INFORMATION MEMORANDUM - Electronic Issuance ...

Information Memorandum Private & Confidential Date: November 18, 2020 For Private Circulation Only

(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)

No: _______________

Addressed to: _________________________

INFORMATION MEMORANDUM

FUSION MICRO FINANCE PRIVATE LIMITED

CIN: U65100DL1994PTC061287

A private limited company incorporated under the Companies Act, 1956 Date of Incorporation: September 05, 1994

Registered Office: H-1, Block C, Community Centre, Naraina Vihar, Near Gurudwara,

New Delhi, 110028 Telephone No.: +91 – 011 46646600

Website: http://www.fusionmicrofinance.com/

Information Memorandum for issue of Debentures on a private placement basis on

Dated: November 18, 2020

Background

This Information Memorandum is related to the Debentures to be issued by Fusion Micro Finance Private Limited (the “Issuer” or “Company”) on a private placement basis and contains relevant information and

disclosures required for the purpose of issuing of the Debentures. The issue of the Debentures comprised

in the Issue and described under this Information Memorandum has been authorised by the Issuer through resolutions passed by the shareholders of the Issuer on July 28, 2020 and the Board of Directors of the

Issuer on November 09, 2020 and the Memorandum and Articles of Association of the Company. The

present issue of Debentures in terms of this Information Memorandum is within the overall powers of the Board as per the above shareholder resolution(s). Pursuant to the resolution passed by the Company’s

shareholders dated July 28, 2020 in accordance with provisions of the Companies Act, 2013, the Company

has been authorised to borrow, upon such terms and conditions as the Board may think fit for aggregate

amounts not exceeding INR 5500,00,00,000/- (Rupees Five Thousand and Five Hundred Crores only). The present issue of Debentures in terms of this Information Memorandum is within the overall powers of

the Board as per the above shareholder resolution(s).

General Risks

Investment in debt and debt related securities involve a degree of risk and Investors should not invest

any funds in the debt instruments, unless they can afford to take the risks attached to such investments

and only after reading the information carefully. For taking an investment decision, the Investors must rely on their own examination of the Company and the Issue including the risks involved. The

Debentures have not been recommended or approved by Securities and Exchange Board of India

(“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of Investors is invited to the statement of Risk Factors at SECTION 3:of this memorandum of private

placement for issue of Debentures on a private placement basis (“Information Memorandum” or

“Disclosure Document”). This Information Memorandum has not been submitted, cleared or approved

by SEBI.

Issue of 250 (Two Hundred and Fifty) Secured, Rated, Listed, Redeemable, Taxable,

Transferable Non-convertible Debentures of face value of Rs. 10,00,000/- (Rupees Ten Lakhs

only) each, aggregating up to Rs. 25,00,00,000/- (Rupees Twenty Five Crores only) on a private

placement basis (the “Issue”).



Issuer’s Absolute Responsibility

The Issuer, having made all reasonable inquiries, confirms and represents that the information contained

in this Information Memorandum/ Disclosure Document is true and correct in all material respects 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 document as a whole or any of

such information or the expression of any such opinions or intentions misleading in any material respect.

The Issuer is solely responsible for the correctness, adequacy and disclosure of all relevant information

herein.

Credit Rating

The Debentures proposed to be issued by the Issuer have been rated by ICRA Limited (“Rating

Agency” / “ICRA”) The Rating Agency has vide its letter dated November 06, 2020, assigned a

rating of “ICRA A-” (Stable)” (pronounced as “ICRA A Minus”) with ‘Stable’ outlook in respect of

the Debentures. The above rating is not a recommendation to buy, sell or hold securities and investors

should take their own decision. The ratings may be subject to revision or withdrawal at any time by

the Rating Agency and should be evaluated independently of any other ratings. Please refer to

Annexure II of this Information Memorandum for the letter dated November 06, 2020, from the

Rating Agency assigning the credit rating abovementioned.

Issue Schedule

Issue Opening on: November 18, 2020

Issue Closing on: November 18, 2020

Deemed Date of Allotment: November 19, 2020

The Issuer reserves the right to change the Issue Schedule including the Deemed Date of Allotment at

its sole discretion, without giving any reasons or prior notice. The Issue shall be open for subscription

during the banking hours on each day during the period covered by the Issue Schedule.

The Debentures are proposed to be listed on the wholesale debt market of the BSE Limited (“BSE”).

Registrar and Transfer Agent Debenture Trustee

Link Intime India Private Limited

C-13, Pannalal Silk Mills Compound

L.B.S. Marg, Bhandup (West)

Mumbai 400 078

Contact Person: Mr Ganesh Jadhav Tel: +91-22-25946970

Fax: +91-22-25946969

Email: [email protected]

Website: http://www. linkintime.co.in

Catalyst Trusteeship Limited Windsor, 6th Floor, Offce No. 604, C.S.T. Road,

Kalina, Santacruz (East), Mumbai – 400 098 Tel.:

022- 49220507

Fax: 022-49220505 Email: 022-49220555

Contact Person: Mr. Umesh Salvi



TABLE OF CONTENTS

SECTION 1: DEFINITIONS AND ABBREVIATIONS 4

SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS 9

SECTION 3: RISK FACTORS 12

SECTION 4: FINANCIAL STATEMENTS 18

SECTION 5: REGULATORY DISCLOSURES 19

SECTION 6: DISCLOSURES PERTAINING TO WILFUL DEFAULT 68

SECTION 7: TRANSACTION DOCUMENTS AND KEY TERMS 69

SECTION 8: OTHER INFORMATION AND APPLICATION PROCESS 70

SECTION 9: DECLARATION 80

ANNEXURE I: TERM SHEET 82

ANNEXURE II: RATING LETTER FROM THE RATING AGENCY 83

ANNEXURE III: CONSENT LETTERS FROM THE DEBENTURE TRUSTEE 88

ANNEXURE IV: APPLICATION FORM 89

ANNEXURE V: FINANCIAL STATEMENTS 92

ANNEXURE VI: ILLUSTRATION OF BOND CASH FLOWS FOR THE

DEBENTURES 104



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SECTION 1: DEFINITIONS AND ABBREVIATIONS

Unless the context otherwise indicates or requires, the following terms shall have the meanings

given below in this Information Memorandum.

Act/Companies Act means the Companies Act, 2013 and shall include any re-enactment,

amendment or modification of the Companies Act, 2013, as in effect

from time to time.

Allot/Allotment/Allotted The allotment of the Debentures pursuant to this Issue.

Application Form The form used by the recipient of this Information Memorandum

and/or the Private Placement Offer cum Application Letter(s), to

apply for subscription to the Debentures, which is annexed to this

Information Memorandum and marked as Annexure IV.

Applicant means a person who has submitted a completed Application Form to

the Issuer in relation to the Debentures in accordance with this Information Memorandum.

Applicable Law means all applicable statutes, enactments or acts of any legislative

body in India, laws, ordinances, rules, bye-laws, regulations, notifications, guidelines, policies, directions, directives and orders of

any Governmental Authority and any modifications or re-enactments

thereof.

Application Money means the subscription amounts paid by the Applicants at the time of

submitting the Application Form.

BSE means the BSE Limited

Board/Board of

Directors The Board of Directors of the Issuer.

Business Day shall mean any day on which commercial banks are open for business

in Mumbai and Delhi.

CDSL Central Depository Services (India) Limited

CERSAI Central Registry of Securitisation Asset Reconstruction and Security

Interest of India

Client Loan Each loan made by the Issuer as a lender, and “Client Loans” shall refer to the aggregate of such loans.

Debentures / NCDs 250 (Two Hundred and Fifty) Secured, Rated, Listed, Redeemable,

Taxable , Transferable, Non-convertible Debentures bearing a face value of Rs. 10,00,000/- (Rupees Ten Lakhs only) each, aggregating

to Rs. 25,00,00,000/- (Rupees Twenty Five Crores only).

Debenture Holders /

Investors The holders of the Debentures issued by the Issuer and shall include

the registered transferees of the Debentures from time to time.

Debenture Trustee Catalyst Trusteeship Limited

Debenture Trustee

Agreement

Agreement executed / to be executed by and between the Debenture

Trustee and the Company inter alia for the purposes of appointment of the Debenture Trustee to act as debenture trustee in connection with

the issuance of the Debentures.

Debenture Trust Deed Shall mean the debenture trust deed executed / to be executed by and

between the Debenture Trustee and the Company inter alia recording the terms and conditions upon which the Debentures are being issued

and shall include the representations and warranties and the covenants

to be provided by the Issuer.

Deed of Hypothecation the unattested deed of hypothecation to be executed by and between the Issuer and the Debenture Trustee, pursuant to which hypothecation

over the Hypothecated Assets shall be created by the Issuer in favour



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of the Debenture Trustee (acting for and on behalf of the Debenture

Holders).

Deemed Date of Allotment

November 19, 2020

Demat Refers to dematerialized securities which are securities that are in

electronic form, and not in physical form, with the entries noted by

the Depository. Depositories Act The Depositories Act, 1996, as amended from time to time. Depository A Depository registered with SEBI under the SEBI (Depositories and

Participant) Regulations, 2018, as amended from time to time. Depository Participant / DP

A depository participant as defined under the Depositories Act

Director(s) Board of Director(s) of the Issuer. Disclosure Document /

Information Memorandum

This document which sets out the information regarding the

Debentures being issued on a private placement basis.

DP ID Depository Participant Identification Number. Due Date shall mean any date on which the holders of the Debentures are

entitled to any payments whether on maturity or otherwise prior to the

scheduled Redemption Date / Maturity Date or upon acceleration.

EBP Guidelines The guidelines issued by SEBI with respect to electronic book

mechanism under the terms of the SEBI Circular dated January 5,

2018 (bearing reference number SEBI/HO/DDHS/CIR/P/2018/05)

read with the SEBI Circular dated August 16, 2018 (bearing reference number SEBI/HO/DDHS/CIR/P/2018/122) and the operational

guidelines issued by the relevant Electronic Book Provider, as may be

amended, clarified or updated from time to time.

EFT Electronic Fund Transfer. Electronic Book

Provider / EBP

shall have the meaning assigned to such term under the EBP

Guidelines.

Eligible Investors Shall have the meaning specified in Clause 8.14 below.

Financial Year/ FY Twelve months period commencing from April 1 of a particular

calendar year and ending on March 31 of the subsequent calendar

year. Final Settlement Date shall mean the date on which the entire outstanding amounts of the

Issuer in relation to the Debentures including the principal amounts in

respect of the Debentures, the coupon accrued thereon, the Default

Interest, additional interest, costs, fees, charges, etc. and all obligations of the Issuer under the Transaction Documents have been

irrevocably and unconditionally discharged in full, to the satisfaction

of the Debenture Trustee.

GAAP Generally Accepted Accounting Principles prescribed by the Institute of Chartered Accountants of India from time to time and consistently

applied by the Issuer. GOI Guarantee means the partial credit guarantee to be provided by the Guarantor in

accordance with the terms of the GOI Guidelines in respect of, inter alia, the Debentures.

GOI Guidelines shall mean the ‘Partial Credit Guarantee Scheme’ offered by the

Government of India to public sector banks as originally issued on August 10, 2019 and as replaced vide the scheme issued on December

11, 2019 and as extended by the ‘Extended Partial Credit Guarantee

Scheme’ issued by the Department of Financial Services, Ministry of

Finance of the Government of India vide circular dated May 20, 2020,



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in each case as amended, replaced or modified from time to time, the

frequently asked questions (FAQs) issued in respect of partial credit

guarantee scheme from time to time including the FAQs issued by the Department of Financial Services, Ministry of Finance of the

Government of India dated August 30, 2019 and May 20, 2020 and all

other circulars, notifications, rules, regulations and guidelines as issued by the RBI from time to time in relation to the partial credit

guarantee schemes offered by the Government of India including in

relation to corporate bonds purchased / subscribed by public sector bank(s).

Guarantor means the Government of India (acting through the Small Industrial

Development Bank of India or any other person in accordance with

the GOI Guidelines and Applicable Law).

Hypothecated Assets shall have the meaning assigned to the term in the Deed of

Hypothecation.

IBC shall mean the Insolvency and Bankruptcy Code, 2016, and the rules

and regulations made thereunder which are in effect from time to time and shall include any other statutory amendment or re-enactment

thereof.

ICCL Indian Clearing Corporation Limited

Issue Private Placement of the Debentures. Issue Closing Date November 18, 2020

Issue Opening Date November 18, 2020

Issuer/ Company Fusion Micro Finance Private Limited Majority Debenture Holders

Debenture Holders whose participation or share in the principal amount(s) outstanding with respect to the Debentures aggregate to

more than 51% (Fifty One Percent) of the value of the nominal amount

of the Debentures for the time being outstanding.

Material Adverse Effect means the effect or consequence of an event, circumstance, occurrence or condition which has caused, as of any date of

determination, a material and adverse effect on (i) the financial

condition, business or operation of the Issuer, or prospects of the

Issuer; (ii) the ability of the Issuer to perform their respective obligations under the Transaction Documents; or (iii) the validity or

enforceability of any of the Transaction Documents including the

ability of any party to enforce any of its remedies thereunder)

Maturity Date May 19, 2022, being 18 (Eighteen) months from the Deemed Date of

Allotment, or such other date on which the final payment of the

principal amount of the Debentures becomes due and payable

provided by the Debenture Holders, whether at such stated maturity date, by declaration of acceleration, or otherwise

Net Assets Net Assets shall mean the total assets on the balance sheet of the Issuer

excluding any securitised assets and managed (non-owned) loan portfolio.

N.A. Not Applicable. NBFC Directions means the Non-Banking Financial Company - Systemically Important

Non-Deposit taking Company and Deposit taking Company (Reserve

Bank) Directions, 2016 dated September 1, 2016 and/or the Non-

Banking Financial Company - Non-Systemically Important Non- Deposit taking Company (Reserve Bank) Directions, 2016 dated

September 1, 2016 (each as amended, modified or restated from time

to time) as may be applicable, read together with the RBI's Master Circular dated July 1, 2015 on "Non-Banking Financial Company-



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Micro Finance Institutions' (NBFC-MFIs) - Directions" (each as

amended, modified or restated from time to time).

NBFC Non-Banking Financial Company.

NBFC-MFI Non-Banking Financial Company – Micro Finance Institution.

NSDL National Securities Depository Limited. Outstanding Principal

Amount

means, on any date, the principal amounts outstanding under the

Debentures.

PAN Permanent Account Number.

Private Placement Offer cum Application

Letter(s)

Shall mean the private placement offer cum application letter(s) prepared in compliance with Section 42 of the Companies Act, 2013

read with the Companies (Prospectus and Allotment of Securities)

Rules, 2014 and issued by the Company to the proposed holders / applicants of the Debentures.

Rating Agency ICRA Limited, being a credit rating agency registered with SEBI

pursuant to SEBI (Credit Rating Agencies) Regulations 1999, as

amended from time to time. RBI Reserve Bank of India.

Record Date The date which will be used for determining the Debenture Holders

who shall be entitled to receive the amounts due on any Due Date in

relation to the Debentures, which shall be the date falling 3 (Three) Business Days prior to any Due Date.

Receivables shall have the meaning assigned to such term in the Deed of

Hypothecation

Redemption Amount shall mean with reference to each Debenture, the principal amount outstanding on the Debentures plus the accrued Coupon along with

the Default Interest (if any), and other such costs, charges and

expenses if any, payable under the Transaction Documents.

Register of Debenture

Holders

means the register maintained by the Company containing the name(s)

of the Debenture Holder(s) in the form and manner as prescribed

under the Companies (Management and Administration Rules), 2014,

which register shall be maintained at the registered office of the Company

R&T Agent Registrar and Transfer Agent to the Issue, in this case being Link

Intime India Private Limited.

ROC Registrar of Companies. Rs. / INR Indian Rupee. RTGS Real Time Gross Settlement. SEBI Securities and Exchange Board of India constituted under the

Securities and Exchange Board of India Act, 1992 (as amended from time to time).

SEBI Debt Listing

Regulations The Securities and Exchange Board of India (Issue and Listing of Debt

Securities) Regulation, 2008 issued by SEBI, as amended from time

to time. Secured Obligations shall mean all obligations at any time due, owing or incurred by the

Company to the Debenture Trustee and the Debenture Holder(s) in

respect of the Debentures and shall include the obligation to redeem the Debentures in terms thereof including payment of Coupon,

Default Interest accrued thereon (if any), any outstanding

remuneration of the Debenture Trustee and all fees, costs, charges and

expenses payable to the Debenture Trustee and other monies payable by the Company in respect of the Debentures under the Transaction

Documents.



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Tax or Taxes shall mean any and all present or future, direct or indirect, claims for

tax, withholding tax, surcharge, levy, impost, duty, cess, statutory due

or other charge of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying

any of the same) including on gross receipts, sales, turn-over, value

addition, use, consumption, property, service, income, franchise, capital, occupation, license, excise, documents (such as stamp duties)

and customs and other taxes, duties, assessments, or fees, however

imposed, withheld, levied, or assessed by any Government;

TDS Tax Deducted at Source. Terms & Conditions Shall mean the terms and conditions pertaining to the Issue as outlined

in the Transaction Documents. Transaction Documents The Issuer has executed/ shall execute the documents including

but not limited to the following: (i) Information Memorandum;

(ii) Private Placement Offer cum Application Letter;

(iii) consent letter issued by the Debenture Trustee for Debentures;

(iv) Debenture Trustee Agreement;

(v) Debenture Trust Deed; (vi) Deed of Hypothecation;

(vii) the credit rating letter from the Rating Agency in respect

of the Debentures;

(viii) each tripartite agreement between the Issuer, the Registrar and any Depository;

(ix) Listing agreement with BSE;

(x) any other document mandated under the GOI guidelines; and

(xi) any other document that may be designated by the

Debenture Trustee as a Transaction Document.

(collectively referred to as “Transaction Documents”)

WDM Wholesale Debt Market segment of the BSE. Wilful Defaulter Shall mean an Issuer who is categorized as a wilful defaulter by any

Bank or financial institution or consortium thereof, in accordance with

the guidelines on wilful defaulters issued by the Reserve Bank of India and includes an issuer whose director or promoter is categorized as

such in accordance with Regulation 2(n) of SEBI (Issue and Listing

of Debt Securities) Regulations, 2008.



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SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS

2.1 ISSUER’S DISCLAIMER

This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus and should

not be construed to be a prospectus or a statement in lieu of a prospectus under the Companies Act. The

issue of the Debentures to be listed on the WDM segment of the BSE is being made strictly on a private

placement basis. Multiple copies hereof given to the same entity shall be deemed to be given to the same

person and shall be treated as such. This Information Memorandum does not constitute and shall not be

deemed to constitute an offer or invitation to subscribe to the Debentures to the public in general.

As per the applicable provisions, it is not necessary for a copy of this Information Memorandum /

Disclosure Document to be filed or submitted to the SEBI for its review and/or approval. This Information

Memorandum has been prepared in conformity with the SEBI Debt Listing Regulations as amended from

time to time and the applicable RBI Circulars governing private placements of debentures by NBFCs.

This Information Memorandum has been prepared solely to provide general information about the Issuer

to the eligible investors to whom it is addressed and who are willing and eligible to subscribe to the

Debentures. This Information Memorandum does not purport to contain all the information that any

eligible investor may require. Further, this Information Memorandum has been prepared for informational

purposes relating to this transaction only and upon the express understanding that it will be used only for

the purposes set forth herein.

Neither this Information Memorandum nor any other information supplied in connection with the

Debentures is intended to provide the basis of any credit or other evaluation and any recipient of this

Information Memorandum should not consider such receipt as a recommendation to subscribe to any

Debentures. Each potential Investor contemplating subscription to any Debentures should make its own

independent investigation of the financial condition and affairs of the Issuer, and its own appraisal of the

creditworthiness of the Issuer. Potential Investors should consult their own financial, legal, tax and other

professional advisors as to the risks and investment considerations arising from an investment in the

Debentures and should possess the appropriate resources to analyze such investment and the suitability

of such investment to such potential Investor’s particular circumstances.

The Issuer confirms that, as of the date hereof, this Information Memorandum (including the documents

incorporated by reference herein, if any) contains all the information that is material in the context of the

Issue and regulatory requirements in relation to the Issue and is accurate in all such material respects. No

person has been authorized to give any information or to make any representation not contained or

incorporated by reference in this Information Memorandum or in any material made available by the

Issuer to any potential Investor pursuant hereto and, if given or made, such information or representation

must not be relied upon as having been authorized by the Issuer. The Issuer certifies that the disclosures

made in this Information Memorandum and/or the Private Placement Offer cum Application Letter(s) are

adequate and in conformity with the SEBI Debt Listing Regulations. Further, the Issuer accepts no

responsibility for statements made otherwise than in the Information Memorandum or any other material

issued by or at the instance of the Issuer and anyone placing reliance on any source of information other

than this Information Memorandum would be doing so at its own risk.

This Information Memorandum, the Private Placement Offer cum Application Letter(s) and the

contents hereof are restricted only for the intended recipient(s) who have been addressed directly

and specifically through a communication by the Issuer and only such recipients are eligible to

apply for the Debentures. All Investors are required to comply with the relevant

regulations/guidelines applicable to them for investing in this Issue. The contents of this

Information Memorandum and/or the Private Placement Offer cum Application Letter(s) are

intended to be used only by those potential Investors to whom it is distributed. It is not intended for

distribution to any other person and should not be reproduced by the recipient.



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No invitation is being made to any person other than those to whom Application Forms along with this

Information Memorandum and the Private Placement Offer cum Application Letter(s) being issued have

been sent. Any application by a person to whom the Information Memorandum and/or the Private

Placement Offer cum Application Letter(s) has not been sent by the Issuer shall be rejected without

assigning any reason.

The person who is in receipt of this Information Memorandum and/or the Private Placement Offer cum

Application Letter(s) shall not reproduce or distribute in whole or part or make any announcement in

public or to a third party regarding the contents hereof without the consent of the Issuer. The recipient

agrees to keep confidential all information provided (or made available hereafter), including, without

limitation, the existence and terms of the Issue, any specific pricing information related to the Issue or the

amount or terms of any fees payable to us or other parties in connection with the Issue. This Information

Memorandum and/or the Private Placement Offer cum Application Letter(s) may not be photocopied,

reproduced, or distributed to others at any time without the prior written consent of the Issuer. Upon

request, the recipients will promptly return all material received from the Issuer (including this

Information Memorandum) without retaining any copies hereof. If any recipient of this Information

Memorandum and/or the Private Placement Offer cum Application Letter(s) decides not to participate in

the Issue, that recipient must promptly return this Information Memorandum and/or the Private Placement

Offer cum Application Letter(s) and all reproductions whether in whole or in part and any other

information statement, notice, opinion, memorandum, expression or forecast made or supplied at any time

in relation thereto or received in connection with the Issue to the Issuer.

The Issuer does not undertake to update the Information Memorandum and/or the Private Placement Offer

cum Application Letter(s) to reflect subsequent events after the date of Information Memorandum and/or

the Private Placement Offer cum Application Letter(s) and thus it should not be relied upon with respect

to such subsequent events without first confirming its accuracy with the Issuer.

Neither the delivery of this Information Memorandum and/or the Private Placement Offer cum

Application Letter(s) nor any sale of Debentures made hereafter shall, under any circumstances, constitute

a representation or create any implication that there has been no change in the affairs of the Issuer since

the date hereof.

This Information Memorandum and/or the Private Placement Offer cum Application Letter(s) does not

constitute, nor may it be used for or in connection with, an offer or solicitation by anyone in any

jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful

to make such an offer or solicitation. No action is being taken to permit an offering of the Debentures or

the distribution of this Information Memorandum and/or the Private Placement Offer cum Application

Letter(s) in any jurisdiction where such action is required. Persons into whose possession this Information

Memorandum comes are required to inform themselves about and to observe any such restrictions. The

Information Memorandum is made available to potential Investors in the Issue on the strict understanding

that it is confidential.

2.2 DISCLAIMER CLAUSE OF STOCK EXCHANGES

As required, a copy of this Information Memorandum has been filed with the BSE in terms of the SEBI

Debt Listing Regulations. It is to be distinctly understood that submission of this Information

Memorandum to the BSE should not in any way be deemed or construed to mean that this Information Memorandum has been reviewed, cleared, or approved by the BSE; nor does the BSE in any manner

warrant, certify or endorse the correctness or completeness of any of the contents of this Information

Memorandum, nor does the BSE warrant that the Issuer’s Debentures will be listed or will continue to be

listed on the BSE; nor does the BSE take any responsibility for the soundness of the financial and other conditions of the Issuer, its promoters, its management or any scheme or project of the Issuer.



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2.3 DISCLAIMER CLAUSE OF SEBI

As per the provisions of the SEBI Debt Listing Regulations, it is not stipulated that a copy of this

Information Memorandum has to be filed with or submitted to the SEBI for its review / approval. It is to

be distinctly understood that this Information Memorandum should not in any way be deemed or

construed to have been approved or vetted by SEBI and that this Issue is not recommended or approved

by SEBI. SEBI does not take any responsibility either for the financial soundness of any proposal for

which the Debentures issued thereof is proposed to be made or for the correctness of the statements made

or opinions expressed in this Information Memorandum.

2.4 DISCLAIMER IN RESPECT OF RBI

The Issuer is having a valid certificate of registration issued by the Reserve Bank of India under Section

45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or

guarantee about the present position as to the financial soundness of the company or for the correctness

of any of the statements or representations made or opinions expressed by the company and for repayment

of deposits/ discharge of liability by the company.

