RITES LIMITED Ujwal DISCOM Assurance Yojana VISL Vizhinjam International Seaport Limited VSC Vehicle...

DRAFT RED HERRING PROSPECTUS Dated January 15, 2018

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

100% Book Building Offer

RITES LIMITED

Our Company was originally incorporated at New Delhi on April 26, 1974 under the Companies Act, 1956 as a private limited company under the name of Rail India Technical and Economic Services Private Limited. The word private was deleted from the name of our Company pursuant to section 43A of the Companies Act, 1956 on February 17, 1976. Subsequently, in accordance with section 21 of the Companies Act, 1956, the name of our Company was changed to our present name, RITES Limited, consequent to which the Registrar of Companies, Delhi and Haryana issued a fresh certificate of incorporation dated March 28, 2000. Subsequently, our Company was converted into a public limited company pursuant to a fresh certificate of incorporation dated February 5, 2008 issued by the Registrar of Companies, National Capital Territory of Delhi and Haryana. For further details of change in name and registered office of our Company, please refer to History and Certain Corporate Matters on page 150.

Registered Office: RITES Limited, Scope Minar, Laxmi Nagar, Delhi - 110 092, India; Corporate Office: RITES Bhavan, No. 1, Sector 29, Gurugram 122001, IndiaContact Person: Mr. Param Tej Mittal, Company Secretary, GM (Legal) and Compliance Officer

Registered Office: Telephone: +91 11 22024610; Fax: +91 11 22024660; Corporate Office: Telephone: +91 124 2571665; Fax: +91 124 2571187 E-mail: [email protected]; Website: www.ritesltd.com

Corporate Identification Number: U74899DL1974GOI007227

OUR PROMOTER: THE PRESIDENT OF INDIA, ACTING THROUGH THE MINISTRY OF RAILWAYS, GOVERNMENT OF INDIA

INITIAL PUBLIC OFFERING OF [] EQUITY SHARES OF FACE VALUE OF `10 EACH (EQUITY SHARES) OF RITES LIMITED (OUR COMPANY OR THE ISSUER) THROUGH AN OFFER FOR SALE BY THE PRESIDENT OF INDIA, ACTING THROUGH THE MINISTRY OF RAILWAYS, GOVERNMENT OF INDIA (THE SELLING SHAREHOLDER), FOR CASH AT A PRICE OF `[]* PER EQUITY SHARE (INCLUDING A PREMIUM OF ` []) (THE OFFER PRICE), AGGREGATING TO `[] MILLION (THE OFFER). SUBJECT TO RECEIPT OF NECESSARY APPROVALS FROM THE GOVERNMENT OF INDIA (GOI), UPTO [] EQUITY SHARES MAY BE RESERVED FOR ELIGIBLE EMPLOYEES (DEFINED BELOW) (THE EMPLOYEE RESERVATION PORTION). THE OFFER LESS EMPLOYEE RESERVATION PORTION (IF ANY) IS REFERRED TO AS THE NET OFFER. THE OFFER WILL COMPRISE OF A NET OFFER OF 24,000,000 EQUITY SHARES AND THE EMPLOYEE RESERVATION PORTION OF UPTO [] EQUITY SHARES. THE OFFER AND NET OFFER SHALL CONSTITUTE []% AND 12% OF THE POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY RESPECTIVELY.

THE PRICE BAND, THE RETAIL DISCOUNT, EMPLOYEE DISCOUNT, AS APPLICABLE AND THE MINIMUM BID LOT SIZE WILL BE DECIDED BY THE SELLING SHAREHOLDER AND OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS (BRLMs) AND WILL BE ADVERTISED IN ALL EDITIONS OF THE ENGLISH DAILY NEWSPAPER [] AND ALL EDITIONS OF THE HINDI DAILY NEWSPAPER [] (HINDI BEING THE REGIONAL LANGUAGE OF DELHI WHEREIN THE REGISTERED OFFICE OF OUR COMPANY IS LOCATED), EACH WITH WIDE CIRCULATION, AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/ OFFER OPENING DATE AND SUCH ADVERTISEMENT SHALL BE MADE AVAILABLE TO BSE LIMITED (BSE) AND NATIONAL STOCK EXCHANGE OF INDIA LIMITED (NSE, AND TOGETHER WITH BSE, THE STOCK EXCHANGES) FOR THE PURPOSE OF UPLOADING ON THEIR RESPECTIVE WEBSITES.*A discount of up to []% (equivalent to up to `[] per Equity Share) on the Offer Price may be offered to Retail Individual Bidders (Retail Discount) and a discount of up to []% (equivalent to up to `[] per Equity Share) on the Offer Price may be offered to Eligible Employees Bidding in the Employee Reservation Portion (if any) (Employee Discount).In case of any revision in the Price Band, the Bid/ Offer Period shall be extended for at least three additional Working Days after such revision of the Price Band, subject to the total Bid/ Offer Period not exceeding 10 Working Days. Any revision in the Price Band, and the revised Bid/ Offer Period, if applicable, shall be widely disseminated by notification to the Stock Exchanges by issuing a press release and also by indicating the change on the websites of the BRLMs and at the terminals of the Syndicate Members.

In terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (SCRR), this is an Offer for at least 10% of the post-Offer paid-up Equity Share capital of our Company. In accordance with Regulation 26(1) read with Regulation 43 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (SEBI ICDR Regulations), the Offer is being made through the Book Building Process wherein not more than 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (QIBs) (QIB Portion). 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Offer Price. However, if the aggregate demand from Mutual Funds is less than 5% of the QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the remaining QIB Portion for proportionate allocation to QIBs. Further, not less than 15% of the Net Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Offer shall be available for allocation and Allotment to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. Further, subject to receipt of necessary approvals from the GoI, our Company may reserve upto [] Equity Shares for allocation to Eligible Employees, subject to valid bids being received at or above the Offer Price. All Bidders shall mandatorily participate in the Offer through the Application Supported by Blocked Amount (ASBA) process by providing details of their respective bank account in which the Bid Amount will be blocked by the Self Certified Syndicate Banks (SCSBs). For details, see Offer Procedure on page 600.

RISKS IN RELATION TO THE FIRST OFFER

This being the first issue of the Issuer, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares is `10 each and the Floor Price is [] times of the face value and the Cap Price is [] times of the face value. The Offer Price is [] times the face value. The Offer Price (as determined and justified by our Company and the Selling Shareholder in consultation with the BRLMs), as stated in the chapter titled Basis for Offer Price on page 87 of this Draft Red Herring Prospectus should not be taken to be indicative of the market price of the Equity Shares after such Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.

GENERAL RISKS

Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this Offer unless they can afford to take the risk of losing their entire investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Offer. For taking an investment decision, investors must rely on their own examination of the Issuer 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 the contents of this Draft Red Herring Prospectus. Specific attention of the investors is invited to the section titled Risk Factors on page 18.

COMPANYS AND SELLING SHAREHOLDERS ABSOLUTE RESPONSIBILITY

Our Company and the Selling Shareholder, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company, the Selling Shareholder and this Offer, which is material in the context of the Offer, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions, misleading, in any material respect.

LISTING

The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the BSE and the NSE. Our Company has received in-principle approvals from the BSE and the NSE for listing of the Equity Shares pursuant to their letters dated [] and [], respectively. For the purposes of this Offer, the [] shall be the Designated Stock Exchange. A copy of the Red Herring Prospectus and the Prospectus shall be delivered for registration to the RoC in accordance with Section 26(4) of the Companies Act, 2013. For details of the material contracts and documents available for inspection from the date of the Red Herring Prospectus up to the Bid/Offer Closing Date, see the section titled Material Contracts and Documents for Inspection on page 664.

BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE OFFER

Elara Capital (India) Private Limited Address: Indiabulls Finance Centre, Tower 3, 21st Floor, Senapati Bapat Marg, Elphinstone Road West,Mumbai 400 013, IndiaTelephone: +91 22 6164 8599Facsimile: +91 22 6164 8589Email: [email protected]: www.elaracapital.comInvestor Grievance ID: [email protected] Person: Mr. Kunal SafariSEBI Registration Number: INM000011104

IDBI Capital Markets & Securities Limited(Formerly known as IDBI Capital Market Services Limited)Address: 3rd floor, Mafatlal Center, Nariman Point, Mumbai - 400 021, IndiaTelephone: +91 22 4322 1212 Facsimile: +91 22 2285 0785Email: [email protected]: www.idbicapital.com Investor Grievance ID: [email protected] Person: Mr. Sumit Singh SEBI Registration Number: INM000010866

IDFC Bank LimitedAddress: Naman Chambers, C-32, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051, IndiaTelephone: +91 22 7132 5500Facsimile: +91 22 6622 2501Email: [email protected]: www.idfcbank.comInvestor Grievance ID: [email protected] Person: Mr. Akshay BhandariSEBI Registration Number: MB/INM000012250

SBI Capital Markets LimitedAddress: 202, Maker Tower E, Cuffe Parade, Mumbai 400 005, IndiaTelephone: +91 22 2217 8300Facsimile: +91 22 2218 8332Email: [email protected]: www.sbicaps.comInvestor Grievance ID: [email protected] Person: Mr. Nikhil Bhiwapurkar/ Mr. Sambit Rath SEBI Registration Number: INM000003531

Link Intime India Private LimitedAddress: C-101,1st Floor, 247 Park, Lal Bahadur Shashtri Marg, Vikhroli (West), Mumbai 400 083, IndiaTelephone: +91 22 4918 6200Facsimile: +91 22 4918 6195E-mail: [email protected]: www.linkintime.co.inInvestor Grievance ID: [email protected] Person: Ms. Shanti GopalkrishnanSEBI Registration No.: INR000004058

BID/OFFER PROGRAMME

BID/OFFER OPENING DATE: [] BID/OFFER CLOSING DATE*: []

* Our Company and the Selling Shareholder may, in consultation with the BRLMs, consider closing the Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer Closing Date in accordance with SEBI ICDR Regulations.

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TABLE OF CONTENTS

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

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

CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ............. 14

FORWARD-LOOKING STATEMENTS ................................................................................................................... 16

SECTION II: RISK FACTORS.......18

SECTION III: INTRODUCTION ............................................................................................................................... 42

SUMMARY OF INDUSTRY ..................................................................................................................................... 42

SUMMARY OF OUR BUSINESS ............................................................................................................................. 47

SUMMARY OF FINANCIAL INFORMATION ....................................................................................................... 53

THE OFFER ................................................................................................................................................................ 65

GENERAL INFORMATION ...................................................................................................................................... 66

CAPITAL STRUCTURE ............................................................................................................................................ 75

SECTION IV: PARTICULARS OF THE OFFER ...................................................................................................... 86

OBJECTS OF THE OFFER ........................................................................................................................................ 86

BASIS FOR OFFER PRICE ....................................................................................................................................... 87

STATEMENT OF TAX BENEFITS ........................................................................................................................... 90

SECTION V: ABOUT THE COMPANY ................................................................................................................... 93

INDUSTRY OVERVIEW ........................................................................................................................................... 93

OUR BUSINESS ....................................................................................................................................................... 128

KEY INDUSTRY REGULATIONS AND POLICIES ............................................................................................. 146

HISTORY AND CERTAIN CORPORATE MATTERS .......................................................................................... 150

OUR MANAGEMENT ............................................................................................................................................. 164

OUR PROMOTER, PROMOTER GROUP AND GROUP COMPANIES .............................................................. 187

RELATED PARTY TRANSACTIONS .................................................................................................................... 188

DIVIDEND POLICY ................................................................................................................................................ 189

SECTION VI: FINANCIAL INFORMATION ......................................................................................................... 190

FINANCIAL STATEMENTS ................................................................................................................................... 190

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATION.......515

FINANCIAL INDEBTEDNESS ............................................................................................................................... 554

SECTION VII: LEGAL AND OTHER INFORMATION ........................................................................................ 560

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ............................................................... 560

GOVERNMENT AND OTHER APPROVALS ....................................................................................................... 569

OTHER REGULATORY AND STATUTORY DISCLOSURES ............................................................................ 573

SECTION VIII OFFER RELATED INFORMATION .......................................................................................... 591

TERMS OF THE OFFER.......................................................................................................................................... 591

OFFER STRUCTURE .............................................................................................................................................. 596

OFFER PROCEDURE .............................................................................................................................................. 600

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ......................................................... 650

SECTION IX MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION .................................................. 651

SECTION X: OTHER INFORMATION .................................................................................................................. 664 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .................................................................. 664 DECLARATION ....................................................................................................................................................... 666

1

SECTION I GENERAL

DEFINITIONS AND ABBREVIATIONS

This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates

or implies, shall have the meaning ascribed to such defined terms and abbreviations as provided below. References to any

legislation, act, regulation, rule, guideline, policy, circular, notification or clarification shall be to such legislation, act,

regulation, rule, guideline, policy, circular, notification or clarification as amended from time to time, including any

statutory re-enactments thereto.

The words and expressions used in this Draft Red Herring Prospectus but not defined herein shall have, to the extent

applicable, the meanings ascribed to such terms under the Companies Act, the SEBI ICDR Regulations, the SCRA, the

Depositories Act or the rules and regulations made thereunder.

Notwithstanding the foregoing, terms used in the sections entitled Industry Overview, Statement of Tax Benefits,

Financial Statements, Main Provisions of Articles of Association, Outstanding Litigation and Material

Developments, Regulations and Policies and Offer Procedure (Part B) on pages 93, 90, 190, 651, 560, 146 and

613, respectively, shall have the meaning ascribed to such terms in such sections.

Company Related Terms

Term Description

our Company, the

Company or the Issuer

RITES Limited, a company incorporated under the Companies Act,1956, having its

registered office at Scope Minar, Laxmi Nagar, Delhi 110092, India we, us or our Unless the context otherwise requires or implies, RITES Limited and its Subsidiaries

and Joint Ventures, on a consolidated basis

Articles of Association or

Articles or AoA

The articles of association of our Company, as amended from time to time

Audit Committee The audit committee of the Board of Directors, as described in Our Management

on page 164

Auditor or Statutory

Auditors

Statutory auditors of our Company, namely, Agiwal & Associates, Chartered

Accountants

Board or Board of

Directors

The board of directors of our Company as constituted from time to time, including a

duly constituted committee thereof

Chief Financial Officer or

CFO

The chief financial officer of our Company, Mr. Ajay Kumar Gaur, Director

(Finance)

Compliance Officer The compliance officer of our Company, Mr. Param Tej Mittal, Company Secretary

and General Manager (Legal)

Corporate Office The corporate office of our Company situated at RITES Bhawan, No. 1, Sector 29,

Gurugram -122 001, India

CPSE Capital

Restructuring Guidelines

The guidelines on Capital Restructuring of Central Public Sector Enterprises issued

by DIPAM vide Office Memorandum dated May 27, 2016 bearing reference F. No.

5/2/2016-Policy

CSR Committee The Corporate Social Responsibility Committee of the Board of Directors, as

described in Our Management on page 164

Director(s) The director(s) on the Board of our Company, as appointed from time to time

DIPAM Department of Investment and Public Asset Management, Ministry of Finance, GoI

Executive Director(s) or

ED(s)

An executive Director(s) of our Company

Equity Shares The equity shares of our Company of face value of 10 each

Government Nominee

Director(s)

The Director(s) on our Board who are nominated by the MoR

Group Companies The Companies which are covered under the applicable accounting standards and

other companies as considered material by our Board, pursuant to a policy on

materiality of group companies approved by our Board on November 20, 2017. For

details, see the section entitled Our Group Companies on page 187

Independent Director(s) The Independent Director(s) on our Board

IPO Committee The committee constituted by our Board for the Offer, as described in Our

Management on page 164

2

Term Description

Joint Venture

Arrangements

The joint venture arrangement(s) of our Company namely, Geoconsult-RITES NRT

1 (GC-RITES NRT-1), Geoconsult-RITES (GC-RITES), Geoconsult-RITES (JV),

Geoconsult-RITES T10 JV and RICON - Beira Rail Corridor Concessioning as on

the date of this Draft Red Herring Prospectus

Joint Venture(s) The joint venture(s) of our Company namely, SAIL-RITES Bengal Wagon Industry

