private placement of 15,000 (fifteen thousand) … private placement bonds...registered &...

PRIVATE & CONFIDENTIAL

[This is a Disclosure Document prepared in conformity with Securities and Exchange Board of India (Issue and Listing of

Debt Securities), Guidelines, 2008]

PRIVATE PLACEMENT OF 15,000 (Fifteen Thousand) UNSECURED, REDEEMABLE, NON-CONVERTIBLE TAXABLE BONDS – SERIES – 56 OF RS. 1,00,000/- EACH FOR CASH AT PAR AGGREGATING TO RS. 150 CRORE (RUPEES ONE HUNDRED AND FIFTY CRORE ONLY) WITH GREEN-SHOE OPTION TO RETAIN OVERSUBSCRIPTION

Registered & Corporate Office: IFCI Ltd. IFCI Tower, 61, Nehru Place, New Delhi - 110019 Tel No.: (011) 41792800, 41732000 Fax No. 91-11- 26230029, 26230466

E-mail: [email protected]; Website: www.ifciltd.com

INFORMATION MEMORANDUM

Credit Rating Brickwork Ratings India (P) Ltd. (“BRICKWORK”) has vide its letter No. BWR/BLR/RA/2011-12/0061 dated May 24, 2011 assigned credit rating of "BWR AA-” with ‘positive’ outlook for long term bonds. Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.

The above ratings are not recommendations to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agencies and each rating should be evaluated independently of any other rating.

Credit Analysis and Research Ltd.(“CARE Ratings”) has also been assigned the mandate for rating this issue. On assignment of rating, the same will be disclosed by way of addendum to this Information Memorandum.

Listing The Unsecured, Redeemable, Non-Convertible, Taxable Bonds – Series 56 are proposed to be listed on the Bombay Stock Exchange (BSE).

Beetal Financial & Computers Services (P) Ltd. BEETAL House, 3

rd Floor,

99 Madangir, Behind LSC, New Delhi- 110 062 Tel: 011-29961281-3, Fax: 011-29961284 Email: [email protected]

Axis Trustee Services Ltd. 2

nd Floor, Axis House

Bombay Dyeing Mills Compound, Pandurang Budhkar Marg, Worli, Mumbai- 400025

Tel: 022-24252525/43252525, Fax: 022-24254200 Email: [email protected]

Issue opens on: April 23, 2012 Issue closes on: June 08, 2012 Deemed Date of Allotment: June 26, 2012

mailto:[email protected]


IFCI PRIVATE PLACEMENT BONDS – SERIES 56 – Information Memorandum

2

ARRANGERS TO THE ISSUE (In alphabetical order)

Almondz Global Securities Limited 2nd Floor, 3 Scindia House Janpath, New Delhi - 110 001 Tel: 011-41514666/669 Fax: 011-41514665 Email: [email protected]

RR Investors Capital Services Pvt Ltd 47, M M Road, Rani Jhansi Marg, Jhandewalan, New Delhi – 110 055 Tel: 011-23636362/63,9312940483 Fax- 011-23636666 Email: [email protected]

SPA Merchant Bankers Ltd 25, 'C' Block Community Centre Janak Puri, New Delhi – 110 058 Tel: 011- 45675500 / 25517371 Fax: 011- 25572763 / 25532644 Email: [email protected]

Yes Bank Ltd. Nehru Centre, Discovery Of India Bldg, Dr. A.B Road, Worli, Mumbai Tel No. - 022-66699000 Fax No. - 022-66699018 Email id - [email protected]

Darashaw & Co. (P) Ltd Regent Chambers 12th Floor 208, Nariman Point,Mumbai-400021 Tel: (022)66306612-13 Fax:91-22-22040031 Email: [email protected]

A.K.Capital Services Ltd. 609, 6th Floor, Antriksh Bhavan 22, K. G. Marg New Delhi - 110 001 Tel: 011-23739628,Fax: 011-23739627 Email: [email protected]

LKP Securities Ltd. 2nd floor, Gulab Bhawan,6, Bahadur Shah Zafar Marg, New Delhi- 110 002 Tel:011-41517624, Fax:011-41517627 Email: [email protected]


3

TABLE OF CONTENTS

I DEFINITIONS/ABBREVIATIONS…………………………………………………………....4

II DISCLAIMER STATEMENT.....................................................................................................6

III RISK FACTORS........................................................................................... ................................7

IV ISSUE STRUCTURE (SUMMARY)................................................................................. ........16

V GENERAL INFORMATION.....................................................................................................18

Issuer

Arrangers

Registrar

Trustees

Bankers

Credit Rating

Listing

Future Resource raising

Permission/consent from prior creditors

VI DETAILED TERMS OF THE ISSUE........................................................................................22

Issue

Subscription and related payments

Basis of allotment

Nomination

Transfer

Interest

Tenor & Redemption

Modes of payment

Debenture Trustee

Rights of bondholders

VII STATEMENT OF TAX BENEFITS..........................................................................................34

VIII PROCEDURE OF APPLICATION...........................................................................................35

Who can apply

How to apply

Payment Instructions

Rejection of Applications

Letters of allotment/refund order

IX ABOUT IFCI LTD................................................................................. ......................................42

Background and Main Objects

Board of Directors

Operational performance

Details of other borrowings

X APPENDICES…………………………………………………………………………………...56

Rating assignment letters

Consent letter of Debenture Trustee

List of Collecting Branches


4

DEFINITIONS/ ABBREVIATIONS

Arrangers A K Capital Services Ltd, Almondz Global Securities Ltd., Darashaw & Co.

(P) Ltd., LKP Securities Ltd., RR Investors Capital Services Pvt. Ltd., SPA

Merchant Bankers Ltd. & Yes Bank Ltd.

Articles Articles of Association of IFCI Ltd.

Board/ Board of

Directors

The Board of Directors of IFCI Ltd. or Committee thereof

Bonds Unsecured, Redeemable, Non-Convertible, Taxable Bonds Series 56 in the

nature of promissory notes of Rs.1,00,000/- each.

Book Closure/ Record

Date

The date of closure of register of Bonds for payment of interest and

repayment of principal

Brickwork Brickwork Ratings India (P) Ltd.

CARE Ratings Credit Analysis and Research Ltd.

CAR Capital Adequacy Ratio

Call Option Option with the issuer for redeeming the Bonds before maturity on the Call

Option Date

Call Option Date June 26, 2017 i.e. 5(Five) years from the Deemed Date of Allotment

CDSL Central Depository Services (India) Ltd.

Debt Securities Non-Convertible debt securities which create or acknowledge indebtedness

and include debenture, bonds and such other securities of the Issuer, whether

constituting a charge on the assets of the Issuer or not, but excludes security

receipts and securitized debt instruments

Depository A Depository registered with SEBI under the SEBI (Depositories and

Participant) Regulations, 1996, as amended from time to time

Depositories Act The Depositories Act, 1996, as amended from time to time.

Depository Participant A Depository participant as defined under Depositories Act

Designated Stock

Exchange

Bombay Stock Exchange Ltd.

DER Debt Equity Ratio

Director(s) Director(s) of IFCI Ltd. unless otherwise mentioned

Disclosure Document Disclosure Document dated April 20, 2012 for Private Placement of

Unsecured, Redeemable, Non-Convertible, Taxable Bonds Series 56

DP Depository Participant

EPS Earning Per Share

FIs Financial Institutions

FIIs Foreign Institutional Investors

Financial Year/ FY Period of twelve months period ending March 31, of that particular year

GoI Government of India/ Central Government

HUF Hindu Undivided Family

Issuer/ IFCI/ Company IFCI Ltd.

I.T. Act The Income Tax Act, 1961, as amended from time to time

Listing Agreement Listing Agreement for Debt Securities issued by Securities and Exchange

Board of India vide circular no. SEBI/IMD/BOND/1/2009/11/05 dated May

11, 2009 and Amendments to Simplified Debt Listing Agreement for Debt

Securities issued by Securities and Exchange Board of India vide Circular

No.SEBI/IMD/DOF-1/BOND/Cir-5/2009 dated November 26, 2009 and

Amendments to Simplified Debt Listing Agreement for Debt Securities

issued by Securities and Exchange Board of India vide Circular No.

SEBI/IMD/DOF-1/BOND/Cir-1/2010 dated January 07, 2010


5

MoF Ministry of Finance

NPAs Non Performing Assets

NRIs Non Resident Indians

NSDL National Securities Depository Ltd.

OCBs Overseas Corporate Bodies

PAN Permanent Account Number

PLR Prime Lending Rate

Put Option Option with the investor for redeeming the Bonds before maturity on the Put

Option Date

Put Option Date June 26, 2017 i.e. 5(Five) years from the Deemed Date of Allotment

Rs. Indian National Rupee

RBI Reserve Bank of India

RTGS Real Time Gross Settlement

Registrar Registrar to the Issue, in this case being Beetal Financial & Computer

Services (P) Ltd.

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

1992

SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to

time

SEBI Regulations Securities and Exchange Board of India (Issue and Listing of Debt

Securities) Regulations, 2008 issued vide Circular No. LAD-

NRO/GN/2008/13/127878 dated June 06, 2008

TDS Tax Deducted at Source

The Companies Act/

The Act

The Companies Act, 1956 as amended from time to time

The Issue/ The Offer/

Private Placement

Issue through Private Placement of 15,000 Unsecured, Redeemable, Non-

Convertible, Taxable Bonds Series-56 in the nature of promissory notes of

Rs.1,00,000/- each.


6

DISCLAIMER STATEMENT

This Information Memorandum is neither a Prospectus nor a statement in lieu of Prospectus. It does

not constitute an offer or an invitation to the Public to subscribe to the PP Bonds- Series 56 to be

issued by IFCI Limited. This Information Memorandum is not intended for distribution and is for the

consideration of the person to whom it is addressed and should not be reproduced/redistributed by the

recipient. It cannot be acted upon by any person other than to whom it has been specifically

addressed. Multiple copies hereof given to the same entity shall be deemed to be offered to the same

person. The securities mentioned herein are being issued strictly on a private placement basis and this

offer does not constitute a public offer/invitation.

This Information Memorandum is not intended to form the basis of evaluation for the potential

investors to whom it is addressed and who are willing and eligible to subscribe to these PP Bonds to

be issued by IFCI. This Information Memorandum has been prepared to give general information

regarding IFCI to parties proposing to invest in this issue of PP Bonds and it does not purport to

contain all the information that any such party may require. IFCI and the Arrangers do not undertake

to update this Information Memorandum to reflect subsequent events and thus it should not be relied

upon without first confirming its accuracy with IFCI.

Potential investors are required to make their own independent valuation and judgment before making

the investment and are believed to be experienced in investing in debt markets and are able to bear the

economic risk of investing in the Bonds. It is the responsibility of potential investors to have obtained

all consents, approvals or authorisation required by them to make an offer to subscribe for, and

purchase the Bonds. Potential investors should not rely solely on information in the Information

Memorandum or by the Arrangers nor would providing of such information by the Arrangers be

construed as advice or recommendation by the Issuer or by the Arrangers to subscribe to and purchase

the Bonds. Potential investors also acknowledge that the Arrangers do not owe them any duty of care

in respect of their offer to subscribe for and purchase of the Bonds. It is the responsibility of potential

investors to also ensure that they subscribe to these Bonds in strict accordance with this Information

Memorandum and other applicable laws, and that this Issue does not constitute an offer to the public

within the meaning of the Companies Act, 1956. Potential investors should also consult their own tax

advisors on the tax implications of the acquisitions, ownership, sale and redemption of Bonds and

income arising thereon.

The Company may have included statements in this Information Memorandum, which contain words

or phrases such as “will”, “would”, “aim”, “aimed”, “will likely result”, “is likely”, “are likely”,

“believe”, “expect”, “expected to”, “will continue”, “will achieve”, “anticipate”, “estimate”,

“estimating”, “intend”, “plan”, “contemplate”, “seek to”, “seeking to”, “trying to”, “target”, “propose

to”, “future”, “objective”, “goal”, “project”, “should”, “can”, “could”, “may”, “will pursue”, “our

judgment” and similar expressions or variations of such expressions, that are “forward-looking

statements”. Actual results may differ materially from those suggested by the forward-looking

statements due to certain risks or uncertainties associated with the Company’s expectations. 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, losses or impact on net interest income

and net income could materially differ from those that have been estimated.


7

RISK FACTORS

Prospective investors should carefully consider the risks and uncertainties described below, in

addition to the other information contained in this Information Memorandum before making any

investment decision relating to the Issue. Investors must rely on their own examination of the

Company and this Issue, including the risks and uncertainties involved.

INTERNAL RISK FACTORS

1. As a financial institution, the risk of default and non-payment by borrowers and other

counterparties is one of the most significant risks which may affect our profitability and

asset quality.

Our loan portfolio consists of loans provided to large corporates, and medium scale enterprises, with

the earlier segment constituting a significant portion of our portfolio. While large corporate customers

are generally stable in their risk profile, the relatively large sized single ticket exposures to the same

can impact profitability and result in NPAs on even a small number of defaults. The borrowers and/or

guarantors and/or third parties may default in their repayment obligations due to various reasons

including insolvency, lack of liquidity, and operational failure. Besides macroeconomic conditions,

we face risks specific to each line of our business. Though the Company’s total provisioning against

the NPAs, with 87.45% provision coverage, may be considered at present adequate to cover all the

identified losses in the loan portfolio, there may not be any assurance that in the future, provisioning

levels, though compliant with regulatory requirements, will be sufficient to cover all anticipated

losses. This is because the Company may not be able to meet its recovery targets for NPAs set for the

particular fiscal year due to the general economic slowdown at both global and domestic levels and

other factors mentioned above.

2. If we are unable to manage our rapid growth effectively, our business, prospects, results of operations and financial condition could be adversely affected.

Our business has grown rapidly since the fiscal 2009. From fiscal 2009 to fiscal 2012, our balance

sheet size and total income increased at a compounded annual growth rate of 24 per cent each. We

intend to continue to grow our business rapidly, though with caution, which could place significant

demands on our operational, credit, financial and other internal risk controls. Our growth may also

exert pressure on the adequacy of our capitalization, making management of asset quality increasingly

important.

Our asset growth will be primarily funded by the issuance of new debt. We may have difficulty

obtaining funding on suitable terms or at all. As we are a systemically important non-deposit

accepting NBFC and do not have access to deposits, our liquidity and profitability are dependent on

timely and adequate access to capital, including borrowings from banks. Banks may fix internal limits

for their aggregate exposure to NBFCs, which may put strain on our ability to obtain adequate

funding.

Increase in debt would lead to leveraging the balance sheet, exerting pressure on the financial

covenants that we are required to maintain under our various loan agreements. We cannot assure you

that we would continue to be in compliance with loan agreements’ conditions. Any default under a

loan agreement may lead to an adverse impact on our financial condition and results of operations.

Further, our growth also increases the challenges involved in preserving a uniform culture, values and

work environment; and developing and improving our internal administrative infrastructure.

Addressing the challenges arising from our growth entails substantial senior level management time

and resources and would put significant demands on our management team and other resources. As

we grow and diversify, we may not be able to implement, manage or execute our strategy efficiently


8

in a timely manner or at all, which could adversely affect our business, prospects, results of

operations, financial condition and reputation.

3. We have significant exposure to certain sectors and to certain borrowers and if certain

assets become non-performing, the quality of our asset portfolio may be adversely

affected.

As of March 31, 2012, our four largest sector-wise exposures were in the Infrastructure, Oil & Gas,

Banking & Finance and Construction & Real Estate sectors. Additionally, our concentration within

these sectors was also significant. Any negative trends or adverse developments in the energy,

transportation, construction and real estate sectors could increase the level of non-performing assets in

our portfolio and adversely affect our business and financial performance. Though, subsequently, our

exposure to iron &steel has reduced substantially, credit losses on account of sector concentration risk

in the other three sectors could adversely affect our business and financial performance and the price

of our Bonds.

In addition, at present a majority of our income is in the form of interest income received from our

borrowers. Additionally, we expect good return from our investment in project equity in post

implementation period of the concerned projects. Any default by our large borrowers and/or any

difficulty in profitable exit from our equity investment for any reason may have an adverse impact on

our liquidity position and results of operations.

4. If the level of non-performing assets in our portfolio were to increase, our business will

be adversely affected.

As of March 31, 2012, our gross and net non-performing loans were Rs. 2,608 crore and Rs. 327

crore, respectively. These represent 13.51 per cent and 1.92 per cent of our total gross and net assets,

respectively. We expect the size of our asset portfolio to continue to increase in the future, and we

may have additional non-performing assets on account of these new loans and sectoral exposures. If

we are not able to prevent increases in our level of non-performing assets, our business, prospects,

results of operations, financial condition and asset quality could be adversely affected.

5. The Company may experience delays in enforcing its collateral when borrowers default

on their obligations to the Company, which may result in failure to recover the expected

value of collateral security, exposing it to a potential loss.

A substantial portion of the Company’s loans to corporate customers are secured by real assets,

including property, plant and equipment. In some cases, the Company may have taken further security

of a first or second charge on fixed assets, a pledge of financial assets like marketable securities,

corporate guarantees and personal guarantees. Although in general the Company’s loans are over-

collateralized, an economic downturn could result in a fall in relevant collateral values for the

Company. In India, foreclosure on immovable property generally requires a written petition to an

Indian court or tribunal.

An application, when made, may be subject to delays and administrative requirements that may result,

or be accompanied by, a decrease in the value of the immovable property. Security created on shares

of a borrower can be enforced without court proceedings. However, there can be delays in realization

in the event that the borrower challenges the enforcement in an Indian court. In the event a corporate

borrower makes a reference to a specialized quasi-judicial authority called the Board for Industrial

and Financial Reconstruction (BIFR), foreclosure and enforceability of collateral is stayed.

Additionally, the realizable value of our collateral in liquidation may be lower than its book value. In

a volatile equity market, the value and volume of pledged shares traded may fall significantly thereby

reducing our security cover and we may not be able to sell the pledged shares to the extent and at the

price we need to do to realise our loan recovery.


9

The Company may not be able to realize the full value on its collateral as a result of, among other

factors, delays in bankruptcy and foreclosure proceedings, defects in the registration of collateral and

fraudulent transfers by borrowers. A failure to recover the expected value of collateral security could

expose the Company to a potential loss. Any unexpected loss could adversely affect the Company’s

business, its future financial performance and the trading price of the Bonds.

