1 ISSUE SALIENT FEATURES Yields range from 9.65% to 11.15% depending on the series applied for (Series I, II, III, IV & V) and the category of investor Credit Rating of CRISIL AA/Stable by CRISIL and CARE AA+ by CARE s shall be allotted on first come first serve basis based on the basis of date of upload of each Application into the electronic book of the Stock Exchange, in each Portion subject to the Allocation Ratio s have five series of options: Interest on the Series I (36 months) and Series II (60 months) shall be payable on an annual basis, Interest on Series III (60 months) shall be payable on a monthly basis. However, Series IV s, shall be redeemable at a premium of Rs per Series IV held by an Individual and at a premium of Rs per Series IV held by a Non Individual. For Series V s, 50% of the Face Value of the s shall be redeemable at a premium of Rs per Series V held by an Individual and at a premium of Rs per Series V held by a Non Individual, at the end of forty eight months from the Deemed Date of Allotment and the remaining 50% of the Face Value of the s shall be redeemable at a premium of Rs per Series V held by an Individual and at a premium of Rs per Series V held by a Non Individual, at the end of sixty months from the Deemed Date of Allotment. ISSUE TIME TABLE Issuer Shriram Transport Finance Company Limited Lead Managers A. K. Capital Services Limited, JM Financial Institutional Securities Private Limited, ICICI Securities Limited and HDFC Bank Limited. Co-Lead Managers Karvy Investor Services Limited, RR Investors Capital Services Private Limited, SMC Capitals Limited and Trust Investment Advisors Private Ltd Debenture Trustee IDBI Trusteeship Services Limited Issue Public Issue of s aggregating upto Rs. 375 Crores with an option to retain over-subscription upto Rs. 375 Crores for issuance of additional s aggregating to a total of upto Rs. 750 Crores Type of Instrument Secured redeemable Non Convertible Debentures Face Value/Issue Price (Rs/ ) 1,000/- Minimum Application Rs. 10,000/- (10 s) (for all Series of s, namely Series I, Series II, Series III, Series IV and Series V either taken individually or collectively) In Multiples of Nature of Instrument Mode of Issue Listing Credit Rating Mode of Allotment Rs. 1,000/- (1 ) Secured Public Issue BSE and NSE Depositories NSDL and CDSL Issue Opening Date July 16, 2013 Issue Closing Date July 29, 2013* Interest on Application Monies used towards allotment of s Interest on Application Monies received which are liable to be refunded Put/Call Option Deemed Date of Allotment CRISIL AA/Stable by CRISIL and CARE AA+ by CARE All Series of s, except for Series III s, will be allotted in the dematerialized form and/or the physical form, at the option of the Applicant. Series III s will be allotted compulsorily in the dematerialized form. at the rate of 9.00% per annum, other than to ASBA Applicants, subject to deduction of income tax as applicable from the date of realization of the cheque(s)/demand draft(s) or 3 (three) days from the date of receipt of the application (being the date of upload of each Application on the electronic Application platform of the Stock Exchanges) whichever is later upto one day prior to the Deemed Date of Allotment at the rate of 2.50% per annum, other than to ASBA Applicants, subject to deduction of income tax, as applicable, from the date of realization of the cheque(s)/demand draft(s) or 3 (three) days from the date of receipt of the application. There is no put/call option for the s. The Deemed Date of Allotment for the s shall be the date on which the Board of Directors or duly authorized committee thereof approves the allotment of the s or such date as may be determined by the Board of the Company and/or a duly authorized committee thereof and notified to the Stock Exchanges. All benefits under the s including payment of interest will accrue to the from the Deemed Date of Allotment. Actual Allotment may occur on a date other than the Deemed Date of Allotment. *The Issue may close on such earlier date or extended date as may be decided at the discretion of the duly authorised committee of Directors of the Company subject to necessary approvals. In the event of such early closure or extension of the Issue, the Company shall ensure that notice of the same is provided to the prospective investors, on or before such early date of closure or the initial Closing Date, as the case may be, through advertisement/s in a leading national daily newspaper.