Private Limited and BNV Gujarat Rail Private Limited, as on the date of this Draft

Red Herring Prospectus

Key Management

Personnel or Key

Managerial Personnel or

KMP

The key management personnel of our Company in terms of Regulation 2(1)(s) of

the SEBI ICDR Regulations and key managerial personnel of our Company in terms

of section 2(51) of the Companies Act, 2013 and as disclosed in Our Management

on page 164

Memorandum of

Association or MoA

The memorandum of association of our Company, as amended from time to time

MoR Ministry of Railways, Government of India

MoU The memorandum of understanding entered into by our Company with the Ministry

of Railways, Government of India every Financial Year

Promoter The President of India acting through the MoR

Registrar of Companies or

RoC

The Registrar of Companies, National Capital Territory of Delhi & Haryana

(formerly known as the Registrar of Companies, Delhi and Registrar of Companies,

Delhi & Haryana) situated at Delhi

Restated Consolidated

Financial Information

The audited consolidated financial statements of our Company as at, and for the six

months ended September 30, 2017 and for the financial years ended March 31, 2017,

2016, 2015, 2014 and 2013, which comprises the audited consolidated statement of

assets and liabilities, the audited consolidated statement of profit and loss and the

audited consolidated cash flow statement and notes to the audited consolidated

financial statements of assets and liabilities, profit and loss and cash flows, prepared

in accordance with Ind AS and the Companies Act and restated in accordance with

the SEBI ICDR Regulations and the Revised Guidance Note on Reports in Company

Prospectuses (Revised) issued by the ICAI, together with the schedules, notes and

annexures thereto

Restated Standalone

Financial Information

The audited standalone financial statements of our Company as at, and for the six

months ended September 30, 2017 and for the financial years ended March 31, 2017,

2016, 2015, 2014 and 2013, which comprises the audited standalone statement of

assets and liabilities, the audited standalone statement of profit and loss and the

audited standalone cash flow statement and notes to the audited standalone financial

statements of assets and liabilities, profit and loss and cash flows, prepared in

accordance with Ind AS and the Companies Act and restated in accordance with the

SEBI ICDR Regulations and the Revised Guidance Note on Reports in Company

Prospectuses (Revised) issued by the ICAI, together with the schedules, notes and

annexures thereto

Restated Financial

Information

Restated Standalone Financial Information and Restated Consolidated Financial

Information

Registered Office The registered office of our Company located at Scope Minar, Laxmi Nagar, Delhi

110 092, India

RMC Risk Management Committee of our Board as described in Our Management on

page 164

Senior Management Executive Directors as designated of our Company are one level below the Board

Shareholders The holders of the Equity Shares of our Company from time to time

SRBWIPL SAIL-RITES Bengal Wagon Industry Private Limited

Stakeholders Relationship

Committee

The stakeholders relationship committee of our Board as described in Our

Management on page 164

Subsidiary or Subsidiaries Subsidiaries of our Company as on the date of this DRHP namely, Railway Energy

Management Company Limited, RITES (AFRIKA) (Proprietary) Limited, and RITES

Infrastructure Services Limited, as of the date of this Draft Red Herring Prospectus, in

accordance with the Companies Act, 2013 as described in History and Certain

Corporate Matters on page 150

3

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 ASBA Form

Allot/ Allotment/ Allotted Transfer of Equity Shares to Allottees pursuant to this Offer

Allottee A successful Bidder to whom the Equity Shares are Allotted

Allotment Advice cum

Refund Intimation or

Allotment Advice

Note or advice or intimation of status of Allotment sent to the Bidders who have

applied for the Equity Shares after the Basis of Allotment has been approved by

the Designated Stock Exchange

Application Supported by

Blocked Amount or ASBA

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

authorising an SCSB to block the Bid Amount in the ASBA Account

All Bidders shall mandatorily participate in the Offer through the ASBA process

ASBA Account An account maintained with an SCSB and specified in the ASBA Form submitted

by Bidders for blocking the Bid Amount mentioned in the ASBA Form

ASBA Form An application form, whether physical or electronic, used by Bidders which will

be considered as the application for Allotment in terms of the Red Herring

Prospectus and the Prospectus

BSE BSE Limited

Basis of Allotment The basis on which Equity Shares will be Allotted to successful Bidders under the

Offer and which is described in the section Offer Procedure on page 600

Bid An indication to make an offer during the Bid/ Offer Period by a prospective

Bidder pursuant to submission of ASBA Form, to subscribe for or purchase the

Equity Shares of our Company at a price within the Price Band, including all

revisions and modifications thereto

The term Bidding shall be construed accordingly

Bid Amount The highest value of optional Bids indicated in the ASBA Form and blocked in

the ASBA Account upon submission of the Bid in the Offer

Bid/ Offer Closing Date The date after which the Designated Intermediaries will not accept any Bids,

which shall be notified in all editions of the English daily newspaper [] and all

editions of the Hindi daily newspaper [] (Hindi also being the regional language

of Delhi wherein the Registered Office of our Company is located), each with

wide circulation

Our Company and the Selling Shareholder may, in consultation with the BRLMs,

consider closing the Bid/ Offer Period for QIBs one Working Day prior to the Bid/

Offer Closing Date in accordance with the SEBI ICDR Regulations

Bid/ Offer Opening Date The date on which the Designated Intermediaries shall start accepting Bids, which

shall be notified in all editions of the English daily newspaper [] and all editions

of the Hindi daily newspaper [] (Hindi being the regional language of Delhi

wherein the Registered Office of our Company is located), each with wide

circulation

Bid/ Offer Period The period between the Bid/ Offer Opening Date and the Bid/ Offer Closing Date,

inclusive of both days, during which prospective Bidders can submit their Bids,

including any revisions thereof

Bid Lot [] Equity Shares

Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red

Herring Prospectus and the ASBA Form

Bidding Centres

Centres at which at the Designated Intermediaries shall accept the ASBA Forms,

i.e. Designated Branch for SCSBs, Specified Locations for Syndicate, Broker

Centres for Registered Brokers, Designated RTA Locations for RTAs and

Designated CDP Locations for CDPs

Book Building Process Book building process, as provided in Schedule XI of the SEBI ICDR

Regulations, in terms of which the Offer is being made

4

Term Description

BRLMs or Book Running

Lead Managers

The book running lead managers to the Offer namely Elara Capital (India) Private

Limited, IDBI Capital Markets & Securities Limited (formerly known as IDBI

Capital Market Services Limited), IDFC Bank Limited and SBI Capital Markets

Limited

Broker Centres The broker centres notified by the Stock Exchanges where Bidders can submit the

ASBA Forms to a Registered Broker

The details of such Broker Centres, along with the names and contact details of

the Registered Broker are available on the respective website of the Stock

Exchanges (www.bseindia.com and www.nseindia.com)

Cap Price The higher end of the Price Band, above which the Offer Price will not be finalised

and above which no Bids will be accepted

CDP or Collecting

Depository Participant

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, and a list of such locations is available on the website of

the BSE and NSE at

http://www.bseindia.com/Static/Markets/PublicIssues/RtaDp.aspx?expandable=

6 and

https://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm

respectively

Client ID Client identification number of the Bidder's beneficiary account

Cut-off Price Offer Price, finalised by our Company and the Selling Shareholder in consultation

with the BRLMs

Only Retail Individual Bidders and Eligible Employees Bidding in the Employee

Reservation Portion (if any) are entitled to Bid at the Cut-off Price. No other

category of Bidders is entitled to Bid at the Cut-off Price

Demographic Details

Details of the Bidders including the Bidders address, name of the Bidders

father/husband, investor status, occupation and bank account details

Designated Branches Such branches of the SCSBs which shall collect the ASBA Forms used by the

Bidders, a list of which is available on the website of SEBI at

http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&i

ntmId=35 and updated from time to time or at such other website as may be prescribed by SEBI from time to time

Designated Date The date on which the amounts blocked by the SCSBs are transferred from the

ASBA Accounts, to the Public Offer Account after filing of the Prospectus with

the RoC, following which the Board of Directors may Allot Equity Shares to

successful Bidders in the Offer

Designated CDP Locations Such locations of the CDPs where Bidders can submit the ASBA Forms

The details of such Designated CDP Locations, along with names and contact

details of the Collecting Depository Participants eligible to accept ASBA Forms

are available on the respective websites of the Stock Exchanges

(www.bseindia.com and www.nseindia.com)

Designated Intermediaries

Collectively, the members of the Syndicate, Sub-Syndicate/Agents, SCSBs,

Registered Brokers, the CDPs and RTAs, who are authorised to collect ASBA

Forms from the Bidders, in relation to the Offer

Designated Stock

Exchange

[]

Designated RTA

Locations

Such locations of the RTAs where Bidders can submit the ASBA Forms to RTAs.