6. We may not be able to access funds at competitive rates and such higher cost of

borrowings could have a significant impact on the scale of our operations and on our

profit margins.

Our growing business needs would require us to raise funds through commercial borrowings. Our

ability to raise funds at competitive rates would depend on our credit rating, regulatory, economic and

financial markets environment in the country and on the price and availability of liquidity in the

financial markets. Besides any domestic developments, changes in the international markets also

affect the Indian interest rate environment, and may relatively impact our borrowing costs. A

substantial position of our borrowing is on floating interest rate basis, which has been rising due to

policy rate hikes by RBI. Further increase in interest rates would affect the NIM and profitability of

the company adversely.

7. We are affected by volatility in interest rates for both our lending and treasury

operations, which could cause our net interest income to decline and adversely affect our

return on assets and profitability.

Being a non-deposit accepting NBFC, our Company is exposed to greater interest rate risk compared

to banks or deposit accepting NBFCs. Interest rates are highly sensitive to many factors beyond our

control, including the monetary policies of the RBI, deregulation of the financial sector in India,

domestic and international economic and political conditions and other factors. Due to these factors,

interest rates in India have historically experienced a relatively high degree of volatility.

If interest rates rise we may have greater difficulty in maintaining a low effective cost of funds

compared to our competitors which may have access to low-cost deposit funds. Since, a good portion

of our borrowings are linked to market rates, we may have to pay interest at a higher rate as compared

to other lenders. But significantly high proportion of our lending is at fixed rate, which may reduce

our net interest margin in an increasing rate scenario. Fluctuations in interest rates may also adversely

affect our treasury operations. In a rising interest rate environment, especially if the rise were sudden

or sharp, we could be adversely affected by the decline in the market value of our securities portfolio

and other fixed income securities. In addition, the value of any interest rate hedging instruments we

may enter into in the future would be affected by changes in interest rates.

When interest rates decline, we are subject to greater repricing and prepayment risks as borrowers

take advantage of the attractive interest rate environment. When assets are repriced, our spread on our

loans, which is the difference between our average yield on loans and our average cost of funds, could

be affected. During periods of low interest rates and high competition among lenders, borrowers may

seek to reduce their borrowing cost by asking lenders to reprice loans. If we reprice loans, our results

may be adversely affected in the period in which the repricing occurs. If borrowers prepay loans, the

return on our capital may be impaired as any prepayment premium we receive may not fully

compensate us for the redeployment of such funds elsewhere. Our inability to effectively and

efficiently manage interest rate variations may adversely affect our result of operations and

profitability.


10

8. We make equity investments, which can be volatile and may not be recovered.

As of March 31, 2012, the book value of our equity investments accounted for 19.13 per cent of our

total assets. The value of these investments depends on the success of the operations and management

and continued viability of the investee entities. We may have limited control over the operations or

management of these entities and majority of these investments are unlisted, offering limited exit

options. Therefore, our ability to realize expected gains as a result of our equity investments is highly

dependent on factors outside of our control. Write-offs or write-downs in respect of our equity

portfolio could adversely affect our business, prospects, results of operations, financial condition and

asset quality.

9. The Company may not be able to detect money-laundering and other illegal or improper

activities fully or on a timely basis, which could expose it to additional liability and harm

its business or reputation

The Company is required to comply with applicable anti-money-laundering and anti-terrorism laws

and other regulations in India. These laws and regulations require the Company, among other things,

to adopt and enforce know-your-customer policies and procedures and to report suspicious and large

transactions to the applicable regulatory authorities in different jurisdictions. While the Company has

adopted policies and procedures aimed at detecting and preventing the use of its network for money-

laundering activities and by terrorists and terrorist-related organizations and individuals generally,

such policies and procedures may not completely eliminate instances where the Company may be

used by other parties to engage in money-laundering and the relevant government agencies to whom

the Company reports have the power and authority to impose fines and other penalties. In addition,

the Company’s business and reputation could suffer.

10. Devolvement of Contingent Liabilities could adversely impact the Company’s

profitability.

As on March 31, 2012, the company had contingent liabilities not provided for of Rs.224.30 crore

including Rs. 156.10 crore as claims not acknowledged as debt and Rs. 26.96 crore towards

guarantees issued as against contingent liabilities of about Rs. 160.31 crore as on March 31, 2011.

These liabilities, if devolved on the Company, may adversely affect the financial performance of the

Company and the trading price of the Bonds.

11. The Company is involved in legal proceedings arising from its operations from time to

time.

The Company is involved in various litigations which have mostly arisen out of its operations, when

the Company seeks to recover its dues from the borrowers. The Company is also involved in various

legal cases by its customers, employees, seeking claims/compensation. The Company does not make

provisions or disclosure in its financial investments where in its assessment, the risk is insignificant.

Adverse decisions against the Company in major cases may affect its financial performance

adversely.

12. Our transition to IND AS reporting could have a material adverse effect on our

reported results of operations or financial condition.

On February 25, 2011, the Ministry of Corporate Affairs, Government, of India (“MCA”), notified

that the IND AS will be implemented in a phased manner. It was also mentioned that the date of

implementation of IND AS will be notified by the MCA at a later date. As of the date of this IM, the

MCA has not yet notified the date of implementation of IND AS. There can be no assurance that the

financial condition, results of operations, cash flow or changes in shareholder’s equity of the

Company will not appear materially different under IND AS than under Indian GAAP. As our


11

Company adopts IND AS reporting, it may encounter difficulties in the ongoing process of

implementing and enhancing its management information systems. Moreover, there is increasing

competition for the small number of IND AS-experienced accounting personnel available once Indian

companies begin to prepare IND AS financial statements.

13. System failures and infrastructure bottlenecks in computer systems may adversely

affect our business and significant security breaches could adversely impact the

Company’s business

Our business is highly dependent on our ability to process, on a daily basis, a large number of

transactions. Our financial, accounting or other data processing systems may fail to operate

adequately or may become disabled as a result of events that are wholly or partially beyond our

control, including a disruption of electrical or communications services. These circumstances could

affect our operations and/or result in financial loss, disruption of our businesses and/or damage to our

reputation. In addition, our ability to conduct business may be adversely impacted by a disruption in

the infrastructure that supports our businesses and the localities in which we are located.

The Company seeks to protect its computer systems and network infrastructure from physical break-

ins as well as security breaches and other disruptions caused by increased use of technology including

the internet. Computer break-ins and power disruptions could affect the security of information stored

in and transmitted through these computer systems and network infrastructure. Although the

Company intends to continue to implement security technology and establish operational procedures

to prevent break-ins, failed security measures could have a material adverse effect on the Company’s

business, its future financial performance and the trading price of the Bonds.

14. We may face asset-liability mismatches, which could affect our liquidity position

The difference between the value of assets and liabilities maturing, in any time period category

provides the measure to which we are exposed to the liquidity risk. However, a large portion of our

liabilities have medium to long-term maturities and asset-liability cumulative gap is positive. Still, on

account of unforeseen factors, the funding mismatches could happen, which could have an adverse

effect on our business and future financial performance.

15. The current trading of our existing listed privately placed unsecured non-convertible

bonds may not reflect the liquidity of the Bonds

We have offered other unsecured non-convertible bonds from time to time, on private placement

basis, which have been listed on BSE. There can be no assurance that an active public market for the

Bonds will develop, and if such a market were to develop, there is no obligation on us to maintain

such a market.

16. Changes in interest rates may affect the price of the Bonds

All securities where a fixed rate of interest is offered, such as the Bonds, are subject to price risk. The

price of such securities will vary inversely with changes in prevailing interest rates, i.e. when interest

rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase. The

extent to which prices increase or decrease is a function of the existing coupon, days to maturity and

the extent to which prevailing interest rates increase or decrease.


12

EXTERNAL RISK FACTORS

17. Our access to liquidity is susceptible to adverse conditions in the domestic and global

financial markets.

Since the second half of 2007, the global credit markets have experienced, and may continue to

experience, significant dislocations and liquidity disruptions, which have originated from the liquidity

disruptions in the United States and the European credit and sub-prime residential mortgage markets.

These and other related events, such as the collapse of a number of financial institutions, have had and

continue to have a significant adverse impact on the availability of credit and the confidence of the

financial markets, globally as well as in India. There can be no assurance that we will be able to

secure additional financing required by us on adequate terms or at all.

In response to such developments, legislators and financial regulators in the United States and other

jurisdictions, including India, have implemented a number of policy measures designed to add

stability to the financial markets. However, the overall impact of these and other legislative and

regulatory efforts on the global financial markets is uncertain, and they may not have the intended

stabilizing effects. In the event that the current difficult conditions in the global credit markets

continue or if there is any significant financial disruption, such conditions could have an adverse

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

18. A large part of the Company’s loans are disbursed at fixed rates for specific tenures

which may differ from its funding sources and therefore interest rate fluctuations could

impact the Company’s margins as well as profitability.

Our Company’s business is largely dependent on interest income from our operations. We are

exposed to interest rate risk principally as a result of lending to customers at interest rates and in

amounts and for periods, which may differ from the funding sources (institutional/bank borrowings

and debt offerings). We endeavour to match our interest rate positions to minimize our interest rate

risk. Despite these efforts, there can be no assurance that significant interest rate movements will not

have an effect on the results of our operations. Any adverse/unexpected movements in interest rates

may affect our profitability.

19. Regulatory changes in India could adversely affect our business and competitiveness

We are subject to the Companies Act and are subject to supervision and regulation by the RBI and by

the SEBI. In addition, we are subject generally to changes in Indian Law, as well as to changes in

regulation and government policies and accounting principles. We also receive certain benefits from

being notified as a public financial institution under Companies Act. Any amendments or other

changes to the regulations governing us may require us to restructure our activities and/or incur

additional expenses in complying with such laws and regulations and could materially and adversely

affect our business, financial condition and results of operations.

20. A slowdown in economic growth could cause the Company’s business to suffer.

The Company’s performance and the quality and growth of its assets are necessarily dependent on the

health of the Indian economy as well as on global economic conditions. An economic slowdown

could adversely affect our business, including our ability to grow our asset portfolio, to maintain the

quality of our assets and to implement our strategy. The domestic economy could be adversely

affected by a variety of domestic as well as global factors.

The current uncertain economic situation, in India and globally, could result in a further slowdown in

economic growth, investment and consumption. A further slowdown in the rate of growth in the

Indian economy could result in lower demand for credit and other financial products and services and


13

higher defaults. Any slowdown in the growth or negative growth of sectors where we have a relatively

higher exposure could adversely impact our performance. Any such slowdown could adversely affect

our business, prospects, results of operations and financial condition.

21. Our business may be adversely impacted by natural calamities or unfavourable climatic

changes.

India has experienced natural calamities such as earthquakes, floods, droughts and a tsunami in recent

years. India has also experienced pandemics, including the outbreak of avian flu and swine flu. The

extent and severity of these natural disasters and pandemics determine their impact on the economy

and in turn their effect on the financial services sector of which our Company is a part. Prolonged

spells of abnormal rainfall and other natural calamities could have an adverse impact on the economy

which in turn could adversely affect our results of operations.

22. The Company faces increasing competition from other established banks and other

NBFCs. The success of our business depends on our ability to face the competition.

The Company’s main competitors are established commercial banks and other NBFCs. Over the past

few years, the infrastructure financing area has seen the entry of banks, both public and private sectors

as well as foreign. Banks have access to low cost funds which could enable them to offer finance to

our customers at lower rates, thereby reducing our Company’s competitive abilityfor attracting quality

customers.

23. Financial instability in other countries could disrupt our business.

The Indian market and the Indian economy are influenced by economic and market conditions in

other countries. Although economic conditions are different in each country, investors’ reactions to

developments in one country can have adverse effects on the economy as a whole, in other countries,

including India. A loss of investor confidence in the financial systems of other emerging markets may

cause volatility in Indian financial markets and indirectly, in the Indian economy in general. Any

worldwide financial instability could also have a negative impact on the Indian economy, including

the movement of exchange rates and interest rates in India. In the event that the current difficult

conditions in the global credit markets continue or if the recovery is slower than expected or if there

any significant financial disruption, this could have an adverse effect on our cost of funding, loan

portfolio, business, prospects, results of operations and financial condition.

24. Political instability or changes in the Government could adversely affect economic

conditions in India and consequently, our business.

The Government has traditionally exercised and continues to exercise a significant influence over

many aspects of the economy. Since 1991, successive governments have pursued policies of

economic and financial sector liberalisation and deregulation and encouraged infrastructure projects.

The current Government, which came to power in May 2009, is a coalition of several political parties.

Although the previous Governments had announced policies and taken initiatives that supported the

economic liberalization programme pursued by previous governments, the policies of subsequent

Governments may change the rate of economic liberalisation. A significant change in the

Government’s policies in the future, particularly in respect of the banking and finance industry and

the infrastructure sector, could affect business and economic conditions in India. This could also

adversely affect our business, prospects, results of operations and financial condition.


14

25. If regional hostilities, terrorist attacks or social unrest in India increases, our business

could be adversely affected.

India has from time to time experienced social and civil unrest and hostilities within itself and with

neighbouring countries. India has also experienced terrorist attacks in some parts of the country.

These hostilities and tensions and/or the occurrence of similar terrorist attacks have the potential to

cause political or economic instability in India and adversely affect our business and future financial

performance. India has also experienced social unrest in some parts of the country. If such tensions

occur in other parts of the country, leading to overall political and economic instability, it could have

an adverse effect on our business, prospects, results of operations and financial condition.

26. Difficulties faced by other banks, financial institutions or NBFCs or the Indian financial

sector generally could cause our business to be adversely affected.

We are exposed to the risks of the Indian financial sector which in turn may be affected by financial

difficulties and other problems faced by Indian financial institutions. Certain Indian financial

institutions have experienced difficulties during recent years particularly in managing risks associated

with their portfolios and matching the duration of their assets and liabilities, and some co-operative

banks have also faced serious financial and liquidity crises. Any major difficulty or instability

experienced by the Indian financial sector could create adverse market perception, which in turn could

adversely affect our business, prospects, results of operations and financial condition.

RISKS RELATING TO THE BONDS

27. There is no guarantee that the Bonds issued pursuant to this Issue will be listed on BSE

in a timely manner, or at all.

In accordance with Indian law and practice, permissions for listing and trading of the Bonds issued

pursuant to this Issue will not be granted until after the Bonds have been allotted. There could be a

failure or delay in listing the Bonds on the Stock Exchanges.

28. The investors may not be able to recover, on a timely basis or at all, the full value of the

outstanding amounts and/or the interest accrued thereon in connection with the Bonds.

Our ability to pay interest accrued on the Bonds and/or the principal amount outstanding from time to

time in connection therewith would be subject to various factors inter-alia including our financial

condition, profitability and the general economic conditions in India and in the global financial

markets. We cannot assure you that we would be able to repay the principal amount outstanding from

time to time on the Bonds and/or the interest accrued thereon in a timely manner, or at all.

29. Debenture Redemption Reserve shall not be created for these bonds.

The Department of Company Affairs General Circular No.9/2002 No.6/3/2001-CL.V dated April 18,

2002 specifies that NBFCs which are registered with the RBI under Section 45-IA of the Reserve

Bank of India Act, 1934 need not create any Debenture Redemption Reserve for redemption of the

debentures issued through private placement. Therefore, the Company will not be maintaining any

debenture redemption reserve and the Bondholders may find it difficult to enforce their interests in the

event of or to the extent of a default.


15

30. Any downgrade in the credit ratings of our Bonds may affect the value of the Bonds and

thus our ability to refinance our debt.

Brickwork Ratings has assigned the rating of ‘BWR AA-’ for issue of these Bonds for long term

borrowings of the Company. The Issuer cannot guarantee that this rating will not be downgraded. The

Rating Agencies have the right to revise/suspend/withdraw the ratings in future on the basis of any

information etc. Any revision or downgrading in the above rating may affect our ability to raise

further debt and lower the price of the bond. CARE Ratings has also been assigned to rate these

bonds. The aforesaid principles shall also apply to the rating that may be assigned by CARE Ratings.


16

ISSUE STRUCTURE (SUMMARY)

IFCI PRIVATE PLACEMENT BONDS – SERIES 56

The following is a summary of the Private Placement Bonds-Series 56 Issue. The summary should be

read in conjunction with, and is qualified in its entirety by, more detailed information in the section

“Terms of the Series 56 Issue”.

Common Terms

Issuer IFCI Limited (“the Issuer”)

Offering 15,000 Nos. Unsecured, Redeemable, Non-Convertible, Taxable Bonds Series-

56 of Rs.1,00,000/- each aggregating to Rs.150 crore with unspecified green-

shoe option to retain over-subscription

Type Private Placement basis

Instrument Unsecured, Redeemable, Non-Convertible, Taxable Bonds

Eligible Investors Domestic investors authorised to invest in the bonds other than Individuals &

HUFs

Rating ‘BWR AA–’ by Brickwork Ratings India Pvt. Limited

Face Value Rs.1,00,000/- per bond

Minimum Application Rs.5,00,000/- (i.e. 5 Bonds of Rs.1,00,000 each)

Application in

multiples of

Rs.1,00,000/- (i.e. 1 Bond)

Deemed Date of

Allotment

June 26, 2012

Security Unsecured

Nature of indebtedness

and ranking

The Bonds are Unsecured, Redeemable, Non-Convertible and Taxable Bonds in

the nature of Promissory Notes ranking at par with other unsecured senior debt

Trustee Axis Trustee Services Limited

Listing Proposed to be listed on Bombay Stock Exchange (BSE)

Depositories National Securities Depository Ltd. and Central Depository Services (India) Ltd.

Registrar Beetal Financial & Computer Services (P) Ltd.

Issuance & Trading In dematerialised mode only

Mode of Interest

Payment / Redemption

RTGS/ECS/At Par Cheques/Demand Drafts

Issue Schedule Issue Open Date :April 23, 2012

Issue Close Date :June 08, 2012

The issuer would have the right to pre-close the issue or extend the closing date

by giving 1 day notice to the Arrangers


17

The specific terms of available Options under this IFCI Private Placement Bonds- Series

56 Issue are set out below:

Options I II

Tenor 10 (Ten) years with

Put/Call Option

10 (Ten) years

Put/Call option At the end of 5 (five)

years from the Deemed

date of allotment

No Put/Call Option

Coupon (% p.a.) 10.25 % p.a. 10.15 % p.a.

