 - 1.44 (2.94) 1.50 -
Transfers from Stage 3 6.23 - (6.23) - 0.42 - (0.42) -
Gross carrying amount - closing balance 3,764.28 8.77 16.30 3,789.35 1,916.23 23.67 9.40 1,949.30

(Rs. in millions)
30 September 2019 30 September 2018 31 March 2019
Loan commitments
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
ECL allowance - opening balance 14.51 - - 14.51 10.21 - - 10.21 10.21 - - 10.21
New assets originated/ significant increase 7.67 - -
in credit risk 9.95 - - 9.95 7.67 13.30 - - 13.30
Assets derecognised or repaid (9.57) - - (9.57) (1.09) - - (1.09) (9.00) - - (9.00)
Transfers from Stage 1 - - - - - - - - - - - -
Transfers from Stage 2 - - - - - - - - - - - -
Transfers from Stage 3 - - - - - - - - - - - -
ECL allowance - closing balance 14.89 - - 14.89 16.79 - - 16.79 14.51 - - 14.51

(Rs. in millions)
31 March 2018 31 March 2017
Loan commitments
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
ECL allowance - opening balance 6.47 - - 6.47 3.48 - - 3.48
New assets originated/ significant increase
in credit risk 8.79 - - 8.79 5.71 - - 5.71
Assets derecognised or repaid (5.05) - - (5.05) (2.72) - - (2.72)
Transfers from Stage 1 - - - - - - -
Transfers from Stage 2 - - - - - - - -
Transfers from Stage 3 - - - - - - - -
ECL allowance - closing balance 10.21 - - 10.21 6.47 - - 6.47

230
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

4.2 Impairment assessment

The references below show where the Company’s impairment assessment and measurement approach is set out in these notes.

Definition of default
The Company considers a financial instrument as defaulted and considered it as Stage 3 (credit-impaired) for expected credit loss (ECL) calculations in all cases, when the assets becomes
more than 90 days past due on its contractual payments. The probability of default is an estimate of the likelihood of default over a given time horizon. A default may only happen at a
certain time over the assessed year, if the facility has not been previously derecognised and is still in the portfolio.

Exposure at default
The exposure at default (EAD) represents the gross carrying amount of the financial instruments subject to the impairment calculation, addressing both the client’s ability to increase its
exposure while approaching default and potential early repayments too.

To calculate the EAD for a Stage 1 loan, the Company assesses the possible default events within 12 months for the calculation of the 12 months ECL. For Stage 2 and Stage 3 financial
assets, the exposure at default is considered for events over the lifetime of the instruments.

Loss given default

The Company segments its lending products into smaller homogeneous portfolios (housing, construction finance, loan against property and commercial loan), based on key characteristics
that are relevant to the estimation of future cash flows. The data applied is collected loss data and involves a wider set of transaction characteristics (e.g., product type, days past due, LTV)
as well as borrower characteristics.

Significant increase in credit risk

The Company continuously monitors all assets subject to ECLs. In order to determine whether an instrument or a portfolio of instruments is subject to 12 months ECL or Life time ECL, the
Company assesses whether there has been a significant increase in credit risk since initial recognition. The Company considers an exposure to have significantly increased in credit risk when
contractual payments are more than 30 days past due.

When estimating ECLs on a collective basis for a group of similar assets, the Company applies the same principles for assessing whether there has been a significant increase in credit risk
since initial recognition.

Grouping financial assets measured on a collective basis

As explained above, the Company calculates ECLs on collective basis on following asset classes:
- Housing loans
- Construction finance
- Loan against property
- Commercial loan

Risk assessment model

The Company has designed and operates its risk assessment model that factors in both quantitative as well as qualitative information on the loans and the borrowers. The model uses
historical empirical data to arrive at factors that are indicative of future credit risk and segments the portfolio on the basis of combinations of these parameters into smaller homogenous

Collateral
The Company holds collateral to mitigate credit risk associated with financial assets. The main types of collateral include residential and commercial properties. The collateral presented
relates to instruments that are measured at amortised cost.
(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Properties (amount of collateral) 57,210.66 35,645.81 45,720.79 23,588.32 13,491.05

5 Investments
(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
At fair value through profit and loss
Unquoted: Mutual funds
Sundaram money fund 486.25 - 99.80 - -
Kotak liquid fund 341.75 200.09 336.39 - -
SBI liquid fund - - 279.99 - -
INVESCO India liquid fund 120.03 - 41.54 - -
IDFC cash fund - - 271.45 - -
Tata liquid fund 346.90 - - - -
Aditya birla sunlife liquid fund 137.99 - - - -
Axis liquid fund 617.25 - - - -
HSBC cash fund 483.58 - - - -
ICICI prudential liquid fund 150.88 - - - -
UTI liquid cash fund 92.80 - - - -
2,777.43 200.09 1,029.17 - -
Investment in India 2,777.43 200.09 1,029.17 - -
Investment outside India - - - - -
2,777.43 200.09 1,029.17 - -

(This page has been intentionally left blank)

231
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

5 Investments (cont…)
Number of units
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Unquoted: Mutual funds
- Sundaram money fund 11,938,532 - 2,532,338 - -
- Kotak liquid fund 87,449 163,628 88,890 - -
- SBI liquid fund - - 95,607 - -
- INVESCO India liquid fund 45,182 - 16,148 - -
- IDFC cash fund - - 119,765 - -
- Tata liquid fund 113,964 - - - -
- Aditya birla sunlife liquid fund 443,950 - - - -
- Axis liquid fund 288,021 - - - -
- HSBC cash fund 251,150 - - - -
- ICICI prudential liquid fund 528,109 - - - -
- UTI liquid cash fund 29,333 - - - -
13,725,690 163,628 2,852,748 - -

6 Other financial assets

(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Interest receivable strip 394.66 65.02 229.92 34.96 49.60
Security deposits 18.34 13.27 14.20 9.13 6.66
Advances to employees 11.92 6.40 8.36 3.39 2.91
Other deposits 0.19 0.12 0.10 0.10 0.10
Other receivables* 51.54 23.06 8.62 1.51 0.36
476.65 107.87 261.20 49.09 59.63
*Other receivables as at 30 September 2019 includes Rs. 17.93 millions pertaining to expenses incurred towards project darwin, which shall be receivable from the selling shareholders once
the project is successfully completed. It also includes receivable from related parties amounting to Rs. 7.57 millions (30 September 2018: Nil; 31 March 2019: Nil; 31 March 2018: Nil; 31
March 2017: Nil) (refer note 28.3).

7 Current tax assets (net)

(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Advance tax (net)* 53.19 8.06 10.25 4.66 -
53.19 8.06 10.25 4.66 -

*Net of provision for tax Rs. 89.21 millions (30 September 2018: Rs. 66.55 millions; 31 March 2019: Rs. 160.53 millions; 31 March 2018: Rs. 120.36 millions; 31 March 2017: Nil).

(This page has been intentionally left blank)

232
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)
Annexure 6 - Notes to restated financial information

8 Property, plant and equipment and other intangible assets

(Rs. in millions)
Property, plant and equipment Other intangible assets
Furniture and Office Computers Leasehold Right of use Total tangible Computer Licenses Scoring Total other
fixtures equipment improvements building assets software algorithm intangible assets
Gross carrying value
As at 1 April 2016 8.98 3.01 5.25 - 12.53 29.77 5.94 0.06 0.30 6.30
Additions for 2016-17 10.76 2.08 3.22 - 38.12 54.18 1.29 - - 1.29
Sale/ deletion for 2016-17 - - - - (0.61) (0.61) - - - -
As at 31 March 2017 19.74 5.09 8.47 - 50.04 83.34 7.23 0.06 0.30 7.59
Additions for 2017-18 18.52 2.27 10.11 - 25.51 56.41 2.81 - - 2.81
Sale/ deletion for 2017-18 - - - - (2.43) (2.43) - - - -
As at 31 March 2018 38.26 7.36 18.58 - 73.12 137.32 10.04 0.06 0.30 10.40
Additions for half year September 2018 14.00 4.94 7.99 17.56 23.33 67.82 4.54 - - 4.54
Sale / deletion for half year September 2018 - - - - (5.27) (5.27) - - - -
As at 30 September 2018 52.26 12.30 26.57 17.56 91.18 199.87 14.58 0.06 0.30 14.94
Additions for 2018-19 20.72 6.80 14.91 28.59 41.97 112.99 5.96 - - 5.96
Sale/ deletion for 2018-19 - - - - (6.77) (6.77) - - - -
As at 31 March 2019 58.98 14.16 33.49 28.59 108.32 243.54 16.00 0.06 0.30 16.36
Additions for half year September 2019 1.60 0.93 6.39 12.01 28.23 49.16 0.16 - - 0.16
Sale/ deletion for half year September 2019 (0.12) (0.03) - - (5.44) (5.59) - - - -
As at 30 September 2019 60.46 15.06 39.88 40.60 131.11 287.11 16.16 0.06 0.30 16.52

Accumulated depreciation/ amortisation

As at 1 April 2016 1.40 1.06 3.12 - - 5.58 3.57 0.06 0.25 3.88
Charge for the year 2016-17 1.35 0.79 1.65 - 10.31 14.10 1.40 - 0.05 1.45
Sale/ deletion for the year 2016-17 - - - - (0.61) (0.61) - - - -
As at 31 March 2017 2.75 1.85 4.77 - 9.70 19.07 4.97 0.06 0.30 5.33
Charge for the year 2017-18 3.15 1.16 3.13 - 15.62 23.06 1.57 - - 1.57
Sale/ deletion for the year 2017-18 - - - - (2.43) (2.43) - - - -
As at 31 March 2018 5.90 3.01 7.90 - 22.89 39.70 6.54 0.06 0.30 6.90
Charge for half year September 2018 2.30 0.84 2.98 0.93 11.06 18.11 1.31 - - 1.31
Sale/ deletion for half year September 2018 - - - - (5.27) (5.27) - - - -
As at 30 September 2018 8.20 3.85 10.88 0.93 28.68 52.54 7.85 0.06 0.30 8.21
Charge for the year 2018-19 4.94 2.00 6.81 4.79 24.48 43.02 2.75 - - 2.75
Sale/ deletion for the year 2018-19 - - - - (6.77) (6.77) - - - -
As at 31 March 2019 10.84 5.01 14.71 4.79 40.60 75.95 9.29 0.06 0.30 9.65
Charge for half year September 2019 2.85 1.27 4.94 6.35 15.23 30.64 1.72 - - 1.72
Sale/ deletion for half year September 2019 (0.03) (0.03) - - (5.37) (5.43) - - - -
As at 30 September 2019 13.66 6.25 19.65 11.14 50.46 101.16 11.01 0.06 0.30 11.37

233
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)
Annexure 6 - Notes to restated financial information

8 Property, plant and equipment and other intangible assets (Contd..)

(Rs. in millions)
Property, plant and equipment Other intangible assets
Furniture and Office Computers Leasehold Right of use Total tangible Computer Licenses Scoring Total other
fixtures equipment improvements building assets software algorithm intangible assets

Net carrying value

As at 31 March 2017 16.99 3.24 3.70 - 40.34 64.27 2.26 - - 2.26
As at 31 March 2018 32.36 4.35 10.68 - 50.23 97.62 3.50 - - 3.50
As at 30 September 2018 44.06 8.45 15.69 16.63 62.50 147.33 6.73 - - 6.73
As at 31 March 2019 48.14 9.15 18.78 23.80 67.72 167.59 6.71 - - 6.71
As at 30 September 2019 46.80 8.81 20.23 29.46 80.65 185.95 5.15 - - 5.15

Note: On conversion to Ind AS, the Company has elected to continue with all its property, plant and equipment and other intangible assets recognised as at 1 April 2018 measured as per the previous Indian GAAP and use
the carrying value as the deemed cost of the property, plant and equipment and other intangible assets. The Company has followed the same accounting policy choice as initially adopted on transition date 1 April 2018,
while preparing the restated schedule for the year ended 31 March 2018 and 31 March 2017.

(This page has been intentionally left blank)

234
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

9 Other non-financial assets

(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Prepayments 25.75 19.30 45.30 24.87 11.22
Advance to creditors 6.97 5.34 2.59 3.44 0.88
Capital advances 4.66 3.64 2.02 2.00 5.83
Balance with government authorities 5.06 - 3.48 - 2.13
Other receivables 1.25 0.01 0.03 0.41 2.44
43.69 28.29 53.42 30.72 22.50

10 Trade payables
(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Total outstanding dues of micro enterprises and small enterprises - - - - 0.56
Total outstanding dues of creditors other than micro enterprises and small
enterprises 1.71 7.22 13.58 5.37 32.37
1.71 7.22 13.58 5.37 32.93

The management has identified enterprises which qualify under the definition of micro enterprises and small enterprises, as defined under Micro, Small and Medium Enterprises
Development (MSMED) Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at the year end has been made in the financial statements based on
information received and available with the Company and has been relied upon by the statutory auditors.
(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Principal amount remaining unpaid - - - - 0.56
Interest due thereon
Interest paid by the Company in terms of Section 16 of MSMED Act, 2006, along
with the amount of the payment made to the suppliers and service providers
beyond the appointed day during the period / year - - - - -
Interest due and payable for the period of delay in making payment (which has
been paid but beyond the appointed day during the year) but without adding the
interest specified under MSMED Act, 2006 - - - - -
Amount of interest accrued and remaining unpaid at the end of the period /year
- - - - -
Further interest remaining due and payable even in the succeeding years, until
such date when the interest dues as above are actually paid to the small enterprise
for the purpose of disallowance as a deductible expenditure under section 23 of
the MSMED Act, 2006 - - - - -

11 Debt securities
(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Unsecured
At amortised cost
Commercial papers - 492.49 - - -
- 492.49 - - -

Debt securities in India - 492.49 - - -

Debt securities outside India - - - - -
- 492.49 - - -
Note: Discount on commercial paper varies from 8% to 9%. Debt securities outstanding as at 30 September 2018 are repayable within 2 months from the reporting date.

12 Borrowings (other than debt securities)

(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Secured
At amortised cost
Term loans
- from banks 17,022.78 10,681.12 13,388.73 7,743.75 5,965.29
- from National Housing Bank (NHB) 5,468.81 4,288.66 5,867.63 2,455.01 587.99
- from other parties 364.67 - - - -
- working capital loan 100.00 - - - -
Loans repayable on demand - from banks 0.05 100.00 0.05 - 77.17
22,956.31 15,069.78 19,256.41 10,198.76 6,630.45

Borrowings in India 22,956.31 15,069.78 19,256.41 10,198.76 6,630.45

Borrowings outside India - - - - -
22,956.31 15,069.78 19,256.41 10,198.76 6,630.45

Notes:
(i) All borrowings are secured against the loan assets of the Company.
(ii) The repayment of the borrowing is done in monthly, quarterly, half - yearly and annual instalment.
(iii) The Company has not made any default in repayment of instalments due over the reporting period.

235
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

12 Borrowings (other than debt securities) (cont….)

Terms of repayment of term loans (Rs. in millions)
Rate of interest (p.a.) Maturity 30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Secured Secured Secured Secured Secured
4%-5% 1,577.86 1,498.97 1,498.97 565.84 -
6%-7% 273.62 259.94 259.94 259.94 211.20
7%-8% 103.34 98.17 98.17 98.17 48.77
8%-9% 1 - 5 years 7,774.98 8,452.61 5,698.24 6,193.81 209.11
9%-10% 9,790.99 2,498.39 7,564.04 1,795.58 2,039.26
10%-11% 1,134.50 - 1,203.55 - 1,915.00
11%-11.50% - - - - 1,520.00
4%-5% 319.16 587.76 483.31 238.22 -
6%-7% 96.59 109.45 109.42 109.45 88.93
7%-8% 25.82 36.09 30.96 41.22 20.54
8%-9% 5 -7 years 468.23 599.28 297.36 307.75 14.36
9%-10% 613.28 183.36 824.64 6.78 171.78
10%-11% 208.00 - 208.00 - 185.00
11%-11.50% - - - - -
4%-5% 107.11 214.29 160.95 267.62 -
6%-7% 9.09 61.26 33.92 88.62 104.90
7%-8% 7-10 years 5.90 24.60 19.40 29.80 10.15
8%-9% 77.50 164.02 - - 14.36
9%-10% 265.50 206.17 535.13 202.28 10.18
10%-11% 161.90 - 272.00 10.19 -
9%-10% More than 10 years - 2.51 0.82 4.21 7.60
Total borrowings (excluding loans repayable on demand) 23,013.37 14,996.87 19,298.82 10,219.48 6,571.14
Adjustment of unamortised processing fee (EIR) (57.11) (27.09) (42.46) (20.72) (17.86)
Total adjusted borrowings (excluding loans repayable on demand) 22,956.26 14,969.78 19,256.36 10,198.76 6,553.28

13 Other financial liabilities

(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Interest accrued but not due on borrowings 171.36 36.96 43.43 22.67 38.71
Lease liability (refer note 37) 90.07 69.29 75.89 55.74 43.50
Payable to Central Bank of India (CBoI) on account of direct assignment 57.76 13.63 62.02 15.90 21.07
Payable to NHB against credit linked subsidy scheme (CLSS) 6.44 0.92 1.24 3.28 -
Employee benefits payable 21.88 20.05 34.41 20.67 12.02
Bank book credit balance 101.60 - - - -
Other financial liabilities* 26.06 8.27 21.44 11.91 3.77
475.17 149.12 238.43 130.17 119.07
*Other financials liabilities includes Rs. 0.25 millions payable to related parties (30 September 2018: Rs. 0.51 millions; 31 March 2019: Rs. 6.23 millions; 31 March 2018: Rs. 0.51 millions;
31 March 2017: 0.29 millions) (refer note 28.3 for further details)

14 Current tax liabilities (net)

(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017

Provision for tax (net)* - - - - 0.84

- - - - 0.84

*Net of advance tax of Rs. 47.54 millions as at 31 March 2017

15 Provisions
(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Provision for employee benefits - Gratuity (refer note 34.6) 13.15 7.39 8.58 5.63 4.15
Provision for corporate social responsibility (refer note 38) 3.70 2.10 - - 1.08
Provision for expected credit loss on undisbursed loan commitment (refer
note 4.1 (b)) 14.89 16.79 14.51 10.21 6.47
Provision for expenses 15.43 12.24 6.53 2.90 8.75
47.17 38.52 29.62 18.74 20.45

16 Other non financial liabilities

(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Deferred income 32.03 24.23 30.41 28.92 12.23
Statutory dues 34.23 16.32 9.90 8.13 5.78
Others 16.28 11.63 10.30 7.18 4.25
82.54 52.18 50.61 44.23 22.26

236
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

17 Share capital
Details of authorised, issued, subscribed and paid up share capital
As at 30 September 2019 As at 30 September 2018
No. of shares Amount (Rs. in No. of shares Amount (Rs. in
million) million)
Authorised share capital
Equity shares of Rs 10 each 25,000,000 250.00 15,000,000 150.00
1% Series A Compulsorily convertible preference shares of Rs. 10 each* - - - -
1% Series B Compulsorily convertible preference shares of Rs. 10 each* - - - -
25,000,000 250.00 15,000,000 150.00
Issued, subscribed and paid up
Equity shares of Rs 10 each 15,659,543 156.60 12,630,748 126.31
1% Series A Compulsorily convertible preference shares of Rs 10 each - - - -
1% Series B Compulsorily convertible preference shares of Rs 10 each - - - -
15,659,543 156.60 12,630,748 126.31

Details of authorised, issued, subscribed and paid up share capital (cont…)

As at 31 March 2019 As at 31 March 2018
No. of shares Amount (Rs. in No. of shares Amount (Rs. in
million) million)
Authorised share capital
Equity shares of Rs 10 each 15,000,000 150.00 10,991,185 109.91
1% Series A Compulsorily convertible preference shares of Rs. 10 each* - - 1,600,004 16.00
1% Series B Compulsorily convertible preference shares of Rs. 10 each* - - 2,408,811 24.09
15,000,000 150.00 15,000,000 150.00
Issued, subscribed and paid up
Equity shares of Rs 10 each 12,667,898 126.68 10,323,331 103.23
1% Series A Compulsorily convertible preference shares of Rs 10 each - - - -
1% Series B Compulsorily convertible preference shares of Rs 10 each - - - -
12,667,898 126.68 10,323,331 103.23

Details of authorised, issued, subscribed and paid up share capital (cont…)

As at 31 March 2017
No. of shares Amount (Rs. in
million)
Authorised share capital
Equity shares of Rs 10 each 10,991,185 109.91
1% Series A Compulsorily convertible preference shares of Rs. 10 each* 1,600,004 16.00
1% Series B Compulsorily convertible preference shares of Rs. 10 each* 2,408,811 24.09
15,000,000 150.00
Issued, subscribed and paid up
Equity shares of Rs 10 each 10,320,531 103.21
1% Series A Compulsorily convertible preference shares of Rs 10 each - -
1% Series B Compulsorily convertible preference shares of Rs 10 each - -
10,320,531 103.21

*The Company has reclassified 99,996 authorised unissued 1% Series A Compulsorily convertible preference shares and 91,189 authorised unissued 1% Series B Compulsorily convertible
preference shares into equity shares of Rs. 10 each on 3 March 2017.
The Company has reclassified 1,600,004 authorised unissued 1% Series A Compulsorily convertible preference shares and 2,408,811 authorised unissued 1% Series B Compulsorily
convertible preference shares into equity shares of Rs. 10 each on 7 July 2018.

i. The reconciliation of the number of shares outstanding and the amount of share capital as at 30 September 2019, 30 September 2018, 31 March 2019, 31 March 2018, and 31
March 2017 is set out below

As at 30 September 2019 As at 30 September 2018

Equity shares No. of shares Amount (Rs. in No. of shares Amount (Rs. in
million) million)
Shares outstanding at the beginning of the period / year 12,667,898 126.68 10,323,331 103.23
Add: Shares issued during the period / year 2,991,645 29.92 2,307,417 23.08
Add: Preference shares converted during the period / year - - - -
Shares outstanding at the end of the year 15,659,543 156.60 12,630,748 126.31

As at 31 March 2019 As at 31 March 2018

Equity shares No. of shares Amount (Rs. in No. of shares Amount (Rs. in
million) million)
Shares outstanding at the beginning of the year 10,323,331 103.23 10,320,531 103.21
Add: Shares issued during the year 2,344,567 23.45 2,800 0.02
Add: Preference shares converted during the year - - - -
Shares outstanding at the end of the year 12,667,898 126.68 10,323,331 103.23

As at 31 March 2017
Equity shares No. of shares Amount (Rs. in
million)
Shares outstanding at the beginning of the year 3,752,907 37.53
Add: Shares issued during the year 2,558,809 25.59
Add: Preference shares converted during the year 4,008,815 40.09
Shares outstanding at the end of the year 10,320,531 103.21

237
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

As at 31 March 2018 As at 31 March 2017

Preference shares No. of shares Amount (Rs. in No. of shares Amount (Rs. in
million) million)
Shares outstanding at the beginning of the year - - 4,008,815 40.09
Add: Shares issued during the year - - - -
Add: Preference shares converted during the year - - (4,008,815) (40.09)
Shares outstanding at the end of the year ** - - - -
** The Company has reclassified 1,600,004 authorised unissued 1% Series A Compulsorily convertible preference shares and 2,408,811 authorised unissued 1% Series B Compulsorily
convertible preference shares into equity shares of Rs. 10 each on 7 July 2018.

ii. Shareholders holding more than 5% of the shares in the Company

As at 30 September 2019 As at 30 September 2018
Equity shares
No. of shares % of holding No. of shares % of holding
True North Value Fund V LLP (Formerly known as India Value Fund V LLP) 71,77,694 45.84% 5,813,289 46.02%
Aether (Mauritius) Limited 47,85,129 30.56% 3,875,526 30.68%
Bessemer India Capital Holdings II Limited 25,48,847 16.28% 2,072,424 16.41%
Mr. P S Jayakumar 8,07,555 5.16% 656,609 5.20%

As at 31 March 2019 As at 31 March 2018

Equity shares No. of shares No. of shares
% of holding % of holding
True North Value Fund V LLP (Formerly known as India Value Fund V LLP) 5,836,059 46.07% 4,428,839 42.90%
Aether (Mauritius) Limited 3,890,706 30.71% 2,952,559 28.60%
Bessemer India Capital Holdings II Limited 2,072,424 16.36% 2,072,424 20.08%
Mr. Jaithirth Rao - - - -
Mr. Manoj Viswanathan - - - -
Mr. P S Jayakumar 656,609 5.18% 656,609 6.36%

1% Series A Compulsorily convertible preference shares of Rs. 10 each

Bessemer India Capital Holdings II Limited - - - -
1% Series B Compulsorily convertible preference shares of Rs 10 each
Alpha TC Holdings Pte Limited - - - -
Bessemer India Capital Holdings II Limited - - - -

As at 31 March 2017
Equity shares
No. of shares % of holding
True North Value Fund V LLP (Formerly known as India Value Fund V LLP) 4,019,429 38.95%
Aether (Mauritius) Limited 2,679,619 25.96%
Bessemer India Capital Holdings II Limited 2,072,424 20.08%
Mr. Jaithirth Rao - -
Mr. Manoj Viswanathan - -
Mr. P S Jayakumar 1,338,959 12.97%

1% Series A Compulsorily convertible preference shares of Rs. 10 each

Bessemer India Capital Holdings II Limited - -
1% Series B Compulsorily convertible preference shares of Rs 10 each
Alpha TC Holdings Pte Limited - -
Bessemer India Capital Holdings II Limited - -
iii. Terms, rights, preferences and restrictions attached to shares
Equity shares:
The Company has only one class of equity share having par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The dividend proposed by the board of
directors is subject to the approval at shareholders in the ensuing general meeting. In the event of liquidation of the Company, the holder of equity shares will be entitled to receive any of the
remaining assets of the Company.

Preference shares:
a) Right to dividend: Each '1% Series A Compulsorily convertible preference shares' and '1% Series B Compulsorily convertible preference shares' shall be entitled to annual dividend on
each share at the rate of 1% and will be payable when declared by the Board of Directors, prior and in preference to the dividend on the equity shares. The dividends shall not be cumulative
in nature. Notwithstanding anything provided above, each Series A and Series B preference shares shall also participate equally with equity shares of the Company, on and as converted basis
for all other dividends and declarations made by the Company.

b) Right in case of liquidation: In case of any liquidation event, winding up or dissolution of the Company, merger, or any Company sale, each of the holders of Series A and Series B
preference shares shall be entitled to first receive the aggregate of (i) their respective investments in preference shares as on that date; and (ii) an amount being the pro rata share of each
holder of the preference shares in the net assets of the Company resulting from the liquidation event based on the then existing shareholding in the Company on a fully diluted basis, prior to
any payments being made to any equity shareholders or to any holders of any securities irrespective as to whether other shares are convertible, redeemable or exchangeable as on that date.

c) Conversion ratio: Each '1% Series A Compulsorily convertible preference shares' and '1% Series B Compulsorily convertible preference shares' is converted into 1 equity share of the
Company (subject to anti-dilution rights and appropriate adjustment in the event of any stock dividend, stock split, combination, anti-dilution or any other similar recapitalisation).

iv. Issue of bonus shares or buy back of shares

The Company has not issued/ allotted any shares pursuant to contracts without payment being received in cash, nor issued any bonus shares nor there has been any buy back of shares during
five years immediately preceding 30 September 2019.

238
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

18 Other equity
(Rs. in millions)
As at As at As at As at As at
Notes
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Securities premium account 18.2 7,550.22 4,293.08 4,294.57 2,803.28 2,802.46
Statutory reserve 18.3 254.19 131.89 179.19 94.19 42.19
Retained earnings 18.4 848.70 268.67 558.62 190.70 82.20
Stock option outstanding account 18.5 83.32 65.82 72.34 60.75 33.52
8,736.43 4,759.46 5,104.72 3,148.92 2,960.37

(Rs. in millions)
Particulars As at As at As at As at As at
18.1
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Securities premium
Opening balance 4,294.57 2,803.28 2,803.28 2,802.46 1,373.97
Add: Premium received on allotment of shares 3,254.28 1,488.08 1,639.83 0.64 1,428.49
Add: Transferred from employee stock option reserve pursuant to stock
options exercised 4.73 3.22 6.46 0.18 -
Less: Share issue expenses adjusted in accordance with Section 52 of Companies
Act, 2013 (3.36) (1.50) (155.00) - -
7,550.22 4,293.08 4,294.57 2,803.28 2,802.46
Statutory reserve
Opening balance 179.19 94.19 94.19 42.19 24.39
Add: Current year transfer 75.00 37.70 85.00 52.00 17.80
254.19 131.89 179.19 94.19 42.19
Retained earnings
Opening balance 558.62 190.70 190.70 82.20 36.01
Add: Transferred from statement of profit and loss 365.08 114.01 451.07 160.12 65.90
Less: Transfer to statutory reserve (75.00) (37.70) (85.00) (52.00) (17.80)
Less: Creation of deferred tax liability on Statutory reserve (refer note 27.2) - - - - (0.41)
Less: Dividend - - - - (1.55)
Less: Dividend distribution tax - - - - (0.40)
Add: Transferred from stock option outstanding - 1.66 1.85 0.38 0.45
848.70 268.67 558.62 190.70 82.20
Stock option outstanding account
Opening balance 72.34 60.75 60.75 33.52 26.54
Add: Charge for the half year / year 15.71 9.95 19.90 27.79 7.43
Less: Transferred to retained earnings pursuant to stock options lapsed - (1.66) (1.85) (0.38) (0.45)
Less: Transferred to securities premium pursuant to stock options exercised (4.73) (3.22) (6.46) (0.18) -
83.32 65.82 72.34 60.75 33.52
8,736.43 4,759.46 5,104.72 3,148.92 2,960.37

18.2 Securities premium account

Securities premium is credited when shares are issued at premium. It can be used to issue bonus shares, to provide for premium on redemption of shares or debentures, share issue related
expenses like underwriting costs etc. in accordance with Sec 52 of the Companies Act 2013.

18.3 Statutory reserve

As per Section 29C of National Housing Bank Act (NHB), 1987, the Company is required to transfer at least 20% of its net profits every year to a reserve before any dividend is declared.
For this purpose, any Special Reserve created by the Company under Section 36(1)(viii) of the Income Tax Act, 1961 is considered to be an eligible transfer. Thus, during the half year ended
30 September 2019, 30 September 2018 and year ended 31 March 2019, 31 March 2018 and 31 March 2017 the Company has transferred to Statutory Reserve, an amount arrived in
accordance with Section 29C of the NHB Act, 1987.

18.4 Retained earnings

Retained earnings represents the amount of accumulated earnings of the Company.

18.5 Stock option outstanding account

The stock option outstanding account is used to recognise grant date fair value of options issue to employees under the Company's stock option schemes.

(This page has been intentionally left blank)

239
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

19 Interest income
(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
On financial assets measured at amortised cost
Interest on term loans 1,548.37 970.44 2,289.15 1,274.47 851.78
Interest on bank deposits 34.57 2.84 21.64 12.28 15.56
Other interest income 20.88 3.20 8.46 12.83 12.59
1,603.82 976.48 2,319.25 1,299.58 879.93

20 Other operating income

(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Processing fees on credit linked subsidy scheme (CLSS) 7.30 6.20 25.99 4.00 0.95
Gain on modification of financial asset 0.67 - - - -
Miscellaneous income 4.93 2.23 5.38 2.89 1.50
12.90 8.43 31.37 6.89 2.45

21 Other income
(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Display income 35.00 27.88 72.91 16.70 -
Net gain on foreign currency transaction(s) and translation(s) 0.04 - - - -
Dividend income on mutual fund - 7.32 7.69 4.75 -
Net gain on financial instruments (investment in mutual funds) 63.09 - 29.22 - -
Other non operating income 0.67 - 0.63 - 0.01
98.80 35.20 110.45 21.45 0.01

21.01 Total net gain on fair value changes on financial instruments at fair value through profit or loss
Fair value changes:
-Realised 59.34 - 27.20 - -
-Unrealised - MTM gain 3.75 - 2.02 - -
Total net gain on fair value changes 63.09 - 29.22 - -
*Fair value changes in this schedule are other than those arising on account of accrued interest income/expense.

22 Finance cost
(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
On financial liabilities measured at amortised cost
Interest on borrowings 904.07 515.87 1,241.32 642.45 532.85
Interest on debt securities - 4.19 7.51 4.66 -
Interest on lease liability (refer note 37) 3.99 3.38 7.12 4.98 3.34
Bank charges and others 10.31 5.98 9.49 7.55 4.25
918.37 529.42 1,265.44 659.64 540.44

23 Impairment on financial instruments

(measured at amortised cost)
(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Loans
Impairment loss allowance 30.57 40.88 67.23 24.63 17.37
Write offs 8.89 2.55 5.90 4.11 -
39.46 43.43 73.13 28.74 17.37

24 Employee benefits expense

(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Salaries, wages and bonus 259.51 171.13 375.76 204.09 134.64
Contribution to provident fund (refer note 34 B) 10.94 6.88 15.42 8.02 4.96
Employee insurance 3.14 1.80 4.71 2.06 0.99
Gratuity (refer note 34.4 A) 1.53 1.09 2.17 1.85 0.67
Expenses on employee stock options scheme 15.71 9.95 19.90 27.79 7.43
Staff welfare expenses 4.55 4.04 9.21 5.74 1.28
295.38 194.89 427.17 249.55 149.97

240
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

25 Others expenses
(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Power and fuel 2.81 1.53 3.14 1.70 1.03
Rent (refer note 37) 0.05 0.09 0.35 0.22 0.69
Repairs and maintenance 0.56 0.63 1.93 0.64 0.63
Telephone and communication expense 1.36 0.75 1.92 1.51 1.28
Office administrative expenses 5.21 4.71 10.65 9.36 -
Marketing and sales promotion expense 3.78 6.04 11.79 4.47 13.19
Net loss on foreign currency transaction and translation (other than considered as finance
cost) - 0.20 0.43 0.10 -
Auditor’s remuneration
- Statutory audit and certification fees 2.00 2.80 3.65 2.12 2.15
- Tax audit fees 0.05 0.20 0.18 0.15
Legal and professional charges (refer note 28.2) 40.63 29.57 67.02 38.06 20.20
Travelling expense 23.23 16.61 39.63 18.38 10.94
Software license fees 22.56 14.46 31.52 17.57 12.36
Technology fees (refer note 28.2) 14.30 6.20 18.24 11.05 8.83
Rates and taxes 13.79 8.38 24.19 13.34 4.80
Loss on modification of financial asset - 1.59 2.75 4.23 1.73
Corporate social responsibility (refer note 38) 3.70 2.10 4.10 1.85 1.08
Miscellaneous expenses 15.33 13.05 24.24 12.33 9.83
149.31 108.76 245.75 137.11 88.89

26 Tax expense
(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Current tax expense
Current tax for the period 89.21 66.55 160.53 120.36 48.73
89.21 66.55 160.53 120.36 48.73
Deferred taxes (net)
Change in deferred tax assets (2.44) (20.93) (42.22) (58.65) (36.74)
Change in deferred tax liabilities 48.67 14.23 81.60 21.03 24.80
Net deferred tax expense 46.23 (6.70) 39.38 (37.62) (11.94)

Total income tax expense 135.44 59.85 199.91 82.74 36.79

26.1 Tax reconciliation

(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Profit before income tax expense 502.85 174.41 651.95 242.70 103.56
Income tax rate 25.17% 29.12% 29.12% 34.61% 34.61%
Tax at statutory income tax rate 126.56 50.79 189.85 83.99 35.84
Tax effect of amounts which are not deductible / not taxable in calculating taxable income
Items disallowed 10.06 (1.39) (2.37) (1.62) (0.70)
Exempt income - (2.13) (2.24) (1.64) -
Provision for special reserve [Sec 36 (1) (viii) and Sec 36 (1) (viia) of Income tax Act, 1962] (9.17) (5.17) (5.17) - 1.89
Employee stock option plan (ESOP) expense 0.10 - - - -
Impact on account of financial assets and other items 7.10 17.53 19.44 2.10 (0.29)
Tax on other comprehensive income 0.79 0.22 0.40 (0.09) 0.46
Tax on statutory reserve created through equity - - - - (0.41)
Income tax expense 135.44 59.85 199.91 82.74 36.79

(This page has been intentionally left blank)

241
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

26.2 Deferred tax movement related to the following:

(Rs. in millions)
Recognised in
Deferred tax asset / (liability) (net) As at Recognised in
As at restated Recognised in As at
30 September restated statement Recognised in OCI
31 March 2019 statement of OCI 31 March 2018
2019 of profit and loss
profit and loss
Deferred tax asset on account of:
Provision for employee benefits 3.31 (0.02) (0.79) 2.50 (0.15) (0.40) 1.95
Expected credit loss 41.47 (2.39) - 39.08 (16.59) - 22.49
Corporate social responsibility (CSR) 0.93 (0.93) - - - - -
Unamortised processing fee 98.86 (2.58) - 96.28 (22.63) - 73.65
Lease liability 22.67 (0.57) - 22.10 (2.81) - 19.29
Employee stock option plan (ESOP) 17.02 4.05 - 21.07 (0.04) - 21.03
184.26 (2.44) (0.79) 181.03 (42.22) (0.40) 138.41
Deferred tax liability on account of:
Difference between tax depreciation and depreciation charged
18.15
for the financial reporting 21.67 1.62 - 20.05 1.90 -
Special reserve 63.97 11.79 - 52.18 19.58 - 32.60
Unamortised borrowing cost 15.00 0.85 - 14.15 4.27 - 9.88
Interest income on non performing assets 5.64 1.92 - 3.72 1.36 - 2.36
Deduction claimed for provision for bad debts u/s 36(1)(viia) 2.46 2.46
Fair valuation of investment in mutual funds 0.94 0.35 - 0.59 0.59 - -
Gain on direct assignment of loans 95.19 29.68 - 65.51 53.90 - 11.61
204.87 48.67 - 156.20 81.60 - 74.60
Deferred tax charge / (credit) for the period (20.61) 46.23 (0.79) 24.83 39.38 (0.40) 63.81

(Rs. in millions)
Recognised in
As at Recognised in
As at restated Recognised in As at
Deferred tax asset / (liability) (net) 30 September restated statement Recognised in OCI
31 March 2018 statement of OCI 31 March 2017
2018 of profit and loss
profit and loss
Deferred tax asset on account of:
Provision for employee benefits 2.15 0.02 (0.22) 1.95 (0.60) 0.09 1.44
Expected credit loss 31.40 (8.91) - 22.49 (7.84) - 14.65
Corporate social responsibility (CSR) 0.61 (0.61) - - - - -
Unamortised processing fee 86.05 (12.40) - 73.65 (36.55) - 37.10
Lease liability 20.18 (0.89) - 19.29 (4.23) - 15.06
Employee stock option plan (ESOP) 19.17 1.86 - 21.03 (9.43) - 11.60
159.56 (20.93) (0.22) 138.41 (58.65) 0.09 79.85

Deferred tax liability on account of:

Difference between tax depreciation and depreciation charged
for the financial reporting 19.06 0.91 - 18.15 3.45 - 14.70
Special reserve 38.41 5.81 - 32.60 18.00 - 14.60
Unamortised borrowing cost 10.09 0.21 - 9.88 3.68 - 6.20
Interest income on non performing assets 3.08 0.72 - 2.36 0.96 - 1.40
Gain on direct assignment of loans 18.19 6.58 - 11.61 (5.06) - 16.67
88.83 14.23 - 74.60 21.03 - 53.57
Deferred tax charge / (credit) for the period 70.73 (6.70) (0.22) 63.81 (37.62) 0.09 26.28

Note: There has been no transfer to deferred tax asset/ (liability) in any period / year ended 31 March 2018, 30 September 2018, 31 March 2019 and 30 September 2019.

(Rs. in millions)
Deferred tax asset / (liability) (net) Recognised in
As at 31 March Recognised in Recognised in As at 1 April
restated statement
2017 OCI other equity 2016
of profit and loss
Deferred tax asset on account of:
Provision for employee benefits 1.44 (0.27) (0.46) - 0.71
Expected credit loss 14.65 (6.39) - - 8.26
Unamortised processing fee 37.10 (16.74) - - 20.36
Lease liability 15.06 (10.52) - - 4.54
Employee stock option plan (ESOP) 11.60 (2.82) - - 8.78
79.85 (36.74) (0.46) - 42.65

Deferred tax liability on account of:

Difference between tax depreciation and depreciation charged for the financial reporting 14.70 10.04 - - 4.66
Special reserve 14.60 6.98 - 0.41 7.21
Unamortised borrowing cost 6.20 1.43 - - 4.77
Interest income on non performing assets 1.40 1.02 - - 0.38
Gain on direct assignment of loans 16.67 5.33 - - 11.34
53.57 24.80 - 0.41 28.36
Deferred tax charge / (credit) for the period 26.28 (11.94) (0.46) 0.41 14.29

27 Earnings per share (EPS)

As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Net profit after tax attributable to equity holders (Rs. in millions) 367.41 114.56 452.04 159.96 66.77
Weighted average number of equity shares for calculating basic EPS (Nominal value Rs. 10) 13,774,046 10,460,175 11,556,025 10,320,796 3,777,911
Adjustment for stock split (refer note below) 55,096,184 41,840,700 46,224,100 41,283,184 15,111,644

Weighted average number of equity shares for calculating basic EPS after stock split (Nominal value Rs. 2) 68,870,230 52,300,875 57,780,125 51,603,980 18,889,555

Diluted effect of outstanding stock options (Nominal value Rs. 10) 321,553 265,511 256,570 268,435 578,125
Adjustment for stock split (refer note below) 1,286,213 1,062,044 1,026,280 1,073,740 2,312,500
Weighted average number of equity shares for calculating diluted EPS after stock split (Nominal value Rs.
2) 70,477,996 53,628,430 59,062,975 52,946,155 21,780,180

Earnings per share

Basic earning per share (Rs.) (Nominal Value - Rs. 2) 5.33 2.19 7.82 3.10 3.53
Diluted earning per share (Rs.) (Nominal Value - Rs. 2) 5.21 2.14 7.65 3.02 3.07
Nominal value per share (Rs.) (before stock split) 10.00 10.00 10.00 10.00 10.00

Note: (1) The shareholders vide a special resolution have approved sub-division of equity shares of the Company in the ratio of five shares of face value of Rs. 2 each for each existing equity share of the face
value of Rs. 10 each. The requisite approvals for modification of the memorandum and article of association of the Company had been accorded by the shareholders on 30 October 2019 in extraordinary general
meeting (EGM).
(2) Basic EPS and diluted EPS for half year ended 30 September 2019 and 30 September 2018 represents a semi annual EPS / diluted EPS.

242
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

28 Related party disclosures

Related party disclosures as required under Indian Accounting standard 24, " Related party disclosure" are given below.

28.1 List of related parties

Nature of relationship Name of related party

Entity having significant influence True North Fund V LLP (Formerly known as India Value Fund V LLP with effect from 10 April 2017)
Entity having significant influence Aether (Mauritius) Limited
Entity having significant influence True North Managers LLP

Key Management Personnel (KMP) Mr. Manoj Viswanathan - Director and Chief Executive Officer
Key Management Personnel (KMP) Ms. Nutan Gaba Patwari - Chief Financial Officer (with effect from 4 March 2019)
Key Management Personnel (KMP) Ms. Kiran Agarwal Todi - Chief Financial Officer (upto 30 November 2018)
Key Management Personnel (KMP) Mr. Shreyans Bachhawat - Company Secretary (with effect from 7 September 2017)
Key Management Personnel (KMP) Ms. Trupti Bolke - Company Secretary (upto 18 April 2017)
Key Management Personnel (KMP) Mr. Sakti Prasad Ghosh - Independent Director
Key Management Personnel (KMP) Ms Sujatha Venkatramanan - Independent Director

Entity under common control Actify Data Labs Private limited (with effect from 1 January 2018)

28.2 Transactions during the period with related parties :

(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
Transactions with Nature of transactions 1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Mr. Manoj Viswanathan Remuneration 7.58 5.67 9.40 8.16 7.99
Ms. Nutan Gaba Patwari Remuneration 4.85 - 1.99 - -
Ms. Kiran Agarwal Todi Remuneration - 4.41 9.80 6.39 -
Mr. Shreyans Bachhawat Remuneration 1.05 0.90 1.79 0.89 -
Ms. Trupti Bolke Remuneration - - - - 0.48
Mr. Manoj Viswanathan Dividend - - - - 0.05
Ms. Kiran Agarwal Todi Exercise of ESOP - 7.40 20.03 0.19 -
Ms. Kiran Agarwal Todi ESOP exercised - perquisite - - 23.79 - -
Mr. Sakti Parsad Ghosh Exercise of ESOP 6.29 - - - -
Ms Sujatha Venkatramanan Exercise of ESOP 5.70 - - - -
Mr. Sakti Parsad Ghosh Sitting fees paid 0.40 0.30 1.10 0.90 -
Ms Sujatha Venkatramanan Sitting fees paid 0.30 0.30 0.70 0.45 -
True North Fund V LLP Equity infusion 1,497.26 900.00 900.00 - 900.00
Aether (Mauritius) Limited Equity infusion 998.18 600.00 600.00 - 600.00
Mr. Manoj Viswanathan Equity infusion 5.00 - - - -
Ms. Nutan Gaba Patwari Equity infusion 15.00 - - - -
True North Managers LLP Reimbursement of expenses 0.25 - 5.78 - -
Actify Data Labs Private Limited Technology fees 2.60 - 1.00 - -
Actify Data Labs Private Limited Legal and professional fees 0.53 - 1.50 - -

Note: 'The KMPs are covered under the Company’s gratuity policy and ESOP scheme along with other eligible employees of the Company. Proportionate amount of gratuity expenses and ESOP expenses are not
included in the aforementioned disclosures as it cannot be separately ascertained.

28.3 Amount due to / from related parties:

(Rs. in millions)
As at As at As at As at As at
Particulars Nature
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Mr. Manoj Viswanathan Payable 0.25 0.36 0.25 0.43 0.29
Ms. Kiran Agarwal Todi Payable - 0.15 0.09 0.08 -
Ms. Nutan Gaba Patwari Payable - - 0.11 - -
Ms. Sujatha Venkatramanan Receivable 7.57 - - - -
True North Managers LLP Payable - - 5.78 - -

29 Capital management

The Company’s capital management strategy is to effectively determine, raise and deploy capital to cover risk inherent in business and is meeting the capital adequacy requirements of National Housing Bank
(NHB). The same is done through a mix of either equity and / or combination of short term / long term debt as may be appropriate. The Company determines the amount of capital required on the basis of
operations. The adequacy of the Company's capital is monitored using, among other measures, that includes the regulations issued by NHB.

The capital structure is monitored on the basis of net debt to equity and maturity profile of overall debt portfolio. The Company's policy is in line with Housing finance Companies (National Housing Bank)
Directions, 2010 (the "NHB Directions") which currently permits HFCs to borrow up to 12 times of their net owned funds ("NOF").

The Company has complied in full with all its externally imposed capital requirements over the reported period.

As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Net total debt (net of cash and cash equivalents) (Rs. in millions) 21,896.64 14,548.79 17,399.17 9,968.62 5,470.65
Total equity (Rs. in millions) 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58
Net debt to equity ratio 2.46 2.98 3.33 3.07 1.79

Loan covenants

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets the financial covenants attached to the interest-bearing loans and borrowings that
define capital structure requirements. Breach in meeting these financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any
borrowing in the current period.
Loan covenants mainly include minimum CRAR of 12%, ratio of total outstanding liability to total net worth to be less than or equal to 12 times etc.

243
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

30 Fair value measurement

30.1 Financial instruments by category (Rs. in millions)

Particulars Category As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017

Financial assets:
Cash and cash equivalent Amortised Cost 1,059.67 1,013.48 1,857.24 230.14 1,159.80
Other bank balances Amortised Cost 1,693.21 862.89 62.59 72.04 661.72
Loans Amortised Cost 26,329.46 18,339.56 21,466.74 13,144.09 7,928.97
Less : Impairment loss (149.89) (91.06) (119.69) (56.74) (35.85)
Investments FVTPL 2,777.43 200.09 1,029.17 - -
Other financial assets Amortised Cost 476.65 107.87 261.20 49.09 59.63
Total financial assets 32,186.53 20,432.83 24,557.25 13,438.62 9,774.27

Financial liabilities:
Trade payables Amortised Cost 1.71 7.22 13.58 5.37 32.93
Debt securities Amortised Cost - 492.49 - - -
Borrowings (other than debt securities) Amortised Cost 22,956.31 15,069.78 19,256.41 10,198.76 6,630.45
Other financial liabilities* Amortised Cost 385.10 79.83 162.54 74.43 75.57
Total financial liabilities 23,343.12 15,649.32 19,432.53 10,278.56 6,738.95

* Other financial liabilities exclude liability pertaining to lease liabilities covered under Indian accounting standard - 116 (30 September 2019: Rs. 90.07 millions, 30 September 2018: Rs. 69.29 millions, 31
March 2019: Rs. 75.89 millions, 31 March 2018: Rs. 55.74 millions, 31 March 2017: Rs.43.50 millions)

30.2 Fair value hierarchy

The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for
which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the
three levels prescribed under the Indian Accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. For example, listed equity instruments that have quoted market price.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the- counter derivatives) is determined using valuation techniques which maximise the use
of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Open ended mutual funds are valued at Net Asset Value (NAV) declared by respective fund house and are classified under Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and
indemnification asset included in level 3.