2.5 DISCLAIMER IN RESPECT OF JURISDICTION

This Issue is made in India to Investors as specified under the clause titled “Eligible Investors” of this

Information Memorandum, who shall be/have been identified upfront by the Issuer. This Information

Memorandum and/or the Private Placement Offer cum Application Letter(s) does not constitute an offer

to sell or an invitation to subscribe to Debentures offered hereby to any person to whom it is not

specifically addressed. Any disputes arising out of this Issue will be subject to the exclusive jurisdiction

of the courts and tribunals at Mumbai. This Information Memorandum and/or the Private Placement Offer

cum Application Letter(s) does not constitute an offer to sell or an invitation to subscribe to the Debentures

herein, in any other jurisdiction to any person to whom it is unlawful to make an offer or invitation in

such jurisdiction.

2.6 DISCLAIMER IN RESPECT OF RATING AGENCIES

Ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall

the concerned bank facilities or to buy, sell or hold any security. The Rating Agency has based its ratings

on information obtained from sources believed by it to be accurate and reliable. The Rating Agency does

not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible

for any errors or omissions or for the results obtained from the use of such information. Most entities

whose bank facilities/instruments are rated by the Rating Agency have paid a credit rating fee, based on

the amount and type of bank facilities/instruments.

2.7 ISSUE OF DEBENTURES IN DEMATERIALISED FORM

The Debentures will be issued in dematerialised form. The Issuer has made arrangements with the

Depositories for the issue of the Debentures in dematerialised form. Investors will have to hold the

Debentures in dematerialised form as per the provisions of Depositories Act. The Issuer shall take

necessary steps to credit the Debentures allotted to the beneficiary account maintained by the Investor

with its depositary participant. The Issuer will make the Allotment to Investors on the Deemed Date of

Allotment after verification of the Application Form, the accompanying documents and on realisation of

the application money.



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SECTION 3: RISK FACTORS

The following are the risks relating to the Company, the Debentures and the market in general envisaged

by the management of the Company. Potential Investors should carefully consider all the risk factors in

this Information Memorandum and/or the Private Placement Offer cum Application Letter(s) for

evaluating the Company and its business and the Debentures before making any investment decision

relating to the Debentures. The Company believes that the factors described below represent the principal

risks inherent in investing in the Debentures but does not represent that the statements below regarding

risks of holding the Debentures are exhaustive. The ordering of the risk factors is intended to facilitate

ease of reading and reference and does not in any manner indicate the importance of one risk factor over

another. Investors should also read the detailed information set out elsewhere in this Information

Memorandum and/or the Private Placement Offer cum Application Letter(s) and reach their own views

prior to making any investment decision.

3.1 REPAYMENT IS SUBJECT TO THE CREDIT RISK OF THE ISSUER.

Potential Investors should be aware that receipt of the principal amount, (i.e. the redemption amount) and

any other amounts that may be due in respect of the Debentures is subject to the credit risk of the Issuer.

Potential Investors assume the risk that the Issuer will not be able to satisfy their obligations under the

Debentures. In the event that bankruptcy proceedings or composition, scheme of arrangement or similar

proceedings to avert bankruptcy are instituted by or against the Issuer, the payment of sums due on the

Debentures may not be made or may be substantially reduced or delayed.

3.2 THE SECONDARY MARKET FOR DEBENTURES MAY BE ILLIQUID.

The Debentures may be very illiquid and no secondary market may develop in respect thereof. Even if

there is a secondary market for the Debentures, it is not likely to provide significant liquidity. Potential

Investors may have to hold the Debentures until redemption to realize any value.

3.3 CREDIT RISK & RATING DOWNGRADE RISK

The Rating Agency has assigned the credit ratings to the Debentures. In the event of deterioration in the

financial health of the Issuer, there is a possibility that the Rating Agency may downgrade the rating of

the Debentures. In such cases, potential investors may incur losses on revaluation of their investment or

make provisions towards sub-standard/ non-performing investment as per their usual norms.

3.4 CHANGES IN INTEREST RATES MAY AFFECT THE PRICE OF NCDS.

All securities where a fixed rate of interest is offered, such as this Issue, are subject to price risk. The price

of such securities will vary inversely with changes in prevailing interest rates, i.e. when interest rates rise,

prices of fixed income securities fall and when interest rates drop, the prices increase. The extent of fall

or rise in the prices is a function of the existing coupon, days to maturity and the increase or decrease in

the level of prevailing interest rates. Increased rates of interest, which frequently accompany inflation

and/or a growing economy, are likely to have a negative effect on the pricing of the Debentures.

3.5 TAX CONSIDERATIONS AND LEGAL CONSIDERATIONS

Special tax considerations and legal considerations may apply to certain types of investors. Potential

Investors are urged to consult with their own financial, legal, tax and other advisors to determine any

financial, legal, tax and other implications of this investment.

3.6 ACCOUNTING CONSIDERATIONS

Special accounting considerations may apply to certain types of taxpayers. Potential Investors are urged



13

to consult with their own accounting advisors to determine implications of this investment.

3.7 SECURITY MAYBE INSUFFICIENT TO REDEEM THE DEBENTURES

In the event that the Company is unable to meet its payment and other obligations towards Investors under

the terms of the Debentures, the Debenture Trustee may enforce the Security as per the terms of security

documents, and other related documents. The Investor’s recovery in relation to the Debentures will be

subject to (i) the market value of such secured property, (ii) finding willing buyers for the Security at a

price sufficient to repay the potential Investors amounts outstanding under the Debentures. The value

realised from the enforcement of the Security may be insufficient to redeem the Debentures.

3.8 MATERIAL CHANGES IN REGULATIONS TO WHICH THE ISSUER IS SUBJECT

COULD IMPAIR THE ISSUER’S ABILITY TO MEET PAYMENT OR OTHER

OBLIGATIONS.

The Issuer is subject generally to changes in Indian law, as well as to changes in government regulations

and policies and accounting principles. Any changes in the regulatory framework could adversely affect

the profitability of the Issuer or its future financial performance, by requiring a restructuring of its

activities, increasing costs or otherwise.

3.9 LEGALITY OF PURCHASE

Potential Investors of the Debentures will be responsible for the lawfulness of the acquisition of the

Debentures, whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it

operates or for compliance by that potential Investor with any law, regulation or regulatory policy

applicable to it.

3.10 POLITICAL AND ECONOMIC RISK IN INDIA

The Issuer operates only within India and, accordingly, all of its revenues are derived from the domestic

market. As a result, it is highly dependent on prevailing economic conditions in India and its results of

operations are significantly affected by factors influencing the Indian economy. An uncertain economic

situation, in India and globally, could result in a further slowdown in economic growth, investment and

consumption. A slowdown in the rate of growth in the Indian economy could result in lower demand for

credit and other financial products and services and higher defaults. Any slowdown in the growth or

negative growth of sectors where the Issuer has a relatively higher exposure could adversely impact its

performance. Any such slowdown could adversely affect its business, prospects, results of operations and

financial condition.

3.11 RISKS RELATED TO THE BUSINESS OF THE ISSUER

A. Majority of the Issuer’s loans are unsecured and the clients of these unsecured loans are of

the high-risk category and if the Issuer is unable to control the level of non-performing loans

(“NPAs”) in the future, or if the Issuer’s loan loss reserves are insufficient to cover future loan

losses, the financial condition and results of operations may be materially and adversely

affected.

A majority of the Issuer’s loans are unsecured and the clients of these unsecured loans are of the

high-risk category. There is uncertainty on the client’s ability to fulfil its loan obligations as MFI

clients typically do not have bank accounts or proper income proof verification so it can be

difficult to verify all client details and assess the risk. Such non-performing or low credit quality

loans can negatively impact our results of operations.

The Issuer has various procedures and process controls in place to mitigate the risk. All group

lending loans are provided under the Grameen Model and based on the joint liability of the group.



14

As on September 30, 2020 (IND AS), the gross NPA was INR 41.62 Crore on a gross portfolio

of Rs. 3626.22 Crores (including managed / securitized portfolio of Rs. 122.45 Crore).

B. The Issuer cannot assure that it will be able to effectively control and reduce the level of the

NPAs of its Client Loans. The amount of its reported NPAs may increase in the future as a

result of growth of Client Loans, and also due to factors beyond its control, such as over-

extended member credit that it is unaware of. If the Issuer is unable to manage NPAs or

adequately recover its loans, the results of its operations will be adversely affected.

The current loan loss reserves of the Issuer may not be adequate to cover an increase in the amount

of NPAs or any future deterioration in the overall credit quality of Client Loans. As a result, if the

quality of its total loan portfolio deteriorates the Issuer may be required to increase its loan loss

reserves, which will adversely affect its financial condition and results of operations.

The members are poor and, as a result, might be vulnerable if economic conditions worsen or

growth rates decelerate in India, or if there are natural disasters such as floods and droughts in

areas where the Issuer’s members live. Moreover, there is no precise method for predicting loan

and credit losses, and the Issuer cannot assure that it’s monitoring and risk management

procedures will effectively predict such losses or that loan loss reserves will be sufficient to cover

actual losses. If the Issuer are unable to control or reduce the level of its NPAs or poor credit

quality loans, its financial condition and results of its operations could be materially and adversely

affected.

C. The Issuer’s business operates through a large number of rural and semi urban branches and

is exposed to operational risks including fraud

The Issuer is exposed to operational risks, including fraud, petty theft and embezzlement, as it

handles a large amount of cash due to high volume of small transactions. This could harm its

operations and its financial position.

As the Issuer handles a large amount of cash through a high volume of small transactions taking

place in its network, the Issuer is exposed to the risk of fraud or other misconduct by its employees

or outsiders. These risks are further compounded due to the high level of delegation of power and

responsibilities that the Issuer’s business model requires. Given the high volume of transactions

processed by the Issuer, certain instances of fraud and misconduct may go unnoticed before they

are discovered and successfully rectified. Even when the Issuer discovers such instances of fraud

or theft and pursue them to the full extent of the law or with its insurance carriers, there can be no

assurance that the Issuer will recover any such amounts. In addition, the Issuer’s dependence upon

automated systems to record and process transactions may further increase the risk that technical

system flaws or employee tampering or manipulation of those systems will result in losses that

are difficult to detect.

The Issuer maintains an internal audit process to ensure the operations team follows the defined

procedures and reports any deviations to the operations staff and management team. The Issuer

also has a strong MIS system that has a wide range of data that can be used to monitor financial

and operational performance.

To mitigate the above risk, the Issuer maintains an internal audit process to ensure the operations

team follows the defined procedures and reports any deviations to the operations staff and

management team. The Issuer also has a MIS system able to generate data analysis that can be

used to monitor financial and operational performance.

D. Loans due within two years account for a large part of the Issuer’s interest income, and a

significant reduction in short term loans may result in a corresponding decrease in its interest

income



15

All of the loans the Issuer issues are due within approximately two years of disbursement. The

relatively short-term nature of the Issuer’s loans means that the Issuer’s long-term interest income

stream is less certain than if a portion of its loans were for a longer term. In addition, the Issuer’s

customers may not obtain new loans from the Issuer upon maturity of their existing loans,

particularly if competition increases. The potential instability of the Issuer’s interest income could

materially and adversely affect the Issuer’s results of operations and financial position.

The loans given by the issuer are at fixed interest rate, and the tenor of the underlying asset has

increased from one year to two year which has provided stability to the portfolio and interest

income and has also smoothened operating expense.

E. The Issuer is exposed to certain political, regulatory and concentration of risks

Due to the nature of its operations, the Issuer is exposed to political, regulatory and concentration

risks. The Issuer believes a mitigate to this is to expand its geographical reach and may

consequently expand its operations other states. If it is not effectively able to manage such

operations and expansion, it may lose money invested in such expansion, which could adversely

affect its business and results of operations.

Large scale attrition, especially at the senior management level, can make it difficult for the Issuer

to manage its business.

If the Issuer is not able to attract, motivate, integrate or retain qualified personnel at levels of

experience that are necessary to maintain the Issuer’s quality and reputation, it will be difficult

for the Issuer to manage its business and growth. The Issuer depends on the services of its

executive officers and key employees for its continued operations and growth. In particular, the

Issuer’s senior management has significant experience in the banking and financial services

industries. The loss of any of the Issuer’s executive officers, key employees or senior managers

could negatively affect its ability to execute its business strategy, including its ability to manage

its growth. The Issuer’s business is also dependent on its team of personnel who directly manage

its relationships with its customers. The Issuer’s business and profits would suffer adversely if a

substantial number of such personnel left the Issuer or became ineffective in servicing its

customers over a period of time. The Issuer’s future success will depend in large part on its ability

to identify, attract and retain highly skilled managerial and other personnel. Competition for

individuals with such specialized knowledge and experience is intense in this industry, and the

Issuer may be unable to attract, motivate, integrate or retain qualified personnel at levels of

experience that are necessary to maintain its quality and reputation or to sustain or expand its

operations. The loss of the services of such personnel or the inability to identify, attract and retain

qualified personnel in the future would make it difficult for the Issuer to manage its business and

growth and to meet key objectives.

F. The Issuer’s business and results of operations would be adversely affected by strikes, work

stoppages or increased wage demands by employees

The employees are not currently unionized. However, there can be no assurance that they will not

unionize in the future. If the employees unionize, it may become difficult to maintain flexible

labour policies, and could result in high labour costs, which would adversely affect the Issuer’s

business and results of operations.

G. The Issuer’s insurance coverage may not adequately protect it against losses. Successful claims

that exceed its insurance coverage could harm the Issuer’s results of operations and diminish

its financial position

The Issuer maintains insurance coverage of the type and in the amounts that it believes are

commensurate with its operations and other general liability insurances. The Issuer’s insurance



16

policies, however, may not provide adequate coverage in certain circumstances and may be

subject to certain deductibles, exclusions and limits on coverage.

In addition, there are various types of risks and losses for which the Issuer does not maintain

insurance, such as losses due to business interruption and natural disasters, because they are either

uninsurable or because insurance is not available to the Issuer on acceptable terms. A successful

assertion of one or more large claims against the Issuer that exceeds it’s available insurance

coverage or results in changes in its insurance policies, including premium increases or the

imposition of a larger deductible or co-insurance requirement, could adversely affect the Issuer’s

business, financial condition and results of operations.

H. Issuer requires certain statutory and regulatory approvals for conducting business and failure

to obtain or retain them in a timely manner, or at all, may adversely affect operations.

NBFCs in India are subject to strict regulation and supervision by the RBI. The Issuer requires

certain approvals, licenses, registrations and permissions for operating its business, including

registration with the RBI as a NBFC pursuant to Section 45-IA of the RBI Act, 1934. Further,

such approvals, licenses, registrations and permissions must be maintained/renewed over time,

applicable requirements may change and the Issuer may not be aware of or comply with all

requirements all of the time. Additionally, RBI has issued detailed directions on prudential norms

inter alia prescribing guidelines on income recognition, asset classification and provisioning

requirements applicable to NBFCs, exposure norms, disclosures in the balance sheet, requirement

of capital adequacy, restrictions on investments in land and building and unquoted shares besides

others. In particular, the Issuer is required to obtain a certificate of registration for carrying on

business as a NBFC-ND that is subject to numerous conditions. In addition, its branches are

required to be registered under the relevant shops and establishments laws of the states in which

they are located. The shops and establishments laws regulate various employment conditions,

including working hours, holidays and leave and overtime compensation. If the Issuer fails to

obtain or retain any of these approvals or licenses, or renewals thereof, in a timely manner, or at

all, its business may be adversely affected. If the Issuer fails to comply, or a regulator claims that

it has not complied, with any of these conditions, the Issuer’s certificate of registration may be

suspended or cancelled and it shall not be able to carry on such activities. If the Issuer fails to

comply with the NBFC Directions and fails to maintain the status of NBFC it may attract penal

provisions under the RBI Act, 1934 for non-compliance. The penal action can also result in RBI

cancelling the Certificate of Registration issued to the NBFC.

I. Competition from banks and financial institutions, as well as state-sponsored social programs,

may adversely affect our profitability and position in the Indian lending industry

The Issuer faces most significant competition from other NBFCs and banks in India. Many of

the institutions with which Issuer competes have greater assets and better access to, and lower

cost of, funding than the issuer. In certain areas, they may also have better name recognition

and larger member bases than Issuer. The Issuer anticipates that it may encounter greater

competition as they continue expanding the operations in India, which may result in an adverse

effect on the business, results of operations and financial condition.

J. The economic fallout from the spread of the COVID-19 virus may impact the Issuer’s business

prospects, financial condition, result of operations and credit risk

The spread of the COVID-19 virus has affected millions across the globe and the same coupled

with measures taken by the governments including lockdowns/ curfew has not only affected day

to day lives of people but has also given a hard blow to the supply chain of factories, with trade



17

routes being disturbed and slowing down of the industry, trade, commerce and business activities

across all sectors.

The COVID-19 virus pandemic is adversely affecting, and is expected to continue to adversely

affect, our operations, business, liquidity and cashflows, and we have experienced and expect to

continue to experience unpredictable reductions in demand for certain of our products and

services. Further, since a good fraction of our borrowers are small transport road operators, the

disruption due to COVID-19 virus will also have an impact on their business as well as repayment

capacity of the loans taken from us.

However, the extent of negative financial impact cannot be reasonably estimated at this time but

a sustained economic slowdown may significantly affect our business, financial condition,

liquidity, cashflows and results of operations and the same will depend on future developments,

which are highly uncertain and cannot be predicted, including new information which may

emerge concerning the severity of the COVID-19 virus and the actions to contain the COVID-19

virus or treat its impact, among others. Consequently, there may be a negative effect on the

Company’s ability to service the obligations in relation to the Debentures.



18

SECTION 4: FINANCIAL STATEMENTS

The financial statements of the Issuer for the FY ended September 30, 2020 are set out in Annexure V

hereto.



19

SECTION 5: REGULATORY DISCLOSURES

The Information Memorandum is prepared in accordance with the provisions of SEBI Debt Listing

Regulations and in this section, the Issuer has set out the details required as per Schedule I of the SEBI

Debt Listing Regulations.

5.1 Documents Submitted to the Exchanges

The following documents have been / shall be submitted to the BSE:

A. Memorandum and Articles of Association of the Issuer and necessary resolution(s) for the allotment of the Debentures;

B. Copy of last 3 (Three) years audited Annual Reports;

C. Statement containing particulars of, dates of, and parties to all material contracts and agreements; D. Copy of the resolution passed by the shareholders of the Company at the Annual General Meeting

held on July 28, 2020, authorizing the issue/offer of non-convertible debentures by the Company;

E. Copy of the resolution passed by the Board of Directors authorizing the issuance of the

Debentures and the list of authorized signatories; F. Copy of the resolution passed by the Company at the Annual General Meeting held on July 28,

2020 authorising the Company to borrow, upon such terms as the Board may think fit, upto an

aggregate limit of INR 5500,00,00,000/- (Rupees Five Thousand Five Hundred Crores only);

G. An undertaking from the Issuer stating that the necessary documents for the creation of the charge,

including the Debenture Trust Deed would be executed within the time frame prescribed in the relevant regulations/acts/rules etc. and the same would be uploaded on the website of the BSE,

where the debt securities have been listed, within 5 (Five) working days of execution of the same;

H. Where applicable, an undertaking that permission / consent from the prior creditor for a second or pari passu charge being created, in favour of the trustees to the proposed issue has been

obtained; and

I. Any other particulars or documents that the recognized stock exchange may call for as it deems

fit.

5.2 Documents Submitted to Debenture Trustee

The following documents have been/shall be submitted to the Debenture Trustee in electronic form (soft

copy) on or before the allotment of the Debentures:

A. Memorandum and Articles of Association of the Issuer and necessary resolution(s) for the

allotment of the Debentures;

B. Copy of last 3 (Three) years audited Annual Reports;

C. Statement containing particulars of, dates of, and parties to all material contracts and agreements;

D. Latest audited / limited review half yearly consolidated (wherever available) and standalone financial information (profit & loss statement, balance sheet and cash flow statement) and auditor

qualifications, if any.

E. An undertaking to the effect that the Issuer would, until the redemption of the debt securities,

submit the details mentioned in point (D) above to the Debenture Trustee within the timelines as

mentioned in Simplified Listing Agreement issued by SEBI vide circular No. SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009 as amended from time to time, for

furnishing / publishing its half yearly/ annual result. Further, the Issuer shall within 180 (One

Hundred and Eighty) calendar days from the end of the financial year, submit a copy of the latest annual report to the Debenture Trustee and the Debenture Trustee shall be obliged to share the

details submitted under this clause with all ‘Qualified Institutional Buyers’ and other existing

debenture-holders within 2 (two) Business Days of their specific request.



20

5.3 Name and Address of Registered Office of the Issuer:

Name of the Issuer: Fusion Micro Finance Private Limited

Registered Office of Issuer: H-1, Block C, Community Centre, Naraina Vihar, Near

Gurudwara, New Delhi – 110028.

Corporate Office of Issuer: H-1, Block C, Community Centre, Naraina Vihar, Near

Gurudwara, New Delhi – 110028.

Compliance Officer of Issuer: Mr. Deepak Madaan

CEO of Issuer: Mr. Devesh Sachdev

CFO of Issuer: Mr. Gaurav Maheshwari

Registration Number: B-14.02857

Corporate Identification Number: U65100DL1994PTC061287

Phone No.: +91 – 011 - 46646600

Fax No.: -

Contact Person: Mr. Deepak Madaan

Email: [email protected]

Website of Issuer: www.fusionmicrofinance.com

Auditors of the Issuer: S.R. Batliboi & Associates LLP Tower B, Golf View Tower,

Sector Road, Sector 42,

Gurgaon – 122002

Trustee to the Issue: Catalyst Trusteeship Limited (Formerly GDA Trusteeship

Limited), Windsor, 6th Floor, Offce No. 604, C.S.T. Road,

Kalina, Santacruz (East), Mumbai – 400098

Registrar to the Issue: Link Intime India Private Limited Address: C-13, Pannalal Silk Mills Compound

L.B.S. Marg, Bhandup (West)

Mumbai 400078

Credit Rating Agency: ICRA Limited

Address: –1105, Kailash Building, 11th Floor,

Kasturba Gandhi Marg, New Delhi – 110001

5.4 A brief summary of business / activities of the Issuer and its line of business:

(a) Overview:

Fusion Microfinance Private Limited (“Fusion”) is a non-deposit taking NBFC registered with

the Reserve Bank of India. The Issuer started its operation in the year January 2010. The Issuer’s



21

mission is “To provide underprivileged women with economic opportunities to transform the

quality of their lives”. The organisation is promoted by Mr. Devesh Sachdev. Mr. Devesh is an

XLRI Post-Graduate with 20 + year experience in the service industry.

Fusion is head quartered in New Delhi and is operational in the less penetrated area of Assam,

Bihar, Chhattisgarh, Delhi, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Madhya Pradesh,

Maharashtra, Odisha, Punjab, Puducherry, Rajasthan, Uttar Pradesh, Uttarakhand, Tamil Nadu,

and West Bengal. Fusion follows the Grameen model of Joint Liabilities Group for its unsecured

group loan product.

Industry Overview

Indian microfinance now has 70 million borrower accounts, by-far the largest in any country

across the world. Over the last year Indian microfinance institutions that are organised as NBFC-

MFIs and operating in remote rural areas of India have emerged as effective financial

intermediaries offering an alternative to the inaccessible formal financial institutions. Most of

them who received funding and growth capital from banks, have demonstrated commendable

scale, sustainability and impact.

Many NBFC-MFIs have received a good quantum of capital in FY 2014 in the form of both debt

and equity. Almost all NBFC-MFIs (less than INR 1000 crores of assets under management) have

been consistent in their growth, maintaining excellent portfolio quality in FY 2015.

As a result of a crisis in the MFI industry on October 2010 in the southern state of Andhra

Pradesh, the RBI set up a committee to study issues and concerns in the MFI sector, which

provided the Malegam Committee Report. The Malegam Committee Report has made various

operational and financial recommendations on the microfinance sector that may have negative

implications on the operating and financial performance of MFIs including the Issuer. Some of

the recommendations made include:

(a) Increase in regulatory restrictions on a NBFC-MFI (minimum net worth, establishing

client protection codes, increase in information technology systems and corporate

governance, maintenance of solvency and penalty on MFI for non-compliance);

(b) State level legislations to be enacted for regulation of MFIs; Maximum indebtedness of

an individual borrower; (c) Maximum annual income of a household qualifying for a loan from an NBFC-MFI;

(d) Maximum number of loans to an individual borrower;

(e) Restrictions on the end usage of the loan for income generating purposes; and (f) Maximum interest rate and maximum margin over cost of funds, maximum processing

fees.

Most of the recommendations made under the Malegam Committee Report in January 2011 have

been accepted by RBI and the RBI has issued circular dated July 20, 2012 to banks stating that

bank loans to micro finance sector will be eligible for categorization as priority sector advance if

they meet the eligibility criterias set out in the said circular and has created a new category of

NBFCs called the Non-Banking Financial Company-Micro Finance Institution (the NBFC-

MFIs). The directions issued by the RBI on August 3, 2012 have been incorporated and now

form part of the NBFC-MFI Directions. The NBFC-MFI Directions have been further modified

on April 08, 2015.