Frequency of Interest Payment Annual Annual

Eligibility Domestic investors authorised to invest in the bonds

other than Individuals & HUFs

Face Value (Rs./Bond) 1,00,000/- 1,00,000/-

Issue Price At par At par

Terms of Payment Full amount with

application

Full amount with

application

Coupon Payment Date June 26, of every year

till redemption

June 26, of every year

till redemption

Maturity

At the end of 10 years

from the deemed date of

allotment

At the end of 10 years

from the deemed date of

allotment

Maturity Date June 26, 2022 June 26, 2022

Put/Call Option Date June 26, 2017 Not Applicable

Lock-in period Nil Nil

Redemption Amount per Bond on

maturity or upon exercise of

put/call option

1,00,000/-

1,00,000/-

Interest on Application Money shall be paid at the respective coupon from the date of

realisation of subscription amount to the date immediately preceding the deemed date of

allotment.

TDS from interest on application money shall be deducted unless exemption certificate from

Income Tax authorities is submitted along with the application form.


18

GENERAL INFORMATION

ISSUER

IFCI Ltd. Was established in 1948 by an Act of Parliament and subsequently became a company

under the Companies Act, 1956 in 1993. Our Company holds a certificate of registration dated

August 18, 2009 bearing registration no.B-14.00009 issued by the RBI to carry on the activities of a

NBFC under section 45 IA of the RBI Act, 1934.

Corporate Identification Number of IFCI Limited is: L74899DL1993PLC053677 issued by the

Registrar of Companies.

Registered Office IFCI Tower, 61 Nehru Place, New Delhi - 110 019

Board of Directors of IFCI Ltd. as on April 20, 2012:

Name Designation

Shri P. G. Muralidharan Non-Executive Chairman of the Board

Shri Atul Kumar Rai Chief Executive Officer and Managing Director

Shri Sanjeev Kumar Jindal Govt. Nominee

Shri V K Chopra Govt. Nominee

Shri Shilabhadra Banerjee Independent Director

Shri Prakash P Mallya Independent Director

Shri Rakesh Bharti Mittal Independent Director

Smt. Usha Sangwan Independent Director

Prof. Shobhit Mahajan Independent Director

Prof. Omprakash Mishra Independent Director

Shri K. Raghuraman Independent Director

Shri S. Shabbeer Pasha Independent Director

Shri Sujit K. Mandal Whole Time Director

For further details on the IFCI’s Management, please refer Chapter IX of this Information

Memorandum.

Compliance Officer

Ms.Rupa Deb, Company Secretary

Tel.: 011- 41732104

Fax: 011- 26230206

Email: [email protected]

Contact Person Ms Barkha Chhabra, Sr. Associate Vice President

Tel.: 011-26485610, 41732000

Fax: 011-26230029

Email: [email protected]




19

A summary of financial performance of IFCI for the last three years is given below:

(Rs. cr)

Particulars For the Financial Years ended on

March 31, 2012 March 31, 2011 March 31, 2010

Income

Operating Income 2729.39 2332.45 1657.05

Other Income 120.81 147.66 22.28

Total Income 2850.20 2480.11 1679.33

Less: Expenditure

Interest & other charges 1871.08 1318.97 891.18

Employee expenses 64.82 64.92 57.28

Establishment expenses 57.60 76.27 54.44

Depreciation 11.67 10.28 8.98

Provisions (112.71) (150.32) (447.81)

Profit before Taxation 957.74 1166.25 1115.26

Less: Provision for Taxation

Current Tax 110.13 93.47 105.45

Deferred Tax 183.99 366.53 338.87

Profit after Tax 663.62 706.25 670.94

ARRANGERS TO THE ISSUE

1. A K Capital Services Ltd

2. Almondz Global Securities Ltd.

3. Darashaw & Co Pvt. Ltd

4. LKP Securities Ltd.

5. RR Investors Capital Services Pvt. Ltd.

6. SPA Merchant Bankers Ltd

7. Yes Bank

REGISTRAR TO THE ISSUE

Beetal Financial & Computer Services (P) Ltd. has been appointed as Registrar to the Issue. The

Registrar shall process the applications received through the Collecting Banker and provide the list of

eligible allottees after eliminating invalid applications and ensure that corporate action for crediting of

bonds to the demat accounts of the applicants/ despatch of refund orders, as applicable are sent.

Investors can contact the Registrar in case of any post-issue problems such as non-receipt of letters of

allotment, demat credit, refund orders, interest on application money.

TRUSTEES

Axis Trustees Services Limited has given its consent to act as the Trustee to the proposed Issue and

for its name to be included in this Information Memorandum. All remedies of the Bond holder(s) for

the amount due on the Bonds will be vested with the Trustees on behalf of the Bond holders. The

holders of the Bonds shall without any further act or deed be deemed to have irrevocably given their


20

consent to and authorised the trustees to do inter-alia, all acts, deeds, and things necessary for

servicing the Bonds being offered.

BANKER TO THE ISSUE

HDFC Bank, Registered Office: HDFC Bank House, Senapati Bapat Marg, Lower Parel (West),

Mumbai- 400 013

CREDIT RATING

Brickwork Ratings India (P) Ltd. (“BRICKWORK”) has vide its letter No. BWR/BLR/RA/2011-

12/0061 dated May 24, 2011 assigned credit rating of "BWR AA-” (pronounced as BWR Double A

Minus) with ‘positive’ outlook for long term bonds. Instruments with this rating are considered to

have high degree of safety regarding timely servicing of financial obligations. Such instruments carry

very low credit risk.

Credit Analysis and Research Ltd. (“CARE Ratings”) has also been assigned the mandate for rating

this issue. On assignment of rating, the same will be disclosed by way of addendum to this

Information Memorandum.

Copy of rating letter received and the rating rationale from Brickwork Ratings are enclosed as

appendix to this Information Memorandum. The above rating is not recommendation to buy, sell or

hold securities and investors should take their own decision. The Rating Agencies have the right to

revise/suspend/withdraw the rating at any time on the basis of new information etc.

LISTING

The Bonds are proposed to be listed on the Bombay Stock Exchange (BSE). IFCI has applied for in-

principle approval from the BSE for listing of the Bonds in this issue. IFCI shall make an application

to the BSE to list the Bonds to be issued and allotted under this Information Memorandum and

complete all the formalities relating to listing of the Bonds within reasonable time. In connection with

listing of Bonds with BSE, IFCI hereby undertakes that:

It shall comply with conditions of listing of Bonds as may be specified in the Listing Agreement

with BSE.

Rating obtained by IFCI shall be periodically reviewed by the credit rating agency and any

revision in the rating shall be promptly disclosed by IFCI to BSE.

Any change in rating shall be promptly disseminated to the holder(s) of the Bonds in such manner

as BSE may determine from time to time.

ISSUE PROGRAMME

The Issue shall remain open for subscription for the period indicated below:

ISSUE OPENS ON April 23, 2012

ISSUE CLOSES ON June 08, 2012

The issuer would have the right to pre-close the issue or extend the closing date by giving 1 day notice

to the Arrangers.

AUTHORITY FOR THE ISSUE

This issue is being made pursuant to the Resolution of the Board of Directors of the Company, passed

at its Meeting held on April 17, 2012 and the delegation provided there under. The current issue of


21

bonds is within the overall borrowings limits set out in the resolution passed under section 293(1)(d)

of the Companies Act, 1956. The Company can issue the bonds proposed by it in view of the present

approvals and no further approvals in general from any Government Authority is required by it to

undertake the proposed activity.

OBJECTS OF THE ISSUE

The current issue of bonds is being made for augmenting the long-term rupee resources for carrying out financing activities of the Company by simultaneously augmenting the supplementary capital of the Company. The Main Object Clause of the Company as contained in its Memorandum of Association and Articles of Association enables it to undertake the activities for which the funds are being raised in the present issue. Also, the main objects of the Company as contained therein, adequately cover its existing and proposed activities.

UTILISATION OF THE ISSUE PROCEEDS

The Company is managed by professionals under the supervision of its Board of Directors. Further, the Company is subject to a number of regulatory checks and balances as stipulated in its regulatory environment. Therefore, the management shall ensure that the funds raised via this private placement shall be utilized only towards satisfactory fulfillment of the Objects of the Issue.

Further, in accordance with the SEBI Debt Regulations, the Company will not utilize the proceeds of the issue for providing loans to or acquisition of shares of any person who is a part of the same group as the Company or who is under the same management as the Company or any subsidiary of the Company. The issue proceeds shall not be utilized towards full or part consideration for the purchase or any other acquisition, inter alia, by way of a lease, of any property.

FUTURE RESOURCE RAISING

IFCI will be entitled to borrow/raise loans or avail financial assistance both from domestic and

international market as also issue Bonds/Equity Shares/Preference Shares/other securities in any

manner ranking paripassu or otherwise and on terms and conditions as IFCI may think fit without the

consent of or intimation to Bondholders or Trustees in this connection.

PERMISSION/ CONSENT FROM PRIOR CREDITORS

The Company hereby confirms that it is entitled to raise money through current issue of Bonds

without the consent / permission / approval from the Bondholders / Trustees / Lenders / other

creditors of IFCI. Further the Bonds proposed to be issued under the terms of this Information

Memorandum being unsecured there is no requirement for obtaining permission / consent from the

prior creditors.


22

DETAILED TERMS OF THE ISSUE

The following are the terms and conditions of Bonds being offered under this Information Memorandum for an amount of Rs.150 crore with a green-shoe option to retain over-subscription.

1. Issue

IFCI Limited (“IFCI” or “Issuer” or “Company”) is offering for subscription, on private

placement basis, unsecured redeemable non-convertible, taxable bonds in the nature of

promissory notes of Rs.1,00,000/- each for cash at par by way of private placement ('the Issue’).

2. Status of Bonds

The Bonds are Unsecured, Redeemable, Non-Convertible and Taxable in the nature of

Promissory Notes. The Bonds are fully paid up, direct & unsecured with and rank paripassu

among themselves. The Bonds are free of any restrictive clauses.

The Bonds cannot be used as collateral for any loan made by IFCI or any of its subsidiaries or

affiliate.

3. Face Value & Issue Price

The face value of each Bond is Rs.1,00,000/- and is issued ‘at par’.

4. Application Size

As set out in the table ‘Issue structure summary’- Chapter IV, the minimum number of Bonds per

Application Form will be calculated on the basis of the total number of Bonds applied for, and

not any specific option. Eligible investors can apply for a minimum of 5 bonds and in multiple of

one bond thereafter across any of the Option(s) or a combination thereof.

Subscription and Related Payments

(a) Subscription

This Issue will open for subscription and close on the dates indicated below:

Issue Opens on April 23, 2012

Issue Closes on June 08, 2012

The issuer would have the right to pre-close the issue or extend the closing date by giving 1 day

notice to the Arrangers.

(b) Application amount

Application amount will be required to be made in full with the application. In case of any

discrepancy between the number of bonds applied and application money paid, allotment shall be

made on the basis of application money received, towards the category applied, subject to the

application being valid in all other respects. Application amount more than the minimum of

Rs.5,00,000/- shall be only in multiples of Rs. 1,00,000/- (Rupes one lakh only), and any excess

amount paid but not in multiples of Rs. 1 (one) lakh shall be refunded to the

applicant, without any interest.


23

Further, in case of allotment of lesser number of Bonds than the number applied for, the excess

amount paid on Application shall be non-interest bearing and the same shall be refunded to the

applicant.

(c) Interest on Application Money

Interest on Application money will be paid at the respective coupon applicable for the particular

option chosen. The interest shall be payable from the date of realisation of cheque/DD until one

day prior to the Deemed Date of Allotment. No interest shall be payable in case of rejection of

application on any count.

(d) Tax Deduction at Source

Interest on Application money shall be paid with respect to the value of Bonds allotted, subject to

deduction of income tax at source under the Income Tax Act, as applicable.

5. Deemed Date of Allotment

Deemed date of allotment shall be June 26, 2012. All benefits relating to the Bonds, to the extent

permitted by law, will be available to the investors from the Deemed Date of Allotment. The

actual allotment may occur on a date other than the Deemed Date of Allotment.

6. Withdrawal by investors

Investors are allowed to withdraw their Application any time prior to closure of the Issue.

7. Over-subscription amount

Beginning on the Issue Opening Date and until the day immediately prior to the Issue Closing

Date, full and firm allotment against all valid applications for the Bonds will be made to

applicants on a first-come-first-serve basis, subject to a limit of the Issue size aggregating to

Rs.150 crore and including the unspecified Green Shoe Option, in accordance with Applicable

Laws. At its sole discretion, IFCI (the Issuer) will decide the amount of over-subscription to be

retained over and above the basic book size of Rs.150 crore.

8. Basis of Allotment

Subject to the application being valid in all respects, in case no category of bonds is ticked,

allotment shall be made in bonds under Option II. In case of discrepancy between the number of

bonds applied and application money paid, allotment shall be made on the basis of application

money received, towards the category applied. The above principles would be applicable subject

to the application otherwise being valid in all other respects.

In case the aggregate of subscription of bonds under this issue exceeds the amount of over-

subscription to be retained as decided by the Issuer, the allotment of bonds shall be made in the

following order of priority in consultation with the Registrar, and the Registrar shall be

responsible for ensuring that the Basis of Allotment is finalized in a fair and proper manner.

(a) Full allotment of Bonds to the Applicants on a first come first basis upto the Issue Closing

Date or the date falling one day prior to the Oversubscription Date, whichever is earlier.


24

(b) For Applications received on the Oversubscription Date, the Bonds shall be allotted in the

following order of priority:

(i) Allotment to the Applicants for Option - II Bonds

(ii) Allotment to the Applicants for Option – I Bonds

Provided, however, that in the event of oversubscription in any Option of Bonds mentioned in

(i) & (ii) above, the Bonds shall be allotted proportionately in that respective Option subject

to the overall limit and the applications for Bonds in subsequent Option shall be rejected.

(c) All Applications received after the Oversubscription Date shall be rejected.

9. Form

The Bonds being issued hereunder can be applied for in the dematerialised form only through a

valid Application Form filled in by the applicant along with attachments, as applicable. The

Bonds will be allotted only in dematerialised form. The Bondholders will hold the Bonds in

dematerialised form and deal with them in accordance with the provisions of the Depositories

Act and/or rules as notified by the Depositories from time to time. The Bonds will be issued in

Indian Rupees only.

Subsequent to the issuance of the Bonds, a Bondholder may request the Depository to provide a

physical Bond certificate. In case of any Bonds rematerialised by a Bondholder in physical form,

a single certificate will be issued to the Bondholder for the aggregate amount (“Consolidated

Bond Certificate”) for each option of Bonds allotted to him under this Issue.

In respect of Consolidated Bond Certificates, upon receipt of a request from the Bondholder, the

company will split such Consolidated Bond Certificates into smaller denominations subject to the

minimum of the Market Lot. No fees would be charged for splitting of Bond Certificates into

Market Lots, but stamp duty payable, if any, would be borne by the Bondholder. The charge for

splitting into lots other than Market Lot will be borne by the Bondholder subject to the maximum

amount agreed upon by us with the Stock Exchange where the Bonds are proposed to be listed.

The request for splitting is required to be accompanied by the original Bond Certificate(s) which

would then be treated as cancelled by us.

10. Market Lot and Trading Lot of the Bonds

The market lot will be 1 (One) Bond (“Market Lot”). Allotment in this Issue will be in electronic

form in multiples of 1(one) Bond. Investors may note that the Bonds in dematerialised form can

be traded only on the Stock Exchange having electronic connectivity with NSDL or CDSL.

11. Listing

The Bonds are proposed to be listed on BSE, under ‘F’ group – Debt instruments, tradeable on

BSE on-line trading system (BOLT) through anonymous order matching similar to that of trades

in equity shares.

12. Record date

The record date for payment of interest and redemption of principal amount shall be 15(fifteen)

days prior to the Interest payment date or redemption date respectively or any other date on

which interest and/ or principal is due and payable.


25

13. Title

In case of:

(i) Bonds held in the dematerialized form, the person for the time being appearing in the register of beneficial owners maintained by the Depository; and

(ii) Bonds held in physical form, the person for the time being appearing in the Register of

bondholders, as Bondholder, shall be treated for all purposes by the Company, the Debenture

Trustee, the Depositories and all other persons dealing with such person as the holder thereof and

its absolute owner for all purposes whether or not it is overdue and regardless of any notice of

ownership, trust or any interest in it or any writing on, theft or loss of the Consolidated Bond

Certificate issued in respect of the Bonds and no person will be liable for so treating the

Bondholder.

No transfer of title of a Bond will be valid unless and until entered on the Register of

Bondholders or the register of beneficial owners maintained by the Depository prior to the

Record Date. In the absence of transfer being registered, interest and/or Maturity Amount, as the

case may be, will be paid to the person, whose name appears first in the Register of Bondholders

maintained by the Depositories and/or the Company and/or the Registrar, as the case may be. In

such cases, claims, if any, by the purchasers of the Bonds will need to be settled with the seller of

the Bonds and not with the Company or the Registrar. The provisions relating to transfer and

transmission and other related matters in respect of the Company's shares contained in the

Articles of Association of the Company and the Companies Act shall apply, mutatis mutandis (to

the extent applicable) to the Bond(s) as well.

14. Transfer of Bonds

There are no restrictions on transfers and except as per Applicable Laws.

a) Register of Bondholders: The Company shall maintain at its registered office or such

other place as permitted by law a register of Bondholders (the "Register of Bondholders")

containing such particulars as required by Section 152 of the Companies Act. In terms of

Section 152A of the Companies Act, the Register of Bondholders maintained by a

Depository for any Bond in dematerialized form under Section 11 of the Depositories Act

shall be deemed to be a Register of Bondholders for this purpose.

