HDFC STANDARD LIFE INSURANCE COMPANY LIMITED · VALIDATION OF THE REPRESENTATIONS BY OUR COMPANY IN...

RED HERRING PROSPECTUS OCTOBER 25, 2017

Please read Section 32 of the Companies Act, 2013 Book Built Issue

HDFC STANDARD LIFE INSURANCE COMPANY LIMITEDOur Company was incorporated at Mumbai on August 14, 2000 as “HDFC Standard Life Insurance Company Limited” a public limited company under the Companies Act, 1956. Our Company obtained a certificate of commencement of business on October 12, 2000 and the certificate of registration from the Insurance Regulatory and Development Authority of India (“IRDAI”) to undertake life insurance business on October 23, 2000.Registered Office: 13th Floor, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai – 400 011. Corporate Office: 12th, 13th, and 14th Floor, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai – 400 011. For details of changes to the address of the registered office of our Company, please see “History and Certain Corporate Matters” on page 260 of this Red Herring Prospectus.

Telephone: +91 (22) 6751 6666; Facsimile: +91 (22) 6751 6861Contact Person: Narendra Gangan, Company Secretary and Compliance Officer;

Email: [email protected]; Website: www.hdfclife.com;Corporate Identity Number: U99999MH2000PLC128245; IRDAI Registration Number: 101

PROMOTERS OF OUR COMPANY: HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED, STANDARD LIFE (MAURITIUS HOLDINGS) 2006 LIMITED AND STANDARD LIFE ABERDEEN PLCINITIAL PUBLIC OFFERING OF UP TO 299,827,818 EQUITY SHARES OF FACE VALUE OF ` 10 EACH (“EQUITY SHARES”) OF HDFC STANDARD LIFE INSURANCE COMPANY LIMITED (“COMPANY” OR “ISSUER”) FOR CASH AT A PRICE OF ` [●] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ` [●] PER EQUITY SHARE, AGGREGATING UP TO ` [●] MILLION THROUGH AN OFFER FOR SALE OF 191,246,050 EQUITY SHARES BY HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED AND UP TO 108,581,768 EQUITY SHARES BY STANDARD LIFE (MAURITIUS HOLDINGS) 2006 LIMITED (“THE PROMOTER SELLING SHAREHOLDERS” AND SUCH OFFERING, “THE OFFER”). THE OFFER COMPRISES A NET OFFER TO THE PUBLIC OF UP TO 266,895,517 EQUITY SHARES (“NET OFFER”), A RESERVATION OF UP TO 2,144,520 EQUITY SHARES (CONSTITUTING UP TO 0.11% OF OUR POST OFFER PAID UP EQUITY SHARE CAPITAL) FOR PURCHASE BY THE ELIGIBLE HDFC LIFE EMPLOYEES (AS DEFINED IN “DEFINITIONS AND ABBREVIATIONS”) AGGREGATING UP TO ` [●] MILLION (“HDFC LIFE EMPLOYEE RESERVATION PORTION”), RESERVATION OF UP TO 805,000 EQUITY SHARES (CONSTITUTING UP TO 0.04% OF OUR POST OFFER PAID UP EQUITY SHARE CAPITAL ) FOR PURCHASE BY THE ELIGIBLE HDFC EMPLOYEES (AS DEFINED IN “DEFINITIONS AND ABBREVIATIONS”) AGGREGATING UP TO ` [●] MILLION (“HDFC EMPLOYEE RESERVATION PORTION”) AND A RESERVATION OF UP TO 29,982,781 EQUITY SHARES (CONSTITUTING UP TO 1.49% OF OUR POST-OFFER PAID UP EQUITY SHARE CAPITAL FOR PURCHASE BY ELIGIBLE HDFC SHAREHOLDERS (AS DEFINED IN “DEFINITIONS AND ABBREVIATIONS”) FOR CASH AT A PRICE OF ` [●] PER EQUITY SHARE AGGREGATING UPTO ` [●] MILLION (“HDFC SHAREHOLDERS RESERVATION PORTION”). THE OFFER SHALL CONSTITUTE 14.92% OF THE FULLY DILUTED POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY, I.E., ASSUMING EXERCISE OF ALL VESTED EMPLOYEE STOCK OPTIONS AND THE NET OFFER SHALL CONSTITUTE 13.28% OF THE FULLY DILUTED POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY, I.E., ASSUMING EXERCISE OF ALL VESTED EMPLOYEE STOCK OPTIONS.THE FACE VALUE OF THE EQUITY SHARES IS ` 10 EACH. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY AND THE PROMOTER SELLING SHAREHOLDERS IN CONSULTATION WITH THE MANAGERS, AND ADVERTISED IN ALL EDITIONS OF BUSINESS STANDARD (WHICH IS A WIDELY CIRCULATED ENGLISH AND HINDI NEWSPAPER AND MUMBAI EDITION OF NAVSHAKTI (WHICH IS A WIDELY CIRCULATED MARATHI NEWSPAPER, MARATHI BEING THE REGIONAL LANGUAGE OF MAHARASHTRA, WHERE OUR REGISTERED OFFICE IS LOCATED), AT LEAST FIVE WORKING DAYS PRIOR TO THE OFFER OPENING DATE IN ACCORDANCE WITH THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, AS AMENDED (THE “ICDR REGULATIONS”) AND SUCH ADVERTISEMENT SHALL BE MADE AVAILABLE TO BSE LIMITED (“BSE”) AND NATIONAL STOCK EXCHANGE OF INDIA LIMITED (“NSE”) FOR THE PURPOSE OF UPLOADING ON THEIR RESPECTIVE WEBSITES.In case of a revision in the Price Band, the Offer Period will be extended by at least three additional Working Days after such revision of the Price Band, subject to the Offer Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Offer Period, if applicable, will be widely disseminated by notification to BSE and NSE, by issuing a press release and also by indicating the change on the websites of the Managers and at the terminals of the Syndicate Members.The Offer is being made in compliance with the requirements of the Insurance Regulatory and Development Authority of India (Issuance of Capital by Indian Insurance Companies transacting Life Insurance Business) Regulations, 2015, as amended (“IRDAI Issuance of Capital Regulations”).Furthermore, in terms of Rule 19(2)(b)(iii) of the Securities Contracts Regulations Rules, 1957, as amended (“SCRR”) read with Regulation 41 of the ICDR Regulations, this is an Offer for at least 10% of the post-Offer paid-up equity share capital of our Company, on a fully diluted basis. The Offer is being made through the Book Building Process, in accordance with Regulation 26(1) of the ICDR Regulations, wherein not more than 50% of the Net Offer shall be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”). Provided that our Company and the Promoter Selling Shareholders, in consultation with the Managers, may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis of which one-third shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not less than 15% of the Net Offer shall be available for allocation on a proportionate basis to Non-Institutional Investors and not less than 35% of the Net Offer shall be available for allocation on a proportionate basis to Retail Individual Investors, in accordance with the ICDR Regulations, subject to valid Bids being received at or above the Offer Price. Further, 2,144,520 Equity Shares will be available for Allocation to Eligible HDFC Life Employees, 805,000 Equity Shares will be available for Allocation to Eligible HDFC Employees, and 29,982,781 Equity Shares will be available for Allocation to Eligible HDFC Shareholders, subject to valid Bids being received from them at or above the Offer Price. All Bidders, other than Anchor Investors, are required to mandatorily utilise the Application Supported by Blocked Amount (“ASBA”) process providing details of their respective bank accounts which will be blocked by the Self Certified Syndicate Banks (“SCSBs”), to participate in this Offer. Anchor Investors are not permitted to participate in the Offer through the ASBA process. For details, please see “Offer Procedure” on page 709 of this Red Herring Prospectus.

RISKS IN RELATION TO FIRST OFFERThis being the first public offer of our Company, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares is ` 10 each. The Floor Price is [●] times the face value of the Equity Shares and the Cap Price is [●] times the face value of the Equity Shares. The Offer Price (as has been determined by our Company and the Promoter Selling Shareholders in consultation with the Managers, and justified as stated in the section “Basis for Offer Price” on page 153 of this Red Herring Prospectus) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding active and / or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.

GENERAL RISKSInvestment in equity and equity-related securities involves a degree of risk and Bidders should not invest any funds in the Offer unless they can afford to take the risk of losing their investment. Bidders are advised to read the Risk Factors carefully before taking an investment decision in the Offer. For taking an investment decision, Bidders must rely on their own examination of our Company and the Offer, including the risks involved. The Equity Shares offered in the Offer have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Red Herring Prospectus. Specific attention of the Bidders is invited to the section “Risk Factors” on page 23 of this Red Herring Prospectus.

