DENA BANK Bank - BSE Ltd. (Bombay Stock ?· DENA BANK Dena Bank (“Bank”) ... The information on…

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  • Draft Preliminary Placement Document

    Subject to Completion

    Not for circulation

    Private and confidential

    Serial No. ___

    DENA BANK Dena Bank (Bank) was constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 on July 19, 1969. For further details with

    respect to constitution of our Bank, please see section General Information beginning on page 230.

    Head Office: Dena Corporate Centre, C 10, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051, Maharashtra, India. Telephone: +91 22 2654 5319,

    Fax: +91 22 2654 5317; Website: www.denabank.com, Email: irc@denabank.co.in

    Our Bank is issuing [] equity shares of face of value 10 each (the Equity Shares) at a price of [] per Equity Share, including a premium of [] per Equity

    Share, aggregating up to [] Crores (the Issue).

    ISSUE IN ACCORDANCE WITH CHAPTER VIII OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND

    DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, AS AMENDED (THE ICDR REGULATIONS), AND THE RULES MADE THEREUNDER

    THIS ISSUE AND THE DISTRIBUTION OF THIS PRELIMINARY PLACEMENT DOCUMENT IS BEING MADE TO QUALIFIED INSTITUTIONAL BUYERS

    AS DEFINED UNDER REGULATION 2(1)(zd) OF THE ICDR REGULATIONS (QIBs) IN RELIANCE UPON CHAPTER VIII OF THE ICDR REGULATIONS.

    THIS PRELIMINARY PLACEMENT DOCUMENT IS PERSONAL TO EACH PROSPECTIVE INVESTOR AND DOES NOT CONSTITUTE AN OFFER OR

    INVITATION OR SOLICITATION OF AN OFFER TO THE PUBLIC OR TO ANY OTHER PERSON OR CLASS OF INVESTORS WITHIN OR OUTSIDE INDIA

    OTHER THAN TO QIBs. THIS PRELIMINARY PLACEMENT DOCUMENT WILL BE CIRCULATED ONLY TO SUCH QIBs WHOSE NAMES ARE

    RECORDED BY OUR BANK PRIOR TO MAKING AN INVITATION TO SUBSCRIBE TO EQUITY SHARES OFFERED IN THE ISSUE.

    YOU ARE NOT AUTHORISED TO AND MAY NOT (1) DELIVER THIS PRELIMINARY PLACEMENT DOCUMENT TO ANY OTHER PERSON; (2)

    REPRODUCE THIS PRELIMINARY PLACEMENT DOCUMENT IN ANY MANNER WHATSOEVER; OR (3) RELEASE ANY PUBLIC ADVERTISEMENT

    OR UTILIZE ANY MEDIA, MARKETING OR DISTRIBUTION CHANNELS OR AGENTS TO INFORM THE PUBLIC AT LARGE ABOUT THE ISSUE. ANY

    DISTRIBUTION OR REPRODUCTION OF THIS PRELIMINARY PLACEMENT DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO

    COMPLY WITH THIS INSTRUCTION MAY RESULT IN A VIOLATION OF THE ICDR REGULATIONS OR OTHER APPLICABLE LAWS OF INDIA AND

    OTHER JURISDICTIONS.

    INVESTMENTS IN EQUITY SHARES INVOLVE A DEGREE OF RISK AND PROSPECTIVE INVESTORS SHOULD NOT INVEST IN THIS ISSUE UNLESS

    THEY ARE PREPARED TO RISK LOSING ALL OR PART OF THEIR INVESTMENT. PROSPECTIVE INVESTORS ARE ADVISED TO CAREFULLY READ

    THE SECTION RISK FACTORS BEGINNING ON PAGE 38 BEFORE MAKING AN INVESTMENT DECISION IN THIS ISSUE. EACH PROSPECTIVE

    INVESTOR IS ADVISED TO CONSULT ITS OWN ADVISORS ABOUT THE PARTICULAR CONSEQUENCES TO IT OF AN INVESTMENT IN THE EQUITY

    SHARES PROPOSED TO BE ISSUED PURSUANT TO THIS PRELIMINARY PLACEMENT DOCUMENT.

    Invitations, offers and sale of the Equity Shares shall only be made pursuant to this Preliminary Placement Document, the Application Form (as defined hereinafter),

    the Placement Document and the Confirmation of Allocation Note (as defined hereinafter). See the section Issue Procedure beginning on page 179. The distribution

    of this Preliminary Placement Document or the disclosure of its contents to any person other than QIBs (as defined in the ICDR Regulations) and persons retained by

    QIBs to advise them with respect to their purchase of the Equity Shares is unauthorized and prohibited. Each prospective investor, by accepting delivery of this

    Preliminary Placement Document, agrees to observe the foregoing restrictions and to make no copies of this Preliminary Placement Document or any documents referred

    to in this Preliminary Placement Document. Information contained in this Preliminary Placement Document is not complete and may be changed. The information on

    our Banks website or any website directly or indirectly linked to our Banks website does not form part of this Preliminary Placement Document and prospective

    investors should not rely on such information contained in, or available through, such websites.

    The Equity Shares of our Bank are listed on the BSE Limited (the BSE) and the National Stock Exchange of India Limited (the NSE) (the BSE and the NSE

    collectively the Stock Exchanges). The closing price of the outstanding Equity Shares on the BSE and the NSE on October 9, 2017 was 30.45 and 30.40 per

    Equity Share, respectively. In-principle approvals under regulation 28(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure

    Requirements) Regulations, 2015, as amended (Listing Regulations) for listing of the Equity Shares have been received from the BSE and the NSE on October10,

    2017. Applications to the Stock Exchanges will be made for the listing of the Equity Shares offered through this Preliminary Placement Document. The Stock Exchanges

    assume no responsibility for the correctness of any statements made, opinions expressed or reports contained herein. Admission of the Equity Shares to trading on the

    Stock Exchanges should not be taken as an indication of the merits of the business of our Bank or the Equity Shares.