The Bonds shall be transferred/transmitted in accordance with applicable laws. A suitable

instrument as may be prescribed by us may be used to effect this.

b) Transfer of Bonds held in dematerialized form: In respect of Bonds held in the

dematerialized form, transfers of the Bonds may be effected only through the

Depository(ies) where such Bonds are held, in accordance with the provisions of the

Depositories Act, 1996 and/or rules as notified by the Depositories from time to time. The

Bondholder shall give delivery instructions containing details of the prospective

purchaser's Depository Participant's account to his Depository Participant. If a prospective

purchaser does not have a Depository Participant account, the Bondholder may

rematerialize his or her Bonds and transfer them in a manner as specified below.

The transferee(s) should ensure that the transfer formalities are completed prior to the Record

Date. If a request for transfer of the Bond is not received by the Registrar before the Record Date


26

for maturity, the Maturity Amount for the Bonds shall be paid to the person whose name appears

as a Bondholder in the Register of Bondholders. In such cases, any claims shall be settled inter se

between the parties and no claim or action shall be brought against the Company/Registrar.

c) Transfer of Bonds held in physical form The Bonds are negotiable instruments and Bonds held in physical form may be transferred by

endorsement and delivery by the Bondholder(s). All endorsements must be clear and vernacular

endorsements must be translated into English immediately below the endorsement. However,

buyers of the Bonds are advised to send the Bond Certificate(s) to us or to such persons as may

be notified by us from time to time, along with a duly executed transfer deed or other suitable

instrument of transfer as may be prescribed by us for registration of transfer of the Bond(s). No

transfer will be valid unless and until entered on the IFCI Register.

In case of sale by or to companies, bodies corporate, societies registered under the Applicable

Laws in India, trusts, provident funds, superannuation funds, gratuity funds, pension funds,

scientific and/or industrial research organisations, commercial Banks, cooperative banks or

regional rural banks, a certified true copy of the Power of Attorney or such other authority as

may be acceptable to IFCI, must be lodged separately at our Registered/Corporate Office or at

the office of Registrar or such other person as may be notified by us for this purpose, at the time

of registration of the Bonds.

15. Rematerialisation and De-materialisation of Bonds

Rematerialisation of bonds viz. conversion of bonds from electronic form to physical form and

de-materialisation of bonds viz. conversion of bonds from physical to electronic form can be

carried out by the bondholders by giving necessary instructions to their Depository Participants

where the demat accounts are maintained.

As a matter of precaution against possible fraudulent encashment of Bond Certificates due to loss

or misplacement, the particulars of the Applicant’s bank account are mandatorily required to be

provided at the time of re-materialisation of the Bonds or transfer of Bond Certificate.

Applications without these details are liable to be rejected. The Bondholders are advised to

submit their bank account details with the Registrar before the Record Date failing which the

amounts will be dispatched to the postal address of the Bondholders as held in the records of the

IFCI. However, in relation to Applications for dematerialised Bonds, these particulars will be

taken directly from the Depositories.

16. Interest

a. Rate of Interest: Option I Bonds bear interest at a fixed rate of 10.25% per annum, and

Option II bonds bear interest at a fixed rate of 10.15% per annum respectively.

b. Frequency of Payment of Interest: Interest in respect of both Option I and II will be

paid annually, commencing from the Deemed Date of Allotment and on the equivalent

date falling every year thereafter till redemption.

c. Day Count Convention: Actual/Actual basis. This means, interest shall be computed on

a 365 days-a-year basis on the principal outstanding on the Bonds. However, where the

interest period (start date to end date) includes February 29, interest shall be computed on

366 days-a-year basis, on the principal outstanding on the Bonds.


27

d. Interest on Application and Refund Money: The Company shall not pay any interest

on refund of Application Amount, in whole or part. However, interest on Application

Money, to the extent of allotment of bonds, shall be paid from the date of credit of this

money to IFCI account to the date immediately preceding the deemed date of allotment

at the respective coupon rates.

e. Tax Deduction at Source: Payment of interest will be subject to deduction of tax as per

the Income Tax Act, or any statutory modification or re-enactment thereof, for the time

being in force. As per the current tax laws, no income tax is deductible at source for

payment of interest on bonds, if such bonds are listed and in demat form.

17. Interest Payments

Payment of interest on the Bonds will be made to those holders of the Bonds, whose name

appears first in the Register of Bondholders maintained by the Depositories and/or the Company

and/or the Registrar, as the case may be, as on the Record Date.

Interest amounts due will be payable on June 26 of every year starting from 2013. The last

interest payment will be made along with repayment of the principal amount.

If redemption of the Bonds do not occur on the Redemption Date due to a lack of permission

from the RBI, then the last interest payment for each of the Bonds shall be made on the date of

maturity of the respective Bonds.

In case of re-materialisation of Bonds or transfer of Bond Certificates held in physical form, for

payment of interest, Bondholders are advised to send the Bond Certificate(s) and the duly

completed transfer deeds or other suitable instrument of transfer as may be prescribed by us for

registration of transfer of Bond(s) to us or such other persons as may be notified by us from time

to time, at least two days prior to the Record Date, failing which interest will be paid to the seller

and not to the buyer. In such cases, claims in respect of interest, if any, shall be settled inter se

amongst the parties and no claim or action shall lie against the Company, or the Registrar to the

Issue.

(a) Record Date:

The record date for the payment of interest or the Maturity Amount shall be 15 days prior to the

date on which such amount is due and payable ("Record date").

(b) Effect of holidays on payment:

If the date of payment of interest or principal or any date specified does not fall on a Working

Day, then the succeeding Working Day will be considered as the effective date for such payment

of interest or principal, as the case may be (the “Effective Date”). Interest and principal or other

amounts, if any, will be paid on the Effective Date . For avoidance of doubt, in case of interest

payment on Effective Date, interest for period between actual interest payment due date and the

Effective Date will be paid in normal course in next interest payment date cycle. In case the

Maturity Date falls on a holiday, the payment will be made on the next Working Day, without

any interest for the period overdue.

(c) Modes of Payment: Please see Para 19 below.


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18. Tenor & Redemption

Bonds allotted will be redeemed at their principal amount outstanding together with accrued

interest, if any, on the payment date falling 10 (ten) years from the Deemed Date of Allotment,

in respect of Option I as well as Option II. The Bonds under option I, however, have both put &

call option at the end of 5 years from the deemed date of allotment. In case, the issuer exercises

the “Call” option or the investor exercises the “put” option, interest on Bonds shall cease on the

expiry of 5 years from the deemed date of allotment. It may be noted that put and call options

are not available in Option II bonds.

(a) Exercise of Put Option

In the case of bonds under Option I, the investor shall have the option to redeem the Bonds by

exercising “Put Option”, at the end of 5 (Five) years from the Deemed Date of Allotment (June

26, 2012). Notice of the put option by the bondholders would be deemed to have been given if

the same has been received by the Issuer/Registrar to the Issue between March 26, 2017 to April

25, 2017, both days inclusive. Through exercise of “put option”, the bondholder may seek

redemption of its entire holding. Exercise of Put Option for part of the holdings shall not be

permissible. Further, in case the bonds are transferred after exercising the Put Option, the

exercise of Put Option shall not be considered valid.

(b) Exercise of Call Option

In the case of bonds under Option I, the Issuer shall have the option to redeem the Bonds by way

of “Call Option”, at the end of 5 (Five) years from the Deemed Date of Allotment. In the event

that such a “Call Option” is exercised by the Company, it shall ensure that notice of the same is

made to the Bondholders through advertisement in atleast one national English daily and one

Hindi newspaper between February 26, 2017 to March 25, 2017, both days inclusive.

(c) Procedure of redemption

Bonds held in electronic form: No action is required on the part of Bondholders at the time of

maturity of the Bonds. On the Maturity Date, the Maturity Amount will be paid as per the

Depositories' records on the Record Date fixed for this purpose. The bank details will be obtained

from the Depositories for payments. Investors who have applied or who are holding the Bond in

electronic form, are advised to immediately update their bank account details as appearing on the

records of Depository Participant as and when changed. Failure to do so could result in delays in

credit of the payments to investors at their sole risk and neither the Company nor the Registrar

shall have any responsibility and undertake any liability for such delays on part of the investors.

Bonds held in physical form: No action will ordinarily be required on the part of the Bondholder

at the time of redemption and the maturity amount will be paid to those Bondholders whose

names appear in the Register of Bondholders maintained by the Company on the Record Date

fixed for the purpose of redemption. The bank details will be obtained from the Registrar for

effecting payments.

However, the Company may require that the Consolidated Bond Certificate(s), duly discharged

by the sole holder or all the joint-holders (signed on the reverse of the Consolidated Bond

Certificate(s)) to be surrendered for redemption on Maturity Date and sent by registered post

with acknowledgment due or by hand delivery to the Registrar or Company or to such persons at


29

such addresses as may be notified by the Company from time to time. Bondholders shall have to

surrender the Consolidated Bond Certificate(s) in the manner as stated above, not more than three

months and not less than one month prior to the Maturity Date so as to facilitate timely payment.

Payments of redemption amount will be made on the Maturity Date or Call/Put Option Date, as

applicable, or within a period of 30 days from the date of receipt of the duly discharged

certificate, whichever is later.

The Company's liability to the Bondholders including for payment or otherwise shall stand

extinguished from the Maturity Date or the Call/Put Option Date, applicable, or upon despatch of

the Redemption Amounts to the Bondholders. Further, the Company will not be liable to pay any

interest, income or compensation of any kind from the Maturity Date or the Call/Put Option Date,

as applicable.

If the Redemption date falls on a Saturday, Sunday or a public holiday, redemption proceeds

would be paid on the next working day.

Subject to the provisions of the Companies Act, where the Company has bought back any Bond(s)

under the Buyback Facility, the Company shall have and shall be deemed always to have had the

right to keep such Bonds alive without extinguishment for the purpose of resale and in exercising

such right, the Company shall have and be deemed always to have had the power to resell such

Bonds.

19. Modes of Payment:

All payments to be made by the Company to the Bondholders shall be by cheques or demand

drafts or through National Electronic Clearing System ("NECS") or through Real Time Gross

Settlements (“RTGS”).

Despatch of cheques or pay orders in respect of payments with respect to redemptions will be

made on the Maturity Date or the Call/Put Option Date, as applicable, or within a period of 30

days from the date of receipt of the duly discharged Consolidated Bond Certificate, if required by

the Company, whichever is later.

The mode of payments of refunds, interest or principal shall be undertaken in any of the

following ways:

1. NECS: Payment of refunds, interest or principal redemption to Applicants having an account

at the centres permitted by RBI and SEBI, shall be undertaken through NECS. This mode of

payment would be subject to availability of complete bank account details including the MICR

code as appearing on a cheque leaf, from the Depositories.

2. NEFT: Payment of refunds, interest or principal redemption shall be undertaken through

NEFT wherever the Applicants‟ bank has been assigned the IFSC which can be linked to MICR,

if any, available to that particular bank branch, and where the Applicants have registered their

nine-digit MICR number and their bank account number while opening and operating the

dematerialised account. The IFSC of that bank branch will be obtained from the RBI’s website as

on a date immediately prior to the date of payment of refund, and will be duly mapped with the

MICR numbers.

4. RTGS: Applicants whose payment of refunds, interest or principal redemption amounts is

above the prescribed amount (at present Rs.2,00,000/-) , have the option to receive the due

amounts through RTGS. In the event the same is not provided, payment of refunds, interest or

principal redemption shall be made through ECS. Charges, if any, levied by the Collecting Bank

for the same would be borne by such Applicant opting for RTGS as a mode of payment of


30

refunds, interest or principal redemption. Charges, if any, levied by the Applicant’s bank

receiving the credit would be borne by the Applicant.

5. For all other Applicants, including those who have not updated their bank particulars with the

MICR code, the interest payment/refund/redemption orders shall be dispatched by ordinary

post/Courier Service for value up to Rs.1,500/- and through speed/registered post/courier service

for refund orders of above Rs.1,500/. Such refunds will be made by cheques, pay orders or

demand drafts drawn on the collecting bank and payable at par at places where Applications are

received. Bank charges, if any, for cashing such cheques, pay orders or demand drafts at other

centres will be payable by the Applicant.

We will not be responsible for any delay in payment of refunds, interest or principal redemption,

provided that the process of such request has been initiated within reasonable time, as per the

process detailed above.

20. Taxation

The interest on Bonds will be subject to deduction of tax at source at the rates prevailing from

time to time under the provisions of the Income Tax Act or any statutory modification or re-

enactment thereof.

As per clause (ix) of Section 193 of the Income Tax Act, no income tax is required to be

withheld on any interest payable on any security issued by a company, where such security is in

dematerialized form and is listed on a recognized stock exchange in India in accordance with the

Securities Contracts Regulation Act, 1956, as amended, and the rules notified thereunder.

Accordingly, no income tax will be deducted at source from the interest on Bonds held in

dematerialized form. In case of Bonds held in a physical form, tax may be withheld, as

applicable. Further, such interest is taxable income in the hands of resident Bondholders.

If interest on Bonds exceeds the prescribed limit, to ensure non-deduction or lower deduction of

tax at source, as the case may be, the Bondholders are required to furnish:

(a) a certificate, from the assessing officer of the Bondholder, in the prescribed form under

section 197 of the Income Tax Act which may be obtained by the Bondholders.

(b) Certain specified entities whose income is unconditionally exempt under section 10 of the

Act and who are statutorily not required to file return of income as per section 139 of the Act,

CBDT has vide Circular no.4/2002 dated July 16, 2002, granted blanket TDS exemption. Some

examples of the specified entities are provident funds, gratuity funds, local authority, hospitals

exempt under section 10(23C)(iiiac), educational institutions or university exempt under section

10(23C)(iiiab).

These certificates may be submitted to the Company or to such person at such address as may be

notified by us from time to time, quoting the name of the sole or first Bondholder, Bondholder

number and the distinctive number(s) of the Bond(s) held, at the time of submitting application

and at any point of time as required by the Issuer from time to time.

Tax exemption certificate or document, if any, must be lodged at the office of the Registrar prior

to the Record Date or as specifically required. Tax applicable on coupon will be deducted at

source on accrual thereof in the Company's books and/or on payment thereof, in accordance with

the provisions of the Income Tax Act and/or any other statutory modification, re-enactment or


31

notification as the case may be. A tax deduction certificate will be issued for the amount of tax so

deducted on annual basis.

21. Debenture Trustee

IFCI has appointed a Debenture Trustee for the Bondholders. IFCI and the Debenture Trustee

will enter into a Debenture Trust Deed specifying, inter alia, the powers, authorities and

obligations of the Debenture Trustee and the Company. All Bondholders shall, without further

act or deed, be deemed to have irrevocably given their consent to the Debenture Trustee or any of

their agents or authorized officials to do all such acts, deeds, matters and things in respect of or

relating to the Bonds as the Debenture Trustee may in their absolute discretion deem necessary or

require to be done in the interest of the Bondholders. Any payment made by us to the Debenture

Trustee on behalf of the Bondholders shall discharge us pro tanto to the Bondholders. The

Debenture Trustee will protect the interest of the Bondholders in the event of default by us in

regard to timely payment of interest and repayment of principal and they will take necessary

action at the Company’s cost.

22. Security

The Bonds are unsecured, which means that the Bonds are not secured against any of the assets

of the company.

23. Bondholder not a shareholder

The Bondholders will not be entitled to any of the rights and privileges available to the equity

and preference shareholders of the Company.

24. Rights of Bondholders:

The Bonds shall not confer upon the holders thereof any rights or privileges including the right to

receive notices or annual reports of, or to attend and/or vote, at a General Meeting of IFCI.

The Bonds comprising the present Private Placement shall rank paripassu inter se with the other

senior debt without any preference to or priority of one over the other or others over them and

shall also be subject to the other terms and conditions to be incorporated in the Agreement/Trust

Deed(s) to be entered into by IFCI with the Trustees and the Letters of Allotment/Bond

Certificates that will be issued. A register of Bondholders will be maintained and sums becoming

due and payable in respect of the Bonds will be paid to the Registered Holder thereof.

The Bonds are subject to the provisions of the Act and the terms of this Information

Memorandum. Over and above such terms and conditions, the Bonds shall also be subject to

other terms and conditions as may be incorporated in the Agreement/Bond Trust Deed/Letters of

Allotments/Bond Certificates, guidelines, notifications and regulations relating to the issue of

capital and listing of securities issued from time to time by the Government of India and/or other

authorities and other documents that may be executed in respect of the Bonds.

25. Modification of rights:

The rights, privileges and conditions attached to the Bonds may be varied, modified and/or

abrogated with the consent in writing of the holders of at least three-fourths of the outstanding

amount of the Bonds or with the sanction of special resolution passed at a meeting of the

concerned Bondholders, provided that nothing in such consent or sanction shall be operative

against IFCI, where such consent or sanction modifies or varies the terms and conditions

governing the Bonds, if the same are not acceptable to IFCI.


32

26. Notices

The communications to the bondholder(s) required to be sent by IFCI or the Trustees shall be

deemed to have been given if sent by an ordinary post to the registered holder of the Bonds. All

communications to be given by the bondholder(s) shall be sent by registered post or by hand

delivery to the Registrar and Transfer Agents or to IFCI or to such person, at such addresses as

may be notified by IFCI from time to time.

All notices to the Bondholders required to be given by IFCI or the Debenture Trustee shall be

published in one English language newspaper having wide circulation and one regional language

daily newspaper each in Mumbai, Chennai, Delhi, Kolkata and Ahmedabad and/or, will be sent

by post/courier to the registered Bondholders from time to time.

27. Loan against Bonds

The Bonds can be pledged or hypothecated for obtaining loans from scheduled commercial

banks. In accordance with the RBI guidelines applicable to the Company, it shall not grant loans

against the security of the Bonds.

28. Right to Reissue Bond(s)

Subject to the provisions of the Act, where the Company has redeemed or repurchased any

Bond(s), the Company shall have and shall be deemed always to have had the right to keep such

Bonds alive without extinguishment for the purpose of resale or reissue and in exercising such

right, the Company shall have and be deemed always to have had the power to resell or reissue

such Bonds either by reselling or reissuing the same Bonds or by issuing other Bonds in their

place. This includes the right to reissue original Bonds.