DISCLAIMER CLAUSE OF THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA (THE “IRDAI”)THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA (“IRDAI”) DOES NOT UNDERTAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF OUR COMPANY OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THIS CONNECTION. ANY APPROVAL BY THE IRDAI UNDER THE IRDAI ISSUANCE OF CAPITAL REGULATIONS SHALL NOT IN ANY MANNER BE DEEMED TO BE OR SERVE AS A VALIDATION OF THE REPRESENTATIONS BY OUR COMPANY IN THE OFFER DOCUMENT.

COMPANY’S AND THE PROMOTER SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITYOur Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Red Herring Prospectus contains all information with regard to our Company and the Offer, which is material in the context of the Offer, that the information contained in this Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions, misleading in any material respect. Further, each of the Promoter Selling Shareholders, severally and not jointly, accept responsibility only for the statements made by such Promoter Selling Shareholder in this Red Herring Prospectus as a Promoter Selling Shareholder in the context of the Offer and the Equity Shares offered by such Promoter Selling Shareholder in the Offer and that such statements are true and correct in all material respects and are not misleading in any material respect.

LISTINGThe Equity Shares offered through this Red Herring Prospectus are proposed to be listed on BSE and NSE. Our Company received “in-principle” approvals from BSE and NSE for listing of the Equity Shares pursuant to their letters dated September 4, 2017 and August 29, 2017, respectively. For the purposes of the Offer, the Designated Stock Exchange shall be NSE. A copy of this Red Herring Prospectus and the Prospectus shall be delivered to the RoC for registration in accordance with the Companies Act, 2013. For details of the material contracts and documents that will be available for inspection from the date of this Red Herring Prospectus up to the Offer Closing Date, please see “Material Contracts and Documents for Inspection” on page 799 of this Red Herring Prospectus.

GLOBAL CO-ORDINATORS AND BOOK RUNNING LEAD MANAGERS

Morgan Stanley India Company Private Limited18F, Tower 2, One Indiabulls Centre, 841, Senapati Bapat Marg, Lower ParelMumbai - 400 013 Maharashtra, IndiaTelephone: +91 (22) 6118 1770Facsimile: +91 (22) 6118 1031Email: [email protected]: https://www.morganstanley.com/about-us/global-offices/indiaInvestor Grievance ID: [email protected] Person: Mr. Rahul JainSEBI Registration No.: INM000011203

HDFC Bank Limited*Investment Banking Group, Unit No. 401 & 402, 4th Floor, Tower B, Peninsula Business Park, Lower Parel Mumbai - 400 013 Maharashtra, IndiaTelephone: +91 (22) 339 58021Facsimile: +91 (22) 3078 8584 Email: [email protected]: www.hdfcbank.comInvestor Grievance ID: [email protected] Person: Mr. Rakesh Bhunatar/ Mr. Kunal DattSEBI Registration No.: INM000011252

Credit Suisse Securities (India) Private LimitedCeejay House, 9th Floor Plot F, Shivsagar Estate Dr. Annie Besant Road Worli, Mumbai - 400 018 Maharashtra, IndiaTelephone: +91 (22) 6777 3885Facsimile: +91 (22) 6777 3820Email: [email protected]: https://www.credit-suisse.com/in/en/investment-banking/regional- presence/asia-pacific/india/ipo.htmlInvestor Grievance ID: [email protected] Person: Mr. Abhay Agarwal SEBI Registration No.: INM000011161

CLSA India Private Limited8/F Dalamal House Nariman Point Mumbai - 400 021Telephone: +91 (22) 6650 5050Facsimile: +91 (22) 2284 0271E-mail: [email protected]: www.india.clsa.comInvestor Grievance ID: [email protected] person: Anurag AgarwalSEBI registration number: INM000010619

Nomura Financial Advisory and Securities (India) Private Limited Ceejay House, Level 11, Plot F, Shivsagar Estate,Dr. Annie Besant Marg, Worli Mumbai – 400 018 Maharashtra, IndiaTelephone: +91 (22) 4037 4037Facsimile: +91 (22) 4037 4111 Email: [email protected]: www.nomuraholdings.com/company/group/asia/india/index.htmlInvestor Grievance ID: investorgrievances- [email protected] Person: Mr. Sumit Sukhramani / Mr. Sandeep BaidSEBI registration number: INM000011419

BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE OFFER

Edelweiss Financial Services Limited14th Floor, Edelweiss HouseOff. C.S.T Road, KalinaMumbai – 400 098, IndiaTelephone: + 91 (22) 4009 4400Facsimile : +91 (22) 4086 3610Website: www.edelweissfin.comEmail: [email protected] Grievance ID:[email protected] person: Mr. Pradeep Tewani/Mr. Kunal MalkanSEBI registration number:INM0000010650

Haitong Securities India Private Limited1203A, Floor 12A, Tower 2A, One IndiabullsCentre, 841, Senapati Bapat Marg,Elphinstone Road,Mumbai – 400 013Maharashtra, IndiaTelephone: +91 (22) 4315 6859Facsimile: +91 (22) 2421 6327Email: [email protected]: http://www.htisec.com/en-us/haitong-indiaInvestor Grievance ID:[email protected] Person: Mr. Himanshu KashyapSEBI Registration No.: INM000012045

IDFC Bank LimitedNaman Chambers, C-32G Block, Bandra Kurla ComplexBandra (East),Mumbai – 400 051Maharashtra, IndiaTelephone: +91 (22) 6622 2600Facsimile: +91 (22) 6622 2501Email: [email protected]: www.idfcbank.comInvestor Grievance ID: [email protected] Person: Mr. Akshay BhandariSEBI Registration No.:MB/INM000012250

IIFL Holdings Limited10th Floor, IIFL Centre Kamala City, Senapati Bapat Marg, Lower Parel (West) Mumbai– 400 013Maharashtra, IndiaTelephone: +91 (22) 4646 4600Facsimile: +91 (22) 2493 1073Email: [email protected]: www.iiflcap.comInvestor Grievance ID: [email protected] Person: Pinak Rudra Bhattacharyya / Pranay DoshiSEBI Registration No: INM000010940

UBS Securities India Private Limited2/F,2 North Avenue, Maker MaxityBandra Kurla Complex, Bandra (East)Mumbai – 400 051Maharashtra, IndiaTelephone: +91 (22) 6155 6000Facsimile: +91 (22) 6155 6292Email: [email protected]: www.ubs.com/indianoffersInvestor Grievance ID:[email protected] Person: Ms. Jasmine KaurSEBI Registration No.: INM000010809

Karvy Computershare Private LimitedKarvy Selenium Tower B, Plot 31-32,Gachibowli, Financial District,NanakramgudaHyderabad – 500 032Andhra Pradesh, IndiaTelephone: +91 (40) 6716 2222Facsimile: +91 (40) 2343 1551Email: [email protected]: https://karisma.karvy.com/Investor Grievance ID: [email protected] Person: Mr. M. Murali KrishnaSEBI Registration No. INR000000221

OFFER PROGRAMMEFOR ALL BIDDERS, OFFER OPENS ON** NOVEMBER 7, 2017

OFFER CLOSES ON NOVEMBER 9, 2017*In compliance with the proviso to Regulation 21A(1) of the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992, as amended, read with proviso to Regulation 5(3) of the ICDR Regulations, HDFC Bank Limited will be involved as a merchant banker only in marketing of the Offer.**Our Company and the Promoter Selling Shareholders in consultation with the Managers may consider participation by Anchor Investors in accordance with the ICDR Regulations. The Anchor Investor Bidding Date shall be one Working Day prior to the Offer Opening Date i.e. November 6, 2017.

http://www.hdfclife.com/mailto:[email protected]://www.nomuraholdings.com/company/group/asia/india/index.htmlhttp://www.nomuraholdings.com/company/group/asia/india/index.htmlmailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://www.iiflcap.com/mailto:[email protected]://karisma.karvy.com/http://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.gitsacademy.com/Online/training/hadoop-course.php&ei=54oWVZLTFYW9uASvi4CgBg&bvm=bv.89381419,d.c2E&psig=AFQjCNHLOiCjqwlJuQmfXiyKkYpvxStTvg&ust=1427627078418890

TABLE OF CONTENTS

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

DEFINITIONS AND ABBREVIATIONS................................................................................................................................................ 1

CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ..................................... 18

FORWARD-LOOKING STATEMENTS .............................................................................................................................................. 21

SECTION II: RISK FACTORS .................................................................................................................................................................. 23

SECTION III: INTRODUCTION .............................................................................................................................................................. 72

