DRAFT RED HERRING PROSPECTUS August 18, 2017 Please …...DRAFT RED HERRING PROSPECTUS August 18, 2017 Please read Section 32 of the Companies Act, 2013 This Draft Red Herring Prospectus

DRAFT RED HERRING PROSPECTUS

August 18, 2017

Please read Section 32 of the Companies Act, 2013

This Draft Red Herring Prospectus will be updated upon filing of the Red Herring Prospectus with the RoC

Book Built Issue

HDFC STANDARD LIFE INSURANCE COMPANY LIMITED

Our Company was incorporated at Mumbai on August 14, 2000 as “HDFC Standard Life Insurance Company Limited” a public limited company under the Companies Act, 1956. Our Company obtained a certificate of commencement of business on October 12, 2000 and the certificate of registration from the Insurance Regulatory and Development Authority of India (“IRDAI”) to undertake life insurance business on October 23, 2000.

Registered Office: 13th Floor, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai – 400 011. Corporate Office: 12

th, 13

th, and 14

th Floor, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai – 400 011. For

details of changes to the address of the registered office of our Company, please see “History and Certain Corporate Matters” on page 250 of this Draft Red Herring Prospectus.

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

Email: [email protected]; Website: www.hdfclife.com;

Corporate Identity Number: U99999MH2000PLC128245; IRDAI Registration Number: 101

PROMOTERS OF OUR COMPANY: HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED, STANDARD LIFE (MAURITIUS HOLDINGS) 2006 LIMITED AND STANDARD LIFE ABERDEEN PLC

INITIAL PUBLIC OFFERING OF UP TO 299,827,818 EQUITY SHARES OF FACE VALUE OF ` 10 EACH (“EQUITY SHARES”) OF HDFC STANDARD LIFE INSURANCE COMPANY LIMITED (“COMPANY” OR “ISSUER”) FOR CASH AT A PRICE OF ` [] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ` [●] PER EQUITY SHARE, AGGREGATING UP TO ` [●] MILLION THROUGH AN OFFER FOR SALE OF 191,246,050 EQUITY SHARES BY HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED AND UP TO 108,581,768 EQUITY SHARES BY STANDARD LIFE (MAURITIUS HOLDINGS) 2006 LIMITED (“THE SELLING SHAREHOLDERS” AND SUCH OFFERING, “THE

OFFER”). THE OFFER COMPRISES A NET OFFER TO THE PUBLIC OF UP TO 266,895,517 EQUITY SHARES (“NET OFFER”), A RESERVATION OF UP TO 2,144,520 EQUITY SHARES (CONSTITUTING UP TO 0.11% OF OUR POST

OFFER PAID UP EQUITY SHARE CAPITAL) FOR PURCHASE BY THE ELIGIBLE HDFC LIFE EMPLOYEES (AS DEFINED IN “DEFINITIONS AND ABBREVIATIONS”) AGGREGATING UP TO ` [●] MILLION (“HDFC LIFE EMPLOYEE RESERVATION PORTION”), RESERVATION OF UP TO 805,000 EQUITY SHARES (CONSTITUTING UP TO 0.04% OF OUR POST OFFER PAID UP EQUITY SHARE CAPITAL ) FOR PURCHASE BY THE ELIGIBLE HDFC

EMPLOYEES (AS DEFINED IN “DEFINITIONS AND ABBREVIATIONS”) AGGREGATING UP TO ` [●] MILLION (“HDFC EMPLOYEE RESERVATION PORTION”) AND A RESERVATION OF UP TO 29,982,781 EQUITY SHARES (CONSTITUTING UP TO 1.50% OF OUR POST-OFFER PAID UP EQUITY SHARE CAPITAL FOR PURCHASE BY ELIGIBLE HDFC SHAREHOLDERS (AS DEFINED IN “DEFINITIONS AND ABBREVIATIONS”) FOR CASH AT A PRICE

OF ` [] PER EQUITY SHARE AGGREGATING UPTO ` [] MILLION (“HDFC SHAREHOLDERS RESERVATION PORTION”). THE OFFER SHALL CONSTITUTE 14.97 % OF THE FULLY DILUTED POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY AND THE NET OFFER SHALL CONSTITUTE 13.33 % OF THE FULLY DILUTED POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.