    OUR BANK HAS PREPARED THIS PRELIMINARY PLACEMENT DOCUMENT SOLELY FOR PROVIDING INFORMATION IN CONNECTION WITH THE

    PROPOSED ISSUE.

    This Preliminary Placement Document has not been reviewed by Securities and Exchange Board of India (SEBI), the Reserve Bank of India (the RBI), the Stock

    Exchanges, or any other regulatory or listing authority. The Equity Shares offered in the Issue have not been recommended or approved by SEBI, nor does SEBI

    guarantee the accuracy or adequacy of this Preliminary Placement Document. This Preliminary Placement Document has not been and will not be registered as a

    prospectus with the Registrar of Companies, Maharashtra (RoC) in India, and will not be circulated or distributed to the public in India or any other jurisdiction and

    will not constitute a public offer in India or any other jurisdiction.

    The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the U.S. Securities Act), or any state securities laws

    of the United States and may not be offered, sold or delivered within the United States except pursuant to an exemption from, or in a transaction not subject to, the

    registration requirements of the U.S. Securities Act and applicable state securities laws. Accordingly, the Equity Shares are being offered and sold outside the United

    States in offshore transactions (as defined in Regulation S under the U.S. Securities Act (Regulation S)) in accordance with Regulation S and the applicable laws

    of the jurisdictions where those offers and sales are made. For further details, see Selling Restrictions and Transfer Restrictions beginning on pages 191 and 197,

    respectively.

    This Preliminary Placement Document is dated October 10, 2017.

    BOOK RUNNING LEAD MANAGERS

    IDBI CAPITAL MARKETS & SECURITIES LIMITED

    MOTILAL OSWAL INVESTMENT ADVISORS LIMITED

    Th

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  • 2

    TABLE OF CONTENTS

    NOTICE TO INVESTORS............................................................................................................................................................... 3

    REPRESENTATIONS BY INVESTORS ........................................................................................................................................ 5

    DISCLAIMER CLAUSE OF STOCK EXCHANGES ................................................................................................................... 11

    CERTAIN CONVENTIONS, CURRENCY OF PRESENTATION AND FINANCIAL DATA .................................................. 12

    INDUSTRY AND MARKET DATA ............................................................................................................................................. 14

    FORWARD LOOKING STATEMENTS .................................................................................................................................... 15

    ENFORCEMENT OF CIVIL LIABILITIES .................................................................................................................................. 16

    EXCHANGE RATES ..................................................................................................................................................................... 17

    DEFINITIONS AND ABBREVIATIONS ..................................................................................................................................... 18

    SUMMARY OF THE ISSUE ......................................................................................................................................................... 26

    SUMMARY OF BUSINESS .......................................................................................................................................................... 28

    SUMMARY OF FINANCIAL INFORMATION ........................................................................................................................... 34

    RISK FACTORS ............................................................................................................................................................................ 38

    MARKET PRICE INFORMATION............................................................................................................................................... 62

    USE OF PROCEEDS ..................................................................................................................................................................... 65

    CAPITALIZATION STATEMENT ............................................................................................................................................... 66

    DIVIDEND POLICY ..................................................................................................................................................................... 67

    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ... 68

    SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IND-AS ............................................................................... 90 SELECT STATISTICAL INFORMATION ................................................................................................................................... 96

    INDUSTRY OVERVIEW ............................................................................................................................................................ 111

    BUSINESS ................................................................................................................................................................................... 123

    REGULATIONS AND POLICIES .............................................................................................................................................. 152

    BOARD OF DIRECTORS AND SENIOR MANAGEMENT ..................................................................................................... 165

    PRINCIPAL SHAREHOLDERS ................................................................................................................................................. 176

    ISSUE PROCEDURE................................................................................................................................................................... 179

    PLACEMENT AND LOCK UP ................................................................................................................................................... 189

    SELLING RESTRICTIONS ......................................................................................................................................................... 191

    TRANSFER RESTRICTIONS ..................................................................................................................................................... 197

    THE SECURITIES MARKET OF INDIA ................................................................................................................................... 200

    DESCRIPTION OF EQUITY SHARES ...................................................................................................................................... 204

    TAXATION .................................................................................................................................................................................. 207

    LEGAL PROCEEDINGS ............................................................................................................................................................. 217

    INDEPENDENT ACCOUNTANTS ............................................................................................................................................ 229

    GENERAL INFORMATION ....................................................................................................................................................... 230

    FINANCIAL STATEMENTS ...................................................................................................................................................... 231

    DECLARATION .......................................................................................................................................................................... 232

  • 3

    NOTICE TO INVESTORS

    Our Bank has furnished and accepts full responsibility for all of the information contained in this Preliminary

    Placement Document and confirms that to its best of knowledge and belief, having made all reasonable enquiries, this

    Preliminary Placement Document contains all information with respect to our Bank and the Equity Shares that is

    material in the context of the Issue. The statements contained in this Preliminary Placement Document relating to our

    Bank and the Equity Shares are, in all material respects, true, accurate and not misleading. The opinions and intentions

    expressed in this Preliminary Placement Document with regard to our Bank and the Equity Shares are honestly held,

    have been reached after considering all relevant cir...

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