The details of such Designated RTA Locations, along with names and contact

details of the RTAs eligible to accept ASBA Forms are available on the respective

websites of the Stock Exchanges (www.bseindia.com and www.nseindia.com)

Designated SCSB

Branches

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

is available on the website of SEBI at

http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes

5

Term Description

Intermediaries or at such other website as may be prescribed by SEBI from time

to time

Draft Red Herring

Prospectus or DRHP

This Draft Red Herring Prospectus dated January 15, 2018, issued in accordance

with the SEBI ICDR Regulations, which does not contain complete particulars,

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

the Offer, including any addendum or corrigendum thereto

Elara/ Elara Capital Elara Capital (India) Private Limited

Eligible Employee

A permanent and full-time employee of our Company (excluding such employees

not eligible to invest in the Offer under applicable laws, rules, regulations and

guidelines), as on the date of registration of the Red Herring Prospectus with the

RoC, who are Indian nationals and are based, working and present in India and

continue to be on the rolls of our Company as on the date of submission of their

ASBA Form and Bidding in the Employee Reservation Portion (if any). Directors,

Key Management Personnel and any other employees of our Company involved

in the Offer Price fixation process cannot participate in the Offer (as per Model

Conduct, Discipline and Appeal Rules of CPSEs and Office memorandum of DPE

dated June 16, 2009 and July 28, 2009) and will not constitute eligible employees

for the purposes of this Offer

An employee of our Company who is recruited against a regular vacancy but is

on probation as on the date of submission of the ASBA Form will also be deemed

a permanent employee of our Company

Eligible FPI(s)

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 Red Herring

Prospectus constitutes an invitation to purchase the Equity Shares offered thereby

Eligible NRI(s) NRI(s) from jurisdictions outside India where it is not unlawful to make an offer

or invitation under the Offer and in relation to whom the Red Herring Prospectus

will constitute an invitation to subscribe for or purchase the Equity Shares

Employee Discount

Discount of up to []% (equivalent of []) to the Offer Price which may be given

to Eligible Employees bidding in the Employee Reservation Portion

Employee Reservation

Portion

The portion of the Offer, being upto [] Equity Shares that may be reserved for

allocation and Allotment to Eligible Employees, subject to the receipt of necessary

approvals from the Government of India.

MoR, pursuant to its letter dated January 09, 2018, has approved the reservation

of Equity Shares in the Employee Reservation Portion over and above the

disinvestment of 12% of our Promoters shareholding in our Company. The

quantum of Equity Shares in the Employee Reservation Portion shall be

determined prior to filing the Red Herring Prospectus. The Employee Reservation

Portion, if any, shall not exceed 5% of the post-Offer capital of our Company.

The maximum Bid Amount under the Employee Reservation Portion by an

Eligible Employee shall not exceed 500,000 (net of Employee Discount).

However, the initial Allotment to an Eligible Employee in the Employee

Reservation Portion shall not exceed 200,000 (net of Employee Discount). Only

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

the initial allotment, such unsubscribed portion may be Allotted on a proportionate

basis to Eligible Employees Bidding in the Employee Reservation Portion, for a

value in excess of 200,000, subject to the total Allotment to an Eligible

Employee not exceeding 500,000 (net of Employee Discount)

Escrow Agent Escrow agent to be appointed pursuant to the Share Escrow Agreement

First Bidder Bidder whose name appears first in the ASBA Form and the Revision Form 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, subject to any revision thereto, at or above which

the Offer Price will be finalised and below which no Bids will be accepted

General Information

Document

The General Information Document prepared and issued in accordance with the

circular (CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by SEBI and

6

Term Description

updated pursuant to the circulars (CIR/CFD/POLICYCELL/III/2015) dated

November 10, 2015 and (SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21,

2016, suitably modified and included in Offer Procedure on page 600

IDBI Capital IDBI Capital Markets & Securities Limited (Formerly known as IDBI Capital

Market Services Limited)

IDFC Bank IDFC Bank Limited

Maximum RII Allottees

Maximum number of Retail Individual Investors who can be Allotted the

minimum Bid Lot and is computed by dividing the total number of Equity Shares

available for Allotment to RIIs by the minimum Bid Lot

Mutual Funds

Mutual funds registered with SEBI under the Securities and Exchange Board of

India (Mutual Funds) Regulations, 1996

Mutual Fund Portion 5% of the QIB Portion which shall be available for allocation to Mutual Funds

only on a proportionate basis, subject to valid Bids being received at or above the

Offer Price

Net Offer The Offer less Employee Reservation Portion, if any

Net Proceeds Offer Proceeds of the Offer less our Companys share of the Offer expenses

(which shall be reimbursed)

For further information about use of the Offer Proceeds and the Offer expenses,

see the section titled Objects of the Offer on page 86

Non-Institutional Bidders All Bidders including Category III Foreign Portfolio Investors that are not QIBs

or Retail Individual Bidders and who have Bid for Equity Shares for an amount

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 which shall be

available for allocation on a proportionate basis to Non-Institutional Bidders,

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

Non-Resident

A person resident outside India, as defined under FEMA and includes a non-

resident Indian, FPIs and FVCIs

NSE National Stock Exchange of India Limited

Offer/ Offer for Sale The public issue of [] Equity Shares of face value of 10 each for cash at a price

of [] each, aggregating [] million through an Offer for Sale by the Selling

Shareholder.

The Company may reserve a portion of up to [] Equity Shares for allocation and

allotment to Eligible Employees (the Employee Reservation Portion) subject

to receipt of necessary approvals from the GoI. The Offer will comprise of a Net

Offer of 24,000,000 Equity Shares and the Employee Reservation Portion of up

to [] Equity Shares.

Offer Agreement The agreement dated January 12, 2018 between our Company, the Selling

Shareholder, the BRLMs, pursuant to which certain arrangements are agreed to in

relation to the Offer

Offer Price The final price (less any Retail Discount and Employee Discount, as applicable)

at which Equity Shares will be Allotted in terms of the Red Herring Prospectus.

The Offer Price will be decided by our Company and the Selling Shareholder in

consultation with the BRLMs on the Pricing Date

Offered Shares [] Equity Shares offered by the Selling Shareholder through the Offer for Sale.

The Offered Shares will comprise of 24,000,000 Equity Shares constituting the

Net Offer and the Employee Reservation Portion of up to [] Equity Shares.

Pre-Offer Advertisement The pre-Offer advertisement to be published by our Company under regulation 47

of the SEBI ICDR Regulations and section 30 of the Companies Act, 2013 after

registration of the Red Herring Prospectus with the RoC, in all editions of the

English national newspaper [] and all editions of the Hindi national newspaper

[] (Hindi being the regional language of Delhi, where our Registered Office is

located), each with wide circulation

Price Band Price band of a minimum price of [] per Equity Share (Floor Price) and the

maximum price of [] per Equity Share (Cap Price) including revisions thereof,

7

Term Description

if any.