THE FACE VALUE OF THE EQUITY SHARES IS ` 10 EACH. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDERS IN CONSULTATION WITH THE MANAGERS, AND ADVERTISED IN [●] EDITIONS OF [●],[ ●] EDITIONS OF [●] AND [●] EDITIONS OF [●] (WHICH ARE WIDELY CIRCULATED ENGLISH, HINDI AND MARATHI NEWSPAPERS, RESPECTIVELY, MARATHI BEING

THE REGIONAL LANGUAGE OF MAHARASHTRA, WHERE OUR REGISTERED OFFICE IS LOCATED), AT LEAST FIVE WORKING DAYS PRIOR TO THE OFFER OPENING DATE IN ACCORDANCE WITH THE SECURITIES AND

EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, AS AMENDED (THE “ICDR REGULATIONS”) AND SUCH ADVERTISEMENT SHALL BE MADE AVAILABLE TO BSE

LIMITED (“BSE”) AND NATIONAL STOCK EXCHANGE OF INDIA LIMITED (“NSE”) FOR THE PURPOSE OF UPLOADING ON THEIR RESPECTIVE WEBSITES.

In case of a revision in the Price Band, the Offer Period will be extended by at least three additional Working Days after such revision of the Price Band, subject to the Offer Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Offer

Period, if applicable, will be widely disseminated by notification to BSE and NSE, by issuing a press release and also by indicating the change on the websites of the Managers and at the terminals of the Syndicate Members.

The Offer is being made in compliance with the requirements of the Insurance Regulatory and Development Authority of India (Issuance of Capital by Indian Insurance Companies transacting Life Insurance Business) Regulations, 2015, as amended (“IRDAI Issuance of Capital Regulations”).

Furthermore, in terms of Rule 19(2)(b)(iii) of the Securities Contracts Regulations Rules, 1957, as amended (“SCRR”) read with Regulation 41 of the ICDR Regulations, this is an Offer for at least 10% of the post-Offer paid-up equity share capital of our Company, on

a fully diluted basis. The Offer is being made through the Book Building Process, in accordance with Regulation 26(1) of the ICDR Regulations, wherein not more than 50% of the Net Offer shall be allocated on a proportionate basis to Qualified Institutional Buyers

(“QIBs”). Provided that our Company and the Selling Shareholders, in consultation with the Managers, may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis of which one-third shall be reserved for domestic Mutual Funds, subject to

valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder

of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not less than 15% of the Net Offer shall be

available for allocation on a proportionate basis to Non-Institutional Investors and not less than 35% of the Net Offer shall be available for allocation on a proportionate basis to Retail Individual Investors, in accordance with the ICDR Regulations, subject to valid Bids

being received at or above the Offer Price. Further, 2,144,520 Equity Shares will be available for Allocation to Eligible HDFC Life Employees, 805,000 Equity Shares will be available for Allocation to Eligible HDFC Employees, and 29,982,782 Equity Shares will be

available for Allocation to Eligible HDFC Shareholders, subject to valid Bids being received from them at or above the Offer Price. All Bidders, other than Anchor Investors, are required to mandatorily utilise the Application Supported by Blocked Amount (“ASBA”)

process providing details of their respective bank accounts which will be blocked by the Self Certified Syndicate Banks (“SCSBs”), to participate in this Offer. Anchor Investors are not permitted to participate in the Offer through the ASBA process. For details, please

see “Offer Procedure” on page 679 of this Draft Red Herring Prospectus.

RISKS IN RELATION TO FIRST OFFER

This being the first public offer of our Company, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares is ` 10 each. The Floor Price is [●] times the face value of the Equity Shares and the Cap Price is [●] times the face value of the Equity Shares. The Offer Price (as has been determined by our Company and the Selling Shareholders in consultation with the Managers, and justified as stated in the section “Basis for Offer Price” on page 147 of this Draft Red Herring Prospectus)

should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding active and / or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded

after listing.

GENERAL RISKS

Investment in equity and equity-related securities involves a degree of risk and Bidders should not invest any funds in the Offer unless they can afford to take the risk of losing their investment. Bidders are advised to read the Risk Factors carefully before taking an

investment decision in the Offer. For taking an investment decision, Bidders must rely on their own examination of our Company and the Offer, including the risks involved. The Equity Shares offered in the Offer have not been recommended or approved by the

Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Draft Red Herring Prospectus. Specific attention of the Bidders is invited to the section “Risk Factors” on page 23 of this Draft Red Herring Prospectus.

