Edelweiss Financial Services : Tranche II Prospectus (Final filed with SE)

Tranche II Prospectus

March 31, 2023

EDELWEISS FINANCIAL SERVICES LIMITED

Edelweiss Financial Services Limited (the "Company" or "Issuer") was incorporated at Mumbai on November 21, 1995 as a public limited company with the name 'Edelweiss Capital Limited' under the provisions of the Companies Act, 1956. Thereafter, a certificate of commencement of business was issued to our Company by the Registrar Of Companies Maharashtra, at Mumbai, ("RoC"), on January 16, 1996. Subsequently, the name of our Company was changed to 'Edelweiss Financial Services Limited' pursuant to a fresh certificate of incorporation issued by the RoC on August 1, 2011. For more information about our Company, please refer "General Information" and "History and Main Objects" on pages 53 and 162 of the Shelf Prospectus and pages 20 and 63 of this Tranche II Prospectus.

Registered Office: Edelweiss House, Off C.S.T. Road, Kalina, Mumbai 400 098, Maharashtra, India; Tel.: [phone];

Fax: [phone]; CIN: L99999MH1995PLC094641; PAN: AAACE1461E; Website: www.edelweissfin.com; Email: [e-mail] Company Secretary and Compliance Officer: Mr. Tarun Khurana; Tel.: [phone]; Email: [e-mail]

Chief Financial Officer: Ms. Ananya Suneja; Tel: [phone]; Email: [e-mail]

PUBLIC ISSUE BY THE COMPANY OF SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES OF FACE VALUE OF ₹ 1,000 EACH ("NCDs") OR "DEBENTURES") FOR AN AMOUNT OF ₹ 2000 MILLION ("BASE ISSUE SIZE) WITH AN OPTION TO RETAIN OVERSUBSCRIPTION UP TO ₹ 2000 MILLION AMOUNTING TO ₹ 4000 MILLION ("TRANCHE II ISSUE LIMIT") ("TRANCHE II ISSUE") WHICH IS WITHIN THE SHELF LIMIT OF ₹ 10,000 MILLION AND IS BEING OFFERED BY WAY OF THIS TRANCHE II PROSPECTUS DATED MARCH 31, 2023 CONTAINING INTER ALIA THE TERMS AND CONDITIONS OF TRANCHE II ISSUE ("TRANCHE II PROSPECTUS"), WHICH SHOULD BE READ TOGETHER WITH THE SHELF PROSPECTUS DATED DECEMBER 27, 2022 ("SHELF PROSPECTUS") FILED WITH THE ROC, STOCK EXCHANGES AND SECURITIES AND EXCHANGE BOARD OF INDIA ("SEBI"). THE SHELF PROSPECTUS AND TRANCHE II PROSPECTUS CONSTITUTES THE PROSPECTUS ("PROSPECTUS"). THE ISSUE IS BEING MADE PURSUANT TO THE PROVISIONS OF SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF NON-CONVERTIBLE SECURITIES) REGULATIONS, 2021, AS AMENDED (THE "SEBI NCS REGULATIONS"), THE COMPANIES ACT, 2013 AND RULES MADE THEREUNDER AS AMENDED TO THE EXTENT NOTIFIED AND THE SEBI OPERATIONAL CIRCULAR. THE ISSUE IS NOT UNDERWRITTEN.

OUR PROMOTERS

1. Mr. Rashesh Shah; Email: [e-mail]; Tel: [phone], (ii) Mr. Venkatchalam Ramaswamy; Email: efslncd @edelweissfin.com; Tel: [phone], (iii) Ms. Vidya Shah; Email: [e-mail]; Tel: [phone], and (iv) Ms. Aparna T.C; Email: [e-mail]; Tel: [phone]. For details of our Promoters, see "Our Promoter" on page 184 of the Shelf Prospectus.

GENERAL RISKS

For taking an investment decision, investors must rely on their own examination of the Issuer and the Issue, including the risks involved. Specific attention of the Investors is invited to the chapters "Risk Factors" on page 18 of the Shelf Prospectus and page 54 of this Tranche II Prospectus, before making an investment in such Issue. This Tranche II Prospectus has not been and will not be approved by any regulatory authority in India, including the Securities and Exchange Board of India ("SEBI"), the Reserve Bank of India ("RBI"), any registrar of companies or any stock exchange in Indian or do they guarantee the accuracy or adequacy of this document.

