IPO Readiness and Listing of shares Private and

IPO Readiness and Listing of shares Private and confidential April 2018

IPO considerations © 2018 Deloitte Haskins & Sells LLP IPO Readiness and Listing of Shares 2

IPO considerations Considering an IPO? Why IPO? Ongoing reporting IPO readiness/process © 2018 Deloitte Haskins & Sells LLP Advantages/ disadvantages Are you ready? Which market are you eligible for Business and Tax considerations IPO Readiness and Listing of Shares 3

Thinking about an IPO? Issues facing your business Why IPO? Financial reporting procedures Forecasting Which market? Local vs. overseas Scalability Future reporting requirements Which market? - Eligibility Transparency of ownership structure Resources/timing/ project management Investment story? — Suitability Corporate governance Choosing advisors Management team Incentivisation/ remuneration Investor relations Historical financial track record Tax efficient group structure Dividend policy Going public is a long, involved process that represents a significant milestone for any company. © 2018 Deloitte Haskins & Sells LLP IPO Readiness and Listing of Shares 4

Steps to consider when you go public There a number of key fundamentals that you should consider 1 Why IPO? • To raise capital for growth • To raise profile and status in the market • To realise the value of the Company • To obtain a broad investor base • To provide an exit strategy for existing shareholders • To be able to use listed shares as an acquisition currency or to reward staff © 2018 Deloitte Haskins & Sells LLP 2 Which market? Are you eligible? • Regulatory requirement for Indian companies to be listed or in the process of listing in India • Companies can also consider alternative structures for an international listing • Business considerations • India, London, New York, Amsterdam, Singapore etc. If London: Main Market or AIM • The key eligibility criteria differ according to which market you want to list in 3 Are you ready? • Is there growth potential for your products/operations • Has your Company demonstrated that it can be profitable • Is there a robust business plan • Is the promoter group able to contribute additional capital to the Company, if required • Are you prepared to give up Management ‘control’ and invite independent Non-Executive Directors onto the Board • Are you prepared for outside investor/regulator scrutiny and loss of privacy IPO Readiness and Listing of Shares 5

Advantages v/s disadvantages of going public The advantages The disadvantages Going public potentially provides both tangible and intangible benefits, including the following: There also some very significant disadvantages of going public that should be weighed against the many advantages: • Increased capital • Disclosure of information • Improved financial position • Less dilution than through PE route • Enhanced ability to raise equity • Liquidity and valuation • Improved credibility with business partners Companies typically make use of a variety of financing options before they even consider going public. • Demands on management • Pressure to maintain growth pattern • Possible loss of control • Listing regulations • Enhanced corporate governance. • Better employee morale and productivity • Extensive ongoing reporting requirements • Listing improves liquidity for investors • Incurrence of additional cost © 2018 Deloitte Haskins & Sells LLP IPO Readiness and Listing of Shares 6

Business and Tax considerations Business considerations • Equity v/s debt • Valuations and dilution of current holding • Impact on operations • Cost of funds • Use of IPO proceeds • Foreign exchange requirements • Enhancement in brand value • Continuing regulatory compliance Tax considerations • Analysing the tax implication of preferring an IPO under the existing structure. • Tax restructuring • Analysing suitable jurisdictions • Deciding on the listing vehicle • Tax treaties between India and other countries • Tax impact on future distributions • Option of seeking advance ruling • Regulatory compliances • Tax implications for shareholders © 2018 Deloitte Haskins & Sells LLP IPO Readiness and Listing of Shares 7

Stakeholders involved Regulators – SEBI/ ROC/ Others Investors/ Analyst Company – Going for listing Bankers/ Underwrites © 2018 Deloitte Haskins & Sells LLP Auditors (Previous and current) Lawyers (India/ International) IPO Readiness and Listing of Shares 8

SEBI Regulations- An Overview © 2018 Deloitte Haskins & Sells LLP IPO Readiness and Listing of Shares 9