DISCLAIMER CLAUSE OF THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA (THE “IRDAI”)

THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA (“IRDAI”) DOES NOT UNDERTAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF OUR COMPANY OR FOR THE CORRECTNESS

OF ANY OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THIS CONNECTION. ANY APPROVAL BY THE IRDAI UNDER THE IRDAI ISSUANCE OF CAPITAL REGULATIONS SHALL NOT IN ANY MANNER BE

DEEMED TO BE OR SERVE AS A VALIDATION OF THE REPRESENTATIONS BY OUR COMPANY IN THE OFFER DOCUMENT.

COMPANY’S AND THE SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY

Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company and the Offer, which is material in the context of the Offer, that the information

contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this

Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions, misleading in any material respect. Further, each of the Selling Shareholders, severally and not jointly, accept responsibility only for the

statements made by such Selling Shareholder in this Draft Red Herring Prospectus as a Selling Shareholder in the context of the Offer and the Equity Shares offered by such Selling Shareholder in the Offer and that such statements are true and correct in all material

respects and are not misleading in any material respect.

LISTING The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on BSE and NSE. Our Company received “in-principle” approvals from BSE and NSE for listing of the Equity Shares pursuant to their letters dated [●] and [●], respectively. For

the purposes of the Offer, the Designated Stock Exchange shall be [●]. A copy of the Red Herring Prospectus and the Prospectus shall be delivered to the RoC for registration in accordance with the Companies Act, 2013. For details of the material contracts and

documents that will be available for inspection from the date of the Red Herring Prospectus up to the Offer Closing Date, please see “Material Contracts and Documents for Inspection” on page 768 of this Draft Red Herring Prospectus.

GLOBAL CO-ORDINATORS AND BOOK RUNNING LEAD MANAGERS

Morgan Stanley India Company Private

Limited

18F, Tower 2, One Indiabulls Centre, 841,

Senapati Bapat Marg, Lower Parel Mumbai - 400 013

Maharashtra, India

Telephone: +91 (22) 6118 1770

Facsimile: +91 (22) 6118 1031

Email: [email protected]

Website:

https://www.morganstanley.com/about-

us/global-offices/india

Investor Grievance ID:

[email protected]

Contact Person: Mr. Rahul Jain

SEBI Registration No.: INM000011203

HDFC Bank Limited*

Investment Banking Group, Unit No. 401 &

402, 4th Floor, Tower B, Peninsula Business

Park, Lower Parel Mumbai - 400 013

Maharashtra, India

Telephone: +91 (22) 339 58021

Facsimile: +91 (22) 3078 8584


Website: www.hdfcbank.com


[email protected]

Contact Person: Mr. Rakesh Bhunatar/

Mr. Kunal Datt


Credit Suisse Securities (India) Private Limited

Ceejay House, 10th Floor

Plot F, Shivsagar Estate

Dr. Annie Besant Road Worli, Mumbai - 400 018

Maharashtra, India

Telephone: +91 (22) 6777 3885

Facsimile: +91 (22) 6777 3820


Website: https://www.credit-

suisse.com/in/en/investment-banking/regional-

presence/asia-pacific/india/ipo.html


[email protected]

Contact Person: Mr. Abhay Agarwal


CLSA India Private Limited

8/F Dalamal House

Nariman Point

Mumbai - 400 021 Telephone: +91 (22) 6650 5050

Facsimile: +91 (22) 2284 0271

E-mail: [email protected]

Website: www.india.clsa.com


[email protected]

Contact person: Anurag Agarwal

SEBI registration number: INM000010619

Nomura Financial Advisory and

Securities (India) Private Limited

Ceejay House, Level 11, Plot F, Shivsagar

Estate, Dr. Annie Besant Marg, Worli

Mumbai – 400 018

Maharashtra, India

Telephone: +91 (22) 4037 4037

Facsimile: +91 (22) 4037 4111


Website:

www.nomuraholdings.com/company/grou

p/asia/india/index.html

Investor Grievance ID: investorgrievances-

[email protected] Contact Person: Mr. Sumit Sukhramani /

Mr. Sandeep Baid

SEBI registration number: INM000011419

BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE OFFER

*

Edelweiss Financial Services Limited

14th Floor, Edelweiss House

Off. C.S.T Road, Kalina

Mumbai – 400 098, India

Telephone: + 91 (22) 4009 4400

Facsimile : +91 (22) 4086 3610

Website: www.edelweissfin.com



[email protected]