COUPON RATE, COUPON PAYMENT FREQUENCY, REDEMPTION DATE, REDEMPTION AMOUNT & ELIGIBLE INVESTORS

For details relating to Coupon Rate, Coupon Payment Frequency, Redemption Date, Redemption Amount & Eligible Investors of the NCDs, please refer to the section titled "Issue Related Information" on page 133 of this Tranche II Prospectus.

CREDIT RATING

The NCDs proposed to be issued under the Issue have been rated "CRISIL AA-/Negative (pronounced as CRISIL double A minus rating with Negative outlook)" for an amount of ₹ 10,000 million by CRISIL vide their rating letter dated December 02, 2022, revalidated vide their letter dated February 6, 2023, with rating rationale dated December 01, 2022, and "ACUITE AA-/ Negative (pronounced as ACUITE double A minus)" for an amount of ₹ 10,000 million by Acuité vide their rating letter dated December 07, 2022, revalidated vide their letter dated February 13, 2023, with rating rationale dated December 07, 2022. The ratings given by the Credit Rating Agencies are valid as on the date of this Tranche II Prospectus and shall remain valid until the ratings are revised or withdrawn. The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The rating agency has a right to suspend or withdraw the rating at any time on the basis of factors such as new information. These ratings are not a recommendation to buy, sell or hold securities and Investors should take their own decisions. Please refer to Annexure A and Annexure B of this Tranche II Prospectus for the rating letter, rationale, revalidation and press release of the above rating.

LISTING

The NCDs offered through the Draft Shelf Prospectus, the Shelf Prospectus and this Tranche II Prospectus are proposed to be listed on BSE Limited ("BSE") and BSE shall be the Designated Stock Exchange. Our Company has received an 'in-principle' approval from BSE vide their letter no. DCS/BM/PI-BOND/017/22-23 dated December 20, 2022.

PUBLIC COMMENTS

The Draft Shelf Prospectus dated December 12, 2022 was filed with the BSE, pursuant to the provisions of the SEBI NCS Regulations and was kept open for public comments for a period of seven Working Days (i.e., until 5 p.m.) on December 19, 2022. No comments were received on the Draft Prospectus until 5p.m. on December 19, 2022

	LEAD MANAGER TO THE ISSUE		REGISTRAR TO THE ISSUE			DEBENTURE TRUSTEE TO THE ISSUE
	EQUIRUS CAPITAL PRIVATE LIMITED		KFIN TECHNOLOGIES LIMITED			BEACON TRUSTEESHIP LIMITED*
	12th Floor, C Wing,		Selenium Tower-B,			4 C&D, Siddhivinayak Chambers,
	Marathon Futurex, N.M. Joshi Marg,		Plot 31 & 32, Gachibowli, Financial District, Nanakramguda,		Gandhi Nagar, Opp. MIG Cricket Club
	Lower Parel, Mumbai 400 013		Serilingampally, Hyderabad - 500 032, Telangana			Bandra (East), Mumbai 400 051
	Tel: [phone]		Tel: [phone]			Tel.: [phone]
	Fax: [phone]		Fax: [phone]			Email: [e-mail]
	Email: [e-mail]		Email: [e-mail]			Website: www.beacontrustee.co.in
	Website: www.equirus.com		Website: www.kfintech.com			Contact Person: Kaustubh Kulkarni
	Contact person: Malay Shah		Contact Person: M Murali Krishna
	CREDIT RATING AGENCY			STATUTORY AUDITOR
							S. R. BATLIBOI & CO. LLP
							12th Floor, The Ruby
	ACUITÉ RATINGS & RESEARCH LIMITED		CRISIL Ratings Limited			29 Senapati Bapat Marg
				Dadar (West),
	708, Lodha Supremus,		CRISIL House,
				Mumbai 400 028
	Lodha iThink Techno Campus,		Central Avenue, Hiranandani Business Park,
				Maharashtra, India
	Kanjurmarg (East), Mumbai 400 042		Powai, Mumbai 400076
				Tel: + 91 22 6819 8000
	Tel: + 91 22 4929 4000		Tel: + 91 22 3342 3000
				Email: [e-mail]
	Email: [e-mail]		Fax: [phone]
				Contact Person: Shrawan Jalan
	Website: www.acuite.in		Email: [e-mail]
	Contact Person: Chitra Mohan		Website: www.crisilratings.com
			Contact Person: Krishna Sitaraman
			TRANCHE II ISSUE PROGRAMME**
	TRANCHE II ISSUE OPENS ON: April 6, 2023		TRANCHE II ISSUE CLOSES ON: April 21, 2023

*Beacon Trusteeship Limited under regulation 8 of SEBI NCS Regulations has by its letter dated December 9, 2022 given its consent for its appointment as Debenture Trustee to the Issue and for its name to be included in this Tranche II Prospectus and in all the subsequent periodical communications sent to the holders of the NCDs issued pursuant to the Issue.