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

the our Company and the Selling Shareholder in consultation with the BRLMs

and will be advertised, at least five Working Days prior to the Bid/ Offer Opening

Date, in all editions of the English national newspaper [] and all editions of the

Hindi national newspaper [] (Hindi also being the regional language of Delhi,

where our Registered Office is located), each with wide circulation

Pricing Date The date on which our Company and the Selling Shareholder, in consultation with

the BRLMs, will finalise the Offer Price

Prospectus The prospectus to be filed with the RoC after the Pricing Date in accordance with

Section 26 of the Companies Act, 2013 and the SEBI ICDR Regulations,

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

Building Process, the size of the Offer and certain other information including any

addenda or corrigenda thereto

Public Offer Account(s) Account opened with the Bankers to the Offer in terms of Section 40(3) of the

Companies Act, 2013 to receive monies from ASBA Accounts on the Designated

Date

Public Offer Account

Agreement

The agreement dated [] to be entered into amongst our Company, the Registrar

to the Offer, the BRLMs, the Selling Shareholder, the Public Offer Bank, and the

Refund Bank for transfer of funds from ASBA Accounts into the Public Offer

Account(s) and from Public Offer Account(s) and where applicable, refunds of

the amounts collected, on the terms and conditions thereof

Public Offer Bank []

QIB Portion The portion of the Offer being not more than 50% of the Net Offer which shall be

allocated to QIBs

Qualified Institutional

Buyers or QIBs

Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI

ICDR Regulations

Red Herring Prospectus or

RHP

The red herring prospectus to be issued in accordance with Section 32 of the

Companies Act, 2013 and the provisions of the SEBI ICDR Regulations, which

will not have complete particulars of the price at which the Equity Shares will be

offered and the size of the Offer including any addenda or corrigenda thereto

The Red Herring Prospectus will be registered with the RoC at least three days

before the Bid/ Offer Opening Date and will become the Prospectus upon filing

with the RoC after the Pricing Date

Refund Account(s) The account opened with the Refund Bank(s), to which refunds, if any, of the

whole or part of the Bid Amount, shall be transferred from the Public Offer

Account(s)

Refund Bank(s) []

Registered Brokers Stock brokers registered with the stock exchanges having nationwide terminals,

other than the members of the Syndicate and eligible to procure Bids in terms of

the circular No. CIR/CFD/14/2012 dated October 4, 2012 issued by the SEBI

Registrar Agreement The agreement dated January 12, 2018 between the President of India, our

Company and the Registrar

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.

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

Registrar to the Offer or

Registrar

Link Intime India Private Limited

Retail Individual Bidder(s) Bidders who have Bid for the Equity Shares for an amount of not more than

200,000 in any of the bidding options in the Net Offer (including HUFs applying

through their Karta and Eligible NRIs)

Retail Discount Discount of up to []% (equivalent to []) to the Offer Price which may be given

to Retail Individual Bidders bidding in the Retail Portion, by our Company and

the Selling Shareholder in consultation with the BRLMs

Retail Portion The portion of the Offer being not less than 35% of the Net Offer which shall be

available for allocation to Retail Individual Bidder(s), in accordance with the

8

Term Description

SEBI ICDR Regulations

Revision Form Form used by the Bidders, to modify the quantity of the Equity Shares or the Bid

Amount in any of their ASBA Forms or any previous Revision Form(s) as

applicable

QIB Bidders and Non-Institutional Bidders are not allowed to lower their Bids (in

terms of quantity of Equity Shares or the Bid Amount) at any stage

SBICAP SBI Capital Markets Limited

Self Certified Syndicate

Bank(s) or SCSB(s)

The banks registered with SEBI, offering services in relation to ASBA, a list of

which is available on the website of SEBI at

http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&i

ntmId=35 and updated from time to time

Selling Shareholder The President of India acting through the MoR

Share Escrow Agreement The agreement dated [] to be entered into among the Selling Shareholder, our

Company and the Escrow Agent in connection with the transfer of Equity Shares

under the Offer for Sale by the Selling Shareholder and credit of such Equity

Shares to the demat account of the Allottees

Specified Locations Bidding centres where the Syndicate shall accept ASBA Forms from Bidders.

Sub Syndicate

The sub-syndicate members, if any, appointed by the BRLMs and the Syndicate

Members, to collect ASBA Forms

Syndicate Agreement The agreement dated [] to be entered into among the BRLMs, the Syndicate

Members, our Company and the Selling Shareholder in relation to the collection

of Bids in the Offer (other than Bids directly submitted to the SCSBs under the

ASBA process and Bids submitted to Registered Brokers at the Broker Centres)

Syndicate Members Intermediaries registered with SEBI who are permitted to carry out activities as

an underwriter, namely, []

Syndicate or members of

the Syndicate

The BRLMs and the Syndicate Members

Underwriters []

Underwriting Agreement The agreement dated [] to be entered into among our Company, the Selling

Shareholder and the Underwriters, entered into on or after the Pricing Date but

prior to the registration of the Prospectus with the RoC

Wilful Defaulter

A company or a person categorised as a wilful defaulter by any bank or financial

institution or consortium thereof, in accordance with the guidelines on wilful

defaulters issued by the RBI and includes any company whose director or

promoter is categorised as such

Working Day All days other than second and fourth Saturday of the month, Sunday or a public

holiday, on which commercial banks in Mumbai are open for business; provided,

however, with reference to (a) announcement of Price Band; and (b) Bid/ Offer

Period, Working Day shall mean all days, excluding all Saturdays, Sundays or

a public holiday, on which commercial banks in Mumbai are open for business;

and with reference to the time period between the Bid/ Offer Closing Date and the

listing of the Equity Shares on the Stock Exchanges, Working Day shall mean

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

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

Technical/Industry Related Terms/Abbreviations

Abbreviation Full Form

AAA Airports Authority Act

AAI Airports Authority of India

ADP Annual Development Program

AMRUT Atal Mission for Rejuvenation and Urban Transformation

ARTIN African Regional Transport Infrastructure Network

BG Broad Gauge

BOOT Build Own Operate Transfer

BOT Build Operate and Transfer

9

BP Bio-power

BRT Bus rapid transit

CAGR Compound Annual Growth Rate

CCEA Cabinet Committee on Economic Affairs

CEA Central Electricity Authority

CITPL Chennai International Container Terminals Pvt. Ltd

CRF Central Road Fund

DFC Dedicated Freight Corridor

DFCCIL Dedicated Freight Corridor Corporation of India

EDFC Eastern Dedicated Freight Corridor

EIB European Investment Bank

FICCI Federation of Indian Chambers of Commerce and Industry

FY Financial Year

GAD General Arrangement Drawings

GDP Gross Domestic Product

GMB Governments Maritime Boards

GoI Government of India

GW Gigawatt

HSD High Speed Diesel

HVDC high-voltage, direct current

IBEF India Brand Equity Foundation

IHHA International Heavy Haul Association

IMF International Monetary Fund

IMPPS Ultra Mega Power Project

InvIT Infrastructure Investment Trust

IRB Indian Railway Board

IREDA Indian Renewable Energy Development Agency

IRFC Indian Rail Finance Corporation

ISC&EI Inter State Connectivity and Economic Importance

JICA Japan International Cooperation Agency

JnNURM Jawaharlal Nehru National Urban Renewal Mission

JNPT Jawaharlal Nehru Port

JVs Joint Venture

LAPSET Lamu Port Southern Sudan Ethiopia Transport Project

LIC Life Insurance Corporation

LOC Line of Credit

MENA Middle East and North Africa Region

MG Meter Gauge

MMT million metric tonnes

MoPIT Ministry of Physical Infrastructure and Transport

MoR Ministry of Railways

MoRTH Ministry of Road Transport and Highways

MoU Memorandum of Understanding

MRTS Mass Rapid Transit System

MTPA Million Tonnes Per Annum

MW Megawatt

NCEF National Clean Energy Fund

NH National Highway

NHAI National Highway Authority of India

NHDP National Highways Development Project

10

NIIF National Investment and Infrastructure Fund

OECD Organisation for Economic Co-operation and Development

PIDA Program for Infrastructure Development in Africa

PMGSY Pradhan Mantri Gram Sadak Yojana

PPP Purchasing Power Parity

PSU Public Sector Undertaking

RBI Reserve Bank Of India

RDAI Railway Development Authority of India

REC Rural Electrification Corporation

REIT Real Estate Investment Trust

RES Renewable energy sources

RoB Railway over Bridges

RPO Renewable purchase Obligation

RuB Railway under Bridges

SH State Highway

SHP small hydro power

SPV Special Purpose Vehicle

UDAY Ujwal DISCOM Assurance Yojana

VISL Vizhinjam International Seaport Limited

VSC Vehicle Stability Control

ZR Zonal Railway

Business Related Terms/Abbreviations


ANAB National Accreditation Board

ANSI-ASQ American National Standards Institute -American National Standards Institute