Contact person: Mr. Pradeep Tewani/

Mr. Kunal Malkan SEBI registration number:

INM0000010650

Haitong Securities India Private Limited

1203A, Floor 12A, Tower 2A, One Indiabulls

Centre, 841, Senapati Bapat Marg,

Elphinstone Road,

Mumbai – 400 013

Maharashtra, India

Telephone: +91 (22) 4315 6859

Facsimile: +91 (22) 2421 6327


Website: http://www.htisec.com/en-

us/haitong-india

Investor Grievance ID: [email protected]

Contact Person: Mr. Himanshu Kashyap


IDFC Bank Limited

Naman Chambers, C-32

G Block, Bandra Kurla Complex

Bandra (East),

Mumbai – 400 051

Maharashtra, India

Telephone: +91 (22) 6622 2600

Facsimile: +91 (22) 6622 2501

Email:[email protected]

Website: www.idfcbank.com


[email protected] Contact Person: Mr. Akshay Bhandari

SEBI Registration No.:

MB/INM000012250

IIFL Holdings Limited

10th Floor, IIFL Centre

Kamala City, Senapati Bapat

Marg, Lower Parel (West)

Mumbai– 400 013

Maharashtra, India

Telephone: +91 (22) 4646

4600

Facsimile: +91 (22) 2493

1073

Email:

[email protected] Website: www.iiflcap.com


[email protected]

Contact Person: Mr. Gaurav

Singhvi

SEBI Registration No:

INM000010940

UBS Securities India Private

Limited

2/F,2 North Avenue, Maker Maxity

Bandra Kurla Complex, Bandra (East)

Mumbai – 400 051

Maharashtra, India

Telephone: +91 (22) 6155 6000

Facsimile: +91 (22) 6155 6292


Website: www.ubs.com/indianoffers


[email protected] Contact Person: Ms. Jasmine Kaur

SEBI Registration No.:

INM000010809

Karvy Computershare Private

Limited

Karvy Selenium Tower B, Plot 31-32,

Gachibowli, Financial District,

Nanakramguda

Hyderabad – 500 032

Andhra Pradesh, India

Telephone: +91 (40) 6716 2222

Facsimile: +91 (40) 2343 1551


Website: https://karisma.karvy.com/

Investor Grievance ID:[email protected]

Contact Person: Mr. M. Murali

Krishna

SEBI Registration No. INR000000221

OFFER PROGRAMME

FOR ALL BIDDERS, OFFER OPENS ON: [●]**

[●]

OFFER CLOSES ON***

[●]

*In compliance with the proviso to Regulation 21A(1) of the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992, as amended, read with proviso to Regulation 5(3) of the ICDR Regulations, HDFC Bank Limited will be involved only in

marketing of the Offer.

**Our Company and the Selling Shareholders in consultation with the Managers may consider participation by Anchor Investors in accordance with the ICDR Regulations. The Anchor Investor Bidding Date shall be one Working Day prior to the Offer Opening Date

i.e. [●].

*** Our Company and the Selling Shareholders, in consultation with the Managers, may decide to close the Offer Period for QIBs one Working Day prior to the Offer Closing Date, i.e. [●] in accordance with the ICDR Regulations

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

TABLE OF CONTENTS

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

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

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

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

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

SECTION III: INTRODUCTION .............................................................................................................................................................. 67

SUMMARY OF INDUSTRY .................................................................................................................................................................. 67

SUMMARY OF OUR BUSINESS .......................................................................................................................................................... 77

SUMMARY OF FINANCIAL INFORMATION .................................................................................................................................. 85

THE OFFER ............................................................................................................................................................................................ 94

GENERAL INFORMATION ................................................................................................................................................................. 96

CAPITAL STRUCTURE ...................................................................................................................................................................... 106