All non-deposit taking NBFCs (other than a company licensed under Section 25 of the Indian

Company Act, 1956) that has not less than 85% of its net assets in the nature of ―qualifying

assets and has a minimum net owned funds of Rs. 5 Crores other than the ones registered in north



22

eastern region of the country for which net owned fund requirement stands at Rs. 2 Crores. The

existing NBFCs to be classified as NBFC-MFIs will be required to comply with the NBFC-MFI

Directions w.e.f. April 01, 2012. Existing NBFCs with asset size of more than Rs. 100 Crores

are required to maintain a minimum CRAR of 15% from Dec 2, 2011 onwards. Some of the key

requirements of the NBFC-MFI Directions and subsequent modifications which the Issuer is

required to comply with which will affect the business operations of the Issuer, which are:

i. All registered NBFCs intending to convert to NBFC-MFI must seek registration with immediate effect and in any case not later than October 31, 2012, subject to the condition

that they shall maintain Net Owned Funds (NOF) at Rs.3 Crores by March 31, 2013 and at

Rs.5 Crores by March 31, 2014, failing which they must ensure that lending to the Microfinance sector i.e. individuals, SHGs or JLGs which qualify for loans from MFIs, will

be restricted to 10 per cent of the total assets.

ii. NBFC-MFIs are required to maintain not less than 85 per cent of their net assets as

Qualifying Assets. In view of the problems being faced by NBFCs in complying with these criteria on account of their existing portfolio, it has been decided that only the assets

originated on or after January 1, 2012 will have to comply with the Qualifying Assets

criteria. As a special dispensation, the existing assets as on January 1, 2012 will be reckoned towards meeting both the Qualifying Assets criteria as well as the Total Net Assets criteria.

iii. Rate of interest on individual loans may exceed 26%, the maximum variance permitted for

individual loans between the minimum and maximum interest rate cannot exceed 4 per cent.

iv. Maintain margin cap of 10% for NBFC- MFIs with assets more than INR 100 Crores and 12% for NBFC-MFIs with assets less than INR 100 Crores

v. NBFC-MFIs are also required to ensure that the aggregate amount of loans given for income

generation is not less than 50 per cent of the total loans extended. vi. NBFI MFIs will have to ensure compliance with, among others, conditions relating to

annual household income levels Rs. 125,000/- for rural and Rs.200,000/- for urban and semi

urban households, total indebtedness not to exceed Rs. 125,000/- membership of SHG/JLG, borrowing sources as well as percentage of qualifying assets and percentage of income

generating assets

vii. Maintain fair practices in lending as stated in the NBFC-MFI Directions;

viii. Ensure that it has a code of conduct and systems are in place for supervision of field staff such that non- coercive methods for recovery are used;

ix. Ensure corporate governance norms are adopted and there is improvement in efficiency,

information technologies etc.; and submit statutory auditors certificate with reference to the position of the company as at end of the financial year ended March 31, every year which

should also indicate that the company fulfils all conditions stipulated to be classified as an

NBFC-MFI.

(b) Corporate Structure/Organization Structure:

(i) Vision and Mission:

The Issuer 's mission is "A self-sustainable financial institution which leverages the distribution

network to channel other products and services”.

The Issuer’s vision is “Fusion microfinance has a social vision and business orientation aims to

provide underprivileged women with economic opportunities to transform the quality of their

lives”.

(ii) Current Corporate Status:

The Issuer was incorporated as a private limited company and is currently registered as a NBFC-

MFI with the RBI. The Issuer derives the following benefits of being registered as an NBFC-

MFI:



23

Access to Funds: Commercial lenders have greater comfort lending to a regulated NBFC-

MFI with transparent ownership. As an Issuer, Fusioncan raise equity and offer commercial

returns.

Diverse Funding Sources: An NBFC-MFI can access commercial investors and

international capital markets, diversifying away from donors or members as equity funders.

Commercialisation: Classifying Fusion as an NBFC-MFI increases its commercial

credibility and integrates it and its clients into the formal financial sector which ultimately increases its outreach potential.

Mainstream Resources: As a for-profit commercial NBFC-MFI, Fusion will be more likely

to attract mainstream capital resources which Societies or Trusts would find difficult to

attract.

Regulatory Coverage: As Fusion grows in size, operating as an NBFC-MFI within the

regulatory framework mitigates risks from political and regulatory intervention.

Stakeholder Involvement: As an NBFC-MFI, Fusion can bring a variety of stakeholders to

the table, including clients, management, employees and investors.



24

(iii) Brief Profile of the Board of Directors:

Board of Directors

Name Designation Experience

Mr. Devesh

Sachdev MD & CEO

An XLRI Post Graduate with more than 20 years of experience in the

Service Industry prior to starting this venture. He started his career with

Citigroup and was part of Credit Card Operations team in Delhi for 4

years.

His entrepreneurial quest started with BSA, a small size logistics

company. He spearheaded the growth of BSA from single city operations,

limited service offerings to Pan India foothold and diversified services

making BSA the Market Leader in its segment. He was also responsible

for developing and retaining relationship with Multinational Banks,

leading Private Banks, Telecom Companies and other Corporates. He took

BSA to new heights, he made it operational in 26 cities which had 500

employees, 300 business associates handling transaction of around 4

million per month. Devesh was the first professional manager to be

appointed Director on the Board of all the group companies of BSA.

Amongst the diverse experiences, his expertise lies in building business,

managing large teams in a cost-efficient manner, strategy, key relationship

management and handling all dimensions of the business.

Under his leadership, Fusion has grown into one of the leading

microfinance institutions and continues to expand its operations.

In 2015, he attended and successfully completed Strategic leadership

program in Harvard Business School.

He is serving as the Vice-Chairman on the board of MFIN, which is a Self-

Regulatory Organization for NBFC-MFIs in India. MFIN works closely

with regulators and other key stakeholders and plays an active part in the

larger financial inclusions dialogue through the medium of microfinance.

Mr. Kenneth

Dan Vander

Weele

Nominee

Director

Mr. Kenneth Dan Vander Weele is a co-founder and partner in Creation

Investments Capital Management, LLC, a fund management company that

manages several specialized private equity vehicles that invest in

emerging market financial services companies serving poor clients.

From 2000 until 2009 Mr. Vander Weele served as the President of the

Investment Services Division at Opportunity International, a major

microfinance network. Mr. Vander Weele was responsible for the

development and oversight of all commercial MFIs within the

Opportunity Network, garnering over $1 billion in assets during his tenure.

During this period, Mr. Vander Weele was involved in forming three

microfinance banks in Eastern Europe (Forus Bank-Russia, Opportunity

Bank-Montenegro, and Opportunity Bank-Serbia), and Ken served as the

board chair of each bank.



25

Board of Directors


Between 1991 and 2000, Mr. Vander Weele held various positions within

the Opportunity International Network, including Global COO, Regional

Vice President for Eastern Europe and Interim CEO.

From 1975 to 1981, Mr. Vander Weele held various positions at Grant

Thornton, CPAs, in their Madison, Boston, Chicago, and US National

Office. From 1981 to 1991, he was the Senior Vice President, CFO and a

founding shareholder of Graphisphere Corporation, a graphic arts holding

company with private equity shareholders, until it was sold to a strategic

buyer.

Mr. Vander Weele was also a founder and the board chair of the

Microfinance Centre for Eastern Europe from 1998 until 2006 and the

Balkan Financial Sector Equity Fund from 2005 to 2011.

Mr. Vander Weele has a PhD in international economics from Oxford

University, and a BBA in Accounting from the University of Wisconsin.

Ken is also a CPA.

Mr. Pradip

Kumar Saha

Independent

Director

Mr. Saha was a Chief General Manager, Small Industries Development

Bank of India (SIDBI) and senior development banker with more than 36

years of experience in development banking.

He started his banking career with IDBI and has been with SIDBI since its

inception. During his long career in IDBI & SIDBI, he has handled various

departments, some as Head of Department. Specific contributions made

by him in HR, Project Finance, SIDBI Foundation for Micro Credit

(SFMC), Promotion and Development departments is worth mentioning

Mr. Narendra

Ostawal

Nominee

Director

Mr. Narendra Ostawal leads investment evaluation in the financial

services sector for his current employer, Warburg Pincus India Private

Limited (“WP India”) and was associated with various investments of the

Warburg Pincus group including Kotak Mahindra Bank, Capital First

Limited and AU Financiers (India) Limited (now AU Small Finance

Bank). He is a Chartered Accountant and has completed Bachelor of

Commerce from Bangalore University and Post Graduate Diploma in

Business Management from Indian Institute of Management, Bangalore.

Ms Ratna

Vishwanathan

Independent

Director

Ratna Viswanathan has been the CEO of MFIN for the last three years and

was Dy. CEO prior to that. She has built a strong Self-regulating

Organisation in line with the sector supervision mandate of the RBI and

has brought in a strong sense of credibility for the sector as far as the

external world is concerned. She has put in place a very valuable property

in terms of the international microfinance conclave which is now an

annual feature and has enhanced the visibility of the sector.

Ms Namrata

Kaul

Independent

Director

Namrata Kaul is a career banker with extensive experience of over 30

years across Treasury, Corporate Banking, Debt Capital markets and

Corporate finance in India and UK. As Managing Director at Deutsche

Bank AG, Namrata led the Corporate Bank practice as its India Head. She

was also responsible for managing risk, credit, compliances and regulatory



26

Board of Directors


reporting for the Corporate portfolio of the Bank. In Deutsche Bank U.K.,

as part of the Strategic Leadership Team aiming to strengthen cross border

networks, she set up an Asia Desk in London. Namrata was a member of

the Deutsche Bank Asia Executive Committee, a Member of the Board of

Deutsche Bank India, and a founding member of the Deutsche Bank

Diversity Council.

(iv) Brief Profile of the management of the Company:

Management Details


Mr. Tarun

Mehndiratta

Chief Operating

Officer

Tarun comes to Fusion with more than 25 years of rich

experience with reputed MNC’s like Citi Corp Finance India

Ltd, GE Capital India and GE joint venture with SBI in India.

His 12 years with GE contributed in making him a specialist

in leading largescale operations with expertise in New

Business Development for the Commercial & Retail Asset

lending segments.

In his last assignment, Tarun was heading Banca Channel in

SBI Cards Payments & Services Ltd.: An SBI – GE Capital

India JV which is currently contributing 40% in new sourcing

for SBI Cards from SBI and Associate Banks pan India. An

inspirational team leader and a problem-solver with strong

focus on root-cause analysis for internal process

improvements in both manual and automated environments,

Fusion stands to benefit a lot from his rich and varied

experience. He brings a wealth of knowledge in Management

& Strategy from his previous work experiences. Tarun is an

MBA from Institute of Marketing and Management, New

Delhi.

Mr. Kamal

Kumar Kaushik

Chief Operating

Officer – MSME

Kamal is a chartered accountant with over 20 years of rich &

insightful experience in financial retailing with leading

private banks and NBFC’s in India. He has significant

exposure in credit risk management in retail asset products,

across customer segments in India. He is subject matter expert

of Mortgage loans, MSME and school finance.

He has joined Fusion Micro Finance as COO-MSME in July

2019. He joins us from Religare Housing Development

Finance, where he was CEO of affordable housing business.

Prior to Religare he was with Fullerton (Rural Project).

Earlier stints include Birla Home Finance, ICICI Bank,

HDFC Bank, GE Money etc.



27

Management Details


Mr. Gaurav

Maheshwari

Chief Financial

Officer

Gaurav comes to Fusion with rich experience of 14 years in

corporate finance with different business houses of India i.e.

Aditya Birla Group and Avantha Group (Thapar’s). His Last

assignment was with Avantha Group in their Corporate

Finance division. By profession, Gaurav is a Chartered

Accountant with Master’s in Business Finance.

Mr. Satish Mani Vice President –

Risk & Audit

He has worked for companies like GE Capital, ICICI Bank

Ltd, Kotak Mahindra Bank Ltd, Sundaram Finance Limited,

UB group etc. He was involved in audit for various PSU's,

companies and Bank's like GAIL, COAL India, SAIL, MUL,

HINDALCO, HAL, WAPCOS, Indian Overseas Bank,

Indian Bank, Bank of India, NFL, RCF, Indian Red Cross

Society, etc. spread across India.

Mr. Ankush

Ahluwalia

Senior Vice

President – Business

Operation

Ankush has more than 14 years of rich experience in the field

of Business Operations and People Management. He has

worked with organizations of high repute like GE Capital,

Kotak Mahindra, Religare etc.

Ms. Lekshmi

Bhargavi

Vice President-

Human Resource &

Admin

Lekshmi comes to Fusion with 14+ years of rich experience

having handled leadership roles with reputed companies like

Vistaar Financial Services, Toyota Financial Services, and

O&M. Lekshmi is a Post Graduate in Human Resources from

SDM-IMD and a B. Com from Kerala University.

Mr. Naveen

Mangle

Senior Vice

President- IT

Naveen is an innovative seasoned IT executive with over 20

years of work experience. He possesses global work

experience in geographies such as USA, UK and Singapore.

Prior to joining Fusion, he comes with diverse experience

worked with all stages of companies from IT Consulting

(Polaris, Birlasoft, TCS and Tech Mahindra), US based

product company (Location Labs) to captive organizations

(Genpact and Aviva Life Insurance). He has led large teams,

held various leadership positions into IT Strategy & Planning,

Digital Transformation, Enterprise Architecture and Project

Delivery Management. He is technology enthusiast with

sound knowledge in next gen technologies such as Data

Science, Artificial Intelligence, Robotic Process Automation,

Analytics, Cloud and Mobility.

Mr. Deepak

Madaan

Vice President -

Company Secretary

He has a corporate experience of over 12 years and prior to

joining our Company, he worked with Almondz Group in

Merchant Banking, Secretarial & legal Department as

Company Secretary and Compliance Officer and has also

worked with Century Group in the past.

Mr. Mohd M

Hossain

Dy Vice President -

IT & operations

He has more than 14 years of experience in the service

industry as a head of MIS and backend processing.



28

Management Details


Mr. Rohit

Dhiman

Assistant Vice

President – Business

Excellence

Rohit Dhiman is a Lean Six Sigma Professional and Change

Management Leader. A Certified Master Black Belt, he

commenced his Fusion journey with a vintage of over 12

years having worked with Global Brands like MetLife, WNS

and eFunds. Having worked in consulting assignments of

diversified portfolios across geographies, Rohit is

instrumental in process reengineering by implementing Lean

Methodologies and Six Sigma framework with best practices

of pioneers like TQMI and QAI Global.

Rohit is a Post Graduate in Mass Communications and a

Commerce Graduate. He is a member of ISQ and is actively

associated with the Delhi based Quality Management

Organization. He is certified from AXELOS Global Best

Practice in ITIL(f)V3

Ms. Shalini

Singh

Assistant Vice

President- SPM &

CSR

She started her career as an Asst. TV Producer but being a

philanthropist at heart she decided to pursue her humanitarian

interest. She made an important contribution in organizing

fund raising campaign for the mid-day meal program, first of

its kind charity dinner, setting up a mobile hospital,

organizing health camps and running vocational training

centres for under privileged school children.

x. Business Segments

MFI PRODUCT DETAILS

Product Feature Purpose Eligibility (Including Fusion Loan)

10000 1 Year IGL Max Indebtedness -125000, 2 Loan

12000 1 year IGL Max Indebtedness -125000, 2 Loan

15000 1.5 year/1 years IGL Max Indebtedness -125000, 2 Loan

18000 1 Year IGL Max Indebtedness -125000, 2 Loan

20000 2 years IGL Max Indebtedness -125000, 2 Loan



35000 2 Years IGL Max Indebtedness -125000, 2 Loan



50000 -




29

Cross Sell

/

Individual

Loan

1-3 Years Individual Loan N.A.

xi. Lending Methodology

Origination Process:

The process starts with village meetings conducted by ROs to spread word about Fusion, its loan products,

mission and eligibility criteria. There villagers are encouraged to form groups and meet the RO to get

loans.

Groups are formed by members meeting the eligibility criteria. The group formation involves enrolment

of the members, KYC form filling and identity documents collection. The information collected for each

borrower includes complete household level information like monthly income, expense, type of house,

number of dependents, age and education profile of members plus caste and religion. The KYC also

captures other loans undertaken and the purpose for which new loan is sought.

Loan Utilization Check:

Loan utilization check is performed for loans by the RO for all the loans.

Collections & Recovery

Clearly defined policies for handling defaults & follow-up are in place. Policies for follow-up are based

on making use of peer pressure to ensure repayments.

MIS

Fusion has implemented a real time, database independent, cloud based web application “Shakti” which

is developed by Qbrik Technologies, Chennai. Shakti is built on open-source platform using the Linux-

Apache-MySQL-PHP (LAMP) stack for both the front-end and back-end processing.

It has several levels of security built in to the architecture. It has a tier IV data centre ensuring strong

firewall and security on the dedicated servers. At the database level, all input content from the users are

sanitized and scrubbed before loading to the tables.

Database and other auxiliary data from the production version will be periodically backed up to data

storage DR server so that it is available on standby mode. Processes are completely automated with built-

in triggers and alerts to be sent out to our support desk for immediate attention.

Risk Management:

The branches are subject to both regular audit and surprise audits. The regular audit is conducted by the

Audit Officer and is conducted on a quarterly basis. Fusion plans to conduct two types of audit -

Comprehensive branch audit, to be conducted quarterly and for all branches and Spot audits, to be

conducted randomly. The Spot Audits will be conducted based upon concerns raised during the regular

audits as well as random visits to branches. Fusion is in the process for setting up processes for Branch

Audit policies.

The Branch Audit will involve checking which includes cash and cash management practices, adherence

to process and systems, record keeping processes.

Audit team size



30

VP-Risk & Audit reports to the Audit Committee and dotted line to CEO.

Frequency of Internal Audit

We are covering all branches detailed on quarterly basis and on monthly basis we are doing short Audits

and departments wise of Head Office are also being covered on quarterly basis

Scope of Internal Audit:

Scope of Internal Audit of Branches will include:

Audit of Branch’s Field Operations:

Physical verification of centre formation,

Conducting GRT,

House visit

Attending collection meeting, Timely arrival of RO and members in the centre meting

Handling of cash at the centre and Receipt process etc.

Loan Utilization check.

Audit of Branch’s back office Operations:

Maintenance of various standard registers in soft / hard copy, and other allied records, protection

of valuables viz; cash, numbered stationery Receipt Books and Control over Cheque Books,

Keys to premises, cash safe etc.

Processing of Loan applications within the TAT of 15 days from the date of formation of Centre.

Level of Knowledge of procedures of Branch officials,

Attendance of staff & Leave Record, advice to Head office for salaries calculation for the month

by the cut-off date,

Preservation of various manuals and other official records,

Maintenance & general cleanliness of branch & RO’s residence.

Branch Audit- In Branch Audit, we will include the following:

Centre Audit

Branch function Audit

Branch Grading

Centre Audit: Sampling- 25% of centres formed in last 3 months and 20% of centres formed before last

3 months.

RO Rating: Sampling – 20% of the centre managed by the RO.

In each selected centre, 2 members of each group in the centre will be covered in the audit.

S no Branch Score Branch Grade Comments

1 90% + GREEN Good- Keep it up

2 75.1 % -90% YELLOW Acceptable- strive for better

3 60.1% - 75% RED Weak systems –Immediate actions Required



31

4 Less than 60% BLACK Stop fresh Disbursement- drastic improvements

required

(c) Key Operational and Financial Parameters for the last 3 audited years on a consolidated

basis (wherever available) else on a standalone basis.

(Amount in Rs.)

Parameters

31-Mar-18

I GAAP

31-Mar-19

I GAAP

31-Mar-20

IND AS

30-Sep-20

IND AS

Audited Audited Audited LR

Net worth 257.7 622.66 1198.89 1227.69

Total Debt 1,604.80 2648.67 2973.68 3183.91

- short term borrowings 120.82 96.84 239.88 397.33

Net Fixed Assets 4.72 5.35 5.89 6.29

Cash and Cash equivalents 505.83 935.13 817.75 750.62

Current investments 0.5 0.50 0.50 60.32

Assets Under Management 1,555.60 2641.39 3606.52 3626.22

Off balance sheet assets 232.91 299.56 199.59 122.45

Interest Income 254.52 486.26 720.26 388.59

Interest Expense 136.6 244.21 337.67 174.64

Provisioning & write Offs 88.32 28.83 92.70 81.31

PAT (39.41) 65.35 70.12 27.42

Gross NPA (%) 3.98% 1.41% 1.12% 1.13%

Net NPA (%) 0.16% 0.00% 0.39%% 0.45%

Tier I Capital Adequacy Ratio

(%) 15.14% 23.36%

33.08% 30.32%

Tier II Capital Adequacy Ratio

(%) 6.73% 3.97%

2.74% 2.53%

(Rs. Crores)

B. Gross Debt: Equity Ratio of the Company (As on September 30, 2020):

Before the issue of debt securities 2.59

After the issue of debt securities 2.74

Calculations

BRANCH NAME LAST AUDIT SCORE 80.00 DIFFERENCE(+/-) 20.00

Score Obtained

Branch Grade Green

Parameters Maximum Score Score Obtained Weightage Final Score

Field Processes 100 100.00 50% 50.00

Branch Processes 100 100.00 10% 10.00

Branch Record Keeping & Reporting 100 100.00 10% 10.00

Cash Management 100 100.00 10% 10.00

Monitoring Mechanism 100 100.00 15% 15.00

Fair Practice Code implementation 100 100.00 5% 5.00

Total 100% 100.00

100.00

Very Good-Keep it up

Version 1.1 Released March 2016



32

As on September 30, 2020, debt-to-equity ratio is calculated as follows:

Debt – INR Crore 3183.91

Equity – INR Crore 1227.69

Debt/Equity 2.59

Subsequent to the issue, debt-to-equity ratio shall be calculated as follows:

Debt – INR Crore 3368.91

Equity – INR Crore 1227.69

Debt/Equity 2.74

C. Project cost and means of financing, in case of funding new projects:

Nil / Not applicable

5.5 A Brief history of Issuer since its incorporation giving details of its following activities:

A. Details of Share Capital as on last quarter end i.e. September 30, 2020:

Share Capital Amounts (INR)

Authorized

Equity Share Capital 900,000,000

Preference Share Capital 50,000,000

TOTAL 950,000,000

Issued and Subscribed

Equity Shares 843,263,880

Preference Shares 0

TOTAL 843,263,880

Paid- up

Fully Paid Up Equity Shares 803,837,160

Partly Paid up Equity Shares 3,942,672

Preference Shares 0

TOTAL 807,779,832

B. Changes in its capital structure as on last quarter end i.e. September 30, 2020, for the last

five years:

Date of

Change

(AGM/EGM)

Authorised

Capital in Rs.

Particulars

24.12.2009 20,000,000 The Authorized Share capital of the Company was increased from

Rs. 50,00,000/- (Rupees Fifty Lakh only) to Rs.2,00,00,000/-

(Rupees Two Crore) in the Extraordinary General Meeting held on

24.12.2009.

05.04.2010 6,00,00,000 The Authorized Share capital of the Company was increased

Rs.2,00,00,000/- (Rupees Two Crore) to Rs. 6,00,00,000/- (Rupees

Six Crore only) in the Extraordinary General Meeting held on

05.04.2010.



33

21.03.2011 120,000,000 The Authorized Share capital of the Company was increased from

Rs. 6,00,00,000/- (Rupees Six Crore only) to Rs. 12,00,00,000/-

(Rupees Twelve Crore only) in the Extraordinary General Meeting

held on 21.03.2011.

07.03.2013 120,000,000 The Authorized Share capital of the company reclassified into

12,000,000 equity shares in the Extraordinary General Meeting.

30.06.2014 22,00,00,000 The Authorized Share capital of the Company was increased from

Rs. 12,00,00,000/- (Rupees Twelve Crore only) to Rs.

22,00,00,000/- (Rupees Twenty Two Crore only) in the

Extraordinary General Meeting held on 30.06.2014.

12.03.2015 28,00,00,000 The Authorized Share Capital of the Company was increased from

Rs. 22,00,00,000/- (Rupees Twenty Two Crore only) to Rs.

28,00,00,000/- (Rupees Twenty Eight Crore only) in the

Extraordinary General Meeting held on 12.03.2015.

11.05.2016 450,000,000

The Authorized Share Capital of the Company was increased from

Rs. 28,00,00,000/- (Rupees Twenty Eight Crore only) to Rs.

45,00,00,000/- (Rupees Forty Five Crore only) in the Extraordinary

General Meeting held on 11.05.2016

30.06.2017 550,000,000


Rs. 45,00,00,000/- (Rupees Forty Five Crore only) to Rs.

550,000,000 (Rupees Fifty Five Crores only) in the Annual General

Meeting held on 30.06.2017

28.08.2018 750,000,000


Rs. 55,00,00,000/- (Rupees Fifty Five Crore only) to Rs.

750,000,000 (Rupees Seventy Five Crores only) in the Annual

General Meeting held on 28.08.2018

05.12.2019 950,000,000

The Authorized Share capital of the company was increased from

Rs. 75,00,00,000/- (Rupees Seventy-Five Crore only) to Rs.

95,00,00,000 (Rupees Ninety-Five Crores only) in the Extra

ordinary General Meeting held on 05.12.2019.