SUMMARY OF INDUSTRY .................................................................................................................................................................. 72

SUMMARY OF OUR BUSINESS .......................................................................................................................................................... 82

SUMMARY OF FINANCIAL INFORMATION .................................................................................................................................. 91

THE OFFER .......................................................................................................................................................................................... 100

GENERAL INFORMATION ............................................................................................................................................................... 102

CAPITAL STRUCTURE ...................................................................................................................................................................... 112

OBJECTS OF THE OFFER ................................................................................................................................................................. 151

BASIS FOR OFFER PRICE ................................................................................................................................................................. 153

STATEMENT OF TAX BENEFITS .................................................................................................................................................... 157

SECTION IV: ABOUT OUR COMPANY ............................................................................................................................................... 168

INDUSTRY OVERVIEW ..................................................................................................................................................................... 168

OUR BUSINESS .................................................................................................................................................................................... 201

REGULATIONS AND POLICIES ....................................................................................................................................................... 244

HISTORY AND CERTAIN CORPORATE MATTERS .................................................................................................................... 260

OUR MANAGEMENT ......................................................................................................................................................................... 266

OUR PROMOTERS, PROMOTER GROUP AND GROUP COMPANIES .................................................................................... 293

RELATED PARTY TRANSACTIONS ............................................................................................................................................... 330

DIVIDEND POLICY ............................................................................................................................................................................. 331

SECTION V: FINANCIAL INFORMATION ......................................................................................................................................... 332

FINANCIAL STATEMENTS ............................................................................................................................................................... 332

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION ....... 551

SECTION VI: EMBEDDED VALUE REPORT ..................................................................................................................................... 590

SECTION VII: LEGAL AND OTHER INFORMATION ...................................................................................................................... 636

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS ...................................................................................... 636

GOVERNMENT AND OTHER APPROVALS .................................................................................................................................. 664

OTHER REGULATORY AND STATUTORY DISCLOSURES ...................................................................................................... 667

SECTION VIII: OFFER INFORMATION ............................................................................................................................................. 696

TERMS OF THE OFFER ..................................................................................................................................................................... 696

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ................................................................................. 702

OFFER STRUCTURE .......................................................................................................................................................................... 703

OFFER PROCEDURE .......................................................................................................................................................................... 709

SECTION IX: MAIN PROVISIONS OF OUR ARTICLES OF ASSOCIATION ................................................................................ 762

SECTION X: OTHER INFORMATION ................................................................................................................................................. 799

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ........................................................................................... 799

DECLARATION ................................................................................................................................................................................... 802

SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

Unless the context otherwise implies or requires, the terms and abbreviations stated hereunder shall have the

meaning as assigned below. References to statutes, rules, regulations, guidelines and policies will, unless the

context otherwise requires, be deemed to include all amendments, modifications and replacements notified thereto

as of the date of this Red Herring Prospectus.

Company and Promoter Selling Shareholders' related terms

Term Description

“Company”, “our

Company”, “HDFC

Standard Life” or

“Issuer”

HDFC Standard Life Insurance Company Limited, a company incorporated under the

Companies Act, 1956 and having its registered office at 13th Floor, Lodha Excelus, Apollo

Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011.

“we”, “us”, or “our” Unless the context otherwise requires or implies, HDFC Standard Life Insurance Company

Limited and its Subsidiaries, on a consolidated basis

“Appointed Actuary” The appointed actuary of our Company, Mr. Srinivasan Parthasarathy

“Articles” or “Articles

of Association”

The articles of association of our Company, as amended

“Auditors” or “Joint

Statutory Auditors”

The joint statutory auditors of our Company, being M/s. Price Waterhouse Chartered

Accountants LLP, Chartered Accountants and M/s. G.M. Kapadia & Co., Chartered

Accountants

“Audit Committee” The audit committee of our Board constituted in accordance with the Companies Act, 2013,

along with the Listing Regulations and IRDAI CG Guidelines

“Board” or “Board of

Directors”

The board of directors of our Company, including any committees thereof

“Chief Financial

Officer”

The chief financial officer of our Company, Ms. Vibha Padalkar

“Compliance Officer” The compliance officer of our Company, Mr. Narendra Gangan

“Corporate Office” The corporate office of our Company, situated at 12th,13th and 14th Floor, Lodha Excelus,

Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011

“CSR Committee” The corporate social responsibility committee of our Board constituted in accordance with the

Companies Act, 2013

“Director(s)” Director(s) on the Board of our Company

“Equity Shares” Equity shares of our Company of face value of ` 10 each “ESOS 2005” Employee Stock Option Scheme, 2005

“ESOS 2010” Employee Stock Option Scheme, 2010

“ESOS 2010-II” Employee Stock Option Scheme, 2010-II






“ESOS Scheme(s)” ESOS 2005, ESOS 2010, ESOS 2010-II, ESOS 2011, ESOS 2012, ESOS 2014, ESOS 2015,

and ESOS 2016 collectively

“ESOS Trust” HDFC Standard Life Employees Stock Options Trust

“Executive Committee” The committee of our Board constituted pursuant to a resolution dated April 26, 2012 and

formerly known as the IPO Committee

“Executive Director” An executive director of our Company

“Group” Our Company and Subsidiaries on a consolidated basis

“Group Companies” Such companies as covered under the applicable accounting standards and also other companies

as considered material by our Board pursuant to a policy on materiality of group companies

approved by our Board on August 16, 2017 and as disclosed in “Our Promoters, Promoter

Group and Group Companies” on page 312 of this Red Herring Prospectus

“GRUH” GRUH Finance Limited

“HDFC” Housing Development Finance Corporation Limited

“HDFC International” HDFC International Life and Re Company Limited

“HDFC Pension” HDFC Pension Management Company Limited

“HDFC Trust” HDFC Employees Welfare Trust

“Independent Actuary” Richard Holloway, a partner in Milliman Advisors LLP, has acted as the Independent Actuary

in accordance with the IRDAI Issuance of Capital Regulations

“Independent Director” A non-executive, independent director of our Company appointed as per the Companies Act,

1

Term Description

2013 and the Listing Regulations

“KMP” or “Key

Management

Personnel”

Key management personnel of our Company in terms of the ICDR Regulations and the IRDAI

CG Guidelines, as disclosed in “Our Management” on page 290 of this Red Herring Prospectus

“MD & CEO” or

“Managing Director and

Chief Executive

Officer”

The managing director and chief executive officer of our Company, Mr. Amitabh Chaudhry

“Memorandum” or

“Memorandum of

Association”

The memorandum of association of our Company, as amended

“Name Usage

Agreement”

The name usage agreement entered into between our Company and HDFC on October 20, 2015

“Nomination and

Remuneration

Committee”

The nomination and remuneration committee of our Board constituted in accordance with the

Companies Act, 2013 along with the Listing Regulations and IRDAI CG Guidelines

“Non-Executive

Director”

A Director not being an Executive Director

“Nominee Director” Non-Executive Directors of our Company appointed on the Board of Directors pursuant to the

Shareholders’ Agreement

“Promoters” The promoters of our Company, namely, Housing Development Finance Corporation Limited,

Standard Life (Mauritius Holdings) 2006 Limited and Standard Life Aberdeen plc

“Promoter Group” Such persons and entities which constitute the promoter group of our Company pursuant to

Regulation 2 (1)(zb) of the ICDR Regulations

“Registered Office” The registered office of our Company located at 13th Floor, Lodha Excelus, Apollo Mills

Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011

“Registrar of

Companies” or “RoC”

Registrar of Companies, Maharashtra situated at Everest, 100, Marine Drive, Mumbai 400 002

“Restated Consolidated

Financial Information”

The restated consolidated financial information of our Group for the Fiscals 2013, 2014, 2015,

2016, 2017 and the six months ended September 30, 2017 prepared in accordance with the

Companies Act and restated in accordance with the requirements of the ICDR Regulations and

the relevant provisions of the IRDAI Issuance of Capital Regulations

“Restated Financial

Information”

Restated Consolidated Financial Information and Restated Standalone Financial Information

collectively.