CFM Potos E Caminhos De Ferro De Mocambique, Mozambique

CO Controlling

CSR Corporate Social Responsibility

DGS&D Director General of Supplies & Disposal

DMRC Delhi Metro Rail Corporation Limited

DMU Diesel Multiple Unit

ECC Enterprise Core Component

EPC Engineering, Procurement and Construction

ERP Enterprise resource planning

FI Financial Accounting

HR Human Resources

IEC International Electrotechnical Commission

INCAP Infrastructure Corporation of Andhra Pradesh Ltd

IRCON IRCON International Limited

IRSDC Indian Railway Stations Development Corporation Limited

ISO International Organization for Standardization

J&K Jammu and Kashmir

KBUNL Kanti Bijlee Utpadan Nigam Limited

KPMG Klynveld Peat Marwick Goerdeler

L&T Larsen & Toubro

MEGA Metro Link Express for Gandhinagar and Ahmedabad

MM Materials Management

NABCB National Accreditation Board for Inspection Bodies

NABL National Accreditation Board for Testing and Calibration Laboratories

NATRIP National Automotive Testing and R&D Infrastructure Project

NGO Non-Government Organisation

NTPC National Thermal Power Corporation Limited

POH Periodical Overhauling

11

PS Project Systems

QCI Quality Council of India

REMCL Railway Energy Management Company Limited

SA South Africa

SAP Systems, Applications & Products

SD Sales and Distribution

U.A.E. United Arab Emirates

USBRL Udhampur-Srinagar-Baramulla Rail Link

Conventional and General Terms or Abbreviations


/Rs./Rupees Indian Rupees

A/c Account

AD Authorised Dealer Category I Bank

AGM Annual General Meeting

AIF Alternative Investment Funds registered pursuant to SEBI (Alternative Investment

Funds) Regulations, 2012, as amended from time to time

Air Act The Air (Prevention and Control of Pollution) Act, 1981, as amended

AS or Accounting Standards Accounting standards issued by the Institute of Chartered Accountants of India

AY Assessment Year

Category III FPIs

FPIs registered as category III FPIs under the SEBI FPI Regulations, which shall

include all other FPIs not eligible under category I and II foreign portfolio investors,

such as endowments, charitable societies, charitable trusts, foundations, corporate

bodies, trusts, individuals and family offices

CDSL Central Depository Services (India) Limited

CIN Corporate Identity Number

Companies Act or Act

Companies Act, 2013 and the rules thereunder, to the extent notified, and/or the

Companies Act, 1956 and the rules thereunder, to the extent not repealed, as the

context may require

Companies Act, 1956 Companies Act, 1956 and the rules and clarifications thereunder, to the extent not

repealed

Companies Act, 2013 Companies Act, 2013 and the rules and clarifications thereunder, to the extent

notified

Competition Act Competition Act, 2002, as amended

Consolidated FDI Policy The consolidated FDI Policy, effective from August 28, 2017 issued by DIPP, and

any modifications thereto or substitutions thereof, issued from time to time.

DC Direct Current

DIN Directors Identification Number

DP ID Depository Participants Identity

EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation

ECS Electronic Clearing System

EGM Extraordinary General Meeting

EPS

Earnings per share, which is the profit after tax for a fiscal year divided by the

weighted average of outstanding number of equity shares at the end of the fiscal

year

EPF Act Employees Provident Fund and Miscellaneous Provisions Act, 1952, as amended

ESI Act Employees State Insurance Corporation Act, 1948, as amended

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act, 1999, together with rules and regulations

framed thereunder

FEMA Regulations Foreign Exchange Management (Transfer or Issue of Security by a Person Resident

Outside India) Regulations, 2017, as amended.

Fiscal or Financial Year or

FY

Period of twelve months ended March 31 of that particular year, unless otherwise

stated

Finance Act Finance Act, 2017, as amended

FPIs A foreign portfolio investor who has been registered pursuant to the SEBI FPI

Regulations, provided that any QFI or FII who holds a valid certificate of

12


registration shall be deemed to be an FPI until the expiry of the block of three years

for which fees have been paid as per the Securities and Exchange Board of India

(Foreign Institutional Investors) Regulations, 1995

Foreign Trade Act Foreign Trade (Development and Regulation) Act, 1992, as amended

FVCI Foreign Venture Capital Investor registered under the FVCI Regulations

FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors)

Regulations, 2000, as amended

GoI or Government of India The Government of India

GST Goods and Services Tax

HUF Hindu Undivided Family

ICA The Institute of Chartered Accountants of India

IFRS International Financial Reporting Standards

Ind AS Indian Accounting Standards notified under the Companies (Indian Accounting

Standards) Rules, 2015

Indian GAAP Generally accepted accounting principles in India

IPO Initial Public Offering

IRR Advisory IRR Advisory Services Private Limited

IT Information technology

IT Act/ Income Tax Act Income Tax Act, 1961, as amended

IT Department Income Tax Department, GoI

LIBOR London Interbank Offered Rate

Ltd. Limited

MRTS Mass Rapid Transit System

MSMED Act Micro, Small & Medium Enterprises Development Act, 2006

NAV Net Asset Value

NCR National Capital Region

NCT National Capital Territory

NEFT National Electronic Funds Transfer

No. Number

NR or Non-Resident A person resident outside India, as defined under the FEMA and includes a Non-

Resident Indian

NRE Account Non-Resident External Account

NRI

A person resident outside India who is a citizen of India or a person of Indian origin,

as defined under the Foreign Exchange Management (Deposit) Regulations, 2016

or is an Overseas Citizen of India cardholder within the meaning of Section 7(A)

of the Citizenship Act, 1955

NRO Account Non-Resident Ordinary Account

NSDL National Securities Depository Limited

p.a. Per annum

P/E Ratio Price/Earnings Ratio

PAN Permanent Account Number

PAT Profit After Tax

PBT Profit Before Tax

PMC Project Management Contract

RRTS Regional Rapid Transit System

RTGS Real Time Gross Settlement

SCRA Securities Contracts (Regulation) Act, 1956

SCRR Securities Contracts (Regulation) Rules, 1957

SEBI Securities and Exchange Board of India constituted under the SEBI Act

SEBI Act The Securities and Exchange Board of India Act, 1992

SEBI ICDR Regulations The Securities and Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regulations, 2009

13


SEBI Listing Regulations The Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements), Regulations, 2015

Securities Act U.S. Securities Act of 1933

SICA Sick Industrial Companies (Special Provisions) Act, 1985

Sq. ft./ Sft/ sqft Square foot

Sq. mt. Square meter

Takeover Code The Securities and Exchange Board of India (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011

TAN Tax Deduction Account Number allotted under the Income Tax Act, 1961

TDS Tax Deducted at Source

U.S. or US or U.S.A or

United States The United States of America, together with its territories and possessions

US$ United States Dollar, the official currency of the United States of America

VCFs Venture Capital Funds as defined and registered with SEBI under the Securities and

Exchange Board of India (Venture Capital Funds) Regulations, 1996

Water Act The Water (Prevention and Control of Pollution) Act, 1974

Y-O-Y Year-on-Year

Notwithstanding the foregoing, terms specifically defined in this Draft Red Herring Prospectus, shall have the meanings

given to such terms in the sections where specifically defined.

14

CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Certain Conventions

All references in this Draft Red Herring Prospectus to India are to the Republic of India and all references to the U.S.,

U.S.A or United States are to the United States of America.

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

this Draft Red Herring Prospectus.

Financial Data

Unless stated otherwise, the financial information in this Draft Red Herring Prospectus is derived from our Restated

Financial Information. These financial statements have been prepared in accordance with Ind AS and the Companies Act

and restated under the SEBI ICDR Regulations.

Our Companys Financial Year commences on April 1 and ends on March 31 of the following year. Accordingly, all

references to a particular financial year, unless stated otherwise, are to the 12 month period ended on March 31 of that

year. Reference in this Draft Red Herring Prospectus to the terms Fiscal or Fiscal Year or Financial Year is to the 12

months ended on March 31 of such year, unless otherwise specified.