C. Equity Share Capital History of the Company as on last quarter end i.e. September 30, 2020,

for the last five years:

Cumulative Paid Up Capital

Date

of

allot

ment

Name of

Investor

No. of

equity

shares

Face

Valu

e

Issue

Price**

Nature of

Allotment

No of

Equity

Shares

Equity

Share

Capital

Equity

Share

Premi

um

16-

02-

2010

Ashish

Tewari

*50,40

0 10 10 Equity

50,400 504,000 -

16-

02-

2010

Payal

Mittal 24,600 10 10 Equity

75,000

750,000 -



34

16-

02-

2010

Devesh

Sachdev 75,000 10 10 Equity

150,000

1,500,000 -

18-

02-

2010

Praveen

Choudhar

y

50,000 10 10 Equity

200,000

2,000,000 -

18-

02-

2010

Poonam

Batra 50,000 10 10 Equity

250,000

2,500,000 -

18-

02-

2010

Devesh

Sachdev

& Mini

Sachdev

40,000 10 10 Equity

290,000

2,900,000 -

18-

02-

2010

Praveen

Choudhar

y

50,000 10 10 Equity

340,000

3,400,000 -

18-

02-

2010

Yashvir

Singh 50,000 10 10 Equity

390,000

3,900,000 -

12-

03-

2010

Mini

Sachdev

160,00

0 10 10 Equity

550,000

5,500,000 -

12-

03-

2010

Raghvend

ra Mittal 50,000 10 10 Equity

600,000

6,000,000 -

12-

03-

2010

Mini

Sachdev 40,000 10 10 Equity

640,000

6,400,000 -

12-

03-

2010

Yogesh

Sharma 25,000 10 10 Equity

665,000

6,650,000 -

23-

03-

2010

Vishal

Nagpal 25,000 10 10 Equity

690,000

6,900,000 -

23-

03-

2010

Monika

Sharma 25,000 10 10 Equity

715,000

7,150,000 -

23-

03-

2010

Shashi

Bala Wahi 25,000 10 10 Equity

740,000

7,400,000 -



35

23-

03-

2010

Devesh

Sachdev/

Mini

Sachdev

30,000 10 10 Equity

770,000

7,700,000 -

31-

03-

2010

Jasbinder

Singh

Toor

50,000 10 10 Equity

820,000

8,200,000 -

31-

03-

2010

Meenaksh

i Rao 50,000 10 10 Equity

870,000

8,700,000 -

31-

03-

2010

Meenaksh

i Rao 30,000 10 10 Equity

900,000

9,000,000 -

31-

03-

2010

Tarika

Sachdev

Rajeev

Sachdev

35,000 10 10 Equity

935,000

9,350,000 -

31-

03-

2010

Payal

Mittal

Tewari

149,50

0 10 10 Equity

1,084,500

10,845,000 -

31-

03-

2010

Lokesh

Chauhan,

Karta,

Lokesh

Chauchan

(HUF)

25,000 10 10 Equity

1,109,500

11,095,000 -

31-

03-

2010

Soniya

Vikrant

Bhagwant/

Vikrant

Vishwas

Bhagwant

25,000 10 10 Equity

1,134,500

11,345,000 -

31-

03-

2010

Sawant

Jayram

Vishnu/

Sewant

Kumudini

Jayaram

25,000 10 10 Equity

1,159,500

11,595,000 -

10-

05-

2010

Pooja

Chib 25,000 10 10 Equity

1,184,500

11,845,000 -



36

10-

05-

2010

Kapil

Juneja 25,000 10 10 Equity

1,209,500

12,095,000 -

10-

05-

2010

Sridhar

Kuchibhot

la

50,000 10 10 Equity

1,259,500

12,595,000 -

10-

05-

2010

Atma ram 200,00

0 10 10 Equity

1,459,500

14,595,000 -

10-

05-

2010

Diwan

Chand 25,000 10 10 Equity

1,484,500

14,845,000 -

10-

05-

2010

Ravi


1,509,500

15,095,000 -

10-

05-

2010

Anil

Bholla 50,000 10 10 Equity

1,559,500

15,595,000 -

10-

05-

2010

Anju

Bholla 50,000 10 10 Equity

1,609,500

16,095,000 -

10-

05-

2010

Ankur

Singhal

150,00

0 10 10 Equity

1,759,500

17,595,000 -

10-

05-

2010

Suresh

Chand

Jain

40,000 10 10 Equity

1,799,500

17,995,000 -

10-

05-

2010

Shobna

Ganesh

Deodhar

50,000 10 10 Equity

1,849,500

18,495,000 -

10-

05-

2010

Ashish

Tewari

Karta,

Ashish

Tewari

(HUF)

45,000 10 10 Equity

1,894,500

18,945,000 -

10-

05-

2010

RSL

Tewari,

Karta,

RSL

Tewari(H

UF

65,000 10 10 Equity

1,959,500

19,595,000 -



37

10-

05-

2010

Aruna

Tewari 10,000 10 10 Equity

1,969,500

19,695,000 -

10-

05-

2010

Lokesh

Tuteja 50,000 10 10 Equity

2,019,500

20,195,000 -

10-

05-

2010

Praveen

Coudhary 60,000 10 10 Equity

2,079,500

20,795,000 -

10-

05-

2010

Mini

Sachdev

100,00

0 10 10 Equity

2,179,500

21,795,000 -

10-

05-

2010

Devesh

Sachdev

190,00

0 10 10 Equity

2,369,500

23,695,000 -

10-

05-

2010

Vishal


2,394,500

23,945,000 -

10-

05-

2010

Poonam

Batra 55,000 10 10 Equity

2,449,500

24,495,000 -

14-

05-

2010

Ashish

Tewari

145,00

0 10 10 Equity

2,594,500

25,945,000 -

14-

05-

2010

Devesh

Sachdev

145,00

0 10 10 Equity

2,739,500

27,395,000 -

28-

05-

2010

RIF-

NORTH2

2,237,3

14

10 10 Equity

4,976,814

49,768,140 -

12-

10-

2011

Devesh

Sachdev

100,00

0 10 10 Equity

5,076,814

50,768,140 -

12-

10-

2011

Ashish

Tewari

100,00

0 10 10 Equity

5,176,814

51,768,140 -

07-

03-

2013

RIF-

NORTH2

1,956,0

00 10 10 Equity

7,132,814

71,328,140 -



38

07-

03-

2013

RIF-

NORTH2

1,043,8

60 10 10 Equity

8,176,674

81,766,740 -

07-

03-

2013

NMI

FRONTIE

R FUND

2,026,3

16 10 10 Equity

10,202,990

102,029,900 -

10

10,354,703

103,547,030 - 24-

06-

2014

Devesh

Sachdev

151,71

3 10 10 Equity

24-

06-

2014

Ashish

Tewari

151,71

2 10 10 Equity

10,506,415

105,064,150 -

29-

09-

2014

RIF-

NORTH2

1,453,9

86 10 10 Equity

11,960,401

119,604,010 -

29-

09-

2014

NMI

Frontier

2,822,4

42 10 10 Equity

14,782,843

147,828,430 -

29-

09-

2014

Fusion

Employee

s Benefit

trust

288253 10 10 Equity

15,071,096

150,710,960 -

27-

04-

2015

Fusion

Employee

s Benefit

trust

1,557,1

10 10 10 Equity

16,628,206

166,282,060 -

19-

06-

2015

Belgian

Investmen

t

Company

for

Developin

g

Countries

SA

1,004,9

20 10 10 Equity

17,633,126

176,331,260 -

19-

06-

2015

Oikocredit

,

Ecumenic

al

Developm

ent Co-

Operative

1,004,9

20 10 10 Equity

18,638,046

186,380,460 -



39

Society

U.A.

11-

05-

2016

Belgian

Investmen

t

Company

for

Developin

g

Countries

SA

2,650,0

00 10 10 Equity

21,288,046

212,880,460 -

11-

05-

2016

Oikocredit

,

Ecumenic

al

Developm

ent Co-

Operative

Society

U.A.

2,650,0

00 10 10 Equity

23,938,046

239,380,460 -

05-

07-

2016

Devesh

Sachdev

735,53

0 10 10 Equity

24,673,576

246,735,760 -

05-

07-

2016

Fusion

Employee

s Benefit

trust

85,141 10 10 Equity

24,758,717

247,587,170 -

12-

08-

2016

Creation

Investmen

ts Fusion,

LLC

3,700,0

00 10 10 Equity

28,458,717

284,587,170 -

12-

08-

2016

Global

Financial

Inclusion

Fund

3,330,0

00 10 10 Equity

31,788,717

317,887,170 -

12-

08-

2016

Belgian

Investmen

t

Company

for

Developin

g

1,480,0

00 10 10 Equity

33,268,717

332,687,170 -



40

Countries

SA

12-

08-

2016

Oikocredit

,

Ecumenic

al

Developm

ent Co-

Operative

Society

U.A.

1,406,0

00 10 10 Equity

34,674,717

346,747,170 -

30-

12-

2017

Creation

Investmen

ts Fusion,

LLC

5,041,7

16 10 10 Equity

39,716,433

397,164,330 -

30-

12-

2017

Devesh

Sachdev

1,099,2

95 10 10

Partly -

Paid up

Equity

share

40,815,728

398,263,625 -

08-

02-

2018

Oikocredit

,

Ecumenic

al

Developm

ent Co-

Operative

Society

U.A.

1,545,4

55 10 10 Equity

42,361,183

413,718,175

-

08-

02-

2018

Global

Financial

Inclusion

Fund

209,09

1 10 10 Equity

42,570,274

415,809,085

-

16-

07-

2018

Fusion

Employee

s Benefit

Trust

549,64

7 10 10 Equity

43,119,921

421,305,555

-

16-

07-

2018

Devesh

Sachdev

647,65

9 10 10

Partly -

Paid up

Equity

share

43,767,580

421,953,214

-



41

15.10.

2018

Small

Industries

Developm

ent Bank

of India

625,09

3 10 10 Equity

44,392,673

428,204,144

-

05.12.

2018

Honey

Rose

Investmen

t Ltd

19,475,

461 10 10 Equity

63,868,134

622,958,754

-

05.12.

2018

Devesh

Sachdev

1,352,4

54 10 10

Partly -

Paid up

Equity

share

65,220,588

624,311,208

-

16.07.

2019

Fusion

Employee

s Benefit

Trust

549,64

7 10 10 Equity 65,770,235

629,807,678 -

20.12.

2019

Honey

Rose

Investmen

t Ltd

1,23,93

,280 10 10

Equity

78,163,515 753,740,478 -

20.12.

2019

Creation

Investmen

ts Fusion

II, LLC

48,19,6

09 10 10

Equity

82,983,124 801,936,568 -

20.12.

2019 Devesh

Sachdev

8,43,26

4 10 10

Partly -

Paid up

Equity

share

83,826,388 802,779,832 -

*Prior to this, the Company has allotted 5,00,000 equity shares with paid up value of Rs. 50,00,000/-.

After inclusion of said allotment the cumulative number of equity shares and paid up share capital of the

Company as on date is 84,326,388 and Rs. 807,779,832 respectively.

** Issue price here indicates the nominal value

D. Details of any Acquisition or Amalgamation in the last 1 (one) year:

There has been no acquisition or amalgamation in the last 1 (one) year.

E. Details of any Reorganization or Reconstruction in the last 1 (one) year:

There has been no reorganization or reconstruction in the last 1 (one) year.

5.6 Details of the shareholding of the Company as on September 30, 2020:

A. Shareholding pattern of the Company as on September 30, 2020:

Name of Holder Class Number of

Shares

%age of

Holding

Number of

shares held



42

Sr.

No.

in Demat

Form

1

Devesh Sachdev Promoter 5,553,414 6.59%

5,553,414

2 Mini Sachdev Promoter's

Groups 305,000 0.36%

305,000

3

Oikocredit, Ecumenical

Development Co-Operative

Society U.A. Investors 6,606,375 7.83%

-

4 Creation Investments Fusion

LLC (“Creation”) Investors 15,321,043 18.17%

15,321,043

5 Creation Investments Fusion II

LLC (“Creation II”) Investors 9,954,529 11.80%

4,819,609

6 Global Financial Inclusion Fund

(“Gawa”) Investors 3,539,091 4.20%

3,539,091

7 Fusion Employees Benefit Trust Trust 1,827,536 2.17% 1,827,536

8 Employees & Other Individuals

Employees

& Other

Individuals

196,670 0.23%

109,775

9 Honey Rose Investment Ltd

("Warburg Pincus") Investors 41,022,730 48.65%

41,022,730

10 Total 84,326,388 100.00% 72,498,198

Preference Shareholding Structure as on September 30, 2020: Nil

Notes: Details of shares pledged or encumbered by the promoters (if any): NIL

B. List of top 10 holders of equity shares of the Company as on September 30, 2020:

Sr.

No. Name of Holder Class

Number of

Shares

%age of

Holding

Number of shares

held in Demat

Form

1. Honey Rose Investment

Ltd ("Warburg Pincus") Investors 41,022,730 48.65% 41,022,730

2. Creation Investments

Fusion LLC (“Creation”) Investors 15,321,043 18.17% 15,321,043

3.

Oikocredit, Ecumenical

Development Co-

Operative Society U.A.

Investors 6,606,375 7.83% -

4.

Creation Investments

Fusion II LLC (“Creation

II”)

Investors 9,954,529 11.80% 4,819,609



43

5. Devesh Sachdev Promoter 5,553,414 6.59% 5,553,414

6. Global Financial

Inclusion Fund (“Gawa”) Investors 3,539,091 4.20% 3,539,091

7. Fusion Employees

Benefit Trust Trust 1,827,536 2.17% 1,827,536

8. Mini Sachdev Promoter's

Groups 305,000 0.36% 305,000

9. Employees & Other

Individuals

Employees

& Other

Individuals

196,670 0.23% 109,775

5.7 Following details regarding the directors of the Company:

A. Details of current directors of the Company:

This table sets out the details regarding the Company’s Board of Directors:

S.

No

Name of the

Director

Designation DIN Address Occupation

1

Devesh

Sachdev

Managing

Director & CEO

02547111 A-247/2 Phase-1, Ashok

Vihar Delhi 110052

Service

2

Pradip Kumar

Saha

Independent

Director

02947368 1st Floor, N/E Flat No-5,

459 (498), Purbaloke

(Kalikapur) Kolkata 700099 WB

Retired Banker

3

Namrata Kaul Independent

Director

00994532 B2-301, the world SPA

west sector-30/41

Gurgaon Haryana India 122001

Service

4

Kenneth Dan

Vander Weele

Nominee

Director

02545813 4455, East North, Water

Street, #2101, Chicago, IL 60611

Chief investment Officer

5

Ratna

Dharashree

Vishwanathan

Independent

Director

07278291 E-402, Central Park 1

sector 42 Gurgaon,

Haryana 122002

UN Environment-SIFF

6

Narendra

Ostawal

Nominee

Director

06530414 G/601, Gundecha

Gardens, Bombay Gas

Compound, Lalbaug,

Mumbai-400012

Service

*Company to disclose name of the current directors who are appearing in the RBI defaulter list and/or ECGC default

list, if any: None

B. Details of change in directors since last three years as on September 30, 2020:

Name Designation DIN Date of

Appointment/

Resignation

Director of

the Company

since (in case

Remarks



44

of

resignation)

Mr. Nitin

Gupta

Independent

Director

033162

74

28-06/2019 04-09-2015 Due to pre-occupation

Ms. Anita

Alcira

Serrate

Cortez

Nominee

Director

072167

95

09/01/2018 19/06/2015 Resigned Due to pre

occupation

Mr. Albert

Hofsink

Nominee

Director

024228

09

20/12/2019 19/06/2015 Appointment

Mr. Pradip

Kumar Saha

Independent

Director

029473

68

12/02/2016 - Appointment

Mr. Javed

Ahmad

Siddiqui

Nominee

Director

072884

84

04-12-2018 12-02-2016 Pursuant to the terms

of Share Purchase

Agreement

Mr. Kenneth

Dan Vander

Weele

Nominee

Director

254581

3

12-08-16 - Appointment

Mr. Aditya

Bhandari

Nominee

Director

030624

63

28-12-2017 22-Jun-10 As per minimum

threshold for

directorship

mentioned in

Shareholder’s

Agreement

Ms. Laetitia

Ann Lillane

Counye

Nominee

Director

069901

44


of Share Purchase

Agreement

Ms. Ratna

Dharashree

Vishwanath

an

Independent

Director

072782

91


Mr. Njord

Andrewes

Nominee

Director


of Share Purchase

Agreement

Mr.

Narendra

Ostawal

Nominee

Director

065304

14


Ms.

Namrata

Kaul

Independent

Director

009945

32




45

*Company to disclose name of the current directors who are appearing in the RBI defaulter list and/or

ECGC default list, if any: Nil

5.8 Following details regarding the auditors of the Company:

A. Details of the auditor of the Company:

Name Address Auditor

Since Remarks

S.R. Batliboi &

Associates LLP

Tower B, Golf View Tower, Sector

Road, Sector 42, Gurgaon –

122002

June 29, 2019 Appointment

B. Details of change in auditors since last three years:

Name Address

Date of

Appointment /

Resignation

Auditor

Since Remarks

B S R &

Associates LLP

8-2-618/2, Reliance

Humsafar, 4th Floor, Road No.11, Banjara

Hills, Hydrabad-

500034, India

June 29, 2019 (Completion of

Term)

Jan

2010

Resignation as auditor of the

Company

S.R. Batliboi &

Associates LLP

Tower B, Golf View,

Tower, Sector Road,

Sector 42, Gurgaon -

122002

June 29, 2019 June

2019

Appointment as

statutory

auditor of the

Company

5.9 Details of borrowings of the Company, as on latest quarter end i.e. September 30, 2020:

A. Details of Secured Loan Facilities as on September 30, 2020:

(Rs. In Cr.)

Lender Name Loan Type

Sanction Amount (INR

Crores)

Amount Availed (INR

Crores)

Outstanding

ROI% FD% Repayment Date/Sched

ule

Primary

Security %

Tenure (Month

s) SEP"20 (INR

Crores)

Oriental Bank of Commerce

Term Loan

6.50

6.50

5.92

10.10%

10.00%

Quarterly/12 110.00

% 39

Indian Bank Term Loan

50.00

50.00

48.54

11.00%

10.00%

Monthly/36 110.00

% 39

Union Bank Term Loan

20.00

20.00

17.97

10.85%

10.00%

Quarterly/11 110.00

% 36

SIDBI Term Loan

175.00

175.00

129.03

6,78%

4.37%

Monthly/10 110.00

% 12

State Bank of India Term Loan

25.00

25.00

21.46

10.30%

5.00%

Monthly/27 110.00

% 30

NABARD R Term Loan

620.00

537.30

356.04

7.00%

10.00%

Half Yearly/2

112.00%

24

Mudra Term Loan

50.00

50.00

40.09

6.43%

10.00%

Monthly/26 100.00

% 29

Bank Of Baroda Term Loan

50.00

50.00

40.69

10.95%

10.00%

Monthly/33 110.00

% 36

RBL Bank Limited Term Loan

250.00

250.00

99.83

10.85%

0.00%

Quarterly/8 110.00

% 24

BNP Paribas Term Loan

95.00

95.00

36.80

9.50%

5.00%

Quarterly/8 100.00

% 24

Standard Chartered Bank Term Loan

275.00

255.00

182.45

9.90%

0.00%

Bullet Repayment

110.00%

12

HDFC Bank Limited Term Loan

140.00

140.00

56.18

12.00%

0.00%

Quately/3 105.00

% 6



46

DCB Bank Limited Term Loan

45.00

45.00

31.13

10.70%

5.00%

Monthly/24 100.00

% 26

Yes Bank Limited Term Loan

150.00

130.00

35.32

11.50%

5.00%

Monthly/24 100.00

% 24

Axis Bank Limited Term Loan

225.00

225.00

112.60

10.20%

2.50%

Quarterly/8 110.00

% 24

Kotak Mahindra Bank Limited

Term Loan

110.00

95.00

49.83

10.50%

5.00%

Monthly/24 105.00

% 24

Utkarsh Small Finance Bank

Term Loan

20.00

20.00

5.00

12.25%

5.00%

Quaterly/12 100.00

% 39

Federal Bank Term Loan

90.00

90.00

50.95

9.85%

5.00%

Monthly/21 105.00

% 24

SBM India Pvt Ltd Term Loan

20.00

20.00

19.87

10.75%

0.00%

Quarter/8 110.00

% 24

HSBC Bank Limited Term Loan

342.60

342.50

229.08

10.50%

5.00%

Monthly/24 105.00

% 24

Au Small Finance Bank Limited

Term Loan

50.00

50.00

6.72

11.45%

0.00%

Quaterly/8 110.00

% 27

IDFC First Bank Limited Term Loan

400.00

365.00

262.66

11.25%

0.00%

Monthly/30 110.00

% 30

Bandhan Bank Limited Term Loan

300.00

300.00

171.28

11.75%

0.00%

Quartely/8 105.00

% 24

Woori Bank Term Loan

62.00

62.00

17.69

9.95%

5.00%

Monthly/18 110.00

% 18

CITI Bank Term Loan

95.00

95.00

94.97

10.15%

0.00%

Quaterly/4 100.00

% 12

Ujjivan Small Finance Bank Ltd

Term Loan

50.00

50.00

27.34

11.00%

0.00%

Monthly/21 110.00

% 24

ICICI Bank Limited Term Loan

195.00

173.00

138.06

10.60%

2.00%

Monthly/22 110.00

% 24

Equitas Small Finance Bank

Term Loan

67.00

67.00

48.14

11.15%

- Quarterly/8 110.00

% 24

CREDIT AGRICOLE CIB Term Loan

38.00

38.00

32.42

10.94%

0.00%

Quarterly/7 100.00

% 24

MAS Financial Services Limited

Term Loan

235.00

205.00

87.38

11.05%

0.00%

Monthly/24 110.00

% 24

NABKISAN Finance Ltd. Term Loan

30.00

30.00

10.88

12.00%

0.00%

Quarterly/11 110.00

% 35

Manapuram Finance Term Loan

85.00

85.00

29.12

12.00%

0.00%

Monthly/36 110.00

% 36

Shriram City Union Finance Ltd.

Term Loan

20.00

20.00

3.86

12.40%

0.00%

Monthly/36 110.00

% 36

Hinduja Leyland Finance Ltd

Term Loan

20.00

20.00

4.94

12.28%

0.00%

Monthly/36 110.00

% 36

Muthhoot Capital Services Ltd

Term Loan

15.00

15.00

5.40

12.50%

0.00%

Monthly/36 105.00

% 36

Sundaram Fianance Ltd Term Loan

20.00

20.00

12.19

12.00%

0.00%

Monthly/24 118.11

% 24

BAJAJ Finance Limited Term Loan

25.00

25.00

10.39

11.00%

0.00%

Monthly/24 110.00

% 24

Total 4,466.10 4,241.30 2,532.24

*The above date excluding NCD position, which has provided in Table C

B. Details of Unsecured Loan Facilities as on September 30, 2020:

Lender’s Name Type of Facility

Amount

Sanctioned

Amount

Outstanding

(INR Crores)

Repayment

Date/Schedule (INR Crores)

SIDBI Sub Debt 7.00 7.00 72

IDFC First Bank Limited Sub Debt 30.00 30.00 72

Northern Arc Capital Ltd Sub Debt 15.00 14.88 66

KARVY Sub Debt 15.00 14.88 66

IFMR Fimpact Long Term Credit Fund Sub Debt 35.00 34.95 73



47

IFMR Fimpact Medium Term

Opportunity Fund Sub Debt 15.00 14.98 73

Northern Arc Capital Limited-ALPHA NCD 15.00 14.99 12

UTI International Wealth Creator

("responsAbility")

NCD (US) 55.00 54.93 108

UTI International Wealth Creator

("responsAbility")

NCD (US) 35.00 34.91 72

IFMR Fimpact Income Builder Fund

MLD

NCD (US) 25.00 24.98 43

C. Details of Non-Convertible Debentures as on September 30, 2020:

(Rs. In Cr.)

Debenture

Series

Tenor

/Period

of

Maturi

ty

Coupon

(Rate of

Interest)

Amount

OS

Date of

allotment

(MMDDY

Y)

Redempti

on Date/

Schedule

(MMDDY

Y)

Cred

it

Ratin

g

Secured

/

Unsecur

ed

Securi

ty

IFMR FImpact

Investment

Private

Limited

69 15.00%

10.00 05/31/15 12/18/20

CAR

E A- Secured

110.00

%

IFMR Fimpact

Income

Builder Fund

MLD

42 13.25-

13.75%

24.98 03-06-18 09-02-21

CAR

E A-

Unsecur

ed 0.00%

Blue Orchard (MF)_III

60 13.60%

46.96 08/31/16 08/31/21

ICRA A-

Secured 105.00

%

ASN

Microcredit

Fund ( TJ )

72 12.75%

52.42

06-02-

2016 05/16/22

ICRA

A- Secured

100.00

%

AAV Saral-

Symboitic III 36 12.30%

18.93 03/14/18 03/14/21

ICRA

A- Secured

100.00

%

AAV Saral-

Symboitic IV 36 12.20%

34.81 10/22/18 10/22/21

ICRA

A- Secured

100.00

%

UTI

International

Wealth

Creator

("responsAbili

ty")

108 11.91%

54.93 09/15/16 09/15/25

ICRA

A-

Unsecur

ed 0.00%

UTI

International Wealth

Creator

("responsAbili

ty")

72 11.91%

34.91

09/10/201

9

09/09/202

5

ICRA

A-

Unsecur

ed 0.00%

Triodos Fare

Share Fund 72 12.75%

62.97

03/16/201

8 03/16/21

ICRA

A- Secured

100.00

%

CPP-Incofin -2 36 12.50%

24.97 09/27/18 09/27/21

ICRA

A-

Unsecur

ed

110.00

%

DCB Bank 36 11.90%

9.94

06/10/202

0

06/12/202

3

ICRA

A- Secured

110.00

%



48

Au Small

Finance Bank

Limited

36 11.40%

29.94 06/19/20 06/19/23

ICRA

A- Secured

110.00

%

Union Bank of

India 36 11.25%

19.94 06/30/20 06/30/23

ICRA

A- Secured

110.00

%

Union Bank of

India NCD 2 18 10.50%

24.93 8/12/2020 2/11/2022

ICRA

A- Secured

110.00

%

Indian Bank 36 11.50%

19.69 7/29/2020 7/29/2023

ICRA

A- Secured

115.00

%

State Bank of

India 32 11.25%

24.89 7/31/2020 4/21/2023

ICRA

A- Secured

125.00

%

Punjab National Bank

18 10.50%

24.81 8/12/2020 2/11/2022

ICRA A-

Secured 110.00

%

405.19

D. List of Top 10 Debenture Holders (as on September 30, 2020):

Sr.