2 ISSUE CATEGORIES AND ALLOTMENT Category I Category II Category III Category IV Institutional Investors Non Institutional Investors High Net-worth Individual, ( HNIs ), Investors Retail Individual Investors Resident public financial Companies, bodies corporate and Resident Indian individuals who apply for Resident Indian individuals who institutions as specified in Section 4 societies, registered under the s aggregating to a value more than Rs. apply for s aggregating to a A of the Companies applicable laws in India, and 5 lacs, across all Series value not more than Rs. 5 lacs, across Act authorized to invest in the authorized to invest in the s; of s; and all Series of s; and s; Trusts settled under the Hindu Undivided Families through the Karta Hindu Undivided Families through Statutory corporations including State Indian Trusts Act, who apply for s aggregating to a value more the Karta who apply for s Industrial Development Corporations, 1882, public/private than Rs. 5 aggregating to a value not more than commercial banks, co- operative banks and regional rural banks incorporated in charitable/religious trusts and/or settled lacs, across all Series of s. Rs. 5 lacs, across all Series of s India and authorized to invest in the s; registered in India under applicable laws, which are authorized to invest in Indian Provident funds, pension the s; funds, superannuation funds and Resident Indian scientific gratuity funds, authorized to invest in and/or industrial research the s; organizations, authorized to invest in Indian alternative investment funds registered with SEBI; Indian insurance companies registered with the IRDA; Indian Mutual Funds registered with SEBI; National Investment Fund set up pursuant to the resolution F. No. 2/3/2005-DD-II dated November 23, 2005 by the Government of India; and Insurance funds set up and managed by the Indian army, navy or the air force of the Union of India or by the Department of Posts, India the s; Partnership firms formed under applicable laws in Indian the name of the partners, authorized to invest in the s; and Limited Liability Partnerships formed and registered under the provisions of the Limited Liability Partnership Act, 2008 (No. 6 of 2009), authorized to invest in the s. ALLOCATION RATIO Institutional Category Non Institutional Category HNI Category Retail Individual Category 10% of the Issue Size 10% of the Issue Size 30% of the Issue Size 50% of the Issue Size
3 ISSUE INVESTMENT SERIES Series I II III IV V Frequency of Interest Payment Annual Annual Monthly Coupon (% per annum) - (A) 9.65% 9.80% 9.40% Additional Incentive on Coupon (% per annum) on Any Record Date - (B) Aggregate of Coupon and Additional Incentive on any Record Date (% per annum) = (A) + (B) Effective Yield (% per annum) on any Record Date Non Non Non 1.25% Nil 1.35% Nil 1.23% Nil Non Non Non 10.90% 9.65% 11.15% 9.80% 10.63% 9.40% Non Non Non Non who are Individual s Non 10.90% 9.65% 11.15% 9.80% 11.15% 9.80% 10.90% 9.65% % 11.15% 9.80% Tenor Thirty six months Sixty months Sixty months Thirty six months Sixty months 50% redemption at the end of 50% redemption at the end of forty eight forty eight months and balance Redemption Thirty six months from the Sixty months from the Thirty six months from the months and balance 50% at the end of sixty 50% at the end of sixty months Date Deemed Date of Allotment. Deemed Date of Allotment. Deemed Date of Allotment. months from the Deemed Date of from the Deemed Date of Allotment. Allotment. Redemption Amount (Rs./) Repayment of the Face Value plus any interest at the applicable Coupon that may have accrued at the Redemption Date plus Additional Incentive as may be applicable for Individual Re-payment of 50% of the Face Value of the s payable at the end of the 48 months and remaining 50% at the end of the 60 months from the Deemed Date of Allotment. The Face Value at each stage of redemption as detailed above, shall be payable together with any interest at the applicable Coupon which may have accrued on the date of such redemption plus Additional Incentive as may be applicable for Individual. Repayment of the Face Value plus any interest at the applicable Coupon that may have accrued at the Redemption Date plus Additional Incentive as may be applicable for Individual Rs. 1, per * Non Rs. 1, per * who are Individual s Rs per * at the end of the 48 months from the Deemed Date of Allotment and Rs per * at the end of 60 months from the Deemed Date of Allotment Non Rs per * at the end of the 48 months from the Deemed Date of Allotment and Rs per * at the end of 60 months from the Deemed Date of Allotment *subject to applicable tax deducted at source, if any. Note: All categories of persons individuals or natural persons (including Hindu Undivided Families acting through their Karta) including without limitation HNIs and Retail Individual Investors eligible under applicable laws to hold the s are collectively referred to as. All categories of entities, associations, organizations, societies, trusts, funds, partnership firms, Limited Liability Partnerships, bodies corporate, statutory and/or regulatory bodies and authorities and other forms of legal entities NOT individuals or natural persons and are eligible under applicable laws to hold the s including without limitation Institutional Investors and Non Institutional Investors are collectively referred to as Non