30.3 Financial assets and liabilities measured at fair value through profit or loss at each reporting date
(Rs. in millions)
Level 2
Particulars As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Financial assets measured at FVTPL
Investments 2,777.43 200.09 1,029.17 - -

30.4 Financial assets and liabilities measured at amortised cost at each reporting date
The carrying value of loans given, interest strip receivable, bank deposits and borrowings represents its fair value. Further, the carrying value of cash and cash equivalents, other bank balances, other financial
assets, trade payables and other payables and other financial liabilities are considered to be approximately equal to the fair value due to their short term maturities.
The above mentioned financial assets and liabilities are classified under level 2 of fair valuation hierarchy.

30.5 Valuation techniques

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:

Loans - The fair value of floating rate loans are deemed to be equivalent to the carrying value.

Borrowings - The fair value of certain fixed rate borrowings is determined by discounting expected future contractual cash flows using current market interest rates charged for similar new loans. The fair value of
floating rate borrowings are deemed to be equivalent to the carrying value.

During the periods mentioned above, there have been no transfers amongst the levels of hierarchy.

31 Financial risk management

The Company is exposed to certain financial risks namely credit risk, liquidity risk and market risk i.e. foreign currency risk, interest risk and price risk. The Company’s primary focus is to achieve better
predictability of financial markets and minimise potential adverse effects on its financial performance by effectively managing the risks on its financial assets and liabilities.

The principal objective in Company 's risk management processes is to measure and monitor the various risks associated with the Company and to follow policies and procedures to address such risks. The
Company's risk management framework is driven by its Board and its subcommittees including the Audit Committee, the Asset Liability Management Committee and the Risk Management Committee. The
Company gives due importance to prudent lending practices and have implemented suitable measures for risk mitigation, which include verification of credit history from credit information bureaus, personal
verification of a customer’s business and residence, valuation of collateral, technical and legal verifications, conservative loan to value, and required term cover for insurance.

A Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of
financial liabilities - borrowing, trade payables and other financial liabilities. The Company manages liquidity risk by maintaining adequate cash reserves by continuously monitoring forecast and actual cash
flows, and by matching the maturity profiles of financial assets and liabilities.

The table below summarises the maturity profile of the undiscounted cash flows of the Company's financial liabilities.

As at 30 September 2019 (Rs. in millions)

Within 1 year 1 - 5 years 5 - 10 years Beyond 10 years Total

Trade payables 1.71 - - - 1.71

Borrowings (other than debt securities) (refer note (i) below) 4,867.99 15,787.35 2,358.08 - 23,013.42
Other financial liabilities (refer note (ii) below) 385.10 - - - 385.10
Total 5,254.80 15,787.35 2,358.08 - 23,400.23

244
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

31 Liquidity risk (cont…)

As at 30 September 2018 (Rs. in millions)

Within 1 year 1 - 5 years 5 - 10 years Beyond 10 years Total

Trade payables 7.22 - - - 7.22

Debt securities 492.49 - - - 492.49
Borrowings (other than debt securities) (refer note (i) below) 2,456.21 10,451.87 2,186.28 2.51 15,096.87
Other financial liabilities (refer note (ii) below) 79.83 - - - 79.83
Total 3,035.75 10,451.87 2,186.28 2.51 15,676.41

As at 31 March 2019 (Rs. in millions)

Within 1 year 1 - 5 years 5 - 10 years Beyond 10 years Total

Trade payables 13.58 - - - 13.58

Borrowings (other than debt securities) (refer note (i) below) 3,203.01 13,119.95 2,975.09 0.82 19,298.87
Other financial liabilities (refer note (ii) below) 162.54 - - - 162.54
Total 3,379.13 13,119.95 2,975.09 0.82 19,474.99

As at 31 March 2018 (Rs. in millions)

Within 1 year 1 - 5 years 5 - 10 years Beyond 10 years Total

Trade payables 5.37 - - - 5.37

Borrowings (other than debt securities) (refer note (i) below) 1,522.97 7,390.37 1,301.93 4.21 10,219.48
Other financial liabilities (refer note (ii) below) 74.43 - - - 74.43
Total 1,602.77 7,390.37 1,301.93 4.21 10,299.28

As at 31 March 2017 (Rs. in millions)

Within 1 year 1 - 5 years 5 - 10 years Beyond 10 years Total

Trade payables 32.93 - - - 32.93

Borrowings (other than debt securities) (refer note (i) below) 1,168.15 4,852.36 620.20 7.60 6,648.31
Other financial liabilities (refer note (ii) below) 75.57 - - - 75.57
Total 1,276.65 4,852.36 620.20 7.60 6,756.81

Notes:
(i) Borrowings (other than debt securities) does not carry adjustment of unamortised processing fee (EIR).
(ii) Other financial liabilities exclude liability pertaining to lease liabilities covered under Indian accounting standard - 116 (30 September 2019: Rs. 90.07 millions, 30 September 2018: Rs. 69.29 millions, 31
March 2019: Rs. 75.89 millions, 31 March 2018: Rs. 55.74 millions, 31 March 2017: Rs.43.50 millions).
(iii) Amounts repayable on demand are included in 'within 1 year'

B Market risk

(i) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign currency rates. The Company’s exposure to the risk of changes in foreign
exchange rates relates primary to certain vendors in trade payables.

Foreign currency exposure risk

The Company's exposure for foreign currency risk at the end of reporting period are as follows:

As at 30 September 2018
USD Rs.
Trade payables (Amount in millions) 0.01 0.45

Note: There were no foreign currency exposure as on 30 September 2019, 31 March 2019, 31 March 2018 and 31 March 2017.

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in the USD exchange rate, with all other variables held constant, of the Company’s profit before tax (due to changes in the fair
value of monetary assets and liabilities).

As at 30 September 2018
Change in rates Effect on profit
Change in rates before tax
(Rs. in millions)
Trade payables INR / USD (+/-)0.5% (+/-)0.00226

(ii) Interest rate risk

The Company is subject to interest rate risk, since the rates of loans and borrowing might fluctuate over the tenure of instrument. Interest rates are highly sensitive to many factors beyond control, including the
monetary policies of the Reserve Bank of India, deregulation of the financial sector in India, domestic and international economic and political conditions, inflation and other factors. In order to manage interest
rate risk, the Company seeks to optimise borrowing profile between short-term and long-term loans. The liabilities are categorised into various time buckets based on their maturities and Asset Liability
Management Committee supervise an interest rate sensitivity report periodically for assessment of interest rate risks.

Exposure to loans and borrowings

(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Loans (variable) 26,329.46 18,339.56 21,466.74 13,144.09 7,928.97

Borrowings and debt securities

Borrowings (variable) 20,394.35 12,127.21 16,512.91 8444.23 6,083.13

245
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

(ii) Interest rate risk (cont…)

Sensitivity analysis
The following table demonstrates the sensitivity to a reasonably possible change in interest rates (all other variables being constant) of the Company's statement of profit and loss:
(Rs. in millions)
Impact on profit before tax
For the period For the period
Interest rate Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Loans
Increase by 50 basis points 131.65 91.70 107.33 65.72 39.64
Decrease by 50 basis points (131.65) (91.70) (107.33) (65.72) (39.64)
Borrowings and debt securities
Increase by 50 basis points (101.97) (60.64) (82.56) (42.22) (30.42)
Decrease by 50 basis points 101.97 60.64 82.56 42.22 30.42

(iii) Price risk

The Company is exposed to price risk from its investment in mutual funds measured at fair value through statement of profit and loss:
(Rs. in millions)
Impact on profit before tax
For the period For the period
Sensitivity Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Increase by 50 basis points 13.89 1.00 5.15 - -
Decrease by 50 basis points (13.89) (1.00) (5.15) - -

32 Credit risk management

32.1 Credit quality of assets

Credit risk is the risk that the Company will incur a loss because the counterparty might fail to discharge their contractual obligations. The Company has a comprehensive framework for monitoring credit quality
of its retail and other loans primarily based on number of days past due.

The Company manage credit risks by using a set of credit procedures and guidelines, laid down in our credit risk policy, to ensure effective credit risk management and health of our portfolio. The adherence to the
policy and various process is monitored and appraised in credit committee meetings on a quarterly basis. The policy is amended periodically and to ensure compliance with the guidelines of NHB as well as other
regulatory bodies.

We have implemented a structured credit approval process, including multi-step customer verification and comprehensive credit risk assessment, which encompasses analysis of relevant quantitative and
qualitative information to ascertain the credit worthiness of a potential customer. As part of our multi-step customer verification, we have established a process by which separate set of verifications are conducted
by a customer relationship manager and customer service officer to ensure the quality of customers acquired as well as eliminate misuse of borrowing practices.

Portfolio quality, credit limits, collateral quality and credit exposure limits are regularly monitored at various levels.

The following table sets out information about credit quality of loans and investments measured at amortised cost based on days past due information. The amount represents gross carrying amount. (Also refer
note 4 - Loans for detailed disclosure on gross carrying value and ECL amount on loans.)

(Rs. in millions)
Loans As at 30 September 2019 As at 30 September 2018
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total

Home loan 23,251.96 179.50 264.72 23,696.18 16,631.00 165.02 126.68 16,922.70
Loan against property 1,436.27 11.39 3.64 1,451.30 470.50 3.48 2.94 476.92
Commercial loan 318.57 1.40 - 319.97 145.61 0.75 - 146.36
Construction finance 851.28 10.73 - 862.01 793.58 - - 793.58
Total 25,858.08 203.02 268.36 26,329.46 18,040.69 169.25 129.62 18,339.56

(Rs. in millions)
Loans As at 31 March 2019 As at 31 March 2018
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total

Home loan 19,181.23 188.41 168.30 19,537.94 12,438.05 96.49 78.71 12,613.25
Loan against property 843.15 5.26 2.15 850.56 274.57 5.30 1.97 281.84
Commercial loan 243.27 - - 243.27 74.57 - - 74.57
Construction finance 834.97 - - 834.97 174.43 - - 174.43
Total 21,102.62 193.67 170.45 21,466.74 12,961.62 101.79 80.68 13,144.09

(Rs. in millions)
Loans As at 31 March 2017
Stage 1 Stage 2 Stage 3 Total

Home loan 7,498.08 102.37 56.25 7,656.70

Loan against property 228.76 1.44 - 230.20
Commercial loan 41.08 - 0.99 42.07
Construction finance - - - -
Total 7,767.92 103.81 57.24 7,928.97

(Rs. in millions)
As at 30 September 2019 As at 30 September 2018
Loans commitments
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total

Home loan 5,368.71 14.62 41.43 5,424.76 4,539.19 30.00 16.51 4,585.70
Loan against property 225.91 - - 225.91 145.26 - - 145.26
Commercial loan 49.84 - - 49.84 42.03 - - 42.03
Construction finance 384.49 9.63 - 394.12 768.80 - - 768.80
Total 6,028.95 24.25 41.43 6,094.63 5,495.28 30.00 16.51 5,541.79

246
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

32.1 Credit quality of assets (cont..)

(Rs. in millions)
As at 31 March 2019 As at 31 March 2018
Loans commitments
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total

Home loan 4,975.38 22.80 24.60 5,022.78 3,277.82 8.77 16.30 3,302.89
Loan against property 153.82 - - 153.82 26.89 - - 26.89
Commercial loan 55.82 - - 55.82 26.57 - - 26.57
Construction finance 520.59 - - 520.59 433.00 - - 433.00
Total 5,705.61 22.80 24.60 5,753.01 3,764.28 8.77 16.30 3,789.35

(Rs. in millions)
As at 31 March 2017
Loans commitments
Stage 1 Stage 2 Stage 3 Total

Home loan 1,889.06 23.67 9.40 1,922.13

Loan against property 18.60 - - 18.60
Commercial loan 8.57 - - 8.57
Construction finance - - - -
Total 1,916.23 23.67 9.40 1,949.30

Customer type (Rs. in millions)

As at 30 September 2019 As at 30 September 2018
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total

Salaried 18,783.38 94.57 128.67 19,006.62 13,326.84 78.15 58.57 13,463.56

Self employed 7,074.70 108.45 139.69 7,322.84 4,713.85 91.10 71.05 4,876.00
Total 25,858.08 203.02 268.36 26,329.46 18,040.69 169.25 129.62 18,339.56

(Rs. in millions)
As at 31 March 2019 As at 31 March 2018
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total

Salaried 15,270.94 94.10 86.85 15,451.89 9,607.81 47.19 30.04 9,685.04

Self employed 5,831.68 99.57 83.60 6,014.85 3,353.81 54.60 50.64 3,459.05
Total 21,102.62 193.67 170.45 21,466.74 12,961.62 101.79 80.68 13,144.09

(Rs. in millions)
As at 31 March 2017
Stage 1 Stage 2 Stage 3 Total

Salaried 5,409.13 51.44 22.11 5,482.68

Self employed 2,358.79 52.37 35.13 2,446.29
Total 7,767.92 103.81 57.24 7,928.97

33 Transfers of assets

Assignment deal:

The Company has sold some loans measured at amortised cost as per assignment deals, as a source of finance. As per the terms of these deals, since substantial risk and rewards related to these assets were
transferred to the buyer, the assets have been derecognised from the Company’s balance sheet.

The management has evaluated the impact of assignment transactions done during the year for its business model. Based on the future business plan, the Company business model remains to hold the assets for

collecting contractual cash flows. The table below summarises the carrying amount of the derecognised financial assets measured at amortised cost and the gain on derecognition, per type of asset.
(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
Loans measured at amortised cost 1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Carrying amount of derecognised financial assets 4,746.42 674.05 2,920.65 374.62 542.41
Gain from derecognition 211.22 37.68 214.76 - 25.92

34 Employee benefits

(A) Defined benefit obligation

The Company has an unfunded defined benefit plan i.e., Gratuity, for its employees. Under the gratuity plan every employee who has completed at least five years of service gets a gratuity on departure at 15 days
of salary for each year of service.

Contribution to gratuity fund (funded scheme)

In accordance with Indian Accounting Standard 19 "Employee benefits", actuarial valuation was done in respect of the aforesaid defined benefit plan of gratuity based on the following assumptions:

(Rs. in millions)
As at As at As at As at As at
Particulars
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
34.1 Actuarial assumptions
Indian Assured Lives Indian Assured Lives Indian Assured Indian Assured Indian Assured
Mortality rate Mortality (2006-08) Mortality (2006-08) Lives Mortality Lives Mortality Lives Mortality
(2006-08) (2006-08) (2006-08)
Discount rate (% p.a) 5.97% 8.13% 6.66% 7.18% 6.67%
Rate of salary increase (% p.a) 15.00% 9.00% 15.00% 9.00% 12.00%
Rate of employee turnover (% p.a) 35.00% 25.00% 35.00% 25.00% 23.00%

34.2 Changes in the present value of defined benefit obligation

Present value of obligation at the beginning of the year 8.58 5.63 5.63 4.28 2.15
Interest expense 0.29 0.20 0.40 0.29 0.16
Current service cost 1.24 0.89 1.77 1.35 0.64
Past service cost - - - 0.09 -
Benefit paid directly by the employer (0.08) (0.10) (0.59) (0.13) -
Actuarial (gains) / losses on obligations - due to change in demographic assumptions - - (1.08) (0.26) 0.08
Actuarial (gains) / losses on obligations - due to change in financial assumptions 0.25 (0.25) 1.29 (0.77) 0.79
Actuarial (gains) / losses on obligations - due to experience 2.87 1.02 1.16 0.78 0.46
Present value of obligation at the end of the year 13.15 7.39 8.58 5.63 4.28

34.3 Assets and liabilities recognised in the balance sheet

Present value of the defined benefit obligation at the end of the year (13.15) (7.39) (8.58) (5.63) (4.28)
Funded status (deficit) (13.15) (7.39) (8.58) (5.63) (4.28)
Net (liability) / asset recognised in the balance sheet (13.15) (7.39) (8.58) (5.63) (4.28)

247
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

34.4 Expenses recognised in the statement of profit and loss

(Rs. in millions)
Particulars For the period For the period
Year ended 31 Year ended 31 Year ended 31
1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Current service cost 1.24 0.89 1.77 1.35 0.64
Past service cost - - - 0.09 -
Net interest expense 0.29 0.20 0.40 0.29 0.16
Expenses recognised in the statement of profit and loss for the period / year * 1.53 1.09 2.17 1.73 0.80
* Expenses recognised in the statement of profit and loss for year ended 31 March 2018 includes Rs. 0.13 millions as benefit paid considered in the previous year ended 31 March 2017.

34.5 Expenses recognised in the statement of Other comprehensive income (OCI)

(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
Particulars 1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Actuarial (gain) / loss on post employment defined benefit obligation 3.12 0.77 1.37 (0.25) 1.33
Expenses recognised in the statement of OCI 3.12 0.77 1.37 (0.25) 1.33

34.6 Reconciliation of net asset / (liability) recognised:

(Rs. in millions)
Particulars As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Opening net liability 8.58 5.63 5.63 4.28 2.15
Expenses recognised at the end of period / year 1.53 1.09 2.17 1.73 0.80
Amount recognised in other comprehensive income 3.12 0.77 1.37 (0.25) 1.33
Employer's contribution (0.08) (0.10) (0.59) (0.13) -
Net liability/(asset) recognised in the balance sheet* 13.15 7.39 8.58 5.63 4.28
* Expenses recognised in the statement of profit and loss for year ended 31 March 2018 includes Rs. 0.13 millions as benefit paid considered in the previous year ended 31 March 2017.

34.7 Sensitivity analysis:

(Rs. in millions)
Particulars As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Delta effect of +1% change in rate of discounting (0.36) (0.25) (0.24) (0.20) (0.18)
Delta effect of -1% change in rate of discounting 0.38 0.27 0.25 0.21 0.19
Delta effect of +1% change in rate of salary increase 0.31 0.25 0.22 0.20 0.16
Delta effect of -1% change in rate of salary increase (0.30) (0.24) (0.21) (0.19) (0.15)
Delta effect of +1% change in rate of employee turnover (0.23) (0.08) (0.16) (0.07) (0.08)
Delta effect of -1% change in rate of employee turnover 0.24 0.08 0.17 0.07 0.08

34.8 Maturity analysis of projected benefit obligation

(Rs. in millions)
As at As at As at As at As at
Year
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
1 2.77 1.32 1.80 0.90 0.65
2 2.43 1.17 1.51 0.92 0.55
3 2.08 1.12 1.39 0.82 0.58
4 1.96 1.06 1.27 0.82 0.54
5 1.79 1.08 1.23 0.79 0.57
Sum of years 6 to 10 3.85 3.05 2.74 2.23 1.81
Sum of years 11 and above 1.02 1.62 0.74 1.20 1.34

(B) Defined contribution plan

The Company contributes towards provident fund for employees which is the defined contribution plan for qualifying employees. Under this scheme, the Company is required to contribute specified percentage of
the payroll cost to fund the benefits. The Company recognised Rs. 10.94 million (30 September 2018: Rs. 6.88 million, 31 March 2019 : Rs. 15.42 million, 31 March 2018 : Rs. 8.02 million, and 31 March
2017 : Rs. 4.96 million ) for provident fund contributions in the statement of profit and loss.

35 Employee stock options

35.1 The Company has an Employee Share based payment scheme, under which grants were made as per details provided below:

The Board has granted 581,636 options, convertible into 581,636 equity shares of the Company, under the Employee Stock Option Scheme (ESOP) 2012 and the board resolutions, dated 14 March 2012, 25
March 2013, 19 March 2014, 30 March 2015 and 4 January 2016 which is in accordance with the provisions of the law and guidelines issued by the relevant authority applicable at the date of the grant.

The Company issued 687,548 options vide board resolution dated 28 February 2018 under a new policy termed as ESOP scheme II which is in accordance with the provisions of the law and/or guidelines issued
by relevant authority applicable at the date of the grant. The Company has further approved 137,510 options via board resolution dated 13 May 2019 under ESOP scheme II.

ESOP I (Scheme 2012)

Particulars
Tranche 1 Tranche 2 Tranche 3 Tranche 4 Tranche 5
No. of options approved 5,81,636 options
No. of options granted 115,000 125,000 170,000 103,136 68,500
Date of grant 14 March 2012 25 March 2013 19 March 2014 30 March 2015 04/01/2016
Exercise price per option Rs. 239.13 Rs. 239.13 Rs. 281.13 Rs. 281.13 Rs. 281.13

ESOP Scheme II
Particulars
Tranche 1* Tranche 2 Tranche 3*
No. of options approved 8,25,058 options*
No. of options granted 484,444 58,359 331,700
Date of grant 1 April 2017 1 April 2018 1 April 2019
Exercise price per option Rs. 586.21 Rs. 586.05 Rs. 696.48

*49,445 options lapsed in Tranche 1 of ESOP scheme II and was reissued in Tranche 3.

Note: Amortisation of option cost for the half year ended 30 September 2019, 30 September 2018 and for year ended 31 March 2019, 31 March 2018, 31 March 2017 are Rs. 15.71 millions, Rs. 9.95 millions,
Rs. 19.90 millions, Rs. 27.79 millions and Rs. 7.43 millions respectively.

248
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

35.2 Vesting condition :

ESOP I: Vesting of options would be subject to continued employment with the Company and thus the options would vest on passage of time. Options vest in four instalments - 15% each in first two instalments,
30% in third instalment and balance 40% in the last instalment. All the management options are time based and also exit linked, i.e. they shall vest in four instalments as described above or on exit of promoters/
investors, whichever is earlier.

ESOP I Scheme 2012

Particulars Tranche 1 Tranche 2 Tranche 3 Tranche 4 Tranche 5
Vesting start period 2012 2013 2014 2015 2016
1st Year 17,250 18,750 25,500 15,470 10,275
2nd Year 17,250 18,750 25,500 15,470 10,275
3rd Year 34,500 37,500 51,000 30,941 20,550
4th Year 46,000 50,000 68,000 41,255 27,400

ESOP II :

Management option: Vesting will be in two parts- 66% will be performance plus time based which will vest in 6 equal instalments; and 34% will be exit linked.
Non Management option: Vesting will be in 6 equal instalments starting from 1 April 2018. If the grant is after 1 April 2018, then the Vesting will start from 1 April 2019 and so on.

ESOP II (Scheme II)

Particulars Tranche 1* Tranche 2 Tranche 3*
Vesting start period 2018 2019 2020
Management
1st Year 41,800 5,500 10,450
2nd Year 41,800 5,500 10,450
3rd Year 41,800 5,500 10,450
4th Year 41,800 5,500 10,450
5th Year 41,800 5,500 10,450
6th Year 41,800 5,500 10,450
Exit linked 129,200 17,000 32,300
Non- Management
1st Year 17,755 1,421 40,239
2nd Year 17,755 1,421 40,239
3rd Year 17,755 1,421 40,239
4th Year 17,755 1,421 40,239
5th Year 17,755 1,421 40,239
6th Year 15,669 1,254 35,505
*49,445 options lapsed in Tranche 1 of ESOP scheme 2 and was reissued in Tranche 3

35.3 Contractual life

ESOP I: The contractual life (vesting period plus exercise period) ranges from 11 to 14 years i.e. vesting period ranging from 1 to 4 years and exercise period of 10 years from the date of vesting of the option. In
case of resignation/ termination of any employee, the exercise period shall be 6 months from the last working day of the employee.

ESOP II: The contractual life (vesting period plus exercise period) ranges from 11 to 16 years i.e. vesting period ranging from 1 to 6 years and exercise period of 10 years from the date of vesting of the option. In
case of resignation/ termination of any employee, the exercise period shall be 6 months from the last working day of the employee.

Method of settlement: ESOP I and II is to be settled through

i) issue of equity shares or
ii) the Board may purely at its discretion, subject to the compliance of applicable laws, settle vested options prior to listing of Shares on recognized stock exchange, in cash.

35.4 Computation of fair value of options granted

ESOP I (Scheme 2012)

Particulars
Tranche 1 Tranche 2 Tranche 3 Tranche 4 Tranche 5
Share price 239.13 239.13 245.00 280.00 280.00
Exercise price 239.13 239.13 281.13 281.13 281.13
Volatility 37.05% 35.51% 34.95% 34.17% 33.51%
1st year- 8.06% 1st year- 7.73% 1st year- 8.66% 1st year- 7.88% 1st year- 7.05%
2nd year- 7.93% 2nd year- 7.66% 2nd year- 8.58% 2nd year- 7.84% 2nd year- 7.22%
Risk free rate
3rd year- 8.01% 3rd year- 7.74% 3rd year- 8.72% 3rd year- 7.79% 3rd year- 7.32%
4th year- 8.10% 4th year- 7.84% 4th year- 8.88% 4th year- 7.75% 4th year- 7.43%
Dividend yield - - - - -
1st year- 44 1st year- 42 1st year- 29 1st year- 48 1st year- 46
2nd year- 65 2nd year- 63 2nd year- 51 2nd year- 72 2nd year- 69
Fair value of options*
3rd year- 83 3rd year- 80 3rd year- 70 3rd year- 91 3rd year- 89
4th year- 98 4th year- 95 4th year- 87 4th year- 108 4th year- 105

ESOP Scheme II
Particulars
Tranche 1 Tranche 2 Tranche 3
Share price 586.21 586.05 696.48
Exercise price 586.21 586.05 696.48
Volatility 30.00% 30.00% 31.29%
1st year- 6.63% 1st year- 6.79% 1st year- 6.43%
2nd year- 6.66% 2nd year- 7.33% 2nd year- 6.52%
3rd year- 6.79% 3rd year- 7.57% 3rd year- 6.66%
Risk free rate 4th year- 6.93% 4th year- 7.74% 4th year- 6.85%
5th year- 7.05% 5th year- 7.78% 5th year- 6.93%
6th year- 6.92% 6th year- 7.89% 6th year- 7.17%
7th year- 7.08%
Dividend yield - - -
1st year- 88 1st year- 89 1st year- 107
2nd year- 133 2nd year- 137 2nd year- 162
3rd year- 171 3rd year- 177 3rd year- 207
Fair value of option* 4th year- 205 4th year- 213 4th year- 248
5th year- 235 5th year- 244 5th year- 283
6th year- 260 6th year- 272 6th year- 318
7th year- 285

* The fair value of option has been determined based on Black - Scholes - Merton formula.

249
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

35.5 Reconciliation of outstanding stock options:

As at 30 September 2019 As at 30 September 2018 As at 31 March 2019

Particulars (No. of options)
ESOP I ESOP II ESOP I ESOP II ESOP I ESOP II
Options outstanding at beginning of half year / year 438,601 468,148 522,986 484,444 522,986 484,444
Options vested at beginning of half year / year 418,201 50,762 485,536 - 485,536 -
Number of options granted during the half year / year - 331,700 - 58,359 - 58,359
Number of options vested during the half year / year - 57,685 - 59,553 15,300 59,553
Lapsed - 9,101 8,900 6,768 9,650 67,505
- Forfeited (vested - lapsed) - - 7,150 - 7,900 1,641
- Lapsed (unvested - lapsed) - 9,101 1,750 6,768 1,750 65,864
Exercised 63,500 - 44,735 - 74,735 7,150
Options outstanding at end of year 375,101 790,747 469,351 536,035 438,601 468,148
Options vested and exercisable at end of year 354,701 108,447 433,651 59,553 418,201 50,762
Weighted average exercise price per option of options outstanding 265.43 631.37 264.23 586.19 263.53 586.21
Weighted average remaining contractual life of options 7.34 years 12.56 years 8.05 years 13.04 years 7.69 years 12.69 years

As at 31 March 2018 As at 31 March 2017

Particulars (No. of options)
ESOP I ESOP II ESOP I ESOP II
Options outstanding at beginning of year 572,261 - 581,636 -
Options vested at beginning of year 493,411 - 256,470 -
Number of options granted during the year - 484,444 - -
Number of options Vested during the year 30,025 - 236,941 -
Lapsed 46,475 - 9,375 -
- Forfeited (vested - lapsed) 35,100 - - -
- Lapsed (unvested - lapsed) 11,375 - 9,375 -
Exercised 2,800 - - -
Options outstanding at end of year 522,986 484,444 572,261 -
Options vested and exercisable at end of year 485,536 - 493,411 -
Weighted average exercise price per option of options outstanding 262.85 586.21 260.70 -
Weighted average remaining contractual life of options 8.76 years 16 years 9.75 years -

36 Segment information

36.1 Operating segment

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM regularly monitors and reviews the operating result of
the whole Company as one segment of "Financing". Thus, as defined in Ind AS 108 “Operating Segments”, the Company’s entire business falls under this one operational segment.

36.2 Entity wide disclosures

No revenue from transactions with a single external customer or counterparty amounted to 10% or more of the Company’s total revenue in half year ended 30 September 2019 and 30 September 2018; year ended
31 March 2019, 31 March 2018 and 31 March 2017.
The Company operates in single geography i.e. India and therefore geographical information is not required to be disclosed separately.

37 Lease disclosure

Where the Company is the lessee:

The Company has entered into agreements for taking its office premises under leave and license arrangements. These agreements are for tenures between 1 year and 9 years and majority of the agreements are
renewable by mutual consent on mutually agreeable terms, lease rentals have an escalation ranging between 5% to 15%. Some of the leases for which the lease term is less than 12 months has been accounted as
short term leases.
(Rs. in millions)
Lease liability As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Not later than one year 38.89 26.66 31.93 20.97 15.73
Later than one year and not later than five years 68.02 53.28 53.99 45.05 37.06
Later than five years 6.07 - 2.28 - -
Total undiscounted lease liabilities 112.98 79.94 88.20 66.02 52.79
Lease liabilities included in restated statement of assets and liabilities
Total finance lease liabilities 90.07 69.29 75.89 55.74 43.50

(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
Amount recognised in the statement of profit and loss account 1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Interest on lease liabilities 3.99 3.38 7.12 4.98 3.34
Expenses relating to short term leases 0.05 0.09 0.35 0.22 0.69

(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
Amount recognised in statement of cashflow 1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Total cash outflow for leases 18.00 13.25 29.28 18.47 12.38

38 Corporate social responsibility expenses

(Rs. in millions)
For the period For the period
Year ended 31 Year ended 31 Year ended 31
Particulars 1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
(a) Total amount to be spent for the financial year (including amount unspent in previous year) 3.70 2.10 4.10 2.93 1.08
(b) Total amount spent during the year pertaining to previous year - - - 1.08 -
(b) Total amount spent during the year pertaining to current year - - 4.10 1.85 -
(c) Amount unspent, if any* 3.70 2.10 - - 1.08

*Unspent amount disclosed above were not spent by the Company during the period and the provisions are created basis the annual estimate for CSR spend

250
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

39 First time adoption of Ind AS

A First Ind AS financial statements

The financial statements for the half year ended 30 September 2019, 30 September 2018 and years ended 31 March 2019, 31 March 2018, 31 March 2017 and opening balance sheet as at 1 April 2016 is
prepared in accordance with requirements of Ind AS for the purpose of restated financial statements. These financial statements have been prepared by making suitable restatement adjustments to the assets and
liabilities based on accounting policy consistent with those used at date of transition to Ind AS. These financial statements have been prepared by making Ind AS adjustments, wherever applicable to the audited
financial statements. The impact of Ind AS adjustments to the equity as at 1 April 2016, 31 March 2017, 31 March 2018, 30 September 2018, 31 March 2019 and on other comprehensive income for the half
year ended 30 September 2018 and years ended 31 March 2019, 31 March 2018 and 31 March 2017 has been explained as under.

An explanation of how the transition from Indian GAAP to Ind AS has affected the Company’s financial position, financial performance is as follows:

Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemption and mandatory exemption applied in the transition from Indian GAAP to Ind AS. The Company has applied the following exemptions /
exceptions.

(i) Mandatory exceptions applied

Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Indian GAAP (after adjustments to reflect any
difference in accounting policies), unless there is objective evidence that those estimates were in error.

De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a
first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and
financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the derecognition provisions of Ind AS
109 prospectively from the date of transition to Ind AS.

Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS. The Company has complied with
the same.

Impairment of financial assets

Ind AS 101 provides relaxation from applying the impairment related requirements of Ind AS 109 retrospectively. At the date of transition, it requires an entity to use reasonable and supportable information that
is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised and compare that to the credit risk at the date of transition to Ind AS or recognise
a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is de-recognised, if at the date of transition to Ind AS, determination of credit risk
involves undue cost or effort. The Company has elected to apply Ind AS 109 prospectively from the date of transition to Ind AS.

B First time adoption reconciliations

Equity reconciliation: (Rs. in millions)

Equity as at Equity as at Equity as at Equity as at Equity as at Equity as at
Particulars Notes
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017 1 April 2016
Equity as per Indian GAAP (A) 5,018.46 5,261.72 3,331.06 3,078.38 1,536.98
Ind AS adjustments
Impact of EIR of borrowings measured at amortised cost B.1 34.66 48.60 28.57 17.86 14.37
Impact of EIR of loans measured at amortised cost B.1 (284.93) (317.86) (206.01) (103.14) (62.74)
Impact on account of provision for expected credit loss on
financial assets B.2 (22.21) (26.28) (5.78) (1.44) 1.14
Fair valuation of investment in mutual funds B.3 - 2.02 - - -
Recognition of interest only strip receivable on assigned loans B.4 67.92 230.74 38.47 48.18 34.31
Impact on account of lease accounting as per Ind AS 116 B.6 (4.18) (3.86) (3.11) (1.86) (0.48)
Proposed dividend - - - - 1.95
Deferred tax on above adjustments B.8 70.24 31.53 58.99 25.60 13.22
Total adjustments (138.50) (35.11) (88.87) (14.80) 1.77
Equity as per Ind AS (A) 8,891.03 4,879.96 5,226.61 3,242.19 3,063.58 1,538.75

Other material adjustments

Direct assignments B.10 (6.00) (5.45) (5.82) (4.93) - -
Deferred tax on restatement adjustments B.8 8.00 11.26 10.61 14.89 - -
Prior period tax B.12 - - - - - (0.22)
2.00 5.81 4.79 9.96 - (0.22)
Equity as per restated Ind AS (A) 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58 1,538.53

Reconciliation of total comprehensive income (Rs. in millions)

For the period For the period
Year ended 31 Year ended 31 Year ended 31
Particulars Notes 1 April 2019 to 1 April 2018 to
March 2019 March 2018 March 2017
30 September 2019 30 September 2018
Total net profit after tax as per Indian GAAP 177.76 422.38 252.02 87.72

Ind AS adjustments
Impact of EIR of borrowings measured at amortised cost B.1 6.09 20.03 10.71 3.49
Impact of EIR of loans measured at amortised cost B.1 (78.93) (111.86) (102.88) (42.70)
Impact on account of provision for expected credit loss on financial assets B.2 (16.44) (20.51) (4.35) (0.28)
Amortisation of option cost for equity settled ESOP's B.5 (9.93) (19.87) (27.79) (7.43)
Fair valuation of investment in mutual funds B.3 - 2.02 - -
Gain on direct assignment of loans B.4 29.45 192.27 (14.64) 13.87
Impact on account of lease accounting as per Ind AS 116 B.6 (1.06) (0.74) (1.25) (1.38)
Remeasurement of gains / (losses) on defined benefit plans B.7 0.77 1.37 (0.25) 1.33
Deferred tax on above adjustments B.8 11.02 (27.85) 48.39 11.93
Total adjustments (59.03) 34.86 (92.06) (21.17)

Other Comprehensive income

Remeasurement of gains/ (losses) on defined benefit plans B.7 (0.77) (1.37) 0.25 (1.33)
Deferred tax on above adjustment B.8 0.22 0.40 (0.09) 0.46
Total (0.55) (0.97) 0.16 (0.87)

Total comprehensive income as per Ind AS 367.87 118.18 456.27 160.12 65.68

Other material adjustments

Direct assignments B.10 (0.19) (0.52) (0.89) - -
Restatement of vested ESOPs B.11 - (0.02) (0.03) - -
Deferred tax on above B.8 (2.60) (3.63) (4.28) - -
Restatement of tax expense B.12 - - - 0.22
Total (2.79) (4.17) (5.20) - 0.22

Total comprehensive income under restated Ind AS 365.08 114.01 451.07 160.12 65.90

251
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

Explanations to reconciliations

B.1 Interest income and expense measured using effective interest method

Borrowings
Under Indian GAAP, the transaction costs related to borrowings were recognised upfront on disbursal in the statement of profit and loss. Under Ind AS, such costs are amortised over the contractual term of the
borrowing and recognised as interest expense using effective interest method in the statement of profit and loss.

Loans
Under Indian GAAP, origination fees was recognised on cash basis and transaction cost was recognised on accrual basis upfront. Under Ind AS, such fees and costs is amortised over the expected life of the loan
assets and recognised as interest income using effective interest method. Under Indian GAAP, interest income on non performing assets (i.e. loans that are 90 days past due) was not accrued. Under Ind AS
interest income on such loans are recognised on their net carrying amount.

B.2 Impairment allowance for expected credit loss

Under Indian GAAP, the Company has created provision for loans based on the Guidelines on prudential norms issued by National Housing Bank. Under Ind AS, impairment allowance has been determined
based on Expected Loss model (ECL).

B.3 Fair valuation of investment in mutual funds

Under Indian GAAP, investment in mutual funds was carried at lower of cost or net realisable value. Under Ind AS, these investments are measured at FVTPL.

B.4 Recognition of interest only strip receivable on assigned loans

Under Indian GAAP, gain/(loss) on account of assignment deals was recognised as and when due. Under Ind AS, gain/(loss) on account of assignment is recognised on the date of derecognition. Accordingly,
Company has created an Interest only strip receivable with corresponding credit to the statement of profit and loss for the year/retained earnings, which has been computed by discounting Excess Interest Spread
(EIS) to present value. Necessary adjustment with respect to credit risk has also been made.

B.5 Share based payments

Under Indian GAAP, the Company recognised only the intrinsic value for the share based payments plans as an expense. Ind AS requires the fair value of the stock options to be determined using an appropriate
pricing model recognised over the vesting year. An additional expense has been recognised in the statement of profit or loss for the period ended 30 September 2018, 31 March 2019, 31 March 2018 and 31
March 2017. Further on account of above adjustment, an amount of Rs 22.55 million has been referred from retained earnings to ESOP reserve as at 1 April 2018, net impact of such adjustment on equity is nil.

B.6 Lease accounting

Under the Indian GAAP, lease rentals related to operating lease were accounted as expense in the statement of profit and loss. Under Ind AS, lease liability and right of use is recorded at present value of future
contractual rent payment on initial date of lease. Subsequently, finance cost is accrued on lease liability and lease payments are recorded by way of reduction in lease liability. ROU is depreciated over lease term.

B.7 Remeasurement of employee benefits

Under the Indian GAAP, actuarial gains / losses on defined benefit obligations were recognised in the statement of profit and loss. Under Ind AS, remeasurements i.e. actuarial gains and losses, excluding amounts
included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of the statement of profit and loss.

B.8 Deferred tax

Under the Indian GAAP, deferred tax was accounted as per the income statement approach which required creation of deferred tax asset/ liability on timing differences between taxable income and accounting
income. Under Ind AS, deferred tax is accounted as per the balance sheet approach which requires creation of deferred tax asset/ liability on temporary differences between the carrying amount of an asset/ liability
in the Balance Sheet and its corresponding tax base. The adjustments in equity and net profit, as discussed above, resulted in additional temporary differences on which deferred taxes are calculated.

B.9 Proposed dividend

In audited financial statements, Proposed dividends till 31 March 2016 were recognised as a liability as an adjusting event occurring after the balance sheet date. For the purpose of Restated Financial
Information, dividends declared by board of directors after the report date is considered as non-adjusting events and hence recognised as and when approved by the shareholders.

Explanations to restatement adjustments

B.10 Restatement adjustment relating to direct assignment transaction
In audited financial statements, the Company has done adjustment related to direct assignment transaction prospectively i.e. transactions occurring on or after the date of transition. For the purpose of Restated Ind
AS Financial Information, the Company has created an Interest only strip receivable with corresponding credit to the statement of profit and loss for the year/retained earnings, by discounting Excess Interest
Spread (EIS) to present value as on 1 April 2016. Necessary adjustment with respect to credit risk has also been made.

B.11 Restatement adjustment relating to Share based payments

In audited financial statements, the Company has availed optional exemption under Ind AS 101 and has not made any adjustments for options vested before the date of transition. For the purpose of Restated Ind
AS Financial Information, the Company has done adjustments for options unvested as on 1 April 2016. On account of above adjustment, an amount of Rs. 26.54 millions has been transferred from retained
earnings to ESOP reserve as at 1 April 2016.

B.12 Prior period tax

In audited financial statements, tax pertaining to earlier years were accounted based on assessment by Income-tax authorities. For the purpose of the restated Ind AS financial statement, such taxes have been
appropriately adjusted in the respective financial year to which they relate.

(This page has been intentionally left blank)

252
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

Reconciliation between previous GAAP and Ind AS

C Effect of Ind AS adoption on the balance sheet

(a) Reconciliation of Balance sheet as at 31 March 2017 (Rs. in millions)

Regrouped Ind AS Proforma Restatement
Notes IGAAP adjustments Ind AS adjustment Restated Ind AS
Assets
Financial assets
Cash and cash equivalents 1,159.80 - 1,159.80 - 1,159.80
Other bank balances 661.72 - 661.72 - 661.72
Loans B.1, B.2 7,985.20 (92.08) 7,893.12 - 7,893.12
Investments - - - - -
Other financial assets B.4, B.10 10.01 49.62 59.63 - 59.63
Total financial assets 9,816.73 (42.46) 9,774.27 - 9,774.27

Non-financial assets
Current tax assets (net) - - - - -
Deferred tax assets (net) B.8 0.71 25.57 26.28 - 26.28
Property, plant and equipment B.6 23.93 40.34 64.27 - 64.27
Capital work-in-progress - - - - -
Intangible assets under development - - - - -
Other intangible assets 2.26 - 2.26 - 2.26
Other non-financial assets B.1 22.48 0.02 22.50 - 22.50
Total non financial assets 49.38 65.93 115.31 - 115.31
Total assets 9,866.11 23.47 9,889.58 - 9,889.58

Liabilities and equity

Liabilities
Financial liabilities
Payables
Trade payables - - - - -
- Total outstanding dues of micro enterprises and small
enterprises 0.56 - 0.56 - 0.56
- Total outstanding dues of creditors other than micro enterprises 32.37 - 32.37
and small enterprises 32.37 -
Borrowings (other than debt securities) B.1 6,648.30 (17.85) 6,630.45 - 6,630.45
Other financial liabilities B.6 80.38 38.69 119.07 - 119.07
Total financial liabilities 6,761.61 20.84 6,782.45 - 6,782.45

Non-financial liabilities
Current tax liabilities (net) 0.84 - 0.84 - 0.84
Deferred tax liabilities (net) - - - -
Provisions B.2 15.25 5.20 20.45 - 20.45
Other non-financial liabilities B.1 10.03 12.23 22.26 - 22.26
Total non financial liabilities 26.12 17.43 43.55 - 43.55
Total liabilities 6,787.73 38.27 6,826.00 - 6,826.00

Equity
Equity share capital 103.21 - 103.21 - 103.21
Other equity B.1 to B.12 2,975.17 (14.80) 2,960.37 - 2,960.37
Total equity 3,078.38 (14.80) 3,063.58 - 3,063.58
Total liabilities and equity 9,866.11 23.47 9,889.58 - 9,889.58

(This page has been intentionally left blank)

253
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

(b) Reconciliation of Balance sheet as at 31 March 2018 (Rs. in millions)

Regrouped Ind AS Proforma Restatement
Notes IGAAP adjustments Ind AS adjustment Restated Ind AS
Assets
Financial assets
Cash and cash equivalents 230.14 - 230.14 - 230.14
Other bank balances 72.04 - 72.04 - 72.04
Loans B.1, B.2 13,264.27 (176.92) 13,087.35 - 13,087.35
Investments - - -
Other financial assets B.4, B.10 14.14 39.88 54.02 (4.93) 49.09
Total financial assets 13,580.59 (137.04) 13,443.55 (4.93) 13,438.62

Non-financial assets
Current tax assets (net) 4.66 - 4.66 - 4.66
Deferred tax assets (net) B.8 (10.09) 59.01 48.92 14.89 63.81
Property, plant and equipment B.6 47.40 50.22 97.62 - 97.62
Capital work-in-progress 7.88 - 7.88 - 7.88
Intangible assets under development 2.61 - 2.61 - 2.61
Other intangible assets 3.50 - 3.50 - 3.50
Other non-financial assets B.1 22.87 7.85 30.72 - 30.72
Total non financial assets 78.83 117.08 195.91 14.89 210.80

Total assets 13,659.42 (19.96) 13,639.46 9.96 13,649.42

Liabilities and equity

Liabilities
Financial liabilities
Payables
Trade payables
- Total outstanding dues of micro enterprises and small - - - - -
enterprises
- Total outstanding dues of creditors other than micro enterprises 5.37 - 5.37 - 5.37
and small enterprises
Borrowings (other than debt securities) B.1 10,219.45 (20.69) 10,198.76 - 10,198.76
Other financial liabilities B.6 77.30 52.87 130.17 - 130.17
Total financial liabilities 10,302.12 32.18 10,334.30 - 10,334.30

Non-financial liabilities
Current tax liabilities (net) - - - - -
Deferred tax liabilities (net) - - - - -
Provisions B.2 10.92 7.82 18.74 - 18.74
Other non-financial liabilities B.1 15.32 28.91 44.23 - 44.23
Total non financial liabilities 26.24 36.73 62.97 - 62.97
Total liabilities 10,328.36 68.91 10,397.27 - 10,397.27

Equity
Equity share capital 103.23 - 103.23 - 103.23
Other equity B.1 to B.12 3,227.83 (88.87) 3,138.96 9.96 3,148.92
Total equity 3,331.06 (88.87) 3,242.19 9.96 3,252.15
Total liabilities and equity 13,659.42 (19.96) 13,639.46 9.96 13,649.42

(This page has been intentionally left blank)

254
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

(c) Reconciliation of Balance sheet as at 30 September 2018 (Rs. in millions)

Regrouped Ind AS Restatement
Notes IGAAP adjustments Ind AS adjustment Restated Ind AS
Assets
Financial assets
Cash and cash equivalents 1,013.48 - 1,013.48 - 1,013.48
Other bank balances 862.89 - 862.89 - 862.89
Loans B.1, B.2 18,521.99 (273.49) 18,248.50 - 18,248.50
Investments 200.09 - 200.09 - 200.09
Other financial assets B.4, B.10 42.85 70.47 113.32 (5.45) 107.87
Total financial assets 20,641.30 (203.02) 20,438.28 (5.45) 20,432.83

Non-financial assets
Current tax assets (net) 8.06 - 8.06 - 8.06
Deferred tax assets (net) B.8 (10.80) 70.27 59.47 11.26 70.73
Property, plant and equipment B.6 84.85 62.48 147.33 - 147.33
Capital work-in-progress 1.11 - 1.11 - 1.11
Intangible assets under development - - - - -
Other intangible assets 6.73 - 6.73 - 6.73
Other non-financial assets B.1 26.29 2.00 28.29 - 28.29
Total non financial assets 116.24 134.75 250.99 11.26 262.25

Total assets 20,757.54 (68.27) 20,689.27 5.81 20,695.08

Liabilities and equity

Liabilities
Financial liabilities
Payables
Trade payables
- Total outstanding dues of micro enterprises and small - - - - -
enterprises
- Total outstanding dues of creditors other than micro enterprises 7.22 - 7.22 - 7.22
and small enterprises
Debt securities 492.49 - 492.49 - 492.49
Borrowings (other than debt securities) B.1 15,096.89 (27.11) 15,069.78 - 15,069.78
Other financial liabilities B.6 84.64 64.48 149.12 - 149.12
Total financial liabilities 15,681.24 37.37 15,718.61 - 15,718.61

Non-financial liabilities
Current tax liabilities (net) - - - - -
Deferred tax liabilities (net) - - - - -
Provisions B.2 29.89 8.63 38.52 - 38.52
Other non-financial liabilities B.1 27.95 24.23 52.18 - 52.18
Total non financial liabilities 57.84 32.86 90.70 - 90.70
Total liabilities 15,739.08 70.23 15,809.31 - 15,809.31