OBJECTS OF THE OFFER ................................................................................................................................................................. 145

BASIS FOR OFFER PRICE ................................................................................................................................................................. 147

STATEMENT OF TAX BENEFITS .................................................................................................................................................... 151

SECTION IV: ABOUT OUR COMPANY ............................................................................................................................................... 162

INDUSTRY OVERVIEW ..................................................................................................................................................................... 162

OUR BUSINESS .................................................................................................................................................................................... 194

REGULATIONS AND POLICIES ....................................................................................................................................................... 235

HISTORY AND CERTAIN CORPORATE MATTERS .................................................................................................................... 250

OUR MANAGEMENT ......................................................................................................................................................................... 256

OUR PROMOTERS, PROMOTER GROUP AND GROUP COMPANIES .................................................................................... 284

RELATED PARTY TRANSACTIONS ............................................................................................................................................... 311

DIVIDEND POLICY ............................................................................................................................................................................. 312

SECTION V: FINANCIAL INFORMATION ......................................................................................................................................... 313

FINANCIAL STATEMENTS ............................................................................................................................................................... 313

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION ....... 525

SECTION VI: EMBEDDED VALUE REPORT ..................................................................................................................................... 564

SECTION VII: LEGAL AND OTHER INFORMATIONS .................................................................................................................... 610

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENT ........................................................................................... 610

GOVERNMENT AND OTHER APPROVALS .................................................................................................................................. 635

OTHER REGULATORY AND STATUTORY DISCLOSURES ...................................................................................................... 638

SECTION VIII: OFFER INFORMATION ............................................................................................................................................. 666

TERMS OF THE OFFER ..................................................................................................................................................................... 666

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ................................................................................. 672

OFFER STRUCTURE .......................................................................................................................................................................... 673

OFFER PROCEDURE .......................................................................................................................................................................... 679

SECTION IX: MAIN PROVISIONS OF OUR ARTICLES OF ASSOCIATION ................................................................................ 731

SECTION X: OTHER INFORMATION ................................................................................................................................................. 768

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ........................................................................................... 768

DECLARATION ................................................................................................................................................................................... 771

1

SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

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

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

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

as of the date of this Draft Red Herring Prospectus.

Company and Selling Shareholders' related terms

Term Description

“Company”, “our

Company”, “HDFC

Standard Life” or

“Issuer”

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

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

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

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

Limited and its Subsidiaries, on a consolidated basis

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

“Articles” or “Articles

of Association”

The articles of association of our Company, as amended

“Auditors” or “Joint

Statutory Auditors”

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

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

Accountants

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

along with the Listing Regulations and IRDAI CG Guidelines

“Board” or “Board of

Directors”

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

“Chief Financial

Officer”

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

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

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

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

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

Companies Act, 2013

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

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

“ESOS 2010” Employee Stock Option Scheme, 2010

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






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

and ESOS 2016 collectively

“ESOS Trust” HDFC Standard Life Employees Stock Options Trust

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

formerly known as the IPO Committee

“Executive Director” An executive director of our Company

“Group” Our Company and Subsidiaries on a consolidated basis

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

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

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

Group and Group Companies” on page 284 of this Draft Red Herring Prospectus

“GRUH” GRUH Finance Limited

“HDFC” Housing Development Finance Corporation Limited

“HDFC International” HDFC International Life and Re Company Limited

“HDFC Pension” HDFC Pension Management Company Limited

“HDFC Trust” HDFC Employees Welfare Trust

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

in accordance with the IRDAI Issuance of Capital Regulations

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

2

Term Description

2013 and the Listing Regulations

“KMP” or “Key

Management

Personnel”

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

CG Guidelines, as disclosed in “Our Management” on page 256 of this Draft Red Herring

Prospectus

“MD & CEO” or

“Managing Director and

Chief Executive

Officer”

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

“Memorandum” or

“Memorandum of

Association”

The memorandum of association of our Company, as amended

“Name Usage

Agreement”

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

“Nomination and

Remuneration

Committee”

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

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

“Non-Executive

Director”

A Director not being an Executive Director

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

Shareholders’ Agreement

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

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

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

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

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

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

“Registrar of

Companies” or “RoC”

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

“Restated Consolidated

Financial Information”

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

2016, 2017 and the three months ended June 30, 2017 prepared in accordance with the

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

the relevant provisions of the IRDAI Issuance of Capital Regulations

“Restated Financial

Information”

Restated Consolidated Financial Information and Restated Standalone Financial Information

collectively.