No.

Debenture Series Amount in Crore

1 UTI International Wealth Creator (responsAbility) 54.93

2 PETTELAAR EFFECTENBEWAARBEDRIJF N.V. (ASN

Microcredit Fund TJ)

52.42

3 Blue Orchard (Microfinance Fund) 46.96

4 UTI International Wealth Creator (responsAbility) 34.91

5 AAV Saral-Symboitic IV 34.81

6 Triodos Fare Share Fund 31.48

7 Triodos Microfinance Fund 31.48

8 AU Small Finance Bank 29.94

9 IFMR Fimpact Income Builder Fund MLD 24.98

10 'Incofin Administered Fund 24.97

Note: Top 10 holders’ (in value terms, on cumulative basis for all outstanding debentures issues) details should be

provided.

E. The amount of corporate guarantee issued by the Issuer along with name of the

counterparty (like name of the subsidiary, JV entity, group-company, etc) on behalf of

whom it has been issued. (if any):

Nil

F. Details of Commercial Paper:

Nil

G. Details of rest of the borrowing (if any including hybrid debt like FCCB, Optionally

Convertible Debentures / Preference Shares) as on September 30, 2020:

Party Name

(In case of

Facility)/

Instrument

Name

Type of

Facility /

Instrum

ent

Amount

Sanctioned /

Issued

Principal

Amount

Outstanding

Repayment

Date /

Schedule

Cre

dit

Rati

ng

Secure

d /

Unsecu

red

Securit

y



49

Nil Nil Nil Nil Nil Nil Nil Nil

H. Details of all default/s and/or delay in payments of interest and principal of any kind of term

loans, debt securities and other financial indebtedness including corporate guarantee issued

by the Company, in the past 5 years:

Nil

I. Details of any outstanding borrowings taken / debt securities issued where taken / issued (i)

for consideration other than cash, whether in whole or part, (ii) at a premium or discount,

or (iii) in pursuance of an option:

Nil

5.10 Details of Promoters of the Company:

A. Details of Promoter Holding in Company as on latest quarter end, i.e. September 30, 2020:

Name of

Shareholders

Category

No. of

Shares

(Pre)

No. of shares

in Demat

form

% Share

No of

share

s

Pledg

ed

% of shares

pledged

with respect

to shares

owned

Devesh Sachdev Promoter 5,553,414 5,553,414 6.59% - -

Mini Sachdev Promoter’s

Group 305,000 305,000 0.36% - -

Total 5,858,414 5,858,414 - -

5.11 Abridged version of the Audited Consolidated and Standalone Financial Information (like

Profit and Loss statement, Balance Sheet and Cash Flow statement) for at least last three

years and auditor qualifications, if any.

[Note: Financial information submitted must be in line with the timelines specified in the

Simplified Listing Agreement, issued vide Circular no. SEBI/IMD/BOND/1/2009/11/05, dated

May 11, 2009]

As per Indian GAAP

Profit and Loss Statement (INR

Crore)

31.03.2017 31.03.2018 31.03.2019

Audited Audited Audited

Interest Income 184.9 254.52 486.26

Less: Interest Expenses 97.44 136.6 244.21

Net Interest Income 87.46 117.92 242.05

Other Income 16.14 12.79 25.38

Total Income 103.6 130.71 267.44

Operating Expenses 66.9 93.95 148.00

Provisions & Write Offs 30.29 88.32 28.83

Operating Profit 36.61 5.63 119.17



50

Depreciation 1.6 2.04 2.39

Profit Before Tax 4.82 -53.6 88.22

Provisions for tax 0.72 -14.19 22.87

Profit After Tax 4.1 -39.41 65.35

Fusion Micro Finance Private Limited – As per IND AS

Statement of Profit and Loss for year ended March 31, 2020 & September 30,

2020

(All amounts are in Rupees millions)

Particulars FY20 Sep’20

Revenue from operations

Interest Income 6,664.88 3836.77

Fees and commission Income 34.64 2.06

Net gain on fair value changes 231.57 47.07

Net gain on derecognition of financial instruments under amortised cost category 271.55 -

Total Revenue from operations 7,202.63 3885.90

Other Income 100.47 19.52

Total Income 7,303.10 3,905.42

Expenses

Finance Costs 3,376.72 1,746.36

Impairment on financial instruments 926.99 813.07

Employee benefits expenses 1,483.33 764.23

Depreciation and amortization 25.76 13.25

Others expenses 490.36 195.43

Total Expenses 6,303.14 3,532.33

Profit before tax 999.96 373.09

Tax Expense:

Current Tax 395.99 311.69

Deferred Tax (92.14) (212.81)

Profit for the year 696.11 274.21

Other Comprehensive Income

Items that will not be reclassified subsequently to profit or loss

Re-measurement gains/(loss) on defined benefit plans 6.46 -

Income tax effect (1.40) -

5.06 -

Total Comprehensive Income for the year 701.16 274.21

As per Indian GAAP

Balance Sheet (INR Crore) 31.03.2017 31.03.2018 31.03.2019

Audited Audited Audited

Equity capital 37.26 44.18 61.58

Reserve & Surplus 185.28 213.51 561.09

TNW (A) 222.54 257.70 622.66

Total Debt 938.10 1,604.80 2648.67



51

Current Liabilities+ Provisions 57.79 105.97 137.64

Total Outside Liabilities (B) 995.89 1,710.77 2786.31

Total Liabilities (A + B) 1,218.43 1,968.46 3408.97

Fixed assets (Net) 4.36 4.72 5.35

Investments 210.51 0.50 0.50

Gross Advances 771.16 1,492.76 2592.86

Less : Managed Portfolio 20.14 170.07 251.03

Net Loan Outstanding 751.02 1,322.69 2341.83

Cash Bank Balance 166.51 505.83 935.13

Non Current assets 51.44 78.00 60.80

Other current assets 23.43 31.38 42.31

Deferred Tax Assets 10.90 25.09 22.87

Intangible Assets 0.26 0.24 0.17

Other Long Term Assets - - -

Total Assets 1,218.43 1,968.46 3408.97

Fusion Micro Finance Private Limited

Balance Sheet as at March 31, 2020 & September 30, 2020– As

per IND AS


Particulars

As on

31st

March

2020

As on 30th

September

2020

Assets

Financial assets

Cash and cash equivalents

5,396.67

7,506.19

Bank balances other than cash and cash equivalents 2,780.82

1,481.12

Trade receivables

31.39

6.40 Loans

33,429.73

35,042.82

Investments 5.00

603.17

Other financial assets

238.46

182.82

Non-financial Assets Current tax assets (net)

119.09

73.80

Deferred tax assets (net) 305.02

517.84

Property, plant and equipment

58.98

54.32



52

Capital Work in Progress 6.18

Intangible assets 1.47

2.44

Right to use assets 82.70

Other non-financial assets

33.31

15.81

Total assets

42,399.94

45,575.62

Liabilities and equity

Liabilities

Financial liabilities

Payables

40.71

160.29 Debt securities

3,998.98

5,349.97

Borrowings (other than debt securities) 24,571.58

25,322.40

Subordinated liabilities

1,166.29

1,166.73

Other financial liabilities 513.28

1100.48

Non-financial liabilities

Current tax liabilities (net) 0.53

69.43

Provisions

57.72

74.86

Other non-financial liabilities 61.96

54.59

Equity

Equity share capital 789.50

789.50

Other equity

11,199.39

11,487.36

Total liabilities and equity

42,399.94

45,575.61

5.12 Abridged version of Latest Audited/ Limited Review Half Yearly Consolidated and

Standalone Financial Information and auditors’ qualifications, if any:

[Note: Financial information submitted must be in line with the timelines specified in the

Simplified Listing Agreement, issued vide Circular no. SEBI/IMD/BOND/1/2009/11/05, dated

May 11, 2009]

As per Indian GAAP As at 31 March 2018 As at 31 March 2019

EQUITY AND LIABILITIES

Shareholder's funds

Share capital 44,18,26,745 61,57,75,618

Reserve and surplus 2,13,51,26,158 5,61,08,70,407

2,57,69,52,903 6,22,66,46,025

Non-current liabilities



53

Long-term borrowings 10,02,48,61,095 14,19,47,74,307

Long-term provisions 1,69,69,203 4,87,20,616

10,04,18,30,298 14,24,34,94,923

Current liabilities

Short term borrowings 1,20,81,75,525 96,84,02,778

Other current liabilities 5,33,05,61,568 12,18,15,68,585

Short-term provisions 52,70,93,587 46,96,31,198

7,06,58,30,680 13,61,96,02,560

Total 19,68,46,13,881 34,08,97,43,509

ASSETS

Non-current assets

(i) Tangible assets 4,72,49,139 5,35,15,304

(ii) Intangible assets 23,92,087 17,26,309

Deferred tax assets, net 25,09,31,961 22,87,38,564

Loan portfolio 4,39,19,34,739 6,85,72,87,081

Long-term loans and advances 3,00,29,916 9,78,83,457

Other non-current assets 74,99,95,256 51,01,65,290

Non-current investments 0 50,00,000

5,47,25,33,098 7,75,43,16,005

Current assets

Current investments 50,00,000 0

Trade receivables 47,97,197 60,92,421

Cash and bank balances 5,05,83,28,187 9,35,12,51,880

Loan portfolio 8,83,49,57,752 16,56,10,26,376

Short-term loans and advances 12,05,99,597 6,48,45,183

Other current assets 18,83,98,050 35,22,11,643

14,21,20,80,783 26,33,54,27,504

Total 19,68,46,13,881 34,08,97,43,509

Fusion Micro Finance Private Limited

Balance Sheet as at March 31, 2020 & September 30, 2020– As

per IND AS


Particulars

As on

31st

March

2020

As on 30th

September

2020

Assets

Financial assets

Cash and cash equivalents

5,396.67

7,506.19 Bank balances other than cash and cash equivalents

2,780.82

1,481.12

Trade receivables 31.39

6.40

Loans

33,429.73

35,042.82



54

Investments

5.00

603.17 Other financial assets

238.46

182.82

Non-financial Assets

Current tax assets (net) 119.09

73.80

Deferred tax assets (net)

305.02

517.84 Property, plant and equipment

58.98

54.32

Capital Work in Progress 6.18

Intangible assets 1.47

2.44

Right to use assets 82.70

Other non-financial assets 33.31

15.81

Total assets

42,399.94

45,575.62

Liabilities and equity

Liabilities

Financial liabilities

Payables 40.71

160.29

Debt securities

3,998.98

5,349.97

Borrowings (other than debt securities) 24,571.58

25,322.40

Subordinated liabilities

1,166.29

1,166.73 Other financial liabilities

513.28

1100.48

Non-financial liabilities Current tax liabilities (net)

0.53

69.43

Provisions

57.72

74.86 Other non-financial liabilities

61.96

54.59

Equity Equity share capital

789.50

789.50

Other equity 11,199.39

11,487.36

Total liabilities and equity

42,399.94

45,575.61

As per Indian GAAP

Particulars 31 March 2018 31 March 2019

Income



55

Revenue from operations 2,545,195,313 4,86,26,26,235

Other income 127,931,766 25,38,33,359

Total revenue 2,673,127,079 5,11,64,59,594

Expenses

Operating expenses 944,959,645 37,77,11,360

Employee benefits expense 661,008,113 1,01,19,16,452

Finance costs 1,366,023,585 2,44,20,78,376

Depreciation and amortisation 20,406,853 2,38,74,193

Other expenses 216,777,285 37,86,46,270

Total expenses 3,209,175,481 4,23,42,26,651

(Loss)/ profit before tax (536,048,402) 88,22,32,943

Tax expenses:

- Current tax - 20,65,19,400

- Deferred tax (141,913,770) 2,21,93,398

Profit for the period from continuing

operations (394,134,632) 65,35,20,145

(Loss)/ profit after tax (394,134,632) 65,35,20,145

Fusion Micro Finance Private Limited – As per IND AS

Statement of Profit and Loss for year ended March 31, 2020 & September 30,

2020


Particulars FY20 Sep’20

Revenue from operations

Interest Income 6,664.88 3836.77

Fees and commission Income 34.64 2.06

Net gain on fair value changes 231.57 47.07

Net gain on derecognition of financial instruments under amortised cost category 271.55 -

Total Revenue from operations 7,202.63 3885.90

Other Income 100.47 19.52

Total Income 7,303.10 3,905.42

Expenses

Finance Costs 3,376.72 1,746.36

Impairment on financial instruments 926.99 813.07

Employee benefits expenses 1,483.33 764.23

Depreciation and amortization 25.76 13.25

Others expenses 490.36 195.43

Total Expenses 6,303.14 3,532.33

Profit before tax 999.96 373.09

Tax Expense:

Current Tax 395.99 311.69

Deferred Tax (92.14) (212.81)

Profit for the year 696.11 274.21



56

Other Comprehensive Income

Items that will not be reclassified subsequently to profit or loss

Re-measurement gains/(loss) on defined benefit plans 6.46 -

Income tax effect (1.40) -

5.06 -

Total Comprehensive Income for the year 701.16 274.21

5.13 Any material event/ development or change having implications on the financials/credit

quality (e.g. any material regulatory proceedings against the Issuer/promoters, tax

litigations resulting in material liabilities, corporate restructuring event etc) at the time of

Issue which may affect the issue or the Investor’s decision to invest / continue to invest in

the debt securities.

The Issuer hereby declares that there has been no material event, development or change at the

time of issue from the position as on the date of the last audited financial statements of the Issuer,

which may affect the Issue or the Investor’s decision to invest/ continue to invest in the debt

securities of the Issuer.

5.14 Names of the Debentures Trustees and Consents thereof

The Debenture Trustee of the proposed Debentures is Catalyst Trusteeship Limited. Catalyst

Trusteeship Limited has given its written consent for its appointment as debenture trustee to the

Issue and inclusion of its name in the form and context in which it appears in this Information

Memorandum and in all the subsequent periodical communications sent to the Debenture Holders.

The consent letter from Debenture Trustee issued in respect of the Debentures is provided in

Annexure III of this Information Memorandum.

5.15 Rating Rationale(s) adopted (not older than one year on the date of opening of the Issue)/

credit rating letter issued (not older than one month on the date of opening of the Issue).

The Rating Agency has assigned ratings of “ICRA A-” (pronounced as “ICRA A Minus”) with

“stable” outlook to the Debentures. Instruments with this rating are considered to have moderate

degree of safety regarding timely servicing of financial obligations. Such instruments carry

moderate credit risk.

5.16 If the security is backed by a guarantee or letter of comfort or any other document / letter

with similar intent, a copy of the same shall be disclosed. In case such document does not

contain detailed payment structure (procedure of invocation of guarantee and receipt of

payment by the investor along with timelines), the same shall be disclosed in the offer

document.

(a) The Debentures are proposed to be guaranteed by the Guarantor by way of the GOI

Guarantee. The GOI Guarantee will be issued in accordance with Rule 280 of the

General Financial Rules as published by the Ministry of Finance (Department of

Expenditure), Government of India from time to time (hereinafter referred to as

"GFR") within the timelines that are agreed between the Guarantor and the

Debenture Holders, in accordance with the terms of GOI Guidelines and other

Applicable Law.

(b) The GOI Guarantee may be invoked by the relevant Debenture Holders upon



57

occurrence of any event for invocation set out under the GOI Guidelines (including

the inability of the Company to repay/pay any part of the outstanding amounts in

respect of the Debentures in accordance with the procedure set out in the GOI

Guidelines.

(c) Subject to the terms of the GOI Guidelines, the GOI Guarantee is a continuing

guarantee and may be reviewed on an annual basis in accordance with Rule 281 of the

GFR.

(d) Any claims under the GOI Guarantee and/or other reporting requirements in respect of

the GOI Guarantee will be done in accordance with the GOI Guidelines.

5.17 Names of all the recognized stock exchanges where the debt securities are proposed to be

listed:

The Debentures are proposed to be listed on the WDM segment of the BSE. The Issuer shall

comply with the requirements of the listing agreement for debt securities to the extent applicable

to it on a continuous basis. The in-principle approval of the BSE has been obtained in this regard.

5.18 Other details:

A. Debenture Redemption Reserve Creation:

As per Section 71 of the Act, any company that intends to issue debentures must create a

debenture redemption reserve to which adequate amounts shall be credited out of the profits of

the company until the redemption of the debentures. However, at present under the Companies

(Issuance of Share Capital and Debentures) Rules, 2014, non-banking financial companies are

exempt from this requirement in respect of privately placed debentures. Pursuant to this

exemption, the Company does not presently intend to create any reserve funds for the redemption

of the Debentures.

B. Issue / instrument specific regulations:

The Issue of Debentures shall be in conformity with the applicable provisions of the Companies

Act including the notified rules thereunder, the SEBI Debt Listing Regulations, the SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), the GOI

Guidelines and the applicable RBI guidelines.

C. Application process:

The application process for the Issue is as provided in SECTION 8: of this Information

Memorandum.

5.19 A statement containing particulars of the dates of, and parties to all material contracts,

agreements:

The contracts and documents referred to hereunder are material to the Issue, may be inspected at

the Registered Office of the Company between 10.00 am to 4.00 pm on working days.

S.

No. Nature of Contract



58

1 Certified true copy of the Memorandum & Articles of Association of the Issuer.

2 Board Resolution dated November 09, 2020 authorizing the issue of Debentures

offered under terms of this Disclosure Document

3 Shareholder Resolution dated July 28, 2020 authorizing the issue of non-convertible debentures by the Company.

4 Shareholder Resolution dated July 28, 2020 authorizing the borrowing limits of the

Company and the creation of security in respect of such borrowings.

5 Copies of Annual Reports of the Company for the last three financial years.

6 Credit rating letter from the Rating Agency dated November 06, 2020.

7 Letter from Catalyst Trusteeship Limited dated November 09, 2020 giving its consent

to act as Debenture Trustee in respect of the Debentures.

8 Letter for Register and Transfer Agent.

9 Certified true copy of the certificate of incorporation of the Company.

10 Certified true copy of the tripartite agreement between the Company, the Registrar &

Transfer Agent and NSDL.

11 Copy of application made to BSE for grant of in-principle approval for listing of Debentures

5.20 Details of Debt Securities Sought to be Issued

Under the purview of the current document, the Issuer intends to raise an amount of Rs. 25,00,00,000/-

(Rupees Twenty Five Crores only) by issue of Secured Rated Listed Redeemable Non-Convertible

Debentures, on a private placement basis.

For further details of the Debentures, please refer to the terms and conditions of the debentures set out in

Section 5.23 of this Information Memorandum.

5.21 Issue Size

The aggregate issue size for the Debentures is 25,00,00,000/- (Rupees Twenty Five Crores only).

5.22 Utilization of the Issue Proceeds

The Issuer undertakes that the proceeds of this Issue shall be utilized for the deployment of funds on its

own balance sheet and not to facilitate resource requests of its group entities/parent company/associates.

The Issue shall not be utilised towards acquisition financing: viz buyback of shares/securities, purchase

of shares of other companies and/or promoter contribution towards the equity capital of a company or as

a bridge loan

The Company undertakes that proceeds of this Issue shall not be utilized for the following purposes as

specified in the RBI Master Circular No. DBOD.BP.BC.No.5/21.04.172/2015-16 dated July 1, 2015

including inter alia:

1) Bills discounted / rediscounted by NBFCs, except for rediscounting of bills discounted by NBFCs

arising out of: Commercial vehicles (including light commercial vehicles) and two wheeler and

three wheeler vehicles, subject to the following conditions: The bills should have been drawn by

the manufacturer on dealers only; The bills should represent genuine sale transactions as may be

ascertained from the chassis / engine number and; Before rediscounting the bills, the bona fides and

track record of NBFCs which have discounted the bills would be verified.



59

2) Investments of NBFCs both of current and long-term nature, in any company / entity by way of

shares, debentures, etc. However, Stock Broking Companies may be provided need-based credit

against shares and debentures held by them as stock-in-trade.

3) Unsecured loans / inter-corporate deposits by NBFCs to / in any company.

4) All types of loans and advances by NBFCs to their subsidiaries, group companies / entities.

5) Finance to NBFCs for further lending to individuals for subscribing to Initial Public Offerings

(IPO) and for purchase of shares from secondary market.

5.23 Issue Details

Security Name 10.50%FMPL2022

Issuer Fusion Micro Finance Private Limited

Type of Instrument Non-Convertible Debentures

Nature of Instrument Secured Senior Rated Listed Redeemable Taxable Transferable Non-

Convertible Debentures

Seniority Secured

Mode of Issue private placement

Eligible Investor(s) Please refer Section 8.14 below.

Listing (including name of

stock exchange(s) where it will be listed and timeline for

listing)

The Issuer shall take all steps for making an application to the Wholesale

Debt Market (“WDM”) segment of the BSE and all steps necessary to get the Debentures listed within 20 (Twenty) calendar days from the Deemed

Date of Allotment.

In the event of any delay in listing of the debt securities beyond 20 (Twenty) calendar days from the Deemed Date of Allotment, the Issuer shall make

payment to the Debenture Holders of additional interest calculated on the

face value of the Debentures at the rate of at least 1% (One Percent) p.a. over and above the Coupon Rate from the expiry of 30 (Thirty) calendar days

from the Deemed Date of Allotment of Debentures till the listing of such

Debentures.

Rating of the Instrument “ICRA A-” (pronounced as “ICRA A Minus”) with “stable” outlook.

Issue Size Rs. 25,00,00,000/- (Rupees Twenty Five Crores only).

Option to retain

oversubscription amount

N.A.

Objects of the Issue To raise secured debt to the extent up to Rs. 25,00,00,000/- (Rupees Twenty

Five Crores only) on a private placement basis for the Debentures Purpose.

Details of the utilization of the proceeds

The Issuer shall utilise the monies received from the subscription of the Debentures, after meeting the costs and expenses in respect of the Issue,

solely for the following purposes (the “Purpose”):

(a) deployment in business and growth of asset books by on-lending; and

(b) general corporate purpose for ordinary course of business.

The Issuer undertakes that no part of the monies received from the subscription of the Debentures shall be utilized by the Issuer directly or

indirectly towards (A) any capital market instrument such as equity, debt, debt linked, and equity linked instruments or any other capital market

related activities; or (B) land acquisition or usages as restricted under bank

finance.



60

Coupon Rate shall mean the coupon payable on a quarterly basis (fixed) in respect of the Debentures on the Coupon Payment Date(s), which shall be 10.50% (Ten

Decimal Point Five Zero Percent) per annum.

Step Up/Step Down Coupon Rate

In the event that the credit rating assigned to the Debentures by the Rating Agency and/or by any other credit rating agency is downgraded

by one notch or more until rating of “BBB-” (pronounced as “Triple B

Minus”), the Coupon Rate payable on the principal amount of the

Debentures shall, without any act, deed or thing, automatically increase by 0.25% (Zero Decimal Point Two Five Percent) for every notch until

the rating of “BBB-” over and above the prevailing Coupon Rate over

and above the prevailing Coupon Rate.

In the event that the credit rating assigned to the Debentures by the

Rating Agency or any other external credit rating agency falls below

“BBB-” (pronounced as “Triple B Minus”), the Coupon Rate payable on the principal amount of the Debentures shall, without any act, deed or

thing, automatically increase by 0.50% (Zero Decimal Point Five Zero

Percent) over and above the prevailing Coupon Rate. The increase in the Coupon Rate shall be applicable on and from the date of the downgrade

of credit rating of the Debentures by the Rating Agency and/or such

credit rating agency to the residual maturity of the Debentures. As on the date of this Information Memorandum, the credit rating assigned to the

Debentures is “ICRA A-”.

Early Redemption (a) In the event that (i) the long term credit rating assigned to Debentures

by the Rating Agency and/or any other credit rating agency is withdrawn or suspended at any time during the currency of the

Debentures; or (ii) breach of any covenants in the event such breach

has not been cured or remedied within the cure period set out under the Debenture Trust Deed; or (iii) in the event of there being any

material adverse effect in the business, condition (financial or

otherwise), operations, performance or prospects of the Issuer due to

any pending or threatened litigation, charges, investigation or proceedings that may or can have an adverse effect on the business

condition (financial or otherwise), operations, performance or

prospects of the Issuer, that affects the payment of amounts outstanding under the Debentures (each an “Early Redemption

Event”), the Debenture Holder(s)) shall have the right, without being

obligated, to require the redemption of the Debentures from the Company (in full or in part) prior to the Maturity Date.

(b) Upon the occurrence of an Early Redemption Event, the Company

shall forthwith promptly issue a notice to the Debenture Holders and Debenture Trustee, informing such Debenture Holders and

Debenture Trustee about the occurrence of such Early Redemption

Event (“Early Redemption Notice”). In the event that any Debenture Holder is desirous of exercising the Early Redemption

Event, the said Debenture Holder shall issue a notice to the Company

(with a copy marked to the Debenture Trustee), in writing, within a

maximum period of 30 (Thirty) calendar days from the receipt of Early Redemption Notice (“Early Redemption Option Exercise

Notice”).