ICDR- Listing Requirements 1. Net tangible assets (excluding intangibles) of at least Rs. 3 Crores in each of the preceding 3 years of which not more than 50 % is held in monetary assets; 2. Average pre-tax operating profits ≥ Rs. 15 Crores during 3 most profitable years out of past 5 years; 3. Net worth of at least Rs. 1 Crore in each of the 3 preceding FY; 4. The aggregate of the proposed issue does not exceed 5 times the pre-issue net worth of the immediately preceding financial year; and 5. If name has changed in the last one year, at least 50% of the revenue for the preceding full one year has been earned from the activity indicated by the new name Issue is made through book-building process with at least 75% of net offer to public being allotted to QIBs if above conditions are not met © 2018 Deloitte Haskins & Sells LLP IPO Readiness and Listing of Shares 10

ICDR-Listing Requirements Promoters' Shareholding Public Shareholding • Minimum 20% of post issue shareholding; • Atleast 25% of post issue capital (at offer price) is ≤ INR 1600 Crore; • Lock-in of minimum promoter’s contribution for 3 years; • Atleast INR 400 Crore, if post issue capital (at offer price) is ≥ INR 1600 Crore and ≤ INR 4, 000 Crore; • Promoter’s holding in excess of 20% shall be locked in for 1 year Alteration in Ao. A • Common form or transfer • Fully paid shares to be free from all lien • Advance call money may carry interest but shall not entitle declaration of dividend • No forfeiture of unclaimed dividends before claims barred by law • option or right to call of shares can be be given only with the sanction of the company in general meeting © 2018 Deloitte Haskins & Sells LLP • Atleast 10%, if the post issue capital is ≥ INR 4, 000 Crore IPO Key Considerations Pricing of shares • Price to be determined in consultation with Merchant Banker • Differential pricing for different type of investor allowed subject to certain conditions • If issue size is ≥ INR 500 Crore, Face value may be less than INR 10 but not lower than INR 1 • If issue size is < INR 500 Crore, Face value shall be INR 10 IPO Readiness and Listing of Shares 11

LODR- Board Governance and Listing Compliances Board Composition Constitution of Committees • One Women Director; • Audit Committee; • 1/2 of the members of the Board be non-executive directors; • Nomination and Remuneration Committee; • 1/3 rd ID's, if Chairman is nonexecutive and if Chairman is executive director 1/2 shall be ID's. • A person shall not serve more than 7 companies as ID; • If, a person is serving as WTD in any listed company, he shall not serve as ID of more than 3 companies • CSR Committee • Stakeholder Relationship Committee; • Risk Management Committee (Applicable on top 100 listed companies as per market capitalization) • IPO Committee (optional) Various Policies • Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions; • Policy on preservation of documents; • Policy for determining material subsidiaries; Independent Directors • ID’s to hold one separate meeting in a year without the presence of non-IDs and members of the management of the Company; • IDs in their separate meeting to review: v Performance of non-IDs and Board; v Performance of the chairperson v the quality, quantity and timeliness of flow of information between the management and the board • Vigil Mechanism; • Nomination and Remuneration Policy; • Policy on diversity of Board; • Risk Management Policy; • Code of Conduct for Board and Senior Management; • Familiarization Programme; • Policy for determining material events. • The company to familiarize the IDs through various programmes about the Company • Dividend Distribution Policy(Applicable on top 100 listed companies as per market capitalization) • Code of Conduct for Insider Trading Regulations IPO Readiness and Listing of Shares © 2018 Deloitte Haskins & Sells LLP • Code of Fair Disclosures 12

Disclosures- LODR, Insider Trading and SAST © 2018 Deloitte Haskins & Sells LLP IPO Readiness and Listing of Shares 13

LODR-Public Disclosures Quarterly results within 45 days Capital and Debt Restructuring Issuance, split, consolidation, forfeiture of securities etc. Revision in Ratings Agreements/ family settlements impacting change in management Fraud/defaults by promoters/ KMP and their arrest Change in Directors, KMP, Auditor & Compliance Officer Notice, call letters etc. issued to shareholders. General Meeting proceedings. Amendment of Mo. A/Ao. A © 2018 Deloitte Haskins & Sells LLP Disclosure to Stock Exchanges IPO Readiness and Listing of Shares 14