“Restated Standalone

Financial Information”

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

2016, 2017 and the three months ended June 30, 2017 prepared in accordance with Companies

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

provisions of the IRDAI Issuance of Capital Regulations

“Risk Management

Committee”

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

Regulations and the IRDAI CG Guidelines

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

“Shareholders’

Agreement” or “SHA”

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

Company 2006 (formerly known as the Standard Life Assurance Company Limited) on January

15, 2002, as amended by the amendment agreement entered into between our Company, HDFC

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

agreement dated August 18, 2017

“Stakeholders’

Relationship

Committee”

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

Companies Act, 2013 along with the Listing Regulations

“Standard Life” Standard Life Mauritius and Standard Life Aberdeen

“Standard Life

Assurance”

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

Company Limited

“Standard Life

Mauritius”

Standard Life (Mauritius Holdings) 2006 Limited

“Standard Life

Aberdeen”

Standard Life Aberdeen plc formerly known as Standard Life plc

“Subsidiary” or

“Subsidiaries”

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

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

Companies - Subsidiaries” on page 299 of this Draft Red Herring Prospectus

“With Profits

Committee”

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

Linked Insurance Products) Regulations, 2013

3

Offer Related Terms

Term Description

“Acknowledgement

Slip”

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

the Bid cum Application Form

“Allot”, “Allotment”

or “Allotted”

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

Selling Shareholders pursuant to the Offer

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

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

Exchange

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

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

the requirements specified under the ICDR Regulations and the Red Herring Prospectus

“Anchor Investor

Allocation Price”

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

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

Shareholders in consultation with the Managers

“Anchor Investor

Bidding Date”

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

shall be submitted and allocation to Anchor Investors shall be completed

“Anchor Investor

Form”

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

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

Prospectus

“Anchor Investor

Offer Price”

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

Herring Prospectus and the Prospectus, which price will be equal to or higher than the Offer Price

but not higher than the Cap Price. The Anchor Investor Offer Price will be decided by our

Company and the Selling Shareholders in consultation with the Managers

“Anchor Investor

Portion”

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

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

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

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

Anchor Investor Allocation Price

“Application

Supported by

Blocked Amount” or

“ASBA”

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

an SCSB to block the Bid Amount in the ASBA Account

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

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

the ASBA Form

“ASBA Bidder” All bidders except Anchor Investors

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

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

Prospectus

“Banker(s) to the

Offer”

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

“Basis of Allotment” The basis on which the Equity Shares will be Allotted to successful Bidders under the Offer, as

described in “Offer Procedure – Allotment Procedure and Basis of Allotment” on page 718 of this

Draft Red Herring Prospectus

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

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

Application Form, to purchase, the Equity Shares at a price within the Price Band, including all

revisions thereto as permitted under the ICDR Regulations, and the term “Bidding” shall be

construed accordingly

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

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

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

“Bid cum Application

Form”

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

“Bid Lot” [●] Equity Shares

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

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

Investor

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

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

Brokers, Designated RTA Locations for RTAs and Designated CDP Locations for CDPs

4

Term Description

“Book Building

Process”

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

of which the Offer is being made

“Book Running Lead

Manager(s) or

BRLM(s)”

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

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

Private Limited

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

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

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

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

“CAN” or

“Confirmation of

Allocation Note”

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

Equity Shares after the Anchor Investor Bidding Date

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

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

account

“CLSA” CLSA India Private Limited

“Collecting

Depository

Participant” or

“CDP”

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

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

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

“CS” Credit Suisse Securities (India) Private Limited

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

the Managers.