4 APPLICATIONS CANNOT BE MADE BY a) Minors without a guardian name*; b) Foreign nationals inter-alia including any NRIs (i) based in the USA, and/or, (ii) domiciled in the USA, and/or, (iii) residents/citizens of the USA, and/or, (iv) subject to any taxation laws of the USA; c) Persons resident outside India; d) Foreign Institutional Investors; e) Qualified Foreign Investors; f) Overseas Corporate Bodies; and g) Persons ineligible to contract under applicable statutory/regulatory requirements. * Applicant shall ensure that guardian is competent to contract under Indian Contract Act, 1872 UNDER SUBSCRIPTION If there is any under subscription in any Portion, priority in allotments will be given in the following order (in decreasing order of priority): (i) Retail Individual Portion (ii) HNI Portion (iii) Non Institutional Portion (iv) Institutional Portion OVER SUBSCRIPTION # In case of an oversubscription, allotments to the maximum extent, as possible, will be made on a first-come first-serve basis and thereafter on proportionate basis in each Portion, i.e. full allotment of s to the Applicants on a first come first serve basis up to the date falling 1 (one) day prior to the date of oversubscription and proportionate allotment of s to the Applicants on the date of oversubscription (determined on the basis of the upload of each Application into the electronic book of the Stock Exchange, in each Portion). #SEBI has granted exemption to STFC vide its letter dated July 02, 2013 SUBMISSION OF COMPLETED APPLICATION FORM Mode of Submission of Application Forms To whom the Application Form has to be submitted ASBA Applications (i) If using physical Application Form, (a) to the Lead Managers, the Co-Lead Managers, Lead Brokers, sub-brokers or Trading Members of the Stock Exchanges only at the Specified Cities ( Syndicate ASBA ), or (b) to the Designated Branches of the SCSBs where the ASBA Account is maintained; or (ii) If using electronic Application Form, to the SCSBs, electronically through internet banking facility, if available. Non-ASBA Applications The Lead Managers, the Co-Lead Managers, Lead Brokers, sub- brokers or Trading Members of the Stock Exchanges at the centres mentioned in the Application Form. Note: Applications for Allotment in physical form can be made only by using non-asba Applications and Applicants are not permitted to make Applications for Allotment in physical form using ASBA Applications and Direct Online Applications.
5 STRENGTHS The largest asset financing NBFC in India The D&B Research Report had named STFC as the largest asset financing NBFC in India in their research based on various financial and non financial parameters of the NBFCs specified therein for the financial year ended March 31, STFC primarily caters to First Time Users ( FTUs ) and Small Road Transport Operators ( SRTOs ) and believes to be among the leading financing institutions in the organized sector in this particular segment. The company s widespread network of 539 branches across India and presence in 350 rural centres as of March 31, 2013 enables it to access a large customer base including in most major and minor commercial vehicle hubs along various road transportation routes in India. The Assets Under Management on an unconsolidated basis as of March 31, 2013, was Rs. 50, Crores. Access to a range of cost effective funding sources STFC s fund requirements are currently predominantly sourced through term loans from banks, issue of redeemable non-convertible debentures, and cash credit from banks including working capital loans. The company accesses funds from a number of credit providers, including nationalized banks, private Indian banks and foreign banks. Their track record of prompt debt servicing has allowed the Company to establish and maintain strong relationships with these financial institutions. STFC has been able to achieve a relatively stable cost of funds despite the difficult conditions in the global and Indian economy and the resultant reduced liquidity and an increase in interest rates, primarily due to our improved credit ratings, effective treasury management and innovative fund raising programs. Unique business model and a track record of strong financial performance: STFC primarily caters to FTUs and SRTOs and is the only financing institution in the organized sector providing finance to FTUs and SRTOs in the preowned commercial vehicle finance segment. As