LODR- Disclosure of outcome of Board Meeting • Dividends and/or cash bonuses recommended or declared or the decision to pass any dividend and the date on which dividend shall be paid/dispatched; • Cancellation of dividend with reasons thereof; • Buyback of securities; • Fund raising proposed to be undertaken; Within Disclosures 30 minutes to Stock Exchange • Increase in capital by issue of bonus shares; • Reissue of forfeited shares or securities, or the issue of shares or securities held in reserve for future issue or the creation in any form or manner of new shares or securities or any other rights, privileges or benefits to subscribe to; • Short particulars of alterations of capital, including calls; • Financial results; • Voluntary delisting © 2018 Deloitte Haskins & Sells LLP IPO Readiness and Listing of Shares 15

SAST- Disclosures under Takeover Code 1 Event Based • Acquisition of ≥ 5%; • Change of ≥ 2% after the 5% • Disclosure to be made to Stock Exchange within 2 days No obligation on the Target Company to give the disclosure to Stock Exchange. © 2018 Deloitte Haskins & Sells LLP 2 3 Encumbered Shares Continual • Encumbrance considered akin to acquisition/ disposal of shares • Persons holding ≥ 25%; • Every Promoter • Disclosure to be made to Stock Exchange within 7 days of closure of financial year • Include a pledge, lien or any such transaction, by whatever name called. Convertible security shall also be regarded as shares and disclosures of such acquisitions and holdings shall be made accordingly. IPO Readiness and Listing of Shares 16

Disclosures under Insider Trading Regulations • Disclosure of their holding in the Company by Promoters, Directors and KMPs within 30 days of Listing. • Every KMP, Director or person becoming a promoter shall disclose his holding of securities in Company as on date of appointment/becoming promoter to the Company within 7 days Initial of such appointment. Disclosures • Every promoter, employee and director shall disclose to the Company the number of securities acquired or disposed of within 2 trading days, if the value of the securities traded, whether in one transaction or a series of transactions over any calendar quarter, aggregate to a traded value in excess of Rs. 10 Lacs; Continual • Company shall notify the particulars of such trading to stock exchange within 2 trading Disclosures days of receipt of aforementioned disclosures. • The Company may at its discretion require any other connected person or class of connected persons to make disclosure of their holding and trading of securities Disclosures by other connected persons © 2018 Deloitte Haskins & Sells LLP IPO Readiness and Listing of Shares 17

Roadmap for IPO © 2018 Deloitte Haskins & Sells LLP IPO Readiness and Listing of Shares 18

Roadmap for an Indian IPO • Readiness Diagnostics and preparation • Appointment of Merchant Bankers and other advisors • Due diligence • Compilation of information for and review of offer document • Preparation of restated financial statements including auditors’ report and other certifications Stage 1 Preparation Stage 3 Marketing and distribution Unlisted Company Listed Company Stage 2 Filings • Filing of draft offer document with SEBI • Responses to SEBI Comments • Filing of offer document with Registrar of Companies in India © 2018 Deloitte Haskins & Sells LLP • Information for Road shows • Launch of IPO • Receiving bids/applications • Closure of IPO • Review of offer document before and after printing of offer document with price information Stage 4 Listing and quotation • Allocation and allotment • Obtain Listing Approvals • Listing on stock exchanges IPO Readiness and Listing of Shares 19

Illustrative IPO timeline File RHP with ROC In-house preparation File DRHP with SEBI Receive SEBI go-ahead to RHP T + 179 T + 178 T + 177 Listing T + 165 T + 163 T + 162 T + 158 T + 153 T + 152 File RHP with SEBI Receive SEBI comments on DRHP Research Presentation T + 140 T + 137 T + 130 T + 76 T + 55 Inprinciple approval from SEs Auditors report and other certifications © 2018 Deloitte Haskins & Sells LLP Anchor Investor Incorporate SEBI comments in RHP T + 54 T + 50 T + 40 T + 10 Due Diligence & Drafting T T - 60 Kick off Obtain listing and trading approvals Roadshows Publication of Research Report Allotment Issue Opens Issue closes Note: Timelines may alter depending on preparedness of the Company, Market sentiments (secondary and primary) and SEBI and Stock Exchange clearances IPO Readiness and Listing of Shares 20

Discussion Atul Mittal Director Deloitte Haskin & Sells LLP 9810065744 Past – Chairman and Central Council member- NIRC-ICSI © 2018 Deloitte Haskins & Sells LLP IPO Readiness and Listing of Shares 21

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