Equity
Equity share capital 126.31 - 126.31 - 126.31
Other equity B.1 to B.12 4,892.15 (138.50) 4,753.65 5.81 4,759.46
Total equity 5,018.46 (138.50) 4,879.96 5.81 4,885.77
Total liabilities and equity 20,757.54 (68.27) 20,689.27 5.81 20,695.08

(This page has been intentionally left blank)

255
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

(d) Reconciliation of Balance sheet as at 31 March 2019 (Rs. in millions)

Regrouped Ind AS Proforma Restatement
Notes IGAAP adjustments Ind AS adjustment Restated Ind AS
Assets
Financial assets
Cash and cash equivalents 1,857.24 - 1,857.24 - 1,857.24
Other bank balances 62.59 - 62.59 - 62.59
Loans B.1, B.2 21,664.42 (317.37) 21,347.05 - 21,347.05
Investments B.3 1,027.16 2.01 1,029.17 - 1,029.17
Other financial assets B.4, B.10 31.32 235.70 267.02 (5.82) 261.20
Total financial assets 24,642.73 (79.66) 24,563.07 (5.82) 24,557.25

Non-financial assets
Current tax assets (net) 10.25 - 10.25 - 10.25
Deferred tax assets (net) B.8 (17.31) 31.53 14.22 10.61 24.83
Property, plant and equipment B.6 99.88 67.71 167.59 - 167.59
Capital work-in-progress - - - - -
Intangible assets under development - - - - -
Other intangible assets 6.71 - 6.71 - 6.71
Other non-financial assets B.1 47.26 6.16 53.42 - 53.42
Total non financial assets 146.79 105.40 252.19 10.61 262.80

Total assets 24,789.52 25.74 24,815.26 4.79 24,820.05

Liabilities and equity

Liabilities
Financial liabilities
Payables
Trade payables
- Total outstanding dues of micro enterprises and small
enterprises
- Total outstanding dues of creditors other than micro enterprises 13.63 (0.05) 13.58 - 13.58
and small enterprises
Borrowings (other than debt securities) 19,298.86 (42.45) 19,256.41 - 19,256.41
Other financial liabilities B.1 175.65 62.78 238.43 - 238.43
Total financial liabilities B.6 19,488.14 20.28 19,508.42 - 19,508.42

Non-Financial Liabilities
Current tax liabilities (net) - - - - -
Deferred tax liabilities (net) - - - - -
Provisions B.2 19.43 10.19 29.62 - 29.62
Other non-financial liabilities B.1 20.23 30.38 50.61 - 50.61
Total non financial liabilities 39.66 40.57 80.23 - 80.23
Total liabilities 19,527.80 60.85 19,588.65 - 19,588.65

Equity
Equity share capital 126.68 - 126.68 - 126.68
Other equity B.1 to B.12 5,135.04 (35.11) 5,099.93 4.79 5,104.72
Total equity 5,261.72 (35.11) 5,226.61 4.79 5,231.40
Total liabilities and equity 24,789.52 25.74 24,815.26 4.79 24,820.05

(This page has been intentionally left blank)

256
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

(e) Reconciliation of Balance sheet as at 30 September 2019 (Rs. in millions)

Restatement
IGAAP Adjustments Notes Ind AS adjustment Restated Ind AS
Assets
Financial assets
Cash and cash equivalents 2,679.67 - 1,059.67 - 1,059.67
Other bank balances 63.17 - 1,693.21 - 1,693.21
Loans 26,078.42 (409.40) B.1, B.2 26,179.57 - 26,179.57
Investments 2,773.68 3.75 B.3 2,777.43 - 2,777.43
Other financial assets 817.33 400.65 B.4, B.10 482.65 (6.00) 476.65
Total financial assets 32,412.27 (5.00) 32,192.53 (6.00) 32,186.53

Non-financial assets
Current tax assets (net) - - 53.19 - 53.19
Deferred tax assets (net) - B.8 - - -
Property, plant and equipment 105.31 80.64 B.6 185.95 - 185.95
Capital work-in-progress 2.03 - 2.03 - 2.03
Intangible assets under development - - - -
Other intangible assets 5.15 - 5.15 - 5.15
Other non-financial assets - 2.50 B.1 43.69 - 43.69
Total non financial assets 112.49 83.14 290.01 - 290.01

Total assets 32,524.76 78.14 32,482.54 (6.00) 32,476.54

Liabilities and equity

Liabilities
Financial liabilities
Payables
Trade payables
- Total outstanding dues of micro enterprises and small enterprises - - - - -
- Total outstanding dues of creditors other than micro enterprises and small enterprises
2.16 (0.03) 1.71 - 1.71
Borrowings (other than debt securities) 18,245.46 (57.09) 22,956.31 - 22,956.31
Other financial liabilities 5,243.56 54.67 B.1 475.17 - 475.17
Total financial liabilities 23,491.18 (2.45) B.6 23,433.19 - 23,433.19

Non-financial liabilities
Current tax liabilities (net) - - - - -
Deferred tax liabilities (net) 29.57 (0.96) B.8 28.61 (8.00) 20.61
Provisions 151.94 10.60 B.2 47.17 - 47.17
Other non-financial liabilities 32.03 B.1 82.54 - 82.54
Total non financial liabilities 181.51 41.67 158.32 (8.00) 150.32
Total liabilities 23,672.69 39.22 23,591.51 (8.00) 23,583.51

Equity
Equity share capital 156.60 - 156.60 - 156.60
Other equity 8,695.49 38.94 B.1 to B.12 8,734.43 2.00 8,736.43
Total equity 8,852.09 38.94 8,891.03 2.00 8,893.03
Total liabilities and equity 32,524.78 78.16 32,482.54 (6.00) 32,476.54
0.02 0.02 -

(This page has been intentionally left blank)

257
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

D Effect of Ind AS adoption on the statement of profit and loss

(i) Statement of profit and loss for year ended 31 March 2017 (Rs. in millions)
Regrouped Ind AS Proforma Restatement
Notes IGAAP adjustments Ind AS adjustment Restated Ind AS
Revenue from operations
Interest income B.1, B.2, B.4 878.78 1.15 879.93 - 879.93
Fees and commission income B.1 61.71 (54.24) 7.47 - 7.47
Net gain on derecognition of financial instruments under amortised - 25.92 25.92 25.92
cost category B.4, B.10 -
Other operating income B.1 2.38 0.07 2.45 - 2.45
Total revenue from operations 942.87 (27.10) 915.77 - 915.77
Other income 0.01 - 0.01 - 0.01
Total income 942.88 (27.10) 915.78 - 915.78

Expenses
Finance costs B.1, B.6 540.60 (0.16) 540.44 - 540.44
Impairment on financial instruments B.2 17.09 0.28 17.37 - 17.37
Employee benefits expenses B.5, B.7, B.11 143.88 6.09 149.97 - 149.97
Depreciation, amortisation and impairment B.6 5.24 10.31 15.55 - 15.55
Others expenses B.6 99.42 (10.53) 88.89 - 88.89
Total expenses 806.23 5.99 812.22 - 812.22
-
Profit before tax 136.65 (33.09) 103.56 - 103.56

Tax expense:
- Current tax B.12 48.95 - 48.95 (0.22) 48.73
- Deferred tax expense / (income) B.8 (0.02) (11.92) (11.94) - (11.94)
48.93 (11.92) 37.01 (0.22) 36.79

Profit after tax 87.72 (21.17) 66.55 0.22 66.77

Other comprehensive income (OCI)

Items that will not be reclassified to profit or loss
- Remeasurements of the defined benefit plans B.7 - (1.33) (1.33) - (1.33)
- Income tax relating to items that will not be reclassified to profit or
loss B.8 - 0.46 0.46 - 0.46
Other comprehensive income - (0.87) (0.87) - (0.87)

Total comprehensive income 87.72 (22.04) 65.68 0.22 65.90

(ii) Statement of profit and loss for year ended 31 March 2018 (Rs. in millions)
Regrouped Ind AS Proforma Restatement
Notes IGAAP adjustments Ind AS adjustment Restated Ind AS
Revenue from operations
Interest income B.1, B.2, B.4 1,294.37 5.21 1,299.58 - 1,299.58
Fees and commission income B.1 140.20 (125.75) 14.45 - 14.45
Net gain on derecognition of financial instruments under amortised
cost category B.4 - - - - -
Other operating income B.4 6.83 0.06 6.89 - 6.89
Total revenue from operations 1,441.40 (120.48) 1,320.92 - 1,320.92
Other income 21.45 - 21.45 - 21.45
Total income 1,462.85 (120.48) 1,342.37 - 1,342.37

Expenses
Finance costs B.1, B.6 665.37 (5.73) 659.64 - 659.64
Impairment on financial instruments B.2 24.39 4.35 28.74 - 28.74
Employee benefits expenses B.5, B.7, B.11 221.51 28.04 249.55 - 249.55
Depreciation and amortisation B.6 9.01 15.62 24.63 - 24.63
Other expenses B.6 159.39 (22.28) 137.11 - 137.11
Total expenses 1,079.67 20.00 1,099.67 - 1,099.67

Profit before tax 383.18 (140.48) 242.70 - 242.70

Tax expense:
- Current tax B.12 120.36 - 120.36 - 120.36
- Deferred tax expense / (income) B.8 10.80 (48.42) (37.62) - (37.62)
131.16 (48.42) 82.74 - 82.74
-
Profit after tax 252.02 (92.06) 159.96 - 159.96

Other comprehensive income (OCI)

Items that will not be reclassified to profit or loss
- Remeasurements of the defined benefit plans B.7 - 0.25 0.25 - 0.25
- Income tax relating to items that will not be reclassified to profit or
loss B.8 - (0.09) (0.09) - (0.09)
Other comprehensive income - 0.16 0.16 - 0.16

Total comprehensive income 252.02 (91.90) 160.12 - 160.12

258
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

(iii) Statement of profit and loss for period ended 30 September 2018 (Rs. in millions)
Regrouped Ind AS Restatement
IGAAP adjustments Ind AS adjustment Restated Ind AS
Revenue from operations
Interest income B.1, B.2, B.4, B.10 953.10 23.88 976.98 (0.50) 976.48
Fees and commission income B.1 128.00 (115.46) 12.54 - 12.54
Net gain on derecognition of financial instruments under amortised
cost category B.4 - 37.68 37.68 - 37.68
Other operating income B.1 8.40 0.03 8.43 - 8.43
Total revenue from operations 1,089.50 (53.87) 1,035.63 (0.50) 1,035.13
Other income 35.20 - 35.20 - 35.20
Total income 1,124.70 (53.87) 1,070.83 (0.50) 1,070.33

Expenses
Finance costs B.1, B.6 532.13 (2.71) 529.42 - 529.42
Impairment on financial instruments B.2 26.99 16.44 43.43 - 43.43
Employee benefits expenses B.5, B.7, B.11 185.69 9.18 194.87 0.02 194.89
Depreciation and amortisation B.6 8.36 11.06 19.42 19.42
Other expenses B.6 126.51 (17.77) 108.74 0.02 108.76
Total expenses 879.68 16.20 895.88 0.04 895.92

Profit before tax 245.02 (70.07) 174.95 (0.54) 174.41

Tax expense:
- Current tax B.12 66.55 - 66.55 - 66.55
- Deferred tax expense / (income) B.8 0.71 (11.04) (10.33) 3.63 (6.70)
67.26 (11.04) 56.22 3.63 59.85

Profit after tax 177.76 (59.03) 118.73 (4.17) 114.56

Other comprehensive income (OCI)

Items that will not be reclassified to profit or loss
- Remeasurements of the defined benefit plans B.7 - (0.77) (0.77) - (0.77)
- Income tax relating to items that will not be reclassified to profit or
loss B.8 - 0.22 0.22 - 0.22
Other comprehensive income - (0.55) (0.55) - (0.55)

Total comprehensive income 177.76 (59.58) 118.18 (4.17) 114.01

(iv) Statement of profit and loss for year ended 31 March 2019 (Rs. in millions)
Regrouped Ind AS Proforma Restatement
Notes IGAAP adjustments Ind AS adjustment Restated Ind AS
Revenue from operations
Interest income B.1, B.2, B.4, B.10 2,241.92 78.36 2,320.28 (1.03) 2,319.25
Fees and commission income B.1 271.73 (238.35) 33.38 - 33.38
Net gain on derecognition of financial instruments under amortised costB.4
category - 214.76 214.76 - 214.76
Other operating income B.1 31.29 0.08 31.37 - 31.37
Total revenue from operations 2,544.94 54.85 2,599.79 (1.03) 2,598.76
Other income B.3 108.43 2.02 110.45 - 110.45
Total income 2,653.37 56.87 2,710.24 (1.03) 2,709.21

Expenses
Finance costs B.1, B.6 1,278.34 (12.90) 1,265.44 - 1,265.44
Impairment on financial instruments B.2 52.63 20.50 73.13 - 73.13
Employee benefits expenses B.5, B.7, B.11 408.66 18.48 427.14 0.03 427.17
Depreciation, amortization and impairment B.6 21.28 24.49 45.77 - 45.77
Others expenses B.6, B.10 302.32 (56.43) 245.89 (0.14) 245.75
Total expenses 2,063.23 (5.86) 2,057.37 (0.11) 2,057.26

Profit before tax 590.14 62.73 652.87 (0.92) 651.95

Tax expense:
- Current tax 160.53 - 160.53 160.53
- Deferred tax expense / (income) B.8 7.23 27.87 35.10 4.28 39.38
167.76 27.87 195.63 4.28 199.91

Profit after tax 422.38 34.86 457.24 (5.20) 452.04

Other comprehensive income (OCI)

Items that will not be reclassified to profit or loss
- Remeasurements of the defined benefit plans B.7 - (1.37) (1.37) - (1.37)
- Income tax relating to items that will not be reclassified to profit or
loss B.8 - 0.40 0.40 - 0.40
Other comprehensive income - (0.97) (0.97) - (0.97)

Total comprehensive income 422.38 33.89 456.27 (5.20) 451.07

259
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

(v) Statement of profit and loss for period ended 30 September 2019 (Rs. in millions)
Restatement
IGAAP Adjustments Notes Ind AS adjustment Restated Ind AS
Revenue from operations
Interest income 1,562.24 7.55 B.10 1,604.36 (0.54) 1,603.82
Fees and commission income 65.00 (139.67) 10.99 - 10.99
Net gain on derecognition of financial instruments under amortised
cost category - 211.22 211.22 - 211.22
Other operating income 97.74 0.34 B.10 12.55 0.35 12.90
Total revenue from operations 1,724.98 79.44 1,839.12 (0.19) 1,838.93
Other income 131.71 1.75 98.80 - 98.80
Total income 1,856.69 81.19 1,937.92 (0.19) 1,937.73

Expenses
Finance costs 925.41 (7.04) 918.37 - 918.37
Impairment on financial instruments 22.88 7.69 39.46 - 39.46
Employee benefits expenses 282.79 12.59 295.38 - 295.38
Depreciation and amortisation 17.13 15.23 32.36 - 32.36
Other expenses 197.49 (39.33) 149.31 - 149.31
Total expenses 1,445.70 (10.86) 1,434.88 - 1,434.88

Profit before tax 410.99 92.05 503.04 (0.19) 502.85

Tax expense:
- Current tax 89.21 - 89.21 89.21
- Deferred tax expense / (income) 12.24 31.39 43.63 2.60 46.23
101.45 31.39 132.84 2.60 135.44

Profit after tax 309.54 60.66 370.20 (2.79) 367.41

Other comprehensive income (OCI)

Items that will not be reclassified to profit or loss
- Remeasurements of the defined benefit plans - (3.12) B.7 (3.12) - (3.12)
- Income tax relating to items that will not be reclassified to profit or loss 0.79 B.8 0.79 - 0.79
Other comprehensive income - (2.33) (2.33) - (2.33)

Total comprehensive income 309.54 58.33 367.87 (2.79) 365.08

(This page has been intentionally left blank)

260
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

40 Maturity analysis of assets and liabilities

(Rs. in millions)
As at 30 September 2019 As at 30 September 2018 As at 31 March 2019
Assets Within After Within After Within After
Total Total Total
1 year 1 year 1 year 1 year 1 year 1 year
Financial assets
Cash and cash equivalents 1,059.67 - 1,059.67 1,013.48 - 1,013.48 1,857.24 - 1,857.24
Other bank balance 1,620.00 73.21 1,693.21 800.00 62.89 862.89 - 62.59 62.59
Loans 701.31 25,478.26 26,179.57 530.86 17,717.64 18,248.50 573.88 20,773.17 21,347.05
Investments 2,777.43 - 2,777.43 200.09 - 200.09 1,029.17 - 1,029.17
Other financial assets 231.07 245.58 476.65 60.64 47.23 107.87 113.14 148.06 261.20

Non financial assets

Current tax assets (net) - 53.19 53.19 - 8.06 8.06 - 10.25 10.25
Deferred tax asset (net) - - - - 70.73 70.73 - 24.83 24.83
Property, plant and equipment - 185.95 185.95 - 147.33 147.33 - 167.59 167.59
Capital work-in-progress - 2.03 2.03 - 1.11 1.11 - - -
Intangible assets under development - - - - - - - - -
Other intangible assets - 5.15 5.15 - 6.73 6.73 - 6.71 6.71
Other non financial assets 34.94 8.75 43.69 23.10 5.19 28.29 48.05 5.37 53.42

Total assets 6,424.42 26,052.12 32,476.54 2,628.17 18,066.91 20,695.08 3,621.48 21,198.57 24,820.05
Liabilities
Financial liabilities
Trade payables 1.71 - 1.71 7.22 - 7.22 13.58 - 13.58
Debt securities - - - 492.49 - 492.49 - - -
Borrowings (Other than debt securities) 4,854.80 18,101.51 22,956.31 2,451.28 12,618.50 15,069.78 3,194.65 16,061.76 19,256.41
Other financial liabilities 423.99 51.18 475.17 106.49 42.63 149.12 194.46 43.97 238.43

Non financial liabilities

Current tax liabilities (net) - - - - - - - - -
Deferred tax liability (net) - 20.61 20.61
Provisions 21.90 25.27 47.17 15.66 22.86 38.52 8.33 21.29 29.62
Other non financial liabilities 82.54 - 82.54 52.18 - 52.18 50.61 - 50.61

Total liabilities 5,384.94 18,198.57 23,583.51 3,125.32 12,683.99 15,809.31 3,461.63 16,127.02 19,588.65
Net 1,039.48 7,853.55 8,893.03 (497.15) 5,382.92 4,885.77 159.85 5,071.55 5,231.40

(Rs. in millions)
As at 31 March 2018 As at 31 March 2017
Assets Within After Within After
Total Total
1 year 1 year 1 year 1 year
Financial assets
Cash and cash equivalents 230.14 - 230.14 1,159.80 - 1,159.80
Other bank balance - 72.04 72.04 610.00 51.72 661.72
Loans 343.79 12,743.56 13,087.35 171.00 7,722.12 7,893.12
Investments - - - - - -
Other financial assets 21.87 27.22 49.09 20.82 38.81 59.63

Non financial assets

Current tax assets (net) - 4.66 4.66 - - -
Deferred tax asset (net) - 63.81 63.81 - 26.28 26.28
Property, plant and equipment - 97.62 97.62 - 64.27 64.27
Capital work-in-progress - 7.88 7.88 - - -
Intangible assets under development - 2.61 2.61 - - -
Other intangible assets - 3.50 3.50 - 2.26 2.26
Other non financial assets 28.07 2.65 30.72 15.65 6.85 22.50

Total assets 623.87 13,025.55 13,649.42 1,977.27 7,912.31 9,889.58

Liabilities
Financial liabilities
Trade payables 5.37 - 5.37 32.93 - 32.93
Debt securities - - - - - -
Borrowings (other than debt securities) 1,519.01 8,679.75 10,198.76 1,181.20 5,449.25 6,630.45
Other financial liabilities 95.39 34.78 130.17 91.31 27.76 119.07

Non financial liabilities

Current tax liabilities (net) - - - 0.84 - 0.84
Provisions 3.79 14.95 18.74 10.34 10.11 20.45
Other non financial liabilities 44.23 - 44.23 22.26 - 22.26

Total liabilities 1,667.79 8,729.48 10,397.27 1,338.88 5,487.12 6,826.00

Net (1,043.92) 4,296.07 3,252.15 638.39 2,425.19 3,063.58

261
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

Disclosures required by the NHB vide Policy no. NHB.HFC.CG-DIR.1/MD&CEO/2016 dated 9 February 2017 and in terms of the circular no. NHB/ND/DRS/Pol-No.35/2010-11 dated
11 October 2010

41 Capital to risk assets ratio ('CRAR')

The following table sets forth, for the periods indicated, the details of capital to risk assets ratio:

As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
i) CRAR (%) 47.55% 43.78% 38.50% 43.02% 68.52%
ii) CRAR – Tier I Capital (%) 46.81% 42.87% 37.73% 42.25% 67.49%
iii) CRAR – Tier II Capital (%) 0.74% 0.91% 0.77% 0.77% 1.03%
iv) Amount of subordinated debt raised as Tier - II capital - - - - -
v) Amount of subordinated debt raised as Tier - II capital - - - - -

The following table sets forth, for the periods indicated, the details of capital to risk assets ratio under NHB guidelines:

As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
i) CRAR (%) 47.46% 43.67% 38.01% 42.59% 66.66%
ii) CRAR – Tier I Capital (%) 46.85% 42.84% 37.42% 41.90% 65.98%
iii) CRAR – Tier II Capital (%) 0.61% 0.83% 0.59% 0.69% 0.68%
iv) Amount of subordinated debt raised as Tier - II capital - - - - -
v) Amount of subordinated debt raised as Tier - II capital - - - - -

42 Reserve fund under section 29C of NHB Act, 1987

(Rs in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Balance at the beginning of the year
a) Statutory reserve u/s 29C of NHB Act, 1987 0.71 0.71 0.71 0.71 -
b) Amount of special reserve u/s 36(1) (viii) of Income Tax Act, 1961 taken into account for the
purposes of Statutory Reserve under Section 29C of the NHB Act, 1987 178.48 93.48 93.48 41.48 24.39
179.19 94.19 94.19 42.19 24.39
Addition/ Appropriation/ Withdrawal during the year
Add:
a) Amount transferred u/s 29C of NHB Act, 1987 10.37 - - - 0.71
b) Amount of special reserve u/s 36(1) (viii) of Income Tax Act, 1961 taken into account for the 64.63 37.70 85.00 52.00 17.09
purposes of Statutory Reserve under Section 29C of the NHB Act, 1987
Less:
a) Amount appropriated from Statutory reserve u/s 29C of the NHB Act, 1987 - - - - -
b) Amount of special reserve u/s 36(1) (viii) of Income Tax Act, 1961 taken into account for the - - - - -
purposes of Statutory Reserve under Section 29C of the NHB Act, 1987
Balance at the end of the year
a) Statutory Reserve u/s 29C of NHB Act, 1987 11.08 0.71 0.71 0.71 0.71
b) Amount of special reserve u/s 36(1) (viii) of Income Tax Act, 1961 taken into account for the 243.11 131.18 178.48 93.48 41.48
purposes of Statutory Reserve under Section 29C of the NHB Act, 1987
c) Total 254.19 131.89 179.19 94.19 42.19

43 Investments
(Rs in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Value of investments
i) Gross value of investments
(a) In India 2,777.43 200.09 1,029.17 - -
(b) Outside India - - - - -
ii) Provision for depreciation
(a) In India - - - - -
(b) Outside India - - - - -
iii) Net value of investments
(a) In India 2,777.43 200.09 1,029.17 - -
(b) Outside India - - - - -

Movement of provision held towards depreciation on investments

i) Opening balance - - - - -
ii) Add: Provision made during the year / period - - - - -
iii) Less: write off / written back of excess provision during the year / period - - - - -
iv) Closing balance - - - - -

The following table sets forth, for the periods indicated, the details of investment under NHB guidelines
(Rs in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Value of investments
i) Gross value of investments
(a) In India 2,773.68 200.09 1,027.15 - -
(b) Outside India - - - - -
ii) Provision for depreciation
(a) In India - - - - -
(b) Outside India - - - - -
iii) Net value of investments
(a) In India 2,773.68 200.09 1,027.15 - -
(b) Outside India - - - - -

262
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Movement of provision held towards depreciation on investments
i) Opening balance - - - - -
ii) Add: Provision made during the year / period - - - - -
iii) Less: write off / written back of excess provision during the year / period - - - - -
iv) Closing balance - - - - -

44 Derivatives

44.1 Forward rate agreement (FRA) / Interest rate swap (IRS)

The Company has not entered into any transaction in forward rate agreements and interest rate swaps during the half year ended 30 September 2019 and 30 September 2018 and for the year ended 31
March 2019, 31 March 2018 and 31 March 2017.

44.2 Exchange traded interest rate (IR) derivative

The Company has not entered into any transaction in exchange traded interest rate derivatives during the half year ended 30 September 2019 and 30 September 2018 and for the year ended 31 March
2019, 31 March 2018 and 31 March 2017.

45 Securitisation

45.1 Details of financial assets sold to securitisation / reconstruction Company for asset reconstruction

The Company has not sold any financial assets to Securitisation / Reconstruction Company for asset reconstruction during half year ended 30 September 2019 and 30 September 2018 and for year
ended 31 March 2019, 31 March 2018 and 31 March 2017.

45.2 Details of assignment transactions

As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
(i) Number of accounts 9,464 1,048 5,178 532 725
(ii) Aggregate value ( net of provisions) of accounts assigned* (Rs in millions) 4,746.42 674.05 2920.65 374.62 542.41
(iii) Aggregate consideration (Rs in millions) 5,624.87 1,102.25 3,462.82 729.41 729.41
(iv) Additional consideration realised in respect of accounts transferred in earlier years - - - - -
(v) Aggregate gain / loss over net book value (Rs in millions) - - - - -
* The aggregate value excludes minimum retention ratio (MRR) retained by the Company

45.3 Details of non-performing financial assets purchased / sold

The Company has not purchased / sold any non performing assets during the period ended 30 September 2019 (30 September 2018: Nil, 31 March 2019: Nil, 31 March 2018: Nil, 31 March 2017:
Nil).

46 Exposure

46.1 Exposure to real estate sector (Rs in millions)

As at As at As at As at As at
Category 30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
a) Direct exposure
(i) Residential mortgages
Lending fully secured by mortgages on residential property that is or will be occupied by the 25,126.49 17,394.54 20,378.80 12,890.94 7,880.19
borrower or that is rented;
Individual housing loans up to Rs.1.5 millions (included in above) 19,081.10 13,438.35 15,451.02 10,160.23 6,223.91

(ii) Commercial real estate

Lending secured by mortgages on commercial real estates (office buildings, retail space, 1,202.97 945.02 1,087.94 253.15 48.78
multipurpose commercial premises, multi-family residential buildings, multi-tenanted
commercial premises, industrial or warehouse space, hotels land acquisition, development and
construction, etc.). Exposure would also include non-fund based (NFB) limits
(iii) Investments in Mortgage Backed Securities (MBS) and other securities exposures
a) Residential Nil Nil Nil Nil Nil
b) Commercial real estate Nil Nil Nil Nil Nil
b) Indirect exposure
Fund based and non-fund based exposures on National Housing Bank (NHB) Nil Nil Nil Nil Nil
and Housing Finance Companies (HFCs)

46.2 Exposure to capital market

The Company does not have any exposure to capital market sector as at 30 September 2019, 30 September 2018, 31 March 2019, 31 March 2018 and 31 March 2017.

46.3 Details of financing of parent company products: Nil (30 September 2018: Nil, 31 March 2019: Nil, 31 March 2018: Nil, 31 March 2017: Nil)

46.4 Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the Company

The Company has not exceeded single or group borrower exposure limit during half year ended 30 September 2019 and 30 September 2018 and year ended 31 March 2019, 31 March 2018 and 31
March 2017.

46.5 Unsecured advances

There are no unsecured advances against intangible securities such as rights, licenses, authority as collateral security during half year ended 30 September 2019 and 30 September 2018 and year ended
31 March 2019, 31 March 2018 and 31 March 2017.

47 Miscellaneous

47.1 Disclosure of penalties imposed by NHB and other regulators

During half year ended 30 September 2019 the Company has paid penalty of Rs 0.01 million levied by NHB for non-compliance of provision of paragraph 2(1) (zg) and paragraph 30 of the Housing
Finance Companies (NHB) Directions, 2010 (30 September 2018: Nil, 31 March 2019: Nil, 31 March 2018: Nil and 31 March 2017: Nil).

263
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

47.2 Rating assigned by credit rating agency and migration of rating during the year

As at 30 September 2019
Instrument Rating Rating Comments
agency

ICRA A1+ ICRA Instruments with this rating are considered to have very strong degree of safety regarding timely
Commercial paper payment of financial obligations. Such instruments carry lowest credit risk.

IND A1+ India Ratings Instruments with this rating are considered to have very strong degree of safety regarding timely
Commercial paper & Research payment of financial obligations. Such instruments carry lowest credit risk.

ICRA A+ ICRA Instruments with this rating are considered to have adequate degree of safety regarding timely
Term loans (stable) servicing of financial obligations. Such instruments carry low credit risk.

ICRA A+ ICRA Instruments with this rating are considered to have adequate degree of safety regarding timely
Non-convertible debentures (stable) servicing of financial obligations. Such instruments carry low credit risk.

Term loans Care A+ CARE Instruments with this rating are considered to have adequate degree of safety regarding timely
(stable) servicing of financial obligations. Such instruments carry low credit risk.

As at 30 September 2018
Instrument Rating Rating Comments
agency

Term loans ICRA A+ ICRA Instruments with this rating are considered to have very strong degree of safety regarding timely
(stable) payment of financial obligations. Such instruments carry lowest credit risk.

Commercial paper ICRA A+ ICRA Instruments with this rating are considered to have adequate degree of safety regarding timely
servicing of financial obligations. Such instruments carry low credit risk.

Commercial paper IND A1+ India Ratings Instruments with this rating are considered to have very strong degree of safety regarding timely
& Research payment of financial obligations. Such instruments carry lowest credit risk.

Non-convertible debentures ICRA A+ ICRA Instruments with this rating are considered to have adequate degree of safety regarding timely
(stable) servicing of financial obligations. Such instruments carry low credit risk.

Term loans Care A+ CARE Instruments with this rating are considered to have adequate degree of safety regarding timely
(stable) servicing of financial obligations. Such instruments carry low credit risk.

As at 31 March 2019
Instrument Rating Rating Comments
agency

Commercial paper ICRA A1+ ICRA Instruments with this rating are considered to have very strong degree of safety regarding timely
payment of financial obligations. Such instruments carry lowest credit risk.

Commercial paper IND A1+ India Ratings Instruments with this rating are considered to have very strong degree of safety regarding timely
& Research payment of financial obligations. Such instruments carry lowest credit risk.

Term loans ICRA A+ ICRA Instruments with this rating are considered to have adequate degree of safety regarding timely
(stable) servicing of financial obligations. Such instruments carry low credit risk.

Non-convertible debentures ICRA A+ ICRA Instruments with this rating are considered to have adequate degree of safety regarding timely
servicing of financial obligations. Such instruments carry low credit risk.

Term loans Care A+ CARE Instruments with this rating are considered to have adequate degree of safety regarding timely
servicing of financial obligations. Such instruments carry low credit risk.

As at 31 March 2018
Instrument Rating Rating Comments
agency
Term loans ICRA A+ ICRA Instruments with this rating are considered to have very strong degree of safety regarding timely
(stable) payment of financial obligations. Such instruments carry lowest credit risk.

Commercial paper ICRA A1+ ICRA Instruments with this rating are considered to have adequate degree of safety regarding timely
servicing of financial obligations. Such instruments carry low credit risk.

As at 31 March 2017
Instrument Rating Rating Comments
agency

Term loans CARE A- CARE Instruments with this rating are considered to have adequate degree of safety regarding timely
servicing of financial obligations. Such instruments carry low credit risk.

48 Provisions and commitments

48.1 Break up of 'provisions and contingencies' shown under the head expenditure in statement of profit and loss (Rs in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
1) Provisions for depreciation on investment - - - - -
2) Provision made towards income tax 89.21 66.55 160.53 120.36 48.73
3) Provision towards non performing assets (NPA) 14.17 9.18 25.79 6.94 6.51
4) Provision for standard assets
-Commercial real estate 0.09 1.14 1.59 - -
-Commercial real estate - RH 0.14 4.78 4.69 1.66 -
-Others 15.79 19.20 30.86 12.29 7.87

264
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

48.2 Break up of loan and advances and provisions thereon

(Rs in millions)
Housing loan
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Standard assets
a) Total outstanding amount 23,770.95 17,340.64 19,797.08 12,647.90 7,558.51
b) Provisions made 72.18 57.38 63.79 36.26 23.52
Sub - Standard assets
a) Total outstanding amount 211.52 100.82 133.37 61.64 52.35
b) Provisions made 42.27 18.90 28.75 12.33 8.78
Doubtful assets – Category-I
a) Total outstanding amount 40.61 14.25 23.32 15.92 2.87
b) Provisions made 9.50 2.99 6.54 3.44 0.42
Doubtful assets – Category-II
a) Total outstanding amount 12.25 11.46 11.37 0.63 -
b) Provisions made 3.62 3.11 6.42 0.09 -
Doubtful assets – Category-III
a) Total outstanding amount - - - - 0.08
b) Provisions made - - - - 0.06
Loss assets
a) Total outstanding amount - - - - -
b) Provisions made - - - - -
Total
a) Total outstanding amount 24,035.33 17,467.17 19,965.14 12,726.09 7,613.81
b) Provisions made 127.57 82.38 105.50 52.12 32.78

(Rs in millions)
Non housing loan
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Standard assets
a) Total outstanding amount 2,290.15 869.30 1,499.21 415.51 313.22
b) Provisions made 21.14 7.87 13.50 3.98 2.80
Sub - Standard assets
a) Total outstanding amount 1.80 1.43 0.24 2.49 1.76
b) Provisions made 0.33 0.25 0.06 0.64 0.25
Doubtful assets – Category-I
a) Total outstanding amount 0.43 1.66 2.15 - -
b) Provisions made 0.07 0.56 0.63 - -
Doubtful assets – Category-II
a) Total outstanding amount 1.75 - - - -
b) Provisions made 0.78 - - - -
Doubtful assets – Category-III
a) Total outstanding amount - - - - 0.18
b) Provisions made - - - - 0.02
Loss assets
a) Total outstanding amount - - - - -
b) Provisions made - - - - -
Total
a) Total outstanding amount 2,294.13 872.39 1,501.60 418.00 315.16
b) Provisions made 22.32 8.68 14.19 4.62 3.07

The following table sets forth, for the periods indicated, the details of loans and advances under NHB guidelines
(Rs in millions)
Housing loan
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Standard assets
a) Total outstanding amount 23,839.98 17,419.46 19,850.86 12,691.08 7,300.12
b) Provisions made 70.35 57.22 61.65 44.32 29.36
Sub - Standard assets -
a) Total outstanding amount 199.86 94.87 126.73 58.86 47.70
b) Provisions made 32.33 14.79 23.14 10.14 7.16
Doubtful assets – Category-I -
a) Total outstanding amount 35.12 13.11 20.42 13.63 2.38
b) Provisions made 10.30 3.50 6.92 3.92 0.60
Doubtful assets – Category-II
a) Total outstanding amount 9.86 9.48 10.15 0.48 -
b) Provisions made 4.53 4.30 7.02 0.19 -
Doubtful assets – Category-III -
a) Total outstanding amount - - - - -
b) Provisions made - - - - -
Loss assets -
a) Total outstanding amount - - - - -
b) Provisions made - - - - -
Total
a) Total outstanding amount 24,084.82 17,536.92 20,008.16 12,764.05 7,350.20
b) Provisions made 117.51 79.81 98.73 58.57 37.12

265
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

(Rs in millions)
Non housing loan
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Standard assets
a) Total outstanding amount 2,299.08 875.89 1,504.83 418.23 576.16
b) Provisions made 12.21 5.10 8.53 2.11 2.55
Sub - Standard assets -
a) Total outstanding amount 1.70 1.35 0.24 2.43 3.65
b) Provisions made 0.26 0.20 0.06 0.51 0.55
Doubtful assets – Category-I -
a) Total outstanding amount 0.34 1.50 1.85 - 0.74
b) Provisions made 0.09 0.52 0.61 - 0.69
Doubtful assets – Category-II -
a) Total outstanding amount 1.50 - - - -
b) Provisions made 0.75 - - - -
Doubtful assets – Category-III -
a) Total outstanding amount - - - - -
b) Provisions made - - - - -
Loss assets -
a) Total outstanding amount - - - - -
b) Provisions made - - - - -
Total
a) Total outstanding amount 2,302.62 878.74 1,506.92 420.66 580.55
b) Provisions made 13.31 5.82 9.20 2.62 3.79

48.3 Commitments
(Rs. in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Other commitments - Undisbursed amount of housing and other loans 6,094.63 5,541.79 5,753.01 3,789.35 1,949.30

49 Draw down reserves

During any of the years, the Company has not made any draw down from reserves.

50 Concentration of public deposits, advances, exposures and NPA's

50.1 Concentration of public deposits (for public Deposit taking/holding HFCs)

The Company do not accept any public deposits and hence the same is not applicable.

50.2 Concentration of loans and advances

As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Total loans and advances to twenty largest borrowers (Rs in millions) 850.98 796.39 813.65 257.35 79.58
Percentage of Loans and Advances to twenty largest borrowers to total advances of the HFC 3.23% 4.34% 3.79% 1.96% 1.00%

50.3 Concentration of all exposures (including off - balance sheet exposure)

As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Total exposure to twenty largest borrowers / customers (Rs in millions) 1,205.09 1,425.88 1274.8 681.57 94.2
Percentage of exposures to twenty largest borrowers / customers to total 3.72% 5.97% 4.68% 4.03% 0.95%
exposure of the HFC on borrowers / customers

50.4 Concentration of non performing assets

(Rs in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
Total exposure to top ten NPA accounts* 37.63 18.24 20.12 16.97 16.69

* The exposure is disclosed at customer level.

266
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

50.5 Sectorwise Non performing assets (NPAs)

Sectorwise percentage of NPAs to total advances in As at As at As at As at As at

that sector 30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
A Housing loans :
1 Individuals 1.13% 0.75% 0.87% 0.63% 0.73%
2 Builders/Project loans - - - - -
3 Corporates - - - - -
4 Others - - - - -
B Non housing loans :
1 Individuals 0.19% 0.41% 0.18% 0.62% 0.73%
2 Builders/Project loans - - - - -
3 Corporates - - - - -
4 Others - - - - -

50.6 Movement of Non performing assets (NPAs)

(Rs in millions)
As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
(I) Net NPAs to net advances (%) 0.80% 0.57% 0.60% 0.49% 0.61%
(II) Movement of NPAs (Gross)
a) Opening balance 170.45 80.68 80.68 57.24 20.77
b) Additions during the year (net) 151.76 73.84 133.64 66.15 53.91
c) Reductions during the year 53.85 24.90 43.87 42.71 17.44
d) Closing balance 268.36 129.62 170.45 80.68 57.24
(III) Movement of Net NPAs
a) Opening balance 128.05 64.18 64.18 47.71 17.58
b) Additions during the year (net) 121.75 59.55 98.86 51.98 44.91
c) Reductions during the year 38.01 19.92 34.99 35.51 14.78
d) Closing balance 211.79 103.81 128.05 64.18 47.71
(IV) Movement of provisions for NPAs ( excluding provisions on standard assets)
a) Opening balance 42.40 16.50 16.50 9.53 3.19
b) Provision made during the year (net) 30.01 14.29 34.78 14.17 9.00
c) Reductions during the year 15.84 4.98 8.88 7.20 2.66
d) Closing balance 56.57 25.81 42.40 16.50 9.53
-
51 Overseas assets and off-balance sheet special purpose vehicle (SPVs) sponsored

The Company does not own any assets overseas during any of the years.
There are no off-balance sheet SPVs sponsored during any of the years.

52 Disclosure of customer complaints

As at As at As at As at As at
30 September 2019 30 September 2018 31 March 2019 31 March 2018 31 March 2017
a) No. of complaints pending at the beginning of the year - - - - -
b) No. of complaints received during the year 62 17 38 46 29
c) No. of complaints redressed during the year 61 17 38 46 29
d) No. of complaints pending at the end of the year 1 - - - -

53 Asset liability management (Maturity pattern of certain items of assets and liabilities)

(Rs. in millions)
As at 30 September 2019 As at 30 September 2018
Bank Bank Loans and
Loans and advances Investments Investments
borrowings borrowings advances
Upto one month 399.03 487.02 3,523.68 320.16 309.38 1,000.09
Over 1 month and upto 2 months 158.37 477.92 400.00 264.65 304.13 -
Over 2 months and upto 3 months 366.96 468.98 470.00 43.66 298.97 -
Over 3 months and upto 6 months 1,332.28 1,355.01 - 766.95 866.83 -
Over 6 months and upto 1 year 2,611.30 2,490.42 - 1,453.28 1,605.68 -
Over 1 year and upto 3 years 9,516.48 7,566.45 - 5,822.35 5,001.37 -
Over 3 years and upto 5 years 6,270.87 4,894.25 - 4,629.52 3,354.09 -
Over 5 years and upto 7 years 1,731.09 3,095.64 - 1,515.94 2,217.03 -
Over 7 years and upto 10 years 626.99 2,668.41 - 670.34 2,008.98 -
Over 10 years - 2,752.41 - 2.51 2,363.56 -
Total 23,013.37 26,256.51 4,393.68 15,489.36 18,330.02 1,000.09

267
 Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 6 - Notes to restated financial information

(Rs. in millions)
As at 31 March 2019 As at 31 March 2018
Bank Bank Loans and
Loans and advances Investments Investments
borrowings borrowings advances
Upto one month 153.29 440.10 1,027.15 79.00 236.68 -
Over 1 month and upto 2 months 44.12 431.00 - 9.40 232.39 -
Over 2 months and upto 3 months 231.62 422.09 - 34.40 228.18 -
Over 3 months and upto 6 months 1,046.46 1,214.63 - 491.05 660.04 -
Over 6 months and upto 1 year 1,727.47 2,212.36 - 909.12 1,216.26 -
Over 1 year and upto 3 years 7,424.39 6,532.30 - 4,949.57 3,725.93 -
Over 3 years and upto 5 years 5,695.56 4,011.24 - 2,440.80 2,426.86 -
Over 5 years and upto 7 years 1,953.68 2,415.44 - 703.43 1,558.83 -
Over 7 years and upto 10 years 1,021.41 1,958.49 - 598.50 1,362.23 -
Over 10 years 0.82 1,769.51 - 4.21 1,476.12 -
Total 19,298.82 21,407.16 1,027.15 10,219.48 13,123.52 -

(Rs. in millions)
As at 31 March 2017
Bank Loans and
Investments
borrowings advances
Upto one month 30.00 113.62 590.00
Over 1 month and upto 2 months - 111.98 -
Over 2 months and upto 3 months 66.90 110.35 -
Over 3 months and upto 6 months 386.03 321.56 -
Over 6 months and upto 1 year 608.05 602.40 -
Over 1 year and upto 3 years 2,856.35 1,945.26 -
Over 3 years and upto 5 years 1,996.01 1,388.40 -
Over 5 years and upto 7 years 480.61 970.54 -
Over 7 years and upto 10 years 139.59 950.17 -
Over 10 years 7.60 1,375.56 -
Total 6,571.14 7,889.84 590.00

*Classification of assets and liabilities under different maturity buckets is based on the same estimates and assumptions as used by the Company for compiling the return submitted to NHB.
Note: The Company does not have market borrowing, foreign currency liabilities, deposits, foreign currency assets and investments as at 30 September 2019, 30 September 2018, 31 March 2019, 31
March 2018 and 31 March 2017.

54 Provident fund
There has been a supreme court (SC) judgement dated 28 February 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident
fund under the Employment Provident Fund Act. There are interpretative aspects related to the judgement including the effective date of application. The Company will continue to assess any further
developments in this matter for their implications on financial statements, if any.

55 There were no instances of fraud reported during the period ended 30 September 2019 (30 September 2018: Nil, 31 March 2019: Rs. 2.32 million, 31 March 2018: Nil, 31 March 2017: Nil).

56 Figures for the previous year have been regrouped/ re-arranged wherever considered necessary to conform to the figures presented in the current period.

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors
Chartered Accountants
Firm registration no.: 001076N/N500013

Khushroo B. Panthaky Manoj Viswanathan Rajagopalan Santhanam

Partner Director and Chief Executive Officer Director
Membership No.: 042423 DIN No : 01741612 Din No : 00025669
Place: Mumbai Place: Mumbai Place: Mumbai
Date: 18 November 2019 Date: 18 November 2019 Date: 18 November 2019

Nutan Gaba Patwari Shreyans Bachhawat

Chief Financial Officer Company Secretary
Place: Mumbai Place: Mumbai
Date: 18 November 2019 Date: 18 November 2019

268
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 7 - Restated statement of accounting ratios

Particulars 30 September 30 September 31 March 2019 31 March 2018 31 March 2017

2019 2018

A Net worth (Rs. in millions) 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58

B Net profit after tax, as restated (Rs. in millions) 367.41 114.56 452.04 159.96 66.77
C Adjusted profit 367.41 114.56 452.04 159.96 66.77

Weighted average number of equity shares outstanding during the year

D For basic earnings per share
Weighted average number of equity shares outstanding during the year (before stock split) 13,774,046 10,460,175 11,556,025 10,320,796 3,777,911
Adjustment for stock split (1:5) 55,096,184 41,840,700 46,224,100 41,283,184 15,111,644
Weighted average number of equity shares outstanding during the year (after stock split) 68,870,230 52,300,875 57,780,125 51,603,980 18,889,555

E For diluted earnings per share

Weighted average number of equity shares outstanding during the year (before stock split) 13,774,046 10,460,175 11,556,025 10,320,796 3,777,911
Additional equity shares considered for dilutive EPS for ESOPs 321,553 265,511 256,570 268,435 578,125
Weighted average number of equity shares for Diluted earnings per share(before stock split) 14,095,599 10,725,686 11,812,595 10,589,231 4,356,036
Adjustment for stock split (1:5) 56,382,397 42,902,744 47,250,380 42,356,924 17,424,144
Weighted average number of equity shares for Diluted earnings per share (after stock split) 70,477,996 53,628,430 59,062,975 52,946,155 21,780,180

Number of shares outstanding at the end of the period

F Number of shares outstanding at the end of the period (before stock split) 15,659,543 12,630,748 12,667,898 10,323,331 10,320,531
Adjustment for stock split (1:5) 62,638,172 50,522,992 50,671,592 41,293,324 41,282,124
Number of shares outstanding at the end of the period (after stock split) 78,297,715 63,153,740 63,339,490 51,616,655 51,602,655

G Number of shares outstanding at the end of the period (before stock split) 15,659,543 12,630,748 12,667,898 10,323,331 10,320,531
Diluted effect of outstanding stock options 321,553 265,511 256,570 268,435 578,125
Dilutive equity shares (before stock split) 15,981,096 12,896,259 12,924,468 10,591,766 10,898,656
Adjustment for stock split (1:5) 63,924,385 51,585,036 51,697,872 42,367,064 43,594,624
Dilutive equity shares (after stock split) 79,905,481 64,481,295 64,622,340 52,958,830 54,493,280

H Restated basic earnings per share (Rs.)

- before stock split (B/D) 26.67 10.95 39.12 15.50 17.67
- after stock split (B/D) 5.33 2.19 7.82 3.10 3.53

I Restated diluted earnings per share (Rs.)

- before stock split (C/E) 26.07 10.68 38.27 15.11 15.33
- after stock split (C/E) 5.21 2.14 7.65 3.02 3.07

J Return on net worth (%) (B/A) 4.13% 2.34% 8.64% 4.92% 2.18%

K Net assets value per share

Based on existing outstanding number of shares (A/F)
- before stock split 567.90 386.82 412.97 315.03 296.84
- after stock split 113.58 77.36 82.59 63.01 59.37
Based on dilutive number of shares (A/G)
- before stock split 556.47 378.85 404.77 307.05 281.10
- after stock split 111.29 75.77 80.95 61.41 56.22

L Earnings before tax (Rs. in millions) 502.85 174.41 651.95 242.70 103.56
Add: Depreciation and amortisation (Rs. in millions) 32.36 19.42 45.77 24.63 15.55
Add: Finance Cost (Rs. in millions) 918.37 529.42 1,265.44 659.64 540.44
Earnings before interest, tax , depreciation and amortisation (EBITDA) (Rs. in millions) 1,453.58 723.25 1,963.16 926.97 659.55

L Face value (Rs) 10.00 10.00 10.00 10.00 10.00

Notes:
1. The ratio has been computed as below:

Net profit after tax, as restated

Basic earnings per share (Rs) =
Weighted average number of equity shares outstanding during the year

Net profit after tax, as restated

Diluted earnings per share (Rs) =
Weighted average number of potential equity shares outstanding during the year

Net profit after tax, as restated

Return on net worth (%) =
Net worth as restated as at year end

Net worth, as restated

Net asset value per share (Rs) =
Number of equity shares outstanding as at year end

269
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 7 - Restated statement of accounting ratios

2. Earning per shares (EPS) calculation is in accordance with the notified Indian Accounting Standard (Ind AS) 33 'Earnings per share' prescribed by the Companies (Indian
Accounting Standards) Rules, 2015.