29. Future borrowings

IFCI shall be entitled to make further issue of secured or unsecured debentures and/or raise term

loans or raise further funds from time to time from any persons, banks, financial institutions or

bodies corporate or any other agency without the consent of, or notification to or consultation

with the Bondholders or the Debenture Trustee.

30. Sharing of Information

The Company may, at its option, use its own, as well as exchange, share or part with any

financial or other information about the Bondholders available with the Company with its

subsidiaries and affiliates and other banks, financial institutions, credit bureaus, agencies,

statutory bodies, as may be required and neither the Company nor its subsidiaries and affiliates

nor their agents shall be liable for use of the aforesaid information.

31. Issue of Duplicate Consolidated Bond Certificate(s)

If any Consolidated Bond Certificate is mutilated or defaced, it may be replaced by the Company

against the surrender of such Consolidated Bond Certificates, provided that where the

Consolidated Bond Certificates are mutilated or defaced, they will be replaced only if the

certificate numbers and the distinctive numbers are legible.

If any Consolidated Bond Certificate is destroyed, stolen or lost then upon production of proof

thereof to IFCI's satisfaction and upon furnishing such indemnity/security and/or documents as

we may deem adequate, duplicate Consolidated Bond Certificate(s) shall be issued.


33

32. Jurisdiction

The courts of Delhi shall have jurisdiction to settle any disputes which may arise out of or in

connection with the Debenture Trust Deed or the Bonds and that accordingly any suit, action or

proceedings (together referred to as "Proceedings") arising out of or in connection with the

Debenture Trust Deed and the Bonds may be brought in the courts of Delhi.

The Bonds, the Debenture Trust Deed, the Tripartite Agreement, the Registrar MoU and other

relevant documents shall be governed by and construed in accordance with the laws of India. The

Bank in the Debenture Trust Deed will agree, for the exclusive benefit of the Debenture Trustee

and the Bondholders, that the courts of Delhi are to have jurisdiction to settle any disputes which

may arise out of or in connection with the Debenture Trust Deed or the Bonds (including a

dispute relating to any non-contractual obligations arising out of or in connection with the

Debenture Trust Deed and the Bonds and that accordingly any suit, action or proceedings arising

out of or in connection with the Debenture Trust Deed and the Bonds (including any suit, action

or proceedings relating to any non-contractual obligations arising out of or in connection with

these documents) may be brought in the courts of Delhi.


34

STATEMENT OF TAX BENEFITS

TAX BENEFITS UNDER THE INCOME TAX ACT, 1961

Under the current tax laws (existing as well as proposed) the following tax benefits, inter alia, will be

available to the Bond Holder as mentioned below. The benefits are given as per the prevailing tax

laws and may vary from time to time in accordance with amendments to the law or enactments

thereto. The Bond Holder is advised to consider in his own case the tax implications in respect of

subscription to the Bond after consulting his tax advisor as alternate views are possible. IFCI or the

Trustees shall not be liable to the Bond Holder in any manner for placing reliance upon the contents

of this statement of tax benefits.

A. INCOME TAX:

Taxability of Interest Taxability of interest on Bonds would depend upon the method of accounting adopted by the resident

bondholder as mentioned in the provisions of the IT Act.

Withholding Tax:

No income tax is deductible at source on interest on Bonds as per the provisions of section 193 of the

I.T. Act in respect of the following:

(a) When the Assessing Officer issues a certificate on an application by a Bond Holder on

satisfaction that the total income of the Bond Holder justifies nil/lower deduction of tax

at source as per the provisions of Section 197(1) of the I.T. Act;

(b) On any securities issued by a company in a dematerialized form listed on recognized

stock exchange in India. (w.e.f. 1.06.2008).

In all other situations, tax would be deducted at source as per prevailing provisions of the I.T. Act;

Transfer before maturity: Under section 2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, a listed Bond is treated as a long term capital asset if the same is held for more than 12 months immediately preceding the date of its transfer.

Under section 112 of the I.T. Act, capital gains arising on the transfer of long term capital assets being listed securities are currently subject to tax at the rate of 10% of capital gains calculated without indexation of the cost of acquisition. The capital gains will be computed by deducting expenditure incurred in connection with such transfer and cost of acquisition of the Bonds from the sale consideration.

A 2% education cess and 1% secondary and higher education cess on the total income tax (including surcharge) is payable by all categories of tax payers as per the current tax laws.

Short-term capital gains on the transfer of listed Bonds, where Bonds are held for a period of notmore than 12 months, would be taxed at the normal rates of tax in accordance with and subject to the provision of the I.T. Act. The provisions related to minimum amount not chargeable to tax, surcharge and education cess as described above would also apply to such short-term capital gains.

In case the bonds are held as stock in trade, the income on transfer of bonds would be taxed as business income or loss in accordance with and subject to the provisions of the IT Act.

B. WEALTH TAX

Wealth-tax is not levied on investment in Bonds under section 2(ea) of the Wealth-tax Act, 1957.


35

PROCEDURE OF APPLICATION

The Information Memorandum and the Application Forms for this Issue can be obtained from our

Registered/Regional Office: ifciltd.com, or from the arrangers appointed for the Issue.

All Applicants shall have the option of applying for the Bonds either through RTGS/cheque/bank

draft as advised in the section “Payment Instructions for Applicants”.

Application Form

Applicants are required to submit their Applications through the Banker to Issue. Such Applicants

shall only use the specified Application Form. All Applicants shall have the option to apply for either

or both Options of Bonds in the Application Form.

WHO CAN APPLY

The following categories of persons are eligible to apply in this Issue:

Public Financial Institutions, Commercial Banks, Cooperative Banks and Regional Rural

Banks, who are authorised to invest in the Bonds;

Provident, Pension, Superannuation and Gratuity Funds;

Insurance Companies registered with IRDA authorised to invest in the Bonds.

Mutual Funds;

Companies, Bodies Corporate and Societies registered under the Applicable Laws in India

and authorised to invest in the Bonds;

Public/ private trusts (charitable/ religious or otherwise) and authorised to invest in the Bonds.

Any other investor authorised to invest in these bonds, subject to confirmation from the issuer.

Note: Individuals & HUFs, FIIs & OCBs are NOT permitted to apply in this Issue.

All investors are required to comply with the relevant regulations/guidelines applicable to them for

investing in this issue of bonds. However, out of the aforesaid class of investors eligible to invest,

this Memorandum is intended solely for the use of the person to whom it has been sent by IFCI for the

purpose of evaluating a possible investment opportunity by the recipient(s) in respect of the securities

offered herein, and it is not to be reproduced or distributed to any other person(s) other than

professional advisors of the prospective investor receiving this memorandum from IFCI.

The Arrangers, their associates and affiliates are permitted to subscribe in this Issue. However, this

Issue or any part thereof is not being underwritten by the Arrangers to the Issue or by any of its

associates and affiliates. It may be noted that participation by any investor in this Issue, including the

investment limits applicable to them, will be subject to necessary approvals and authorisations

required under the laws applicable to them as well as any corporate authorisations applicable to them.


36

As per notification No. F.No. 5(88)/2006-PR. Dated August 14, 2008 issued by Department of

Economics Affairs, Ministry of Finance, Provident Funds, Superannuation Funds and Gratuity Funds

can invest upto 40% of their corpus/fund in bonds of not less than three years tenure issued by Public

Financial Institutions as specified u/s 4A of the Companies Act, 1956 provided that the Bonds have an

investment grade rating from at least one credit rating agency.

As per the Industrial Finance Corporation (transfer of undertaking and repeal) Act, 1993 of the Govt.

of India, the Bonds and Debentures of IFCI shall be deemed to be approved securities for the purpose

of the Indian Trusts Act, 1882, and the Insurance Act, 1983.

Impersonation/ Fictitious applications.

Attention of the Applicants is specifically drawn to the provisions of sub-section (1) of section 68A of

the Companies Act, which is reproduced below:

Any person who –

(a) makes, in a fictitious name, an Application to a body corporate for acquiring, or subscribing to,

the Bonds, or

(b) otherwise induces a body corporate to allot, or register any transfer of, bonds therein to them,

or any other person in a fictitious name, shall be liable for legal consequences of such action.

Application size

Applications are required to be for a minimum of Rs.5,00,000/-i.e 5 (Five) Bonds and multiples of

one (1) Bond thereafter.

HOW TO APPLY:

General Instructions:

1. Applications for the Bonds must be made in the prescribed form (“Application Form”).

2. The Application Forms are required to be completed in block letters in English as per the

instructions contained herein and in the Application Form, and are liable to be rejected if not so

completed.

3. Thumb impressions and signatures other than in English/Hindi must be attested by an

authorised official of a Bank or Magistrate or Notary Public or a Special Executive Magistrate

under his official seal.

4. Applications under Power of Attorney: Unless we specifically agree in writing, and subject to

such terms and conditions as we may deem fit, in the case of Applications made under Power of

Attorney or by limited companies, corporate bodies, trusts etc., a certified copy of the Power of

Attorney and/or the relevant authority, as the case may be, and a certified copy of

Memorandum and Articles of Association and/or bye-laws, where applicable, is required to be

lodged separately, along with a copy of the Application Form at the office of the Registrar to

the Issue simultaneously with the submission of the Application Form, indicating the name of

the Applicant along with the address, Application number, date of submission of the

Application Form, name of the bank and branch where it was deposited, Cheque/Demand Draft

Number and the bank and branch on which the Cheque/Demand Draft was drawn.

5. Permanent Account Number: The Applicant is required to mention his PAN allotted under the

Income Tax Act in the Application Form. The PAN would be the sole identification number for

participants transacting in the securities markets, irrespective of the amount of the transaction.


37

Any Application Form without the PAN is liable to be rejected. It is to be specifically noted

that Applicants should not submit the GIR Number instead of the PAN as the Application is

liable to be rejected on this ground.

6. As the issue of bonds is only in demat form, the Applicant must mention the 16 digit DP ID/Client

ID correctly in the Application Form.

Documents to be submitted along with application form

All the investors need to submit the certified true copies of the following documents, along with the

application form:

a) Memorandum and Articles of Association/Documents governing constitution

b) Resolution authorizing the investment

c) Certified true copy of Power of Attorney, where applicable

d) Certificate (in duplicate) issued by Income Tax Authorities- for investors seeking exemption from

tax deduction at source or for deduction of tax at a lower rate on the interest on application money

and/or on interest on bonds.

e) Identification and specimen signatures of the authorized signatories duly certified by an

appropriate authority.

In case of applications by Mutual Funds, a separate application must be made in respect of each

scheme of the mutual fund. The applications must clearly indicate the name of each scheme under

which the Application has been made and should be accompanied by certified true copies of the

following documents:

a) The Power of Attorney/appointment authority by Mutual Fund, as the case may be in favour of

Asset Management Company, delegating the power to invest the funds on behalf of Mutual Fund.

b) SEBI’s registration certificate of Mutual Fund

c) Resolution/authority authorizing the officers to invest in the bonds by AMC.

d) Certificate from AMC stating that the scheme for which investment is made is an approved

scheme of mutual fund.

e) Power of Attorney/appointment authority in favour of custodian by mutual fund, if any.

f) PAN (otherwise exemption certificate issued by IT authorities).

g) Identification & Specimen signatures of the authorized signatories, duly certified by an

appropriate authority.

7. Applicants are requested to write their names, telephone no. and Application serial number on

the reverse of the account payee cheque/draft by which the payments are made.

8. Applicants should ensure to make payment of the Application Amount by way of single

cheque/DD/RTGS and not multiple cheques/DDs for a single Application Form.

9. Tax Deduction at Source: Applicants claiming receipt of interest on Application money without

deduction of tax at source are required to submit a certificate under section 197 of the Income

Tax Act. For availing the exemption from deduction of tax at source from interest on Bonds,

the Applicants are required to submit valid relevant exemption/recognition certificate each

financial year.

10. Category: All Applicants are requested to tick the relevant column “Category of Investor” in

the Application Form.


38

For further instructions, please read the Application Form carefully.

Payment Instructions for Applicants:

All Applicants are required to make payment of the full Application Amount along with the

Application Form.

All cheques/drafts must be made payable to “IFCI Ltd. - Bond Collection A/c” and crossed

“A/C PAYEE ONLY” and payable locally where the Application is being submitted.

Demand Draft charges, if any, shall be borne by the applicant.

Cheques/Demand Drafts may be drawn on any designated collection centre (as mentioned in

the Information Memorandum) where application form is being deposited.

All Applications duly completed and accompanied by account payee cheques/drafts shall be

submitted at the Designated Branches of the Collecting Bank listed in the Information

Memorandum or as may be specified by us in the Application Form. Applications shall be

deemed to have been received by us only when submitted to our Designated Branches or at

our specified collection centres/agents as detailed herein and not otherwise.

Unless we specifically agree in writing with or without such terms or conditions as we may

deem, a separate single cheque/draft must accompany each Application Form. All Application

Forms received with outstation cheques/drafts, post-dated cheques, cheques/bank drafts

drawn on banks not participating in the clearing process, money orders/postal orders shall be

rejected and we shall not be responsible for such rejections. Further, our Designated

Branches/collection centres/agents will not accept payments made in cash.

No receipt would be issued by the Issuer for the Application money. However, our

Designated Branch on receiving the applications will acknowledge receipt by stamping and

returning the acknowledgment slip to the Applicant.

Applicants may also pay the subscription amount through RTGS. In such case, funds may be

transferred directly to the account of IFCI maintained with either HDFC Bank as per details

below:

Name of the Bank HDFC Bank

Name of the Account IFCI Ltd. - Bond Collection A/c

Account No. 00030350014080

IFSC Code HDFC0000060

Scanned copy of the application form

to be mailed to/or faxed to [email protected]/ [email protected]

022-25799809

The UTR No. and date of RTGS shall be indicated in the place for Cheque No. & Date

respectively and the word 'RTGS' from “(Remitting Bank)” shall be written in the place for

'Drawn on Bank'. The original copy of all such applications are to be sent directly to the

Registrar, addressed to Mr.S.P. Gupta, M/s Beetal Financial & Computers Services (P)

Ltd., BEETAL House, 3rd

Floor, 99 Madangir, Behind LSC, New Delhi- 110 062, through

registered post/ courier service.

IFCI shall not be responsible in case of non-receipt /delay in receipt of the application.




39

Rejection of Applications:

The Company reserves its full, unqualified and absolute right to accept or reject any Application in

whole or in part and in either case without assigning any reason thereof.

Application would be liable to be rejected on one or more technical grounds, including but not

restricted to:

Applications by ineligible entities like individuals/HUFs, FIIs and OCBs

Number of Bonds applied for is less than the minimum Application size

Applications not duly signed by the Applicant

Applications for a number of Bonds which is not in a multiple of one

Investor category not ticked

Bank account details not given

Amount remitted without supporting application form.

Applications by persons not competent to contract under the Indian Contract Act, 1872, as

amended;

Applications submitted without supporting documents;

Application by stock invest;

Applications accompanied by cash;

Applications without PAN;

GIR number furnished instead of PAN;

In case no corresponding record is available with the Depositories that matches three

parameters namely, name of the Applicant, the DP ID and the beneficiary’s account

number.

The Company shall not be responsible for rejection of the Application on any of the technical grounds

mentioned above and no interest will be paid on Application amount.

Application form received after the closure of the Issue shall be rejected.

In the event, if any Bond(s) applied for is/are not allotted, the Application monies of such Bonds will

be refunded, as may be permitted under the provisions of applicable laws, without any interest.

Depository Arrangement

We have made depository arrangements with NSDL and CDSL for this Issue and holding of the

Bonds in dematerialised form. As per the provisions of the Depositories Act, the Bonds can be held in

a dematerialised form, i.e., they shall be fungible and be represented by a statement issued through

electronic mode. In this context:

(i) Two tripartite agreements have been signed: Tripartite Agreement between IFCI, Beetal Financial

& Computer Services (P) Ltd. and NSDL for offering depository option to the Bondholders and

Tripartite Agreement, between IFCI, Beetal Financial & Computer Services (P) Ltd. and CDSL for

offering depository option to the Bondholders.

(ii) An Applicant shall seek the Allotment of Bonds only in electronic mode for the entire Bond;

(iii) An Applicant is required to apply for Bonds in the electronic form and is required to have at least

one beneficiary account with any of the Depository Participants (“DPs”) of NSDL or CDSL, prior to

making the Application.


40

(iv) An Applicant seeking Allotment of Bonds is required to fill in the details (including the

beneficiary account number and DP ID) appearing in the Application Form.

(v) Bonds allotted to an Applicant will be credited directly to the Applicant’s respective beneficiary

account(s) with the DP.

(vi) The names of the Applicants stated in the Application Forms are required to be identical to those

appearing in the account details with the Depository.

(vii) Non-transferable Allotment advice/refund orders will be directly sent to the Applicant by the

Registrar to the Issue.

(viii) In case of Allotment of Bonds, the address and other details of the Applicant as registered with

his DP shall be used for all correspondence with the Applicant. The Applicant is therefore responsible

for the correctness of his demographic details given in the Application Form vis-à-vis those with his

DP. In case the information is incorrect or insufficient, IFCI would not be liable for losses, if any.

(ix) It may be noted that Bonds in electronic form can be traded only on the Stock Exchange having

electronic connectivity with NSDL or CDSL. BSE, where our Bonds are proposed to be listed has

connectivity with NSDL and CDSL.

(x) Interest or other benefits with respect to the Bonds held in dematerialised form would be paid to

those Bondholders whose names appear on the list of beneficial owners given by the Depositories to

us as on Record Date. In case of those Bonds for which the beneficial owner is not identified by the

Depository as on the Record Date, we would keep in abeyance the payment of interest or other

benefits, till such time that the beneficial owner is identified by the Depository and conveyed to us,

whereupon the interest or benefits will be paid to the beneficiaries, as identified, within a period of 30

days.

The trading of the Bonds shall be in dematerialised form only.

Letters of Allotment/ Refund Orders

IFCI reserves, in its absolute and unqualified discretion and without assigning any reason thereof, the

right to reject any application in whole or in part. The unutilised portion of the application money will

be refunded to the Applicant by an account payee cheque/demand draft. In case the cheque payable at

par facility is not available, IFCI reserves the right to adopt any other suitable mode of payment.