the market for commercial vehicle financing, especially the pre-owned commercial vehicle financing, is fragmented, STFCs credit evaluation techniques, relationship based approach, extensive branch network and strong valuation skills make its business model unique and sustainable as compared to other financiers. In particular, STFCs internally-developed valuation methodology requires deep knowledge and practical experience developed over a period of time, which they believe is difficult to replicate. The retail focus, stringent credit policies and relationship based model has helped STFC maintain relatively low NPA levels. The Net NPAs as a percentage of Net Loan Assets was 0.73% as of March 31, 2013 on an unconsolidated basis. Strong brand name The "Shriram" brand is well established in commercial vehicle financing throughout India. STFC s targeted focus on and the otherwise fragmented nature of this market segment, widespread branch network, particularly in commercial vehicle hubs across India, as well as their large customer base has enabled us to build a strong brand. Experienced senior management team STFC s Board consists of ten Directors with extensive experience in the automotive and/or financial services sectors. The senior and middle management personnel have significant experience and in-depth industry knowledge and expertise. In order to strengthen the credit appraisal and risk management systems, and to develop and implement the credit policies, the company has hired a number of senior managers who have extensive experience in the Indian banking and financial services sector and in specialized lending finance firms providing loans to retail customers.
6 FINANCIAL HIGHLIGHTS (Unconsolidated) (Rs. in Lacs) As on/for the year/period ended March 31, 2009 March 31, 2010 March 31, 2011 March 31, 2012 March 31,2013 Share Capital 20, , , , , Reserve and Surplus 208, , , , , Total Shareholders Fund 231, , , , , Long Term Borrowings (Non-current portion) Short Term Borrowings (Current liabilities) 794, ,038, ,246, ,468, ,905, , , , , , Asset Under Management(Consolidated) Long Term Loans & Advances (Noncurrent portion) Total Income - - 3,681, ,222, ,316, ,168, ,253, ,425, ,575, , , , , Total Expenditure 281, , , , Profit Before Tax Profit After Tax from continuing operations 92, , , , , , , , Capital Adequacy Ratio (CAR) % 16.35% 21.33% 24.82% 22.26% 1,988, , , , , % Net NPA (% to Net NPA to Net Loans) 0.83% 0.71% 0.38% 0.45% 0.73% Amounts might not add up due to rounding off
7 DISCLAIMER: * For the purpose of information only, invest only after referring to the final prospectus. This document has been prepared based on Final Prospectus and is for informational purpose only. Invest only after referring to final prospectus. It is meant for the recipient for use as intended and not for circulation. This document should not be reported or copied or made available to others. The information contained herein is from the public domain or sources believed to be reliable. While reasonable care has been taken to ensure that information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. We do not guarantee the accuracy, adequacy or completeness of any Data in the Report and is not responsible for any errors or omissions or for the results obtained from the use of such Data. The company and its employees will not in any way be responsible for the contents of this report. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. The company states that it has no financial liability whatsoever towards any investments based on this research report. Registered Office: Sharekhan Limited, 10th Floor, Beta Building, Lodha ithink Techno Campus, Off. JVLR, Opp. Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai , Maharashtra. Tel: Sharekhan Ltd.: SEBI Regn. Nos. BSE Cash-INB ; F&O-INF ; NSE INB/INF ; DP: NSDL-IN-DP-NSDL ; CDSL-IN-DP-CDSL ; Mutual Fund: ARN 20669; For any complaints at Disclaimer: Client should read the Risk Disclosure Document issued by SEBI, relevant exchanges and the T & C on before investing. Sharekhan Ltd is engaged as a distributor of IPOs/ Bonds/ s/ FDs/ Mutual Funds. Sharekhan or any of its group concerns do not in any manner recommends any product or any of its characteristics. The client is advised to take his / her own independent decisions for investing in any financial product after understanding their respective nature and risk and returns involved. The client may also approach his / her own consultants for investing in financial products or in relation to the tax related aspects. We do not solicit any action based upon this promotional material. Please note that the product does not take into account any particular investment objectives, financial decisions or needs of individual recipients. Neither Sharekhan nor any person connected with Sharekhan accepts any liability arising out of investment suggested in this material.