3. The amounts disclosed above are based on the Restated Financial Information of the Company.

4. Net worth means the aggregate value of the paid up share capital of the Company and all reserves created out of profits and securities premium account as per Restated Statement
of Assets and Liabilities of the Company.

5. EBIDTA stands for earnings before interest, taxes, depreciation and amortisation.

6. The shareholders vide a special resolution have approved sub-division of equity shares of the Company in the ratio of five shares of face value of Rs. 2 each for each existing equity
share of the face value of Rs. 10 each. The requisite approvals for modification of the memorandum and article of association of the Company had been accorded by the shareholders
on 30 October 2019 in extraordinary general meeting (EGM).

(This page has been intentionally left blank)

270
Home First Finance Company India Limited
(Formerly known as Home First Finance Company India Private Limited)

Annexure 8 - Restated Statement of Capitalisation

(Rs. in millions)
Pre - Issue
Particulars Post - Issue*
(as at 30 September 2019)

Total Borrowings 22,956.31

Total Equity
Share capital 156.60 -
Other equity 8,736.43 -
Total shareholders' fund (net worth) 8,893.03 -

Ratio : Total borrowings/total equity 2.58 -

Notes:
1. The amounts disclosed above are based on the restated statement of assets and liabilities as per annexure 1.
2. The above statement should be read with the statement of notes to the restated financial information in Annexure 5
* These amounts (as adjusted for issue) are not determinable at this stage pending the completion of the book building process and hence
have not been furnished.

(This space has been intentionally left blank)

271
 OTHER FINANCIAL INFORMATION

The audited standalone financial statements of our Company as at and for the year ended March 31, 2019, March 31, 2018, and
March 31, 2017 and the reports thereon dated May 13, 2019, May 29, 2018 and May 26, 2017, respectively (“Standalone
Financial Statements”) are available at https://homefirstindia.com. Our Company is providing a link to this website solely to
comply with the requirements specified in the SEBI ICDR Regulations. The Standalone Financial Statements do not constitute,
(i) a part of this Draft Red Herring Prospectus; or (ii) a prospectus, a statement in lieu of a prospectus, an offering circular, an
offering memorandum, an advertisement, an offer or a solicitation of any offer or an offer document to purchase or sell any
securities under the Companies Act, the SEBI ICDR Regulations, or any other applicable law in India or elsewhere in the world.
The Standalone Financial Statements should not be considered as part of information that any investor should consider to
subscribe for or purchase any securities of our Company, or any entity in which it or its shareholders have significant influence
(collectively, the “Group”) and should not be relied upon or used as a basis for any investment decision. None of the Group or
any of its advisors, nor any Book Running Lead Managers or the Selling Shareholders, nor any of their respective employees,
directors, affiliates, agents or representatives accept any liability whatsoever for any loss, direct or indirect, arising from any
information presented or contained in the Standalone Financial Statements, or the opinions expressed therein.

For details of accounting ratios, see “Restated Financial Information – Annexure 7: Restated Statement of Accounting Ratios”
on page 269.

272
 FINANCIAL INDEBTEDNESS

Our Company is engaged in the business of providing affordable housing loans and accordingly, have availed loans in the
ordinary course of their business for the purposes of onward lending.

Pursuant to a resolution passed by our shareholders in their AGM held on June 12, 2019, our Board is authorised to borrow from
time to time all such sums of money together with the monies already borrowed by our Company (apart from the temporary
loans obtained or to be obtained from our Company’s bankers in the ordinary course of business), which may exceed the
aggregate of the paid-up capital and free reserves of our Company (reserves not set apart for any specific purposes), provided
that the total amount up to which monies may be borrowed by our Board and which shall remain outstanding at any given point
of time shall not exceed ₹ 50,000 million.

The following table sets forth details of the aggregate outstanding borrowings of our Company as of September 30, 2019:

Category of borrowing Sanctioned amount (in ₹ Outstanding amount (in ₹

million) million)
Term Loans from Banks and Other Parties 21,910.00 17,387.45
Working Capital Facilities 500.00 100.00
Loans repayable on demand - Cash Credit/Overdraft 295.00 0.05
Facilities
Term Loans from NHB 6,550.00 5,468.81
Total 29,255.00 22,956.31

Principal terms of the borrowings availed by our Company

The details provided below are indicative and there may be additional terms, conditions and requirements under the various
borrowing arrangements entered into by us.

1. Interest: The interest rate for term loans is typically from 8% to 11% per annum and for NHB sanctioned refinance is
typically 4% to 10%, which is linked to the marginal cost of funds based lending rate of the respective lenders. In terms
of the cash credit facilities availed of by us, the interest rate is typically on a fixed or floating rate basis. Further, in
terms of the refinance assistance availed from NHB, the refinance assistance is provided either on a fixed or floating
interest rate depending upon NHB’s lending rate prevailing for the respective refinance schemes on the date of each
disbursement.

2. Security: In terms of our borrowings where security needs to be created, we are typically required to create security by
way of first hypothecation or charge on our Company’s book debts and receivables. There may be additional
requirements for creation of security under the various borrowing arrangements entered into by us.

3. Prepayment: We have the option to prepay the lenders, subject to payment of prepayment charges at such rate as may
be stipulated by the lenders which typically ranges from 1% to 2%. Further, the loans can be prepaid without any
prepayment charge subject to fulfilment of conditions including prior notice to the lender.

4. Re-payment: The cash credit facilities are typically repayable on demand. The repayment period for most term loans
and NHB sanctioned refinance typically ranges from 3 years to 6 years and 7 years to 15 years, respectively. We are
required to repay in such instalments as per the repayment schedule stipulated in the relevant loan documentation.

5. Key covenants:

In terms of our facility agreements and sanction letters, we are required to comply with various restrictive covenants
and conditions as follows:

(a) take the prior consent of lenders to effect any adverse changes or alter its capital structure;

(b) take the prior consent of lenders to formulate or effect any scheme of amalgamation or merger or
reconstruction;

(c) take the prior consent of lenders to approach capital market for mobilizing additional resources either in the
form of debts or equity;

(d) take the prior consent of lenders to undertake any activity other than the activities indicated in the objects
clause of the memorandum of association of our Company;

(e) take the prior consent of lenders for any transfer of the controlling interest or the management set up;

273
 (f) provide the lenders copies of structural liquidity statements submitted to NHB;

(g) take the prior consent of lenders to undertake guarantee obligations on behalf of any other person;

(h) provide 60 days’ prior notice to the lenders for declaration of dividend for any year except out of profits relating
to the year after making all due and necessary provisions; and

(i) take the prior consent of lenders to make any amendments to the memorandum of association and articles of
association.

Further, some of our Shareholders (including our Promoters) may be required to take prior consent from respective
lenders for transferring all or a part of their shareholding in the Offer.

6. Events of Default:

In terms of our facility agreements, sanction letters and refinance documents, the following, among others, constitute
events of default:

(a) failure and inability to pay amounts on the due date by our Company;

(b) failure in performance of any covenant, condition or agreement on the part of our Company;

(c) failure in compliance with RBI/NHB norms at any time during the currency of the loan;

(d) misrepresentation/providing incorrect or misleading information provided by our Company;

(e) cessation or change in business;

(f) change in control of our Company or of any other person who controls our Company without the approval of
the lenders;

(g) the occurrence of any cross-default;

(h) upon occurrence of any event that may have a material adverse effect; and

(i) downgrading in our credit rating below the specified limit or deterioration in the credit worthiness of our
Company in the sole opinion of lenders.

7. Consequences of occurrence of events of default:

In terms of our facility agreements and sanction letters, the following, among others, are the consequences of occurrence
of events of default, our lenders may:

(a) enforce their security over the hypothecated / mortgaged assets;

(b) appoint nominee directors;

(c) review the management set up or organisation of our Company and may require our Company to restructure
inter alia the formation of management;

(d) convert the debt into equity in conformity with RBI guidelines;

(e) declare the outstanding amount to be due and payable forthwith; and

(f) declare our Company, the Promoters and Directors as non-co-operative borrower and report such classification
to the RBI and/or any other agency authorised in this behalf by the RBI.

This is an indicative list and there may be additional terms that may require the consent of the relevant lender or the trustee that
may amount to an event of default under the various borrowing arrangements entered into by us.

274
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

You should read the following discussion in conjunction with our restated financial statements as of and for the six months ended
September 30, 2019 and 2018 and the financial years ended March 31, 2019, 2018 and 2017, including the related annexures.
These restated financial statements are prepared in accordance with Ind AS and restated as per Chapter III of the Companies
Act and the SEBI ICDR Regulations.

Ind AS differs in certain material respects with IFRS and U.S. GAAP. See “Risk Factors – External Risk Factors – Significant
differences exist between Ind AS and other accounting principles, such as US GAAP and IFRS, which may be material to
investors' assessments of our financial condition” on page 40.

Our financial year ends on March 31 of each year. Accordingly, all references to a particular financial year are to the 12-month
period ended March 31 of that year.

This discussion contains forward-looking statements that involve risks and uncertainties and reflects our current view with
respect to future events and financial performance. Actual results may differ from those anticipated in these forward-looking
statements as a result of factors such as those set forth under “Forward-looking Statements” and “Risk Factors” on pages 16
and 22, respectively.

Overview

We are a technology driven affordable housing finance company that targets first time home buyers in low and middle-income
groups. We primarily offer customers housing loans for the purchase or construction of homes, which comprised 91.5% of our
Gross Loan Assets, as of September 30, 2019. Our Gross Loan Assets have grown at a CAGR of 69.8% between the financial
year 2017 and the financial year 2019 and increased from ₹ 8,473.16 million as of March 31, 2017 to ₹ 31,133.76 million as of
September 30, 2019.

We serve salaried and self-employed customers. Salaried customers account for 72.6% of our Gross Loan Assets and self-
employed customers account for 24.6% of Gross Loan Assets. We serviced 37,086 active loan accounts, as of September 30,
2019. We also offer other types of loans comprising loans against property, developer finance loans and loans for purchase of
commercial property, which comprised 4.7%, 2.8% and 1.1% of our Gross Loan Assets, as of September 30, 2019, respectively.
As of the same date, 35.9% of our Gross Loan Assets were from customers who were new to credit. The average ticket size of
our housing loans was ₹ 1.02 million, with an average loan-to-value on Gross Loan Assets of 58.4%, as of September 30, 2019.
As of September 30, 2019 and March 31, 2019, our Stage 3 Loan Assets expressed as a percentage of our Gross Loan Assets
were 0.9% and 0.7%, respectively.

As of September 30, 2019, we had a network of 65 branches covering over 60 districts in 11 states and a union territory in India,
with a significant presence in urbanized regions in the states of Gujarat, Maharashtra, Karnataka and Tamil Nadu. We have
increased the scale of our operations and grown our branches by adopting a strategy of contiguous expansion across regions and
have strategically expanded to geographies where there is substantial demand for housing finance. According to the CRISIL
Report, the 11 states and union territory in which we are present accounted for approximately 79% of the affordable housing
finance market in India during the financial year 2019. We utilize a diverse range of lead sourcing channels such as connectors,
architects, contractors, affordable housing developers, in addition to conducting loan camps and micro marketing activities, and
utilizing employee and customer referrals and branch walk-in customers.

We have leveraged technology in various facets of our business such as processing loan applications, managing customer
experience and risk management. We have developed a paperless process to onboard customers efficiently and our well-trained
front-end teams appraise customers by conducting home and workplace visits and ensure minimal disruption to a customer’s
daily routine. We offer mobility solutions through dedicated mobile applications for our customers to enable quick and
transparent loan related transactions. We have an integrated customer relationship management and loan management system
set up on a leading cloud based customer relationship platform providing us with a holistic view of all our customers. We utilize
proprietary machine learning customer scoring models to assist us with our centralized credit underwriting process, which has
led to consistent and accurate credit evaluation with quick turn around times. During the six months ended September 30, 2019
and the last three financial years, we invested ₹ 146.65 million in our information technology systems (comprising software
license fees, technology fees and other intangible assets).

As of September 30, 2019, our Total Borrowings were ₹ 22,956.31 million and we did not have any outstanding debt securities.
We typically obtain long-term funding from a variety of sources including private and public sector banks, the NHB and through
assignment transactions. According to the CRISIL Report, we had the highest share of NHB refinance (37%) among our peers
in our borrowing mix as of March 31, 2019. We have improved our credit ratings from ‘CARE A-’ as of March 31, 2017 to
‘CARE A+’ as of September 30, 2019 and also currently have an ‘A+ (stable) rating from ICRA Limited.

275
Our Company was founded by Jaithirth Rao, P. S. Jayakumar and Manoj Viswanathan and we commenced our operations in
August 2010. We are a company managed by professionals and our Promoters are True North Fund V LLP and Aether (Mauritius)
Limited. Further, Bessemer has invested in our Company. We have and expect to continue to benefit from strong capital
sponsorship and professional expertise of our marquee shareholders. In addition to assisting us with capital raising, our
shareholders have assisted us in implementing strong corporate governance, which we believe have been critical to the growth
of our operations.

The following table sets forth certain key financial and operational information, as of and for the periods indicated:

Metric As of and for the six months ended As of and for the financial year ended
September 30, March 31,
2019 2018 2019 2018 2017
Gross Loan Assets 1 (₹ million) 31,133.76 19,089.71 24,435.74 13,559.32 8,473.16
Growth rate of Gross Loan Assets2 (%) 63.1 - 80.2 60.0 54.7
Disbursements (₹ million) 8,857.53 7,168.35 15,728.21 7,455.29 4,243.57
Growth rate of Disbursements3 (%) 23.6 - 111.0 75.7 53.5
Total Income (₹ million) 1,937.73 1,070.33 2,709.21 1,342.37 915.78
Profit after Tax (₹ million) 367.41 114.56 452.04 159.96 66.77
Net Worth4 (₹ million) 8,893.03 4,885.77 5,231.40 3,252.15 3,063.58
Stage 3 Loan Assets5 / Gross Loan Assets 0.9 0.7 0.7 0.6 0.7
(%)
Stage 3 Loan Assets (Net)6 / Net Loan 0.7 0.5 0.5 0.5 0.6
Assets 7 (%)
Average Yield on Loans - Principal 6.5 6.2 13.2 12.1 13.1
Outstanding8 (%)
Average Cost of Borrowing (excluding 4.3 4.0 8.5 7.7 9.8
assignments)9 (%)
Net Interest Margin10 (%) (Net Interest 2.2 2.6 5.4 5.3 4.0
Income / Average total Assets11)
Operating Expenses12 / Average Total 1.7 1.9 3.8 3.6 3.3
Assets (%)
Cost to Income Ratio13 (Operating Expenses 47.5 60.4 50.3 61.0 68.4
/ Net Total Income)
CRAR (%) 47.6 43.8 38.5 43.0 68.5
Number of Branches 65 54 60 42 36
Active Loan Accounts 37,086 21,689 29,372 15,723 9,747
Figures disclosed in the table above, except Total Income and Profit after Tax are not measures of financial position, operating performance
or liquidity defined by Ind AS or generally accepted accounting principles and may not be comparable to similarly titled measures presented
by other companies.
1 Gross Loan Assets represents the aggregate of current principal outstanding and overdue principal outstanding, if any, for all loan assets
under management which includes loan assets held by our Company as of the last day of the relevant year or period as well as loan assets
which have been transferred by our Company by way of assignment and are outstanding as of the last day of the relevant year or period.
2 Growth Rate of Gross Loan Assets represents percentage growth in Gross Loan Assets as of the last day of the relevant year or period
over Gross Loan Assets as of the last day of corresponding immediately prior period.
3 Growth Rate of Disbursements represents the percentage growth in disbursements for the relevant year or period over disbursements of
the corresponding immediately prior period.
4 Net Worth is the aggregate of the paid-up share capital, reserves and surplus (excluding revaluation reserve) as reduced by the aggregate
of miscellaneous expenditure (to the extent not adjusted or written off) and the debit balance of the profit and loss account.
5 Stage 3 Loan Assets represents closing balance of loan assets overdue for 90 days or more as of the last day of the relevant year or period.
6 Stage 3 Loan Assets (Net) represents Stage 3 loan assets less Impairment loss allowance on Stage 3 loan assets as at the end of the
relevant year or period as per our restated financial statements.
7 Net Loan Assets represents Gross Loan Assets less impairment loss allowance excluding impairment loss allowance on undisbursed
commitments as of the last day of the relevant year or period.
8 Average Yield on Loans - Principal outstanding represents (Interest on term loans/ Average loans – principal outstanding) for the relevant
year or period as per restated financial statements. Average loans – principal outstanding represents the simple average of loans –
principal outstanding as of the last day of the relevant year or period and loans – principal outstanding as of the last day of the immediately
prior year.
9 Average Cost of Borrowing excluding assignments represents (Interest on borrowings and Interest on debt securities)/ Average
borrowings (including debt securities) for the relevant year or period as per our restated financial statements. Average (borrowings
including debt securities) represents the simple average borrowings including debt securities as of the last day of the relevant year or
period and borrowings including debt securities as of the last day of the immediately prior year.
10 Net Interest Margin represents the Net Interest Income for the relevant year or period divided by Average Total Assets as of the last day
of such year or period. Net Interest Income represents interest income on term loans minus Interest on borrowings and Interest on debt
securities for the relevant year or period as per our restated financial statements. Interest Income represents Interest Income on loans.

276
11 Average Total Assets represents the simple average of Total Assets outstanding as of the last day of the relevant year or period and Total
Assets outstanding as of the last day of the immediately prior year or corresponding immediately prior period as shown in our restated
financial statements.
12 Operating Expenses is the sum of employee benefits expenses, depreciation and amortisation, interest on lease liability, bank charges and
others and other expenses for the relevant year or period as per our restated financial statements.
13 Cost to Income ratio represents Operating Expenses as a percentage of net Total Income (i.e., Total Income less interest on borrowings
and interest on debt securities).

Significant Factors Affecting our Results of Operations

Our results of operations and financial condition are affected by a number of important factors including:

Availability of Cost Effective Funding Sources

The availability of cost-effective funding sources affects our results of operations. We have historically secured funding from
private and public sector banks, the NHB and through assignment transactions. As of September 30, 2019 and March 31, 2019,
2018 and 2017, our Total Borrowings were ₹ 22,956.31 million, ₹ 19,256.41 million, ₹ 10,198.76 million and ₹ 6,630.45 million,
respectively, and our average cost of borrowings (excluding assignments) was 4.3%, 8.5% 7.7% and 9.8%, respectively. Our
ability to continue to meet customer demand for new loans will depend primarily on our ability to borrow from various external
sources on suitable terms and in a timely manner. Our funding sources are varied, as we believe that a diversified debt profile
ensures that we are not overly dependent on any one type or source for funding. The availability for funding as well as the overall
cost of funds depends on many external factors, including developments in the Indian economy and its credit markets and, in
particular, interest rate movements and the existence of adequate liquidity in the debt markets. Internal factors that affect our
cost of funds include our credit ratings and available credit limits. See “ - Credit Ratings” on page 295 as well as “Risk Factors
– Internal Risk Factors - Any disruption in our sources of funding could have an adverse effect on our business, results of
operations and financial condition” on page 22.

Volatility in Borrowing and Lending Rates

Our results of operations depend substantially on our net interest spread, which is the difference between the interest rates on our
interest-earning assets and interest-bearing liabilities. Any change in interest rates would affect our finance costs and our interest
income. We offer customers housing loans at variable interest rates and we determine our reference rate from time to time based
fon market conditions. Our interest income constitutes the largest component of our revenue from operations. For the six months
ended September 30, 2019 and the financial years 2019, 2018 and 2017, interest income represented 87.2%, 89.2%, 98.4% and
96.1% of our revenue from operations, respectively.

Our finance costs, which primarily include interest on borrowings represented 64.0%, 61.5% 60.0% and 66.5% of our total
expenses for the six months ended September 30, 2019 and the financial years 2019, 2018 and 2017, respectively. Interest rates
are sensitive to many factors beyond our control, including the monetary policies of the RBI, deregulation of the financial sector
in India and domestic and international economic conditions. Moreover, interest rates in India are typically correlated with the
inflation rate, as the inflation rate increases, the RBI has historically sought to raise interest rates. Our results of operations are
thus affected by changes in interest rates and our ability to re-price our interest-earning assets accordingly. See “Risk Factors –
Internal Risk Factors - We are affected by volatility in interest rates for both our lending and treasury operations, which could
cause our net interest income to vary and consequently affect our profitability” on page 23 and “- Quantitative and Qualitative
Disclosures about Market Risks - Interest Rate Risks” on page 295.

Credit Quality and Provisioning

Our ability to manage the credit quality of our loan portfolio, which we measure in part through non-performing assets, is a key
driver of our results of operations. We are required to classify the loans we provide into performing and non-performing assets
in accordance with the NHB Directions. Defaults by our customers for a period of more than 90 days result in such loans being
classified as “non-performing”. Non-performing assets are also classified into sub-standard, doubtful and loss assets and
provisions are made based on criteria stipulated by the NHB Directions. We rely on our credit assessment process to maintain a
high-quality loan portfolio and we make provisions over and above the provisions stated in the NHB Directions against all non-
performing assets, if in the opinion of our management such provisions are necessary. We consider a financial instrument as
defaulted and considered it as Stage 3 (credit-impaired) for expected credit loss calculations in all cases, when the asset becomes
more than 90 days past due on its contractual payments. For further details, see “- Statement of Certain Significant Accounting
Policies - Financial Instruments - Impairment of financial assets” below.

In addition, on account of our recent growth, a significant portion of our loan portfolio is relatively new and was disbursed during
the last 36 months. We believe that the risk of delinquency in home loans typically emerges 18 to 36 months from disbursement.
As the number of our loans that become non-performing assets increases, the credit quality of our loan portfolio decreases.

The following table illustrates our non-performing assets for the periods indicated:

277
 Metric As of
September 30, 2019 March 31, 2019 March 31, 2018 March 31, 2017
Stage 3 Loan Assets (₹ in million) 268.36 170.45 80.68 57.24
Stage 3 Loan Assets / Gross Loan Assets (%) 0.9% 0.7% 0.6% 0.7%

Stage 3 Loan Assets (Net) (₹ in million) 211.79 128.05 64.18 47.71

Stage 3 Loan Assets (Net) / Net loan assets (%) 0.7% 0.5% 0.5% 0.6%

Further, since the underlying security on our loans is a mortgage over the customers’ property, our loan portfolio is exposed to
events affecting the real estate sector. A decline in real estate prices, and in turn in the value of the collateral could affect our
ability to recover amounts owed to us upon foreclosure. See “Risk Factors – Internal Risk Factors - Our inability to recover the
full value of collateral, or amounts outstanding under defaulted loans in a timely manner, or at all, could adversely affect our
business, results of operations and financial condition” on page 25.

Investment in Technology

We are a technology driven company and have built a scalable operating model, which enables us to expand our operations and
drive growth in revenue with lower incremental costs. We have established a differentiated technology framework with
customized systems and tools, enhancing convenience for our customers as well as increasing operational efficiency. During the
six months ended September 30, 2019 and the last three financial years, we invested ₹ 146.65 million in our information
technology systems (comprising software license fees, technology fees and other intangible assets). Our information technology
systems allow us to leverage economies of scale to increase productivity and reduce turn around times and transaction costs. Our
ability to grow our customer base, improve customer experience and increase our revenues will depend, in part, on our ability to
leverage technology. We plan to continue to make significant investments in technology to create an end-to-end digital process
for housing loans, upgrade and automate our existing systems and enhance our mobility solutions.

Competition in Our Industry

The Indian housing finance industry is characterized by high levels of competition. The factors on which we compete include
loan approval rates, interest rates charges for loans, turn around times and customer relationships. We compete with several
HFCs and NBFCs in the regions in which we operate and many of our competitors may have better access to, and lower costs
of, funding than we do. In certain geographies, our competitors may also have better brand recognition and a larger customer
base than ours. If we are unable to access funds at an effective cost that is comparable to, or lower than our competitors, or
expand our reach and build our brand, we may lose existing as well as potential customers to competition, resulting in a decline
in our market share.

Competition is also increasing as a result of interest rate deregulation and other liberalization measures. Demand for housing
finance has increased as a result of a reduction in interest rates, higher incomes and increased financial incentives for customers.
Further, technological advances and internet based lending platforms have increased accessibility to housing finance products
and services for customers and resulted in an increase in competition. With relatively lesser barriers to entry in the housing
finance sector, competition is likely to intensify further as a result of regulatory changes and liberalization.

General Economic Conditions in India

Our results of operations are affected by the general economic conditions prevalent in India. Overall economic growth and an
increase in GDP are likely to result in an increase in incomes and spending on housing in India, which may lead to an increase
in demand for housing loans. Conversely, a slowdown in the Indian economy could adversely affect our business and our
borrowers, especially if such a slowdown were to be continued and prolonged. Several factors beyond our control, such as
developments in the Indian economy and domestic employment levels, conditions in the world economy, fluctuations in interest
rates, movements in global commodity markets and exchange rates could have either a positive or an adverse impact on the
quality of our Gross Loan Assets. The demand for housing loans is also affected by real estate prices and developments in the
real estate sector in each of the regions in which we operate. Typically, higher real estate prices are likely to result in lower
affordability for buyers. Any trends or events, which have a significant impact on the economic situation in India could have an
adverse impact on our business.

Government Policy and Regulations

Our results of operations and continued growth depend on government policies and regulations, including incentives provided
to the affordable housing industry such as the Pradhan Mantri Awas Yojana. We are affected by a number of regulations
promulgated by the RBI and NHB that regulate, among other things, limits on borrowings, investments and interest rates, asset
classification and provisioning for standard and non-standard assets, norms for creation of special reserves as well as minimum
capital adequacy requirements. For example, the NHB Directions currently permits HFCs to borrow up to 14 times their net
owned funds (“NOF”) until March 31, 2020 and after which this limit shall be further reduced to 13 times of their NOF until

278
March 31, 2021 and subsequently to 12 times of their NOF until March 31, 2022. As of September 30, 2019, we had Total
Borrowings of ₹ 22,956.31 million, which was 2.6 times our NOF of ₹ 8,893.03 million. Further, under Ind AS, we compute
impairment allowance based on the expected credit loss model. For further details, see “- Statement of Certain Significant
Accounting Policies - Financial Instruments - Impairment of financial assets” below.

The regulations applicable to us also address issues such as our conduct with customers and recovery practices, market conduct
and foreign investment. Any change in the regulatory framework affecting HFCs, and in particular those requiring us to maintain
certain financial ratios, placement restrictions on accessing funds or lending to HFCs, among others, would affect our results of
operations and growth.

Further, the NHB Act Amendments have come into force on August 9, 2019, which require HFCs to among others, apply to the
RBI for registration under the NHB Act, in place of NHB and authorize the RBI to determine policy and issue instructions in
relation to housing finance institutions. See “Risk Factors – Internal Risk Factors - The Indian housing finance industry is
extensively regulated and any changes in laws and regulations applicable to HFCs could have an adverse effect on our business”
on page 26.

Statement of Certain Significant Accounting Policies

Use of estimates

The preparation of financial information requires our management to make judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the
reporting period. Although these estimates are based on our management’s best knowledge of current events and actions,
uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying
amounts of assets or liabilities in future periods. Examples of these estimates include useful lives of property, plant and
equipment, expected credit loss allowance, future obligations under employee retirement benefit plans and income taxes. Actual
results could differ from these estimates. Any revisions to accounting estimates are recognised in the period in which such
revisions are made.

Financial Instruments

Financial Assets

Initial recognition and measurement

Financial assets are recognised when we become a party to the contractual provisions of the financial instrument and are
measured initially at fair value adjusted for transaction costs, except for those financial assets classified as at fair value through
profit and loss (“FVTPL”). Transaction costs directly attributable to the acquisition of financial assets classified as FVTPL are
recognised immediately in our statement of profit and loss.

Classification

We classify our financial assets in the following measurement categories:

 those to be measured subsequently at fair value (either through other comprehensive income, or through statement of
profit or loss), and

 those measured at amortised cost.

Subsequent measurement

Financial instruments at amortised cost: the financial instrument is measured at the amortised cost if both the following conditions
are met:

 the asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

 contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate
(“EIR”) method. All our debt instruments are measured at amortised cost.

Financial instruments at FVTPL/FVOCI: For assets measured at fair value, gains and losses will either be recorded in our
statement of profit and loss or other comprehensive income. Investments in equity instruments are classified as FVTPL unless

279
we irrevocably elect at initial recognition to present subsequent changes in fair value through other comprehensive income for
investments in equity instruments which are not held for trading.

Reclassifications within classes of financial assets

A change in the business model would lead to a prospective re-classification of the financial asset and accordingly the
measurement principles applicable to the new classification will be applied. During the current financial year and previous
accounting period there was no change in the business model under which we hold financial assets and therefore no
reclassifications were made.

Impairment of financial assets

The measurement of impairment losses across all categories of financial assets requires judgement, in particular, the estimation
of the amount and timing of future cash flows and collateral values when determining impairment losses and the assessment of
a significant increase in credit risk. These estimates are driven by a number of factors, changes in which can result in different
levels of allowances.

Our expected credit loss (“ECL”) calculations are outputs of complex models with a number of underlying assumptions
regarding the choice of variable inputs and their interdependencies.

The measurement of ECL is calculated using three main components:

 probability of default (“PD”);

 loss given default (“LGD”); and

 the exposure at default (“EAD”).

The 12-month ECL is calculated by multiplying the 12-month PD, LGD and the EAD. The 12-month and lifetime PDs represent
the PD occurring over the next 12 months and the remaining maturity of the instrument respectively. The EAD represents the
expected balance at default, taking into account the repayment of principal and interest from the balance sheet date to the default
event together with any expected drawdowns of committed facilities. The LGD represents expected losses on the EAD given the
event of default, taking into account, among other attributes, the mitigating effect of collateral value at the time it is expected to
be realised and the time value of money.

We apply a three-stage approach to measure ECL on financial assets accounted for at amortised cost and fair value through other
comprehensive income (“FVTOCI”). Assets migrate through the following three stages based on the change in credit quality
since initial recognition.

We have provided ECL on the undisbursed loan commitments classified under Stage 1.

Stage 1: 12-months ECL

For exposures where there has not been a significant increase in credit risk since initial recognition and that are not credit impaired
upon origination, the portion of the lifetime ECL associated with the probability of default events occurring within the next 12
months is recognised. Exposures with days past due (“DPD”) less than or equal to 29 days are classified as stage 1. We have
identified zero bucket and bucket with DPD less than or equal to 29 days as two separate buckets.

Stage 2: Life time ECL - not credit impaired

For credit exposures where there has been a significant increase in credit risk since initial recognition but that are not credit
impaired, a lifetime ECL is recognised. Exposures with DPD equal to 30 days but less than or equal to 89 days are classified as
stage 2. At each reporting date, we assess whether there has been a significant increase in credit risk for financial asset since
initial recognition by comparing the risk of default occurring over the expected life between the reporting date and the date of
initial recognition. We have identified cases with DPD equal to or more than 30 days and less than or equal to 59 days and cases
with DPD equal to or more than 60 days and less than or equal to 89 days as two separate buckets.

Stage 3: Lifetime ECL - credit impaired

Financial asset is assessed as credit impaired when one or more events that have a detrimental impact on the estimated future
cash flows of that asset have occurred. For financial asset that have become credit impaired, a lifetime ECL is recognised on
principal outstanding as at period end. Exposures with DPD equal to or more than 90 days are classified as stage 3.

Exposures are considered to have resulted in a significant increase in credit risk and are moved to Stage 2 when the accounts are
overdue for more than 30 days Accounts that are overdue for 90 days or more are moved to Stage 3.

280
De-recognition of financial assets

A financial asset is derecognised only when:

 we have transferred the rights to receive cash flows from the financial asset, or

 we retain the contractual rights to receive the cash flows of the financial asset, but assume a contractual obligation to
pay the cash flows to one or more recipients.

Where we have transferred an asset, we evaluate whether we have transferred substantially all risks and rewards of ownership
of the financial asset. In such cases, the financial asset is derecognised. Where we have not transferred substantially all risks and
rewards of ownership of the financial asset, the financial asset is not derecognised.

Where we have neither transferred a financial asset nor retained substantially all risks and rewards of ownership of the financial
asset, the financial asset is derecognised if we have not retained control of the financial asset. Where we retain control of the
financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount (measured at the date of
derecognition) and the consideration received (including any new asset obtained less any new liability assumed) shall be
recognised in the statement of profit or loss.

On derecognition of a part of financial asset in its entirety, the previous carrying amount of the larger financial asset shall be
allocated between the part that continues to be recognised and the part that is derecognised, on the basis of the relative fair values
of those parts on the date of the transfer. For this purpose, a retained servicing asset shall be treated as a part that continues to be
recognised. The difference between the carrying amount (measured at the date of derecognition) allocated to the part
derecognised and the consideration received for the part derecognised (including any new asset obtained less any new liability
assumed) shall be recognised in the statement of profit or loss.

Write offs

Impaired loans and receivables are written off, against the related allowance for loan impairment on completion of our internal
processes and when we conclude that there is no longer any realistic prospect of recovery of part or all of the loan. For loans that
are individually assessed for impairment, the timing of write off is determined on a case by case basis. A write-off constitutes a
de-recognition event. We have a right to apply enforcement activities to recover such written off financial assets. Subsequent
recoveries of amounts previously written off are credited to the income statement.

Financial Liability

A financial liability is a contractual obligation to deliver cash or another financial asset or to exchange financial assets or financial
liabilities with another entity under conditions that are potentially unfavourable to us or a contract that will or may be settled in
our own equity instruments and is a non-derivative contract for which we are or may be obliged to deliver a variable number of
our own equity instruments, or a derivative contract over own equity that will or may be settled other than by the exchange of a
fixed amount of cash (or another financial asset) for a fixed number of our own equity instruments.

Classification

We classify our financial liability as “Financial liability measured at amortised cost” except for those classified as financial
liabilities measured at fair value through profit and loss.

Initial recognition and measurement

Financial liability is recognised initially at cost of acquisition net of transaction costs and incomes that is attributable to the
acquisition of the financial liability. Cost equates the fair value on acquisition.

De-recognition of financial liabilities

We derecognise financial liabilities when, and only when, our obligations are discharged, cancelled or have expired. The
difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is
recognised in the statement of profit or loss.

Fair value of financial instruments

The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e.,
an exit price) regardless of whether that price is directly observable or estimated using another valuation technique. When the

281
fair values of financial assets and financial liabilities cannot be derived from active markets, they are determined using a variety
of valuation techniques that include the use of valuation models. The inputs to these models are taken from observable markets
where possible, but where this is not feasible, estimation is required in establishing fair values. Judgements and estimates include
considerations of liquidity and model inputs related to items such as credit risk (both own and counterparty), funding value
adjustments, correlation and volatility.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable
right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal
course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

Property, plant and equipment and other intangible assets and depreciation /amortisation

Property, plant and equipment and intangible assets are stated at cost less accumulated depreciation, amortisation and impairment
losses. Cost includes purchase price, inward freight, taxes and expenses incidental to acquisition and installation, up to the point
the asset is ready for its intended use.

Cost of property, plant and equipment and intangible assets not ready for their intended use before such date is disclosed under
capital work-in-progress.

Depreciation in respect of assets is provided on the straight-line method as per the over the useful life of the assets. We have
used the following useful lives to provide depreciation /amortisation on its property, plant and equipment and intangible asset:

Property Plant and Equipment Years

Furniture and fixtures 10
Office equipment 5
Computers 3
Leasehold improvements Over the lease period
Intangible Assets
Computer software 3
Licenses 3
Scoring algorithm 3

Property, plant and equipment purchased or sold during the year are depreciated on a pro-rata basis.

Revenue Recognition

Interest Income

Interest income is recorded using the EIR method. EIR is the rate that exactly discounts the estimated future cash flows over the
expected life of the financial instrument or a shorter year, where appropriate, to the gross carrying amount of the financial asset.
The calculation takes into account all contractual terms of the financial instrument (for example, prepayment options) and
includes any fees or incremental costs that are directly attributable and are an integral part of the EIR, but not future credit losses.
We calculate interest income by applying the EIR to the gross carrying amount of financial assets other than credit-impaired
assets. When a financial asset becomes credit-impaired and is, therefore, regarded as ‘Stage 3’, we calculate interest income by
applying the effective interest rate to the net amortised cost of the financial asset (gross value less ECL provision). If the financial
assets cures and is no longer credit-impaired, we revert to calculating interest income on a gross basis.

Fee and Other Revenue

Project appraisal fees and other ancillary fees is recognised on the basis of actual receipt. Display income is accounted on accrual
basis.

Dividend Income

Dividend are recognised in the statement of profit and loss only when the right to receive payment is established, it is probable
that the economic benefits associated with the dividend will flow to us, and the amount of the dividend can be measured reliably.

Taxes on Income

Income tax expense comprises current tax expenses and net change in the deferred tax assets or liabilities during the year. Current
and deferred taxes are recognised in the statement of profit and loss, except when they relate to item that are recognised in other

282
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity respectively.

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable
income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax
losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting
period.

Deferred income tax is recognised using balance sheet approach. Deferred income tax assets and liabilities are recognised for
deductible and taxable temporary differences arising between the tax base of an assets and liabilities and their carrying amount
in the financial statements, except when the deferred income tax arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of recognition.

Deferred tax asset is recognised to the extent that sufficient taxable profit will be available against which the deductible temporary
differences and the carry forward of unused tax credits and unused tax losses can be utilised. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. The carrying amount
of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable sufficient taxable
profit will be available to allow or part of deferred income tax assets to be utilised. At each reporting date, we re-assess
unrecognised deferred tax assets. We recognise unrecognised deferred tax asset to the extent that it has become reasonably
certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be
realised.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the
liability simultaneously.

Deferred tax assets include Minimum Alternate Tax (“MAT”) paid in accordance with the tax laws in India, which is likely to
give future economic benefit in the form of availability of setoff against future income tax liability. Accordingly, MAT is
recognised as deferred tax assets in the balance sheet when the assets can be measured reliably and it is probable that the future
economic benefit associated with the asset will be realised.

Leases: Company as a Lessee

Our leased assets primarily consist of leases for buildings. We assess whether a contract contains lease, at inception of a contract.
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, we assess
whether:

 the contract involves the use of an identified asset;

 we have substantially all of the economic benefits from use of the asset through the period of the lease; and

 we have the right to direct the use of the asset.

At the date of commencement of the lease, we recognise a right-of-use asset and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for leases with a lease term of twelve months or less (short-term leases) and low
value leases.

For these short-term and low value leases, we recognise the lease payments as an operating expense on a straight-line basis over
the term of the lease.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives.
They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and
useful life of the underlying asset.

The lease liability is initially measured at the present value of the fixed lease payments including variable lease payments that
depend on an index or a rate. The lease payments are discounted using the interest rate implicit in the lease or, if not readily
determinable, using our incremental borrowing rate.

283
Lease liability and right-of-use asset have been separately presented in the balance sheet and lease payments have been classified
as financing cash flows.

Impairment of Non-financial Assets

The carrying amount of the non-financial assets are reviewed at each balance sheet date if there is any indication of impairment
based on internal or external factors. An impairment loss is recognised whenever the carrying amount of an asset or a cash
generating unit exceeds its recoverable amount. The recoverable amount of the assets (or where applicable, that of the cash
generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. Impairment loss
is recognised in the statement of profit and loss.

After impairment, depreciation/ amortisation is provided on the revised carrying amount of the asset over its remaining useful
life.

A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the carrying
value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation/
amortisation if there were no impairment.

Cash and Cash Equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at
call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when we have a present obligation as a result of past events and it is probable that an outflow of
resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are measured
at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the
reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects the current market
assessments of time value of money and the risks specific to the liability. The increase in the provision due to passage of time is
recognised as interest expense. The provisions are reviewed at each balance sheet date and adjusted to reflect the current
management estimates.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be
confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within our control.

Contingent assets are not recognised in our financial statements. However, it is disclosed only when an inflow of economic
benefits is probable.

Employee Benefits

Short-term employee benefits: All employee benefits, which are due within twelve months of rendering the services are classified
as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, and the expected cost of
bonus, ex-gratia are recognised in the period in which the employee renders the related service. All short-term employee benefits
are accounted on undiscounted basis during the accounting year based on services rendered by employees.

Post-employment Benefits

We make contributions to statutory provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions
Act, 1952 which is a defined contribution plan and contribution paid or payable is recognised as an expense in the year in which
services are rendered by the employees.

Our gratuity benefit scheme is an unfunded defined benefit plan. Our obligation in respect of the gratuity benefit scheme is
calculated by estimating the amount of future benefit that employees have earned in return for their services in the current and
prior periods recognised as a liability at the present value of the defined benefit obligations at the balance sheet date based on an
actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method. The discount rates used for
determining the present value of the obligations under the defined benefit plan are based on the market yields on government
bonds as at the balance sheet date. Actuarial gains or losses on such valuation are recognised immediately in the other
comprehensive income.

Critical Estimates and Judgements

The preparation of financial statements in conformity with Ind AS requires estimates and assumptions to be made by our
Management that affects the reported amounts of assets and liabilities on the date of the financial statements and the reported

284
amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised
in the period in which the results are known.

Our management believes that these estimates are prudent and reasonable and are based upon management’s best knowledge of
current events and actions. Actual results could differ from these estimates and differences between actual results and estimates
are recognised in the periods in which the results are known or materialised.

The items below provide an overview of the areas that involved a higher degree of judgement or complexity, and of items, which
are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally
assessed. Examples of such estimates include the useful life of property, plant and equipment, provision for doubtful
debts/advances, future obligation in respect of retirement benefit plans, provision for inventory obsolescence and impairment of
investments/assets.

Business model assessment

We determine our business model at the level that best reflects how we manage groups of financial assets to achieve our business
objective.

We consider the frequency, volume and timing of sales in prior years, the reason for such sales, and our expectations about future
sales activity. However, information about sales activity is not considered in isolation, but as part of a holistic assessment of how
our stated objective for managing the financial assets is achieved and how cash flows are realised. Therefore, we consider
information about past sales in the context of the reasons for those sales, and the conditions that existed at that time as compared
to current conditions. Based on this assessment and our future business plans, our management has measured our financial assets
at amortised cost as the asset is held within a business model whose objective is to collect contractual cash flows, and the
contractual terms of the financial asset give rise to cash flows that are solely payments of principle and interest.

Effective Interest rate method

Our EIR methodology recognises interest income using a rate of return that represents the best estimate of a constant rate of
return over the expected behavioural life of loans and recognises the effect of potentially different interest rates charged at various
stages and other characteristics of the product life cycle (including prepayments and penalty interest and charges). This
estimation, by nature, requires an element of judgement regarding the expected behaviour and life-cycle of the instruments, as
well expected changes to our base rate and other fee income/expense that are integral parts of the instrument.

Income Tax

We review at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from
actual outcome, which could lead to an adjustment to the amounts reported in the standalone financial statements.

Contingencies

Our management has estimated the possible outflow of resources at the end of each annual reporting financial year, if any, in
respect of contingencies/claim/litigations against us as it is not possible to predict the outcome of pending matters with accuracy.

Impairment of financial assets

The measurement of impairment losses on loan assets and commitments requires judgement, in estimating the amount and timing
of future cash flows and recoverability of collateral values while determining the impairment losses and assessing a significant
increase in credit risk. Our ECL calculation is the output of a complex model with a number of underlying assumptions regarding
the choice of variable inputs and their interdependencies. Elements of the ECL model that are considered accounting judgements
and estimates include:

Our criteria for assessing if there has been a significant increase in credit risk:

 the segmentation of financial assets when their ECL is assessed on a collective basis

 development of ECL model, including the various formulae and the choice of inputs

 selection of forward-looking macroeconomic scenarios and their probability weightings, to derive the economic inputs
into the ECL model

The measurement of all expected credit losses for financial assets held at the reporting date are based on historical experience,
current conditions and reasonable and supportable forecasts. The measurement of ECL involves increased complexity and
judgement, including estimation of PDs, LGD, a range of unbiased future economic scenarios, estimation of expected lives and
estimation of EAD and assessing significant increases in credit risk.

285
Revenue and Expenses

Our revenue and expenditure is reported in the following manner:

Revenue. Total revenue consists of revenue from operations and other income.

Revenue from operations. Revenue from operations comprises interest income, net gain on derecognition of financial instruments
under amortised category, other operating income, fees and commission income and dividend income.

Revenue from interest income comprises interest income from housing loans, loans against property, developer finance and loans
for purchase of commercial property. It also comprises interest income on fixed deposits with banks and other interest income,
which comprises net interest income on securitized assets.

Other Income. Other income comprises display income received on account of advertisements displayed at our branches and
other non-operating income.

Expenses

Expenses comprise finance costs, impairment on financial instruments, employee benefits expenses, depreciation and
amortisation and other expenses.

Finance Costs. Finance cost comprises interest on borrowings, bank and other charges, interest on lease liability and interest on
commercial paper.

Impairment on financial instruments. Impairment on financial instruments comprises provision created on loans and write-offs.

Employee benefits expenses. Employee benefits expenses comprises salaries, wages and bonus, share based payments,
contribution to provident fund, staff welfare expenses and gratuity.

Depreciation and amortisation. Depreciation and amortisation expenses are primarily incurred on account of depreciation of
furniture and fixtures, office equipment, computers, right of use building and amortisation of computer software.

Other expenses. Other expenses primarily comprise legal and professional charges, travelling expenses, software license fees,
technology fees, marketing and sales promotion expense and office administrative expenses.

Our Results of Operations

The following table sets forth select financial data from our restated statement of profit and loss for the six months ended
September 30, 2019 and 2018, the components of which are also expressed as a percentage of total income for such periods:

For the six months ended September 30,

2019 2018
(₹ in million) % of Total (₹ in million) % of Total
Income Income
Revenue from operations:
Interest income 1,603.82 82.8% 976.48 91.2%
Fees and commission income 10.99 0.6% 12.54 1.2%
Net gain on derecognition of financial 211.22 10.9% 37.68 3.5%
instruments under amortised cost category
Other operating income 12.90 0.7% 8.43 0.8%
Total revenue from operations 1,838.93 94.9% 1,035.13 96.7%
Other Income 98.80 5.1% 35.20 3.3%
Total Income 1,937.73 100.0% 1,070.33 100.0%
Expenses:
Finance costs 918.37 47.4% 529.42 49.5%
Impairment on financial instruments 39.46 2.0% 43.43 4.1%
Employee benefits expenses 295.38 15.2% 194.89 18.2%
Depreciation and amortisation 32.36 1.7% 19.42 1.8%
Other expenses 149.31 7.7% 108.76 10.2%
Total Expenses 1,434.88 74.0% 895.92 83.7%
Profit before tax 502.85 26.0% 174.41 16.3%
Tax Expense:
Current tax 89.21 4.6% 66.55 6.2%
Deferred tax (income) / expense 46.23 2.4% (6.70) (0.6%)

286
 For the six months ended September 30,
2019 2018
(₹ in million) % of Total (₹ in million) % of Total
Income Income
135.44 7.0% 59.85 5.6%
Profit after tax 367.41 19.0% 114.56 10.7%

Six months ended September 30, 2019 compared to six months ended September 30, 2018

Our results of operations for the six months ended September 30, 2019 were particularly driven by the following factors:

 an increase in interest income on our loan portfolio due to the overall growth of our business;

 an increase in our average cost of borrowings due to the overall increase in borrowings to support the growth of our
business; and

 an increase in the absolute amount of our employee benefit expenses and other expenses on account of an increase in
the number of our branches and our employee base due to the overall growth of our business. However, such expenses
expressed a percentage of our total income had reduced during the six months ended September 30, 2019.

Total Income

Our total income increased by 81.0% to ₹ 1,937.73 million for the six months ended September 30, 2019 from ₹ 1,070.33 million
for the six months ended September 30, 2018, primarily due to an increase in revenue from operations.