IFCI shall credit the allotted Bond to the respective beneficiary accounts/dispatch the Letter(s) of

Allotment or Letter(s) of Regret/Refund Orders upto Rs.1,500/- by Ordinary Post/Speed Post and

orders in excess of Rs.1,500/- by registered/speed post at the Applicant’s sole risk. Further,

(a) Deemed date of Allotment of the Bonds shall be June 26, 2012.

(b) Credit to dematerialised accounts will be made within two Working Days from the date of

Allotment;

(c) In case of rejection of the application on account of technical ground or for any other

reason, refund of application money without interest will be made within a period of 30

days from the date of allotment of the Bonds.

Governing Law

The Bonds are governed by and shall be construed in accordance with the existing laws in India. Any

dispute arising thereof will be subject to the jurisdiction of courts at Delhi.


41

Investors relations and grievances redressal:

Arrangements have been made to redress investor grievances expeditiously as far as possible. IFCI

endeavours to resolve the investors’ grievances within 30 days of its receipt. All grievances related to

the issue quoting the Application Number (including prefix), number of bonds applied for, amount

paid on application and place where the application was submitted, may be addressed to the Registrar

and Transfer Agents, M/s Beetal Financial & Computers Services (P) Ltd.,BEETAL House, 3rd

Floor, 99 Madangir, Behind LSC, New Delhi- 110 062, Tel: 011 29961281-83 Fax: 011 2996 1284,

Email: [email protected] or Resources Department at the Registered & Corporate Office of

IFCI Limited at IFCI Tower, 61 Nehru Place, New Delhi-110019, Tel No.: (011) 41792800,

41732000; Fax: 91-11- 26230029, 26230466; Email: [email protected].



42

ABOUT IFCI LIMITED

Corporate Details :

Name of the Issuer : IFCI Ltd.

Registered & Corporate Office : IFCI Tower, 61 Nehru Place, New Delhi – 110019

Tel. No. : (011) 41732000/41792800

Fax No. : (011) 26230029

Website : www.ifciltd.com

E-mail : [email protected]

Background

IFCI was established in the year 1948 by an Act of Parliament to provide institutional finance for

industrial development in the country. It was subsequently corporatized in July 1993 after passing of

the Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993 by the parliament

of India. By virtue of this Repeal Act, the tax benefits, available to it under the Income Tax Act and

Rules, as a statutory corporation, have been made available to it even after becoming a company.

Subsequently, during the year 2001, its name was changed to IFCI Limited and an amended

certificate of incorporation was obtained from the Registrar of Companies, Delhi & Haryana. It was

registered as a non-banking financial company with RBI during the year 1998, but was exempted

from most of the regulatory guidelines for non-banking financial companies, being regulated as a

financial institution. From August 2007 onwards, it is being regulated as a non-banking financial

company.

Its lending policies over the last 60 years of operations sought to achieve the primary objective of

providing medium and long term assistance to the industrial sector and to fulfill the overall goal of

industrial development in the country, while remaining initially within the limits of provisions of the

Industrial Finance Corporation Act 1948 and after incorporation as a company, doing business as set

out in the Memorandum and Articles of Association of the IFCI Limited. Since its inception, IFCI has

been meeting the changing requirements of the clients through various schemes and financial

products.

As the first development financial institution of India, IFCI has been instrumental in development of

industry in the country in the immediate post-independence period when the Indian capital market

was not developed and banks were not in a position to provide long term assistance. Initially, the

funding of its resources was from Reserve Bank of India, Government of India, Bonds guaranteed by

Government of India and from international multilateral agencies. Post-corporatization, the resources

are being mobilized from the market through equity, bonds and loans. IFCI, at present, is a non-

banking financial company as per the Reserve Bank of India Act, 1949. IFCI is also a notified public

financial institution under Section 4A of the Companies Act, 1956. The management of its affairs is

vested with the Board of Directors, the day to day operations being carried out by a pool of

experienced professionals under the immediate supervision of the Chief Executive Officer and

Managing Director.


43

Main Objects

The main objects as contained in our Memorandum of Association are:

To take over the assets/liabilities, rights, powers, authorities and privileges, business and

functions of Industrial Finance Corporation of India, established under Industrial Finance

Corporation Act, 1948.

To carry on the business of assisting enterprises in industrial and services sectors.

To provide financial assistance in the form of short, medium or long term loans or working capital

facilities or equity participation, individually or in syndicates and in any form/scheme as may be

deemed expedient.

To subscribe to or purchase, underwrite, invest in and acquire and hold and sell, dispose of shares,

stocks, debentures or any other instruments.

To carry on the business of leasing and hire purchase finance company.

To borrow or raise moneys by way of loans or otherwise both in rupees and foreign currencies or

secure the payment of money by the issue, sale of debentures, stock, bonds, obligations,

mortgages and securities of all kinds.

To receive/invest moneys on deposit on such terms and conditions as may be deemed expedient in

the interest of the Company.

To draw, make, accept, endorse, discount, rediscount, negotiate, execute and issue of bills of

exchange, promissory notes and other negotiable or transferable instruments.

To provide consultancy and merchant banking services in or outside India.

To perform and undertake activities pertaining to warehousing, bill marketing, factoring, custodial

services and related fields.

To carry on the business of Depository Participants and provide related services.

To set up Trusts, under the Indian Trust Act for establishment of mutual funds, venture capital

funds and funds of any kind and to carry on and to provide related services.

To deal, transact, undertake, buy, sell foreign currencies as an authorized (Foreign Exchange)

Dealer.

Present Business Activities:

Though started as a term lending institution, IFCI has diversified to many other activities over the

period and provides a wide range of services to industry in the areas of both fund based and fee based

services. Its products and services include:

• Project Finance, which includes financial assistance to industrial and service concerns for their

new projects as also for expansion, diversification and modernization schemes, underwriting,

direct subscription to equity, senior debt financing in the form of loans, debentures, securitized

debts, mezzanine products, including subordinated debt and preference capital and equity

financing through unlisted equity;

• Corporate Loans, including short-term loans for working capital, capital expenditure and general

corporate expenditure purposes;

• Project Development, which includes project conceptualization and participation in the

development of a project as a co-promoter or financial investor, in consortium with other

financiers with an objective to exit the project in a definite time frame after implementation, with

the desired return:

• Principal Investments, which includes equity investments made by the company with a view to

earning non-interest income;

• Resolution of Non-Performing Assets, including acquisition of non-performing assets from

other banks and institutions with a view to leveraging the expertise developed in course of its

business in resolution of such assets;

• Financial Services, comprising debt and equity syndication, structured finance;

• Project and Corporate Advisory Services, which include investment appraisal, business asset

valuation, privatization and PSU disinvestment, advice on mergers & joint ventures, buy/sell


44

advisory, legal advisory, capital structuring, study of techno-economic feasibility, IPO

monitoring, financial analysis and modeling as well as advisory services to state and central

governments. IFCI has provided these services to reputed corporates like SAIL, BHEL, BEML,

ONGC, GAIL, Neelachal Ispat, Inland Waterways Authority, ITPO, Air India, Uttaranchal Jal

Vidyut Nigam, Tata Steel, Indian Hotels Ltd., Omaxe Ltd and various governments like

Government of India, Government of Uttar Pradesh and Government of Rajasthan; and

• Other Fee Based Services, which include managing the disbursement of funds from the Sugar

Development Fund of Government of India to the eligible sugar manufacturing companies and

recovery from such companies and financial appraisal of such companies’ sugar projects on

management fee basis.

Subsidiaries and Associates

During the course of its existence, IFCI has established various subsidiaries as an extension of its

business and many other organizations of national and social importance. Recently, tangible steps

have been taken for reorientation and growth of these subsidiaries viz., IFCI Venture Capital Fund

(IVCF), IFCI Financial Services Ltd. (IFIN), IFCI Infrastructure Development Ltd. (IIDL) and IFCI

Factors Ltd. (IFL) {previously Foremost Factors Ltd.}. These entities, managed by professional

Boards, have tremendous potential for growth and have shown remarkable progress in the immediate

past year. IFCI has also promoted some of the specialized institutions like Management Development

Institute (MDI), Information & Credit Rating Agency of India Ltd. (ICRA), Asset Care &

Reconstruction Enterprise Ltd. (ACRE), Institute of Leadership Development (ILD){previously

known as Institute of Labour Development}, Tourism Finance Corporation of India Ltd. (TFCI). IFCI

has also taken part in establishment of national institutions like Securities Trading Corporation of

India Ltd. (STCI), LIC Housing Finance Ltd., GIC Housing Finance Ltd., Entrepreneurship

Development Institute of India (EDII) and various Technical Consultancy Organizations (TCOs),

Stock Holding Corporation of India Ltd., National Stock Exchange of India Ltd., OTC Exchange of

India, Biotech Consortium India Ltd., A B Home Finance Ltd. and continues to hold stakes in these

organizations.

Board of Directors

The composition of the Board of Directors of the Company as on as on April 20, 2012 stood as under:

Name Designation Address

Shri P. G. Muralidharan Non-Executive Chairman of the Board

Lavanya, VH-52, Vikramapuram Hill Kuravankonam, Trivandrum – 695003

Shri Atul Kumar Rai Chief Executive Officer and Managing Director

IFCI Limited, IFCI Tower 61, Nehru Place, New Delhi – 110 019

Shri Sanjeev Kumar Jindal Govt. Nominee Director,Ministry of Finance, Department of Financial Services, Jeevan Deep Building, 3rd Floor, Parliament Street, New Delhi – 110 001

Shri V K Chopra Govt. Nominee Deputy Secretary, Ministry of Finance, Department of Financial Services, Jeevan Deep Building, 3rd Floor, Parliament Street, New Delhi – 110 001

Shri Shilabhadra Banerjee

Independent Director 1464, Sector-14, Faridabad(HR) – 121007

Shri Prakash P Mallya Independent Director No. 46, Pratosh, 2nd Cross, Bannerghatta Road Panduranganagar, Bangalore-560076

Shri Rakesh Bharti Mittal Independent Director Vice Chairman & Managing Director,


45

Bharti Enterprises Ltd., Bharti Crescent, 1, Nelson Mandela Road, VasantKunj, Phase-II, New Delhi – 110070

Smt. Usha Sangwan Independent Director

Executive Director, LIC of India, Central Office, Yogakshema Jeevan Bima Marg, P.O. Box No 19953, Mumbai – 400021

Prof. Shobhit Mahajan Independent Director 780, Sector-4, Urban Estate Gurgaon – 122001

Prof. Omprakash Mishra Independent Director

‘Prachi’ 428, Purbhachal Main Road, Kolkata - 700078

Shri K. Raghuraman Independent Director M-6, 1st Floor, Lajpat Nagar-II, New Delhi-110024

Shri S. Shabbeer Pasha Independent Director Chartered Accountant, 96/8, Al-Ameen Apartments, First Cross, South End Road, Bangalore-560004

Shri Sujit K. Mandal Whole Time Director IFCI Ltd., IFCI Tower 61, Nehru Place New Delhi – 110 019

Major events including Capital Restructuring

Share Capital: IFCI started its operations with an initial equity share capital of Rs.5 crore in 1948-

49. The share capital was gradually increased to Rs.10 crore by 1973 and Rs.202.50 crore by June

1993. After incorporation as a company, IFCI came out with its public issue in December 1993 and its

equity capital stood at Rs.339.07 crore as at the end of March 1994. Subsequently, through a rights

issue in the year 2000-01, its equity share capital was increased to Rs.638.67 crore. During the year

2007-08, a major portion of the Zero Coupon Convertible Debentures was converted into equity

shares of IFCI through exercise of the option by the holders and the equity share capital increased to

Rs.737.84 crore as on March 31, 2010. The preference share capital, issued during the years from

1997-98 to 2000-01, stood at Rs.263.84 crore as on March 31, 2010.

With the formation of IDBI in 1964, the shares of IFCI, originally subscribed by the Government of

India and Reserve Bank of India, were transferred to IDBI and the stake of IDBI was increased to

50% subsequently through additional acquisition. However, with initial public issue, the shareholding

pattern became diversified with the general public holding a substantial portion. The shareholding

pattern, as on March 31, 2012 is as under:

Shareholding Pattern (%age) March 31, 2012 March 31, 2011

Banks, Financial Institutions, Insurance

Companies, Mutual Funds & UTI 31.60 29.38

Bodies Corporate 12.72 10.70

Foreign Institutional Investors 10.96 22.04

Others – Public 44.72 37.88

Total 100.00 100.00

Restructuring of Liabilities

As a development financial institution, a major portion of the financial assistance of IFCI was being

made to Greenfield projects and to the projects in underdeveloped states. With the industrial

liberalization and globalization through economic reforms, many Indian industries became


46

uncompetitive. The industrial recession during the 1990s made many of the large projects financed by

IFCI un-viable and non-performing assets. This affected its profitability and liquidity, which

necessitated restructuring of IFCI’s liabilities for the first time in its five decade history. With the

cooperation from all classes of investors, the liabilities were successfully restructured. With this and

the financial support of Rs.2,932 crore from the Government of India, the company turned around and

started earning operational profit from the year 2004-05 and net profit from the year 2006-07

onwards.

Investments/Disinvestments

During the financial year 2011-12, IFCI acquired the entire stake of ICICI Bank Ltd. of 16.96 % in

Stock Holding Corporation of India Ltd. (SHCIL). With this, IFCI holds 33.92% in the share capital

of SHCIL. This was a strategic investment by IFCI in SHCIL which was promoted by All India

Financial Institutions and Insurance Companies including IFCI. SHCIL apart from being a depository

participant, stock broker and custodian, is the sole e-stamping authority in the country. Further, during

the previous year, IFCI disinvested its entire stake viz. 14.92% in IDBI Trusteeship Services Limited.

Operational Performance

The following tables show the details of Sources and Application of Funds, Profit & Loss account and

the salient features of the financial results during the last four years:

Table I (Rs. in crore)

BALANCE SHEET AS ON 31-Mar-12 31-Mar-11 31-Mar-10 31-Mar-09

EQUITY & LIABILITIES:

Shareholders' Funds

- Share Capital 1001.68 1001.68 1001.68 1108.28

- Reserves & Surplus 4534.09 4001.72 3608.12 2632.47

Loan Funds

- Rupee Loans 20469.49 18712.10 13028.27 9039.98

- Foreign Currency Loans 540.19 526.85 534.19 631.29

Current Liabilities &

Provisions

1638.35 1285.63 1416.95 1470.54

TOTAL 28183.80 25527.98 19589.21 14882.56

ASSETS:

Fixed Assets 1165.92 1212.15 1450.10 889.10

Investments 10761.87 7843.80 5882.43 4038.76

Loans & Advances 13946.24 14200.56 10171.81 7019.90

Deferred Tax Assets 836.92 1020.91 1387.44 1726.31

Cash & Bank Balances 898.61 527.86 38.53 483.59

Other Assets 574.24 722.70 658.90 724.90

TOTAL 28183.80 25527.98 19589.21 14882.56 Note: Figures for the years ended 31 March 2012 and 31 March 2011 have been shown as per revised schedule

VI of Companies Act, 1956 and accordingly, the Figures for the year ended 31 March 2011 have been

regrouped/rearranged wherever necessary. The Figures for the years ended 31 March 2010 and 31 March 2009

have not been regrouped/rearranged.


47

Table II

PROFIT & LOSS ACCOUNT 2011-12 2010-11 2009-10 2008-09

INCOME

Income from Operations 2729.39 2332.45 1657.05 1402.07

Other Income 120.81 147.66 22.28 82.45

TOTAL INCOME (A) 2850.20 2480.11 1679.33 1484.52

EXPENDITURE

Cost of Borrowings 1871.08 1318.97 891.18 790.05

Payments to and provisions for

employees

64.82 64.92 57.28 51.23

Establishment and Other Expenses 57.60 76.27 54.44 39.62

Depreciation (Net of transfer from

Revaluation Reserve)

11.67 10.28 8.98 7.52

TOTAL EXPENDITURE (B) 2005.17 1464.18 1011.88 888.42

PROFIT BEFORE PROVISIONS/

WRITE OFF (A-B)

845.03 1015.93 667.45 596.1

Bad and Doubtful Loans & Advances and

other Assets

Provision/Write-off against bad &

doubtful assets-net reversal

(112.71) (150.32) (447.81) (414.13)

PROFIT BEFORE TAX 957.74 1166.25 1115.26 1010.23

Provision for Taxation

- Income Tax 110.13 93.47 105.45 111.62

- MAT Credit Entitlement - - - -74.72

- Deferred Tax Charge (Net) 183.99 366.53 338.87 311.41

- Fringe Benefit Tax - - - 4.77

PROFIT AFTER TAX 663.62 706.25 670.94 657.15

Surplus brought forward from Previous

Year

1066.46 607.79 312.11 12.36

Profit available for appropriation 1730.08 1314.04 983.05 669.51

APPROPRIATIONS:

Reserve u/s 45IC of RBI Act 132.72 141.25 134.19 133.9

Capital Redemption Reserve - - 82.03 82.03

General Reserve - - 65.00 65.00

Special Reserve u/s 36(1)(viii) 15.00 10.00 10.00 -

Staff Welfare Fund - 0.27 - -

Corporate Social Responsibility Fund - 10.00 - -

Proposed Dividend

- Equity 73.78 73.78 71.81 60.99

- Preference 0.26 0.26 0.26 4.37

Tax on Distributed Profits

- Equity 11.97 11.97 11.92 10.37

- Preference 0.05 0.05 0.05 0.74

Balance carried over to Balance Sheet 1496.30 1066.46 607.79 312.11

Total 1730.08 1314.04 983.05 669.51


48

Basic Earnings per share of Rs.10.00

each (Rs.)

8.99 9.57 9.08 8.55

Diluted Earnings per share of Rs.10.00

each (Rs.)

7.23 8.30 5.68 4.58

Note: Figures for the years ended 31 March 2012 and 31 March 2011 have been shown as per revised schedule

VI of Companies Act, 1956 and accordingly, the Figures for the year ended 31 March 2011 have been

regrouped/rearranged wherever necessary. The Figures for the years ended 31 March 2010 and 31 March 2009

have not been regrouped/rearranged.