“Restated Standalone

Financial Information”

The restated standalone financial information of our Company for the Fiscals 2013, 2014, 2015,

2016, 2017 and the six months ended September 30, 2017 prepared in accordance with

Companies Act and restated in accordance with the requirements of the ICDR Regulations and

the relevant provisions of the IRDAI Issuance of Capital Regulations

“Risk Management

Committee”

The risk management committee of our Board constituted in accordance with the Listing

Regulations and the IRDAI CG Guidelines

“Shareholder(s)” Shareholders of our Company, from time to time

“Shareholders’

Agreement” or “SHA”

Shareholders’ agreement entered into between HDFC and The Standard Life Assurance

Company 2006 (formerly known as The Standard Life Assurance Company) on January 15,

2002, as amended by the amendment agreement entered into between our Company, HDFC and

Standard Life Mauritius on November 16, 2015 and amended pursuant to the termination

agreement dated August 18, 2017

“Stakeholders’

Relationship

Committee”

The stakeholders’ relationship committee of our Board constituted in accordance with the

Companies Act, 2013 along with the Listing Regulations

“Standard Life” Standard Life Mauritius and Standard Life Aberdeen

“Standard Life

Assurance”

The Standard Life Assurance Company 2006 formerly known as The Standard Life Assurance

Company

“Standard Life

Mauritius”

Standard Life (Mauritius Holdings) 2006 Limited

“Standard Life

Aberdeen”

Standard Life Aberdeen plc formerly known as Standard Life plc

“Subsidiary” or

“Subsidiaries”

A subsidiary of our Company as of the date of this Red Herring Prospectus, in accordance with

the Companies Act, 2013, and as set out in “Our Promoters, Promoter Group and Group

Companies - Subsidiaries” on page 318 of this Red Herring Prospectus

“Trademark

Agreement”

The trademark agreement entered into between our Company, Standard Life Mauritius and

Standard Life Employee Services Limited on October 18, 2017

“With Profits

Committee”

A committee of the Directors of our Company constituted in accordance with the IRDAI (Non-

Linked Insurance Products) Regulations, 2013

2

Offer Related Terms

Term Description

“Acknowledgement

Slip”

The slip or document issued by the Designated Intermediary to a Bidder as proof of registration of the

Bid cum Application Form

“Allot”,

“Allotment” or

“Allotted”

Unless the context otherwise requires, the transfer of Equity Shares to successful Bidders by the

Promoter Selling Shareholders pursuant to the Offer

“Allotment

Advice”

A note or advice or intimation of Allotment, sent to each successful Bidder who has been or is to be

Allotted the Equity Shares after approval of the Basis of Allotment by the Designated Stock Exchange

“Allottee” A successful Bidder to whom the Equity Shares are Allotted

“Anchor Investor” A Qualified Institutional Buyer, applying under the Anchor Investor Portion in accordance with the

requirements specified under the ICDR Regulations and this Red Herring Prospectus

“Anchor Investor

Allocation Price”

The price at which Equity Shares will be allocated to the Anchor Investors in terms of this Red Herring

Prospectus and the Prospectus, which will be decided by our Company and the Promoter Selling

Shareholders in consultation with the Managers

“Anchor Investor

Bidding Date”

The day, one Working Day prior to the Offer Opening Date, on which Bids by Anchor Investors shall

be submitted and allocation to Anchor Investors shall be completed

“Anchor Investor

Form”

The form used by an Anchor Investor to Bid in the Anchor Investor Portion and which will be

considered as an application for Allotment in terms of this Red Herring Prospectus and the Prospectus

“Anchor Investor

Offer Price”

The final price at which Equity Shares will be Allotted to Anchor Investors in terms of this Red Herring

Prospectus and the Prospectus, which price will be equal to or higher than the Offer Price but not higher

than the Cap Price. The Anchor Investor Offer Price will be decided by our Company and the Promoter

Selling Shareholders in consultation with the Managers

“Anchor Investor

Portion”

Up to 60% of the QIB Portion, which may be allocated by our Company and the Promoter Selling

Shareholders, in consultation with the Managers, to Anchor Investors on a discretionary basis in

accordance with the ICDR Regulations, out of which one third shall be reserved for domestic Mutual

Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor

Investor Allocation Price

“Application

Supported by

Blocked Amount”

or “ASBA”

An application, whether physical or electronic, used by ASBA Bidders to make a Bid authorising an

SCSB to block the Bid Amount in the ASBA Account

“ASBA Account” A bank account maintained with an SCSB and specified in the ASBA Form submitted by an ASBA

Bidder, which will be blocked by such SCSB to the extent of the Bid Amount specified in the ASBA

Form

“ASBA Bidder” All bidders except Anchor Investors

“ASBA Form” An application form, whether physical or electronic, used by ASBA Bidders which will be considered

as the application for Allotment in terms of this Red Herring Prospectus and the Prospectus

“Banker to the

Offer”

The Escrow Collection Bank, Public Offer Account Bank and Refund Bank, collectively

“Basis of

Allotment”

The basis on which the Equity Shares will be Allotted to successful Bidders under the Offer, as

described in “Offer Procedure – Allotment Procedure and Basis of Allotment” on page 749 of this Red

Herring Prospectus

“Bid” An indication to make an offer during the Offer Period by an ASBA Bidder, or on the Anchor Investor

Bidding Date by an Anchor Investor, pursuant to the submission of a Bid cum Application Form, to

purchase, the Equity Shares at a price within the Price Band, including all revisions thereto as permitted

under the ICDR Regulations, and the term “Bidding” shall be construed accordingly

“Bid Amount” In relation to each Bid shall mean the highest value of the optional Bids indicated in the Bid cum

Application Form and payable by the Bidder, or blocked in the ASBA Account of the ASBA Bidders,

as the case maybe, upon submission of the Bid in the Offer

“Bid cum

Application Form”

Anchor Investor Form or the ASBA Form, as the context requires

“Bid Lot” [●] Equity Shares

“Bidder” Any prospective investor who makes a Bid pursuant to the terms of this Red Herring Prospectus and the

Bid cum Application Form and unless otherwise stated or implied, includes an Anchor Investor

“Bidding Centres” Centres at which the Designated Intermediaries shall accept the ASBA Forms, i.e., Designated

Branches for SCSBs, Specified Locations for the Syndicate, Broker Centres for Registered Brokers,

Designated RTA Locations for RTAs and Designated CDP Locations for CDPs

“Book Building

Process”

The book building process as described in Part A, Schedule XI of the ICDR Regulations, in terms of

which the Offer is being made

“Book Running

Lead Manager(s) or

The book running lead managers being Edelweiss Financial Services Limited, Haitong Securities India

Private Limited, IDFC Bank Limited, IIFL Holdings Limited and UBS Securities India Private Limited

3

Term Description

BRLM(s)”

“Broker Centre” Broker centres notified by the Stock Exchanges where ASBA Bidders can submit the ASBA Forms to

Registered Brokers and details of which, along with the names and contact details of the Registered

Broker are available on the websites of the respective Stock Exchanges as below:

www.bseindia.com and https://www.nseindia.com/

“CAN” or

“Confirmation of

Allocation Note”

The note or advice or intimation of allocation sent to Anchor Investors who have been allocated Equity

Shares after the Anchor Investor Bidding Date

“Cap Price” The higher end of the Price Band, i.e. ` [●], above which the Offer Price and the Anchor Investor Offer Price will not be finalised and above which no Bids will be accepted

“Cash Escrow

Agreement”

The agreement entered into amongst our Company, the Registrar to the Offer, the Syndicate, the

Promoter Selling Shareholders, the Escrow Collection Bank, the Public Offer Account Bank, and the

Refund Bank for, amongst other things, collection of the Bid Amounts from Anchor Investors and

where applicable, refunds of the amounts collected on the terms and conditions thereof

“Client ID” Client identification number maintained with one of the Depositories in relation to the demat account

“CLSA” CLSA India Private Limited

“Collecting

Depository

Participant” or

“CDP”

A depository participant as defined under the Depositories Act, 1996, registered with SEBI and who is

eligible to procure Bids at the Designated CDP Locations in terms of circular no.

CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI

“CS” Credit Suisse Securities (India) Private Limited

“Cut-off Price” The Offer Price, as finalised by our Company and the Promoter Selling Shareholders in consultation

with the Managers.

Only Retail Individual Investors, Eligible HDFC Life Employees Bidding under the HDFC Life

Employee Reservation Portion, Eligible HDFC Employees Bidding under the HDFC Employees

Reservation Portion and Eligible HDFC Shareholders Bidding under the HDFC Shareholders

Reservation Portion are entitled to Bid at the Cut-off Price.