Revenue from operations. Our revenue from operations increased by 77.7% to ₹ 1,838.93 million for the six months ended
September 30, 2019 from ₹ 1,035.13 million for the six months ended September 30, 2018, primarily due to an increase in
interest on term loans to ₹ 1,548.37 million for the six months ended September 30, 2019 from ₹ 970.44 million for the six
months ended September 30, 2018 and a net gain on derecognition of financial instruments under amortised cost category of ₹
211.22 million for the six months ended September 30, 2019 as compared to ₹ 37.68 million for the six months ended September
30, 2018. The increase in interest on term loans was consistent with the increase in our customer base; our Gross Loan Assets
were ₹ 31,133.76 million as of September 30, 2019 as compared to ₹ 19,089.71 million as of September 30, 2018.

Other income. Our other income increased to ₹ 98.80 million for the six months ended September 30, 2019 from ₹ 35.20 million
for the six months ended September 30, 2018 primarily on account of a net gain on financial instruments (investment in mutual
funds) to ₹ 63.09 million for the six months ended September 30, 2019 from nil for the six months ended September 30, 2018
and an increase in display income from advertisements displayed at our branches to ₹ 35.00 million for the six months ended
September 30, 2019 from ₹ 27.88 million for the six months ended September 30, 2018.

Expenses

Finance costs. Our finance cost increased by 73.5% to ₹ 918.37 million for the six months ended September 30, 2019 from ₹
529.42 million for the six months ended September 30, 2018, primarily due to an increase in interest on borrowings to ₹ 904.07
million for the six months ended September 30, 2019 from ₹ 515.87 million for the six months ended September 30, 2018. Our
finance costs increased as a result of the increase in the outstanding amount of borrowings the six months ended September 30,
2019 to support the growth of our business as well as an increase in the average cost of our borrowings (excluding assignments)
to 4.3% during the six months ended September 30, 2019 from 4.0% during the six months ended September 30, 2018 on account
of a liquidity crunch in the market.

Impairment on financial instruments. Impairment on financial instruments decreased by 9.1% to ₹ 39.46 million for the six
months ended September 30, 2019 from ₹ 43.43 million for the six months ended September 30, 2018, primarily due to a decrease
in impairment loss allowance to ₹ 30.57 million for the six months ended September 30, 2019 from ₹ 40.88 million for the six
months ended September 30, 2018, which was partially offset by an increase in write-offs to ₹ 8.89 million for the six months
ended September 30, 2019 from ₹ 2.55 million for the six months ended September 30, 2018.

Employee benefits expenses. Employee benefits expenses increased by 51.6% to ₹ 295.38 million for the six months ended
September 30, 2019 from ₹ 194.89 million for the six months ended September 30, 2018, primarily due to an increase in salaries,
wages and bonus to ₹ 259.51 million for the six months ended September 30, 2019 from ₹ 171.13 million for the six months
ended September 30, 2018. The increase in salaries, wages and bonus was due to an increase in our number of employees as a
result of growth in our business and compensation increments given to our employees. Our number of employees increased to
738 employees as of September 30, 2019 from 538 employees as of September 30, 2018.

287
Depreciation and amortisation. Our depreciation and amortisation expense increased by 66.6% to ₹ 32.36 million for the six
months ended September 30, 2019 from ₹ 19.42 million for the six months ended September 30, 2018, primarily due to a
corresponding increase in our gross block of right of use building, leasehold improvements and computers.

Other expenses. Our other expenses increased by 37.3% to ₹ 149.31 million for the six months ended September 30, 2019 from
₹ 108.76 million for the six months ended September 30, 2018, primarily due to an increase in legal and professional charges to
₹ 40.63 million for the six months ended September 30, 2019 from ₹ 29.57 million for the six months ended September 30, 2018,
an increase in technology fees to ₹ 14.30 million for the six months ended September 30, 2019 from ₹ 6.20 million for the six
months ended September 30, 2018 and an increase in software license fees to ₹ 22.56 million for the six months ended September
30, 2019 from ₹ 14.46 million for the six months ended September 30, 2018. The increase in other expenses was on account of
the growth in our operations which also resulted in an increase in our revenue from operations.

Total tax expense. Our total tax expense increased to ₹ 135.44 million for the six months ended September 30, 2019 from ₹ 59.85
million for the six months ended September 30, 2018. For the six months ended September 30, 2019, we had a current tax
expense of ₹ 89.21 million and a deferred tax expense of ₹ 46.23 million. For the six months ended September 30, 2018, we had
a current tax expense of ₹ 66.55 million and a deferred tax income of ₹ 6.70 million. Our effective tax rate (which represents the
ratio of total tax expenses to profit before tax during the relevant period, expressed as a percentage) was 26.9% and 34.3% for
the six months ended September 30, 2019 and 2018, respectively.

Profit after tax. Our profit after tax increased to ₹ 367.41 million for the six months ended September 30, 2019 from ₹ 114.56
million for the six months ended September 30, 2018.

The following table sets forth select financial data from our restated statement of profit and loss for the financial years 2019,
2018 and 2017, the components of which are also expressed as a percentage of total income for such periods:

For the financial year

2019 2018 2017
(₹ in % of Total (₹ in % of Total (₹ in % of Total
million) Income million) Income million) Income
Revenue from operations:
Interest income 2,319.25 85.6% 1,299.58 96.8% 879.93 96.1%
Fees and commission income 33.38 1.2% 14.45 1.1% 7.47 0.8%
Net gain on derecognition of financial 214.76 7.9% - 0.0% 25.92 2.8%
instruments under amortised cost category
Other operating income 31.37 1.2% 6.89 0.5% 2.45 0.3%
Total revenue from operations 2,598.76 95.9% 1,320.92 98.4% 915.77 100.0%
Other Income 110.45 4.1% 21.45 1.6% 0.01 0.0%
Total Income 2,709.21 100.0% 1,342.37 100.0% 915.78 100.0%
Expenses:
Finance costs 1,265.44 46.7% 659.64 49.1% 540.44 59.0%
Impairment on financial instruments 73.13 2.7% 28.74 2.1% 17.37 1.9%
Employee benefits expenses 427.17 15.8% 249.55 18.6% 149.97 16.4%
Depreciation and amortisation 45.77 1.7% 24.63 1.8% 15.55 1.7%
Other expenses 245.75 9.1% 137.11 10.2% 88.89 9.7%
Total Expenses 2,057.26 75.9% 1,099.67 81.9% 812.22 88.7%
Profit before tax 651.95 24.1% 242.70 18.1% 103.56 11.3%
Tax Expense:
Current tax 160.53 5.9% 120.36 9.0% 48.73 5.3%
Deferred tax (income) / expense 39.38 1.5% (37.62) (2.8%) (11.94) (1.3%)
199.91 7.4% 82.74 6.2% 36.79 4.0%
Profit after tax 452.04 16.7% 159.96 11.9% 66.77 7.3%

Financial Year 2019 compared to Financial Year 2018

Our results of operations for the financial year 2019 were particularly driven by the following factors:

 an increase in interest income on our loan portfolio due to the overall growth of our business;

 a reduction in our average cost of borrowings; and

 an increase in the absolute amount of our employee benefit expenses and other expenses on account of an increase in
the number of our branches and our employee base due to the overall growth of our business. However, such expenses
expressed a percentage of our total income had reduced during the financial year 2019.

288
Total Income

Our total income increased to ₹ 2,709.21 million for the financial year 2019 from ₹ 1,342.37 million for the financial year 2018,
primarily due to an increase in revenue from operations.

Revenue from operations. Our revenue from operations increased by 96.7% to ₹ 2,598.76 million for the financial year 2019
from ₹ 1,320.92 million for the financial year 2018, primarily due to an increase in interest on term loans to ₹ 2,289.15 million
for the financial year 2019 from ₹ 1,274.47 million for the financial year 2018 and a net gain on derecognition of financial
instruments under amortised cost category as a result of direct assignments of ₹ 214.76 million for the financial year 2019 as
compared to nil for the financial year 2018. The increase in interest on term loans was consistent with the increase in our customer
base; our Gross Loan Assets were ₹ 24,435.74 million as of March 31, 2019 as compared to ₹ 13,559.32 million as of March 31,
2018.

Other income. Our other income increased to ₹ 110.45 million for the financial year 2019 from ₹ 21.45 million for the financial
year 2018 primarily on account of an increase in display income from advertisements displayed at our branches to ₹ 72.91 million
for the financial year 2019 from ₹ 16.70 million for the financial year 2018 and a net gain on financial instruments (investment
in mutual funds) to ₹ 29.22 million for the financial year 2019 from nil for the financial year 2018.

Expenses

Finance costs. Our finance cost increased by 91.8% to ₹ 1,265.44 million for the financial year 2019 from ₹ 659.64 million for
the financial year 2018, primarily due to an increase in interest on borrowings to ₹ 1,241.32 million for the financial year 2019
from ₹ 642.45 million for the financial year 2018 as a result of the increase in the outstanding amount of borrowings over the
year to support the growth of our business. There was an increase in the average cost of our borrowings (excluding assignments)
from 7.7% during the financial year 2018 to 8.5% during the financial year 2019.

Impairment on financial instruments. Impairment on financial instruments increased to ₹ 73.13 million for the financial year
2019 from ₹ 28.74 million for the financial year 2018, primarily due to an increase in impairment loss allowance to ₹ 67.23
million for the financial year 2019 from ₹ 24.63 million for the financial year 2018.

Employee benefits expenses. Employee benefits expenses increased by 71.2% to ₹ 427.17 million for the financial year 2019
from ₹ 249.55 million for the financial year 2018, primarily due to an increase in salaries, wages and bonus to ₹ 375.76 million
for the financial year 2019 from ₹ 204.09 million for the financial year 2018. The increase in salaries, wages and bonus was due
to an increase in our number of employees as a result of growth in our business and annual increments given to our employees.
Our number of employees increased to 675 employees as of March 31, 2019 from 382 employees as of March 31, 2018.

Depreciation and amortisation. Our depreciation and amortisation expense increased by 85.8% to ₹ 45.77 million for the
financial year 2019 from ₹ 24.63 million for the financial year 2018, primarily due to a corresponding increase in our gross block
of right of use building, computers and furniture and fixtures as a result of the increase in the number of our branches.

Other expenses. Our other expenses increased by 79.2% to ₹ 245.75 million for the financial year 2019 from ₹ 137.11 million
for the financial year 2018, primarily due to an increase in travelling expense to ₹ 39.63 million for the financial year 2019 from
₹ 18.38 million for the financial year 2018, an increase in technology fees to ₹ 18.24 million for the financial year 2019 from ₹
11.05 million for the financial year 2018, an increase in software license fees to ₹ 31.52 million for the financial year 2019 from
₹ 17.57 million for the financial year 2018 and an increase in legal and professional charges to ₹ 67.02 million for the financial
year 2019 from ₹ 38.06 million for the financial year 2018. The increased expenses were incurred to support the growth of our
business shown by the increase in our Gross Loan Assets to ₹ 24,435.74 million as of March 31, 2019 as compared to ₹ 13,559.32
million as of March 31, 2018, which also resulted in an increase in our revenue from operations.

Total tax expense. Our total tax expense increased to ₹ 199.91 million for the financial year 2019 from ₹ 82.74 million for the
financial year 2018. For the financial year 2019, we had a current tax expense of ₹ 160.53 million and a deferred tax expense of
₹ 39.38 million. For the financial year 2018, we had a current tax expense of ₹ 120.36 million and a deferred tax income of ₹
37.62 million. Our effective tax rate (which represents the ratio of total tax expenses to profit before tax during the relevant
period, expressed as a percentage) was 30.7% and 34.1% for the financial years 2019 and 2018, respectively.

Profit after tax. Our profit after tax increased to ₹ 452.04 million for the financial year 2019 from ₹ 159.96 million for the
financial year 2018.

Financial Year 2018 compared to Financial Year 2017

Our results of operations for the financial year 2018 were particularly driven by the following factors:

 an increase in interest income on our loan portfolio due to the overall growth of our business; and

 a reduction in our average cost of borrowings.

289
Total Income

Our total income increased by 46.6% to ₹ 1,342.37 million for the financial year 2018 from ₹ 915.78 million for the financial
year 2017, primarily due to an increase in revenue from operations.

Revenue from operations. Our revenue from operations increased by 44.2% to ₹ 1,320.92 million for the financial year 2018
from ₹ 915.77 million for the financial year 2017, primarily due to an increase in interest on term loans to ₹ 1,274.47 million for
the financial year 2018 from ₹ 851.78 million for the financial year 2017. The increase in interest on term loans was consistent
with the increase in our customer base; our Gross Loan Assets were ₹ 13,559.32 million as of March 31, 2018 as compared to ₹
8,473.16 million as of March 31, 2017.

Other income. Our other income increased to ₹ 21.45 million for the financial year 2018 from ₹ 0.01 million for the financial
year 2017 primarily on account of an increase in display income from advertisements displayed at our branches to ₹ 16.70 million
for the financial year 2018 from nil for the financial year 2017 and an increase in dividend income on mutual funds to ₹ 4.75
million for the financial year 2018 from nil for the financial year 2017.

Expenses

Finance costs. Our finance cost increased by 22.1% to ₹ 659.64 million for the financial year 2018 from ₹ 540.44 million for the
financial year 2017, primarily due to an increase in interest on borrowings to ₹ 642.45 million for the financial year 2018 from
₹ 532.85 million for the financial year 2017 as a result of the increase in the outstanding amount of borrowings over the year to
support the growth of our business. However, such increase was partially offset by a reduction in the average cost of our
borrowings (excluding assignments) from 9.8% during the financial year 2017 to 7.7% during the financial year 2018.

Impairment on financial instruments. Impairment on financial instruments increased by 65.5% to ₹ 28.74 million for the financial
year 2018 from ₹ 17.37 million for the financial year 2017, primarily due to an increase in impairment loss allowance to ₹ 24.63
million for the financial year 2018 from ₹ 17.37 million for the financial year 2017.

Employee benefits expenses. Employee benefits expenses increased by 66.4% to ₹ 249.55 million for the financial year 2018
from ₹ 149.97 million for the financial year 2017, primarily due to an increase in salaries, wages and bonus to ₹ 204.09 million
for the financial year 2018 from ₹ 134.64 million for the financial year 2017. The increase in salaries, wages and bonus was due
to an increase in our number of employees as a result of growth in our business and annual increments given to our employees.
Our number of employees increased to 382 employees as of March 31, 2018 from 200 employees as of March 31, 2017.

Depreciation and amortisation. Our depreciation and amortisation expense increased by 58.4% to ₹ 24.63 million for the
financial year 2018 from ₹ 15.55 million for the financial year 2017, primarily due to a corresponding increase in our gross block
of right of use building, furniture and fixtures and computers as a result of the increase in the number of our branches.

Other expenses. Our other expenses increased by 54.2% to ₹ 137.11 million for the financial year 2018 from ₹ 88.89 million for
the financial year 2017, primarily due to an increase in legal and professional charges to ₹ 38.06 million for the financial year
2018 from ₹ 20.20 million for the financial year 2017, an increase in travelling expense to ₹ 18.38 million for the financial year
2018 from ₹ 10.94 million for the financial year 2017 and an increase in rates and taxes to ₹ 13.34 million for the financial year
2018 from ₹ 4.80 million for the financial year 2017. The increased expenses were incurred to support the growth of our business
shown by the increase in our Gross Loan Assets to ₹ 13,559.32 million as of March 31, 2018 as compared to ₹ 8,473.16 million
as of March 31, 2017, which also resulted in an increase in our revenue from operations.

Total tax expense. Our total tax expense increased to ₹ 82.74 million for the financial year 2018 from ₹ 36.79 million for the
financial year 2017. For the financial year 2018, we had a current tax expense of ₹ 120.36 million and a deferred tax income of
₹ 37.62 million. For the financial year 2017, we had a current tax expense of ₹ 48.73 million and a deferred tax income of ₹
11.94 million. Our effective tax rate (which represents the ratio of total tax expenses to profit before tax during the relevant
period, expressed as a percentage) was 34.1% and 35.5% for the financial years 2018 and 2017, respectively.

Profit after tax. Our profit after tax increased to ₹ 159.96 million for the financial year 2018 from ₹ 66.77 million for the financial
year 2017.

Financial Position

Assets

The following table sets forth the principal components of our assets as of September 30, 2019 and March 31, 2019, 2018 and
2017:

290
 (₹ in million)
As of September As of March 31,
30, 2019 2019 2018 2017
Financial Assets:
Cash and cash equivalents 1,059.67 1,857.24 230.14 1,159.80
Other bank balance 1,693.21 62.59 72.04 661.72
Loans 26,179.57 21,347.05 13,087.35 7,893.12
Investments 2,777.43 1,029.17 - -
Other financial assets 476.65 261.20 49.09 59.63
Total financial assets 32,186.53 24,557.25 13,438.62 9,774.27
Non-financial assets:
Current tax assets (net) 53.19 10.25 4.66 -
Deferred tax assets (net) - 24.83 63.81 26.28
Property, plant and equipment 185.95 167.59 97.62 64.27
Capital work-in-progress 2.03 - 7.88 -
Intangible assets under development - - 2.61 -
Other intangible assets 5.15 6.71 3.50 2.26
Other non-financial assets 43.69 53.42 30.72 22.50
Total non-financial assets 290.01 262.80 210.80 115.31
Total Assets 32,476.54 24,820.05 13,649.42 9,889.58

As of September 30, 2019, we had total assets of ₹ 32,476.54 million, compared to ₹ 24,820.05 million as of March 31, 2019,
compared to ₹ 13,649.42 million as of March 31, 2018 and ₹ 9,889.58 million as of March 31, 2017. The increase in our total
assets was primarily on account of a significant growth in our loan portfolio due to an increase in the number of our customers.

Financial Assets

Cash and Cash Equivalents

As of September 30, 2019, we had cash and cash equivalents of ₹ 1,059.67 million, compared to ₹ 1,857.24 million as of March
31, 2019, compared to ₹ 230.14 million as of March 31, 2018 and ₹ 1,159.80 million as of March 31, 2017. Our cash and cash
equivalents decreased between March 31, 2019 and September 30, 2019 as well as between March 31, 2017 and March 31, 2018
primarily on account of effective utilization of funds and to improve profitability by reducing the cash on hand with banks. Our
cash and cash equivalents increased between March 31, 2018 and March 31, 2019 primarily due to prudential liquidity measures
taken by our Company post the liquidity crisis in September 2018 to maintain liquidity on balance sheet to manage borrowing
obligations and support business growth.

Investments

As of September 30, 2019, we had investments of ₹ 2,777.43 million, compared to ₹ 1,029.17 million as of March 31, 2019,
compared to nil as of March 31, 2018 and 2017. We commenced investing in mutual funds during the financial year 2019 and
made additional mutual fund investments during the six months ended September 30, 2019.

Loans

As of September 30, 2019, we had loans of ₹ 26,179.57 million, compared to ₹ 21,347.05 million as of March 31, 2019, compared
to ₹ 13,087.35 million as of March 31, 2018 and ₹ 7,893.12 million as of March 31, 2017. This increase was primarily on account
of a growth in our operations and branch network resulting in a higher disbursement of loans.

Other Financial Assets

As of September 30, 2019, we had other financial assets of ₹ 476.65 million, compared to ₹ 261.20 million as of March 31, 2019,
compared to ₹ 49.09 million as of March 31, 2018 and ₹ 59.63 million as of March 31, 2017. This increase was primarily on
account of an increase in our interest receivable strip.

Property, Plant and Equipment

As of September 30, 2019, we had property, plant and equipment of ₹ 185.95 million, compared to ₹ 167.59 million as of March
31, 2019, compared to ₹ 97.62 million as of March 31, 2018 and ₹ 64.27 million as of March 31, 2017. This increase was
primarily due to an increase in our gross block of right of use building, computers and furniture and fixtures.

291
Liabilities

The following table sets forth the principal components of our liabilities as of September 30, 2019 and March 31, 2019, 2018
and 2017:

As of September As of March 31,

30,
2019 2019 2018 2017
(₹ in million)
Financial liabilities
Trade payables
total outstanding dues of micro enterprises and - - - 0.56
small enterprises
total outstanding dues of creditors other than 1.71 13.58 5.37 32.37
micro enterprises and small enterprises
Debt securities - - - -
Borrowings (Other than debt securities) 22,956.31 19,256.41 10,198.76 6,630.45
Other financial liabilities 475.17 238.43 130.17 119.07
Total financial liabilities 23,433.19 19,508.42 10,334.30 6,782.45

Non-financial liabilities
Current tax liabilities (Net) - - - 0.84
Deferred tax liability (Net) 20.61 - - -
Provisions 47.17 29.62 18.74 20.45
Other non-financial liabilities 82.54 50.61 44.23 22.26
Total non-financial liabilities 150.32 80.23 62.97 43.55
Total Liabilities 23,583.51 19,588.65 10,397.27 6,826.00

Borrowings (Other than Debt Securities)

As of September 30, 2019, we had borrowings (other than debt securities) of ₹ 22,956.31 million, compared to ₹ 19,256.41
million as of March 31, 2019, compared to ₹ 10,198.76 million as of March 31, 2018 and ₹ 6,630.45 million as of March 31,
2017. This increase was on account of an increase in our borrowings from banks and the NHB to satisfy the credit requirements
of our growing customer base for our housing loans.

Shareholders’ Funds

As of September 30, 2019, our Total Equity (shareholders’ funds) was ₹ 8,893.03 million, representing 27.4% of our total assets.
As of March 31, 2019, our Total Equity was ₹ 5,231.40 million, representing 21.1% of our total assets. As of March 31, 2018,
our Total Equity was ₹ 3,252.15 million, representing 23.8% of our total assets. The increase in our Total Equity between March
31, 2018 and September 30, 2019, was primarily due to an increase in our securities premium account due to the allotment of
equity shares.

Liquidity and Capital Resources

We typically obtain long-term funding from a variety of sources including private and public sector banks, the NHB and through
assignment transactions. For the six months ended September 30, 2019 and the financial years 2019, 2018 and 2017, we had
proceeds of borrowings from banks and financial institutions of ₹ 5,601.24 million, ₹ 10,870.13 million, ₹ 6,490.13 million and
₹ 3,093.62 million, respectively. As of September 30, 2019, our Total Borrowings were ₹ 22,956.31 million and we did not have
any outstanding debt securities.

We actively manage our liquidity and capital position by raising funds periodically. We regularly monitor our funding levels to
ensure that we are able to satisfy the requirements for loan disbursements and maturity of our liabilities. All our loan agreements
contain a number of covenants including financial covenants. For details, see “Financial Indebtedness” and “Risk Factors –
Internal Risk Factors – Our inability to meet our obligations, including financial and other covenants under our debt financing
arrangements could adversely affect our business, results of operations and financial condition” on pages 273 and 27,
respectively.

Cash Flows

The following table sets forth our cash flows for the periods indicated:

292
 For the six months ended For the financial year
September 30,
2019 2018 2019 2018 2017
(₹ in million)
Net cash (used in) operating activities (4,427.38) (5,075.77) (7,905.70) (5,064.00) (2,728.96)
Net cash generated from / (used in) (3,365.59) (1,020.43) (1,054.86) 562.51 (140.11)
investing activities
Net cash generated from financing 6,995.40 6,879.54 10,587.66 3,571.83 3,798.60
activities
Net increase / (decrease) in cash and (797.57) 783.34 1,627.10 (929.66) 929.53
cash equivalents

Operating Activities

Net cash used in operating activities was ₹ 4,427.38 million for the six months ended September 30, 2019. While our net profit
before tax was ₹ 502.85 million for the six months ended September 30, 2019, we had an operating profit before working capital
changes of ₹ 308.20 million, primarily due to upfront gain on direct assignment of ₹ 164.74 million. Our changes in working
capital for the six months ended September 30, 2019 primarily consisted of an increase in loans of ₹ 4,932.51 million to satisfy
the credit requirements of our growing customer base for our housing loans.

Net cash used in operating activities was ₹ 5,075.77 million for the six months ended September 30, 2018. While our net profit
before tax was ₹ 174.41 million for the six months ended September 30, 2018, we had an operating profit before working capital
changes of ₹ 276.31 million, primarily due to financial asset measured at amortised cost of ₹ 87.37 million and impairment on
financial instruments of ₹ 43.43 million. Our changes in working capital for the six months ended September 30, 2018 primarily
consisted of an increase in loans of ₹ 5,291.95 million to satisfy the credit requirements of our growing customer base for our
housing loans.

Net cash used in operating activities was ₹ 7,905.70 million for the financial year 2019. While our net profit before tax was ₹
651.95 million for the financial year 2019, we had an operating profit before working capital changes of ₹ 644.03 million,
primarily due to financial asset measured at amortised cost of ₹ 116.33 million, impairment on financial instruments of ₹ 73.13
million and depreciation, amortisation and impairment of ₹ 45.77 million, which was partially offset by an upfront gain on direct
assignment transactions of 194.96 million. Our changes in working capital for the financial year 2019 primarily consisted of an
increase in loans of ₹ 8,449.16 million to satisfy the credit requirements of our growing customer base for our housing loans.

Net cash used in operating activities was ₹ 5,064.00 million for the financial year 2018. While our net profit before tax was ₹
242.70 million for the financial year 2018, we had an operating profit before working capital changes of ₹ 428.82 million,
primarily due to financial asset measured at amortised cost of ₹ 88.94 million, impairment on financial instruments of ₹ 28.74
million and fair valuation of ESOPs of ₹27.79 million. Our changes in working capital for the financial year 2018 primarily
consisted of an increase in loans of ₹ 5,311.91 million to satisfy the credit requirements of our growing customer base for our
housing loans.

Net cash used in operating activities was ₹ 2,728.96 million for the financial year 2017. While our net profit before tax was ₹
103.56 million for the financial year 2017, we had an operating profit before working capital changes of ₹ 148.84 million,
primarily due to financial asset measured at amortised cost of ₹ 42.92 million, impairment on financial instruments of ₹ 17.37
million and depreciation, amortisation and impairment of ₹ 15.55 million, which was offset by interest income on bank deposits
of ₹ 15.56 million. Our changes in working capital for the financial year 2017 primarily consisted of an increase in loans of ₹
2,872.83 million to satisfy the credit requirements of our growing customer base for our housing loans.

Investing Activities

Net cash used in investing activities was ₹ 3,365.59 million for the six months ended September 30, 2019, primarily comprising
purchase of investments of ₹ 15,327.50 million, which was partially offset by proceeds from investments of ₹ 13,580.97 million.

Net cash used in investing activities was ₹ 1,020.43 million for the six months ended September 30, 2018, primarily comprising
purchase of investments of ₹ 8,063.58 million, which was partially offset by proceeds from investments of ₹ 7,863.49 million.

Net cash used in investing activities was ₹ 1,054.86 million for the financial year 2019, primarily comprising purchase of
investments of ₹ 19,919.50 million, which was partially offset by proceeds from investments of ₹ 18,892.35 million.

Net cash generated from investing activities was ₹ 562.51 million for the financial year 2018, primarily comprising bank deposits
(net) of ₹ 590.00 million, partially offset by purchase of property, plant and equipment and other intangible assets ₹ 44.20 million.

Net cash used in investing activities was ₹ 140.11 million for the financial year 2017, primarily comprising bank deposits (net)
of ₹ 140.00 million and purchase of property, plant and equipment and other intangible assets ₹ 16.77 million.

293
Financing Activities

Net cash generated from financing activities was ₹ 6,995.40 million for the six months ended September 30, 2019, primarily
comprising proceeds of borrowings from banks and financial institutions of ₹ 5,601.24 million, proceeds from the issuance of
share capital (including share premium) of ₹ 3,280.84 million, which was partially offset by repayment of borrowings from banks
and financial institutions of ₹ 1,886.68 million.

Net cash generated from financing activities was ₹ 6,879.54 million for the six months ended September 30, 2018, primarily
comprising proceeds of borrowings from banks and financial institutions of ₹ 5,490.00 million, proceeds from the issuance of
share capital (including share premium) of ₹ 1,509.66 million, which was partially offset by repayment of borrowings from banks
and financial institutions of ₹ 712.61 million.

Net cash generated from financing activities was ₹ 10,587.66 million for the financial year 2019, primarily comprising proceeds
of borrowings from banks and financial institutions of ₹ 10,870.13 million and proceeds from the issuance of share capital
(including share premium) of ₹ 1,508.28 million, which was partially offset by repayment of borrowings from banks and financial
institutions of ₹ 1,790.80 million.

Net cash generated from financing activities was ₹ 3,571.83 million for the financial year 2018, primarily comprising proceeds
of borrowings from banks and financial institutions of ₹ 6,490.13 million, which was partially offset by repayment of borrowings
from banks and financial institutions of ₹ 2,841.79 million.

Net cash generated from financing activities was ₹ 3,798.60 million for the financial year 2017, primarily comprising proceeds
of borrowings from banks and financial institutions of ₹ 3,093.62 million and proceeds from the issuance of share capital
(including share premium) of ₹ 1,454.08 million, which was partially offset by repayment of borrowings from banks and financial
institutions of ₹ 797.69 million.

Financial Indebtedness

As of September 30, 2019, we had borrowings (other than debt securities) with maturities of more than one year of ₹ 18,145.43
million and Borrowings (other than debt securities) with maturities within one year of ₹ 4,867.99 million. We did not have any
outstanding debt securities as of September 30, 2019. For details, see “Financial Indebtedness” on page 273. The following table
sets forth certain information relating to outstanding indebtedness as of September 30, 2019, and our repayment obligations in
the periods indicated:

As of September 30, 2019

Payment due by period
Total Less than 1 1-5 years 5-7 years More than
year 7 years
Borrowings (other than debt securities) with
maturities of more than one year
Secured 18,145.43 - 15,787.35 1,731.09 626.99
Unsecured - - - - -
Total Borrowings (other than debt securities) with 18,145.43 0.00 15,787.35 1,731.09 626.99
maturities of more than one year
Borrowings (other than debt securities) with
maturities within one year
Secured 4,867.99 4,867.99
Unsecured - - - - -
Total Borrowings (other than debt securities) with 4,867.99 4,867.99 0.00 0.00 0.00
maturities within one year
Total Borrowings (other than debt securities) 23,013.42 4,867.99 15,787.35 1,731.09 626.99
Adjustment of unamortised processing fee (EIR) (57.11)
Total adjusted borrowings (other than debt 22,956.31
securities)

Capital and Other Commitments

As of September 30, 2019, we had other commitments – undisbursed amount of housing and other loans of ₹ 6,094.63 million.

Direct Assignment Arrangements

During the six months ended September 30, 2019 and 2018 and the financial years 2019, 2018 and 2017, we had assigned assets
worth ₹ 4,746.42 million, ₹ 674.05 million, ₹ 2,920.65 million, ₹ 374.62 million and ₹ 542.41 million, respectively.

294
Contingent Liabilities

As of September 30, 2019, we did not have any contingent liabilities.

Off-Balance Sheet Commitments and Arrangements

Except as disclosed above in “Direct Assignment Arrangements”, we do not have any off-balance sheet arrangements, derivative
instruments, swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would
have been established for the purpose of facilitating off-balance sheet arrangements.

Capital Expenditure

For the six months ended September 30, 2019, we added tangible assets of property, plant and equipment of ₹ 49.16 million,
primarily for right of use building and leasehold improvements and intangible assets of ₹ 0.16 million for computer software.
For the financial year 2019, we added tangible assets of property, plant and equipment of ₹ 112.99 million, primarily for right
of use building, leasehold improvements and furniture and fixtures and intangible assets of ₹ 5.96 million for computer software.
For the financial year 2018, we added tangible assets of property, plant and equipment of ₹ 56.41 million, primarily for right of
use building and furniture and fixtures and intangible assets of ₹ 2.81 million for computer software. For the financial year 2017,
we added tangible assets of property, plant and equipment of ₹ 54.18 million, primarily for right of use building and furniture
and fixtures and intangible assets of ₹ 1.29 million for computer software. For the financial year 2020, we expect our capital
expenditures to be incurred for the purposes of developing branch infrastructure, including furniture and fixtures and towards
information technology systems.

Capital to Risk-Weighted Assets Ratios

The following table sets forth certain details of our CRAR in accordance with our restated Ind AS financial information, as of
the dates indicated:

As of
September 30, September 30, March 31, 2019 March 31, 2018 March 31, 2017
2019 2018
CRAR (%) 47.6 43.8 38.5 43.0 68.5
CRAR - Tier I capital (%) 46.8 42.9 37.7 42.3 67.5
CRAR - Tier II capital (%) 0.7 0.9 0.8 0.8 1.0

Credit Ratings

The following table sets forth our credit ratings as of the date of this Draft Red Herring Prospectus:

Rating Agency Instrument Credit Ratings

CARE Ratings ₹ 4.51 billion Term Loans A+ (stable)
ICRA Limited ₹ 32 billion Term Loans A+ (stable)
₹ 2 billion Non-Convertible Debenture Programme A+ (stable)
₹ 1 billion Commercial Paper Programme A1+
India Ratings & Research ₹ 3 billion Commercial Paper Programme A1+

Related Party Transactions

We have engaged in the past, and may engage in the future, in transactions with related parties. For details of our related party
transactions, see “Restated Financial Information – Annexure 6” on page 225.

Quantitative and Qualitative Disclosures about Market Risk

In the course of our business, we are exposed to certain financial risks such as credit risk, liquidity risk, interest risk and price
risk.

Credit Risk

Credit risk is the risk that we will incur a loss because the counterparty might fail to discharge their contractual obligations. We
have a comprehensive framework for monitoring credit quality of our retail and other loans primarily based on number of days
past due. Contractual payments by the counterparties are tracked regularly and if required, necessary steps for recovery are taken
through regular follow-ups and legal recourse. For further details, see “Risk Factors – Internal Risk Factors – The risk of non-
payment or default by borrowers may adversely affect our business, results of operations and financial condition” on page 23.

295
Liquidity Risk

Liquidity risk is defined as the risk that we will not be able to settle or meet our obligations on time or at a reasonable price.
Liquidity risk arises from obligations on account of financial liabilities - trade payables and other financial liabilities. We manage
liquidity risk by maintaining adequate cash reserves and underdrawn credit facilities, by continuously monitoring forecast and
actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following table summarizes the maturity profile of the undiscounted cash flows of our financial liabilities as of September
30, 2019:

(₹ in million)
Within 1 year 1 – 5 years 5 – 10 years Total
Trade payables 1.71 - - 1.71
Borrowings (other than debt securities) 4,867.99 15,787.35 2,358.08 23,013.42
Other financial liabilities 385.10 - - 385.10
Total 5,254.80 15,787.35 2,358.08 23,400.23

For further details, see “Risk Factors – Internal Risk Factors – We may face asset-liability mismatches, which could affect our
liquidity and consequently may adversely affect our operations and profitability” on page 24.

Interest Rate Risk

We are subject to interest rate risk, since the rates of loans and borrowing might fluctuate over the tenure of instrument. Interest
rates are highly sensitive to several factors, including the monetary policies of the RBI, deregulation of the financial sector in
India, domestic and international economic and political conditions, inflation. In order to manage interest rate risk, we seek to
optimize borrowing profile between short-term and long-term loans. The liabilities are categorized into various time buckets
based on their maturities and our Asset Liability Management Committee review an interest rate sensitivity report periodically
for assessment of interest rate risks.

As of September 30, 2019, we had ₹ 20,394.35 million, or 88.8% of our borrowings at variable interest rates, while ₹ 2,561.96
million, or 11.2% of our borrowings were at fixed interest rates.

The following table sets forth the effect that a change of 50 basis points would have on our profit before tax:

(₹ in million)
For the six months ended For the financial year
September 30, 2019 2019 2018 2017
Loans
Increase by 50 basis points 131.65 107.33 65.72 39.64
Decrease by 50 basis points (131.65) (107.33) (65.72) (39.64)
Borrowings and debt securities
Increase by 50 basis points (101.97) (82.56) (42.22) (30.42)
Decrease by 50 basis points 101.97 82.56 42.22 30.42

For further details, see “Risk Factors – Internal Risk Factors – We are affected by volatility in interest rates for both our lending
and treasury operations, which could cause our net interest income to vary and consequently affect our profitability” on page
23.

Price Risk

We are exposed to price risk from our investments in mutual funds measured at fair value through profit and loss. The following
table sets forth the effect that a change of 50 basis points would have on our profit before tax:

(₹ in million)
For the six months ended For the financial year
September 30, 2019 2019 2018 2017
Increase by 50 basis points 13.89 5.15 - -
Decrease by 50 basis points (13.89) (5.15) - -

Unusual or Infrequent Events or Transactions

Except as described in this Draft Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or
transactions that have in the past or may in the future affect our business operations or future financial performance.

296
Known Trends or Uncertainties

Our business has been subject, and we expect it to continue to be subject, to significant economic changes arising from the trends
identified above in “Significant Factors Affecting our Results of Operations” above and the uncertainties described in “Risk
Factors” on page 277. To our knowledge, except as disclosed in this Draft Red herring Prospectus, there are no known factors
which we expect to have a material adverse effect on our income.

Future Relationship between Cost and Revenue

Other than as described in “Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” on pages 22, 132 and 275, respectively, to our knowledge there are no known factors that may
adversely affect our business prospects, results of operations and financial condition.

New Products or Business Segments

Other than as disclosed in this section and in “Our Business” on page 132, there are no new products or business segments that
have or are expected to have a material impact on our business prospects, results of operations or financial condition.

Dependence on a Few Customers

Given the nature of our business operations, we do not believe our business is dependent on any single or a few customers.

Seasonality of Business

Our business is not seasonal in nature.

Competitive Conditions

We operate in a competitive environment. Please refer to “Our Business”, “Industry Overview” and “Risk Factors” on pages
132, 87 and 22, respectively for further information on our industry and competition.

Recent Accounting Pronouncements

As of the date of this Draft Red Herring Prospectus, there are no recent accounting pronouncements, which would have a material
effect on our financial condition or results of operations.

Significant developments subsequent to September 30, 2019

On October 30, 2019, our Company sub-divided its authorised share capital, such that that 25,000,000 equity shares of ₹ 10 each
aggregating to ₹ 250,000,000 were sub-divided and reclassified as 125,000,000 Equity Shares of ₹ 2 each aggregating to ₹
250,000,000. Therefore, the cumulative number of Equity Shares pursuant to sub-division was 78,297,715 Equity Shares.

Except as disclosed above, and in this Draft Red Herring Prospectus, to our knowledge no circumstances have arisen since the
date of the last financial statements disclosed in this Draft Red Herring Prospectus, which materially and adversely affect or are
likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the
next 12 months.

297
 SECTION VII: LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS

Except as stated in this section, there are no outstanding (i) criminal proceedings, (ii) actions taken by statutory or regulatory
authorities, (iii) claims related to direct and indirect taxes, in a consolidated manner or (iv) material civil litigation, in each
case involving our Company, our Promoters or our Directors (collectively, the “Relevant Parties”). Further, except as stated
in this section, there are no disciplinary actions including penalty imposed by the SEBI or stock exchanges against our Promoters
in the last five Financial Years including outstanding action.

In relation to (iv) above, our Board in its meeting held on November 18, 2019, has considered and adopted a policy of materiality
for identification of material civil litigation. In terms of the materiality policy adopted by our Board, any outstanding litigation
involving the Relevant Parties which exceed the amount which is lesser of 1% of the total revenue and 1% of the profit after tax
as per the Restated Financial Information of the Company for the Financial Year 2019 would be considered material for the
Company. Our profit after tax as per the Restated Financial Information is ₹ 452.04 million. Accordingly, disclosures of the
following types of litigation involving the Relevant Parties have been included (a) where the aggregate amount involved in such
individual litigation exceeds ₹ 4.52 million individually; (b) where the decision in one case is likely to affect the decision in
similar cases, even though the amount involved in an individual litigation may not exceed ₹ 4.52 million; (c) all outstanding
litigation filed against the Company which are winding up petitions under the Companies Act, or are corporate insolvency
resolutions processes under the Insolvency and Bankruptcy Code, 2016; (d) where the monetary liability is not quantifiable, but
where the outcome of such legal proceedings could have a material adverse effect on the business, operations, financial position,
prospects or reputation of our Company, would be considered material.

There is no outstanding litigation involving our Group Company which would have a material impact on our Company.

Except as stated in this section, there are no outstanding material dues to creditors of our Company. For this purpose, our Board
has considered and adopted a policy of materiality for identification of material outstanding dues to creditors. In terms of this
materiality policy, outstanding dues to any creditor of our Company having monetary value exceeding ₹ 0.09 million, which is
5% of the trade payables of our Company, as per the latest Restated Financial Information of our Company included in this
Draft Red Herring Prospectus, shall be considered as ‘material’. Accordingly, as on September 30, 2019, any outstanding dues
exceeding ₹ 0.09 million have been considered as material outstanding dues for the purpose of disclosure in this section. Further,
for outstanding dues to any party which is a micro, small or medium enterprise (“MSME”), the disclosure will be based on
information available with the Company regarding status of the creditor as defined under Section 2 of the Micro, Small and
Medium Enterprises Act, 2006, as amended, as has been relied upon by Statutory Auditors.

It is clarified that for the purposes of the above, pre-litigation notices received by the Relevant Parties from third parties
(excluding those notices issued by statutory/regulatory/tax authorities) shall, unless otherwise decided by our Board, not be
considered as material until such time that the Relevant Parties, as applicable, is impleaded as defendant in litigation
proceedings before any judicial forum.

I. Litigation involving our Company

Litigation filed against our Company

Actions by regulatory and statutory authorities involving our Company

1. The NHB issued a show cause notice under the NHB Act, on January 6, 2015, against our Company, alleging
violation of certain provisions of the NHB Act, NHB Directions and NHB policy circular dated April 7, 2014,
in relation to disclosures in balance sheet. Our Company replied to this notice on January 12, 2015, providing
certain clarifications, requesting the NHB for condonation of error and ensuring compliances in the future. No
further action has taken place in relation to the show cause notice as on the date of this draft red herring
prospectus.

2. The NHB issued a show cause notice under the NHB Act, on June 26, 2019, against our Company, alleging
violation of certain provisions of the NHB Act and NHB Directions in relation to inter alia, failure of the
Company in assignment of risk weight on financial guarantee and incorrect inclusion of provisions of non-
performing assets. Our Company replied to this notice on July 4, 2019, providing certain clarifications,
requesting the NHB for condonation of error and ensuring compliances in the future. Further, NHB levied a
penalty of ₹ 0.01 million by its letter dated July 30, 2019 considering the submissions of our Company as not
acceptable. The penalty levied by NHB has been paid by our Company.

Tax proceedings

A show cause notice has been issued to our Company in relation to non-payment of service tax on import of services
and wrong availment of cenvat credit. The amount involved for our Company in the matter is ₹ 5.38 million. Our

298
 Company has filed its reply on October 9, 2017 in relation to the show cause notice. No further action has taken place
in relation to the show cause notice as on the date of this draft red herring prospectus.

Litigation filed by our Company

Criminal proceedings

1. Our Company has filed 10 complaints against various parties, including some of our customers, under Section
138 of the Negotiable Instruments Act, 1881, in relation to dishonour of cheques. The matters are pending at
various stages of adjudication before various courts. The aggregate amount involved in these matters is
approximately ₹ 4.63 million.

2. Our Company has registered a first information report against Shriram Jinturakar, Saroj Jinturakar, Gaurav
Jinturkar and Mangesh Jinturkar alleging inter alia trespass on the mortgaged asset belonging to Shriram
Jinturakar which was sealed by our Company for non-payment of equated monthly instalment. The matter is
currently pending.

II. Litigation involving our Directors

Litigation filed against our Directors

Litigation filed against Deepak Satwalekar

Actions by regulatory and statutory authorities

1. An inspection on Franklin Templeton Asset Management (India) Private Limited (the “Company”) had been
carried out by the Registrar of Companies (“RoC”) in 2010 and the response filed by the Company in 2011,
the Company and some of its directors including ex-directors received a show cause notice dated December
17, 2017 from the office of the RoC. The show cause notice indicated observations made by the inspection
team about some irregularity under section 193 of Companies Act 1956. Further to the approval obtained from
the board of directors, the Company has applied to compound the violation under section 621A/441 of
Companies Act 1956/2013.

2. SEBI by its adjudication order dated November 29, 2016, levied a penalty of ₹ 0.1 million on Franklin
Templeton Mutual Fund (“FTMF”), Franklin Templeton Trustee Services Private Ltd (Trustee) and Franklin
Templeton Asset Management (I) Private Limited (“AMC”). In the order, the adjudicating officer concluded
that while the investment committee (“IC”) constituted by the AMC had discharged its functions, use of the
term “informal group” to describe the constitution of IC and the inclusion of International CIO based outside
India as a member of the IC were in violation of SEBI Circular MFD/CIR/15/19133/2002 dated September
30, 2002 read with Regulation 10(a) of SEBI (Mutual Funds) Regulations 1996 and Regulation 25(18) of SEBI
(Mutual Funds) Regulations, 1996. The penalty has been paid by the FTAMC.

3. The NHB issued a show cause notice, on June 19, 2019, against Piramal Capital & Housing Finance Limited
(“PCHFL”), where Deepak Satwalekar is a director, and directed PCHFL alleging inter alia, the non-
disclosure of information in terms of Housing Finance Companies - Corporate Governance (NHB) Directions
2016 and to show cause reasons to NHB for not levying penalty. PCHFL submitted its response and there is
no further response from NHB.

Litigation filed against Maninder Singh Juneja

Criminal proceedings

Lakshmi Vilas Bank (“LVB”) filed a first information report against National Bulk Handling Corporation Private
Limited ( “NBHC”) and others including Maninder Singh Juneja, then managing director and chief executive officer
of NBHC, before the Central Bureau of Investigation, in relation to the service provided by NBHC as a collateral
management service provider to LVB, alleging inter alia a shortage/replacement of commodities stored in
Jeyaranganathan Godown and Sri Venkateswara Industries both located in Rajapalayam, Tamil Nadu which were
pledged in favour of LVB. The matter is currently pending.

Outstanding dues to creditors

Our Board, in its meeting held on November 18, 2019 has considered and adopted a policy of materiality for
identification of material outstanding dues to creditors (“Materiality Policy”). In terms of the Materiality Policy,
creditors of our Company to whom an amount exceeding five per cent of our trade payables as at September 30, 2019
was outstanding, were considered ‘material’ creditors. As per the Restated Financial Statements, our trade payables as

299
at September 30, 2019, was ₹ 1.71 million and accordingly, creditors to whom outstanding dues exceed ₹ 0.09 million
have been considered as material creditors for the purposes of disclosure in this Draft Red Herring Prospectus.

Based on this criteria, details of outstanding dues owed as at September 30, 2019 by our Company are set out below:

Type of Creditors Number of Amount involved

Creditors (in ₹ million)
Micro, Small and Medium Enterprises - -
Material creditors 3 1.25
Other creditors 80 1.71
Total 83 2.96

The details pertaining to outstanding dues to the material creditors along with names and amounts involved for each
such material creditor are available on the website of our Company at https://homefirstindia.com/list-of-material-
creditors-2/.

Material Developments

Other than as stated in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” on page 275, there have not arisen, since the date of the last financial information disclosed in this Draft
Red Herring Prospectus, any circumstances which materially and adversely affect, or are likely to affect, our operations,
our profitability taken as a whole or the value of our consolidated assets or our ability to pay our liabilities within the
next 12 months.

300
 GOVERNMENT AND OTHER APPROVALS

Our business requires various approvals, licenses, registrations and permits issued by relevant regulatory authorities under
various rules and regulations. Set out below is an indicative list of all material approvals, licenses, registrations and permits
obtained by our Company which are necessary for undertaking our business. In view of such approvals, our Company can
undertake the Offer and its current business activities. Additionally, unless otherwise stated, these approvals, licenses,
registrations and permits are valid as on the date of this Draft Red Herring Prospectus. Certain approvals, licenses, registrations
and permits may expire periodically in the ordinary course and applications for renewal of such expired approvals are submitted
in accordance with applicable requirements and procedures.

We have also set forth below (i) material approvals or renewals applied for but not received; (ii) material approvals expired
and renewal yet to be applied for; and (iii) material approvals required but not obtained or applied for. For further details in
connection with the applicable regulatory and legal framework, see “Key Regulations and Policies in India” beginning on page
[●].

I. Material approvals in relation to the Offer

For the approvals and authorisations obtained by our Company in relation to the Offer, see “Other Regulatory and
Statutory Disclosures – Authority for the Offer” on page 303.

II. Material approvals in relation to our Company

(a). Material approvals obtained by our Company

A. Material approvals in relation to our incorporation

For details in relation to incorporation of our Company, see “History and Certain Corporate Matters” on page
156.

B. Material approvals in relation to our business

The material approvals in relation to the establishments and business operations of our Company issued by
authorities of the respective jurisdictions in which our establishments and business operations are located are
set forth below:

1. Certificate of registration dated August 11, 2010 granted by the NHB bearing registration number
08.0086.10 pursuant to which our Company is allowed to commence / carry on the business of a
housing finance institution without accepting public deposits.