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

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

Reservation Portion and Eligible HDFC Shareholders Bidding under the HDFC Shareholders

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

“Demographic

Details”

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

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

“Designated

Branches”

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

the website of the SEBI at (www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognized-

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

SEBI from time to time

“Designated CDP

Locations”

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

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

ASBA Forms are available on the websites of the respective Stock Exchanges

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

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

funds are transferred from the Escrow Account to the Public Offer Account or the Refund

Account, as appropriate, or the funds blocked by the SCSBs are transferred from the ASBA

Accounts to the Public Offer Account, as the case may be, after the Prospectus is filed with the

RoC

“Designated

Intermediaries”

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

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

the Offer

“Designated RTA

Locations”

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

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

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

https://www.nseindia.com/ )

“Designated Stock

Exchange”

[●]

“Draft Red Herring

Prospectus” or

“DRHP”

This draft red herring prospectus dated August 18, 2017, issued in accordance with the ICDR

Regulations, which does not contain complete particulars of the Offer, including the price at

which the Equity Shares will be Allotted and the size of the Offer

“Edelweiss” Edelweiss Financial Services Limited

“Eligible HDFC

Employees”

A permanent and full time employee of our holding company i.e., HDFC (excluding such

employees who are not eligible to invest in the Offer under applicable laws) as of the date of filing

of the Red Herring Prospectus with SEBI and who continues to be an employee of HDFC until the

submission of the Bid cum Application Form.

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

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

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

http://www.bseindia.com/Markets/PublicIssues/brokercentres_new.aspx?expandable=3https://www.nseindia.com/http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognized-Intermediarieshttp://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognized-Intermediarieshttp://www.bseindia.com/https://www.nseindia.com/http://www.bseindia.com/https://www.nseindia.com/

5

Term Description

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

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

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

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

“Eligible HDFC Life

Employee(s)”

A permanent and full time employee of our Company at the level of assistant vice-president or

below and who has been employed by our Company for a period of at least two years (excluding

such employees who are not eligible to invest in the Offer under applicable laws) as of the date of

filing of the Red Herring Prospectus with SEBI and who will continue to be an employee of our

Company until the submission of the Bid cum Application Form

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

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

HDFC Life Employee in the HDFC Life Employee Reservation Portion shall not exceed

₹ 200,000. Only in the event of an under-subscription in the HDFC Life Employee Reservation

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

basis to Eligible HDFC Life Employees Bidding in the HDFC Life Employee Reservation

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

Life Employee not exceeding ₹ 500,000.

“Eligible HDFC

Shareholders”

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

Group Companies (excluding such other persons not eligible under applicable laws, rules,

regulations and guidelines to invest in the Offer) as on the date of this Draft Red Herring

Prospectus

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

HDFC Shareholder shall not exceed ₹ 200,000.

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

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

Prospectus constitutes an invitation to purchase the Equity Shares offered thereby

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

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

will constitute an invitation to purchase the Equity Shares offered thereby

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

transfer money through direct credit/ NECS/ NEFT/ RTGS in respect of Bid Amounts when

submitting a Bid

“Escrow Agreement” The agreement to be entered into amongst our Company, the Registrar to the Offer, the Managers,

the Selling Shareholders, the Escrow Collection Bank(s), the Public Offer Account Bank(s), and

the Refund Bank(s) for, amongst other things, collection of the Bid Amounts from Anchor

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

thereof

“Escrow Agent” [●] appointed pursuant to the Share Escrow Agreement

“Escrow Collection

Bank(s)”

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

whom the Escrow Account(s) will be opened, being [●]

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

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

held in joint names

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

accepted

“General Information

Document” or “GID”

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

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

suitably modified and included in “Offer Procedure” on page 679 of this Draft Red Herring

Prospectus

“Global Co-

ordinators and Book

Running Lead

Managers” or

“GCBRLM(s)”

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

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

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

“Haitong” Haitong Securities India Private Limited

“HDFC Bank” HDFC Bank Limited

“HDFC Employee

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

“HDFC Shareholders

Reservation Portion” Portion of the Offer being 29,982,782 Equity Shares aggregating up to ` [●] million available for allocation to Eligible HDFC Shareholders, on a proportionate basis

“HDFC Life

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

6

Term Description

Reservation Portion”

“IDFC” IDFC Bank Limited

“IIFL” IIFL Holdings Limited

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

for the Offer in terms of the IRDAI Issuance of Capital Regulations

“IRDAI Approval” In-principle approval dated August 14, 2017 received from the IRDAI for the Offer pursuant to

requirements of the IRDAI Issuance of Capital Regulations

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

Lead Managers.