“Demographic

Details”

The demographic details of the Bidders such as their respective addresses, occupation, PAN, name of

the Bidder’s father/ husband, investor status, MICR Code and bank account details

“Designated

Branches”

Such branches of the SCSBs which shall collect the ASBA Forms, a list of which is available on the

website of the SEBI at

(http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34) and

updated from time to time, and at such other websites as may be prescribed by SEBI from time to time

“Designated CDP

Locations”

Such locations of the CDPs where ASBA Bidders can submit the ASBA Forms, a list of which, along

with names and contact details of the Collecting Depository Participants eligible to accept ASBA

Forms are available on the websites of the respective Stock Exchanges (www.bseindia.com and

https://www.nseindia.com/ )

“Designated Date” The date, after approval of the Basis of Allotment by the Designated Stock Exchanges, on which funds

are transferred from the Escrow Accounts to the Public Offer Account or the Refund Account, as

appropriate, or the funds blocked by the SCSBs are transferred from the ASBA Accounts to the Public

Offer Account, as the case may be, after the Prospectus is filed with the RoC

“Designated

Intermediaries”

The members of the Syndicate, Sub-Syndicate/agents, SCSBs, Registered Brokers, the CDPs and

RTAs, who are authorised to collect Bid cum Application Forms from the Bidders, in relation to the

Offer

“Designated RTA

Locations”

Such locations of the RTAs where ASBA Bidders can submit the ASBA Forms to RTAs, a list of

which, along with names and contact details of the RTAs eligible to accept ASBA Forms are available

on the respective websites of the Stock Exchanges (www.bseindia.com and https://www.nseindia.com/

)

“Designated Stock

Exchange”

NSE

“Draft Red Herring

Prospectus” or

“DRHP”

The draft red herring prospectus dated August 18, 2017, along with the corrigendum dated August 23,

2017 issued in accordance with the ICDR Regulations, which did not contain complete particulars of

the Offer, including the price at which the Equity Shares will be Allotted and the size of the Offer

“Edelweiss” Edelweiss Financial Services Limited

“Eligible HDFC

Employees”

A permanent and full time employee of our holding company, i.e. HDFC, as of the date of registering

this Red Herring Prospectus with RoC, and who continues to be an employee of HDFC at the time of

submission of the Bid cum Application Form (excluding such employees who are not eligible to invest

in the Offer under applicable laws)

The maximum Bid Amount under the HDFC Employee Reservation Portion by an Eligible HDFC

Employee shall not exceed ₹ 500,000. However, the initial Allotment to an Eligible HDFC Employee in

the HDFC Employee Reservation Portion shall not exceed ₹ 200,000. Only in the event of an under-

subscription in the HDFC Employee Reservation Portion post the initial Allotment, such unsubscribed

portion may be Allotted on a proportionate basis to Eligible HDFC Employees Bidding in the HDFC

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Term Description

Employee Reservation Portion, for a value in excess of ₹ 200,000, subject to the total Allotment to an

Eligible HDFC Employee not exceeding ₹ 500,000.

“Eligible HDFC

Life Employee(s)”

A permanent and full time employee of our Company as of the date of registering the Red Herring

Prospectus with RoC, and who continues to be an employee of our Company at the time of submission

of the Bid cum Application Form (excluding such employees who are not eligible to invest in the Offer

under applicable laws)

The maximum Bid Amount under the HDFC Life Employee Reservation Portion by an Eligible HDFC

Life Employee shall not exceed ₹ 500,000. However, the initial Allotment to an Eligible HDFC Life

Employee in the HDFC Life Employee Reservation Portion shall not exceed ₹ 200,000. Only in the

event of an under-subscription in the HDFC Life Employee Reservation Portion post the initial

Allotment, such unsubscribed portion may be Allotted on a proportionate basis to Eligible HDFC Life

Employees Bidding in the HDFC Life Employee Reservation Portion, for a value in excess of

₹ 200,000, subject to the total Allotment to an Eligible HDFC Life Employee not exceeding ₹ 500,000

“Eligible HDFC

Shareholders”

Individuals and HUFs who were the public equity shareholders of HDFC, one of our Promoters and

Group Companies (excluding such persons who are not eligible to invest in the Offer under applicable

laws) as on the date of the Draft Red Herring Prospectus, i.e, August 18, 2017.

The maximum Bid Amount under the HDFC Shareholders Reservation Portion by an Eligible HDFC

Shareholder shall not exceed ₹ 200,000

“Eligible FPIs” FPIs from such jurisdictions outside India where it is not unlawful to make an offer / invitation under

the Offer and in relation to whom the Bid cum Application Form and this Red Herring Prospectus

constitutes an invitation to purchase the Equity Shares offered thereby

“Eligible NRIs” NRIs from jurisdictions outside India where it is not unlawful to make an offer or invitation under the

Offer and in relation to whom the Bid cum Application Form and this Red Herring Prospectus will

constitute an invitation to purchase the Equity Shares offered thereby

“Escrow

Account(s)”

Accounts opened with the Escrow Collection Bank(s) in whose favour Anchor Investors will transfer

money through direct credit/ NACH/ NEFT/ RTGS in respect of Bid Amounts when submitting a Bid

“Escrow Collection

Bank”

The banks which are clearing members and registered with SEBI under the BTI Regulations, with

whom the Escrow Account(s) will be opened, being HDFC Bank

“First Bidder” The Bidder whose name appears first in the Bid cum Application Form or the Revision Form and in

case of joint Bids, whose name shall also appear as the first holder of the beneficiary account held in

joint names

“Floor Price” The lower end of the Price Band, i.e., ` [●] subject to any revisions thereto, at or above which the Offer Price and the Anchor Investor Offer Price will be finalised and below which no Bids will be accepted

“General

Information

Document” or

“GID”

The General Information Document for investing in public issues prepared and issued in accordance

with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013, notified by SEBI, suitably modified

and included in “Offer Procedure” on page 725 of this Red Herring Prospectus

“Global Co-

ordinators and

Book Running

Lead Managers” or

“GCBRLM(s)”

The Global Co-ordinators and Book Running Lead Managers, being Morgan Stanley India Company

Private Limited, HDFC Bank Limited, Credit Suisse Securities (India) Private Limited, CLSA India

Private Limited, Nomura Financial Advisory and Securities (India) Private Limited

“Haitong” Haitong Securities India Private Limited

“HDFC Bank” HDFC Bank Limited

“HDFC Employee

Reservation

Portion”

Portion of the Offer, being 805,000 Equity Shares aggregating up to ` [●] million, available for allocation to Eligible HDFC Employees, on a proportionate basis

“HDFC

Shareholders

Reservation

Portion”

Portion of the Offer being 29,982,781 Equity Shares aggregating up to ` [●] million available for allocation to Eligible HDFC Shareholders, on a proportionate basis

“HDFC Life

Employee

Reservation

Portion”

Portion of the Offer, being 2,144,520 Equity Shares, aggregating up to ` [●] million, available for allocation to Eligible HDFC Life Employees, on a proportionate basis

“IDFC” IDFC Bank Limited

“IIFL” IIFL Holdings Limited

“IRDAI

Application”

Application dated July 18, 2017 made by our Company for seeking prior approval of the IRDAI for the

Offer in terms of the IRDAI Issuance of Capital Regulations

“IRDAI Approval” Approval received from the IRDAI for the Offer pursuant to requirements of the IRDAI Issuance of

Capital Regulations by way of its in-principle approval (conveyed by way of letter no. 102.7/1/F&A-

Life/HDFC-IPO/119/2017 dated August 14, 2017) and final approval (conveyed by way of letter no.

102.7/1/F&A-Life/HDFC-IPO/2017-18/148 dated October 11, 2017)

5

Term Description

“Managers” Collectively, the Global Co-ordinators and Book Running Lead Managers and the Book Running Lead

Managers.

“Maximum RII

Allottees”

Maximum number of Retail Individual Investors who can be Allotted the minimum Bid Lot. This is

computed by dividing the total number of Equity Shares available for Allotment to RIIs by the

minimum Bid Lot

“Morgan Stanley” Morgan Stanley India Company Private Limited

“Mutual Fund

Portion”

Up to 5% of the QIB Portion (other than Anchor Investor Portion) available for allocation to Mutual

Funds only, subject to valid Bids being received at or above the Offer Price

“Net Offer” The Offer less the HDFC Life Employee Reservation Portion, the HDFC Employee Reservation

Portion and the HDFC Shareholders Reservation Portion

“Nomura” Nomura Financial Advisory and Securities (India) Private Limited

“Non-Institutional

Investors”

All Bidders, including Category III FPIs, that are not QIBs or Retail Individual Investors who have Bid

for Equity Shares for an amount of more than ` 200,000 (but not including NRIs other than Eligible NRIs)

“Non-Institutional

Portion”

The portion of the Offer being not less than 15% of the Net Offer available for allocation to

Non-Institutional Investors on a proportionate basis, subject to valid Bids being received at or above the

Offer Price

“Offer” Initial public offering of up to 299,827,818 Equity Shares for cash at a price of ` [●] per Equity Share (including a share premium of ` [●] per Equity Share), aggregating up to ` [●] million consisting of an offer for sale of 191,246,050 Equity Shares by HDFC and up to 108,581,768 Equity Shares by Standard