• The Tranche II Issue shall remain open for subscription on Working Days from 10 a.m. to 5 p.m. (Indian Standard Time) during the period indicated in this Tranche II Prospectus, except that the Tranche II Issue may close on such earlier date or extended date (subject to a maximum period of 10 days from the date of opening of Tranche II Issue) as may be decided by the Board of Directors of our Company or the Debenture Fund Raising Committee, thereof, subject to compliance with Regulation 33A of the SEBI NCS Regulations.. In the event of an early closure or extension of the Tranche II Issue; our Company shall ensure that notice of the same is provided to the prospective investors through an advertisement in a daily national newspaper with wide circulation and a regional daily at the place where the registered office of the Company is situated on or before such earlier or extended date of Tranche II Issue closure. Applications Forms for the Tranche II Issue will be accepted only from 10:00 a.m. to 5:00 p.m. or such extended time as may be permitted by BSE, on Working Days during the Tranche II Issue Period. On the Tranche II Issue Closing Date, Application Forms will be accepted only between 10:00 a.m. to 3:00 p.m. and uploaded until 5:00 p.m. (Indian Standard Time) or such extended time as may be permitted by BSE. Further, pending mandate requests for bids placed on the last day of bidding will be validated by 5 PM on one Working Day after the Tranche II Issue Closing Date. For further details please refer to the chapter titled "Issue Related Information" on page 133 of this Tranche II Prospectus.
  A copy of this Tranche II Prospectuses shall be filed with the Registrar of Companies, Maharashtra at Mumbai in terms of Section 26 of Companies Act, 2013, along with the endorsed/certified copies of all requisite documents. For further details, please refer to the section titled "Material Contracts and Documents for Inspection" on page 196 of this Tranche II Prospectus.

ANNEXURE D - ILLUSTRATIVE CASHFLOWS

ANNEXURE C - DEBENTURE TRUSTEE CONSENT LETTER

TABLE OF CONTENTS
SECTION I - GENERAL	3
DEFINITIONS AND ABBREVIATIONS	3
CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND CURRENCY OF
PRESENTATION	16
FORWARD LOOKING STATEMENTS	19

SECTION II - INTRODUCTION	20
GENERAL INFORMATION	20
CAPITAL STRUCTURE	29
OBJECTS OF THE ISSUE	38
STATEMENT OF POSSIBLE TAX BENEFITS	41
MATERIAL DEVELOPMENTS	54

SECTION III - FINANCIAL INFORMATION	74
FINANCIAL STATEMENTS	74
FINANCIAL INDEBTEDNESS	75
SECTION IV - LEGAL AND OTHER INFORMATION	85
OUTSTANDING LITIGATIONS	85
OTHER REGULATORY AND STATUTORY DISCLOSURES	117
SECTION V - ISSUE RELATED INFORMATION	133
ISSUE STRUCTURE	133
TERMS OF THE ISSUE	140
ISSUE PROCEDURE	159
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION	196
DECLARATION	199

ANNEXURE A - CRISIL RATING, RATING RATIONALE, PRESS RELEASE AND REVALIDATION LETTER 200

ANNEXURE B - ACUITE RATING, RATING RATIONALE, PRESS RELEASE AND REVALIDATION LETTER 201 202

203

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SECTION I - GENERAL

DEFINITIONS AND ABBREVIATIONS

This Tranche II Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates or implies, shall have the meaning ascribed to such definitions and abbreviations set forth herein. References to any legislation, act, regulation, rules, guidelines, clarifications or policies shall be to such legislation, act, regulation, rules, guidelines, clarifications or policies as amended, supplemented or re-enacted from time to time until the date of this Tranche II Prospectus, and any reference to a statutory provision shall include any subordinate legislation notified from time to time pursuant to such provision.

The words and expressions used in this Tranche II Prospectus but not defined herein shall have, to the extent applicable, the same meaning ascribed to such words and expressions under the SEBI NCS Regulations, the Companies Act, 2013, the SCRA, the Depositories Act and the rules and regulations notified thereunder.