(c) Within 30 (Thirty) Business Days of receipt of the Early Redemption

Option Exercise Notice (the “Early Redemption Date”), the

Company shall compulsorily redeem the Debentures identified in the



61

Early Redemption Option Exercise Notice by crediting to the

beneficiary account of each Debenture Holder on the relevant

Record Date available funds an amount that is equal to the Redemption Amount under the Debentures.

Coupon Payment Frequency Quarterly until the Maturity Date with the first Coupon Payment Date

commencing from February 19, 2021 (subject to adjustments for Business Day Convention).

Coupon Payment Date(s) February 19, 2021, May 19, 2021, August 19, 2021, November 19, 2021, February 19, 2022 and May 19, 2022 (subject to adjustments for Business

Day Convention)

Coupon Type Fixed

Coupon Reset Process (including rates, spread,

effective date,

interest rate cap and floor etc).

Please refer to the column on “Step up / Step Down Coupon Rate” above.

Day count basis Actual/Actual.

Interest on application money Interest shall be payable on the application monies received at the Coupon

Rate of 10.50% (Ten Decimal Point Five Zero Percent) per annum (subject

to deduction of tax at source, as applicable) from the date of realization of

cheque (s)/ demand draft(s)/ RTGS up to one day prior to the Deemed Date of Allotment. Where Pay-in Date and Deemed Date of Allotment are the

same, no interest on Application Money is to be paid.

Default Interest Rate In the event of a payment default of the amounts due under this Issue, the Issuer shall pay an additional interest at the rate of 2% (Two Percent) per

annum over and above the applicable Coupon Rate on the outstanding

principal amount and accrued Coupon, calculated from the date of the

occurrence of the default until such default is cured or the Debentures are redeemed pursuant to such default, as applicable ( “Default Interest”).

Delay Penalty In case of any delay in execution of the Deed of Hypothecation by the Issuer

within 30 (Thirty) days from the Deemed Date of Allotment, the Issuer shall pay additional interest of 2% (Two percent) per annum over and above the

Coupon Rate to the Debenture Holder(s) until the conditions are complied

with.

Tenor 18 (Eighteen) Months from the Deemed Date of Allotment

Redemption Date / Maturity Date

At the end of 18 (Eighteen) months from the Deemed Date of Allotment

i.e. May 19, 2022 (subject to adjustments for Business Day convention).

Redemption Amount Rs. 10,00,000/- (Rupees Ten Lakhs only) per Debenture on the Maturity

Date plus accrued coupon on Debentures in the manner set out in

Annexure VI (Illustration of Bond Cash Flows for the Debentures) hereto.

Further, the aforesaid amount would be payable with the accrued coupon, the Default Interest (if any), and other such costs, charges and

expenses if any, payable on the Due Date(s) under the Transaction

Documents executed in respect of Debentures.

Redemption Premium

/Discount

N.A.

Issue Price Rs. 10,00,000/- (Rupees Ten Lakhs only) per Debenture

Discount at which security is issued and the effective yield

as a result of such discount.

N.A.



62

Put Option Date N.A.

Put Option Price N.A.

Put Option Notification Time N.A.

Call Option Date N.A.

Call Option Price N.A.

Call Notification Time N.A.

Face Value Rs. 10,00,000/- (Indian Rupees Ten Lakh only) per Debenture.

Minimum application and in multiples of 1 securities thereof

The minimum application size for the Issue shall be 10 (Ten) debentures (being INR 1,00,00,000 (Indian Rupees One Crore)) and in multiples of 1

(One) debenture thereafter.

Issue Timing for Debentures Issue Opening Date: November 18, 2020;

Issue Closing Date: November 18, 2020; Pay-in Date: November 19, 2020; and

Deemed Date of Allotment: November 19, 2020.

Issuance mode of the Instrument

Dematerialized, Private Placement

Trading mode of the

Instrument

Dematerialized

Settlement mode of the Instrument

The pay-in of subscription monies for the Debentures shall be made by way of transfer of funds from the bank account(s) of the Eligible Investors

(whose bids have been accepted) as registered with the Electronic Book

Provider into the account of the ICCL, as specified in this regard below:

Name of Bank HDFC BANK

IFSC Code HDFC0000060

Account number ICCLEB

Name of beneficiary INDIAN CLEARING CORPORATION LIMITED

Name of Bank ICICI Bank Ltd.

IFSC Code ICIC0000106


Name of beneficiary INDIAN CLEARING CORPORATION LTD

Name of Bank YES BANK

IFSC Code YESB0CMSNOC



Cheque(s)/ electronic clearing services (ECS)/credit through RTGS

system/funds transfer to the specified bank account of the Debenture Holder.

Depositories NSDL and/or CDSL

Business Day Convention If the date of payment of Coupon Rate / redemption of principal amount of the Debentures does not fall on a Business Day, the payment of Coupon Rate

/ principal amount of the Debentures shall be made in accordance with SEBI

Circular CIR/IMD/DF-1/122/2016 dated November 11, 2016.

If any of the Coupon Payment Date(s) falls on a day that is not a



63

Business Day, the payment shall be made by the Issuer on the

immediately succeeding Business Day, which becomes the Coupon

Payment Date for that coupon.

If the date of payment of any redemption amount under Debentures falls

on a day that is not a Business Day, such payment shall be made by the Issuer on the immediately preceding Business Day.

If the Maturity Date or the Early Redemption Date (being a date on which the Debentures are redeemed prior to the Maturity Date in terms

of the Transaction Documents) as the case may be, falls on a day that is

not a Business Day, such payment of Coupon and Redemption Amount

shall be made on the immediately preceding Business Day.

Record Date The date which will be used for determining the Debenture Holders who

shall be entitled to receive the amounts due on any Due Date in relation

to the Debentures, which shall be the date falling 3 (Three) Business Days prior to any Due Date.

All covenants of the issue

(including side letters,

accelerated payment clause, etc.)

Kindly refer to Annexure I (Term Sheet) of this Information

Memorandum.

Description regarding Security

(where

applicable) including type of security (movable / immovable /

tangible etc.), type of

charge (pledge / hypothecation / mortgage etc.),

date of creation of security /

likely date of

creation of security, minimum security cover,

revaluation, replacement of

security, interest to the debenture holder over and

above the

coupon rate as specified in the Trust Deed and

disclosed in the Offer Document /

Information Memorandum.

The Debentures (along with interest, expenses, fees and other amounts due in

relation to the Debentures) shall be secured by a charge created by the Issuer

in favour of the Debenture Trustee (for the benefit of the Debenture Holders) being an exclusive first ranking and floating charge by way of hypothecation

over specific identified receivables, present and future (as set out more

particularly in the Deed of Hypothecation (as defined hereinafter)), representing amounts due from the various borrowers of the Issuer at all times

to the extent equal to an amount aggregating to the total outstanding in

relation to the issue of Debentures (“Hypothecated Assets”) such that the

value of security shall be equal to 1.10x (One Decimal Point One Zero) times or 110% (One Hundred and Ten Percent) of the aggregate of the outstanding

principal amount on the Debentures (“Security Cover”).

The Issuer undertakes:

(i) Upon the execution of the deed of hypothecation, to maintain the value

of the Security Cover at all times till the Final Settlement Date. (ii) to create the security over the Hypothecated Assets by executing a duly

stamped deed of hypothecation (“Deed of Hypothecation”) within 90

(Ninety) calendar days from the Deemed Date of Allotment

(iii) to create, register and perfect the security for the Debentures by filing the relevant Form CHG-9 with the relevant Registrar of Companies,

within 30 (Thirty) calendar days from the date of execution of the Deed

of Hypothecation. (iv) Upon the execution of the Deed of Hypothecation, in the event of any

fall in the Security Cover, additional Hypothecated Assets shall be

taken in the manner as provided for in the Deed of Hypothecation. (v) Upon the execution of the Deed of Hypothecation, to provide a list on

a monthly basis, of specific loan receivables/identified book debts to

the Debenture Trustee over which the charge has been created and

subsisting by way of hypothecation in favour of the Debenture Trustee (for the benefit of the Debenture Holders) (“Monthly Hypothecated

Asset Report”).



64

(vi) In the event the charge over Hypothecated Assets is not created within

90 (Ninety) calendar days from the Deemed Date of Allotment or has

been created insufficiently, the proceeds from the issue shall be placed in an escrow account by the Issuer until the creation of such charge.

(vii) In the event the Company fails to maintain the Security Cover, the

Issuer shall pay an additional interest at the rate of 0.5% (Zero Decimal Point Five Percent) per annum over and above the applicable Coupon

Rate on all amounts outstanding under the Debentures (including the

outstanding principal amounts and any accrued but unpaid interest) from the date of failure of maintenance in Security Cover for the period

of non-maintenance of the Security Cover.

(viii) The underlying receivables constituting Hypothecated Assets should at

all times, until the Final Settlement Date, fulfil the following eligibility criteria:

(a) it should be existing at the time of selection and should have not

been repaid or extinguished or terminated or pre-paid;

(b) the underlying receivables constituting Hypothecated Assets have originated while complying with all the applicable “know your

customer” requirements prescribed by the RBI;

(c) the underlying receivables constituting the Hypothecated Assets

are free from any prior security interest, charge, trust, pledge, lien,

claim or encumbrance and as to future properties the same shall likewise be the unencumbered, not sold or assigned, absolute and

disposable property of the Issuer, with full power of disposition

over the same (except for the charge created by the Deed of

Hypothecation);

(d) the underlying receivables constituting Hypothecated Assets are

‘current assets’ on inclusion and are not overdue;

(e) the underlying receivables constituting Hypothecated Assets do not

have any principal, interest, additional interest, fee or any other

expected payments overdue (“Performing Loans”) and for this purpose the Issuer shall with the consent of the Debenture

Holder(s) replace any underlying receivables constituting the

Hypothecated Property that has one or more instalments of principal, interest, additional interest, fee or any other expected

payments overdue for more than 60 (Sixty) days with Performing

Loans that meet the eligibility criteria. Such replacement shall be

done on or before the 15th of any calendar month;

(f) the underlying receivables constituting the Hypothecated Assets comply with / shall comply with the applicable guidelines and

norms issued by the RBI; and

(g) each of the underlying receivables constituting the Hypothecated

Assets must satisfy the Issuer’s credit and underwriting policies

including credit referencing agency checks where commonly used.

Transaction Documents The Issuer has executed/ shall execute the documents including but not limited to the following:

(a) Information Memorandum;

(b) Private Placement Offer cum Application Letter; (c) consent letter issued by the Debenture Trustee for Debentures;

(d) Debenture Trustee Agreement;



65

(e) Debenture Trust Deed;

(f) Deed of Hypothecation;

(g) the credit rating letter from the Rating Agency in respect of the Debentures;

(h) each tripartite agreement between the Issuer, the Registrar and any

Depository; (i) Listing agreement with BSE;

(j) any other document mandated under the GOI guidelines; and

(k) any other document that may be designated by the Debenture Trustee as a Transaction Document.

(collectively referred to as “Transaction Documents”)

Conditions Precedent to

Disbursement

The Issuer shall fulfil the following conditions precedent to the satisfaction

of the Debenture Trustee and submit conditions precedent documentation

where applicable to the Debenture Trustee, prior to the Pay in Date:

(a) The Issuer shall submit to the Debenture Trustee and the Debenture

Holders, a copy of the rating letter and the rating rationale issued by the

Rating Agency with a minimum credit rating of ‘A-’ (pronounced as

“A Minus”) in relation to the Debentures;

(b) The Company shall submit a certified true copy of the constitutional documents of the Company (being its Memorandum and Articles of

Association and certificate of incorporation) to the Debenture Trustee;

(c) All corporate approvals from the Board of Directors and shareholders

of the Issuer, if applicable, shall have been received for the issue of Debentures, creation of the security and the execution, delivery and

performance by the Company of the Transaction Documents in

accordance with the Companies Act, 2013, the Companies (Prospectus

and Allotment of Securities) Rules, 2014, the Companies (Share Capital

and Debentures) Rules, 2014 and other rules prescribed;

(d) The Company shall execute the Debenture Trustee Agreement and

Debenture Trust Deed, in a form and manner satisfactory to the

Debenture Trustee;

(e) The Issuer shall have submitted to the Debenture Trustee all required documents for the purpose of satisfying 'know your customer'

requirements to the Debenture Trustee / the Debenture Holder(s);

(f) No event of default or reasonably to the knowledge of the issuer

potential event of default has occurred and is continuing, or would

result from any advances availed by the Issuer;

(g) Execution of such other transaction documents in a form and manner

acceptable to the investors and the Issuer;

(h) The Issuer shall comply with the regulatory guidelines applicable to it;

(i) The Issuer shall agree and undertake to provide the following covenants

in the Transaction Documents:

(i) the Issuer and its directors have the necessary powers under the

Memorandum and Articles of Association of the Issuer to

borrow monies pursuant to the issuance of the Debentures; (ii) the borrowing of monies pursuant to the issuance of the

Debentures and the creation of security will not cause any limit

binding on the Issuer to be exceeded;



66

(iii) no material adverse effect (as defined in the Transaction

Documents) has occurred in the Issuer, and/or the business of

the Issuer; (iv) the Issuer has obtained all necessary consents and approvals, if

applicable, from including but not limited to its creditors,

secured or unsecured, for the issuance of the Debentures and creation of security shall have been delivered in a form and

manner satisfactory to the Debenture Trustee;

(v) all representations and warranties contained in the Debenture Trust Deed are true and correct in all material respects on and

as of the Deemed Date of Allotment.

(vi) non–occurrence of any force majeure event; and

(vii) the Debenture Trustee shall have received from the Issuer its duly audited account statements for the financial year ended

March 31, 2020.

(j) The Issuer shall have submitted to the satisfaction of the Debenture Trustee, reports from CIBIL (Credit Information Bureau (India)

Limited) in respect of the Issuer; and

(k) The Issuer shall have duly executed the tripartite agreement between

the Issuer, the Registrar and any Depository and the depository

agreement by inter alia, the Depository and the Issuer.

Conditions subsequent to the Disbursement

The Issuer shall ensure that the following documents are executed/activities

are completed as per the time frame stipulated in the Debenture Trust Deed:

(a) the Issuer shall immediately on receipt of funds, take on all necessary

steps to, including making all applicable filings in the Registrar of

Companies and obtaining all necessary approvals including filing Form

PAS 5 along with the Information Memorandum and Form PAS 3 along

with requisite fee within prescribed timelines;

(b) the Issuer shall file Form PAS 5 along with the Information

Memorandum with SEBI;

(c) the Issuer shall ensure that the Debentures are credited into the

dematerialized accounts of the respective Debenture Holders within 3 (Three) Business Days from the Deemed Date of Allotment for

Debentures;

(d) the Issuer shall have received final listing approval from the BSE within

20 (Twenty) calendar days from the Deemed Date of Allotment;

(e) the Issuer shall create the security in respect of the Debentures, which

shall entail without limitation payment of requisite stamp duty on the Deed of Hypothecation and the other Transaction Documents, as may

be required under the Applicable Laws within 90 (Ninety) calendar

days from the Deemed Date of Allotment. The Issuer shall, file the Form CHG 9 pursuant to Rule 3 of Companies (Registration of

Charges) Rules, 2014 with the concerned ROC within 30 (Thirty)

calendar days from the date of execution of the Deed of Hypothecation.

(f) The Issuer shall ensure compliance with SEBI / Companies Act, 2013

(as applicable) for issuance of Debentures; and

(g) The Issuer shall submit any other document as required by the

Debenture Trustee from time to time.



67

Events of Default (including

manner of voting /conditions

of joining Inter Creditor Agreement)


Memorandum.

Creation of recovery expense

fund a. Details and purpose of the recovery expense fund

The Issuer shall create a recovery expense fund in accordance with the

applicable SEBI regulations, including but not limited to the SEBI circular dated October 22, 2020 (bearing reference number:

SEBI/HO/MIRSD/CRADT/CIR/P/2020/207)

Conditions for breach of

covenants (as specified

in the Debenture Trust Deed)


Memorandum.

Provisions related to Cross Default

Kindly refer to Annexure I (Term Sheet) of this Information Memorandum.

Role and Responsibilities of

Debenture Trustee

To oversee and monitor the overall transaction for and on behalf of the

Debenture Holder(s).

Risk factors pertaining to the

issue As mentioned in SECTION 3: above.

Covenants Kindly refer to Annexure I (Term Sheet) of this Information Memorandum.

Representation and warranties Kindly refer to Annexure I (Term Sheet) of this Information Memorandum.

Illustration of Bond Cash-

flows

Kindly refer to Annexure VI (Illustration of Bond Cash Flows for the

Debentures) of this Information Memorandum.

Governing Law and

Jurisdiction

The Debentures / and documentation will be governed by and construed in

accordance with the laws of India and the parties submit to the exclusive

jurisdiction of the courts in Mumbai and as more particularly provided for in the Debenture Trust Deed.

Note:

1. The list of documents which has been executed or will be executed in connection with the issue and

subscription of debt securities shall be annexed.

2. The penal interest rates mentioned above as payable by the Issuer are independent of each other.

3. While the debt securities are secured to the tune of 100% (One Hundred Percent) of the principal and

interest amount or as per the terms of offer document/ information Memorandum, in favour of

Debenture Trustee, it is the duty of the Debenture Trustee to monitor that the security is maintained,

however, the recovery of 100% (One Hundred Percent) of the amount shall depend on the market

scenario prevalent at the time of enforcement of the security.

Creation of Security: The Issuer shall give an undertaking in the Information Memorandum that

the assets on which charge is created are free from any encumbrances and in cases where the assets

are already charged to secure a debt, the permission or consent to create a second or pari-passu

charge on the assets of the issuer has been obtained from the earlier creditor

The Issuer hereby undertakes that the assets on which the first ranking exclusive charge is created by the

Issuer in favour of the Debenture Trustee to secure the obligations of the Issuer in relation to the

Debentures, under the terms of the Deed of Hypothecation, being the Hypothecated Assets, are free from

any encumbrances.



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SECTION 6: DISCLOSURES PERTAINING TO WILFUL DEFAULT

In case of listing of debt securities made on private placement, the following disclosures are required to

be made vide SEBI (Issue and Listing of Debt Securities) (Amendment) Regulations, 2016 w.e.f. 25-05-

16:

A. Name of the Bank declaring the entity as a Wilful Defaulter: NIL

B. The year in which the entity is declared as a Wilful Defaulter: NIL

C. Outstanding amount when the entity is declared as a Wilful Defaulter: NIL

D. Name of the entity declared as a Wilful Defaulter: NIL

E. Steps taken, if any, for the removal from the list of wilful defaulters: NIL

F. Other disclosures, as deemed fit by the Issuer in order to enable investors to take informed

decisions: NIL

G. Any other disclosure as specified by the Board: NIL



69

SECTION 7: TRANSACTION DOCUMENTS AND KEY TERMS

7.1. Transaction Documents

The following documents shall be executed in relation to the Issue (“Transaction Documents”):

A. Debenture Trustee Agreement, which will confirm the appointment of Catalyst Trusteeship Limited as the Debenture Trustee (“Debenture Trustee Agreement”);

B. Debenture Trust Deed, which will set out the terms upon which the Debentures are being issued

and shall include the representations and warranties and the covenants to be provided by the Issuer

(“Debenture Trust Deed”);

C. Deed of Hypothecation whereby the Issuer will create a first ranking exclusive and floating charge by way of hypothecation over the Hypothecated Assets in favour of the Debenture Trustee to

secure its obligations in respect of the Debentures (“Deed of Hypothecation”); and

D. Such other documents as agreed between the Issuer and the Debenture Trustee.

7.2. Representations and Warranties of the Issuer

The representations and warranties of the Issuer in respect of the Debentures shall be as set out under

Annexure I (Term sheet) below.

7.3. Covenants of the Issuer

The covenants of the Issuer in respect of the Debentures shall be as set out under the Annexure I

(Term Sheet) below.

7.4. Events of Default

The Events of Default in respect of the Debentures shall be as set out under the Annexure I (Term

Sheet) below.

7.5. Consequences of Events of Default

The Consequences of Events of Default in respect of the Debentures shall be as set out under the

Annexure I (Term Sheet) below.



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SECTION 8: OTHER INFORMATION AND APPLICATION PROCESS

The Debentures being offered as part of the Issue are subject to the provisions of the Act, the

Memorandum and Articles of Association of the Issuer, the terms of this Information Memorandum,

Application Form and other terms and conditions as may be incorporated in the Transaction Documents.

8.1. Mode of Transfer/Transmission of Debentures

The Debentures shall be transferable freely; however, it is clarified that no Investor shall be entitled to

transfer the Debentures to a person who is not entitled to subscribe to the Debentures. The Debenture(s)

shall be transferred and/or transmitted in accordance with the applicable provisions of the Act and other

applicable laws. The Debentures held in dematerialized form shall be transferred subject to and in

accordance with the rules/procedures as prescribed by NSDL and CDSL and the relevant DPs of the

transferor or transferee and any other applicable laws and rules notified in respect thereof. The

transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the

absence of the same, amounts due will be paid/redemption will be made to the person, whose name

appears in the register of debenture holders maintained by the R&T Agent as on the Record Date, under

all circumstances. In cases where the transfer formalities have not been completed by the transferor,

claims, if any, by the transferees would need to be settled with the transferor(s) and not with the Issuer.

The normal procedure followed for transfer of securities held in dematerialized form shall be followed

for transfer of these Debentures held in dematerialised form. The seller should give delivery instructions

containing details of the buyer’s DP account to his DP.

8.2. Debentures held in Dematerialised Form

The Debentures shall be held in dematerialised form and no action is required on the part of the Debenture

Holder(s) for redemption purposes and the redemption proceeds will be paid by cheque/fund

transfer/RTGS to those Debenture Holder(s) whose names appear on the list of beneficiaries maintained

by the R&T Agent. The names would be as per the R&T Agent’s records on the Record Date fixed for

the purpose of redemption. All such Debentures will be simultaneously redeemed through appropriate

corporate action.

The list of beneficiaries as of the Record Date setting out the relevant beneficiaries’ name and account

number, address, bank details and DP’s identification number will be given by the R&T Agent to the

Issuer. If permitted, the Issuer may transfer payments required to be made in any relation by EFT/RTGS

to the bank account of the Debenture Holder(s) for redemption payments.

8.3. Trustee for the Debenture Holder(s)

The Issuer has appointed Catalyst Trusteeship Limited to act as trustee for the Debenture Holder(s). The

Issuer and the Debenture Trustee intends to enter into the Debenture Trustee Agreement and the

Debenture Trust Deed inter alia, specifying the powers, authorities and obligations of the Debenture

Trustee and the Issuer. The Debenture Holder(s) shall, without further act or deed, be deemed to have

irrevocably given their consent to the Debenture Trustee or any of its agents or authorized officials to do

all such acts, deeds, matters and things in respect of or relating to the Debentures as the Debenture Trustee

may in its absolute discretion deem necessary or require to be done in the interest of the Debenture

Holder(s). Any payment made by the Issuer to the Debenture Trustee on behalf of the Debenture Holder(s)

shall discharge the Issuer pro tanto to the Debenture Holder(s). The Debenture Trustee will protect the

interest of the Debenture Holder(s) in regard to the repayment of principal and coupon thereon and they

will take necessary action, subject to and in accordance with the Debenture Trustee Agreement and the

Debenture Trust Deed, at the cost of the Issuer. No Debenture Holder shall be entitled to proceed directly

against the Issuer unless the Debenture Trustee, having become so bound to proceed, fails to do so. The



71

Debenture Trustee Agreement and the Debenture Trust Deed shall more specifically set out the rights and

remedies of the Debenture Holder(s) and the manner of enforcement thereof.

8.4. Sharing of Information

The Issuer may, at its option, but subject to applicable laws, use on its own, as well as exchange, share or

part with any financial or other information about the Debenture Holder(s) available with the Issuer, with

its subsidiaries and affiliates and other banks, financial institutions, credit bureaus, agencies, statutory

bodies, as may be required and neither the Issuer nor its subsidiaries and affiliates nor their agents shall

be liable for use of the aforesaid information.

8.5. Debenture Holder not a Shareholder

The Debenture Holder(s) shall not be entitled to any right and privileges of shareholders other than those

available to them under applicable laws. The Debentures shall not confer upon the Debenture Holders the

right to receive notice(s) or to attend and to vote at any general meeting(s) of the shareholders of the

Issuer.

8.6. Modification of Debentures

The Debenture Trustee and the Issuer will agree to make any modifications in the Information

Memorandum which in the opinion of the Debenture Trustee is of a formal, minor or technical nature or

is to correct a manifest error.

Any other change or modification to the terms of the Debentures shall require approval by the Majority

Debenture Holders (as defined under the Debenture Trust Deed) in the manner as provided for in the

Debenture Trust Deed.

For the avoidance of doubt, the following matters require the consent of Majority Debenture Holders,

either by providing their express consent in writing or by way of a resolution at a duly convened meeting

of the Debenture Holders:

A. Creating of any additional security; and

B. Amendment to the terms and conditions of the Debentures or the Transaction Documents.

8.7. Right to accept or reject Applications

The Board of Directors/Committee of Directors reserves its full, unqualified and absolute right to accept

or reject any application for subscription to the Debentures, in part or in full, without assigning any reason

thereof.

8.8. Notices

Any notice may be served by the Issuer/ Debenture Trustee upon the Debenture Holders through

registered post, recognized overnight courier service, hand delivery or by facsimile transmission

addressed to such Debenture Holder at its/his registered address, e-mail or facsimile number.

All notice(s) to be given by the Debenture Holder(s) to the Issuer/ Debenture Trustee shall be sent by

registered post, recognized overnight courier service, hand delivery, email or by facsimile transmission

to the Issuer or to such persons at such address/ facsimile number as may be notified by the Issuer from



72

time to time through suitable communication. All correspondence regarding the Debentures should be

marked “Private Placement of Debentures”.