Life Mauritius. The Offer includes a reservation of up to 2,144,520 Equity Shares in favour of Eligible

HDFC Life Employees under the HDFC Life Employee Reservation Portion, 805,000 Equity Shares in

favour of Eligible HDFC Employees under the HDFC Employee Reservation Portion and a reservation

of up to 29,982,781 Equity Shares in favour of Eligible HDFC Shareholders under the HDFC

Shareholders Reservation Portion for cash at a price of ` [●] per Equity Share aggregating up to ` [●] million. The Offer constitutes 14.92% of the fully diluted post-Offer paid-up Equity Share capital of our

Company and the Net Offer constitutes 13.28% of the fully diluted post-Offer paid-up Equity Share

capital of our Company

“Offer Agreement” The agreement entered into on August 18, 2017 amongst our Company, the Promoter Selling

Shareholders and the Managers (including any addendum thereto), pursuant to the ICDR Regulations,

based on which certain arrangements are agreed to in relation to the Offer

“Offer Closing

Date”

Except in relation to Bids received from the Anchor Investors, the date after which the Designated

Intermediaries will not accept any Bids, which shall be notified in in all editions of Business Standard

(which is a widely circulated English and Hindi newspaper), and in the Mumbai Edition of Navshakti

(which is a widely circulated Marathi newspaper), Marathi being the regional language of Maharashtra,

where our Registered Office is located.

“Offer Opening

Date”

Except in relation to Bids received from the Anchor Investors, the date on which the Designated

Intermediaries shall start accepting Bids, which shall be notified in all editions of Business Standard

(which is a widely circulated English and Hindi newspaper), and in the Mumbai Edition of Navshakti

(which is a widely circulated Marathi newspaper), Marathi being the regional language of Maharashtra,

where our Registered Office is located

“Offer Period” Except in relation to Bids received from the Anchor Investors, the period from and including the Offer

Opening Date to and including the Offer Closing Date during which ASBA Bidders can submit their

Bids, including any revisions thereto. The Offer Period will comprise of Working Days only

“Offer Price” The final price at which the Equity Shares will be Allotted to Bidders other than Anchor Investors in

terms of this Red Herring Prospectus. The Offer Price will be decided by our Company and the

Promoter Selling Shareholders in consultation with the Managers, on the Pricing Date

“Price Band” Any price between and including the Floor Price and the Cap Price, inclusive of the Floor Price and the

Cap Price, and includes revisions thereof

The Price Band and the minimum Bid Lot for the Offer will be decided by our Company and the

Promoter Selling Shareholders in consultation with the Managers and will be advertised in in all

editions of Business Standard (which is a widely circulated English and Hindi newspaper), and in the

Mumbai Edition of Navshakti (which is a widely circulated Marathi newspaper), Marathi being the

regional language of Maharashtra, where our Registered Office is located), at least five Working Days

prior to the Offer Opening Date

“Pricing Date” The date on which our Company and the Promoter Selling Shareholders in consultation with the

Managers, will finalise the Offer Price

“Promoter Selling

Shareholders”

Housing Development Finance Corporation Limited and Standard Life Mauritius

“Prospectus” The prospectus to be filed with the RoC in accordance with the Companies Act, 2013 and the ICDR

Regulations, containing, inter-alia, the Offer Price that is determined at the end of the Book Building

Process, the size of the Offer and certain other information, including any addenda or corrigenda thereto

“Public Offer

Account”

A bank account opened in accordance with the provisions of the Companies Act, 2013, with the Public

Offer Account Bank(s) to receive money from the Escrow Accounts and from the ASBA Accounts on

6

Term Description

the Designated Date

“Public Offer

Account Bank”

The banks which are clearing members and registered with SEBI under the BTI Regulations, with

whom the Public Offer Account will be opened, being HDFC Bank

“Qualified

Institutional

Buyers” or “QIB”

A qualified institutional buyer, as defined under Regulation 2(1)(zd) of the ICDR Regulations

“QIB Portion” The portion of the Offer (including the Anchor Investor Portion) being not more than 50% of the Net

Offer which shall be allocated to QIBs, including the Anchor Investors (which allocation shall be on a

discretionary basis, as determined by our Company and the Promoter Selling Shareholders, in

consultation with the Managers) subject to valid Bids being received at or above the Offer Price

“Red Herring

Prospectus”

This red herring prospectus dated October 25, 2017 issued by our Company in accordance with the

Companies Act, 2013, and the ICDR Regulations, which does not have complete particulars of the price

at which the Equity Shares will be offered and the size of the Offer, including any addenda or

corrigenda thereto

“Refund Account” The account opened with the Refund Bank, from which refunds to unsuccessful Anchor Investors, if

any, of the whole or part of the Bid Amount shall be made

“Refund Bank” The banks which are clearing members and registered with SEBI under the BTI Regulations with whom

the Refund Account will be opened and in this case being HDFC Bank

“Registered

Broker”

Stock brokers registered with the stock exchanges having nationwide terminals other than the

Syndicate, and eligible to procure Bids from ASBA Bidders in terms of the circular No.

CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI

“Registrar” or

“Registrar to the

Offer”

Karvy Computershare Private Limited

“Registrar and

Share Transfer

Agents” or “RTAs”

Registrar and share transfer agents registered with SEBI and eligible to procure Bids at the Designated

RTA Locations in terms of circular no. CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015

issued by SEBI

“Registrar

Agreement”

The agreement dated August 18, 2017 entered into amongst our Company, Promoter Selling

Shareholders and the Registrar to the Offer

“Retail Individual

Investors”/ “RII(s)”

Individual Bidders (including HUFs applying through their karta and Eligible NRIs) who have

submitted a Bid for Equity Shares for an amount of not more than ` 200,000 in any of the bidding options in the Offer

“Retail Portion” The portion of the Offer being not less than 35% of the Net Offer available for allocation to Retail

Individual Investor(s) in accordance with the ICDR Regulations, subject to valid Bids being received at

or above the Offer Price

“Revision Form” The form used by the Bidders to modify the quantity of Equity Shares or the Bid Amount in their Bid

cum Application Forms or any prior Revision Form(s), as applicable. QIBs and Non-Institutional

Investors are not allowed to withdraw or lower their Bids (in terms of quantity of Equity Shares or the

Bid Amount) at any stage. RIIs, Eligible HDFC Life Employees, Eligible HDFC Employees and

Eligible HDFC Shareholders who are RIIs can revise their Bids during the Offer Period and withdraw

their Bids until Offer Closing Date

“Self Certified

Syndicate Bank(s)”

or “SCSB(s)”

Banks which are registered with SEBI under the BTI Regulations, which offer the facility of ASBA, a

list of which is available on the website of the SEBI at


updated from time to time and at such other websites as may be prescribed by SEBI from time to time

“Share Escrow

Agent”

Karvy Computershare Private Limited appointed pursuant to the Share Escrow Agreement

“Share Escrow

Agreement”

The agreement to be entered into amongst our Company, the Promoter Selling Shareholders and the

Share Escrow Agent for deposit of the Promoter Selling Shareholders’ offered Equity Shares in escrow

“Specified Cities”

or “Specified

Locations”

Bidding centres where the Syndicate shall accept ASBA Forms from ASBA Bidders, a list of which is

available on the website of the SEBI


updated from time to time and at such other websites as may be prescribed by SEBI from time to time

“Sub Syndicate” The sub-syndicate members, if any, appointed by the Managers and the Syndicate Members, to collect

Bid cum Application Forms

“Syndicate” or

“member of the

Syndicate”

The Managers and the Syndicate Members

“Syndicate

Agreement”

The agreement entered into amongst the Syndicate, our Company and the Promoter Selling

Shareholders in relation to collection of Bids by the Syndicate

“Syndicate Bidding

Centres”

Syndicate and Sub Syndicate centres established for acceptance of the Bid cum Application Form and

Revision Forms

“Syndicate

Members”

Intermediaries registered with SEBI who are permitted to carry out activities as an underwriter, namely,

Edelweiss Securities Limited, HDFC Securities Limited, IDFC Securities Limited, India Infoline

Limited and Sharekhan Limited

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Term Description

“UBS” UBS Securities India Private Limited

“Underwriters” GCBRLMs, BRLMs and Syndicate Members

“Underwriting

Agreement”

The agreement to be entered into amongst the Underwriters, our Company and the Promoter Selling

Shareholders on or after the Pricing Date

“Working Day” All days other than second and fourth Saturdays of the month, Sundays or public holidays, on which

commercial banks in Mumbai are open for business; provided however, with reference to (a)

announcement of Price Band; and (b) Offer Period, shall mean all days, except Saturday, Sunday and

public holidays on which commercial banks in Mumbai are open for business; and (c) the time period

between the Offer Closing Date and the listing of the Equity Shares on the Stock Exchanges, shall mean

all trading days of Stock Exchanges, excluding Sundays and bank holidays, as per the SEBI Circular

SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21, 2016

Industry related terms

Term Description

“Accretion of discount /

amortisation of premium”

Premium/ discount refers to the difference between the price paid for a debt security and

the par value of that debt security. This premium /discount is spread over the remaining life

of the debt security and is called amortisation of premium/accretion of discount repectively

“Acquisition Cost” Costs, including commission, that vary with and are primarily related to the acquisition of

insurance contracts

“Affiliated investments” Investments made to parties related to insurers

“Annuity Business” The business of effecting contracts to provide for a series of payments to be made at

regular intervals for a certain period or for life.