2. Memorandum of understanding dated August 27, 2015, executed between the NHB (in its capacity
as the central nodal agency under the CLSS) and our Company, in relation to the release of subsidy
by the NHB to our Company for loans disbursed to eligible borrowers under the CLSS.

3. Recognition as a ‘financial institution’ by the Ministry of Finance, by notification dated December

18, 2015 for the purpose of sub-clause (iv) of clause (m) of sub-section (1) of Section 2 of the
SARFAESI Act.

4. LEI registration number 335800LHIN24IFBBN535 on April 16, 2019, from the Clearing Corporation
of India Limited.

5. Registration for information utility services, through agreement dated April 3, 2019 entered into with
National e-Governance Services Limited.

C. Tax related approvals of our Company

1. Our permanent account number is AACCH3317E;

2. Our tax deduction account number is BLRH04970A;

3. Our service tax registration number is AACCH3317ESD005;

4. Goods and services tax registration numbers of our Company, as per the state where are business
operations are spread, are as follows:

301
 State Registration Number
Andhra Pradesh 37AACCH3317E1ZY
Chhattisgarh 22AACCH3317E1Z9
Gujarat 24AACCH3317E1Z5
Haryana 06AACCH3317E1Z3
Karnataka 29AACCH3317E3ZT
Madhya Pradesh 23AACCH3317E1Z7
Maharashtra* 27AACCH3317E2ZY
Maharashtra 27AACCH3317E1ZZ
Rajasthan 08AACCH3317E1ZZ
Tamil Nadu 33AACCH3317E1Z6
Telangana 36AACCH3317E1Z0
Uttar Pradesh 09AACCH3317E1ZX
* Input Service Distributor

5. Our Company has several branches in various states falling under the respective professional tax
legislations. Accordingly, our Company has obtained the necessary licenses and approvals from the
appropriate regulatory and governing authorities in relation to such tax laws.

D. Labour and commercial approvals

1. We are required to obtain a certificate of establishment issued by the labour departments of the
respective state governments where the Registered and Corporate Office and branch offices of our
Company are located under the provisions of the relevant state specific legislations on shops and
establishments. We have obtained the relevant shops and establishment registrations under the
applicable provisions of the shops and establishments legislations of the relevant state for our
Registered and Corporate Office and branch offices in India; and

2. Registration no. KDMAL1188091000 issued by the Employees’ Provident Fund Organisation, India
under the Employees Provident Fund and Miscellaneous Provisions Act, 1952.

E. Intellectual Property Registrations

For details in relation to our intellectual property registrations, see “Our Business – Intellectual Property” on
page 149.

(b). Material approvals pending to be obtained by our Company

The Company made an application before NHB on June 11, 2018 for a fresh certificate of registration upon
conversion to a public limited company.

In addition to the above, renewal applications for certain other approvals, including professional tax enrolment
and registration certificates have been made to the relevant revenue authorities in relation to certain of our
branch offices. Further, applications for shops and establishments registrations in relation to certain of our
branch offices are yet to be made or yet to be received.

302
 OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Offer

The Fresh Issue has been authorised by our Board pursuant to a resolution passed at its meeting held on July 31, 2019 and by
our Shareholders pursuant to a special resolution passed at their meeting held on August 30, 2019 under section 62(1)(c) of the
Companies Act. Further, our Board has taken on record the approval of the Offer for Sale by the Selling Shareholders and has
approved this Draft Red Herring Prospectus pursuant to its resolution dated November 28, 2019.

The Offer for Sale has been authorised by the Selling Shareholders as follows:

Selling Shareholder Number of Offered Shares Date of consent letter Date of corporate
authorisation/ board
resolution
Promoter Selling Shareholders
TN V LLP [●] Equity Shares aggregating up to ₹ November 27, 2019 November 15, 2019
4,984 million
Aether [●] Equity Shares aggregating up to ₹ November 27, 2019 November 25, 2019
3,322 million
Investor Selling Shareholder
Bessemer [●] Equity Shares aggregating up to ₹ November 26, 2019 November 26, 2019
1,764 million
Individual Selling Shareholders
P. S. Jayakumar [●] Equity Shares aggregating up to ₹ 560 November 27, 2019 -
million
Manoj Viswanathan [●] Equity Shares aggregating up to ₹ 359 November 27, 2019 -
million
Bhaskar Chaudhry [●] Equity Shares aggregating up to ₹ 11 November 26, 2019 -
million

Our Company has filed an application dated August 5, 2019 with the NHB seeking no-objection in relation to the initial public
offer and pre-IPO placement. Pursuant to the Finance (No. 2) Act, 2019, the NHB Act has been amended to transfer the regulating
authority for the housing finance sector from NHB to RBI including, among others, the power to regulate, the issue of any
prospectus or advertisement soliciting deposits of money from the public by any HFC. Accordingly, our application dated August
5, 2019 requires the no-objection of the RBI, which is currently awaited.

Our Company received in-principle approvals from BSE and NSE for the listing of the Equity Shares pursuant to letters dated
[●] and [●], respectively.

Prohibition by SEBI or other Governmental Authorities

Our Company, Promoters, Directors, members of our Promoter Group, each Selling Shareholder, the persons in control of our
Company and the persons in control of our Promoters are not prohibited from accessing the capital market or debarred from
buying, selling or dealing in securities under any order or direction passed by SEBI or any securities market regulator in any
other jurisdiction or any other authority/court.

Our Company, Promoters and Directors have not been declared as wilful defaulters by any bank or financial institution or
consortium thereof in accordance with the guidelines on wilful defaulters issued by the RBI.

Our Promoter or Directors have not been declared as Fugitive Economic Offenders.

Compliance with the Companies (Significant Beneficial Owners) Rules, 2018

Our Company, Promoters, members of our Promoter Group and each Selling Shareholder, are in compliance with the Companies
(Significant Beneficial Owners) Rules, 2018, as amended, to the extent applicable to each of them as on the date of this Draft
Red Herring Prospectus.

Directors associated with the Securities Market

Except Deepak Satwalekar, who is a director on the board of directors of Franklin Templeton Asset Management (India) Private
Limited, none of our Directors or entities with which our Directors are associated, are associated with the securities market in
any manner including securities market related business. Except as disclosed below, there has been no action initiated by SEBI
against the Directors of our Company in the five years preceding the date of this Draft Red Herring Prospectus:

303
Name of the entity/company Franklin Templeton Asset Management (India) Private Limited
SEBI Registration No. MF/026/96/8 (Registration is in the name of Mutual Fund and not
in the name of AMC);
INP000000464 (as a Portfolio Manager); INR000004165 (as
Category I Registrar and Transfer Agent - RTA)
Category of registration Mutual Fund; Portfolio Manager; Category I RTA
Date of expiry of registration Not applicable. All registrations are now perpetual.
If registration has elapsed, reasons for non-renewal Not applicable.
Details of outstanding action (including enquiry or No outstanding actions.
investigation) initiated by SEBI in the last five years
Penalty imposed by SEBI, if any (Penalty includes SEBI vide its Adjudication order dated November 29, 2016,
deficiency/warning letter, adjudication proceedings, levied a total penalty of ₹ 10,00,000/- (₹ Ten lakhs only) on
suspension/ cancellation/ prohibitory orders) Franklin Templeton Mutual Fund (FTMF), Franklin Templeton
Trustee Services Private Ltd (Trustee) and Franklin Templeton
Asset Management (I) Pvt. Ltd. (AMC). The company has paid
the penalty.
Outstanding fees payable to SEBI, if any No outstanding fees payable.

Eligibility for the Offer

Our Company is eligible for the Offer in accordance with Regulation 6(1) of the SEBI ICDR Regulations which states the
following:

“An issuer shall be eligible to make an initial public offer only if:

a) it has net tangible assets of at least three crore rupees, calculated on a restated and consolidated basis, in each of the
preceding three full years (of twelve months each), of which not more than fifty per cent. are held in monetary assets:

Provided that if more than fifty per cent. of the net tangible assets are held in monetary assets, the issuer has utilised
or made firm commitments to utilise such excess monetary assets in its business or project;

Provided further that the limit of fifty per cent. on monetary assets shall not be applicable in case the initial public offer
is made entirely through an offer for sale.

b) it has an average operating profit of at least fifteen crore rupees, calculated on a restated and consolidated basis,
during the preceding three years (of twelve months each), with operating profit in each of these preceding three years;

c) it has a net worth of at least one crore rupees in each of the preceding three full years (of twelve months each),
calculated on a restated and consolidated basis;

d) if it has changed its name within the last one year, at least fifty per cent. of the revenue, calculated on a restated and
consolidated basis, for the preceding one full year has been earned by it from the activity indicated by its new name.”.

We are an unlisted company, satisfying the conditions specified in Regulation 6(1) of the SEBI ICDR Regulations in the
following manner:

(a) Our Company has had net tangible assets of at least ₹ 30 million, calculated on a restated and consolidated basis, in
each of the preceding three full years (of 12 months each), of which not more than 50% are held in monetary assets;

(b) Our Company has an average operating profit of at least ₹ 150 million, calculated on a restated and consolidated basis,
during the preceding three years (of 12 months each), with operating profit in each of these preceding three years;

(c) Our Company has a net worth of at least ₹ 10 million in each of the preceding three full years (of 12 months each),
calculated on a restated and consolidated basis; and

(d) Our Company has not changed its name in the last one year.

Our Company’s net tangible assets, monetary assets, monetary assets as a percentage of the net tangible assets, operating profits
and net worth, derived from the Restated Financial Information included in this Draft Red Herring Prospectus as at, and for the
last three Financial Years, are set forth below:

304
 (₹ in million, unless otherwise stated)
Financial Year Financial Year Financial Year
2019 2018 2017
Net tangible assets, as restated(1) 24,813.34 13,643.31 9,887.32
Monetary assets, as restated(2) 2,949.00 302.18 1,821.52
Monetary assets(2), as a percentage of net tangible assets(1), as 11.88% 2.21% 18.42%
restated
Average operating profit, as restated(3) 541.50 221.25 103.55
Net worth, as restated(4) 5,231.40 3,252.15 3,063.58
(1) Net tangible assets have been computed as: sum of total assets excluding intangible assets under development and other intangible assets;
(2) Monetary assets is the aggregate value of cash and cash equivalents, other bank balances (deposits with banks) and investments in mutual
funds;
(3) Operating profits has been computed by deducting total expenses (excluding tax expense) from revenue from operations; and
(4) Net worth means the aggregate value of the paid-up share capital and other equity.

We are eligible to undertake the Offer as per Rule 19(2)(b) of the SCRR read with Regulations 6(1) of the SEBI ICDR
Regulations. Accordingly, in accordance with Regulation 32(1) of the SEBI ICDR Regulations we are required to allot not more
than 50% of the Offer to QIBs. Further, not less than 15% of the Offer shall be available for allocation on a proportionate basis
to Non-Institutional Bidders and not less than 35% of the Offer shall be available for allocation to RIBs in accordance with the
SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. In the event we fail to do so, the full
application money shall be refunded to the Bidders.

Further, in terms of Regulation 49(1) of the SEBI ICDR Regulations, our Company shall ensure that the number of Bidders to
whom the Equity Shares will be Allotted will be not less than 1,000.

Further, our Company confirms that it is in compliance with the conditions specified in Regulation 7(1) of the SEBI ICDR
Regulations, to the extent applicable, and will ensure compliance with the conditions specified in Regulation 7(2) of the SEBI
ICDR Regulations, to the extent applicable.

Further, our Company confirms that it is not ineligible to make the Offer in terms of Regulation 5 of the SEBI ICDR Regulations,
to the extent applicable. The details of our compliance with Regulation 5 of the SEBI ICDR Regulations are as follows:

(a) Neither our Company, the Promoters, the members of our Promoter Group, the Directors, nor the Selling Shareholders
are debarred from accessing the capital markets by SEBI.

(b) None of the Promoters or Directors are promoters or directors of companies which are debarred from accessing the
capital markets by SEBI.

(c) Neither our Company nor the Promoters or Directors is a wilful defaulter.

(d) None of our Promoters or Directors is a Fugitive Economic Offender.

(e) Other than the options granted under the ESOP 2012 and ESOP II, there are no outstanding warrants, options or rights
to convert debentures, loans or other instruments convertible into, or any other right which would entitle any person
any option to receive Equity Shares, as on the date of this Draft Red Herring Prospectus.

Each of the Selling Shareholders confirm that they are in compliance with Regulation 8 of the SEBI ICDR Regulations.

DISCLAIMER CLAUSE OF SEBI

IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THIS DRAFT RED HERRING PROSPECTUS

TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED
OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL
SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE OFFER IS PROPOSED TO BE MADE OR
FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THIS DRAFT RED
HERRING PROSPECTUS. THE BOOK RUNNING LEAD MANAGERS, AXIS CAPITAL LIMITED, CREDIT
SUISSE SECURITIES (INDIA) PRIVATE LIMITED, ICICI SECURITIES LIMITED AND KOTAK MAHINDRA
CAPITAL COMPANY LIMITED, HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THIS DRAFT RED
HERRING PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE SECURITIES
AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS)
REGULATIONS, 2018, AS AMENDED. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN
INFORMED DECISION FOR MAKING AN INVESTMENT IN THE PROPOSED OFFER.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE OUR COMPANY IS PRIMARILY

RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT

305
INFORMATION IN THIS DRAFT RED HERRING PROSPECTUS AND EACH OF THE SELLING
SHAREHOLDERS WILL BE RESPONSIBLE ONLY FOR THE STATEMENTS SPECIFICALLY CONFIRMED OR
UNDERTAKEN BY IT IN THIS DRAFT RED HERRING PROSPECTUS IN RELATION TO ITSELF FOR ITS
RESPECTIVE PORTION OF THE OFFERED SHARES, THE BOOK RUNNING LEAD MANAGERS ARE
EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT OUR COMPANY AND THE SELLING
SHAREHOLDERS DISCHARGE THEIR RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS
THIS PURPOSE, THE BOOK RUNNING LEAD MANAGERS HAVE FURNISHED TO SEBI, A DUE DILIGENCE
CERTIFICATE DATED NOVEMBER 28, 2019, IN THE FORMAT PRESCRIBED UNDER SCHEDULE V(A) OF
THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2018, AS AMENDED.

THE FILING OF THIS DRAFT RED HERRING PROSPECTUS DOES NOT, HOWEVER, ABSOLVE OUR
COMPANY FROM ANY LIABILITIES UNDER THE COMPANIES ACT, 2013 OR FROM THE REQUIREMENT
OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE
OF THE OFFER. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE
BOOK RUNNING LEAD MANAGERS, ANY IRREGULARITIES OR LAPSES IN THIS DRAFT RED HERRING
PROSPECTUS.

Disclaimer from our Company, the Directors, the Selling Shareholders, and the Book Running Lead Managers

Our Company, the Directors, each of the Selling Shareholders, and the Book Running Lead Managers accept no responsibility
for statements made in relation to the Company or the Offer other than those confirmed by it in relation to itself or its Offered
Shares in this Draft Red Herring Prospectus or in the advertisements or any other material issued by or at our Company’s instance
and anyone placing reliance on any other source of information, including our Company’s website, https://homefirstindia.com,
or the respective websites of any of our Promoters, the members of our Promoter Group or the Selling Shareholders would be
doing so at his or her own risk. Each Selling Shareholder, its respective partners, directors, key persons, affiliates, associates and
officers accept or undertake no responsibility for any statements including without limitation any statement made by or in relation
to the Company or its business, other than those specifically undertaken or confirmed by the respective Selling Shareholders in
relation to itself and its respective portion of the Offered Shares.

The Book Running Lead Managers accept no responsibility, save to the limited extent as provided in the Offer Agreement and
the Underwriting Agreement to be entered into among the Underwriters, the Selling Shareholders and our Company.

All information shall be made available by our Company, each Selling Shareholder (to the extent that the information pertain to
itself and its respective portion of the Offered Shares), and the Book Running Lead Managers to the public and investors at large
and no selective or additional information would be available for a section of the investors in any manner whatsoever, including
at road show presentations, in research or sales reports, at Bidding Centres or elsewhere.

None among our Company, the Selling Shareholders or any member of the Syndicate shall be liable for any failure in uploading
the Bids due to faults in any software or hardware system or otherwise.

Bidders will be required to confirm and will be deemed to have represented to our Company, the Selling Shareholders,
Underwriters and their respective directors, officers, agents, affiliates, and representatives that they are eligible under all
applicable laws, rules, regulations, guidelines and approvals to acquire the Equity Shares and will not issue, allot, sell, pledge,
or transfer the Equity Shares to any person who is not eligible under any applicable laws, rules, regulations, guidelines and
approvals to acquire the Equity Shares. Our Company, the Selling Shareholders, Underwriters and their respective directors,
officers, agents, affiliates, and representatives accept no responsibility or liability for advising any investor on whether such
investor is eligible to acquire the Equity Shares.

The Book Running Lead Managers and their respective associates and affiliates may engage in transactions with, and perform
services for, our Company, the Selling Shareholders and their respective group companies, affiliates or associates or third parties
in the ordinary course of business and have engaged, or may in the future engage, in commercial banking and investment banking
transactions with or become customers to our Company, the Selling Shareholders and their respective group companies, affiliates
or associates or third parties, for which they have received, and may in the future receive, compensation.

Disclaimer in respect of Jurisdiction

The Offer is being made in India to persons resident in India (who are competent to contract under the Indian Contract Act, 1872,
as amended, including Indian nationals resident in India, HUFs, companies, other corporate bodies and societies registered under
the applicable laws in India and authorised to invest in shares, Indian Mutual Funds registered with SEBI, Indian financial
institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI permission), or trusts under applicable
trust law and who are authorised under their respective constitution to hold and invest in equity shares, multilateral and bilateral
development financial institutions, state industrial development corporations, insurance companies registered with IRDAI,
provident funds (subject to applicable law) and pension funds, National Investment Fund, insurance funds set up and managed

306
by army, navy or air force of Union of India, insurance funds set up and managed by the Department of Posts, GoI, systemically
important NBFCs registered with the RBI) and permitted Non-Residents including FPIs and Eligible NRIs, AIFs and other
eligible foreign investors, if any, provided that they are eligible under all applicable laws and regulations to purchase the Equity
Shares. This Draft Red Herring Prospectus does not constitute an offer to sell or an invitation to subscribe to Equity Shares
offered hereby, in any jurisdiction other than in India to any person to whom it is unlawful to make an offer or invitation in such
jurisdiction. Any person into whose possession this Draft Red Herring Prospectus comes is required to inform himself or herself
about, and to observe, any such restrictions. Invitations to subscribe to or purchase the Equity Shares in the Offer will be made
only pursuant to the Red Herring Prospectus if the recipient is in India or the preliminary offering memorandum for the Offer,
which comprises the Red Herring Prospectus and the preliminary international wrap for the Offer, if the recipient is outside India.
No person outside India is eligible to bid for Equity Shares in the Offer unless that person has received the preliminary offering
memorandum for the Offer, which contains the selling restrictions for the Offer outside India. Any dispute arising out of the
Offer will be subject to the jurisdiction of appropriate court(s) in Mumbai only.

No action has been, or will be, taken to permit a public offering in any jurisdiction where action would be required for that
purpose, except that this Draft Red Herring Prospectus will be filed with SEBI for its observations. Accordingly, the Equity
Shares represented hereby may not be offered or sold, directly or indirectly, and this Draft Red Herring Prospectus may not be
distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the
delivery of this Draft Red Herring Prospectus nor any offer or sale hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of our Company or any of the Selling Shareholders since the date hereof
or that the information contained herein is correct as of any time subsequent to this date.

The Equity Shares offered in the Offer have not been and will not be registered under the U.S. Securities Act of 1933, as
amended or any state securities laws in the United States, and unless so registered may not be offered or sold within the
United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of
the U.S. Securities Act and applicable state securities laws. Accordingly, such Equity Shares are being offered and sold
(i) outside of the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the
applicable laws of the jurisdiction where those offers and sales occur; and (ii) to “qualified institutional buyers” (as
defined in Rule 144A under the U.S. Securities Act), pursuant to the private placement exemption set out in Section 4(a)
of the U.S. Securities Act.

We intend to rely on an exception from the definition of investment company under the U.S. Investment Company Act
of 1940, as amended, in connection with this Offer.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside
India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction except in compliance
with the applicable laws of such jurisdiction.

Bidders are advised to ensure that any Bid from them does not exceed investment limits or maximum number of Equity Shares
that can be held by them under applicable law. Further, each Bidder where required must agree in the Allotment Advice that
such Bidder will not sell or transfer any Equity Shares or any economic interest therein, including any off-shore derivative
instruments, such as participatory notes, issued against the Equity Shares or any similar security, other than in accordance with
applicable laws.

Disclaimer Clause of BSE

As required, a copy of this Draft Red Herring Prospectus has been submitted to BSE. The disclaimer clause as intimated by BSE
to our Company, post scrutiny of this Draft Red Herring Prospectus, shall be included in the Red Herring Prospectus and the
Prospectus prior to the RoC filing.

Disclaimer Clause of NSE

As required, a copy of this Draft Red Herring Prospectus has been submitted to NSE. The disclaimer clause as intimated by NSE
to our Company, post scrutiny of this Draft Red Herring Prospectus, shall be included in the Red Herring Prospectus and the
Prospectus prior to the RoC filing.

Disclaimer Clause of RBI

[●]

Listing

Applications have been made to the Stock Exchanges for permission to deal in and for an official quotation of the Equity Shares.
[●] will be the Designated Stock Exchange with which the Basis of Allotment will be finalised.

307
If the permission to deal in and for an official quotation of the Equity Shares is not granted by the Stock Exchanges, our Company
shall forthwith repay, without interest, all monies received from the applicants in pursuance of the Red Herring Prospectus in
accordance with applicable law. Our Company shall ensure that all steps for the completion of the necessary formalities for
listing and commencement of trading of Equity Shares at the Stock Exchanges are taken within such time prescribed by SEBI.
If our Company does not allot Equity Shares pursuant to the Offer within such timeline as prescribed by SEBI, it shall repay
without interest all monies received from Bidders, failing which interest shall be due to be paid to the Bidders at the rate of 15%
per annum for the delayed period or such other rate prescribed by SEBI.

Each Selling Shareholder undertakes to provide such reasonable assistance as may be requested by our Company, to the extent
such assistance is required from such Selling Shareholder in relation to its respective Offered Shares to facilitate the process of
listing and commencement of trading of the Equity Shares on the Stock Exchanges within such time prescribed by SEBI.

Consents

Consents in writing of each of the Selling Shareholders, our Directors, our Statutory Auditor, our Company Secretary and
Compliance Officer, legal counsels, the Book Running Lead Managers, the bankers to our Company, CRISIL, ICRA,
independent chartered accountant and the Registrar to the Offer to act in their respective capacities, have been obtained and
consents in writing of the Syndicate Members, Monitoring Agency, Bankers to the Offer/ Escrow Bank and Refund Bank to act
in their respective capacities, will be obtained, and will be filed along with a copy of the Red Herring Prospectus with the RoC
as required under the Companies Act and such consents shall not be withdrawn up to the time of delivery of the Red Herring
Prospectus for registration with the RoC.

Experts to the Offer

Except as stated below, our Company has not obtained any expert opinions:

Our Company has received written consent from the Statutory Auditors, namely, Walker Chandiok & Co LLP, Chartered
Accountants, to include its name as an expert in this Draft Red Herring Prospectus and as an “expert” as defined under Section
2(38) of the Companies Act, in relation to the reports of the Statutory Auditor dated November 18, 2019 on the Restated Financial
Information dated November 26, 2019, and the statement of special tax benefits dated November 26, 2019 included in this Draft
Red Herring Prospectus and such consent has not been withdrawn up to the time of delivery of this Draft Red Herring Prospectus.
However, the term “expert” shall not be construed to mean an “expert” as defined under the U.S. Securities Act. Accordingly,
the reference to the Statutory Auditor as “experts” in this Draft Red Herring Prospectus is not made in the context of the U.S.
Securities Act but solely in the context of the Offer in India.

Particulars regarding public or rights issues by our Company during the last five years

Our Company has not undertaken any public issue in the five years preceding the date of this Draft Red Herring Prospectus.
Other than as disclosed in “Capital Structure – Equity Share capital history of our Company” beginning on page 57, our
Company has not undertaken any rights issues in the five years immediately preceding the date of this Draft Red Herring
Prospectus.

Capital issue during the preceding three years by our Company

Other than as disclosed in “Capital Structure – Equity Share capital history of our Company” on page 57, our Company has not
made any capital issues during the three years preceding the date of this Draft Red Herring Prospectus.

Performance vis-à-vis Objects

Our Company has not undertaken any public issue in the five years preceding the date of this Draft Red Herring Prospectus.
Other than as disclosed in “Capital Structure – Equity Share capital history of our Company” beginning on page 57, our
Company has not undertaken any rights issues in the five years immediately preceding the date of this Draft Red Herring
Prospectus. The objects for which the rights issue was undertaken has been achieved without any delay or shortfall.

Stock Market Data of the Equity Shares

This being the initial public offering of the Equity Shares of our Company, the Equity Shares are not listed on any stock exchange
as on the date of this Draft Red Herring Prospectus, and accordingly, no stock market data is available for the Equity Shares.

Commission or brokerage on previous issues in last five years

Since this is the initial public issue of Equity Shares, no sum has been paid or has been payable as commission or brokerage for
subscribing to or procuring or agreeing to procure subscription for the Equity Shares since our Company’s inception.

308
Price information of past issues handled by the Book Running Lead Managers (during the current Financial Year and two Financial Years preceding the current Financial Year)

A. Axis Capital Limited

1. Price information of past issues handled by Axis Capital Limited:

S. Issue Name Issue Size Issue Listing Date Opening Price +/- % change in closing +/- % change in closing +/- % change in closing
No. (₹ price (₹) on listing date price, [+/- % change in price, [+/- % change in price, [+/- % change in
million) (in ₹) closing benchmark]- 30th closing benchmark]- 90th closing benchmark]- 180th
calendar days from listing calendar days from listing calendar days from listing
1. Sterling And Wilson 28,809.42 780.00 August 20, 2019 706.00 -21.88%, [-1.60%] -48.63%, [+7.97%] -
Solar Limited
2. Spandana Sphoorty 12,009.36 856.00 August 19, 2019 825.00 -0.56%, [-2.14%] +52.76%, [+7.61%] -
Financial Limited
3. Polycab India Limited 13,452.60 538.00^ April 16, 2019 633.00 +15.36%, [-5.35%] +14.70%, [-1.99%] +23.76%, [-4.09%]
4. Chalet Hotels Limited 16,411.80 280.00 February 7, 2019 294.00 +1.14%, [-0.31%] +24.41%, [+3.87%] +10.77%, [-1.87%]
5. Ircon International 4,667.03 475.00* September 28, 412.00 -27.04%, [-8.24%] -6.60%, [-1.84%] -15.71%, [+5.06%]
Limited 2018
6. HDFC Asset 28,003.31 1,100.00 August 6, 2018 1,726.25 +57.43%, [+1.17%] +30.61%, [-7.32%] +23.78%,[-4.33%]
Management
Company Limited
7. Sandhar Technologies 5,124.80 332.00 April 2, 2018 346.10 +18.09%, [+5.17%] +15.95%,[+4.92%] -4.20%, [+7.04%]
Limited
8. Hindustan 41,131.33 1,215.00! March 28, 2018 1,152.00 -6.96%, [+4.98%] -25.84%, [+6.41%] -25.45%, [+10.18%]
Aeronautics Limited
9. Bandhan Bank 44,730.19 375.00 March 27, 2018 499.00 +31.81%, [3.79%] +42.96%, [+6.26%] +51.89%, [+9.42%]
Limited
10. Aster DM Healthcare 9801.00 190.00 February 26, 183.00 -13.66%, [-3.77%] -4.97%, [+0.21%] -8.16%, [+9.21%]
Limited 2018
Source: www.nseindia.com
* Offer Price was 465.00 per equity share to Retail Individual Bidders and Eligible Employees
! Offer Price was ₹1,190.00 per equity share to Retail Individual Bidders and Eligible Employees
^ Offer Price was ₹ 485.00 per equity share to Eligible Employees
Notes:
1. Issue Size derived from Prospectus/final post issue reports, as available.
2. The CNX NIFTY is considered as the Benchmark Index.
3. Price on NSE is considered for all of the above calculations.
4. In case 30th/90th/180th day is not a trading day, closing price on NSE of the previous trading day has been considered.
5. Since 30 calendar days, 90 calendar days and 180 calendar days, as applicable, from listing date has not elapsed for few of the above issues, data for same is not available.

309
2. Summary statement of price information of past issues handled by Axis Capital Limited:

Financial Total Total amount No. of IPOs trading at discount - No. of IPOs trading at No. of IPOs trading at No. of IPOs trading at premium
Year no. of of funds 30th calendar days from listing premium - 30th calendar days discount - 180th calendar days - 180th calendar days from
IPOs raised from listing from listing listing
(₹ Mn.) Over 50% Between Less than Over Between Less than Over Between Less than Over Between Less than
25-50% 25% 50% 25-50% 25% 50% 25-50% 25% 50% 25-50% 25%
2019-20* 3 54,271.38 - - 2 - - 1 - - - - - 1
2018-19 4 54,206.94 - 1 - 1 - 2 - - 2 - - 2
2017-18 18 492,662.22 - 1 9 1 3 4 - 2 7 4 2 3
* The information is as on the date of the document
The information for each of the financial years is based on issues listed during such financial year.
Note: Since 30 calendar days and 180 calendar days, as applicable, from listing date has not elapsed for few of the above issues, data for same is not available.

310
B. Credit Suisse Securities (India) Private Limited

1. Price information of past issues handled by Credit Suisse Securities (India) Private Limited:

S. Issue Name Issue Size Issue Listing Date Opening Price +/- % change in closing +/- % change in closing +/- % change in closing
No. (₹ million) price (₹) on listing date price, [+/- % change in price, [+/- % change in price, [+/- % change in
(in ₹) closing benchmark]- 30th closing benchmark]- 90th closing benchmark]- 180th
calendar days from listing calendar days from listing calendar days from listing
1. S Chand and 7,285.57 670.00 May 09, 2017 700.00 -17.37%, [3.72%] -25.38%, [8.05%] -27.92%, [12.19%]
Company Limited
2. Eris Lifesciences 17,411.63 603.00 June 29, 2017 611.00 0.87%, [5.37%] -5.69%, [3.87%] 27.19%, [10.40%]
Limited
3. Godrej Agrovet 11,573.12 460.00 October 16, 2017 615.60 14.96%, [-0.43%] 34.95%, [4.40%] 51.09%, [2.44%]
Limited
4. HDFC Standard 86,950.00 290.00 November 17, 310.00 31.52%, [0.48%] 48.93%, [2.11%] 74.66%, [5.04%]
Life Insurance 2017
Company Limited
5. Varroc Engineering 19,549.61 967.00 July 6, 2018 1,015.00 1.62%, [5.46%] -7.29%, [0.79%] -24.01%, [1.28%]
Limited
6. CreditAccess 11,311.88 422.00 August 23, 2018 390.00 -21.16%, [-3.80%] -14.91%, [-8.00%] -5.88%, [-8.13%]
Grameen Limited
7. Metropolis 12,042.90 880.00 April 15, 2019 958.00 3.75%, [-4.01%] 21.39%, [-1.18%] 45.93%, [-3.30%]
Healthcare Limited
8. Sterling and Wilson 28,809.42 780.00 August 20, 2019 706.00 -21.88%, [-1.60%] -48.63%, [7.97%] NA
Solar Limited
Source: www.nseindia.com for the price information and prospectus for issue details.
Notes:
(a) 30th, 90th, 180th calendar days from listed day have been taken as listing day plus 29, 89 and 179 calendar days, except wherever 30th , 90th, 180th calendar day is a holiday, in which case we have
considered the closing data of the previous trading date
(b) % of change in closing price on 30th/ 90th / 180th calendar day from listing day is calculated vs issue price. % change in closing benchmark index is calculated based on closing index on listing
day vs closing index on 30th/ 90th / 180th calendar day from listing day.
(c) NIFTY is considered as the benchmark index

311
2. Summary statement of price information of past issues handled by Credit Suisse Securities (India) Private Limited:

Financial Total no. Total No. of IPOs trading at No. of IPOs trading at No. of IPOs trading at discount No. of IPOs trading at
Year of IPOs amount of discount - 30th calendar days premium - 30th calendar days - 180th calendar days from premium - 180th calendar
funds raised from listing from listing listing days from listing
(₹ Mn.) Over Between Less than Over Between Less than Over Between Less than Over Between Less than
50% 25-50% 25% 50% 25-50% 25% 50% 25-50% 25% 50% 25-50% 25%
2019-20 2 40,852.32 - - 1 - - 1 - - - - 1 -
2018-19 2 30.861.49 - - 1 - - 1 - - 2 - - -
2017-18 4 123,220.32 - - 1 - 1 2 - 1 - 2 1 -
Notes:
(a) Discount / Premium data of 180 days not available for current fiscal year FY19-20 for Sterling and Wilson Solar Limited as 180 days of listing not completed

312
C. ICICI Securities Limited

1. Price information of past issues handled by ICICI Securities Limited:

S. Issue Name Issue Size Issue price Listing Date Opening +/- % change in closing +/- % change in closing +/- % change in closing
No. (₹ million) (₹) Price on price, [+/- % change in price, [+/- % change in price, [+/- % change in
listing date closing benchmark]- 30th closing benchmark]- 90th closing benchmark]- 180th
(in ₹) calendar days from listing calendar days from listing calendar days from listing
1. Galaxy Surfactants 9,370.90 1,480.00 8-Feb-18 1,525.00 +1.14%, [-3.31%] -0.85%[+1.33%] -14.68%,[+7.66%]
Limited
2. Aster DM Healthcare 9,801.40 190.00 26-Feb-18 183.00 -13.66%,[-3.77%] -5.39%,[+1.00%] -8.16%,[+9.21%]
Limited
3. Sandhar 5,124.80 332.00 02-Apr-18 346.10 +19.59%[+4.96%] +15.41%,[+4.36%] -4.20%,[+7.04%]
Technologies Limited
4. HDFC Asset 28,003.31 1,100.00 06-Aug-18 1,726.25 +58.04%,[+1.17%] +29.60%,[-7.58%] +23.78%,[-4.33%]
Management
Company Limited
5. Creditaccess 11,311.88 422.00 23-Aug-18 390.00 -21.16%,[-3.80%] -14.90%,[-8.00%] -5.71%,[-8.13%]
Grameen Limited
6. Aavas Financiers Ltd 16,403.17 821.00 08-Oct-18 750.00 -19.32%,[+1.76%] +2.39%,[+4.09%] +38.82%,[+12.74%]
7. IndiaMart InterMesh 4,755.89 973.00(1) 04-Jul-19 1,180.00 +26.39%,[-7.95%] +83.82%,[-4.91%] NA*
Ltd
8. Affle (India) Limited 4,590.00 745 08-Aug-19 926.00 +12.56%,[-0.78] +86.32%,[+8.02%] NA*
9. Spandana Sphoorty 12,009.36 856.00 19-Aug-19 824 -0.73%,[-2.14%] +51.38%,[+7.51%] NA*
Financial Limited
10. Sterling and Wilson 28,496.38 780.00 20-Aug-19 706.00 -7.01%,[-1.60%] -58.90%,[+7.87%] NA*
Solar Limited
* Data not available
(1) Discount of ₹ 97 per equity share offered to Eligible Employees. All calculations are based on Issue Price of ₹ 973.00 per equity share.
Notes:
1. All data sourced from www.nseindia.com
2. Benchmark index considered is NIFTY
3. 30th, 90th, 180th calendar day from listed day have been taken as listing day plus 29, 89 and 179 calendar days, except wherever 30 th, 90th, 180th calendar day is a holiday, in which case we have
considered the closing data of the next trading day

313
2. Summary statement of price information of past issues handled by ICICI Securities Limited:

Financial Total no. Total No. of IPOs trading at No. of IPOs trading at premium No. of IPOs trading at discount - No. of IPOs trading at premium
Year of IPOs amount of discount - 30th calendar - 30th calendar days from listing 180th calendar days from listing - 180th calendar days from
funds raised days from listing listing
(₹ Mn.) Over Between Less Over Between Less than Over Between Less than Over Between Less than
50% 25-50% than 50% 25-50% 25% 50% 25-50% 25% 50% 25-50% 25%
25%
2019-20* 4 49,850.66 - - 1 - 1 2 - - - - - -
2018-19 4 60,843.16 - - 2 1 - 1 - - 2 - 1 1
2017-18 9 208,306.61 - - 5 1 - 3 - - 5 1 2 1
* This data covers issues upto YTD

314
D. Kotak Mahindra Capital Company Limited

1. Price information of past issues handled by Kotak Mahindra Capital Company Limited:

S. Issue Name Issue Size Issue Listing Date Opening +/- % change in closing +/- % change in closing +/- % change in closing
No. (₹ million) price Price on price, [+/- % change in price, [+/- % change in price, [+/- % change in
(₹) listing date closing benchmark]- 30th closing benchmark]- 90th closing benchmark]- 180th
(in ₹) calendar days from listing calendar days from listing calendar days from listing
1. Polycab India 13,452.60 538 April 16, 2019 633.00 +15.36% [-5.35%] +14.70%[-1.99%] +23.76%[-4.09%]
Limited(1)
2. Metropolis 12,042.88 880 April 15, 2019 958.00 +3.75% [-4.01%] +21.39%[-1.18%] +45.93%[-3.30%]
Healthcare Limited
3. CreditAccess 11,311.88 422 August 23, 2018 390.00 -21.6% [-3.80%] -14.91% [-8.00%] -5.71%[-8.13%]
Grameen Limited
4. HDFC Asset 28,003.31 1,100 August 6, 2018 1,726.25 +58.35% [+1.17%] +30.61% [-7.32%] +23.78%[-4.33%]
Management
Company Limited
5. TCNS Clothing Co. 11,251.25 716 July 30, 2018 716.00 -9.29% [+3.70%] -19.74% [-11.39%] -1.00%[-4.76%]
Limited
6. Varroc Engineering 19,549.61 967 July 6, 2018 1,015.00 +1.62% [+5.46%] -7.29% [+0.79%] -24.01% [+1.28%]
Limited(2)
7. IndoStar Capital 18,440.00 572 May 21, 2018 600.00 -0.96% [+1.84%] -16.28% [+9.07%] -39.97 [+1.57%]
Finance Limited
8. Lemon Tree Hotels 10,386.85 56 Apr 9, 2018 61.60 +30.18% [+3.26%] +29.91% [+3.79%] +19.46% [-0.61%]
Limited
9. Bandhan Bank 44,730.19 375 March 27, 2018 499.00 +31.81% [+3.79%] +42.96 [+6.26%] +51.89% [9.42%]
Limited
10. Aster DM Healthcare 9,801.36 190 February 26, 2018 183.00 -13.66% [-3.77%] -4.97% [+0.21%] -8.16% [+9.21%]
Limited
Source: www.nseindia.com
Notes:
1. In Polycab India Limited, the issue price to employees was ₹ 485 after a discount of ₹ 53 per equity share.
2. In Varroc Engineering Limited, the issue price to employees was ₹ 919 after a discount of ₹ 48 per equity share.
3. In the event any day falls on a holiday, the price/index of the immediately preceding working day has been considered.
4. The 30th, 90th, 180th calendar days from listed day have been taken as listing day plus 29, 89 and 179 calendar days.
5. Nifty is considered as the benchmark index.
6. Restricted to last 10 equity public issues.

315
2. Summary statement of price information of past issues handled by Kotak Mahindra Capital Company Limited:

Financial Total Total No. of IPOs trading at discount - No. of IPOs trading at premium No. of IPOs trading at discount - No. of IPOs trading at premium
Year no. of amount of 30th calendar days from listing - 30th calendar days from listing 180th calendar days from listing - 180th calendar days from
IPOs funds listing
raised Over Between Less than Over Between Less than Over Between Less than Over Between Less than
(₹ Mn.) 50% 25-50% 25% 50% 25-50% 25% 50% 25-50% 25% 50% 25-50% 25%
2019-20 2 25,495.48 - - - - - 2 - - - - 1 1
2018-19 6 98,942.90 - - 3 1 1 1 - 1 3 - - 2
2017-18 9 384,510.39 - 1 5 - 1 2 - - 5 2 1 1
Notes:
1. The information is as on the date of this Draft Red Herring Prospectus.
2. The information for each of the financial years is based on issues listed during such financial year.

316
Track record of past issues handled by the Book Running Lead Managers

For details regarding the track record of the Book Running Lead Managers, as specified in circular bearing number
CIR/MIRSD/1/2012 dated January 10, 2012 issued by SEBI, please see the websites of the Book Running Lead Managers, as
provided in the table below:

S. No. Name of the Lead Manager Website

1. Axis Capital Limited www.axiscapital.co.in
2. Credit Suisse Securities (India) Private Limited www.credit-suisse.com/in/en.html
3. ICICI Securities Limited www.icicisecurities.com
4. Kotak Mahindra Capital Company Limited www.investmentbank.kotak.com

Disposal of Investor Grievances by our Company

The Registrar Agreement provides for retention of records with the Registrar to the Offer for a period of at least eight years from
the from the date of listing and commencement of trading of the Equity Shares to enable the Bidders to approach the Registrar
to the Offer for redressal of their grievances.

All grievances in relation to the Bidding process may be addressed to the Registrar to the Offer with a copy to the relevant
Designated Intermediary to whom the Bid cum Application Form was submitted. The Bidder should give full details such as
name of the sole or first Bidder, Bid cum Application Form number, Bidder DP ID, Client ID, PAN, UPI ID (in case of RIBs
using the UPI Mechanism), date of the submission of Bid cum Application Form, address of the Bidder, number of the Equity
Shares applied for and the name and address of the Designated Intermediary where the Bid cum Application Form was submitted
by the Bidder.

Further, the Bidder shall also enclose a copy of the Acknowledgment Slip duly received from the concerned Designated
Intermediary in addition to the information mentioned hereinabove.

The Registrar to the Offer shall obtain the required information from the SCSBs for addressing any clarifications or grievances
of ASBA Bidders. Our Company, the Book Running Lead Managers and the Registrar to the Offer accept no responsibility for
errors, omissions, commission or any acts of SCSBs including any defaults in complying with its obligations under the SEBI
ICDR Regulations. Bidders can contact the Compliance Officer or the Registrar to the Offer in case of any pre-Offer or post-
Offer related problems such as non-receipt of letters of Allotment, non-credit of Allotted Equity Shares in the respective
beneficiary account, non-receipt of refund intimations and non-receipt of funds by electronic mode.

Anchor Investors are required to address all grievances in relation to the Offer to the Book Running Lead Managers.

Our Company estimates that the average time required by our Company or the Registrar to the Offer or the relevant Designated
Intermediary, for the redressal of routine investor grievances shall be 10 Working Days from the date of receipt of the complaint.
In case of non-routine complaints and complaints where external agencies are involved, our Company will seek to redress these
complaints as expeditiously as possible.

Our Company has also appointed Shreyans Bachhawat, Company Secretary of our Company, as the Compliance Officer for the
Offer. For details, see “General Information” beginning on page 49.

Our Company has constituted a Stakeholders’ Relationship Committee comprising Sakti Prasad Ghosh, Maninder Singh Juneja
and Manoj Viswanathan as its members which is responsible for redressal of grievances of security holders of our Company.
For further details on the Stakeholders’ Relationship Committee, see “Our Management – Committees of the Board –
Stakeholders’ Relationship Committee” on page 170.

Our Company has obtained authentication on the SCORES in terms of the SEBI circular bearing number CIR/OIAE/1/2013
dated April 17, 2013 in relation to redressal of investor grievances through SCORES.

Our Company has not received any investor complaint during the three years preceding the date of this Draft Red Herring
Prospectus.

Further, no investor complaint in relation to our Company is pending as on the date of this Draft Red Herring Prospectus.

317
 SECTION VIII: OFFER INFORMATION

TERMS OF THE OFFER

The Equity Shares being offered and Allotted and transferred pursuant to the Offer shall be subject to the provisions of the
Companies Act, SEBI ICDR Regulations, SEBI Listing Regulations, SCRA, SCRR, the Memorandum of Association and
Articles of Association, the terms of the Red Herring Prospectus, the Prospectus, the abridged prospectus, the Bid cum
Application Form, the Revision Form, the CAN or Allotment Advice and other terms and conditions as may be incorporated in
the Allotment Advices and other documents or certificates that may be executed in respect of the Offer. The Equity Shares shall
also be subject to laws as applicable, guidelines, rules, notifications and regulations relating to the issue of capital and listing and
trading of securities issued from time to time by SEBI, the Government of India, the Stock Exchanges, the RBI, the RoC, the
NHB and/or other authorities, as in force on the date of the Offer and to the extent applicable or such other conditions as may be
prescribed by SEBI, the RBI, the NHB, the Government of India, the Stock Exchanges, the RoC or any other authorities while
granting its approval for the Offer.

The Offer

The Offer comprises a Fresh Issue by our Company and an Offer for Sale by the Selling Shareholders.

Ranking of the Equity Shares

The Equity Shares being offered/Allotted and transferred pursuant to the Offer shall be subject to the provisions of the Companies
Act, the MoA and AoA and shall rank pari passu in all respects with the existing Equity Shares including in respect of the right
to receive dividend, voting and other corporate benefits. For further details, see “Description of Equity Shares and Terms of
Articles of Association” beginning on page 341.

Mode of Payment of Dividend

Our Company shall pay dividends, if declared, to the Shareholders in accordance with the provisions of the Companies Act, the
AoA and provisions of the SEBI Listing Regulations and any other guidelines or directions which may be issued by the
Government in this regard. Dividends, if any, declared by our Company after the date of Allotment (pursuant to the transfer of
Equity Shares from the Offer for Sale), will be payable to the Bidders who have been Allotted Equity Shares in the Offer, for the
entire year, in accordance with applicable laws. For further details in relation to dividends, see “Dividend Policy” and
“Description of Equity Shares and Terms of Articles of Association” beginning on pages 182 and 341, respectively.

Face Value, Offer Price and Price Band

The face value of each Equity Share is ₹ 2 and the Offer Price is ₹ [●] per Equity Share. The Floor Price is ₹ [●] per Equity Share
and at the Cap Price is ₹ [●] per Equity Share, being the Price Band. The Anchor Investor Offer Price is ₹ [●] per Equity Share.

The Price Band and the minimum Bid Lot will be decided by our Company and the Promoter Selling Shareholders in consultation
with the Book Running Lead Managers and advertised in all editions of English national daily newspaper, [●], all editions of
Hindi national daily newspaper, [●] and Mumbai editions of the Marathi daily newspaper [●] (Marathi being the regional
language of Maharashtra, where our Registered and Corporate Office is located) each with wide circulation, at least two Working
Days prior to the Bid/Offer Opening Date and shall be made available to the Stock Exchanges for the purpose of uploading the
same on their websites. The Price Band, along with the relevant financial ratios calculated at the Floor Price and at the Cap Price,
shall be pre-filled in the Bid cum Application Forms available on the websites of the Stock Exchanges. The Offer Price shall be
determined by our Company and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers,
after the Bid/Offer Closing Date.

At any given point of time there shall be only one denomination of Equity Shares.

Compliance with disclosure and accounting norms

Our Company shall comply with all disclosure and accounting norms as specified by SEBI from time to time.

Rights of the Equity Shareholders

Subject to applicable laws, rules, regulations and guidelines and the Articles of Association, our Shareholders shall have the
following rights:

 Right to receive dividends, if declared;

 Right to attend general meetings and exercise voting rights, unless prohibited by law;

318
 Right to vote on a poll either in person or by proxy or “e-voting”, in accordance with the provisions of the Companies
Act;

 Right to receive offers for rights shares and be allotted bonus shares, if announced;

 Right to receive surplus on liquidation, subject to any statutory and preferential claim being satisfied;

 Right of free transferability of Equity Shares, subject to applicable laws including any NHB and RBI rules and
regulations; and

 Such other rights, as may be available to a shareholder of a listed public company under the Companies Act, the SEBI
Listing Regulations and the AoA.

For a detailed description of the main provisions of the AoA of our Company relating to voting rights, dividend, forfeiture and
lien, transfer, transmission, consolidation or splitting, see “Description of Equity Shares and Terms of Articles of Association”
beginning on page 341.

Allotment only in Dematerialised Form

Pursuant to Section 29 of the Companies Act and the SEBI ICDR Regulations, the Equity Shares shall be Allotted only in
dematerialised form. As per the SEBI ICDR Regulations, the trading of the Equity Shares shall only be in dematerialised form.
In this context, two agreements have been signed amongst our Company, the respective Depositories and the Registrar to the
Offer:

 Tripartite agreement dated September 18, 2019 amongst our Company, CDSL and the Registrar to the Offer; and

 Tripartite agreement dated May 16, 2012 between our Company, NDSL and the Registrar to the Offer.