Notice(s) shall be deemed to be effective (a) in the case of registered mail, 5 (Five) Business Days after

posting via certified or registered mail, return receipt requested; (b) 1 (One) Business Day after delivery

by recognized overnight courier service, if sent for next Business day delivery (c) in the case of facsimile

at the time when dispatched with a report confirming proper transmission; (d) in the case of personal

delivery, at the time of delivery or (e) or in case of e-mail at the time of the sending thereof (provided no

delivery failure notification is received by the sender within 24 hours of sending such email).

8.9. Issue Procedure

Only Eligible Investors as given hereunder and identified upfront by the Issuer may apply for the Debentures by completing the Application Form in the prescribed format in block letters in English as per

the instructions contained therein. The minimum number of Debentures that can be applied for and the

multiples thereof shall be set out in the Application Form. No application can be made for a fraction of a

Debenture. Application Forms should be duly completed in all respects and applications not completed in the said manner are liable to be rejected. The name of the applicant’s bank, type of account and account

number must be duly completed by the applicant. This is required for the applicant’s own safety and these

details will be printed on the refund orders and /or redemptions warrants. All payments in respect of the Debentures shall be made by the Issuer into the bank account so specified by the applicant.

The subscription to the Debentures shall be made by the Eligible Investors through the electronic book mechanism as prescribed by SEBI under the EBP Guidelines by placing bids on the EBP Platform during

the Issue period. In case the Eligible Investors are not registered on the EBP Platform, they will have to

register themselves as investor on the said platform (as a one time exercise) and also complete the

mandatory KYC verification process. The Eligible Investors should also refer to the operational guidelines of the EBP in this respect. The disclosures required pursuant to the EBP Guidelines are set out

hereinbelow:

Details of size of the Issue including green shoe option, if any

Rs. 25,00,00,000/- (Rupees Twenty Five Crores only).

Bid opening and closing date Bid opening date: November 18, 2020; and Bid closing date: November 18, 2020

Minimum Bid lot Rs. 1,00,00,000/- (Rupees One Crore only) and in the multiples of 1 (One) Debenture thereafter i.e. Rs.

10,00,000/- (Rupees Ten Lakh only). Manner of bidding in the Issue Closed Bidding Manner of allotment in the Issue Uniform Yield Manner of settlement in the Issue Pay-in of funds through ICCL. Settlement cycle T+1,

where T refers to the date of bid opening date / issue

opening date

Process flow of settlement:

Eligible Investors whose bids have been accepted by the Issuer and to whom a signed copy of this

Information Memorandum along with the Private Placement Offer Letter have been issued by the Issuer

and who have submitted/shall submit the application form (“Successful Bidders”), shall make pay-in of subscription monies in respect of the Debentures towards the allocation made to them, into the bank

account of the ICCL, the details of which are as set out below, on the Deemed Date of Allotment:

Name of Bank HDFC BANK

IFSC Code HDFC0000060



73


Name of beneficiary INDIAN CLEARING CORPORATION LIMITED

Name of Bank ICICI Bank Ltd. IFSC Code ICIC0000106



Name of Bank YES BANK

IFSC Code YESB0CMSNOC



The pay-in by the Successful Bidders will be made only from the bank account(s), which have been provided / updated by them in the EBP system. Any amount received from third party accounts or from

accounts not specified in the EBP system will be refunded and no allotment will be made against such

payments. Upon the transfer of funds into the aforesaid account of ICCL and the Issuer confirming its decision to proceed with the allotment of the Debentures in favour of the Successful Bidders to the ICCL,

the R&T Agent and the EBP and initiating the requisite corporate action for allotment of Debentures and

credit of the demat letter of allotment into the relevant demat account of the Successful Bidders through

the R&T Agent, the R&T Agent shall provide corporate action file along with all requisite documents to the Depositories by 12:00 hours and also intimate the EBP of the aforesaid actions. Upon the Depositories

confirming the allotment of the Debentures and the credit of the Debentures into the demat account of the

Successful Bidders to EBP, the subscription monies in respect of the Debentures from the aforesaid account of ICCL shall be released into the Issuer’s bank account, the details of which are as set out below:

Beneficiary Name FUSION MICRO FINANCE PRIVATE LIMITED

Bank Account No. 912020014420522

SWIFT Code AXISINBB791

IFSC Code UTIB0000791

Bank Name Axis Bank Limited

Branch Address SCO 50 & 51, OLD Judicial Complex Civil Lines Sector 15, Gurgaon

122001

It must be noted that all funds pay-in obligations need to be fulfilled in totality. Partial fund receipt against

any given obligation will be treated as a default and debarment penalties will be applicable as specified

by the EBP Guidelines.

8.10. Application Procedure

Potential Investors will be invited to subscribe by way of the Application Form prescribed in the

Information Memorandum during the period between the Issue Opening Date and the Issue Closing Date (both dates inclusive). Subject to the EBP Guidelines, the Issuer reserves the right to change the issue

schedule including the Deemed Date of Allotment at its sole discretion, without giving any reasons. The

Issue will be open for subscription during the banking hours on each day during the period covered by the Issue Schedule.

8.11. Fictitious Application

All fictitious applications will be rejected.

8.12. Basis of Allotment



74

Notwithstanding anything stated elsewhere, Issuer reserves the right to accept or reject any application,

in part or in full, without assigning any reason. Subject to the aforesaid, in case of over subscription, allotment shall be made on a “yield-time” priority basis in accordance with the EBP Guidelines. The

investors will be required to remit the funds as well as submit the duly completed Application Form along

with other necessary documents to Issuer by the Deemed Date of Allotment.

8.13. Payment Instructions

The pay-in of subscription monies in respect of the Debentures by the Successful Bidder shall be made

in accordance with the procedure set out in Clause 8.9 above.

8.14. Eligible Investors

The following categories of Investors, who have been specifically approached and have been identified

upfront, are eligible to apply for this private placement of Debentures subject to fulfilling their respective

investment norms/rules and compliance with laws applicable to them by submitting all the relevant

documents along with the Application Form:

A. Mutual Funds

B. Non-banking financial companies

C. Provident Funds and Pension Funds

D. Corporates

E. Banks

F. Foreign Portfolio Investors (FPIs)

G. Foreign Institutional Investors (FIIs)

H. Qualified Foreign Investors (QFIs)

I. Insurance Companies

J. Investment holding companies of high net worth individuals

K. Any other person (not being an individual or a group of individuals) eligible to invest in the

Debentures

All potential Investors are required to comply with the relevant regulations/guidelines applicable to them

for investing in this issue of Debentures and the Issuer, is not in any way, directly or indirectly, responsible

for any statutory or regulatory breaches by any investor, neither is the Issuer required to check or confirm

the same.

Hosting of the Information Memorandum on the website of the BSE / NSE should not be construed as an

offer or an invitation to offer to subscribe to the Debentures and the same has been hosted only as it is

stipulated under the SEBI Debt Listing Regulations read with the EBP Guidelines. Eligible Investors

should check their eligibility before making any investment.

All potential Investors are required to comply with the relevant regulations/guidelines applicable to them

for investing in this issue of Debentures.

Note: Participation by potential Investors in the Issue may be subject to statutory and/or regulatory

requirements applicable to them in connection with subscription to Indian securities by such categories

of persons or entities. Applicants are advised to ensure that they comply with all regulatory requirements

applicable to them, including exchange controls and other requirements. Applicants ought to seek

independent legal and regulatory advice in relation to the laws applicable to them.



75

8.15. Procedure for Applying for Dematerialised Facility

A. The applicant must have at least one beneficiary account with any of the DPs of NSDL and CDSL

prior to making the application.

B. The applicant must necessarily fill in the details (including the beneficiary account number and

DP - ID) appearing in the Application Form under the heading “Details for Issue of Debentures

in Electronic/Dematerialised Form”.

C. Debentures allotted to an applicant will be credited to the applicant’s respective beneficiary

account(s) with the DP.

D. For subscribing to the Debentures, names in the Application Form should be identical to those

appearing in the details in the Depository. In case of joint holders, the names should necessarily

be in the same sequence as they appear in the account details maintained with the DP.

E. Non-transferable allotment advice/refund orders will be directly sent to the applicant by the

Registrar and Transfer Agent to the Issue.

F. If incomplete/incorrect details are given under the heading “Details for Issue of Debentures in

Electronic/Dematerialised Form” in the Application Form, it will be deemed to be an incomplete

application and the same may be held liable for rejection at the sole discretion of the Issuer.

G. For allotment of Debentures, the address, nomination details and other details of the applicant as

registered with his/her DP shall be used for all correspondence with the applicant. The applicant

is therefore responsible for the correctness of his/her demographic details given in the Application

Form vis-a-vis those with his/her DP. In case the information is incorrect or insufficient, the Issuer

would not be liable for the losses, if any.

H. The redemption amount or other benefits would be paid to those Debenture Holders whose names

appear on the list of beneficial owners maintained by the R&T Agent as on the Record Date. In

case of those Debentures for which the beneficial owner is not identified in the records of the

R&T Agent as on the Record Date, the Issuer would keep in abeyance the payment of the

redemption amount or other benefits, until such time that the beneficial owner is identified by the

R&T Agent and conveyed to the Issuer, whereupon the redemption amount and benefits will be

paid to the beneficiaries, as identified.

8.16. Depository Arrangements

The Issuer shall make necessary arrangement with NSDL and CDSL for issue and holding of Debenture

in dematerialised form.

8.17. List of Beneficiaries

The Issuer shall request the R&T Agent to provide a list of beneficiaries as at the end of each Record

Date. This shall be the list, which will be used for payment or repayment of redemption monies.

8.18. Application under Power of Attorney

A certified true copy of the power of attorney or the relevant authority as the case may be along with the

names and specimen signature(s) of all the authorized signatories of the Investor and the tax exemption



76

certificate/document of the Investor, if any, must be lodged along with the submission of the completed

Application Form. Further modifications/additions in the power of attorney or authority should be notified

to the Issuer or to its agents or to such other person(s) at such other address(es) as may be specified by

the Issuer from time to time through a suitable communication.

In case of an application made by companies under a power of attorney or resolution or authority, a

certified true copy thereof along with memorandum and articles of association and/or bye-laws along with

other constitutional documents must be attached to the Application Form at the time of making the

application, failing which, the Issuer reserves the full, unqualified and absolute right to accept or reject

any application in whole or in part and in either case without assigning any reason thereto. Names and

specimen signatures of all the authorized signatories must also be lodged along with the submission of

the completed Application Form.

8.19. Procedure for application by Mutual Funds and Multiple Applications

In case of applications by mutual funds and venture capital funds, a separate application must be made in

respect of each scheme of an Indian mutual fund/venture capital fund registered with the SEBI and such

applications will not be treated as multiple application, provided that the application made by the asset

management company/trustee/custodian clearly indicated their intention as to the scheme for which the

application has been made.

The application forms duly filled shall clearly indicate the name of the concerned scheme for which

application is being made and must be accompanied by certified true copies of

A. SEBI registration certificate

B. Resolution authorizing investment and containing operating instructions

C. Specimen signature of authorized signatories

8.20. Documents to be provided by Investors

Investors need to submit the following documents, as applicable

A. Memorandum and Articles of Association or other constitutional documents

B. Resolution authorising investment

C. Power of Attorney to custodian

D. Specimen signatures of the authorised signatories

E. SEBI registration certificate (for Mutual Funds)

F. Copy of PAN card

G. Application Form (including EFT/RTGS details)

8.21. Applications to be accompanied with Bank Account Details

Every application shall be required to be accompanied by the bank account details of the applicant and

the magnetic ink character reader code of the bank for the purpose of availing direct credit of redemption

amount and all other amounts payable to the Debenture Holder(s) through EFT/RTGS.

8.22. Succession

In the event of winding-up of the holder of the Debenture(s), the Issuer will recognize the liquidator or

such other legal representative of the Debenture Holder(s) as having title to the Debenture(s).



77

The Issuer may, in its absolute discretion, where it thinks fit, dispense with production of such other legal

representation, in order to recognize such holder as being entitled to the Debenture(s) standing in the name

of the concerned Debenture Holder on production of sufficient documentary proof and/or an indemnity.

8.23. Mode of Payment

All payments must be made through EFT/RTGS as set out in the Application Form.

8.24. Effect of Holidays

If the date of payment of Coupon Rate / redemption of principal amount of the Debentures does not fall

on a Business Day, the payment of Coupon Rate / principal amount of the Debentures shall be made in accordance with SEBI Circular CIR/IMD/DF-1/122/2016 dated November 11, 2016.

If any of the Coupon Payment Date(s) falls on a day that is not a Business Day, the payment shall be made by the Issuer on the immediately succeeding Business Day, which becomes the Coupon

Payment Date for that coupon.

If the date of payment of any redemption amount under Debentures falls on a day that is not a

Business Day, such payment shall be made by the Issuer on the immediately preceding Business

Day.

If the Maturity Date or the Early Redemption Date (being a date on which the Debentures are

redeemed prior to the Maturity Date in terms of the Transaction Documents) as the case may be,

falls on a day that is not a Business Day, such payment of Coupon and Redemption Amount shall be made on the immediately preceding Business Day.

8.25. Tax Deduction at Source

Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment

thereof will be deducted at source by the Company. For seeking TDS exemption/lower rate of TDS,

relevant certificate/document must be lodged by the Debenture Holder(s) at the office of the R&T Agents

of the Issuer at least 15 (Fifteen) calendar days before the relevant payment becoming due. Tax exemption

certificate / declaration of non-deduction of tax at source on interest on Application Money, should be

submitted along with the Application Form.

If any payments under this issuance is subject to any tax deduction other than such amounts as are required

as per current regulations existing as on the date of the Debenture Trust Deed), including if the Company

shall be required legally to make any payment for tax from the interest/coupon payable under the Issue,

(“Tax Deduction”), the Company shall make such Tax Deduction, and shall simultaneously pay to the

Debenture Holders, such additional amounts as may be necessary in order that the net amounts received

by the Debenture Holders after the Tax Deduction shall equal the respective amounts which would have

been receivable by the Debenture Holders in the absence of such Tax Deduction.

8.26. Letters of Allotment

The letter of allotment, indicating allotment of the Debentures, will be credited in dematerialised form

within 2 (Two) Business Days from the Deemed Date of Allotment. The aforesaid letter of allotment shall

be replaced with the actual credit of Debentures, in dematerialised form, within a maximum of 3 (Three)

Business Days from the Deemed Date of Allotment.

8.27. Deemed Date of Allotment



78

All the benefits under the Debentures will accrue to the Investor from the specified Deemed Date of

Allotment. The Deemed Date of Allotment for the Issue is November 19, 2020 by which date the Investors

would be intimated of allotment.

8.28. Record Date

The date which will be used for determining the Debenture Holders who shall be entitled to receive

the amounts due on any Due Date in relation to the Debentures, which shall be the date falling 3

(Three) Business Days prior to any Due Date.

8.29. Refunds

For applicants whose applications have been rejected or allotted in part, refund orders will be dispatched

within 7 (seven) days from the Deemed Date of Allotment of the Debentures.

In case the Issuer has received money from applicants for Debentures in excess of the aggregate of the

application money relating to the Debentures in respect of which allotments have been made, the R&T

Agent shall upon receiving instructions in relation to the same from the Issuer repay the moneys to the

extent of such excess, if any.

8.30. Interest on Application Money

Interest shall be payable on the application monies received at the Coupon Rate of 10.50% (Ten Decimal

Point Five Zero Percent) per annum (subject to deduction of tax at source, as applicable) from the date of

realization of cheque (s)/ demand draft(s)/ RTGS up to one day prior to the Deemed Date of Allotment.

Where Pay-in Date and Deemed Date of Allotment are the same, no interest on Application Money is to

be paid.

8.31. PAN Number

Every applicant should mention its Permanent Account Number (“PAN”) allotted under Income Tax Act,

1961, on the Application Form and attach a self-attested copy as evidence. Application forms without

PAN will be considered incomplete and are liable to be rejected.

8.32. Payment on Redemption

Payment on redemption will be made by way of cheque(s)/redemption warrant(s)/demand draft(s)/credit

through RTGS system/funds transfer in the name of the Debenture Holder(s) whose names appear on the

list of beneficial owners given by the Depository to the Issuer as on the Record Date.

The Debentures shall be taken as discharged on payment of the redemption amount by the Issuer on

maturity to the registered Debenture Holder(s) whose name appears in the Register of Debenture

Holder(s) on the Record Date. On such payment being made, the Issuer will inform NSDL and CSDL and

accordingly the account of the Debenture Holder(s) with NSDL and CDSL will be adjusted.

On the Issuer dispatching the amount as specified above in respect of the Debentures, the liability of the

Issuer shall stand extinguished.

Disclaimer: Please note that only those persons to whom this Information Memorandum has been

specifically addressed are eligible to apply. However, an application, even if complete in all respects,



79

is liable to be rejected without assigning any reason for the same. The list of documents provided

above is only indicative, and an investor is required to provide all those documents / authorizations

/ information, which are likely to be required by the Issuer. The Issuer may, but is not bound to

revert to any investor for any additional documents / information, and can accept or reject an

application as it deems fit. Investment by investors falling in the categories mentioned above are

merely indicative and the Issuer does not warrant that they are permitted to invest as per extant

laws, regulations, etc. Each of the above categories of investors is required to check and comply

with extant rules/regulations/ guidelines, etc. governing or regulating their investments as

applicable to them and the Issuer is not, in any way, directly or indirectly, responsible for any

statutory or regulatory breaches by any investor, neither is the Issuer required to check or confirm

the same.



80

SECTION 9: DECLARATION

The Issuer declares that all the relevant provisions in the regulations/guideline issued by SEBI and

other applicable laws have been complied with and no statement made in this Information

Memorandum is contrary to the provisions of the regulations/guidelines issued by SEBI and other

applicable laws, as the case may be. The information contained in this Information Memorandum is

as applicable to privately placed debt securities and subject to information available with the Issuer.

The extent of disclosures made in the Information Memorandum is consistent with disclosures

permitted by regulatory authorities to the issue of securities made by the companies in the past.

For Fusion Micro Finance Private Limited

_____________________

Deepak Madaan

Company Secretary

Date: November 18, 2020



81

DECLARATION (To be provided by the Directors)

A. The Issuer has complied with the provisions of the Companies Act, 2013 and the rules made

hereunder;

B. The compliance with the Companies Act, 2013 and the rules made thereunder do not imply that

payment of dividend or interest or repayment of the Debentures, if applicable, is guaranteed by the

Central Government; and

C. the monies received under the offer shall be used only for the purposes and objects indicated in this

Information Memorandum.

I am authorized by the Board of Directors of the Issuer vide resolution dated November 09, 2020, to sign

this Information Memorandum and declare that all the requirements of Companies Act, 2013 and the rules

made thereunder in respect of the subject matter of this form and matters incidental thereto have been

complied with.

Whatever is stated in this Information Memorandum and in the attachments thereto is true, correct and

complete and no information material to the subject matter of this Information Memorandum has been

suppressed or concealed and is as per the original records maintained by the promoters subscribing to the

Memorandum of Association and Articles of Association.

It is further declared and verified that all the required attachments have been completely, correctly and

legibly attached to this Information Memorandum.

For Fusion Microfinance Private Limited

_________________________

Authorised Signatory

Name: Mr. Devesh Sachdev

Title: MD & CEO

Date: November 18, 2020



82

ANNEXURE I: TERM SHEET

ATTACHED



83

ANNEXURE II: RATING LETTER FROM THE RATING AGENCY



84



85



86



87



88

ANNEXURE III: CONSENT LETTER FROM THE DEBENTURE TRUSTEE



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ANNEXURE IV: APPLICATION FORM

FUSION MICROFINANCE PRIVATE LIMITED

CIN: U65100DL1994PTC061287

A private limited company incorporated under the Companies Act, 1956

Date of Incorporation: September 05, 1994

Registered Office: H-1, Block C, Community Centre, Naraina Vihar, Near Gurudwara, New Delhi, 110028

Telephone No.: +91 – 011 46646600

Website: http://www.fusionmicrofinance.com/

DEBENTURE SERIES APPLICATION FORM SERIAL NO. 1 5 / 2 0 2 0 - 2 1

ISSUE OF 250 (TWO HUNDRED AND FIFTY) SECURED, RATED, LISTED, REDEEMABLE,

TAXABLE, TRANSFERABLE NON-CONVERTIBLE DEBENTURES OF FACE VALUE OF

RS. 10,00,000/- (RUPEES TEN LAKHS ONLY) EACH, AGGREGATING UP TO RS.

25,00,00,000/- (RUPEES TWENTY-FIVE CRORES ONLY) ON A PRIVATE PLACEMENT

BASIS (THE “ISSUE”).

DEBENTURE SERIES APPLIED FOR:

Number of Debentures ________ In words ____________________________________________

Amount Rs. _____________________/-_ in words Rupees ____________________________________

__________________________________________________Crores only

DETAILS OF PAYMENT:

RTGS

No. _____________ Drawn on_____________________________________________

Funds transferred to Fusion Micro Finance Private Limited

Dated ____________

Total Amount Enclosed

(In Figures) _____________ (In words) ______________________________________

APPLICANT’S NAME IN FULL (CAPITALS) SPECIMEN SIGNATURE



90

APPLICANT’S ADDRESS

ADDRESS

STREET

CITY

PIN PHONE FAX

APPLICANT’S PAN/GIR NO. ___________________IT CIRCLE/WARD/DISTRICT ____

WE ARE ( ) COMPANY ( ) OTHERS ( ) SPECIFY __________

We have read and understood the Terms and Conditions of the issue of Debentures including the Risk

Factors described in the Memorandum and have considered these in making our decision to apply. We

bind ourselves to these Terms and Conditions and wish to apply for allotment of these Debentures. We

request you to please place our name(s) on the Register of Holders.

Name of the Authorised

Signatory(ies)

Designation Signature

Applicant’s

Signature

We the undersigned, are agreeable to holding the Debentures of the Company in dematerialised form.

Details of my/our Beneficial Owner Account are given below:

DEPOSITORY NSDL ( ) CDSL ( )

DEPOSITORY PARTICIPANT NAME

DP-ID

BENEFICIARY ACCOUNT NUMBER

NAME OF THE APPLICANT(S)

Applicant Bank Account:

(Settlement by way of Cheque / Demand

Draft / Pay Order / Direct Credit / ECS /

NEFT/RTGS/other permitted mechanisms)

FOR OFFICE USE ONLY

DATE OF RECEIPT ________________ DATE OF CLEARANCE ________________



91

(Note: Cheque and Drafts are subject to realisation)

We understand and confirm that the information provided in the Information Memorandum is provided

by the Issuer and the same has not been verified by any legal advisors to the Issuer and other intermediaries

and their agents and advisors associated with this Issue. We confirm that we have for the purpose of

investing in these Debentures carried out our own due diligence and made our own decisions with respect

to investment in these Debentures and have not relied on any representations made by anyone other than

the Issuer, if any.

The Issuer understands and accepts that the Applicants' intention to subscribe to the Issue is subject to (i)

the absence of material adverse changes in the availability of currency hedging accessible to it between

the Issue Opening Date and the Pay-in Date and/or (ii) the hedging price being acceptable to the

Applicants.

We understand that: i) in case of allotment of Debentures to us, our Beneficiary Account as mentioned

above would get credited to the extent of allotted Debentures, ii) the Applicant must ensure that the

sequence of names as mentioned in the Application Form matches the sequence of name held with our

Depository Participant, iii) if the names of the Applicant in this application are not identical and also not

in the same order as the Beneficiary Account details with the above mentioned Depository Participant or

if the Debentures cannot be credited to our Beneficiary Account for any reason whatsoever, the Company

shall be entitled at its sole discretion to reject the application or issue the Debentures in physical form.

We understand that we are assuming on our own account, all risk of loss that may occur or be suffered by

us including as to the returns on and/or the sale value of the Debentures. We undertake that upon sale or

transfer to subsequent investor or transferee (“Transferee”), we shall convey all the terms and conditions

contained herein and in this Information Memorandum to such Transferee. In the event of any Transferee

(including any intermediate or final holder of the Debentures) suing the Issuer (or any person acting on

its or their behalf) we shall indemnify the Issuer and also hold the Issuer harmless in respect of any claim

by any Transferee.

Applicant’s

Signature

FOR OFFICE USE ONLY

DATE OF RECEIPT ______________________ DATE OF CLEARANCE _________________

(Note : Cheque and Drafts are subject to realisation)

-------------------------------------------------(TEAR HERE)--------------------------------------------

- ACKNOWLEDGMENT SLIP -

(To be filled in by Applicant) SERIAL NO. 1 5 / 2 0 2 0 - 2 1

Received from _______________________________________________

Address________________________________________________________________

______________________________________________________________________

Cheque/Draft/UTR # ______________ Drawn on _______________________________ for

Rs. _____________ on account of application of _____________________ Debenture



92

ANNEXURE V: FINANCIAL STATEMENTS



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95



96



97



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99



100



101



102



103



104

ANNEXURE VI: ILLUSTRATION OF BOND CASH FLOWS FOR THE DEBENTURES

Illustration of Bond Cash Flows

Company Fusion Micro Finance Private Limited

Face Value (per security) Rs. 10,00,000/- (Rupees Ten Lakhs only)

Issue Date / Date of Allotment Issue Opening Date: November 18, 2020

Deemed Date of Allotment: November 19, 2020

Maturity Date May 19, 2022

Coupon Rate 10.50% (Ten Decimal Point Five Zero Percent) per annum

(computed on a simple interest basis).