An immediate annuity is a contract that pays out a regular stream of payments that starts

immediately in return for a lump sum paid at the start of the contract.

A deferred annuity is a contract that pays out a regular stream of payments that starts after

the deferment period (vesting period) is completed in return for either a lump sum paid at

the start of the contract or regular premiums paid during the deferment period.

“APE (Annualised Premium

Equivalent)”

APE (Annualised Premium Equivalent) is the sum of annualised first year premiums on

regular premium policies, and ten percent of single premiums, on the new business written

during any period from both our individual and group customers. The APE is adjusted for

any new business cancellations effected during the period.

“Asset – Liability

Management”

It refers to the management of an insurer’s assets with specific reference to the

characteristics of its liabilities so as to optimise the balance between risk and return. It is

the ongoing process of formulating, implementing, monitoring and revising strategies

related to assets and liabilities to achieve an insurer’s financial objective, given the

insurer’s risk tolerance and other constraints

“Asset share” The accumulation of premiums at the actual investment returns less deductions related to

expenses, commission, cost of benefits provided, cost of capital, cost of guarantee, tax etc.

“Assets under management

(AUM)”

AUM refers to the carrying value of investments managed by our Company and includes

investment loans and net current assets pertaining to Unit Linked investments. Unless

otherwise stated, AUM refers to Standalone AUM of our Company

“Bancassurance” An arrangement entered into by a financial institution (such as banks, non-banking

financial companies, micro-finance institutions and small finance banks) and an insurance

company (either through corporate agency or as a master policyholder), through which

such financial institution sells/ enrolls the insurance products of the Company to its client

base.

“Basic Earning Per Share” In accordance with Accounting Standard 20 on “Earnings per share”, “basic earning per

share” is calculated as net profit after tax for the period attributable to equity shareholders

divided by the weighted average number of equity shares outstanding during the period

“Bonus (to policyholders)” The non guaranteed benefits added to a participating policy and represents the share of

surplus distributed to the policyholders

“Certificate of Registration” Certificate granted by the IRDAI under the IRDAI Registration Regulations, registering an

insurance company to transact the classes of business specified therein

“Certificate of Renewal of

registration”

Renewal of certificate of registration of an insurer issued on an annual basis in form

IRDA/R6

“Conservation ratio” It is the ratio of renewal premium received in any given year/period as a percentage of first

year and renewal premium received in the previous year/corresponding period of previous

year

“Cost or total cost” or

“Expense of Management”

Cost or total cost refers to total expenses including commission and including provision for

doubtful debts and bad debts

8

Term Description

“Credit Risk” Risk of default of a counterparty or obligor, including the risk of default of risk mitigating

contracts like reinsurance and financial derivatives

“Creditors”/ “Sundry

Creditors”

Sundry creditors include payables to vendors providing goods and services including inter

group payable but does not include payables on account of insurance contract liabilities

“CRISIL” CRISIL Research, a division of CRISIL Limited

“CRNHR” Cost of Residual Non Hedgeable Risks is an allowance for risks to shareholder value to the

extent that these are not already allowed for in the Time Value of Options and Guarantees

or in the present value of future profits

“Death Benefit” Amount of benefit which is payable on death as specified in the policy document. This is

stated at the inception of the contract

“Debtors”/ “Sundry Debtors” Debtors include investment debtors

“Debt investment” Debt investment means investment other than in equity instruments, equity mutual funds,

and investment in subsidiary, Venture Capital Equity, Infrastructure Investment Trust

Units, Additional Tier 1 Bonds and investment property. It includes fixed income

securities, discounted securities and money market instruments issued by government,

public sector undertakings and corporates. It also includes investment in debt and liquid

mutual funds, Venture Capital Debt and Security Receipts

“Diluted Earning Per Share” In accordance with Accounting Standard 20 on “Earnings per Share”, “dilued earnings per

share” is calculated as net profit after tax for the period attributable to equity shareholders

divided by the weighted average number of equity shares adjusted for the effects of all

dilutive potential equity shares, outstanding during the period

“Discontinued Policy Fund /

Funds for discontinued

policies”

A segregated fund of the insurer that is set aside in respect of all discontinued policies in

accordance with the IRDA (Linked Insurance Products) Regulations, 2013

“Dividend Cover” A measure of the ability of an insurance company to pay its dividend. It is calculated as

operating profit after tax divided by the total dividend paid for a particular financial year

“Economic Capital” Economic Capital is the amount of capital required to cover potential losses, at a given risk

tolerance level, over a specified time horizon

“Embedded Value (EV)” The measure of the consolidated value of shareholders’ interest in the existing life

insurance business. It represents the present value of shareholders’ interests in the earnings

distributable from the assets allocated to the business after sufficient allowance for the

aggregate risks in the business and is generally expressed as a sum of Adjusted Net worth

and Value of In-force of business. Embedded value determined as per the requirements and

principles prescribed in the Actuarial Practice Standard 10 issued by the Institute of

Actuaries of India is referred to as Indian Embedded Value

“Embedded Value Operating

Profit (EVOP)/ Embedded

Value Operating Earnings

(EVOE)

Embedded Value Operating Profit (“EVOP”) is a measure of the change in the EV during

any given period due to matters that can be influenced by management. It includes value

created due to writing of new business and positive (or negative) operating variance due to,

for example, better (or worse) persistency and mortality experience, better (or worse)

expense efficiencies etc. It excludes changes in the EV due to external factors like changes

in economic variables and shareholder-related actions like capital injection or dividend

pay-outs. It is also referred to as Embedded Value Operating Earnings (EVOE)

“Operating Return on

Embedded Value”

Operating Return on Embedded Value is the ratio of EVOP for any given period to the EV

at the beginning of that period

“Embedded Value Report” The Embedded Value Report dated October 18, 2017 prepared by Richard Holloway,

partner at Milliman Advisors LLP and acting as Reporting Actuary in accordance with

Actuarial Practice Standard 10 issued by the Institute of Actuaries of India

“Facultative arrangement” An arrangement under which the insurer is free to place the reinsurance with any reinsurer.

Similarly, the reinsurer may accept or reject the reinsurance offered

“Fair value change ” (Unit

Linked)

Unrealised gains / losses arising due to changes in the fair value of investment assets

including listed equity shares, mutual funds and debt securities

“Fair value change” (Other

than Unit Linked and

Shareholders)

Unrealised gains/ losses arising due to changes in the fair value of equity investments,

Additional Tier 1 Bonds and mutual funds

“First Year Premium” Insurance premium that is due for the first policy year of a life insurance contract

“Funds for Future

Appropriation”

The Funds for Future Appropriation (the “FFA”), comprise funds in the participating

segment which have not been explicitly allocated either to policyholders or to shareholders

at the valuation date

“Funds for Future

Appropriation” – provision for

lapsed policies unlikely to be

revived

It represents the lapse/surrender charges on unit linked policies that are within the revival

period and retained within the policyholder segments, which would be transferred to the

shareholders after the revival period on these policies is completed

“Health Insurance Business” The effecting of contracts which provide for sickness benefits or medical, surgical or

hospital expense benefits, whether in-patient or out-patient travel cover and personal

accident cover, on an indemnity, reimbursement, service, pre-paid, hospital or other plans

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Term Description

basis, including assured benefits and long-term care

“Industry Report” CRISIL’s report titled “Analysis of life insurance industry in India”

“Indian Insurance Company” Under the Insurance Act, any insurer being a company which is limited by shares and:

which is formed and registered under the Companies Act, 2013 as a public company or is converted into such a company within one year of the commencement of the