Market Lot and Trading Lot

Since trading of the Equity Shares is in dematerialised form, the tradable lot is one Equity Share. Allotment in the Offer will be
only in electronic form in multiples of one Equity Share subject to a minimum Allotment of [●] Equity Shares. For further details,
see “Offer Procedure” beginning on page 326.

Joint Holders

Subject to the provisions contained in the Articles of Association, where two or more persons are registered as the holders of the
Equity Shares, they shall be entitled to hold the same as joint tenants with benefits of survivorship.

Nomination facility to Bidders

In accordance with Section 72 of the Companies Act read with the Companies (Share Capital and Debentures) Rules, 2014, as
amended, the sole Bidder, or the first Bidder along with other joint Bidders, may nominate any one person in whom, in the event
of the death of sole Bidder or in case of joint Bidders, death of all the Bidders, as the case may be, the Equity Shares Allotted, if
any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall be
entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the Equity Share(s).
Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become
entitled to Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale,
transfer or alienation of Equity Share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the
manner prescribed. Fresh nomination can be made only on the prescribed form available on request at our Registered and
Corporate Office or to the registrar and transfer agents of our Company.

Any person who becomes a nominee by virtue of the provisions of Section 72 of the Companies Act shall upon the production
of such evidence as may be required by our Board, elect either:

a) to register himself or herself as the holder of the Equity Shares; or

b) to make such transfer of the Equity Shares, as the deceased holder could have made.

Further, our Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to
transfer the Equity Shares, and if the notice is not complied with within a period of 90 days, our Board may thereafter withhold
payment of all dividends, bonuses or other monies payable in respect of the Equity Shares, until the requirements of the notice
have been complied with.

319
Since the Allotment of Equity Shares in the Offer will be made only in dematerialised mode there is no need to make a separate
nomination with our Company. Nominations registered with respective Depository Participant of the Bidder will prevail. If the
Bidder wants to change their nomination, they are requested to inform their respective Depository Participant.

Withdrawal of the Offer

Our Company and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers, reserve the right
not to proceed with the Fresh Issue, and each Selling Shareholder reserves the right to not proceed with the Offer for Sale, in
whole or in part thereof, to the extent of its respective portion of the Offered Shares after the Bid/Offer Opening Date but before
the Allotment. In such an event, our Company would issue a public notice in the newspapers in which the pre-Offer
advertisements were published, within two days of the Bid/Offer Closing Date or such other time as may be prescribed by SEBI,
providing reasons for not proceeding with the Offer. The Book Running Lead Managers through the Registrar to the Offer, shall
notify the SCSBs and the Sponsor Bank, in case of RIBs using the UPI Mechanism, to unblock the bank accounts of the ASBA
Bidders (other than Anchor Investors) shall notify the Escrow Collection Bank to release the Bid Amounts to the Anchor
Investors, within one Working Day from the date of receipt of such notification. Our Company shall also inform the same to the
Stock Exchanges on which Equity Shares are proposed to be listed.

Notwithstanding the foregoing, the Offer is also subject to obtaining (i) the final listing and trading approvals of the Stock
Exchanges, which our Company shall apply for after Allotment, and (ii) the final RoC approval of the Prospectus after it is filed
with the RoC. If our Company and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers,
withdraw the Offer after the Bid/Offer Closing Date and thereafter determines that it will proceed with a public offering of the
Equity Shares, our Company shall file a fresh draft red herring prospectus with SEBI and the Stock Exchanges.

Bid/Offer Programme

BID/OFFER OPENS ON [●]*

BID/OFFER CLOSES ON [●]**
* Our Company and the Promoter Selling Shareholders may, in consultation with the Book Running Lead Managers, consider participation
by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor Investor Bid/Offer Period shall be one Working Day
prior to the Bid/Offer Opening Date in accordance with the SEBI ICDR Regulations.

** Our Company and the Promoter Selling Shareholders may, in consultation with the Book Running Lead Managers, consider closing the
Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer Closing Date in accordance with the SEBI ICDR Regulations.

An indicative timetable in respect of the Offer is set out below:

Event Indicative Date

Bid/Offer Closing Date [●]
Finalisation of Basis of Allotment with the Designated Stock Exchange On or about [●]
Initiation of refunds (if any, for Anchor Investors)/unblocking of funds from ASBA On or about [●]
Account
Credit of Equity Shares to demat accounts of Allottees On or about [●]
Commencement of trading of the Equity Shares on the Stock Exchanges On or about [●]

The above timetable, other than the Bid/Offer Closing Date, is indicative and does not constitute any obligation on our
Company or the Selling Shareholders or the Book Running Lead Managers.

Whilst our Company shall ensure that all steps for the completion of the necessary formalities for the listing and the
commencement of trading of the Equity Shares on the Stock Exchanges are taken within six Working Days of the
Bid/Offer Closing Date or such other time as may be prescribed by SEBI, the timetable may be subject to change due to
various factors, such as extension of the Bid/Offer Period by our Company and the Promoter Selling Shareholders,
revision of the Price Band or any delay in receiving the final listing and trading approval from the Stock Exchanges or
delay in receipt of final certificates from SCSBs, etc. The commencement of trading of the Equity Shares will be entirely
at the discretion of the Stock Exchanges and in accordance with the applicable laws. Each Selling Shareholder confirms
that it shall extend reasonable co-operation in relation to the its respective portion of the Offered Shares required by our
Company and the Book Running Lead Managers for the completion of the necessary formalities for listing and
commencement of trading of the Equity Shares at the Stock Exchanges within six Working Days from the Bid/Offer
Closing Date or such other time as may be prescribed by SEBI.

The BRLMs will be required to submit reports of compliance with timelines and activities prescribed by SEBI in connection
with the allotment and listing procedure within six Working Days from the Bid/Offer Closing Date, identifying non-adherence
to timelines and processes and an analysis of entities responsible for the delay and the reasons associated with it.

Submission of Bids (other than Bids from Anchor Investors):

320
 Bid/Offer Period (except the Bid/Offer Closing Date)
Submission and Revision in Bids Only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time (“IST”)
Bid/Offer Closing Date
Submission and Revision in Bids Only between 10.00 a.m. and 3.00 p.m. IST

On the Bid/Offer Closing Date, the Bids shall be uploaded until:

(i) 4.00 p.m. IST in case of Bids by QIBs and Non-Institutional Bidders, and

(ii) until 5.00 p.m. IST or such extended time as permitted by the Stock Exchanges, in case of Bids by RIBs.

On Bid/Offer Closing Date, extension of time will be granted by Stock Exchanges only for uploading Bids received by RIBs
after taking into account the total number of Bids received and as reported by the Book Running Lead Managers to the Stock
Exchanges.

It is clarified that Bids not uploaded on the electronic bidding system or in respect of which the full Bid Amount is not
blocked by SCSBs or not blocked under the UPI Mechanism in the relevant ASBA Account, as the case may be, would
be rejected.

Due to limitation of time available for uploading the Bids on the Bid/Offer Closing Date, Bidders are advised to submit their
Bids one day prior to the Bid/Offer Closing Date. Any time mentioned in this Draft Red Herring Prospectus is IST. Bidders are
cautioned that, in the event a large number of Bids are received on the Bid/Offer Closing Date, some Bids may not get uploaded
due to lack of sufficient time. Such Bids that cannot be uploaded will not be considered for allocation under the Offer. Bids will
be accepted only during Monday to Friday (excluding any public holiday). None of our Company, the Selling Shareholders or
any member of the Syndicate is liable for any failure in uploading the Bids due to faults in any software or hardware system or
blocking of application amount by SCSBs on receipt of instructions from the Sponsor Bank due to any errors, omissions, or
otherwise non-compliance by various parties involved in, or any other fault, malfunctioning or breakdown in the UPI Mechanism.

In case of any discrepancy in the data entered in the electronic book vis-à-vis the data contained in the physical Bid cum
Application Form, for a particular Bidder, the details as per the Bid file received from the Stock Exchanges shall be taken as the
final data for the purpose of Allotment.

Our Company and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers, reserves the right
to revise the Price Band during the Bid/Offer Period in accordance with the SEBI ICDR Regulations. The revision in the Price
Band shall not exceed 20% on either side, i.e. the Floor Price can move up or down to the extent of 20% of the Floor Price and
the Cap Price will be revised accordingly, but the Floor Price shall not be less than the Face Value of the Equity Shares. In all
circumstances, the Cap Price shall be less than or equal to 120% of the Floor Price.

In case of any revision to the Price Band, the Bid/Offer Period will be extended by at least three additional Working Days
following such revision of the Price Band, subject to the Bid/Offer Period not exceeding 10 Working Days. In cases of
force majeure, banking strike or similar circumstances, our Company may, for reasons to be recorded in writing, extend
the Bid/Offer Period for a minimum of three Working Days, subject to the Bid/Offer Period not exceeding 10 Working
Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated by
notification to the Stock Exchanges, by issuing a public notice, and also by indicating the change on the respective websites
of the Book Running Lead Managers and at the terminals of the Syndicate Members and by intimation to Self-Certified
Syndicate Banks (“SCSBs”), other Designated Intermediaries and the Sponsor Bank, as applicable.

Minimum Subscription

If our Company does not receive the minimum subscription of 90% of the Fresh Issue on the date of closure of the Offer; or
withdrawal of applications; or after technical rejections; or if the listing or trading permission is not obtained from the Stock
Exchanges for the Equity Shares so offered under the Offer Document, our Company shall forthwith refund the entire
subscription amount received. If there is a delay beyond fifteen days, our Company and every Director of our Company, who
are officers in default, shall pay interest at the rate of fifteen per cent per annum. Subject to applicable law, a Selling Shareholder
shall not be responsible to pay interest for any delay, unless such delay has been caused solely by such Selling Shareholder.

The requirement for minimum subscription is not applicable to the Offer for Sale. In case of under-subscription in the Offer,
after meeting the minimum subscription requirement of 90% of the Fresh Issue, the balance subscription in the Offer will be met
in the following order of priority: (i) through the sale of Offered Shares being offered by the Selling Shareholders in the Offer
for Sale on a proportionate basis; and (ii) through the issuance of balance part of the Fresh Issue.

Undersubscription, if any, in any category except the QIB portion, would be met with spill-over from the other categories at the
discretion of our Company and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers, and
the Designated Stock Exchange.

321
Further, our Company shall ensure that the number of prospective Allottees to whom the Equity Shares will be Allotted shall not
be less than 1,000 in compliance with Regulation 49(1) of SEBI ICDR Regulations.

Arrangements for Disposal of Odd Lots

Since the Equity Shares will be traded in dematerialised form only, and the market lot for our Equity Shares will be one Equity
Share, no arrangements for disposal of odd lots are required.

New Financial Instruments

Our Company is not issuing any new financial instruments through this Offer.

Restrictions, if any on Transfer and Transmission of Equity Shares

Except for the lock-in of the pre-Offer Equity Share capital of our Company, Promoter’s minimum contribution and the Anchor
Investor lock-in as provided in “Capital Structure” beginning on page 57 and except as provided in the Articles of Association,
there are no restrictions on transfer or transmission of Equity Shares and their consolidation or splitting. For details see
“Description of Equity Shares and Terms of Articles of Association” beginning on page 341.

322
 OFFER STRUCTURE

The Offer is of up to [●] Equity Shares of face value of ₹ 2 at an Offer Price of ₹ [●] per Equity Share for cash (including a share
premium of ₹ [●] per Equity Share) aggregating up to ₹ 15,000 million comprising a Fresh Issue of up to [●] Equity Shares
aggregating up to ₹ 4,000 million and an Offer of Sale of up to [●] Equity Shares aggregating up to ₹ 11,000 million by the
Selling Shareholders. The Offer will constitute [●]% of the post-Offer paid-up Equity Share capital of our Company.

Our Company may consider a Pre-IPO Placement for an aggregate amount not exceeding ₹ 1,600 million. The Pre-IPO
Placement, if undertaken, will be at a price to be decided by our Company and the Pre-IPO Placement will be completed prior
to filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is undertaken, the amount raised from the Pre-
IPO Placement will be reduced from the Fresh Issue, subject to the minimum Offer size constituting at least 10% of the post-
Offer paid-up Equity Share capital of our Company.

The Offer is being made through the Book Building Process.

Particulars QIBs(1) Non-Institutional RIBs

Bidders

Number of Equity Not more than [●] Equity Shares Not less than [●] Equity Not less than [●] Equity
Shares available for Shares available for Shares available for
Allotment or allocation or Offer less allocation or Offer less
allocation*(2) allocation to QIB Bidders allocation to QIB Bidders
and RIBs and Non-Institutional
Bidders

Percentage of Offer Not more than 50% of the Offer being Not less than 15% of the Not less than 35% of the
size available for available for allocation to QIB Bidders. Offer or the Offer less Offer or Offer less
Allotment or However, up to 5% of the Net QIB Portion allocation to QIB Bidders allocation to QIB Bidders
allocation will be available for allocation and RIBs and Non-Institutional
proportionately to Mutual Funds only. Bidders
Mutual Funds participating in the Mutual
Fund Portion will also be eligible for
allocation in the remaining QIB Portion. The
unsubscribed portion in the Mutual Fund
Portion will be added to the Net QIB Portion

Basis of Allotment if Proportionate as follows (excluding the Proportionate The allotment to each RIBs
respective category is Anchor Investor Portion): shall not be less than the
oversubscribed* minimum Bid Lot, subject
(a) [●] Equity Shares shall be available to availability of Equity
for allocation on a proportionate Shares in the Retail Portion
basis to Mutual Funds only; and and the remaining
available Equity Shares if
(b) [●] Equity Shares shall be available any, shall be allotted on a
for allocation on a proportionate proportionate basis. For
basis to all QIBs, including Mutual further details, see the
Funds receiving allocation as per (a) General Information
above. Document.
Up to [●] Equity Shares may be allocated on
a discretionary basis to Anchor Investors of
which one-third shall be available for
allocation to Mutual Funds only

Mode of Bid ASBA only (excluding the UPI ASBA only (excluding the ASBA only (including the
Mechanism)(3) UPI Mechanism) UPI Mechanism)

Minimum Bid Such number of Equity Shares in multiples of Such number of Equity [●] Equity Shares
[●] Equity Shares such that the Bid Amount Shares in multiples of [●]
exceeds ₹ 200,000 Equity Shares such that the
Bid Amount exceeds ₹
200,000

323
 Particulars QIBs(1) Non-Institutional RIBs
Bidders

Maximum Bid Such number of Equity Shares in multiples of Such number of Equity Such number of Equity
[●] Equity Shares not exceeding the size of Shares in multiples of [●] Shares in multiples of [●]
the Offer, subject to limits applicable to each Equity Shares not Equity Shares so that the
Bidder exceeding the size of the Bid Amount does not
Offer (excluding the QIB exceed ₹ 200,000
Portion), subject to limits
applicable to Bidder

Mode of Allotment Compulsorily in dematerialised form

Bid Lot [●] Equity Shares and in multiples of [●] Equity Shares thereafter

Allotment Lot A minimum of [●] Equity Shares and in multiples of one Equity Share thereafter

Trading Lot One Equity Share

Who can apply(4) Public financial institutions as specified in Resident Indian Resident Indian
Section 2(72) of the Companies Act 2013, individuals, Eligible NRIs, individuals, HUFs (in the
scheduled commercial banks, multilateral HUFs (in the name of name of Karta) and
and bilateral development financial Karta), companies, Eligible NRIs applying for
institutions, mutual funds registered with corporate bodies, scientific Equity Shares such that the
SEBI, FPIs other than individuals, corporate institutions, societies, Bid amount does not
bodies and family offices, VCFs, AIFs, family offices and trusts, exceed ₹ 2,00,000 in value.
FVCIs, state industrial development for Equity Shares such that
corporation, insurance company registered the Bid Amount exceeds ₹
with IRDAI, provident fund with minimum 2,00,000 in value.
corpus of ₹ 250 million, pension fund with
minimum corpus of ₹ 250 million, National
Investment Fund set up by the Government,
insurance funds set up and managed by army,
navy or air force of the Union of India,
insurance funds set up and managed by the
Department of Posts, India and Systemically
Important NBFCs

Terms of Payment In case of Anchor Investors: Full Bid Amount shall be payable by the Anchor Investors at the time of
submission of their Bids(5)

In case of all other Bidders: Full Bid Amount shall be blocked by the SCSBs in the bank account of
the ASBA Bidder, or by the Sponsor Bank through the UPI Mechanism, that is specified in the ASBA
Form at the time of submission of the ASBA Form

* Assuming full subscription in the Offer

(1) Our Company and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers may allocate up to 60% of
the QIB Category to Anchor Investors at the Anchor Investor Offer Price, on a discretionary basis, subject to there being (i) a maximum
of two Anchor Investors, where allocation in the Anchor Investor Portion is up to ₹ 100 million, (ii) minimum of two and maximum of 15
Anchor Investors, where the allocation under the Anchor Investor Portion is more than ₹ 100 million but up to ₹ 2,500 million under the
Anchor Investor Portion, subject to a minimum Allotment of ₹ 50 million per Anchor Investor, and (iii) in case of allocation above ₹ 2,500
million under the Anchor Investor Portion, a minimum of five such investors and a maximum of 15 Anchor Investors for allocation up to
₹ 2,500 million, and an additional 10 Anchor Investors for every additional ₹ 2,500 million or part thereof will be permitted, subject to
minimum allotment of ₹ 50 million per Anchor Investor. An Anchor Investor will make a minimum Bid of such number of Equity Shares,
that the Bid Amount is at least ₹ 100 million. One-third of the Anchor Investor Portion will be reserved for domestic Mutual Funds, subject
to valid Bids being received at or above the price at which allocation is made to Anchor Investors.
(2) Subject to valid Bids being received at or above the Offer Price. This is an Offer in terms of Rule 19(2)(b) of the SCRR and Regulation
6(1) of the SEBI ICDR Regulations.
(3) Anchor Investors are not permitted to use the ASBA process.
(4) In case of joint Bids, the Bid cum Application Form should contain only the name of the first Bidder whose name should also appear as
the first holder of the beneficiary account held in joint names. The signature of only such first Bidder would be required in the Bid cum
Application Form and such first Bidder would be deemed to have signed on behalf of the joint holders
(5) Full Bid Amount shall be payable by the Anchor Investors at the time of submission of the Anchor Investor Application Forms provided
that any difference between the Anchor Investor Allocation Price and the Anchor Investor Offer Price shall be payable by the Anchor
Investor Pay-In Date as indicated in the CAN.

324
Bidders will be required to confirm and will be deemed to have represented to our Company, the Selling Shareholders, the
Underwriters, their respective directors, officers, agents, affiliates and representatives that they are eligible under applicable law,
rules, regulations, guidelines and approvals to acquire the Equity Shares.

Subject to valid Bids being received at or above the Offer Price, undersubscription, if any, in any category except the QIB
Portion, would be met with spill-over from the other categories or a combination of categories at the discretion of our Company
and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers, and the Designated Stock
Exchange.

325
 OFFER PROCEDURE

All Bidders should read the General Information Document for Investing in Public Issues prepared and issued in accordance
with the circular bearing number CIR/CFD/DIL/12/2013 dated October 23, 2013 notified by SEBI and updated pursuant to
SEBI circular bearing number CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015, SEBI circular bearing number
CIR/CFD/DIL/1/2016 dated January 1, 2016, SEBI circular bearing number SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January
21, 2016, and the UPI Circulars (the “General Information Document”), which highlights the key rules, processes and
procedures applicable to public issues in general in accordance with the provisions of the Companies Act, the SCRA, the SCRR
and the SEBI ICDR Regulations. The General Information Document is available on the websites of the Stock Exchanges and
the Book Running Lead Managers. Please refer to the relevant provisions of the General Information Document which are
applicable to the Offer especially in relation to the process for Bids by RIBs through the UPI Mechanism. The investors should
note that the details and process provided in the General Information Document should be read along with this section.

Pursuant to the UPI Circulars, the UPI Mechanism has been proposed as an alternate payment mechanism and accordingly, a
reduction in timelines for listing has been proposed in a phased manner. From January 1, 2019, the UPI Mechanism for RIIs
applying through Designated Intermediaries (other than SCSBs) was made effective along with the then existing process and
existing timeline of T+6 days. This phase continued until June 30, 2019. Thereafter, with effect from July 1, 2019, for applications
by RIIs through Designated Intermediaries, the then existing process of physical movement of forms from Designated
Intermediaries to SCSBs for blocking of funds has been discontinued and RIIs submitting their Application Forms through
Designated Intermediaries (other than SCSBs) shall use only the UPI Mechanism with the existing timeline of T+6 days until
March 31, 2020 (“UPI Phase II”). Subsequently, the final reduced timeline of T+3 will be made effective using the UPI
Mechanism for applications by RIIs (“UPI Phase III”), as may be prescribed by SEBI.

Our Company, the Selling Shareholder and the Book Running Lead Managers do not accept any responsibility for the
completeness and accuracy of the information stated in this section, and are not liable for any amendment, modification or
change in the applicable law which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make
their independent investigations and ensure that their Bids are submitted in accordance with applicable laws and do not exceed
the investment limits or maximum number of the Equity Shares that can be held by them under applicable law or as specified in
this Draft Red Herring Prospectus, the Red Herring Prospectus and the Prospectus.

Further, our Company, the Selling Shareholders and the members of the Syndicate do not accept any responsibility for any
adverse occurrences consequent to the implementation of the UPI Mechanism for application in the Offer.

Book Building Procedure

The Offer is being made through the Book Building Process in accordance with Regulation 6(1) of the SEBI ICDR Regulations,
wherein not more than 50% of the Offer shall be allocated on a proportionate basis to QIBs. Our Company and the Promoter
Selling Shareholders may, in consultation with the Book Running Lead Managers, allocate up to 60% of the QIB Portion to
Anchor Investors at the Anchor Investor Allocation Price, on a discretionary basis in accordance with the SEBI ICDR
Regulations, out of which one-third shall be available for allocation to domestic Mutual Funds, subject to valid Bids being
received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. In the event of under-subscription, or
non-allocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the QIB Portion. Further, 5% of the
QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis only to Mutual
Funds, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders other
than Anchor Investors, including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not
less than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not less than 35% of the Offer shall
be available for allocation to RIBs in accordance with SEBI ICDR Regulations, subject to valid Bids being received at or above
the Offer Price.

Subject to valid Bids being received at or above the Offer Price, under-subscription, if any, in any category except in the QIB
Portion, would be allowed to be met with spill-over from any other category or combination of categories, at the discretion of
our Company and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers, and the Designated
Stock Exchange and subject to applicable laws.

The Equity Shares, on Allotment, shall be traded only in the dematerialised segment of the Stock Exchanges.

Bidders should note that the Equity Shares will be Allotted to all successful Bidders only in dematerialised form. The Bid
cum Application Forms, which do not have the details of the Bidders’ depository account, including DP ID, Client ID,
UPI ID (in case of RIBs using the UPI Mechanism) and PAN, shall be treated as incomplete and will be rejected. Bidders
will not have the option of being Allotted Equity Shares in physical form.

326
Phased implementation of UPI for Bids by RIBs as per the UPI Circulars

SEBI has issued UPI Circulars in relation to streamlining the process of public issue of equity shares and convertibles by
introducing an alternate payment mechanism using UPI. Pursuant to the UPI Circulars, UPI has been introduced in a phased
manner as a payment mechanism (in addition to mechanism of blocking funds in the account maintained with SCSBs under the
ASBA) for applications by RIBs through intermediaries with the objective to reduce the time duration from public issue closure
to listing from six Working Days to up to three Working Days. Considering the time required for making necessary changes to
the systems and to ensure complete and smooth transition to the UPI payment mechanism, the UPI Circulars have introduced
and implemented the UPI payment mechanism in three phases in the following manner:

a) Phase I: This phase was applicable from January 1, 2019 until March 31, 2019 or floating of five main board public
issues, whichever is later. Subsequently, the timeline for implementation of Phase I was extended until June 30, 2019.
Under this phase, a RIB also had the option to submit the ASBA Form with any of the intermediary and use his / her
UPI ID for the purpose of blocking of funds. The time duration from public issue closure to listing would continue to
be six Working Days.

b) Phase II: This phase has become applicable from July 1, 2019 and will continue until March 31, 2020. Under this
phase, submission of the physical ASBA Form by a RIB through intermediaries to SCSBs for blocking of funds will be
discontinued and will be replaced by the UPI payment mechanism. However, the time duration from public issue closure
to listing would continue to be six Working Days during this phase. Bids in the Offer will be made under Phase II.

c) Phase III: The commencement period of Phase III is yet to be notified. In this phase, the time duration from public
issue closure to listing would be reduced to be three Working Days.

All SCSBs offering facility of making application in public issues shall also provide facility to make application using UPI. The
issuers will be required to appoint one of the SCSBs as a sponsor bank to act as a conduit between the Stock Exchanges and
NPCI in order to facilitate collection of requests and / or payment instructions of the RIBs using the UPI.

For further details, refer to the General Information Document available on the websites of the Stock Exchanges and the Book
Running Lead Managers.

Bid cum Application Form

Copies of the Bid cum Application Form (other than for Anchor Investors) and the abridged prospectus will be available with
the Designated Intermediaries at the relevant Bidding Centres, and at our Registered and Corporate Office. An electronic copy
of the Bid cum Application Form will also be available for download on the websites of NSE (www.nseindia.com) and BSE
(www.bseindia.com) at least one day prior to the Bid / Offer Opening Date.

All Bidders (other than Anchor Investors) shall mandatorily participate in the Offer only through the ASBA process. ASBA
Bidders must provide either (i) the bank account details and authorisation to block funds in their respective ASBA Form, or (ii)
the UPI ID (in case of RIBs), as applicable, in the relevant space provided in the ASBA Form. The ASBA Forms that do not
contain such details will be rejected. Applications made by the RIBs using third party bank account or using third party linked
bank account UPI ID are liable for rejection. Anchor Investors are not permitted to participate in the Offer through the ASBA
process.

ASBA Bidders shall ensure that the Bids are made on ASBA Forms bearing the stamp of the Designated Intermediary, submitted
at the Bidding Centres only (except in case of electronic ASBA Forms) and the ASBA Forms not bearing such specified stamp
are liable to be rejected. RIBs using UPI Mechanism, shall submit their ASBA Forms with Syndicate Members, Registered
Brokers, RTA or Depository Participants. ASBA Bidders are also required to ensure that the ASBA Account has sufficient credit
balance as an amount equivalent to the full Bid Amount which can be blocked by the SCSB.

For Anchor Investor, the Anchor Investor Application Form will be available at the offices of the Book Running Lead Managers.

The prescribed colour of the Bid cum Application Form for the various categories is as follows:

Category Colour of Bid

cum Application
Form*
Resident Indians, including QIBs, Non-institutional Investors and Retail Individual Investors, each White
resident in India and Eligible NRIs applying on a non-repatriation basis
Non-Residents including Eligible NRIs, their sub-accounts (other than sub-accounts which are foreign Blue
corporates or foreign individuals under the QIB Portion), FPIs or FVCIs registered multilateral and
bilateral development financial institutions applying on a repatriation basis
Anchor Investors White**

327
* Excluding electronic Bid cum Application Form
** Bid cum Application Forms for Anchor Investors will be made available at the office of the Book Running Lead Managers.
Electronic Bid cum Application forms will also be available for download on the website of NSE (www.nseindia.com) and BSE
(www.bseindia.com).

The Designated Intermediaries (other than SCSBs) shall submit/deliver the Bid cum Application Form to the respective SCSB,
where the Bidder has a bank account and shall not submit it to any non-SCSB bank or any Escrow Bank. Further, SCSBs shall
upload the relevant Bid details (including UPI ID in case of ASBA Forms under the UPI Mechanism) in the electronic bidding
system of the Stock Exchanges. Stock Exchanges shall validate the electronic bids with the records of the CDP for DP ID/Client
ID and PAN, on a real time basis and bring inconsistencies to the notice of the relevant Designated Intermediaries, for
rectification and re-submission within the time specified by Stock Exchanges. Stock Exchanges shall allow modification of either
DP ID/Client ID or PAN ID, bank code and location code in the Bid details already uploaded.

For RIBs using UPI mechanism, the Stock Exchanges shall share the bid details (including UPI ID) with Sponsor Bank on a
continuous basis to enable the Sponsor Bank to initiate UPI Mandate Request to RIBs for blocking of funds. The Sponsor Bank
shall initiate request for blocking of funds through NPCI to RIBs, who shall accept the UPI Mandate Request for blocking of
funds on their respective mobile applications associated with UPI ID linked bank account. The NPCI shall maintain an audit trail
for every bid entered in the Stock Exchanges bidding platform, and the liability to compensate RIBs (using the UPI Mechanism)
in case of failed transactions shall be with the concerned entity (i.e. the Sponsor Bank, NPCI or the Bankers to the Offer) at
whose end the lifecycle of the transaction has come to a halt. The NPCI shall share the audit trail of all disputed transactions/
investor complaints to the Sponsor Banks and the Bankers to the Offer. The BRLMs shall also be required to obtain the audit
trail from the Sponsor Banks and the Bankers to the Offer for analysing the same and fixing liability.

Participation by Promoters, Promoter Group, the Book Running Lead Managers, the Syndicate Members and persons
related to Promoters/Promoter Group/the Book Running Lead Managers

The Book Running Lead Managers and the Syndicate Members shall not be allowed to purchase Equity Shares in this Offer in
any manner, except towards fulfilling their underwriting obligations. However, the associates and affiliates of the Book Running
Lead Managers and the Syndicate Members may Bid for Equity Shares in the Offer, either in the QIB Portion or in the Non-
Institutional Portion as may be applicable to such Bidders, where the allocation is on a proportionate basis, and such subscription
may be on their own account or on behalf of their clients. All categories of investors, including associates or affiliates of the
Book Running Lead Managers and Syndicate Members, shall be treated equally for the purpose of allocation to be made on a
proportionate basis.

Except as stated below, neither the Book Running Lead Managers nor any associate of the Book Running Lead Managers can
apply in the Offer under the Anchor Investor Portion:

(i) mutual funds sponsored by entities which are associate of the Book Running Lead Managers;

(ii) insurance companies promoted by entities which are associate of the Book Running Lead Managers;

(iii) AIFs sponsored by the entities which are associate of the Book Running Lead Managers; or

(iv) FPIs sponsored by the entities which are associate of the Book Running Lead Managers.

Further, the Promoters and members of the Promoter Group shall not participate by applying for Equity Shares in the Offer.
Further, persons related to the Promoters and Promoter Group shall not apply in the Offer under the Anchor Investor Portion.
However, a qualified institutional buyer who has any of the following rights in relation to the Company shall be deemed to be a
person related to the Promoters or Promoter Group of our Company:

(i) rights under a shareholders’ agreement or voting agreement entered into with the Promoters or Promoter Group of our
Company;

(ii) veto rights; or

(iii) right to appoint any nominee director on our Board.

Further, an Anchor Investor shall be deemed to be an “associate of the BRLM” if:

(i) either of them controls, directly or indirectly through its subsidiary or holding company, not less than 15% of the voting
rights in the other; or

(ii) either of them, directly or indirectly, by itself or in combination with other persons, exercises control over the other; or

328
(iii) there is a common director, excluding nominee director, amongst the Anchor Investors and the Book Running Lead
Managers.

Bids by Mutual Funds

With respect to Bids by Mutual Funds, a certified copy of their SEBI registration certificate must be lodged along with the Bid
cum Application Form. Failing this, our Company and the Promoter Selling Shareholders, in consultation with the Book Running
Lead Managers, reserve the right to reject any Bid without assigning any reason thereof, subject to applicable law.

Bids made by asset management companies or custodians of Mutual Funds shall specifically state names of the concerned
schemes for which such Bids are made.

In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund registered with SEBI and
such Bids in respect of more than one scheme of the Mutual Fund will not be treated as multiple Bids provided that the Bids
clearly indicate the scheme concerned for which such Bid has been made.

No Mutual Fund scheme shall invest more than 10% of its NAV in equity shares or equity-related instruments of any single
company, provided that the limit of 10% shall not be applicable for investments in case of index funds or sector or industry
specific schemes. No Mutual Fund under all its schemes should own more than 10% of any company’s paid-up share capital
carrying voting rights.

Bids by Eligible NRIs

Eligible NRIs Bidding on non-repatriation basis are advised to use the Bid cum Application Form for residents (white in colour).
Eligible NRIs Bidding on a repatriation basis are advised to use the Bid cum Application Form meant for Non-Residents (blue
in colour).

Eligible NRIs may obtain copies of Bid cum Application Form from the Designated Intermediaries. Eligible NRI Bidders
Bidding on a repatriation basis by using the Non-Resident Forms should authorize their SCSB (if they are Bidding directly
through the SCSB) or confirm or accept the UPI Mandate Request (in case of RIBs Bidding through the UPI Mechanism) to
block their Non-Resident External (“NRE”) accounts, or Foreign Currency Non-Resident (“FCNR”) Accounts, and eligible NRI
Bidders Bidding on a non-repatriation basis by using Resident Forms should authorize their respective SCSBs (if they are
Bidding directly through SCSB) or confirm or accept the UPI Mandate Request (in case of RIBs Bidding through the UPI
Mechanism) to block their Non-Resident Ordinary (“NRO”) accounts for the full Bid Amount, at the time of the submission of
the Bid cum Application Form. Participation of Eligible NRIs in the Offer shall be subject to the FEMA Rules.

NRIs will be permitted to apply in the Offer through Channel I or Channel II (as specified in the UPI Circular). Further, subject
to applicable law, NRIs may use Channel IV (as specified in the UPI Circular) to apply in the Offer, provided the UPI facility is
enabled for their NRE/ NRO accounts.

For details of restrictions on investment by NRIs, see “Restrictions on Foreign Ownership of Indian Securities” beginning on
page 340.

Participation of Eligible NRIs in the Offer shall be subject to the FEMA Rules.

Bids by HUFs

Hindu Undivided Families or HUFs, in the individual name of the Karta. The Bidder/applicant should specify that the Bid is
being made in the name of the HUF in the Bid cum Application Form/Application Form as follows: “Name of sole or first
Bidder/applicant: XYZ Hindu Undivided Family applying through XYZ, where XYZ is the name of the Karta”.
Bids/Applications by HUFs may be considered at par with Bids/Applications from individuals.

Bids by FPIs

In terms of the SEBI FPI Regulations, the issue of Equity Shares to a single FPI or an investor group (which means the same set
of ultimate beneficial owner(s) investing through multiple entities) must be below 10% of our post-Offer Equity Share capital.
Further, in terms of the FEMA Rules, the total holding by each FPI shall be less than 10% of the total paid-up Equity Share
capital of our Company and the total holdings of all FPIs put together shall not exceed 24% of the paid-up Equity Share capital
of our Company. Bids by FPIs submitted under the multiple investment managers structure with the same PAN but with different
beneficiary account numbers, Client ID and DP ID may not be treated as multiple Bids.

In terms of the relevant FEMA Rules, in case the total holding of an FPI increases beyond 10% of the total paid-up Equity Share
capital of our Company, on a fully diluted basis or 10% or more of the paid-up value of any series of debentures or preference
shares or share warrants issued that may be issued by our Company, the total investment made by the FPI will be re-classified

329
as FDI subject to the conditions as specified by SEBI and the RBI in this regard and our Company and the investor will be
required to comply with applicable reporting requirements.

With effect from the April 1, 2020, the aggregate limit shall be the sectoral caps applicable to the Indian company as prescribed
in the FEMA Rules with respect to its paid-up equity capital on a fully diluted basis. the aggregate limit as provided above may
be decreased by the Indian company concerned to a lower threshold limit of 24% or 49% or 74% as deemed fit, with the approval
of its board of directors and its shareholders through a resolution and a special resolution, respectively before March 31, 2020.
The Indian company which has decreased its aggregate limit to 24% or 49% or 74%, may increase such aggregate limit to 49%
or 74% or the sectoral cap or statutory ceiling respectively as deemed fit, with the approval of its board of directors and its
shareholders through a resolution and a special resolution, respectively. However, once the aggregate limit has been increased
to a higher threshold, the Indian company cannot reduce the same to a lower threshold.

FPIs are permitted to participate in the Offer subject to compliance with conditions and restrictions which may be specified by
the Government from time to time.

FPIs who wish to participate in the Offer are advised to use the Bid cum Application Form for non-residents. Subject to
compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of Regulation 22 of the SEBI
FPI Regulations, an FPI and unregulated broad based funds, which are classified as Category II Foreign Portfolio Investors by
virtue of their investment manager being appropriately regulated, may issue or otherwise deal in offshore derivative instruments
(as defined under the SEBI FPI Regulations as any instrument, by whatever name called, which is issued overseas by a FPI
against securities held by it that are listed or proposed to be listed on any recognised stock exchange in India, as its underlying)
directly or indirectly, only if (i) such offshore derivative instruments are issued only to persons who are regulated by an
appropriate regulatory authority; (ii) such offshore derivative instruments are issued after compliance with ‘know your client’
norms, and (iii) such offshore derivative instruments shall not be issued to or transferred to persons who are resident Indians or
NRIs and to entities beneficially owned by resident Indians or NRIs. An FPI is also required to ensure that no further issue or
transfer of any offshore derivative instrument is made by, or on behalf of, it to any persons that are not regulated by an appropriate
foreign regulatory authority. Further, pursuant to the Master Direction – Foreign Investment in India issued by the RBI dated
January 4, 2018 (updated as on March 8, 2019), the investments made by a SEBI registered FPI increases to more than 10% of
the total paid up equity share capital on a fully diluted basis or 10% or more of the paid up value of each series of debentures or
preference shares or warrants.

An FPI issuing offshore derivative instruments is also required to ensure that any transfer of offshore derivative instruments
issued by or on its behalf, is carried out subject to inter alia the following conditions:

(a) such offshore derivative instruments are transferred only to persons in accordance with Regulation 22(1) of the SEBI
FPI Regulations; and

(b) prior consent of the FPI is obtained for such transfer, except when the persons to whom the offshore derivative
instruments are to be transferred to are pre-approved by the FPI.

Participation of FPIs in the Offer shall be subject to the FEMA Rules.

Bids under Power of Attorney

In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies, registered societies, eligible
FPIs, AIFs, Mutual Funds, insurance companies, insurance finds set up by the army, navy or air force of India, insurance funds
set up by the Department of Posts, India or the National Investment Fund and provident funds with a minimum corpus of ₹ 250
million and pension funds with a minimum corpus of ₹ 250 million (in each case, subject to applicable law and in accordance
with their respective constitutional documents), a certified copy of the power of attorney or the relevant resolution or authority,
as the case may be, along with a certified copy of the memorandum of association and articles of association and/or bye laws, as
applicable must be lodged along with the Bid cum Application Form. Failing this, our Company and Promoter Selling
Shareholders reserve the right to accept or reject any Bid in whole or in part, in either case, without assigning any reasons thereof.

Our Company and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers in their absolute
discretion, reserve the right to relax the above condition of simultaneous lodging of the power of attorney along with the Bid
cum Application Form.

Bids by SEBI registered VCFs, AIFs and FVCIs

The SEBI FVCI Regulations, inter alia, prescribe the investment restrictions on VCFs and FVCIs registered with SEBI. Further,
the SEBI AIF Regulations prescribe, amongst others, the investment restrictions on AIFs. Accordingly, the holding in any
company by any individual VCF or FVCI registered with SEBI should not exceed 25% of the corpus of the VCF or FVCI.
Further, VCFs and FVCIs can invest only up to 33.33% of the investible funds in various prescribed instruments, including in
public offerings.

330
Category I AIFs and Category II AIFs cannot invest more than 25% of the investible funds in one investee company. A category
III AIF cannot invest more than 10% of the investible funds in one investee company. A VCF registered as a Category I AIF, as
defined in the SEBI AIF Regulations, cannot invest more than one-third of its investible funds by way of subscription to an initial
public offering of a venture capital undertaking. Pursuant to the repeal of the SEBI VCF Regulations, the VCFs which have not
re-registered as an AIF under the SEBI AIF Regulations shall continue to be regulated by the SEBI VCF Regulations until the
existing fund or scheme managed by the fund is wound up and such fund shall not launch any new scheme after the notification
of the SEBI AIF Regulations. Our Company, the Selling Shareholders, and the Book Running Lead Managers will not be
responsible for loss, if any, incurred by the Bidder on account of conversion of foreign currency.

Participation of VCFs, AIFs or FVCIs in the Offer shall be subject to the FEMA Rules.

All non-resident investors should note that refunds (in case of Anchor Investors), dividends and other distributions, if
any, will be payable in Indian Rupees only and net of bank charges and commission.

Bids by Limited Liability Partnerships

In case of Bids made by limited liability partnerships registered under the Limited Liability Partnership Act, 2008, a certified
copy of certificate of registration issued under the Limited Liability Partnership Act, 2008, must be attached to the Bid cum
Application Form. Failing this, our Company and the Promoter Selling Shareholders in consultation with the Book Running
Lead Managers reserve the right to reject any Bid without assigning any reason thereof.

Bids by Banking Companies

In case of Bids made by banking companies registered with the RBI, certified copies of (i) the certificate of registration issued
by the RBI, and (ii) the approval of such banking company’s investment committee are required to be attached to the Bid cum
Application Form. Failing this, our Company and the Promoter Selling Shareholders, in consultation with the Book Running
Lead Managers, reserve the right to reject any Bid without assigning any reason thereof, subject to applicable law.

The investment limit for banking companies in non-financial services companies as per the Banking Regulation Act, 1949, as
amended, (the “Banking Regulation Act”), and the Master Directions - Reserve Bank of India (Financial Services provided by
Banks) Directions, 2016, as amended, is 10% of the paid-up share capital of the investee company, not being its subsidiary
engaged in non-financial services, or 10% of the bank’s own paid-up share capital and reserves, whichever is lower. Further, the
aggregate investment by a banking company in subsidiaries and other entities engaged in financial services company cannot
exceed 20% of the investee company’s paid up share capital and reserves. However, a banking company would be permitted to
invest in excess of 10% but not exceeding 30% of the paid-up share capital of such investee company if (i) the investee company
is engaged in non-financial activities permitted for banks in terms of Section 6(1) of the Banking Regulation Act, or (ii) the
additional acquisition is through restructuring of debt/corporate debt restructuring/strategic debt restructuring, or to protect the
bank’s interest on loans/investments made to a company. The bank is required to submit a time-bound action plan for disposal
of such shares within a specified period to the RBI. A banking company would require a prior approval of the RBI to make (i)
investment in excess of 30% of the paid-up share capital of the investee company, (ii) investment in a subsidiary and a financial
services company that is not a subsidiary (with certain exceptions prescribed), and (iii) investment in a non-financial services
company in excess of 10% of such investee company’s paid-up share capital as stated in 5(a)(v)(c)(i) of the Reserve Bank of
India (Financial Services provided by Banks) Directions, 2016, as amended.

Bids by SCSBs

SCSBs participating in the Offer are required to comply with the terms of the circulars bearing numbers CIR/CFD/DIL/12/2012
and CIR/CFD/DIL/1/2013 dated September 13, 2012 and January 2, 2013, respectively, issued by SEBI. Such SCSBs are
required to ensure that for making applications on their own account using ASBA, they should have a separate account in their
own name with any other SEBI registered SCSBs. Further, such account shall be used solely for the purpose of making
application in public issues and clear demarcated funds should be available in such account for such applications.

Bids by Insurance Companies

In case of Bids made by insurance companies registered with the IRDAI, a certified copy of certificate of registration issued by
IRDAI must be attached to the Bid cum Application Form. Failing this, our Company and the Promoter Selling Shareholders in
consultation with the Book Running Lead Managers reserve the right to reject any Bid without assigning any reason thereof,
subject to applicable law.

The exposure norms for insurers are prescribed under the Insurance Regulatory and Development Authority of India (Investment)
Regulations, 2016, as amended (“IRDAI Investment Regulations”), based on investments in the equity shares of a company,
the entire group of the investee company and the industry sector in which the investee company operates. Insurance companies
participating in the Offer are advised to refer to the IRDAI Investment Regulations for specific investment limits applicable to
them and shall comply with all applicable regulations, guidelines and circulars issued by IRDAI from time to time.

331
Bids by Provident Funds/Pension Funds

In case of Bids made by provident funds/pension funds with minimum corpus of ₹ 250 million, subject to applicable law, a
certified copy of a certificate from a chartered accountant certifying the corpus of the provident fund/pension fund must be
attached to the Bid cum Application Form. Failing this, our Company and the Promoter Selling Shareholders in consultation
with the Book Running Lead Managers reserve the right to reject any Bid, without assigning any reason thereof.

Bids by Systemically Important Non-Banking Financial Companies

In case of Bids made by Systemically Important Non-Banking Financial Companies registered with RBI, certified copies of: (i)
the certificate of registration issued by RBI, (ii) certified copy of its last audited financial statements on a standalone basis, (iii)
a net worth certificate from its statutory auditor, and (iv) such other approval as may be required by the Systemically Important
Non-Banking Financial Companies, are required to be attached to the Bid cum Application Form. Failing this, our Company and
the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers, reserves the right to reject any Bid
without assigning any reason thereof, subject to applicable law. Systemically Important NBFCs participating in the Offer shall
comply with all applicable regulations, guidelines and circulars issued by RBI from time to time.

The investment limit for Systemically Important NBFCs shall be as prescribed by RBI from time to time.

The information set out above is given for the benefit of the Bidders. Our Company, the Selling Shareholders, and the
Book Running Lead Managers are not liable for any amendments or modification or changes to applicable laws or
regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their
independent investigations and ensure that any single Bid from them does not exceed the applicable investment limits or
maximum number of the Equity Shares that can be held by them under applicable law or regulations, or as will be
specified in the Red Herring Prospectus and the Prospectus.

General Instructions

Please note that QIBs and Non-Institutional Bidders are not permitted to withdraw their Bid(s) or lower the size of their Bid(s)
(in terms of quantity of Equity Shares or the Bid Amount) at any stage. RIBs can revise their Bid(s) during the Bid/Offer Period
and withdraw or lower the size of their Bid(s) until Bid/Offer Closing Date. Anchor Investors are not allowed to withdraw their
Bids after the Anchor Investor Bid/Offer Period.