General Terms

Term	Description
Associates	Associate would mean associates of our Company as at and for the relevant
	financial year/period as applicable.
"EFSL" or "Company" or	Edelweiss Financial Services Limited, a public limited company incorporated
"the Issuer"	under the Companies Act, 1956, and having its Registered Office at Edelweiss
	House, Off C.S.T. Road, Kalina, Mumbai 400 098, Maharashtra, India.
"we" or "us" or "our"	Unless the context otherwise requires, this refers to Edelweiss Financial Services
	Limited together with its Subsidiaries, Associates and Trusts for the relevant
	financial year/period as applicable.
Subsidiaries	Subsidiary would mean subsidiaries of our Company as at and for the relevant
	financial year/period as applicable. For the details of the subsidiaries of our
	Company, as on December 31, 2022, see "Material Developments - History and
	Main Objects" on page 63 of this Tranche II Prospectus.
Trusts	Trust would mean trusts of our Company as at and for the relevant financial
	year/period as applicable. For the details of the trusts of our Company, as on
	December 31, 2022, see "Material Developments - History and Main Objects" on
	page 63 of this Tranche II Prospectus.
Company Related Terms
Term	Description
Articles or Articles of	Articles of Association of our Company
Association or AOA
Audit Committee	Audit committee of the Board of Directors
Auditors or Statutory	The current statutory auditors of our Company, M/s. S. R. Batliboi & Co. LLP,
Auditors	Chartered Accountants
Board or Board of	Board of Directors of our Company or any duly constituted committee thereof.
Directors or our Board or
our Board of Directors
Corporate Social	Corporate Social Responsibility Committee of the Board of Directors
Responsibility Committee
Committee	A committee constituted by the Board, from time to time.
Debenture Fund Raising	Debenture Fund Raising Committee as constituted by the Board of Directors
Committee
Directors	Directors of the Company
Equity Shares	Equity shares of the Company of face value of ₹ 1 each
ESOPs	Employee stock options
H1 Fiscal 2023	Half year ended September 30, 2022
H1 2023 Unaudited	The unaudited consolidated financial information of the Company for the quarter
Consolidated Financial	ended September 30, 2022 and year to date April 1, 2022 to September 30,
Results	2022 prepared by our Company in the manner and format required by the SEBI
	Listing Regulations