Insurance Laws (Amendment) Act, 2015;

in which the aggregate holdings of equity shares by foreign investors, including portfolio investors, do not exceed forty-nine per cent of the paid up equity capital of

such Indian insurance company, which is Indian owned and controlled, in such

manner as may be prescribed;

Explanation: For the purposes of (b) above, the expression “control” shall include the right

to appoint a majority of the directors or to control the management or policy decisions

including by virtue of their shareholding or management rights or shareholders agreements

or voting agreements

whose sole purpose is to carry on life insurance business or general insurance business or re-insurance business or health insurance business

“In-Force” An insurance policy or contract, reflected on records, that has not lapsed/discontinued,

expired, matured or otherwise been surrendered or terminated

“Insurance Penetration” The Insurance premium as % of GDP for any given period

“Insurance Premium” It is the consideration the policyholder will have to pay in order to secure the benefits

offered by the insurance policy

“Insurance Profit” It relates to the part of shareholder profits that arises from the core insurance business

reflected by the net surplus in the underlying policyholder segments

“Insurance Underwriting” The process by which an insurance company determines whether or not and on what basis

it will accept an application for insurance

“Insurer” It means:

(a) an Indian Insurance Company, or

(b) a statutory body established by an Act of Parliament to carry on insurance business, or

(c) an insurance co-operative society, or

(d) a foreign company engaged in re-insurance business through a branch established in

India.

Explanation – For the purposes of this sub-clause, the expression “foreign company” shall

mean a company or body established or incorporated under a law of any country outside

India and includes Lloyd’s established under the Lloyd’s Act, 1871 (United Kingdom) or

any of its members

“Interim Bonus” As bonuses are allocated at the end of the financial period, for policies exiting during the

financial year by death/maturity or surrender, interim bonus for the period from end of

previous financial year to the date of exit (subject to eligibility conditions) is paid

“Investment Assets” All investments made out of shareholders funds representing solvency margin, non-unit

reserves of unit linked insurance business, participating and non-participating funds of

policyholders; policyholders' funds of pension and general annuity fund at their carrying

value; and policyholders unit reserves of unit linked insurance business at their market

value

“Investment Yield” This refers to income earned from the investments. It is usually expressed as a percentage

of the acquisition cost of investment

“Lapse” A life insurance contract lapses if the premiums falling due within the minimum period

required are not paid within the grace period as specified in the IRDA (Non-Linked

Insurance Products) Regulation, 2013 and IRDA (Linked Insurance Products) Regulations,

2013

“Life Insurance Business” Life Insurance Business means the business of effecting contracts of insurance upon

human life, including any contract whereby the payment of money is assured on death

(except death by accident only) or the happening of any contingency dependent on human

life, and any contract which is subject to payment of premiums for a term dependent on

human life and shall be deemed to include –

(a) the granting of disability and double or triple indemnity accident benefits, if so

10

Term Description

provided in the contract of insurance;

(b) the granting of annuities upon human life, and

(c) the granting of superannuation allowances and benefit payable out of any fund

applicable solely to the relief and maintenance of persons engaged or who have been

engaged in any particular profession, trade or employment or of the dependents of such

persons.

Explanation: For the removal of doubts, it is hereby declared that “life insurance business’

shall include any unit linked insurance policy or scrips or any such instrument or unit, by

whatever name called, which provides a component of investment and a component of

insurance issued by an insurer (as defined under the Insurance Act).

“Linked liabilities (fund

reserves)”

This represents the liability for units held under the contracts and is part of the liability that

is held under unit-linked business

“Mathematical Reserves” The provision made by an insurer to cover liabilities arising under or in connection with

policies or contracts for life insurance business. Mathematical reserves also include

specific provision for adverse deviations in experience from the assumptions, such as

mortality and morbidity rates, interest rates, and expense rates, and any explicit provisions

made, in the valuation of liabilities, in accordance with the regulations made by the IRDAI

for this purpose. Please also see “ – Policy Liabilities”

“Maturity Benefit” The amount of benefit which is payable on maturity i.e. at the end of the term, as specified

in the policy document and is stated at the time of inception of the policy

“Maturity Date” The stipulated date on which the term of the insurance contract gets completed and the

maturity benefit is payable.

“Morbidity Rate” It is an estimate of the number of persons that are expected to suffer a disease, illness,

injury, or sickness and could vary by age or other factor such as occupation, health etc

“Mortality Charges” The risk charges that are deducted from the unit fund of a policy to provide for the

mortality benefit to the policyholder

“Mortality Rate” An estimate of the number of deaths, varying by such parameters as age, gender and

health, used in pricing and computing policy liabilities

“NAV / Net Asset Value” NAV in the context of the equity shares is computed as the closing net worth of a

company, divided by the closing outstanding number of fully paid up equity share. In the

context of the unit linked business of our Company and the investments made in mutual

funds by our Company, it represents the value of one unit held by the policyholder/us and

is computed as total assets of the fund/scheme divided by number of units outstanding

“Net Premium” Net premium during any period represents net inflow from policyholders and is computed

as total premiums received less benefits paid (gross of reinsurance claims) to policyholders

“Net worth” Unless otherwise stated, net worth is as defined in IRDAI circular on ‘Public Disclosures

by Insurers’ and it represents the shareholders’ funds computed as sum of share capital

including share application money and reserves and surplus including share premium, fair

value change account with respect to shareholders equities investment as reduced by

aggregate of debit balance in profit and loss account and miscellaneous expenditure (to the

extent not adjusted or written off)

“Net tangible assets” Net tangible assets mean the sum of all net assets of the issuer, excluding intangible assets

as defined in Accounting Standard 26 (AS 26) issued by the Institute of Chartered

Accountants of India.

“New business strain” New business strain arises when the premium paid at the commencement of a contract is

not sufficient to cover the initial expenses including acquisition costs and any

mathematical reserve that our Company needs to set up at that point.

“Non-linked Business” Business other than unit linked business

“Non-Participating Product /

Policy”

Policies without participation in profits, means policies which are not entitled to any share

in surplus (profits) during the term of the policy

“Non-unit liabilities” Non-unit liabilities are liabilities held in addition to Linked liabilities (fund reserves) under

unit-linked business and represents liabilities in respect of future expenses and benefits in

excess of the unit fund. These form part of the mathematical reserves

“Obligatory arrangement” An arrangement under which both the insurer and reinsurer are obliged to place and accept

the risk

“Operating expense ratio” Operating expenses (excluding commission) divided by total premium

“Paid up” It is one of the non–forfeiture options given to the policyholder in case premiums are not

paid within the grace period, after premiums have been paid for the minimum required

period.

“Paid up Sum Assured” The reduced Sum assured under a paid-up policy, wherein sum assured is proportionately

reduced to an amount which bears the same ratio to the full sum assured as the number of

premiums actually paid bears to the total number originally payable in the policy

“Participating Product /

Policy”

A life insurance policy where the policyholder is entitled to share of the surplus emerging

in participating fund. The current minimum share that the policyholders are entitled to, as

11

Term Description

per the IRDAI regulations, is 90%

“Pension Business” Pension business includes business of effecting contracts to invest for retirement benefits

or manage investments of pension funds or superannuation schemes

“Persistency Ratio” The ratio of policies remaining in force to all policies issued in the period 13 month/25

month etc, prior to the date of measurement and is referred to as 13th month/25th month

persistency etc It is the percentage of policies that have not discontinued paying premiums

or surrendered. It can be measured in terms of number of policies or in terms of premium

“Policy Liabilities” The policy liabilities under an insurance contract are the benefits an insurance company

has contractually agreed to pay to the policyholders, plus its future expenses less future

premiums. Please also see “Mathematical Reserves”

“Present Value of Future

Profits” or “PVFP”

Present value of projected distributable profits to shareholders arising from the in-force

covered business, determined by projecting the post taxation shareholder cash flows from

the in-force covered business and the assets backing the associated liabilities

“Pre-tax Operating

Profit/Loss”

Pre – tax Operating Profits means Profit Before Tax as per restated summary statement of

Profit and Loss Account (Shareholders’ Account / Non-Technical Account)

“Protection Gap” As defined in the Swiss Re, Economic Research & Consulting “Mortality Protection Gap

Asia-Pacific 2015”, the protection gap is measured as the difference between the resources

needed and the resources already available for dependents to maintain their living

standards following the death of a working family member

“Quota Share arrangement” An arrangement under which the reinsurer covers a specified percentage of the sum at risk

“Regular Premium Product” Life insurance product which requires regular periodic payment of premium year of a life

insurance contract

“Reinsurance ceded/accepted” Reinsurance means an insurance contract between one insurance company (cedant) and

another insurance comp

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