Do’s:

1. Check if you are eligible to apply as per the terms of the Red Herring Prospectus and under applicable law, rules,
regulations, guidelines and approvals;

2. Ensure that you have Bid within the Price Band;

3. Read all the instructions carefully and complete the Bid cum Application Form in the prescribed form;

4. Ensure that you (other than the Anchor Investors) have mentioned the correct details of ASBA Account (i.e. bank
account number or UPI ID, as applicable) and PAN in the Bid cum Application Form;

5. Ensure that your Bid cum Application Form bearing the stamp of a Designated Intermediary is submitted to the
Designated Intermediary at the relevant Bidding Centre (except in case of electronic Bids) within the prescribed time.
Bidders (other than Anchor Investors) shall submit the Bid cum Application Form in the manner set out in the General
Information Document;

6. If you are RIB and using UPI mechanism, ensure that the name of the bank with which your ASBA Account is
maintained appears in the list of SCSBs displayed on the SEBI website which are live on UPI. In case such bank with
which such ASBA Account is maintained is not live on UPI, RIB may submit the ASBA Form with SCSB physically,
or using the facility of linked online trading, demat and bank account. Further, ensure that the name of the mobile
application and the UPI handle being used for making such application is also appearing on the SEBI website;

7. Ensure that you have funds equal to the Bid Amount in the ASBA Account maintained with the SCSB before submitting
the ASBA Form to the relevant Designated Intermediaries;

8. Ensure that the signature of the first Bidder in case of joint Bids, is included in the Bid cum Application Forms. If the
first Bidder is not the ASBA Account holder, ensure that the Bid cum Application Form is also signed by the ASBA
Account holder;

9. Ensure that the names given in the Bid cum Application Form is/are exactly the same as the names in which the
beneficiary account is held with the Depository Participant. In case of joint Bids, the Bid cum Application Form should

332
 contain the name of only the first Bidder whose name should also appear as the first holder of the beneficiary account
held in joint names;

10. Ensure that you request for and receive a stamped acknowledgement in the form of a counterfoil or acknowledgment
specifying the application number as a proof of having accepted the Bid cum Application Form for all your Bid options
from the concerned Designated Intermediary;

11. Ensure that you submit the revised Bids to the same Designated Intermediary, through whom the original Bid was
placed and obtain a revised acknowledgment;

12. Except for Bids (i) on behalf of the Central or State Governments and the officials appointed by the courts, who, in
terms of the circular no. MRD/DoP/Cir-20/2008 dated June 30, 2008 issued by SEBI, may be exempt from specifying
their PAN for transacting in the securities market, (ii) Bids by persons resident in the state of Sikkim, who, in terms of
the circular dated July 20, 2006 issued by SEBI, may be exempted from specifying their PAN for transacting in the
securities market, and (iii) persons/entities exempt from holding a PAN under applicable law, all Bidders should
mention their PAN allotted under the IT Act. The exemption for the Central or the State Government and officials
appointed by the courts and for investors residing in the State of Sikkim is subject to (a) the Demographic Details
received from the respective depositories confirming the exemption granted to the beneficial owner by a suitable
description in the PAN field and the beneficiary account remaining in “active status”; and (b) in the case of residents of
Sikkim, the address as per the Demographic Details evidencing the same. All other applications in which PAN is not
mentioned will be rejected;

13. Ensure that thumb impressions and signatures other than in the languages specified in the Eighth Schedule to the
Constitution of India are attested by a Magistrate or a Notary Public or a Special Executive Magistrate under official
seal;

14. Ensure that the category and the investor status is indicated in the Bid cum Application Form to ensure proper upload
of your Bid in the electronic Bidding system of the Stock Exchanges;

15. Ensure that in case of Bids under power of attorney or by limited companies, corporates, trust, etc., relevant documents
including a copy of the power of attorney, if applicable, are submitted;

16. Ensure that Bids submitted by any person outside India is in compliance with applicable foreign and Indian laws;

17. Since the Allotment will be in dematerialised form only, ensure that the depository account is active, the correct DP ID,
Client ID, UPI ID (for RIBs bidding through UPI mechanism) and the PAN are mentioned in their Bid cum Application
Form and that the name of the Bidder, the DP ID, Client ID, UPI ID (for RIBs bidding through UPI mechanism) and
the PAN entered into the online IPO system of the Stock Exchanges by the relevant Designated Intermediary, as
applicable, matches with the name, DP ID, Client ID, UPI ID (for RIBs bidding through UPI mechanism) and PAN
available in the Depository database;

18. In case of QIBs and NIIs, ensure that while Bidding through a Designated Intermediary, the ASBA Form is submitted
to a Designated Intermediary in a Bidding Centre and that the SCSB where the ASBA Account, as specified in the
ASBA Form, is maintained has named at least one branch at that location for the Designated Intermediary to deposit
ASBA Forms (a list of such branches is available on the website of SEBI at http://www.sebi.gov.in);

19. Ensure that you have correctly signed the authorisation / undertaking box in the Bid cum Application Form, or have
otherwise provided an authorisation to the SCSB or the Sponsor Bank, as applicable, via the electronic mode, for
blocking funds in the ASBA Account equivalent to the Bid Amount mentioned in the Bid cum Application Form at the
time of submission of the Bid.;

20. Ensure that the Demographic Details are updated, true and correct in all respects;

21. The ASBA Bidders shall use only their own bank account or only their own bank account linked UPI ID for the purposes
of making Application in the Offer, which is UPI 2.0 certified by NPCI;

22. Bidders (except RIBs Bidding through the UPI Mechanism) should instruct their respective banks to release the funds
blocked in the ASBA account under the ASBA process. In case of RIBs, once the Sponsor Bank issues the Mandate
Request, the RIBs would be required to proceed to authorize the blocking of funds by confirming or accepting the UPI
Mandate Request to authorize the blocking of funds equivalent to application amount and subsequent debit of funds in
case of Allotment, in a timely manner;

23. Bidding through UPI Mechanism shall ensure that details of the Bid are reviewed and verified by opening the attachment
in the UPI Mandate Request and then proceed to authorize the UPI Mandate Request using his/her UPI PIN. Upon the
authorization of the mandate using his/her UPI PIN, a RIB Bidding through UPI Mechanism shall be deemed to have

333
 verified the attachment containing the application details of the RIB Bidding through UPI Mechanism in the UPI
Mandate Request and have agreed to block the entire Bid Amount and authorized the Sponsor Bank issue a request to
block the Bid Amount specified in the Bid cum Application Form in his/her ASBA Account;

24. RIBs bidding using the UPI Mechanism should mention valid UPI ID of only the Bidder (in case of single account) and
of the first Bidder (in case of joint account) in the Bid cum Application Form; and

25. RIBs using the UPI Mechanism who have revised their Bids subsequent to making the initial Bid should also approve
the revised UPI Mandate Request generated by the Sponsor Bank to authorize blocking of funds equivalent to the
revised Bid Amount and subsequent debit of funds in case of Allotment in a timely manner.

26. Bids by Eligible NRIs for a Bid Amount of less than ₹ 200,000 would be considered under the Retail Category for the
purposes of allocation and Bids for a Bid Amount exceeding ₹ 200,000 would be considered under the Non-Institutional
Category for allocation in the Offer.

The Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are not complied with.

Don’ts:

1. Do not Bid for lower than the minimum Bid Lot;

2. Do not submit a Bid using UPI ID, if you are not a RIB;

3. Do not Bid for a Bid Amount exceeding ₹ 200,000 (for Bids by RIBs);

4. Do not Bid on another Bid cum Application Form and the Anchor Investor Application Form, as the case may be, after
you have submitted a Bid to any of the Designated Intermediary;

5. Do not Bid/ revise the Bid amount to less than the floor price or higher than the cap price;

6. Do not pay the Bid Amount in cheques, demand drafts or by cash, money order, postal order or by stock invest;

7. Do not send Bid cum Application Forms by post; instead submit the same to the Designated Intermediary only;

8. Do not Bid at Cut-off Price (for Bids by QIBs and Non-Institutional Bidders);

9. Do not instruct your respective banks to release the funds blocked in the ASBA Account under the ASBA process;

10. Do not submit the Bid for an amount more than funds available in your ASBA account;

11. Do not submit Bids on plain paper or on incomplete or illegible Bid cum Application Forms or on Bid cum Application
Forms in a colour prescribed for another category of Bidder;

12. Do not submit a Bid in case you are not eligible to acquire Equity Shares under applicable law or your relevant
constitutional documents or otherwise;

13. Do not Bid if you are not competent to contract under the Indian Contract Act, 1872 (other than minors having valid
depository accounts as per Demographic Details provided by the depository);

14. Do not fill up the Bid cum Application Form such that the Equity Shares Bid for exceeds the Offer size and / or
investment limit or maximum number of the Equity Shares that can be held under the applicable laws or regulations or
maximum amount permissible under the applicable regulations or under the terms of the Red Herring Prospectus;

15. Do not Bid for Equity Shares more than specified by respective Stock Exchanges for each category;

16. In case of ASBA Bidders (other than RIBs using UPI mechanism), do not submit more than one Bid cum Application
Form per ASBA Account;

17. If you are RIB and are using UPI mechanism, do not submit more than one Bid cum Application Form for each UPI
ID;

18. Do not make the Bid cum Application Form using third party bank account or using third party linked bank account
UPI ID;

19. Anchor Investors should not bid through the ASBA process;

334
20. Do not submit the Bid cum Application Form to any non-SCSB bank or our Company;

21. Do not Bid on another Bid cum Application Form and the Anchor Investor Application Form, as the case may be, after
you have submitted a Bid to any of the Designated Intermediaries;

22. Do not submit the GIR number instead of the PAN;

23. Anchor Investors should submit Anchor Investor Application Form only to the Book Running Lead Managers;

24. Do not Bid on a Bid cum Application Form that does not have the stamp of a Designated Intermediary;

25. If you are a QIB, do not submit your Bid after 3 p.m. on the QIB Bid / Offer Closing Date;

26. Do not withdraw your Bid or lower the size of your Bid (in terms of quantity of the Equity Shares or the Bid Amount)
at any stage, if you are a QIB or a Non-Institutional Bidder;

27. Do not submit Bids to a Designated Intermediary at a location other than at the relevant Bidding Centres. If you are
RIB and are using UPI mechanism, do not submit the ASBA Form directly with SCSBs;

28. Do not submit incorrect details of the DP ID, Client ID, PAN and UPI ID details if you are a RIB Bidding through the
UPI Mechanism. Further, do not provide details for a beneficiary account which is suspended or for which details cannot
be verified to the Registrar to the Offer;

29. Do not submit the Bid without ensuring that funds equivalent to the entire Bid Amount are available for blocking in the
relevant ASBA account;

30. Do not link the UPI ID with a bank account maintained with a bank that is not UPI 2.0 certified by the NPCI in case of
Bids submitted by RIBs using the UPI Mechanism;

31. RIBs Bidding through the UPI Mechanism using the incorrect UPI handle or using a bank account of an SCSB or a
banks which is not mentioned in the list provided in the SEBI website is liable to be rejected; and

32. Do not submit more than one Bid cum Application Form for each UPI ID in case of RIBs Bidding using the UPI
Mechanism.

The Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are not complied with.

Grounds for Technical Rejection

In addition to the grounds for rejection of Bids on technical grounds as provided in the GID, Bidders are requested to note that
Bids maybe rejected on the following additional technical grounds:

1. Bids submitted without instruction to the SCSBs to block the entire Bid Amount;

2. Bids which do not contain details of the Bid Amount and the bank account details in the ASBA Form;

3. Bids submitted on a plain paper;

4. Bids submitted by RIBs using the UPI Mechanism through an SCSBs and/or using a mobile application or UPI handle,
not listed on the website of SEBI;

5. Bids under the UPI Mechanism submitted by RIBs using third party bank accounts or using a third party linked bank
account UPI ID (subject to availability of information regarding third party account from Sponsor Bank);

6. ASBA Form submitted to a Designated Intermediary does not bear the stamp of the Designated Intermediary;

7. Bids submitted without the signature of the First Bidder or sole Bidder;

8. The ASBA Form not being signed by the account holders, if the account holder is different from the Bidder;

9. ASBA Form by the RIBs by using third party bank accounts or using third party linked bank account UPI IDs;

10. Bids by persons for whom PAN details have not been verified and whose beneficiary accounts are
“suspended for credit” in terms of SEBI circular CIR/MRD/DP/ 22 /2010 dated July 29, 2010;

11. GIR number furnished instead of PAN;

335
12. Bids by RIBs with Bid Amount of a value of more than ₹200,000 (net of Retail Discount);

13. Bids by persons who are not eligible to acquire Equity Shares in terms of all applicable laws, rules, regulations,
guidelines and approvals;

14. Bids accompanied by stock invest, money order, postal order or cash; and

15. Bids uploaded by QIBs after 4.00 pm on the QIB Bid/ Offer Closing Date and by Non-Institutional Bidders uploaded
after 4.00 p.m. on the Bid/ Offer Closing Date, and Bids by RIBs uploaded after 5.00 p.m. on the Bid/ Offer Closing
Date, unless extended by the Stock Exchanges.

Further, in case of any pre-issue or post issue related issues regarding share certificates/demat credit/refund orders/unblocking
etc., investors shall reach out the Company Secretary and Compliance Officer. For details of the Company Secretary and
Compliance Officer, see “General Information” beginning on page 49.

For details of grounds for technical rejections of a Bid cum Application Form, please see the General Information Document.

Names of entities responsible for finalising the basis of allotment in a fair and proper manner

The authorised employees of the Stock Exchanges, along with the Book Running Lead Managers and the Registrar, shall ensure
that the Basis of Allotment is finalised in a fair and proper manner in accordance with the procedure specified in SEBI ICDR
Regulations.

Method of allotment as may be prescribed by SEBI from time to time

Our Company will not make any allotment in excess of the Equity Shares offered through the Offer through the offer document
except in case of oversubscription for the purpose of rounding off to make allotment, in consultation with the Designated Stock
Exchange. Further, upon oversubscription, an allotment of not more than 1% of the Net Offer to public may be made for the
purpose of making allotment in minimum lots.

The allotment of Equity Shares to applicants other than to the RIBs and Anchor Investors shall be on a proportionate basis within
the respective investor categories and the number of securities allotted shall be rounded off to the nearest integer, subject to
minimum allotment being equal to the minimum application size as determined and disclosed.

The allotment of Equity Shares to each RIB shall not be less than the minimum bid lot, subject to the availability of shares in
RIB category, and the remaining available shares, if any, shall be allotted on a proportionate basis.

Payment into Anchor Investor Escrow Account

Our Company and the Promoter Selling Shareholders, in consultation with the Book Running Lead Managers will decide the list
of Anchor Investors to whom the CAN will be sent, pursuant to which, the details of the Equity Shares allocated to them in their
respective names will be notified to such Anchor Investors. For Anchor Investors, the payment instruments for payment into the
Anchor Investor Escrow Account should be drawn in favour of:

(a) In case of resident Anchor Investors: “[●]”

(b) In case of Non-Resident Anchor Investors: “[●]”

Anchor Investors should note that the escrow mechanism is not prescribed by SEBI and has been established as an arrangement
between our Company, the Selling Shareholders, the Syndicate, the Escrow Collection Bank and the Registrar to the Offer to
facilitate collections of Bid amounts from Anchor Investors.

Pre-Offer Advertisement

Subject to Section 30 of the Companies Act, our Company shall, after registering the Red Herring Prospectus with the RoC,
publish a pre-Offer advertisement, in the form prescribed under the SEBI ICDR Regulations, in all editions of English national
daily newspaper, [●], all editions of Hindi national daily newspaper, [●] and Mumbai editions of the Marathi daily newspaper
[●] (Marathi being the regional language of Maharashtra, where our Registered and Corporate Office is located).

In the pre-Offer advertisement, we shall state the Bid/Offer Opening Date and the Bid/Offer Closing Date. This advertisement,
subject to the provisions of Section 30 of the Companies Act, shall be in the format prescribed in Part A of Schedule X of the
SEBI ICDR Regulations.

336
Allotment Advertisement

Our Company, the BRLMs and the Registrar shall publish an allotment advertisement before commencement of trading,
disclosing the date of commencement of trading in all editions of English national daily newspaper, [●], all editions of Hindi
national daily newspaper, [●] and Mumbai editions of the Marathi daily newspaper [●] (Marathi being the regional language of
Maharashtra, where our Registered and Corporate Office is located).

The information set out above is given for the benefit of the Bidders/applicants. Our Company, the Selling Shareholders,
and the Book Running Lead Managers are not liable for any amendments or modification or changes in applicable laws
or regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders/applicants are advised to
make their independent investigations and ensure that the number of Equity Shares Bid for do not exceed the prescribed
limits under applicable laws or regulations.

Signing of the Underwriting Agreement and Filing with the RoC

(a) Our Company, the Selling Shareholders and the Underwriters intend to enter into an Underwriting Agreement after the
finalisation of the Offer Price.

(b) After signing the Underwriting Agreement, an updated Red Herring Prospectus will be filed with the RoC in accordance
with applicable law, which would then be termed as the Prospectus. The Prospectus will contain details of the Offer
Price, the Anchor Investor Offer Price, the Offer size, and underwriting arrangements and will be complete in all
material respects.

Impersonation

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 38 of the Companies Act,
which is reproduced below:

“Any person who:

(a) makes or abets making of an application in a fictitious name to a company for acquiring, or subscribing for, its
securities; or

(b) makes or abets making of multiple applications to a company in different names or in different combinations of his
name or surname for acquiring or subscribing for its securities; or

(c) otherwise induces directly or indirectly a company to allot, or register any transfer of, securities to him, or to any
other person in a fictitious name,

shall be liable for action under Section 447.”

The liability prescribed under Section 447 of the Companies Act, for fraud involving an amount of at least ₹ 1 million or 1% of
the turnover of the Company, whichever is lower, includes imprisonment for a term which shall not be less than six months
extending up to 10 years and fine of an amount not less than the amount involved in the fraud, extending up to three times such
amount (provided that where the fraud involves public interest, such term shall not be less than three years.) Further, where the
fraud involves an amount less than ₹ 1 million or one per cent of the turnover of the company, whichever is lower, and does not
involve public interest, any person guilty of such fraud shall be punishable with imprisonment for a term which may extend to
five years or with fine which may extend to ₹ 5 million or with both.

Undertakings by our Company

Our Company undertakes the following:

 the complaints received in respect of the Offer shall be attended to by our Company expeditiously and satisfactorily;

 all steps for completion of the necessary formalities for listing and commencement of trading at all the Stock Exchanges
where the Equity Shares are proposed to be listed are taken within six working days of the Bid/Offer Closing Date or
within such other time period prescribed by SEBI will be taken;

 the funds required for making refunds/unblocking (to the extent applicable) as per the mode(s) disclosed shall be made
available to the Registrar to the Offer by our Company;

 if Allotment is not made within six working days from the Bid/Offer Closing Date or such other prescribed timelines
under applicable laws, the entire subscription amount received will be refunded/unblocked within the time prescribed

337
 under applicable laws. If there is a delay beyond such prescribed time, our Company shall pay interest prescribed under
the Companies Act, the SEBI ICDR Regulations and other applicable laws for the delayed period;

 where refunds (to the extent applicable) are made through electronic transfer of funds, a suitable communication shall
be sent to the applicant within time prescribed under applicable laws, giving details of the bank where refunds shall be
credited along with amount and expected date of electronic credit of refund;

 the Promoter’s contribution, if any, shall be brought in advance before the Bid/Offer Opening Date and the balance, if
any, shall be brought in on a pro rata basis before calls are made on the Allottees, in accordance with the applicable
provisions of the SEBI ICDR Regulations;

 that if our Company does not proceed with the Offer after the Bid/Offer Closing Date but prior to Allotment, the reason
thereof shall be given as a public notice within two days of the Bid/Offer Closing Date. The public notice shall be issued
in the same newspapers where the pre-Offer advertisements were published. The Stock Exchanges shall be informed
promptly;

 that if the Offer is withdrawn after the Bid/Offer Closing Date, our Company shall be required to file a fresh offer
document with SEBI, in the event a decision is taken to proceed with the Offer subsequently;

 that our Company shall not have recourse to the Net Proceeds until the final approval for listing and trading of the
Equity Shares from all the Stock Exchanges where listing is sought has been received

 except for any exercise of options vested pursuant to ESOP 2012 and ESOP II and the Pre-IPO Placement, no further
issue of the Equity Shares shall be made till the Equity Shares offered through the Red Herring Prospectus are listed or
until the Bid monies are refunded/unblocked in the relevant ASBA Accounts on account of non-listing, under-
subscription, etc.; and

 adequate arrangements shall be made to collect all Bid cum Application Forms from Bidders.

Undertakings by the Selling Shareholders

Each Selling Shareholder undertakes, severally and not jointly, in relation to itself and its respective Offered Shares that:

 its respective portion of the Offered Shares have been held by it for a period of at least one year prior to the date of
filing of this Draft Red Herring Prospectus with SEBI, such period determined in accordance with Regulation 8 of the
SEBI ICDR Regulations;

 it is the legal and beneficial owner of the Offered Shares, and that such Offered Shares shall be transferred in the Offer,
free from liens, charges and encumbrances;

 it shall deposit the Equity Shares offered by it in the Offer in an escrow account opened with the Registrar to the Offer
prior to the filing of the Red Herring Prospectus with the RoC;

 it shall not offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise
to the Bidder for making a Bid in the Offer, and shall not make any payment, direct or indirect, in the nature of discounts,
commission, allowance or otherwise to any person who makes a Bid in the Offer;

 it shall not have recourse to the proceeds of the Offer for Sale until final approval for trading of the Equity Shares from
the Stock Exchanges has been received.

The statements and undertakings provided above, in relation to the Selling Shareholders, are statements which are specifically
confirmed or undertaken, severally and not jointly, by each Selling Shareholder in relation to itself and its respective portion of
the Offered Shares. All other statements or undertakings or both in this Draft Red Herring Prospectus in relation to the Selling
Shareholders, shall be statements made by our Company, even if the same relate to the Selling Shareholders.

Utilisation of Net Proceeds

The Company declares that:

 all monies received out of the Fresh Issue shall be credited/transferred to a separate bank account other than the bank
account referred to in sub-section (3) of Section 40 of the Companies Act;

338
 details of all monies utilized out of the Fresh Issue shall be disclosed, and continue to be disclosed till the time any part
of the Net Proceeds remains unutilized, under an appropriate separate head in the balance sheet of our Company
indicating the purpose for which such monies have been utilized; and

 details of all unutilized monies out of the Fresh Issue, if any shall be disclosed under an appropriate separate head in
the balance sheet of our Company indicating the form in which such unutilized monies have been invested.

339
 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

Foreign investment in Indian securities is regulated through the FDI Policy and FEMA. The government bodies responsible for
granting foreign investment approvals are the concerned ministries or departments of the Government of India and the RBI.

The Government has from time to time made policy pronouncements on FDI through press notes and press releases. The DPIIT,
issued the FDI Policy by way of circular bearing number D/o IPP F. No. 5(1)/2017-FC-1 dated the August 28, 2017, which with
effect from August 28, 2017, consolidates and supersedes all previous press notes, press releases and clarifications on FDI issued
by the DPIIT that were in force and effect as on August 28, 2017. The Government proposes to update the consolidated circular
on FDI Policy once every year and therefore, the FDI Policy will be valid until the DPIIT issues an updated circular. Up to 100%
foreign investment under the automatic route is currently permitted in “Other Financial Services”, which refers to financial
services activities regulated by financial sector regulators, including the NHB, as notified by the Government of India, subject
to conditions specified by the concerned regulator (in our case, the NHB), if any. For details, see “Key Regulations and Policies
in India – Foreign Investment in HFCs” on page 155.

The transfer of shares between an Indian resident and a non-resident does not require the prior approval of the RBI, provided
that (i) the activities of the investee company are under the automatic route under the FDI Policy and transfer does not attract the
provisions of the SEBI Takeover Regulations; (ii) the non-resident shareholding is within the sectoral limits under the FDI
Policy; and (iii) the pricing is in accordance with the guidelines prescribed by SEBI and RBI.

As per the existing policy of the Government, OCBs cannot participate in the Offer.

The Equity Shares offered in the Offer have not been and will not be registered under the U.S. Securities Act of 1933, as
amended or any state securities laws in the United States, and unless so registered may not be offered or sold within the
United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of
the U.S. Securities Act and applicable state securities laws. Accordingly, such Equity Shares are being offered and sold
(i) outside of the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the
applicable laws of the jurisdiction where those offers and sales occur; and (ii) to “qualified institutional buyers” (as
defined in Rule 144A under the U.S. Securities Act), pursuant to the private placement exemption set out in Section 4(a)
of the U.S. Securities Act.

We intend to rely on an exception from the definition of investment company under the U.S. Investment Company Act
of 1940, as amended, in connection with this Offer.

The above information is given for the benefit of the Bidders. Our Company, the Selling Shareholders, and the Book
Running Lead Managers are not liable for any amendments or modification or changes in applicable laws or regulations,
which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their independent
investigations and ensure that the number of Equity Shares Bid for do not exceed the applicable limits under laws or
regulations.

340
 SECTION IX: DESCRIPTION OF EQUITY SHARES AND TERMS OF ARTICLES OF ASSOCIATION

Capitalized terms used in this section have the meanings that have been given to such terms in the Articles of Association of our
Company. The Articles of Association of our Company consist of two Parts, Part A and Part B. In case of any conflict or
inconsistency between Part A and Part B, Part B shall at all times prevail. Part B of the Articles shall automatically terminate,
without any further action by the Company or its shareholders and cease to have any force and effect and shall be deemed to
fall away on and from the date on which the Equity Shares commence listing and trading on the Stock Exchanges, pursuant to
the Offer.

Pursuant to Schedule I of the Companies Act and the SEBI ICDR Regulations, the main provisions of the Articles of Association
of our Company are detailed below.

PART A

Share Capital and Variation of Rights

The Authorized Share Capital of the Company is as mentioned in Clause V of the Memorandum of Association of the Company.
Subject to the provisions of the Act and these Articles, the shares in the capital of the company shall be under the control of the
directors who may issue, allot or otherwise dispose of the same or any of them to such persons, in such proportion and on such
terms and conditions and either at a premium or at par or at a discount (subject to compliance with the provisions of the Act) and
at such time as they may from time to time think fit, and with the approval of the Company in a General Meeting.

Further issue of share capital

Where at any time, it is proposed to increase the subscribed capital of the Company by allotment of further shares, whether out
of unissued share capital or out of increased share capital, then:

a) such further shares shall be offered to the persons who, at the date of the offer, are holders of the equity shares of the
Company, in proportion, as nearly as circumstances admit, to the capital paid up on these shares at that date;

b) employees under a scheme of employees’ stock option, subject to special resolution passed by the Company and subject
to such conditions as may be prescribed under the Act and other applicable Laws; or

c) any persons, whether or not those persons include the persons referred to above, either for cash or for a consideration
other than cash, if the price of such Shares is determined by the valuation report of a registered valuer, subject to
compliance with the applicable provisions of Chapter III of the Act and any other conditions as may be prescribed, if a
special resolution to this effect is passed by the Company in a General Meeting.

Term of Issue of Debentures

Any debentures, debenture stock or other securities may be issued at a discount, premium or otherwise and may be issued on
condition that they shall be convertible into shares of any denomination, and with any privileges and conditions as to redemption,
surrender, drawing, allotment of shares and attending (but not voting) at general meetings, appointment of directors and
otherwise, debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the company
in general meeting accorded by a special resolution.

Lien

The company shall have a first and paramount lien:

a) on every share (not being a fully paid share), for all monies (whether presently payable or not) called, or payable at a
fixed time, in respect of that share; and

b) on all shares (not being fully paid shares) standing registered in the name of a single person, for all monies presently
payable by him or his estate to the company:

Provided that in respect of any partly paid equity shares of our Company, the lien, if any, shall be restricted to moneys called or
payable at a fixed time in respect of such equity shares.

Provided that the Board of directors may at any time declare any share to be wholly or in part exempt from the provisions of this
clause. Unless otherwise agreed, the registration of a transfer of Shares shall operate as a waiver of the Company’s lien if any,
on such Shares

The company’s lien, if any, on a share shall extend to all dividends payable and bonuses declared from time to time in respect of
such shares.

341
Calls on shares

The Board may, from time to time, make calls upon the members in respect of any monies unpaid on their shares (whether on
account of the nominal value of the shares or by way of premium) and not by the conditions of allotment thereof made payable
at fixed times. Each member shall, subject to receiving at least fourteen days’ notice specifying the time or times and place of
payment, pay to the company, at the time or times and place so specified, the amount called on his shares. Further, a call may be
revoked or postponed at the discretion of the Board.

A call shall be deemed to have been made at the time when the resolution of the Board authorising the call was passed and may
be required to be paid by instalments. The joint holders of a share shall be jointly and severally liable to pay all calls in respect
thereof. If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from
whom the sum is due shall pay interest thereon from the day appointed for payment thereof to the time of actual payment at ten
per cent. per annum or at such lower rate, if any, as the Board may determine. The Board shall be at liberty to waive payment of
any such interest wholly or in part. Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed
date, whether on account of the nominal value of the share or by way of premium, shall, for the purposes of these regulations,
be deemed to be a call duly made and payable on the date on which by the terms of issue such sum becomes payable. In case of
non-payment of such sum, all the relevant provisions of these regulations as to payment of interest and expenses, forfeiture or
otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

Further, the members shall not be entitled to any voting rights in respect of the moneys so paid by him until the same would but
for such payment, become presently payable. The Member shall not be entitled to any voting rights in respect of the moneys so
paid by him until the same would, but for such payment, become presently payable. The provisions of these Articles shall mutatis
mutandis apply to any calls on debentures.

Forfeiture

If a member fails to pay any call, or instalment of a call, on the day appointed for payment thereof, the Board may, at any time
thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on him requiring payment of so
much of the call or instalment as is unpaid, together with any interest which may have accrued. Subject to the provisions of
section 61, the company may, by ordinary resolution consolidate and divide all or any of its share capital into shares of larger
amount than its existing shares; convert all or any of its fully paid-up shares into stock, and reconvert that stock into fully paid-
up shares of any denomination; sub-divide its existing shares or any of them into shares of smaller amount than is fixed by the
memorandum; cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by
any person.

General Meetings

An Annual General Meeting shall be held in each calendar year within 6 (six) months following the end of the previous financial
year of the Company. The Board of Directors shall issue the notice of AGM together with the annual financial statement, auditors
report and other annexures as required under the Act to all Shareholders and others entitled to receive such notice at least 21
(twenty-one) clear days before the AGM is held to approve and adopt the audited financial statements. All general meetings
other than annual general meeting shall be called Extraordinary General Meeting (EGM). The Board may, whenever it thinks
fit, call an extraordinary general meeting. AGM and EGM may be called after giving shorter notice as per the Act. If at any time
directors capable of acting who are sufficient in number to form a quorum are not within India, any director or any two members
of the company may call an extraordinary general meeting in the same manner, as nearly as possible, as that in which such a
meeting may be called by the Board.

Proceedings at General Meetings

No business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting
proceeds to business. Save as otherwise provided herein, the quorum for the general meetings shall be as provided in Section
103. The chairperson, if any, of the Board shall preside as Chairperson at every general meeting of the company. If there is no
such Chairperson, or if he is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling
to act as chairperson of the meeting, the directors present shall elect one of their members to be Chairperson of the meeting. If
at any meeting no director is willing to act as Chairperson or if no director is present within fifteen minutes after the time
appointed for holding the meeting, the members present shall choose one of their members to be Chairperson of the meeting.

Adjournment of Meeting

The Chairperson may, with the consent of any meeting at which a quorum is present, and shall, if so directed by the meeting,
adjourn the meeting from time to time and from place to place. No business shall be transacted at any adjourned meeting other
than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for thirty
days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid, and as

342
provided in Section 103 of the Act, it shall not be necessary to give any notice of an adjournment or of the business to be
transacted at an adjourned meeting.

Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes of shares,

(a) on a show of hands, every member present in person shall have one vote; and

(b) on a poll, the VOTING rights of members shall be in proportion to his share in the paid-up equity share capital of the
company.

A member may exercise his vote at a meeting by electronic means in accordance with Section 108 and shall vote only once. In
the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the other joint holders. For this purpose, seniority shall be determined by the order in which the names
stand in the register of members. A member of unsound mind, or in respect of whom an order has been made by any court having
jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee or other legal guardian, and any such
committee or guardian may, on a poll, vote by proxy. Any business other than that upon which a poll has been demanded may
be proceeded with, pending the taking of the poll. No member shall be entitled to vote at any general meeting unless all calls or
other sums presently payable by him in respect of shares in the company have been paid. No objection shall be raised to the
qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and
every vote not disallowed at such meeting shall be valid for all purposes. Any such objection made in due time shall be referred
to the Chairperson of the meeting, whose decision shall be final and conclusive.

Proxy

The instrument appointing a proxy and the power-of-attorney or other authority, if any, under which it is signed or a notarised
copy of that power or authority, shall be deposited at the registered office of the company not less than 48 hours before the time
for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, or, in the case of a
poll, not less than 24 hours before the time appointed for the taking of the poll; and in default the instrument of proxy shall not
be treated as valid.

Board of Directors

The Board shall comprise up to 9 (nine) directors. The chief executive officer shall be appointed and shall hold office as a whole
time director. A minimum of 3 (three) independent directors, or such additional number of independent Directors as may be
required, shall be appointed to the Board in accordance with applicable law.

a) Notwithstanding anything contained in the Articles, and until TN V LLP retains 15% or more of the total paid-up equity
share capital of the Company, on a fully diluted basis, TN V LLP shall be entitled to nominate up to three directors on
the Board (including the chief executive officer).

b) Notwithstanding anything contained in the Articles, and until Aether retains 10% or more of the total paid-up equity
share capital of the Company, on a fully diluted basis, Aether shall be entitled to nominate up to 2 (two) directors on
the Board.

c) Without prejudice to (a) above, until such time TN V LLP continues to remain the ‘promoter’ of the Company (where
the term ‘promoter’ shall have the meaning set forth in the SEBI ICDR Regulations), TN V LLP shall be entitled to
nominate up to two directors on the Board (including the chief executive officer).

d) Without prejudice to (b) above, until such time Aether continues to remain the ‘promoter’ of the Company (where the
term ‘promoter’ shall have the meaning set forth in the SEBI ICDR Regulations), Aether shall be entitled to nominate
up to one director on the Board.

e) Without prejudice to (a) and (c) above, until such time that the TN V LLP has at least 1 director nominated on the
Board, the audit committee and nomination and remuneration committee of the Board shall each include at least one
director nominated by the TN V LLP.

f) Notwithstanding anything contained in the Articles, until Bessemer retains 10% or more of the total paid-up equity
share capital of the Company, on a fully diluted basis, Bessemer shall be entitled to nominate up to one director on the
Board.

g) The quorum for a Board meeting shall be as prescribed under the Companies Act. The presence of at least one director
nominated by TN V LLP, provided it has exercised its right to appoint at least one director, at the beginning and
throughout the meeting shall be necessary for the purpose of forming a valid quorum for a Board meeting.

343
Provided however that, this Article shall be subject to such rights being approved by the members of the company through a
special resolution at the first general meeting of the company held post listing of equity shares on the stock exchanges.

Notwithstanding anything contained in these Articles, if the listing of the equity shares on the stock exchanges is not completed,
the Article on the board composition of Part B shall prevail over this Article.

Proceedings of the Board

The Board of Directors may meet for the conduct of business, adjourn and otherwise regulate its meetings, as it thinks fit. A
director may, and the manager or secretary on the requisition of a director shall, at any time, summon a meeting of the Board.
The Board may elect a Chairperson of its meetings and determine the period for which he is to hold office. If no such Chairperson
is elected, or if at any meeting the Chairperson is not present within five minutes after the time appointed for holding the meeting,
the directors present may choose one of their number to be Chairperson of the meeting. The Board may, subject to the provisions
of the Act, delegate any of its powers to committees consisting of such member or members of its body as it thinks fit. Any
committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on it by
the Board.

Chief Executive Officer, Manager, Company Secretary or Chief Financial Officer

A provision of the Act or these regulations requiring or authorising a thing to be done by or to a director and chief executive
officer, manager, company secretary or chief financial officer shall not be satisfied by its being done by or to the same person
acting both as director and as, or in place of, chief executive officer, manager, company secretary or chief financial officer.

Dividends and Reserve

The company in general meeting may declare dividends, but no dividend shall exceed the amount recommended by the Board.
Where a dividend has been declared by the company but has not been paid or claimed within thirty days from the date of the
declaration to any shareholder entitled to the payment of the dividend, the company shall, within seven days from the date of
expiry of the said period of thirty days, transfer the total amount of dividend which remains unpaid or unclaimed to a special
account to be opened by the company in that behalf in any scheduled bank to be called the Unpaid Dividend Account. Any
money transferred to the Unpaid Dividend Account of the company which remains unpaid or unclaimed for a period of seven
years from the date of such transfer shall be transferred by the company along with interest accrued, if any, thereon to the Investor
Education and Protection Fund established under sub-section (1) of section 125 of the Act. No unclaimed or unpaid dividend
shall be forfeited by the Board. No dividend shall bear interest against the company.

Accounts

The Board shall from time to time determine whether and to what extent and at what times and places and under what conditions
or regulations, the accounts and books of the company, or any of them, shall be open to the inspection of members not being
directors. No member (not being a director) shall have any right of inspecting any account or book or document of the company
except as conferred by law or authorised by the Board or by the company in general meeting.

Winding Up

Subject to the provisions of Chapter XX of the Act and rules made thereunder—

If the company shall be wound up, the liquidator may, with the sanction of a special resolution of the company and any other
sanction required by the Act, divide amongst the members, in specie or kind, the whole or any part of the assets of the company,
whether they shall consist of property of the same kind or not.

For the purpose aforesaid, the liquidator may set such value as he deems fair upon any property to be divided as aforesaid and
may determine how such division shall be carried out as between the members or different classes of members.

The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit
of the contributories if he considers necessary, but so that no member shall be compelled to accept any shares or other securities
whereon there is any liability.

Indemnity

Every officer of the company shall be indemnified out of the assets of the company against any liability incurred by him in
defending any proceedings relating to acts or omissions by or on behalf of the Company, whether civil or criminal, in which
judgment is given in his favour or in which he is acquitted or in which relief is granted to him by the court or the Tribunal.

344
 PART B

Part B of the Articles of Association of the Company provide for the rights and obligations of the parties to the Shareholders’
Agreement dated March 20, 2017 (“Existing SHA”), as amended by the amendment agreement dated November 26, 2019
between TN V LLP, Aether, our Company, Bessemer, P. S. Jayakumar, Manoj Viswanathan and Bhaskar Chaudhry (the “SHA”).

In case of any conflict or inconsistency between Part A on the one hand and Part B on the other hand, Part B shall at all times
prevail. Part B of the Articles shall automatically terminate and cease to have any force and effect and shall be deemed to fall
away on and from the date of listing and trading of the equity shares of the Company on a stock exchange in India, subsequent
to an initial public offering of its equity shares without any further action by the Company or its shareholders.

If the Equity Shares do not get listed and commence trading on the Stock Exchanges, the Company shall take all steps to amend
the Articles of Association to reflect the terms of the Existing SHA.

345
 SECTION X: OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The copies of the following documents and contracts which have been entered or are to be entered into by our Company (not
being contracts entered into in the ordinary course of business carried on by our Company or contracts entered into more than
two years before the date of this Draft Red Herring Prospectus) which are or may be deemed material will be attached to the
copy of the Red Herring Prospectus which will be delivered to the RoC for registration. Copies of the abovementioned contracts
and also the documents for inspection referred to hereunder, may be inspected at the Registered and Corporate Office between
10 a.m. and 5 p.m. IST on all Working Days from the date of the Red Herring Prospectus until the Bid/Offer Closing Date.

Any of the contracts or documents mentioned in this Draft Red Herring Prospectus may be amended or modified at any time if
so required in the interest of our Company or if required by the other parties, without reference to the Shareholders, subject to
compliance of the provisions contained in the Companies Act and other applicable law.

A. Material Contracts for the Offer

1. Offer Agreement dated November 28, 2019 entered into between our Company, the Selling Shareholders and
the Book Running Lead Managers.

2. Registrar Agreement dated November 27, 2019 entered into between our Company, the Selling Shareholders
and the Registrar to the Offer.

3. Escrow and Sponsor Bank Agreement dated [●] entered into between our Company, the Selling Shareholders,
the Registrar to the Offer, the Book Running Lead Managers, the Banker(s) to the Offer and the Syndicate
Member(s).

4. Share Escrow Agreement dated [●] entered into between our Company, the Selling Shareholders, and the Share
Escrow Agent.

5. Syndicate Agreement dated [●] entered into between our Company, the Selling Shareholders, and the Members
of the Syndicate and the Registrar to the Offer.

6. Underwriting Agreement dated [●] entered into between our Company, the Selling Shareholders, and the
Underwriter(s).

7. Monitoring Agency Agreement dated [●] entered into between our Company and the Monitoring Agency.

B. Material Documents

1. Certified copies of the Memorandum of Association and Articles of our Company, as amended from time to
time.

2. Certificate of incorporation dated February 3, 2010 issued by the Registrar of Companies, Karnataka at
Bangalore in the name of ‘Home First Finance Company India Private Limited’. Fresh certificate of
incorporation dated March 14, 2018 issued by the RoC upon change of name consequent to conversion from
private to public company.

3. Order dated December 17, 2012 issued by Regional Director (South East Region), Ministry of Corporate
Affairs, Hyderabad confirming the change in the registered office of the Company from the state of Karnataka
to the state of Maharashtra and a certificate of registration of the order, dated February 27, 2013 issued by the
RoC.

4. Copies of annual reports of our Company for Financial Years 2019, 2018 and 2017 and audit report for the six
months ended September 30, 2019.

5. Resolution of our Board of Directors dated July 31, 2019 authorising the Offer and other related matters.

6. Resolution of the Shareholders of our Company dated August 30, 2019 authorising the Fresh Issue and other
related matters.

7. Resolution dated November 15, 2019 passed at the meeting of the key persons of TN V LLP authorising the
Offer for Sale for the Equity Shares offered by it and the consent letter dated November 27, 2019 consenting
to include the Equity Shares offered by it in the Offer.

346
 8. Resolution dated November 25, 2019 passed by the board of directors of Aether authorising the Offer for Sale
for the Equity Shares offered by it and the consent letter dated November 27, 2019 consenting to include the
Equity Shares offered by it in the Offer.

9. Resolution dated November 26, 2019 passed by the board of directors of Bessemer authorising the Offer for
Sale for the Equity Shares offered by it and the consent letter dated November 26, 2019 consenting to include
the Equity Shares offered by it in the Offer.

10. Consent letter issued by (i) P. S. Jayakumar dated November 27, 2019, (ii) Manoj Viswanathan dated
November 27, 2019 and (iii) Bhaskar Chaudhry dated November 26, 2019 approving the Offer for Sale of the
Equity Shares offered by them.

11. Share Purchase and Share Subscription Agreement dated March 20, 2017 between TN V LLP, Aether, Jaithirth
Rao, Jaithirth Rao and Kotak Mahindra Trusteeship Services Limited (in their capacity as trustees of Jaithirth
Rao 2012 Trust), Bessemer, our Company, P. S. Jayakumar, Manoj Viswanathan and Bhaskar Chaudhry.

12. Shareholders’ Agreement dated March 20, 2017 between TN V LLP, Aether, our Company, Bessemer, P. S.
Jayakumar, Manoj Viswanathan and Bhaskar Chaudhry, read along with the amendment agreement dated
November 26, 2019.

13. Inter-se agreement dated November 20, 2019 between TN V LLP and Aether.

14. Resolution of our Board of Directors dated November 28, 2019 approving this Draft Red Herring Prospectus.

15. Consent letter from the Statutory Auditors dated November 27, 2019 for inclusion of their name as “experts”.

16. Consent letter from CRISIL Limited dated November 25, 2019 to rely on and reproduce part or whole of the
CRISIL Report and include their name in this Draft Red Herring Prospectus.

17. Consent letter from ICRA Limited dated November 22, 2019 to rely on and reproduce part or whole of the
ICRA Report and include their name in this Draft Red Herring Prospectus.

18. The Statement of Special Tax Benefits dated November 26, 2019 issued by the Statutory Auditors.

19. Examination report in relation to the Restated Financial Information dated November 18, 2019 of our Statutory
Auditors, included in this Draft Red Herring Prospectus.

20. Consents in writing of each of the Selling Shareholders, our Directors, our Company Secretary and Compliance
Officer, Legal Counsel to our Company as to Indian Law, Legal Counsel to the Book Running Lead Managers
as to Indian Law, Legal Counsel to the Promoter Selling Shareholders as to Indian Law, Legal Counsel to the
Investor Selling Shareholder as to Indian Law, Legal Counsel to P. S. Jayakumar and Manoj Viswanathan as
to Indian Law, Legal Counsel to the Book Running Lead Managers as to U.S. Law, Bankers to our Company,
the Book Running Lead Managers, independent chartered accountant, the Syndicate Member(s), the Banker(s)
to the Offer and the Registrar to the Offer, to act in their respective capacities.

21. Employee Stock Option Scheme, 2012, as amended and the Employee Stock Option Scheme II of the
Company, as amended.

22. Employment agreement dated October 9, 2013 along with the amended and restated employment agreement
dated March 21, 2017 entered into with our Executive Director, Manoj Viswanathan.

23. In-principle listing approvals dated [●] and [●] issued by BSE and NSE, respectively.

24. Tripartite agreement dated September 18, 2019 amongst our Company, CDSL and the Registrar to the Offer.

25. Tripartite agreement dated May 16, 2012 between our Company, NDSL and the Registrar to the Offer.

26. Due diligence certificate dated November 28, 2019 addressed from the Book Running Lead Managers to SEBI.

27. SEBI observation letter no. [●] dated [●].

Any of the contracts or documents mentioned in this Draft Red Herring Prospectus may be amended or modified at any time if
so required in the interest of our Company or if required by the other parties, without reference to our Shareholders, subject to
compliance with the provisions contained in the Companies Act and other relevant statutes.

347
 DECLARATION

We hereby declare that all relevant provisions of the Companies Act and the guidelines or regulations issued by the Government
of India or the guidelines or regulations issued by SEBI, established under Section 3 of the SEBI Act, as the case may be, have
been complied with and no statement made in this Draft Red Herring Prospectus is contrary to the provisions of the Companies
Act, the SCRA, the SEBI Act or rules made or guidelines or regulations issued thereunder, as the case may be. We further certify
that all the statements in this Draft Red Herring Prospectus are true and correct.

SIGNED BY ALL THE DIRECTORS OF OUR COMPANY

___________________________ ___________________________

Deepak Satwalekar Sakti Prasad Ghosh

(Chairman and Independent Director) (Independent Director)

___________________________ ___________________________

Sujatha Venkatramanan Divya Sehgal

(Independent Director) (Nominee Director)

___________________________ ___________________________

Maninder Singh Juneja Rajagopalan Santhanam

(Nominee Director) (Nominee Director)

___________________________ ___________________________

Vishal Vijay Gupta Manoj Viswanathan

(Nominee Director) (Director and Chief Executive Officer)

SIGNED BY THE CHIEF FINANCIAL OFFICER

___________________________
Nutan Gaba Patwari
(Chief Financial Officer)

Place: Mumbai
Date: November 28, 2019
 DECLARATION BY TRUE NORTH FUND V LLP AS A PROMOTER SELLING SHAREHOLDER

We, True North Fund V LLP, hereby confirm that all statements, disclosures and undertakings specifically made by us in this
Draft Red Herring Prospectus in relation to ourselves, as a Promoter Selling Shareholder and our Offered Shares, are true and
correct. We assume no responsibility for any other statements, disclosures and undertakings including statements made or
confirmed by or relating to the Company or any other person(s) in this Draft Red Herring Prospectus.

For and on behalf of True North Fund V LLP

Authorised Signatory
Name: Divya Sehgal
Designation: Authorised Signatory
Place: Mumbai
Date: November 28, 2019

_______________________________
 DECLARATION BY AETHER (MAURITIUS) LIMITED AS A PROMOTER SELLING SHAREHOLDER

We, Aether (Mauritius) Limited, hereby confirm that all statements, disclosures and undertakings specifically made by us in this
Draft Red Herring Prospectus in relation to ourselves, as a Promoter Selling Shareholder and our Offered Shares, are true and
correct. We assume no responsibility for any other statements, disclosures and undertakings including statements made or
confirmed by or relating to the Company or any other person(s) in this Draft Red Herring Prospectus.

For and on behalf of Aether (Mauritius) Limited

Authorised Signatory
Name: Ashraf Ramtoola
Designation: Director
Place: Port Louis, Mauritius
Date: November 28, 2019

_______________________________
 DECLARATION BY BESSEMER INDIA CAPITAL HOLDINGS II LTD. AS INVESTOR SELLING
SHAREHOLDER

We, Bessemer India Capital Holdings II Ltd., hereby confirm that all statements, disclosures and undertakings specifically made
by us in this Draft Red Herring Prospectus in relation to ourselves, as an Investor Selling Shareholder and our Offered Shares,
are true and correct. We assume no responsibility for any other statements, disclosures and undertakings including statements
made or confirmed by or relating to the Company or any other person(s) in this Draft Red Herring Prospectus.

For and on behalf of Bessemer India Capital Holdings II Ltd.

Authorised Signatory
Name: Arunagirinatha Runghien
Designation: Director
Place: IFS Court, Bank Street, TwentyEight, Cybercity, Ebene 72201, Mauritius
Date: November 28, 2019

_______________________________
 DECLARATION BY P. S. JAYAKUMAR AS AN INDIVIDUAL SELLING SHAREHOLDER

I, P. S. Jayakumar, hereby confirm that all statements, disclosures and undertakings specifically made by me in this Draft Red
Herring Prospectus in relation to myself, as an Individual Selling Shareholder and my Offered Shares, are true and correct. I
assume no responsibility for any other statements, disclosures and undertakings including statements made or confirmed by or
relating to the Company or any other person(s) in this Draft Red Herring Prospectus.

Signed by P. S. Jayakumar

Place: Mumbai
Date: November 28, 2019

_______________________________
 DECLARATION BY MANOJ VISWANATHAN AS AN INDIVIDUAL SELLING SHAREHOLDER

I, Manoj Viswanathan, hereby confirm that all statements, disclosures and undertakings specifically made by me in this Draft
Red Herring Prospectus in relation to myself, as an Individual Selling Shareholder and my Offered Shares, are true and correct.
I assume no responsibility for any other statements, disclosures and undertakings including statements made or confirmed by or
relating to the Company or any other person(s) in this Draft Red Herring Prospectus.

Signed by Manoj Viswanathan

Place: Mumbai
Date: November 28, 2019

_______________________________
 DECLARATION BY BHASKAR CHAUDHRY AS AN INDIVIDUAL SELLING SHAREHOLDER

I, Bhaskar Chaudhry, hereby confirm that all statements, disclosures and undertakings specifically made by me in this Draft Red
Herring Prospectus in relation to myself, as an Individual Selling Shareholder and my Offered Shares, are true and correct. I
assume no responsibility for any other statements, disclosures and undertakings including statements made or confirmed by or
relating to the Company or any other person(s) in this Draft Red Herring Prospectus.

Signed by Bhaskar Chaudhry

Place: Mumbai
Date: November 28, 2019

_______________________________