The major ratios of operational performance of IFCI during the last five years till 2011-12 are stated

below:

(Rs. in crore)

Ratios 2011-12 2010-11 2009-10 2008-09 2007-08

Networth to Equity

holders 4314 3762 3152 2827 2247

Debt 21394 19265 13,562 9,674 10,223

Debt Equity Ratio (times) 4.96 5.12 4.30 3.42 4.55

Capital Adequacy Ratio

(%) 21.26 16.40 17.88 19.76 17.40

Net NPA to Net

Advances (%) 1.92 0.97 0.50 0.00 0.00

Yield on Advances (%) 11.80 10.90 9.90 9.67 9.10

Cost of Borrowing (%) 9.00 8.00 7.80 7.77 7.77

Interest Spread (%) 2.80 2.90 2.10 1.90 1.40

Operating cost to Income

(%) 4.70 5.85 7.19 6.63 7.55

Return on Average

Networth (%) 16.40 20.40 22.40 25.70 -

Contingent Liabilities and Commitments (to the extent not provided for):

The following were the contingent liabilities and commitments which were not provided for

in the books as on March 31, 2012:

Table I (Rs. in crore)

S.No.

Contingent Liabilities As on

31/03/2012

As on

31/03/2011

(i) Guarantees issued in Indian Currency 26.96 26.96

(ii) Bank Guarantees (2.87+4.00+2.00) 8.87 8.87

(iii) Performance Guarantees issued 0.66 0.60

(iv) Claims not acknowledged as debts 156.10 92.35

(v) Tax Matters –

Income Tax

Service tax

In view of judicial pronouncements and legal opinions in

respect of issues under appeal, no provision is considered

necessary.

27.07

4.84

27.07

4.54


49

Table II

S.No. Commitments As on

31/03/2012

As on

31/03/2011

(i) Estimated amount of contract (including lease contract)

remaining to be executed on capital account (net of

advances)

1.32 3.78

(ii) Undrawn commitments (in line with RBI circular dated

December 26, 2011) 392.97 -

DETAILS OF OTHER BORROWINGS (DETAILS DEBT SECURITIES ISSUED IN THE

PAST, PARTICULARS OF DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER

THAN CASH OR AT A PREMIUM OR DISCOUNT OR IN PURSUANCE OF AN OPTION,

HIGHEST TEN HOLDERS OF EACH CLASS OR KIND OF SECURITIES, DEBT EQUITY

RATIO)

1. Details of borrowings (as on March 31, 2012)

(Rs. in crore)

Particulars As on March 31,2012 As on March 31,2011

Rupee Borrowings

Optionally Convertible Debentures 400.00 400.00

Non-Convertible Debentures 818.19 818.19

Bonds 9924.65 8642.10

Term Loans 8685.83 8748.99

Others 1025.26 128.44

Sub Total 20,853.93 18,737.72

Foreign Currency Borrowings 540.19 526.85

Total 21,394.12 19,264.57

2. Details of Bonds outstanding (as on March 31, 2012):

Sl No Particulars of borrowing Amount outstanding

(Rs.) 1 11th Series - 6% Taxable Bonds 10,00,00,000

2 15th Series - 6% Taxable Bonds 32,50,00,000

3 17th Series - 6% Taxable Bonds 2,80,00,00,000





8 21st Series - 6% Taxable Bonds 40,00,00,000

9 22nd Series - 6% Taxable Bonds 49,65,00,000

10 23rd Series - 6% Taxable Bonds 20,00,00,000


12 24th Series - 6% Taxable Bonds 1,17,50,00,000













50














37 41st Series - 8.5% Taxable Bonds 4,63,00,000




41 43rd Series - 8.5% Taxable Bonds 14,00,000


43 43rd Series - 10.75 Zero Coupon Taxable Bonds 5,60,000



46 45th Series - 9.25% Taxable Bonds 7,56,85,00,000



49 47 R Series - 7.79% Taxable Bonds 1,02,21,14,000


51 48-R Series - 6.46% Taxable Bonds 1,79,76,80,000


53 49-R Series- 6.29% Taxable Bonds 15,43,26,000



56 51st Series - 9.70% Taxable Bonds 2,50,00,00,000

57 51-R Series 6.07% Taxable Bonds 1,46,20,00,000

58 52nd Series - 9.75% Taxable Bonds 1,17,70,01,101

59 52-R Series 6.02% Taxable Bonds 26,11,86,000

60 53rd Series - 9.75% Taxable Bonds 2,50,00,00,000



63 54-R Series - 7.07% Taxable Bonds 99,41,75,000












75 65-R Series - 5.30 Taxable Bonds 1,95,50,00,000

76 BE - 6% Taxable Bonds 2,69,00,00,000

77 BE - 9% Taxable Bonds 8,10,00,000

78 BE09 - 9% Taxable Bonds 45,00,000

79 BE 10 - 9.5% Taxable Bonds 25,00,00,000

80 BE 10 - 9.75% Taxable Bonds 67,00,000


51

81 BE 10 - 10.00% Taxable Bonds 50,20,00,000

82 FB01 - 6% Taxable Bonds 55,25,00,000

83 Ist Series -7.85% Long Term Infrastructure Bonds 54,89,65,670

84 Ist Series -7.95% Long Term Infrastructure Bonds 4,75,92,927

85 2nd Series -8.00% Long Term Infrastructure Bonds 3,04,48,69,800

86 2nd Series -8.25% Long Term Infrastructure Bonds 28,37,15,866

87 3rd Series -8.50% Long Term Infrastructure Bonds 97,14,35,000

88 3rd Series -8.75% Long Term Infrastructure Bonds 12,87,85,000

89 4th Series -9.09% Long Term Infrastructure Bonds 2,89,31,45,000

90 4th Series -9.16% Long Term Infrastructure Bonds 47,02,45,000



93 ON 00 - 6% Taxable Bonds 92,50,00,000

94 ON 00 - 9% Taxable Bonds 3,56,00,000

95 ON 01 - 9% Taxable Bonds 9,68,00,000

96 ON 02 - 6% Taxable Bonds 1,04,88,00,000

97 ON 02 - 9% Taxable Bonds 8,79,00,000

98 ON 03 -6% Taxable Bonds 56,00,000

99 ON 03 -8.5% Taxable Bonds 3,00,00,000

100 ON 03 -9% Taxable Bonds 1,30,00,000

101 ON 09 - 10% Taxable Bonds 70,00,000

102 ON 09 - 10.25% Taxable Bonds 1,00,00,000

103 ON 09 - 11% Taxable Bonds 4,57,00,000

104 ON 09 - 11.25% Taxable Bonds 10,00,000

105 ON 10- 8% Taxable Bonds 25,00,000

106 ON 10- 8.75% Taxable Bonds 30,69,00,000

107 ON 10- 9% Taxable Bonds 6,52,00,000

108 ON 10- 9.15% Taxable Bonds 11,55,00,000

109 ON 10- 9.25% Taxable Bonds 1,42,00,000

110 ON 10- 9.40% Taxable Bonds 31,86,00,000

111 ON 10- 9.50% Taxable Bonds 7,57,00,000

112 ON 10- 9.75% Taxable Bonds 94,51,00,000

113 ON 11- 8.90% Taxable Bonds 18,33,00,000

114 ON 11- 9% Taxable Bonds 64,00,000

115 ON 11- 9.15% Taxable Bonds 11,52,00,000

116 ON 11- 9.25% Taxable Bonds 34,63,00,000

117 ON 11- 9.50% Taxable Bonds 9,16,00,000

118 ON 11- 9.75% Taxable Bonds 4,60,00,000

119 ON 11- 10% Taxable Bonds 7,11,00,000

120 ON 12- 9.75% Taxable Bonds 2,90,00,000

121 ON 12- 10% Taxable Bonds 24,90,00,000

122 ON 12- 10.20% Taxable Bonds 16,27,00,000

123 ON 12- 10.25% Taxable Bonds 1,29,00,000

124 ON 12- 10.30% Taxable Bonds 17,50,00,000

125 ON 12- 10.40% Taxable Bonds 37,76,00,000

126 ON 12- 10.50% Taxable Bonds 13,55,00,000

127 ON 12- 10.60% Taxable Bonds 2,05,00,000

128 Ist Series - 10.50% Subordinate Taxable Bonds 1,91,31,40,000

129 Ist Series - 10.75% Subordinate Taxable Bonds 4,68,54,70,000

130 2nd Series - 10.55% Subordinate Taxable Bonds 2,00,00,00,000

131 3rd Series - 10.50% Subordinate Taxable Bonds 74,50,60,000

132 3rd Series - 10.60% Subordinate Taxable Bonds 8,11,60,000

133 3rd Series - 10.75% Subordinate Taxable Bonds 1,02,48,80,000

134 4th Series - 10.50% Subordinate Taxable Bonds 64,69,50,000

135 4th Series - 10.70% Subordinate Taxable Bonds 1,23,63,40,000

Total 99,24,64,42,364


52

2. Highest ten holders of securities:

a) Equity Shareholders (as on March 31, 2012)

Sr No Name of the Shareholder No. of shares %

1 Life Insurance Corporation of India 6,19,44,644 8.39

2 General Insurance Corporation of India 1,65,02,700 2.24

3 Tourism Finance Corporation of India Limited 1,56,40,537 2.12

4 Canara Bank 1,48,33,946 2.01

5 Macquarie Bank Limited 1,43,20,000 1.94

6 Central Bank of India 1,11,49,626 1.51

7 The Oriental Insurance Company Limited 1,02,45,438 1.39

8 Barclays Capital Mauritius Limited 99,04,000 1.34

9 Punjab National Bank 90,52,100 1.23

10 UCO Bank 86,83,651 1.18

TOTAL 17,22,76,642 23.35

b) Preference Shareholders (as on March 31, 2012)

Sr No Name of the Shareholder Amount (Rs.) %

1 State Bank of India 80,00,00,000 30.38

2 Punjab National Bank 77,00,00,000 29.24

3 Oriental Bank of Commerce 30,66,12,000 11.64

4 Canara Bank 28,26,46,000 10.73

5 Union Bank of India 14,13,22,000 5.37

6 Andhra Bank 900,,00,000 3.42

7 Bank of Baroda 5,00,00,000 1.90

8 State Bank of Hyderabad 5,00,00,000 1.90

9 Dena Bank 4,13,22,000 1.57

10 The Oriental Insurance Co Ltd 3,00,00,000 1.14

TOTAL 256,19,02,000 97.29

c) Bonds (as on March 31, 2012)

Sr No Name of the Bondholder Amount (Rs. cr) %age

1 Central Board of Trustees – EPFO 756.93 7.63

2 Life Insurance Corporation of India 753.69 7.59

3 State Bank of India 607.28 6.12

4 Punjab National Bank 257.65 2.60

5 UCO Bank 240.50 2.42

6 Bank of Baroda 229.75 2.31

7 IOCL PRMBS 200.00 2.01

8 The South Canara District Central Coop. Bank Ltd. 175.00 1.76

9 Canara Bank 173.61 1.75

10 Bank of India 166.17 1.67

TOTAL 3560.58 35.87

d) Debentures (as on March 31, 2012)

Sl No Name of the Debenture holder Amount (Rs. cr) %age

1 Government of India 400.00 32.84

2 Life Insurance Corporation of India 618.19 50.75


TOTAL 1218.19 100.00


53

e) Term Loans as on March 31, 2012

Sl No Name of lender Amount (Rs. cr) %age

1 Central Bank of India 1923.33 22.14

2 Canara Bank 1400.00 16.12

3 Syndicate Bank 1200.00 13.82


5 Dena Bank 583.83 6.72

6 Oriental Bank of Commerce 416.67 4.80

7 UCO Bank 375.00 4.32

8 South India Bank 300.00 3.45

9 Bank of Baroda 200.00 2.30

10 Vijaya Bank 200.00 2.30

11 ICICI Bank 200.00 2.30

Total 7673.83 88.35

f) DEBT EQUITY RATIO

As on Debt Equity Ratio(times)

March 31, 2011 5.12

March 31, 2012 (before considering the present Issue of Rs. 150 cr) 4.96

March 31, 2012 (after considering present Issue of Rs.150 cr) 4.99

4. PARTICULARS OF DEBT SECURITIES ISSUED (I) FOR CONSIDERATION OTHER

THAN CASH, WHETHER IN WHOLE OR PART, (II) AT A PREMIUM OR

DISCOUNT, OR (III) IN PURSUANCE OF AN OPTION

The Company confirms that other than and to the extent mentioned elsewhere in this Information

Memorandum, it has not issued any debt securities or agreed to issue any debt securities for

consideration other than cash, whether in whole or in part, at a premium or discount or in pursuance

of an option since inception.

SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES AND OTHER

BORROWINGS

The payment of interest and repayment of principal is being done in a timely manner on the respective

due dates.


54

UNDERTAKING REGARDING COMMON FORM OF TRANSFER

The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed

by the NSDL/CDSL/Depository Participant of the transferor/transferee and any other applicable laws

and rules notified in respect thereof. The normal procedure followed for transfer of securities held in

dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller

should give delivery instructions containing details of the buyer’s DP account to his depository

participant.

The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In

the absence of the same, interest will be paid/redemption will be made to the person, whose name

appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need

to be settled with the transferor(s) and not with the Company.

The Company undertakes that it shall use a common form/procedure for transfer of Bonds issued

under terms of this Information Memorandum.

MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE

The Company hereby declares that there has been no material event, development or change at the

time of issue which may affect the issue or the investor’s decision to invest/continue to invest in the

debt securities of the Company.

MATERIAL CONTRACTS, AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF

THE ISSUER

Copies of the documents, referred to below, shall be available for inspection at the Registered &

Corporate Office of IFCI between 10:00 a.m. to 12:00noon on any working day until the issue closing

date:

a) The Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993.

b) Memorandum and Articles of Association of the Company.

c) Certificate of incorporation dated May 21, 1993.

d) Fresh Certificate of incorporation dated October 27, 1999, upon change of name.

e) Certified copy of the resolution of the shareholders passed at the Annual General Meeting held on

September 30, 1998, authorizing the Board of Directors of the Company of borrowing powers

under section 293(1)(d) of the Companies Act, 1956.

f) Annual reports of the Company for the financial years 2006-07, 2007-08, 2008-09, 2009-2010

and 2010-11.

g) Copy of letter appointing Beetal Financial & Computer Services (P) Ltd.as Registrar and Transfer

Agents.

h) Copy of letter appointing Axis Trustee Services Ltd. as Trustees to the Bondholders.

i) Board Resolution dated April 17, 2012 authorizing the issue of Bonds offered under terms of this

Information Memorandum.

j) Consent from the Trustees to the Bondholders and Registrars to the Issue referred to in this

Information Memorandum to act in their respective capacities.

k) Copy of application made to BSE for grant of in-principle approval for listing of Bonds.

l) Letter from Brickwork Ratings, conveying the credit rating for the Bonds of the Company.

m) Tripartite Agreement between the Company, NSDL and Beetal Financial & Computer Services

(P) Ltd.for issue of Bonds in dematerialised form.

n) Tripartite Agreement between the Company, CDSL and Beetal Financial & Computer Services

(P) Ltd. for issue of Bonds in dematerialised form.


55

DECLARATION

It is hereby declared that this Information Memorandum contains full disclosures in accordance with

Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008

issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008.

The Company also confirms that this Information Memorandum does not omit disclosure of any

material fact which may make the statements made therein, in light of the circumstances under which

they are made, misleading. The Information Memorandum also does not contain any false or

misleading statement.

The Company accepts no responsibility for the statement made otherwise than in the Information

Memorandum or in any other material issued by or at the instance of the Company and that anyone

placing reliance on any other source of information would be doing so at his own risk.

Signed in pursuance of internal authority granted.

Barkha Chhabra

(Authorised Signatory)

Place: New Delhi

Date: April 20, 2012


56


57


58


59


60


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62

COLLECTING BANK BRANCHES

HDFC BANK

Agra:First Floor, Pariney Garden, Bhagfarjana, Civil Lines, 0562-4010382; Ahmedabad: Astral Tower, Near Mithakhali Six Road,

Navrnagpura, 079-32423470; Ahmednagar: Ambar Plaza, "A" Wing, Second Floor, Station Road, 0241-2451963; Ajmer: Near

Suchna Kendra, Adj. to Swami Complex, 0145-5100123; Akola: Sethi Heights, 1st Floor, Opp. ZillaParishad, 0724-2420726;

Aligarh: 3-316 Bhalla Complex Ramghat Road, 0571-2741973; Allahabad: 58, S.P Marg Civil Lines, 9335070679; Alwar: Bhagat

Singh Circle, Opp. UIT, 0144-5100880; Ambala: 6352/11, Nicholson Road, First Floor, 9315802678; Amravati: C/o Rasik Plaza,

Morshi Road, JaystambhChowk, 9372499428; Amreli: Street # 2, Manekpara Main Road, 09328126897; Amritsar: 26 Kennedy

Avenue, First Floor, 0183-3018603; Anand: 1st Floor, Sanket Complex, Next to Sales India, Grid Cross Road, 09327568094;

Ankleshwar: Commercial Plot 73/P, GIDC Estate, S.A. Motors Building, Old Ankleshwar Highway, 02646-650826; Asansol: P.C

Chatterjee Market, RambandhuTalaw, 0341-2315179; Aurangabad: Divekar Plaza, CTS No.18272, IInd Floor, Railway Station

Road, Padampura, 0240-6604355; Bagalkot: Opp. Railway Station, Ward No.10, 9343340658; Balasore: F.M. Circle, Balasore

Branch (Orissa), 06782-263335; Bangalore: Cash Management Services "SALCO CENTRE", # 8/24, Richmond Road, 080-

66633131; Bardoli: Shree AmbikaNiketan, Station Road, SardarBaug, 09327568085; Bareilly: WBO, 1st Floor, 154 Krishna

Place, Civil Lines, 0581-3299631; Baroda: 1st Floor, Fortune Tower, Vadodara Stock Exchange Building, Opp. ParsiAgiyari,

Sayajigunj, 93247468108; Batala: SCF 173-174 Jalandhar Road, 01871-500042; Begusarai: KachhariChowk, Today Market,

9334391765; Belgaum: No.4830/2A Opp. District Hospital, Dr.Ambedkar Road, 0831-2404415; Bhagalpur: Triveni Apartment, Dr.