Frequency of the Coupon Payment with

specified dates

Coupon payable quarterly.

First Coupon on February 19, 2021, and subsequently on February

19, May 19, August 19 and November 19 of every calendar year

until the Maturity Date (subject to adjustments for Business Day

Convention).

Day Count Convention Actual / Actual

Cash Flows Coupon / Principal

Accrual Date

Coupon / Principal

Payment Date

No. of

days in

Coupon

Period

Coupon

Amount (in

Rupees) per

Debenture

Principal Amount

(in Rupees)

Issue amount 25,00,00,000

1st Coupon February 19, 2021 February 19, 2021 92 26,466

2nd Coupon May 19, 2021 May 19, 2021 89 25,603

3rd Coupon August 19, 2021 August 19, 2021 92 26,466

4th Coupon November 19, 2021 November 19, 2021 92 26,466

5th Coupon February 19, 2022 February 19, 2022 92 26,466

6th Coupon May 19, 2022 May 19, 2022 89 25,603

Principal May 19, 2022 May 19, 2022 25,00,00,000

Total 25,00,00,000

* After adjusting for Non-Business Days.

Indicative Term Sheet

Borrower / Company / Issuer

Fusion Microfinance Private Limited

Debenture Trustee Catalyst Trusteeship Limited NCDs / Debentures / Facility

Rated, Listed, Senior, Secured, Redeemable, Non-Convertible Debentures (“NCDs” or “Debentures”)

Series End use Issue proceed will be utilized for following purposes:

For deployment in business & growth of asset book by on-lending

General Corporate Purpose for ordinary course of business No part of the proceeds would be utilized directly / indirectly towards equity capital markets or land acquisition or usages as restricted under bank finance

Rating ICRA A- Tenor / Final Redemption Date

18 Months from the Deemed Date of Allotment

Amount INR 25.0 crores (Rupees Twenty Five Crores Only) Issuance Schedule

Issue Open Date November 18, 2020 Issue Close Date November 18, 2020 Pay-in Date November 19, 2020 Deemed Date of Allotment November 19, 2020

Interest Rate 10.50% p.a.p.q. (all Inclusive) Interest Type Fixed Interest Payment Frequency

Quarterly

Amortization Frequency

Bullet

Issue Price At Par

Face Value per bond Rs 10,00,000/-

Minimum Subscription Amount

Rs 1,00,00,000/-

Listing The NCDs issued under this document are proposed to be listed on the BSE / NSE In case the Debentures are not listed within 20 days of Deemed Date of Allotment for any reason whatsoever, the Issuer shall pay penal interest of atleast 1% p.a over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of such Debentures to the Investors

Depository National Securities Depository Ltd. (NSDL) /CDSL

Business Day Convention

i) ‘Business Day’ shall be a day on which commercial banks are open for business in the city of Mumbai and Delhi. Should any of dates defined above or elsewhere in the Disclosure Document, excepting the Date of Allotment, fall on a Sunday or a Public Holiday in Mumbai / New Delhi, payment shall be done as per SEBI circular.

ii) If the date of payment of any interest in respect of the Debentures falls on a day that is not a Business Day, such payment of interest shall be made on the next occurring Business Day;

iii) If the date of payment of any redemption amount falls on a day that is not a Business Day, such payment of installment shall be made on the immediately preceding Business Day; and

iv) If the Final Redemption Date or the Early Redemption Date (the date on which the Debentures are redeemed prior to the Final Redemption Date in terms of the Transaction Documents), as the case may be,

falls on a day that is not a Business Day, such payment of interest and redemption amount shall be made on the immediately preceding Business Day.

Record Date 3 Business Days prior to each coupon payment date and redemption date.

Default Interest Rate In case of default in payment of interest and/or principal redemption on the due dates, additional interest @ 2% p.a. over the Interest Rate will be payable by the Company for the defaulting period.

Redemption Amount The sum of the outstanding amounts in the Debentures, accrued Coupon, Default Rate payable (if any) and other charges and fees payable.

Step Up / Step Down Coupon Rate

In case of downgrade in external credit rating of the NCDs, the Coupon Rate for the balance period would increase 0.25% p.a. for each notch downgrade in rating until BBB- and 0.50% p.a. thereafter, and the same will be with effect from the rating downgrade date.

Early Redemption The Debentures along with accrued interest shall become due and payable days upon the occurrence of the following:

1. Breach of any covenants remaining uncured or otherwise as specified in the Debenture Trust Deed

2. Withdrawal / Suspension of long term rating of the instrument 3. In the event of there being any material adverse effect in the

business, condition (financial or otherwise), operations, performance or prospects of the company due to any pending or threatened litigation, charges, investigation or proceedings that may or can have an adverse effect on the business condition (financial or otherwise), operations, performance or prospects of the company, that affects the payment of outstanding on the NCDs to the Debentures holders in any manner, and after the Company has been provided 30 (thirty) calendar days to amend the situation or as specified in the Debenture Trust Deed

Any of the Debenture Holders shall have the option to require the Company to redeem the Debentures (“Early Redemption Option”) on happening of any of the Early Redemption Events. Upon the exercise of the Early Redemption Option by the Debenture Holders, the Debenture Trustee shall issue a notice to the Company for redemption of all amounts outstanding in relation to the Debentures (including any unpaid principal, accrued but unpaid Coupon, Default Interest (if applicable)) as on the date of exercise of the Early Redemption Option (“Early Redemption Date”). The Company shall be required to make payment of the aggregate amounts outstanding in relation to the Debentures, including any unpaid Principal Amount, accrued but unpaid Coupon, Default Interest (if applicable) and liquidated damages (if applicable) within 30 business days of the Early Redemption Date.

Security The outstanding Facility amount, together with interest, YTM Adjustment Amount, default interest, remuneration of the Trustee, charges, fees, expenses and all other monies due from the Company, shall be secured by (to the satisfaction of the NCD holders):

1. Security cover to be 1.10x

2. All the extant "know your customer" norms specified by the RBI must have been complied with for each hypothecated loans;

3. Type of charge - Floating charge on the Company’s Receivables

4. All loans hypothecated under the deed of hypothecation comply with RBI norms and guidelines

Security Cover of 1.10 times to be maintained on the outstanding principal amount of the Debentures at all times during the tenure of the Facility. The Issuer undertakes:

to maintain the value of Security Cover at all times during the period of the Issue;

to create, register and perfect the security over the Company’s Receivables as contemplated above as on the Deemed Date of Allotment by executing a duly stamped Deed of Hypothecation and filing Form 10 with the concerned ROC in relation thereto as soon as practicable and no later than thirty (30) calendar days of the date of execution of the Company’s Receivables;

The charge over the Company’s Receivables is to be created within 90 (ninety) days of the Deemed Date of Allotment. In the event the Security is not created or has insufficiently created, the proceeds from the Issue are to be placed in an escrow account until the creation of security.

to provide a list of specific loan receivables to the Trustee over which charge is created and subsisting by way of hypothecation in favour of the Trustee (for the benefit of the Debenture Holders) and sufficient to maintain the security cover on monthly basis within the 15th day of every calendar month

Security Cover shall be met only with Receivables that does not have any principal, interest, additional interest, fee or any other expected payments overdue (“Performing Loans”) and for this purpose the Borrower shall with the consent of the Lender replace any Receivables constituting the Hypothecated Property that has one or more instalments of principal, interest, additional interest, fee or any other expected payments overdue for more than 60 (sixty) days with Performing Loans that meets the Eligibility Criteria. Such replacement shall be done on or before the 15th of any calendar month.

Eligibility Criteria/Portfolio Origination

Loans constituting the Hypothecated Property must be originated on the basis of criteria specified below:

Loans must be unencumbered (other than under the Facility

Documents) and not sold or assigned by the Borrower Loans must have been originated while complying with all the extant

‘know your customer’ norms specified by the RBI. Loans are current and not in overdue at the time of inclusion in the

Hypothecated Property and have not been terminated or prepaid. Each client loans must satisfy the Borrower’s credit and underwriting policies including credit referencing agency checks where commonly used

Security Creation Security to be created within 30 days of the Deemed Date of Allotment. In the event of delay in security creation, issuer shall pay penal interest of 2% per annum over the coupon rate for the delayed period till such conditions are complied.

In case security cover fall below the required cover, the issuer to pay 0.5% additional interest over XIRR for the period till the security cover is restored back to the requisite levels

Interest on Application Money

Interest at the coupon rate (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) will be paid to the applicants on the application money for the Debentures for the period starting from and including the date of realization of application money in Issuer’s Bank Account upto one day prior to the Deemed Date of Allotment Where Pay-in Date and Deemed date of Allotment are the same, no interest on Application money is to be paid

Transaction Documents

The Issuer has executed/ shall execute the documents including but not limited to the following, as required, in connection with the Issue as per latest SEBI guidelines/ Companies Act 2013 for issuance of NCDs through Private Placement: 1. Security documents 2. Letter appointing Trustees to the Debenture Holders; 3. Debenture Trusteeship Agreement; 4. Debenture Trust Deed; 5. Rating Agreement with the aforesaid rating agency(ies) as regards

to this Issue 6. Tripartite Agreement between the Issuer; Registrar and NSDL for

issue of Bonds in dematerialized form; 7. Listing Agreement with BSE;

Conditions Precedent Customary to facilities of this nature, including but not limited to: Compliance with all the regulatory guidelines. A certified true copy of the constitutional documents of the Company

(being its Memorandum and Articles of Association and Certificate of Incorporation) shall have been submitted to the Debenture Trustee

All corporate approvals from the Board of Directors and shareholders of the Company, if applicable, shall have been received for the issuance of the NCDs, creation of the Security and the execution, delivery and performance by the Company of the Transaction Documents in accordance with the Companies Act, 2013, the Companies (Prospectus and Allotment of Securities) Rules, 2014, the Companies (Share Capital and Debentures) Rules, 2014 and other rules prescribed;

Execution of the Debenture Trustee Agreement and Debenture Trust Deed, in a form and manner satisfactory to the Debenture Trustee shall have taken place;

The Company shall have created the security in respect of the NCDs, which shall entail including without limitation payment of requisite stamp duty on this Deed and the other Transaction Documents, as may be required under the Applicable Laws. However, filing of Form CHG 9 pursuant to Rule 3 of Companies (Registration of Charges) Rules, 2014 with the concerned Registrar of Companies can be done within 30 days from the Pay In Date.

Rating of the Debentures being completed and the rating agency having provided a minimum rating of ‘A-’ for the Debentures and the rating letter issued by the Rating Agency being in a form and manner satisfactory to the Debenture Trustee;

The Company shall covenant in the Transaction Document that:- a) the Company and its Directors have the necessary powers

under the Memorandum and Articles of Association of the Company to borrow moneys pursuant to the issuance of the Debentures;

b) the borrowing of moneys pursuant to the issuance of the Debentures and the creation of Security will not cause any limit binding on the Company to be exceeded;

c) no Material Adverse Effect has occurred in the Company, and/or the business of the Company;

d) the Company has obtained all necessary consents and approvals, if applicable, from including but not limited to its creditors, secured or unsecured, for the issuance of the Debentures and creation of Security shall have been delivered in a form and manner satisfactory to the Debenture Trustee;

e) all representations and warranties contained in this Deed are true and correct in all material respects on and as of the Deemed Date of Allotment

f) non–occurrence of any force majeure event; and g) the Debenture Trustee shall have received from the Company

its audited account statements for the financial year ended 31st March 2020.

Due execution of the Depository Agreements by, inter-alia, the Depository and the Issuer;

Due execution of the Tripartite Agreement by, inter-alia, the Registrar and Transfer Agent, Depository and the Issuer;

The Debenture Trustee shall have received satisfactory reports from CIBIL in respect of the Company;

The Company shall have submitted to the Debenture Holders / Debenture Trustee, all required documents for the purpose of satisfying its respective KYC requirements;

No Event of Default or reasonably to the knowledge of the issuer potential Event of Default has occurred and is continuing, or would result from such advances; and

Execution of transaction documents in form and manner mutually acceptable to Investor & Issuer.

Conditions Subsequent

The Issuer shall ensure that the following documents are executed/ activities are completed as per time frame mentioned elsewhere in this Document:

(a) The Issuer shall immediately on receipt of funds, take on all necessary steps to, including making all applicable filings in the Registrar of Companies and obtaining all necessary approvals including filing Form PAS 5 along with the Information Memorandum and Form PAS 3 along with requisite fee within prescribed timelines;

(b) File Form PAS 5 along with the Information Memorandum with SEBI;

(c) Receive final listing approval from BSE within 20 calendar days from Deemed Date of Allotment;

(d) Credit of demat account(s) of the allottee(s) by number of NCDs allotted within 3 Business days from the Deemed Date of Allotment;

(e) To ensure compliance with SEBI/ Companies Act 2013 for issuance of NCDs

(f) Shareholders resolutions approving the issuance of NCD and current borrowing limit obtained within the timelines stipulated as per Companies Act 2013.

(g) Any others as required by the Debenture Trustee in the Transaction Documents.

Acceleration of Redemption/ Events of Default

The occurrence of any one of the following events shall constitute an “Event of Default” by the Company, each subject to any cure period as may be specified in the Debenture Trust Deed:

(a) Failure to pay any amount due in respect of Debentures including any installment of interest (including penal interest, if applicable) or the principal amount of the Debentures, any other

monies including costs, charges, expenses incurred by the Trustee, as and when the same shall have become due and payable by the Company’s;

(b) Any information given by the Company’s in the Information Memorandum, the Transaction Documents and/or other information furnished and/or the representations and warranties given/deemed to have been given by the Company to the Debenture Holder(s)under the Transaction Documents for financial assistance by way of subscription to the Debentures is or proves to be misleading or incorrect in any respect or is found to be incorrect;

(c) Default by the Company in complying with, or committing a breach of any of the terms, Financial Covenants and Conditions as set out in any of Transaction Documents;

(d) If the Issuer is unable to or admits in writing its inability to pay its debts as they mature or suspends making payment of any of its debts, by reason of actual or anticipated financial difficulties or proceedings for taking it into liquidation have been admitted by any competent court or a moratorium or other protection from its creditors is declared or imposed in respect of any indebtedness of the Company;

(e) If the assets offered as security to the Trustee Debenture Holder(s)for the Debentures depreciate in value to such an extent that in the opinion of the Debenture Holder(s)/ Debenture Trustee, further security to the satisfaction of the Debenture Holder(s) / Debenture Trustee should be given and such security is not given within 15 (fifteen) days of written notice by the Majority Debenture Holders or the Debenture Trustee;

(f) The occurrence of a Material Adverse Effect as determined by the Debenture Trustee, acting solely on the instructions of the Majority Debenture Holders. For the purpose of this transaction any material adverse effect in the business, condition (financial or otherwise), and operations, performance or prospects of the Issuer, the presence of any pending or threatened litigation, investigation or proceedings that may have a material adverse effect on the business condition (financial or otherwise), operations, performance or prospects of the Issuer, including any change in regulation that may have a material adverse effect on the business condition (financial or otherwise), and operations, performance or prospects of the Issuer, which affects the payment on the Debentures.

(g) Key management personnel of the company being declared willful defaulter

(h) The Company shall have voluntarily or involuntarily become the subject of proceedings under bankruptcy or insolvency law including any corporate action, legal proceedings or other procedure or step which has been taken (including the making of an application, the presentation of a petition, the filing or service of a notice or the passing of a resolution);

(i) Voluntary application of insolvency petition under bankruptcy code/NCLT by the Issuer;

(j) Any failure of the Company to comply with any of the provisions of the Transaction Documents in relation to the Security and Security Cover including but not limited to the failure of the Company to provide any additional or alternate security to the satisfaction of the Majority Debenture Holders within a period of 5 (five) business days from the date of such failure;

(k) If an attachment or expropriation or restraint or act of sequestration is levied on the Company’s Receivables or any part thereof and or certificate proceedings are taken or commenced for recovery of any dues from the Company;

(l) any Financial Indebtedness of the Company is not paid when due and the applicable cure period has lapsed without the Company remedying the same; or

(m) If the Company suspends, ceases or threatens to suspend or cease to carry on its business or gives notice of its intention to do so;

(n) All or a material part of the undertaking, assets, rights or revenues of the Company are condemned, seized, nationalised, expropriated or compulsorily acquired, or shall have assumed custody or control of the business or operations of the Company, or shall have taken any action for the dissolution of the Company, or any action that would prevent the Company, their member, or their officers from carrying on their business or operations or a substantial part thereof, by or under the authority of any Government or Government authority;

(o) Any material act of fraud, embezzlement, misstatement, misappropriation or siphoning off of the Issuer funds or revenues or any other act having a similar effect being committed by the management or an officer of the Issuer

(p) The Company has taken or suffered to be taken any action for merger or amalgamation or reduction in share capital by any method (including buyback) without the prior written approval of the Debenture Holders;

(q) Any Transaction Document once executed and delivered, ceases to be in full force and effect or becomes unlawful, invalid or unenforceable or fails to provide the Debenture Trustee and the Debenture holder(s)/Beneficial Owners(s) with the interests in the Security intended to be created thereby;

(r) Any of the necessary clearances required or desirable in relation to the project or Company or the Debentures in accordance with any of the Transaction Documents is not received or is revoked or terminated, withdrawn, suspended, modified or withheld or shall cease to be in full force and effect which shall, in the opinion of Debenture Holder(s), have Material Adverse Effect on the Company or the Debentures;

(s) A petition for the reorganization, arrangement, adjustment, winding up or composition of debts of the Company or is filed on the Company / (voluntary or otherwise) or have been admitted or makes an assignment for the benefit of its creditors generally and such proceeding is not contested by the Company / for staying, quashing or dismissed within 15 (fifteen) days;

(t) It is or becomes unlawful for the Company to perform any of its obligations under any Transaction Document

(u) The Company is adjudged insolvent or takes advantage of any law for the relief of insolvent debtors

(v) If extraordinary circumstances have occurred which make it improbable for the Company to fulfill its obligations under this Agreement and/or the Debentures;

(w) If it is certified by an accountant or a firm of accountants appointed by the Debenture Trustee that the liabilities of the Company exceed its assets;

In case of breach in these covenants resulting in an Event of Default, all dues would stand immediately accelerated apart from other proceedings, as applicable

Covenants for Facility The Company shall provide for following covenant for the Debentures: Financial Covenants 1) The capital adequacy ratio (as defined in NBFC Regulations) shall

not be less than 15% or as prescribed by the RBI from time to time.

Tier I capital adequacy ratio to be at least 13% or higher or as prescribed by RBI from time to time

2) TOL / TNW Ratio shall not exceed 6.0 times 3) The company needs to adhere to following

(a) PAR > 90 to AUM <=5% (b) Net NPA to Equity <=10%

4) Minimum Equity shall not fall below Rs.1000 Crs 5) Current Ratio to be maintained above 1.0 times at all times.

All covenants would be tested on quarterly basis for the Company i.e. as on 31 March, 30 June, 30 Sept and 31 Dec every year, starting from 31 December, 2020 on consolidated and standalone balance sheet till the redemption of the Debentures. The covenants shall be certified by the Company within 60 days from end of each reporting quarter. “Debt” shall mean aggregate of 1. All long-term debt outstanding, whether secured or unsecured, plus 2. Contingent liability pertaining to corporate/ financial guarantees given on behalf of any company / partnership firm/SPV / subsidiary / affiliate to the extent of outstanding of such guaranteed debt, plus 3. Any short term debt outstanding, whether secured or unsecured, availed of in lieu of long term debt or by way of bridge financing for long term debt 4. Any amount raised by acceptance under any acceptance credit facility 5. Receivables sold or discounted (other than any receivables to the extent they are sold on a non- recourse basis) 6. Any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing “Equity” shall mean issued and paid up Equity and Compulsorily Convertible Preference Share capital (+) all reserves (excluding revaluation reserves) (–) any dividend declared (+) deferred tax liability (-) deferred tax asset (-) intangibles (including but not restricted to brand valuation, goodwill etc) as per the latest audited financials of the Company. “PAR 90” shall mean, on the Company’s entire assets under management at any point of time, as the case may be, the outstanding principal value of the relevant portfolio of the Company that has one or more instalments of principal, interest, penalty interest, fee or any other expected payments overdue for 90 days or more, including restructured loans. “Net NPA” shall mean the difference between (i) on the Company’s entire assets under management at any point of time, as the case may be, the outstanding principal value of the relevant portfolio of the Company that has one or more instalments of principal, interest, penalty interest, fee or any other expected payments overdue for 90 days or more, including restructured loans but excluding loans that have been written off by the Company and (ii) all provisions created against standard assets, sub-standard assets, doubtful assets and loss assets. A detailed description of, and additional Financial Covenants are provided in the Debenture Trust Deed. Other Covenants

1) The Company shall not, without the prior consent in writing of the Debenture Trustee, make any changes in its Memorandum or Association and/or Articles of Association, which change, in

the reasonable opinion of the Debenture Trustee adversely affects the interests of the Debenture Holders, including changes in clauses pertaining to main objects, share capital, business or operation of the Company, borrowing powers, etc.

2) Consolidated financial statements at the end of financial year and standalone at the end of financial half years of Issuer

3) Notification of any potential Event of Default or Event of Default; 4) Obtain, comply with and maintain all licenses / authorizations; 5) compliance with environmental and other laws; 6) No M&A, acquisition, restructuring, amalgamation without

approval of debenture holders 7) the Issuer will not purchase or redeem any of its issued shares

or reduce its share capital without the investors’ prior written consent;

8) Any sale of assets / business / division or re-structuring of the existing business, to be with the prior consent of the Debenture Holder(s). This excludes regular ongoing asset sale transactions as part of ordinary course of business

9) No dividend, if an Event of Default has occurred and is subsisting 10) The Issuer shall maintain its corporate existence and right to

carry on its business and operations and comply with all Applicable Laws in all respects, at all times

11) The Issuer shall not, without the prior approval of Investors, enter into any transaction of merger, de-merger, scheme of arrangement or compromise with its creditors or shareholders or effect any scheme of amalgamation or reconstruction; provided however that this restriction shall not apply in the event that the compliance with this restriction would result in the Issuer defaulting in relation to any of its payment obligations in relation to the Debentures.

12) Not undertake any new business or any diversification of its business (other than financial services or ancillary business activities) without approval of the Debenture Holders

13) Provide details of any material litigation, arbitration or administrative proceedings

14) The hypothecated receivables offered as security cover for this Issuance are free from encumbrances

15) Maintain internal control for the purpose of preventing fraud lent by the issuer from money being used for money laundering or illegal purposes

16) Permit visits and inspection of books of records, documents and accounts to debenture holders as and when required by them

Representations, Warranties

The Company will make representations customary for the facilities of this nature and others appropriate in the judgment of the Investor, including but not limited to:

Issuer will give representations and warranties that, amongst other things, that it has full title on all the rights, property and undertakings subject to the security (free from any litigations)

No Event of Default or potential Event of Default has occurred and is continuing and no such event or circumstance will result as a consequence of the Company performing any obligation contemplated under the transaction documents.

No Material Adverse Change in business, condition or operations of the Company

Absence of any pending or threatened litigation, investigation or proceedings that may have a material adverse effect on the business condition (financial or otherwise), operations, performance or prospects of the Company or that purports to affect the Facility

Compliance with all laws and regulations (including any disclosure requirements) and procuring all relevant approvals in

order to creation and perfection of the security, as may be required in relation to the Transaction.

Governing Law and Jurisdiction

This Term Sheet shall be governed and construed exclusively in accordance with the laws of India and any disputes arising there from shall be subject to the jurisdiction of appropriate courts and tribunals at Mumbai.

Indemnification The Company will indemnify, and hold harmless the Debenture Holder(s) from and against any claim, liability, demand, loss, damage, judgment or other obligation or right of action which may arise as a result of a breach of this Term Sheet by the Company.

Confidentiality The terms and conditions described in this Term Sheet, including its existence, shall be confidential information and shall not be disclosed to any third party except to each Party’s advisors and counsel. Provided however that if any of the Parties is required by law to disclose information regarding this Term Sheet or to file this Term Sheet with any regulatory body, it shall, at a reasonable time after making any such disclosure or filing, informing the other Parties.

Transaction Costs

The Issuer shall bear all transaction related costs incurred by the Investor with respect to legal counsel, valuers and auditors / consultants. Such costs include: 1. Legal fees 2. Trustee fees 3. Rating fees 4. Listing fees 5. Stamping and registration in relation to creation of Security and all

Definitive Agreements.

Taxes duties cost and expenses

1. Relevant taxes, duties and levies are to be borne by the Company.

ANNEXURE: ILLUSTRATION OF BOND CASH FLOWS

Illustration of Bond Cash Flows Company Fusion Microfinance Private Limited Face Value (per security) Rs. 10,00,000/- (Rupees Ten Lakhs only) Issue Date / Date of Allotment Issue Opening Date: November 18, 2020

Deemed Date of Allotment: November 19, 2020 Maturity Date May 19, 2022 Frequency of the Coupon Payment with specified dates

Coupon payable quarterly. 19-Feb-21 19-May-21 19-Aug-21 19-Nov-21 19-Feb-22 19-May-22

Day Count Convention Actual/Actual

Coupon Payment Dates

Coupon Amount (in Rupees) per

debenture

Principal Payment Date(s)

Principal Amount (in Rupees) per debenture

19-Feb-21 26,466 19-May-21 25,603 19-Aug-21 26,466 19-Nov-21 26,466 19-Feb-22 26,466 19-May-22 25,603 19-May-22 10,00,000

TOTAL 10,00,000

INFORMATION MEMORANDUM - Electronic Issuance ...

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