Certain figures contained in this Draft Red Herring Prospectus, including financial information, have been subject to

rounding adjustments. All decimals have been rounded off to two or one decimal places. In certain instances, (i) the sum

or percentage change of such numbers may not conform exactly to the total figure given; and (ii) the sum of the numbers

in a column or row in certain tables may not conform exactly to the total figure given for that column or row. However,

where any figures that may have been sourced from third-party industry sources are rounded off to other than two decimal

points in their respective sources, such figures appear in this Draft Red Herring Prospectus as rounded-off to such number

of decimal points as provided in such respective sources.

Ind AS differs from accounting principles with which prospective investors may be familiar in other countries, including

IFRS and US GAAP, and the reconciliation of the financial information to other accounting principles has not been

provided. Our Company has not attempted to explain those differences or quantify their impact on the financial data

included in this Draft Red Herring Prospectus, and investors should consult their own advisors regarding such differences

and their impact on our Companys financial data. The degree to which the financial information included in this Draft Red

Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with

Indian accounting policies and practices, Ind AS, the Companies Act and the SEBI ICDR Regulations. Any reliance by

persons not familiar with Ind AS, the Companies Act, the SEBI ICDR Regulations and practices on the financial disclosures

presented in this Draft Red Herring Prospectus should accordingly be limited.

Unless the context otherwise indicates, any percentage amounts, as set forth in Risk Factors, Our Business,

Managements Discussion and Analysis of Financial Conditions and Results of Operations on pages 18, 128 and 515,

respectively, and elsewhere in this Draft Red Herring Prospectus, have been calculated on the basis of the Restated

Financial Information, unless otherwise stated.

Currency and Units of Presentation

All references to:

Rupees or or INR or Rs. or Re. are to India Rupee, the official currency of the Republic of India;

Euro or are to Euro, the official currency of the European Union; and

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

Our Company has presented certain numerical information in this Draft Red Herring Prospectus in million units.

One million represents 1,000,000 and one billion represents 1,000,000,000.

Exchange Rates

15

This Draft Red Herring Prospectus contains conversion of certain other currency amounts into Rupees that have been

presented solely to comply with the SEBI ICDR Regulations. These conversions should not be construed as a

representation that these currency amounts could have been, or can be, converted into Indian Rupees at any particular rate.

The following table sets forth, for the periods indicated, information with respect to the exchange rate between the Rupee

and other currencies:

(Amount in )

Currency As on March

31, 2013***

As on March 31,

2014**

As on March

31, 2015

As on March 31,

2016

As on March

31, 2017

As on

September 30,

2017*

1 USD 54.39 60.10 62.59 66.33 64.84 65.36

1 EURO 69.54 82.58 67.51 75.10 69.25 77.06

(Source: RBI reference rate from www.rbi.org.in;)

* Exchange rate as on September 29, 2017, as RBI Reference Rate is not available for September 30, 2017 being a

Saturday.

** Exchange rate as on March 28, 2014, as RBI Reference Rate is not available for March 31, 2014, March 30, 2014 and

March 29, 2014 being a public holiday, a Sunday and a Saturday, respectively.

*** Exchange rate as on March 28, 2013, as RBI Reference Rate is not available for March 31, 2013, March 30, 2013 and

March 29, 2013 being a Sunday, Saturday and public holiday respectively.

Industry and Market Data

Information has been included in this Draft Red Herring Prospectus from the report titled Report on Indian Infrastructure

Sector dated January 10, 2018 (IRR Report) issued by IRR Advisory which has been commissioned by us and includes

the following disclaimer:

This report is prepared by IRR Advisory Services Pvt Ltd (IRR Advisory). IRR Advisory has taken utmost care to ensure

accuracy and objectivity while developing this report. IRR Advisory is not responsible for any errors or omissions in

analysis/inferences/views or for results obtained from the use of information contained in this report and especially states

that IRR advisory has no financial liability whatsoever to the user of this report. This report is for the information of the

intended recipients only and no part of this report may be published or reproduced in any form or manner without prior

written permission of IRR Advisory.

Industry publications generally state that the information contained in those publications has been obtained from sources

believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured.

Accordingly, no investment decision should be made on the basis of such information. Although we believe that the

industry data used in this Draft Red Herring Prospectus is reliable, it has not been independently verified by our Company,

the Selling Shareholder, the BRLMs or any of their affiliates or advisors. The data used in these sources may have been

reclassified by us for the purposes of presentation. Data from these sources may also not be comparable.

The extent to which the industry and market data presented in this Draft Red Herring Prospectus is meaningful depends on

the readers familiarity with and understanding of the methodologies used in compiling such data. There are no standard

data gathering methodologies in the industry in which we conduct our business, and methodologies and assumptions may

vary widely among different industry sources.

Such data involves risks, uncertainties and numerous assumptions and is subject to change based on various factors,

including those disclosed in Risk Factors on page 18 of this Draft Red Herring Prospectus. Accordingly, investment

decisions should not be based solely on such information.

16

FORWARD-LOOKING STATEMENTS

This Draft Red Herring Prospectus contains certain forward looking statements. All statements regarding our expected

financial condition and results of operations, business, plans and prospects are forward-looking statements. These forward-

looking statements include statements with respect to our business strategy, our revenue and profitability, our projects and

other matters discussed in this Draft Red Herring Prospectus regarding matters that are not historical facts. These forward

looking statements can generally be identified by words or phrases such as will, aim, will likely result, believe,

expect, will continue, anticipate, estimate, intend, plan, contemplate, seek to, future, objective,

goal, project, should, will pursue and similar expressions or variations of such expressions. Similarly, statements

that describe our objectives, strategies, plans or goals are also forward looking statements. All forward looking statements

are subject to risks, uncertainties and assumptions about us that could cause our actual results to differ materially from

those contemplated by the relevant forward looking statement. Similarly, statements that describe our strategies, objectives,

plans or goals are also forward-looking statements.

Further, the actual results may differ materially from those suggested by the forward-looking statements due to risks or

uncertainties associated with our expectations with respect to, but not limited to, regulatory changes pertaining to the

industries in India in which we have our businesses and our ability to respond to them, our ability to successfully implement

our strategy, our growth and expansion, technological changes, our exposure to market risks, general economic and political

conditions in India and international markets which have an impact on our business activities or investments, the monetary

and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity

prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic laws,

regulations and taxes, changes in competition in our industry, and incidence of any natural calamities and/or acts of

violence. Important factors that could cause actual results to differ materially from our expectations include, among others:

dependence on the MoR, for a significant portion of our business;

competitive pressures from the existing competitors and new entrants in both public and private sector;

varying project related costs and revenue estimates due to long execution period of certain contracts;

influence of GoI on our actions;

quality of work performed by our agencies, suppliers, contractors and sub contractors;

dependence on the expertise of our Key Managerial Personnel, Senior Management and our skilled workforce;

the refusal of suppliers, contractors and sub-contractors to maintain favourable payment conditions and / or performance defaults by suppliers, contractors, sub-contractors or consortium partners;

any delay in the initiation of the projects and / or postponement/putting on hold of previously awarded contracts; and

unanticipated technical problems with equipment or incompatibility of such equipment with existing infrastructure.

For a further discussion of factors that could cause our actual results to differ, refer to the chapters titled Risk Factors,

Our Business and Managements Discussion and Analysis of Financial Condition and Results of Operation on pages

18, 128 and 515 respectively. By their nature, certain market risk disclosures are only estimates and could be materially

different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those

that have been estimated.

We cannot assure Bidders that the expectation reflected in these forward-looking statements will prove to be correct. Given

these uncertainties, Bidders are cautioned not to place undue reliance on such forward-looking statements and not to regard

such statements as a guarantee of future performance.

Forward looking statements reflect the current views of our Company only as of the date of this Draft Red Herring

Prospectus and are not a guarantee of future performance. These statements are based on the managements beliefs and

assumptions, which in turn are based on currently available information. Although we believe the assumptions upon which

these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the

forward-looking statements based on these assumptions could be incorrect. Neither our Company, our Directors, our

Selling Shareholder, the BRLMs nor any of their respective affiliates have any obligation to update or otherwise revise any

statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if

the underlying assumptions do not come to fruition.