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Term	Description
H1 2023 Unaudited	The unaudited standalone financial information of the Company the quarter ended
Standalone Financial	September 30, 2022 and year to date April 1, 2022 to September 30, 2022 prepared
Results	by our Company in the manner and format required by SEBI Listing Regulations
H1 2023 Unaudited	H1 2023 Unaudited Consolidated Financial Results and H1 2023 Unaudited
Financial Results	Standalone Financial Results
Independent Director(s)	The independent director(s) on our Board, in terms of Section 2(47) and Section
	149(6) of the Companies Act, 2013 and SEBI Listing Regulations
KMP / Key Managerial	Key managerial personnel of our Company as disclosed in the Shelf Prospectus
Personnel	and this Tranche II Prospectus and appointed in accordance with Key Managerial
	Personnel, as defined under Section 2(51) of the Companies Act, 2013.
LAP	Loan against property
"MoA" or "Memorandum"	Memorandum of Association of our Company
or "Memorandum of
Association"
Nomination and	Nomination and Remuneration Committee of the Board of Directors
Remuneration Committee
Networth	As defined in Section 2(57) of the Companies Act, 2013, as follows:
	"Networth means the aggregate value of the paid-up share capital and all reserves
	created out of the profits, securities premium account and debit or credit balance
	of profit and loss account, after deducting the aggregate value of the accumulated
	losses, deferred expenditure and miscellaneous expenditure not written off, as per
	the audited balance sheet but does not include reserves created out of revaluation
	of assets, write back of depreciation and amalgamation."
Preference Shares	Preference Shares of the Company having face value of ₹5 each.
Promoter Group	Includes such persons and entities constituting the promoter group of our Company
	pursuant to Regulation 2 (1) (pp) of the SEBI ICDR Regulations, 2018.
Promoters or our Promoter	The promoters of our Company are Mr. Rashesh Shah, Mr. Venkatchalam
	Ramaswamy, Ms. Vidya Shah and Ms. Aparna T.C.
Public Issue 1	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹2,000 million pursuant to the prospectus dated
	December 17, 2020.
Public Issue 2	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹4,000 million pursuant to the prospectus dated March
	26, 2021.
Public Issue 3	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹ 4,000 million pursuant to the prospectus dated August
	9, 2021.
Public Issue 4	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹ 5,000 million pursuant to the tranche I prospectus
	dated November 29, 2021.
Public Issue 5	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹ 4,000 million pursuant to the tranche II prospectus
	dated September 26, 2022.
Public Issue 6	Public issue of secured redeemable non-convertible debentures of face value
	₹1,000 each aggregating to ₹ 4,000 million pursuant to the tranche I prospectus
	dated December 27, 2022.
Q3 2023 Unaudited	The unaudited consolidated financial information of the Company for the quarter
Consolidated Financial	ended December 31, 2022 and year to date April 1, 2022 to December 31, 2022
Results	prepared by our Company in the manner and format required by SEBI Listing
	Regulations
Q3 2023 Unaudited	The unaudited standalone financial information of the Company for the quarter
Standalone Financial	ended December 31, 2022 and year to date April 1, 2022 to December 31, 2022
Results	prepared by our Company in the manner and format required by SEBI Listing
	Regulations
Q3 2023 Unaudited	Q3 2023 Unaudited Consolidated Financial Results and Q3 2023 Unaudited
Financial Results	Standalone Financial Results
Reformatted Financial	Reformatted Consolidated Financial Information and Reformatted Standalone
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Term	Description
Information	Financial Information.
Reformatted Consolidated	The reformatted consolidated statement of assets and liabilities as at March 31,
Financial Information	2022, March 31, 2021, March 31, 2020, the reformatted consolidated statement of
	profit and loss for the year ended 2022, 2021, 2020, the reformatted consolidated
	statement of cash flows for the year ended 2022, 2021, 2020, the reformatted
	consolidated statement of changes in equity for the year ended 2022, 2021 and
	2020.
	Our audited consolidated financial statements as at and for the year ended March
	31, 2022, March 31, 2021 and March 31, 2020 form the basis of such reformatted
	Consolidated Financial Information.
Reformatted Standalone	The reformatted standalone statement of assets and liabilities of our Company as
Financial Information	at March 31, 2022, March 31, 2021, March 31, 2020, the reformatted standalone
	statement of profit and loss for the year ended 2022, 2021, 2020, the reformatted
	standalone statement of cash flows for the year ended 2022, 2021, 2020, the
	reformatted standalone statement of changes in equity for the year ended 2022,
	2021 and 2020.
	Our audited standalone financial statements as at and for the year ended March 31,
	2022, March 31, 2021, and March 31, 2020 form the basis of such reformatted
	Standalone Financial Information.
Registered Office	The registered office of our Company is situated at Edelweiss House, Off C.S.T.
	Road, Kalina, Mumbai 400 098, Maharashtra, India.
Risk Committee	Risk Committee of the Board of Directors.
RoC/ Registrar of	Registrar of Companies, Maharashtra at Mumbai.
Companies
Shareholders	The holders of the Equity Shares from time to time.
Stakeholders' Relationship	Stakeholders' Relationship Committee as constituted by the Board of Directors.
Committee
Total Borrowing(s)/ Total	Debt securities plus borrowings (other than debt securities), subordinated liabilities
Debt	and deposits.

Issue Related Terms

Term	Description
Abridged Prospectus	A memorandum containing the salient features of the Shelf Prospectus and this
	Tranche II Prospectus.
Acknowledgement Slip/	The slip or document issued by the Designated Intermediary to an Applicant as
Transaction Registration	proof of registration of the Application Form.
Slip/ TRS
Acuité/ Acuite	Acuité Ratings & Research Limited.
Allotment Advice	The communication sent to the Allottees conveying the details of NCDs allotted to
	the Allottees in accordance with the Basis of Allotment.
"Allotment", "Allot" or	Unless the context otherwise requires, the allotment of NCDs to the successful
Allotted	Applicants pursuant to the Tranche II Issue.
Allottee(s)	The successful Applicant to whom the NCDs are Allotted either in full or part,
	pursuant to the Tranche II Issue.
"Applicant" or "Investor"	Any person who applies for issuance and Allotment of NCDs through ASBA
	process or through UPI Mechanism pursuant to the terms of the Shelf Prospectus,
	this Tranche II Prospectus, the Abridged Prospectus and the Application Form.
"Application" or "ASBA	An application (whether physical or electronic) to subscribe to the NCDs offered
Application"	pursuant to the Tranche II Issue by submission of a valid Application Form and
	authorising an SCSB to block the Application Amount in the ASBA Account or to
	block the Application Amount using the UPI Mechanism, where the Bid Amount
	will be blocked upon acceptance of UPI Mandate Request by retail investors for
	an Application Amount of upto ₹ 500,000 which will be considered as the
	application for Allotment in terms of the Shelf Prospectus and this Tranche II
	Prospectus.

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