R.P Road, 9334391764; Bharuch: 127, Alfa Society, Link Road, 9327468094; Bhatinda: 83/1 Liberty Chowk, Civil Lines,

9316982824; Bhavnagar: 1st Floor, Sterling Point, Waghawadi Road,0278-2561625; Bhilai: Chauhan Estate, G.E. Road, Supela,

09301174457; Bhilwara: WBOShop No. 1-2-3-4, "A" Block, First Floor, SK Plaza, Pur Road, 01482-512686; Bhiwadi: RIICO

ChowkBhiwadi, 01493-510646; Bhiwani: S-175D/1, Jalan Nagar, MehamChowk, 01664-324542; Bhopal: Asha Avenue, 1st Floor,

Z-1, Zone-1 M.P Nagar, 0755-4002914; Bhubaneswar: C111, Business Park, 1st Floor, Sahid Nagar, 0674-2543486; Bhuj:

101/102 Sunrise Tower, Vijay Nagar, Hospital Road, 9327568107; Bhusaval: Mansingh Complex. C.T.S. No. 3294 (H.No. 4/285)

Jamner Road, Opp. CSM Complex, 9323563602; Bikaner: Roshan Plaza, Rani Bazar, 0151-5130042; Bilaspur: A-99 Link Road,

Near AgresenChowk (Chhattisgarh),9302299907; Bokaro: B-9, City Centre, Sector-4, Bokaro Steel City, 06542- 232787;

Burdwan: 45 GT Road/Burdwan, 0342-2566355; Calicut: IIIrd Floor, Simax Towers, Kannur Road, Nadakkave, 0495-4433154;

Chandigarh: SCO-189-190 Sector 17-C, 0172-4603770; Chenganassery: Golden Towers, M.C Road, 0481-2425002;

Chengannur: Bin Tower, Govt. Hospital Junction, M.C Road, 0479-2456215; Chennai: No.115, Dr.RadhakrishnanSalai, 2nd

Floor, Opp. to CSI Kalyani Hospital, Mylapore, 9381750927; Cochin: First Floor, Palarivattom 25, 0484-4456607; Coimbatore:

WBO, 1552, B7, First Floor, Classic Towers, Trichy Road, 0422-4202636; Cuddapah: RRR Towers, Dwaraka Nagar, R.S Road,

Nagarajupalli, 08562-645003; Cuttack: Holding No.32, 32/A Bajrakabati Road, 0671-2332744; Dahanu: MatruAshish, Irani Road.

02528-225603; Daman: ACE Shopping Mall, Dilip Nagar, Teen Batti, 0260-6536184; Darbhanga: NatrajBhawan, Ist Floor, Katki

Bazar, Tower Chawk, 06272-295030; Davangere: #651 B.H.M Enclave, H.M Road, Mandipet, 08192-232781; Dehradun : WBO

Deptt., 56, Rajpur Road, 0135-3245791; Delhi: Fig-Ops 1st Floor, KailashBldg, C.P, 011-43174071; Deoghar: Assam Acess

Road, Near Tower Chowk, 06432-292539; Dhanbad: Sri Ram Plaza, 1st Floor, Bank More Dhanbad, 0326-2308831;

Dharamshala: 363/3, Centre Point, Civil Line, 01892-229569; Dhule: Wholesale Banking Operations (CMS), Lane No.6 ,

Mundada Arcade, Parola Road, 02562-235672; Durgapur: Balai Commercial Complex, 3rd Floor, Benachity, Nachan Road, 0343-

2588501; Erode: No.680, Lotus Enclave, Brough Road, 0424-2261287; Fazilka: M.C No. 594, Gaushala Road, 01638-502759;

Ferozepur: Building No.30/7, Udham Singh Chowk, 9316280934; Gandhidham: Plot No.1, Sector-8, Rabindranath Tagore Road,

02836-653251; Gaya: K.P Road Near GhantaGhar, 0631-2222968; Gondal: Wholesale Banking Operations, 1st Floor, Aadinath

Complex, College Chowk, 91-2825-645161; Gorakhpur: Wholesale Banking Operations, Shreenath Complex, 10 Park Road, Civil

Lines, 0551-2205685; Gurdaspur: SCF-1 Improvement Trust Bldg, Hanuman Chowk, 01874-242335; Guwahati: 1st Floor, Mishra

Complex, Jail Road, Fancy Bazar, 0361-2734323; Gwalior: J.K Plaza, GastKaTazia, Lashkar, 07514015007; Hajipur: Vimel

Complex, DakBanglow Road, 06224-260264; Haldwani: 8/6 BhotiaParaw, Nainital Road, 05946-282801; Hamirpur: NH-88, New

Road, 01972-320496; Hazaribagh: AnnandaChowk, 06546-292434; Himmatnagar: G.F Shop No.5-8 & First Floor 4–9, Kumar

House, Durga Oil Mill Compound, 02772-571156; Hissar: 3 & 4 M.C Area Red Square Market Railway Road, 01662-241023;

Hoshiarpur: WBO, Ist Floor, Opp. Maharaja Hotel, Sutheri Road, 01882-502956; Hosur: No.24 & 25, Maruthi Nagar, SIPCOT PO,

Near Dharga, 04344-400554; Hubli: Shriram Plaza Dervice Branch Club Road, 0836-2217084; Hyderabad: WBO 1-10-60/3, III

Floor, Suryodaya, Begumpet, 040-30472772; Ichalkaranji: House No 7-55(Old No.9-148) Main Road, JantaChowk, 0230-

2422613; Indore: 1st Floor, Brilliant Avenue, Sch No. 94, Sector-B, Behind Bombay Hospital, Ring Road, 0731-3912851;

Jabalpur: 1st Floor, KumbhareMension, 636, Vijay Nagar , MR-4, Main Road, SBI Chowk, 0761-4018773; Jagadhri: Plot No.1,


63

Rajesh Nagar Colony, Ambala Road, 01732-247006; Jagraon: Opp SSP Office,TehselRoad, 01624-541771; Jaipur: 2nd Floor,

0-10,Ashok Marg, C-Scheme, 9314274796; Jalandhar: 1st Floor, 911, GT Road, Nr. Narinder Cinema, 0181-5017790; Jalgaon:

3rd Floor, Sugan Heights, P.P No.324/2 , TPS II, Near Central Bus Stand Jalgaon, 0257-2237642; Jammu: CB-13, Rail Head

Commercial Complex, Gandhi Nagar, 0191 -2471427; Jamnagar: Abhishek, 3rd Floor, Saru Section Road, Near Savan

Apartment, 02886541963; Jamshedpur: 1st Floor, 105 SNP Area, Sakchi, 0657-2442756; Jhansi: Damroo Cinema Complex ,

Civil Lines, 0510-2449330; Jind: SCF-5 Rani Talab, 9315811091; Jodhpur: Ist Floor, 15, KeshavComlex, Nimbera House, Paota,

Mandore Road, 0291-2541839; Junagadh: Ground Floor, Moti Palace, Opp. Rayji Nagar, Moti Baugh Road, 0285-2670067; Kadi:

Radhaswami Complex, 02764-242027; Kaithal: 1450/51 Ambala Road, PehowaChowk, 01746000000; Kakinada: #20-1-46,Main

Road,Opp. SRMT Kakinada, 533 001, 844-2387666-555,093911-3249; Kangra: Near Bus Stand, 01892 260350; Kannur: Ist

Floor, KVR Tower, South Bazar, 0497- 2705880; Kanpur: 15/46, 1st Floor, Civil Lines, 0512-3028933; Kapurthala: The Mall, Near

M.G.N Public School, 01822-233973; Karad: Besides Hotel Sangam, Kolhapur Naka, 02164-229679; Karnal: Basement, SCO

778-779, Opp. Mahabeer Dal Hospital, 0184-2202789; Karur: 126/D/E Annai Plaza, Kovai Road, 04324-233722; Khanna: Opp.

Bus Stand, G.T Road, 01628-221684; Kolhapur: Gemstone, 517/A/2E Ward New Shahupuri, Nr Central Bus Stand, 0231-

2652791; Kolkata: Abhilasha-II, 6 Royd Street (2nd Floor), 22273761; Kollam: VGP Bulidings, Near Irumpupalam, 0474-3244221;

Kota: 13-14, Main Jhalawar Road, 0744-2390485; Kotkapura: B-X/740, Faridkot Road, 01635-502763; Kottayam: 3rd Floor

Unity Buildings, KK Road, 0481-2302361; Kurukshetra: Shop No.1-5, Kalawati Market, Railway Road, 01744-244732; Latur: IInd

Floor, ShriPrabha Arcade, VoraBunglow, Main Road, Near Nagar Parishad, 02382-255116; Lucknow: Pranay Towers, 38,

DarbariLal Sharma Marg, 0522-3918326; Ludhiana: SCO-54, Phase -2, Urban Estate Dugri, 0161-3040060; Madurai: Sri

Nithyakalyani Towers, No.34 Krishnarayan Tank Street, North Veli Street, 0452-4246609; Mandi Gobindgarh: Hukam Chand

Building, Near Main Post Office, 01765-506033; Mangalore: Ideal Towers 1st Floor, Opp. SharavuGanapathi Temple, G.T Road,

0824-6451392; Manjeri: Kurikkal Plaza, Kacherippadi, 4833294040; Mathura: 169/2 Gaushala Road, Opp. BSA College,

9319059212; Meerut: 1st Floor, 381, Western Kutchery Road, 0121-4028363; Mehsana: Prabhu Complex, Near Rajkamal Petrol

Pump, Highway Road, 02762- 243173; Moga: GT Road, Opp. D.C Office, Thaman Singh Gill Market, 1636283003; Moradabad:

First Floor, Chaddha Complex, GMD Road, 05913208473; Morvi: Om Shopping Complex, Ravapar Road, 02822-221316;

Mumbai: Ground Floor, Maneckji Wadia Building, Nanik Motwani Marg, Near Kala Ghoda, Opp. Mumbai University, Fort, 022-

40801570; Muzaffarnagar: First Floor, 53/4 Janshat Road, New Mandi, 9319065143; Muzaffarpur: TilakMaidan Road,

9334179610; Mysore: Mythri Arcade, Saraswathipuram,1st Main, 0821-4255304; Nabha: SCF 14,15 Patiala Gate, 01765224924;

Nadiad: Shootout Building, College Road, 0268-6540114; Nagpur: 2, "Mile Stone" Block No.303 & 304, Near Lokmat Square,

Wardha Road, 0712-2454417; Narnaul: Opp. S.P Residence, MahinderGarh Road, 01282253388; Nasik: 3rd Floor, Archit Centre,

Opp. Sandeep Hotel, Chandak Circle, Link Road, Near Mahamarg Bus Stand, 0253-6620251; Navsari: Ground Floor, Nandani

Complex, Station Road, 02637-280901; Nawanshahar: B-1/148, Banga Road, 01823503053; Nellore: 17/126, G.V.R. Enclave,

G.T. Road, 0861-6450852; Palakkad: VIII/246, 1st Floor, Chandranagar Jn., 0491-6452086; Palanpur: Nr. Cozy Tower, Opp.

Joravar Palace, 2742651638; Panipat: 801/4, Opp. Railway Road, G.T Road, 01804015268; Panjim: 301, MilrocLarMenezes,

Swami Vivekanand Road, 6659744; Pathanamthitha: Aban Arcade, Ring Road, 0468-2272335; Patiala: Building No.11520, 1st

Floor LeelaBhawan, Near Gopal Sweets, 0175-5022000; Patna: Plot No.651, Jamal Road, 9334384682; Perinthalmana:

Wholesale Banking, Sree Complex, Calicut Road, 04933325306; Phagwara: Kalra Complex, G.T Road, 01824-508675;

Pondicherry: T.S.No.6, 100 Ft Road, Ellaipillaichavady, 0413–2206575; Porbandar: Om Shiv Shakti R.D. Chambers, M.G. Road,

0286 6541019; Pune: Fortune Square, 3rd Floor, Deep Bungalow Chowk, Model Colony, Shivajinagar, 020-41224309; Raipur:

Chawla Towers, Near Bottle House, Shankar Nagar, 0771-4003110; Rajahmundry: 46-17-20, 1st Floor, Danavaipet, 0883-

2428691; Rajapalayam: 251-E Kadabankulam Main, RajapalayamThenkasi Road, 04563-230009; Rajkot: Shivalik-V, 3rd Floor,

Gondal Road, 0281-6536982; Rajpura: # 11-12B, Clibre Market, 01762243114; RamganjMandi: Bazaar No.1, Opp. SBBJ Bank,

9875091240; Ramhgarh: N.H-33 Main Road, Near Bank of Baroda, RamgarhCantt, 06553-230476; Ranchi: 56, Rohini Complex

Circular Road Lalpur, 6512560522; Raniganj: A/29, N.S.B Road, Opposite Asoka Petrol Pump, 9330038274; Ratlam: (WBO) 90,

Station Road, 07412-400672; Ratnagiri: Show Room No.3, MangeshShanta, Apartment, Near MarutiMandir, Ratnagiri-Kolhapur

Highway, 02352-271275; Rewari: L203, 1st Floor, Modal Town, Old Court Road, 01274-221283; Rishikesh: MC No.53 MJ Mall

Railway Road, 0135-3209449; Rohtak: Jawahar Market, Opp. D-Park, Model Town, 01262-326841; Roorkee: 313/8, Civil Lines,

01332-275772; Ropar: Raj Hotel Complex, College Road, 01881-228870; Rourkela: DewadiBhavan, 661250066; Rudrapur: Plot

No.1&2, Nanital Road, Plot No.1&2, Nanital Road, 05944-241747; Saharanpur: Court Road, 0132-3203365; Salem: 5/241-F

Rathan Arcade, Five Roads, Meyyanur, 0427-2331604; Sambalpur: NayaparaGolebazar, 06632400756; Sangamner: 1 Janak

Plaza, New Nagar Road, 224354; Sangli: 640, Venkatesh Senate, SangliMiraj Road, 0233-2327836; Sangrur: SCO-1,2,3 Kaula

Park, 01672-501803; Shillong: Anders Mansion, Police Bazar, 3642506043; Shimla: 3, JankidasBldg, 0177-2658541; Shimoga:

W.B.O, No.447, Sharavathi Complex, Savarlane Road, 08182-261359; Siliguri: 136/115 Hill Cart Road, 0353-2520409; Silvassa:

1-16, Jaypee House, Opp. Patel Petrol Pump, 0260-6547172; Sindhanur: No.6-1-2992/1,Ward No.12, Kushtagi Road, 08535-

220611; Solan: The Mall Road, Opp. UCO Bank, 9318618249; Solapur: 8516/11 MurarjiPeth, Sun Plaza Bldg, Lucky Chowk,

0217-2320877; Srinagar: First Floor, M.S Shopping Mall, Residency Road, 0191-2483843; Surat: 1st Floor, Crossway Mall, Near


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Ram Chowk, GhodDod Road, 0261-6677807; Surendranagar: Middle Point, A Wing, Near Milan Cinema, Main Road, 02752-

650105; Thalassery: Sahara Centre, AVK Nair Road, 0490 2325104; Theni: WBO –Theni, #422-A, Periyakulam Road, 04546-

321300; Thiruvalla: Illampallil Buildings, 26/149, 1&2, MC Road, Ramanchira, 0469-2741378; Tirunelveli: 12,13, Trivandrum High

Road, Vannarpettai, Palayamkottai, 0462-4200675; Tirupati: 19-8-180, Krishna Arcade, Beside IBP Petrol Pump, Near

Annamaiah Circle, 8772220374; Tirupur: No-169, Chidambaram Complex, Kumaran Road, 0421-4342422; Tirur: KMS Tower,

Thazhepalam, 0494-6451045; Trichur: Third Floor, SuharshaTowers,Shornur Road, 09387069206; Trichy: No.11 PLA Kanagu

Towers, 11th Cross, Main Road, Thillainagar, 0431-2742204; Trivendrum: BOB Plaza , Second Floor, T.C 12/149 (3), Pattom,

0471-3083430; Udaipur: Uday 2nd Floor, 3 Durga Nursery, 0294-5103355; Udupi: Panduranga Tower/Diana Circle, Court Road,

0820-4294936; Unjha: 1st Floor, Suvidhi Complex, Station Road, 02762-240624; Valsad: 1st Floor, Ekta Apt, Tithal Road, 02632

652201; Vapi: 1st Floor, Kanta Trade Center, GIDC Char Rasta, 0260-6548104; Varanasi: D-58/9A-1K, Kush Complex, Sigra

Varanasi, 05422221271; Vellore: 73 Officers Line, 0416-2210338; Veraval: "Amrut Deep", Rajmahal Road, Opp. Public Garden,

02876-650219; Vijayawada: 40-1-48/2, 2nd Floor, Valluri Complex, M.G Road, 0866-6647400; Vishakapatnam: First Floor,

Potluri Castle, # 48-14-9, Dwarakanagar, 0891-6671123; Warangal: 1-8-605/1, Nakkalagutta, Hanamkonda, 0870-6454021.

*********


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Regd. Office; IFCI Tower, 61, Nehru Place, New Delhi -110019 Tel No.: (011) 41792800, 41732000; Fax 011- 26230029

For private circulation only

ADDENDUM TO THE INFORMATION MEMORANDUM DATED April 20, 2012

IFCI Private Placement Bonds- Series 56

Private placement of IFCI Unsecured, Redeemable, Non-Convertible, Taxable Bonds Series 56 of face value of Rs.1,00,000/- each in the nature of Promissory Notes aggregating to Rs. 150 Crore with a green-shoe option to retain over-subscription.

Credit Analysis and Research Ltd. (“CARE Ratings”) has, vide its letter dated April 24, 2012

assigned credit rating of "CARE A+” to the Bonds. Instruments with this rating are

considered to have adequate degree of safety regarding timely servicing of financial

obligations. Such instruments carry low credit risk.

The above ratings are not recommendations to buy, sell or hold securities and investors

should take their own decision. The ratings may be subject to revision or withdrawal at any

time by the assigning rating agencies and each rating should be evaluated independently of

any other rating.

The letter and the rating rationale are enclosed herewith. These shall constitute part and

parcel of the Information Memorandum for this issue, which stands amended to the extent

stated hereinabove.

(Authorised Signatory)

April 24, 2012


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