In accordance with SEBI requirements, our Company and the Selling Shareholder shall ensure that investors in India are

informed of material developments from the date of this Draft Red Herring Prospectus in relation to the statements and

undertakings made by them in this Draft Red Herring Prospectus until the time of the grant of listing and trading permission

17

by the Stock Exchanges for this Offer. Further, in accordance with Regulation 51A of the SEBI ICDR Regulations, our

Company may be required to undertake an annual updation of the disclosures made in the Draft Red Herring Prospectus

and make it publicly available in the manner specified by SEBI.

18

SECTION II: RISK FACTORS

An investment in equity shares involves a high degree of risk. You should carefully consider all the information disclosed

in this Draft Red Herring Prospectus, including the risks and uncertainties described below, before making an investment

decision in our Equity Shares. If anyone or a combination of the following risks actually occurs, our business, prospects,

financial condition and results of operations could suffer and the trading price of our Equity Shares could decline and you

may lose all or part of your investment. The risks described below are not the only ones relevant to us or our Equity Shares

or the industry and regions in which we operate. Additional risks and uncertainties, not presently known to us or that we

currently deem immaterial may arise or may become material in the future and may also impair our business, results of

operations and financial condition. The financial and other related implications of risks concerned, wherever quantifiable,

have been disclosed in the risk factors mentioned below. However, there are risks where the effect is not quantifiable and

hence have not been disclosed in the applicable risk factors.

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this

Offer unless they can afford to take the risk of losing all or a part of their investment. Investors are advised to read the risk

factors described below carefully before making an investment decision on this Offer.

To obtain a more detailed understanding of our Company, prospective investors should read this section in conjunction

with sections titled Our Business and Managements Discussion and Analysis of Financial Condition and Results of

Operations on pages 128 and 515, respectively, contained in this Draft Red Herring Prospectus. In making an investment

decision, prospective investors must rely on their own examination of our Company and the terms of the Offer. You should

consult your tax, financial and legal advisors about the particular consequences to you of an investment in this Offer.

This Draft Red Herring Prospectus also contains forward-looking statements that involve risks and uncertainties. Our

actual results could differ materially from those anticipated in these forward-looking statements as a result of certain

factors, including the considerations described below and elsewhere in this Draft Red Herring Prospectus. See the section

Forward-Looking Statements on page 16.

Unless otherwise stated, the financial information of our Company used in this section has been derived from the Restated

Financial Information.

INTERNAL RISK FACTORS

Risk relating to Our Business and Our Industry

1. We depend on the Ministry of Railways, GoI (MoR), central/state governments and central/state PSUs for a significant portion of contracts on our order book which are awarded on a nomination basis. There is no assurance

that future contracts will be awarded to us on nomination basis by these clients. This may result in an adverse

effect on our business growth, financial condition and results of operations.

As of November 30, 2017, our order book from MoR, central/state governments and central/state PSUs was

36,587.73 million or 76.09% of our total order book. Some of these contracts are awarded to us on nomination basis.

There is no assurance that we will be selected by these clients for future contracts on nomination basis. In other

sectors, our major clients for highways, airports, urban infrastructure, ports, institutional buildings etc. are

central/state governments and their PSUs. In recent times we have also ventured into turnkey construction projects

mainly from MoR.

The MoR has distributed the jurisdiction of work between our Company and IRCON International Limited (a peer

group PSU under the MoR) (IRCON) in accordance with our respective core competencies. In the long term

interest of both the PSUs, IRCON is not permitted to make any bid for export of rolling stock and components

manufactured by the Indian Railways to countries other than Malaysia, Indonesia and Thailand. We are permitted to

participate in EPC or Built Operate and Transfer contracts, other than railway contracts, where there is no conflict of

interest with any other PSU under the MoR and to carry out all consultancy, operations and management, conduct

survey, installation and commissioning of all types of rolling stock, feasibility studies, DPR, design, detailed

engineering, tender evaluation, inspection and training. Furthermore, we are permitted to bid for railway rehabilitation

projects in Malaysia, Indonesia and Thailand subject to a monetary limit set by the Indian Railways. There can be no

assurance that such division of territory by the MoR will not be withdrawn or altered. As per the Presidential directive

dated May 26, 2008 wherein such division of jurisdiction was laid down by the MoR also states that, if for any reason,

our Company or IRCON is not interested in participating in a particular bid/tender (wherein conflict of interest is

19

involved), which falls in its domain, then the other PSU may participate in that bid /tender subject to the condition

that the right of first refusal for each case will be with the PSU in whose domain that particular work falls.

There is no assurance that we will continue to be the nominated agency of Indian Railways or the central/state

governments and their PSUs for execution of certain projects and that future contracts will be awarded to us on

nomination basis by these clients. This may result in an adverse effect on our business growth, financial condition

and results of operations.

2. We depend on the MoR for a significant portion of our business including equipment, technical staff etc. Any changes in the government policies or decisions by the MoR may result in an adverse effect on our business growth,

financial condition and results of operations.

We depend largely on the MoR for our transport infrastructure consultancy projects related to the railways sector.

Our reliance on the MoR also encompasses the hiring of skilled professionals who are appointed on deputation basis

from the MoR and some of whom are later absorbed into senior management positions. We also hire staff for aftersales

service and service staff on long and short term deputation from MoR. As on November 30, 2017, our Company had

161 employees on deputation from Indian Railways. We also depend on the MoR inter alia for supply of materials,

technical support staff and manufacturing facilities.

Our locomotives and rolling stock, and its components and sub-systems for both exports and domestic projects, are

not manufactured by us. The locomotives and rolling stock are manufactured by Indian Railways production facilities,

and a large number of components, sub systems are procured from their suppliers, contractors and sub-contractors.

We may therefore be unable to timely supply or service the procurement contracts awarded by our clients due to risks

associated with our reliance on Indian Railways for manufacturing facilities, technical and support staff, and

materials. This may result in an adverse effect on our business growth, financial condition and results of operations.

We have been approached by Indian Railway Stations Development Corporation Limited to contribute upto 2,500

million by buying out upto 25% of its equity share capital. This proposal however, is in its preliminary phase and yet

to be proposed for risk assessment and investment decision by the Company. In the event, the Company decides to

go ahead with the investments and these investments do not yield the expected returns, it may result in an adverse

effect on our business growth, financial condition and results of operations.

3. Our current order book may not necessarily translate into future income in its entirety or could be delayed. Some of our current orders may be modified, cancelled, delayed, put on hold or not fully paid for by our clients, which

could adversely affect our business reputation, which could have a material adverse effect on our business,

financial condition, results of operations and future prospects.

As of November 30, 2017, our order book was 48,087.25 million. As majority of our projects are executed over a

period of up to three years, at any given time we have an order book, which we define as the total contract value (in

accordance with the terms of the contract) of all existing contracts as of such date, minus any revenue already

recognised by us in relation to such existing contracts up to and including such date. We use the completion of

contracted work to recognise revenue for long-term contracts, which constitute the substantial majority of our

contracts and therefore our order book is dependent on the progress of the project. The growth of our order book is a

cumulative indication of the revenues that we expect to recognise in future periods in relation to the contracts.

For some of the contracts in our order book, our clients are obliged to perform or take certain actions, such as securing

required consents from the GoI, providing land and/or fixed assets, securing authorisations or permits from the MoR,

making advance payments or opening of letters of credit or obtaining adequate financing on reasonable terms and

approving suppliers, contractors and sub-contractors etc. If a client does not perform these and other actions in a

timely manner or at all, our projects could be delayed, put on hold, modified or cancelled and as a result, the income

anticipated in our order book may not be realised and our results of operations could be adversely affected.

Furthermore, the profitability of a contract in our order book and our cash flow may be affected by the following

amongst others:

withholding of payments by clients or mismatch between our internal cost milestones and the payment milestones under our contracts;

the refusal of suppliers, contractors and sub-contractors to maintain favourable payment conditions and / or performance defaults by suppliers, contractors, sub-contractors or consortium partners;

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any delay in the initiation of the projects and / or postponement/putting on hold of previously awarded contracts;

unanticipated technical problems with equipment or incompatibility of such equipment with existing infrastructure;

difficulties in obtaining required governmental permits;

unantic

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