“Maximum RII

Allottees”

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

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

minimum Bid Lot

“Morgan Stanley” Morgan Stanley India Company Private Limited

“Mutual Fund

Portion”

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

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

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

Portion and the HDFC Shareholders Reservation Portion

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

“Non-Institutional

Investors”

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

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

“Non-Institutional

Portion”

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

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

above the Offer Price

“Offer” Initial public offering of up to 299,827,818 Equity Shares of face value ` 10 per Equity Share of our Company for cash at a price of ` [●] per Equity Share (including a share premium of ` [●] per Equity Share), aggregating up to ` [●] million consisting of an offer for sale of 191,246,050 Equity Shares by HDFC and up to 108,581,768 Equity Shares by Standard Life Mauritius,

pursuant to the terms of the Red Herring Prospectus. The Offer comprises a net Offer to the public

of up to 266,895.517 Equity Shares, a reservation of up to 2,144,520 Equity Shares (constituting

up to 0.11% of our Post Offer paid up Equity Share capital) for purchase by the Eligible HDFC

Life Employees aggregating up to ` [●] million, reservation of up to 805,000 Equity Shares (constituting up to 0.04% of our post-offer paid up Equity Share capital ) for purchase by the

Eligible HDFC Employees aggregating up to ` [●] million and a reservation of up to is 29,982,781 Equity Shares (constituting up to 1.50% of our post-offer paid up Equity Share capital

for purchase by Eligible HDFC Shareholders for cash at a price of ` [●] per Equity Share aggregating upto ` [●] million. The Offer shall constitute 14.97 % of the fully diluted post-offer paid-up Equity Share capital of our company and the Net Offer shall constitute 13.33 % of the

fully diluted post-offer paid-up Equity Share capital of our Company

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

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

which certain arrangements are agreed to in relation to the Offer

“Offer Closing Date” Except in relation to Bids received from the Anchor Investors, the date after which the Designated

Intermediaries will not accept any Bids, which shall be notified in [●] editions of [●], [●] editions

of [●] and [●] editions of [●] (which are widely circulated English, Hindi and Marathi

newspapers, respectively, Marathi being the regional language of Maharashtra, where our

Registered Office is located).

Our Company and the Selling Shareholders, in consultation with the Managers, may consider

closing the Offer Period for QIBs one Working Day prior to the Offer Closing Date in accordance

with the ICDR Regulations

“Offer Opening Date” Except in relation to Bids received from the Anchor Investors, the date on which the Designated

Intermediaries shall start accepting Bids, which shall be notified in [●] editions of [●], [●] editions

of [●] and [●] editions of [●] (which are widely circulated English, Hindi and Marathi

newspapers, respectively, Marathi being the regional language of Maharashtra, where our

Registered Office is located)

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

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

submit their Bids, including any revisions thereto. The Offer Period will comprise of Working

Days only

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

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

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

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

and the Cap Price, and includes revisions thereof.

7

Term Description

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

Selling Shareholders in consultation with the Managers and will be advertised in [●] editions of

[●], [●] editions of [●] and [●] editions of [●] (which are widely circulated English, Hindi and

Marathi newspapers, respectively, Marathi being the regional language of Maharashtra, where our

Registered Office is located), at least five Working Days prior to the Offer Opening Date

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

will finalise the Offer Price

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

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

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

corrigenda thereto

“Public Offer

Account(s)”

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

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

Accounts on the Designated Date

“Public Offer

Account Bank(s)”

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

whom the Public Offer Account(s) will be opened, being [●]

“Qualified

Institutional Buyers”

or “QIB”

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

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

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

be on a discretionary basis, as determined by our Company and the Selling Shareholders, in

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

“Red Herring

Prospectus”

The red herring prospectus that will be issued by our Company in accordance with the Companies

Act, 2013, and the ICDR Regulations, which will not have complete particulars of the price at

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

corrigenda thereto

“Refund Account(s)” The account opened with the Refund Bank(s), from which refunds to unsuccessful Anchor

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

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

whom the Refund Account(s) will be opened and in this case being [●]

“Registered Broker” Stock brokers registered with the stock exchanges having nationwide terminals other than the

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

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

“Registrar” or

“Registrar to the

Offer”

Karvy Computershare Private Limited

“Registrar and Share

Transfer Agents” or

“RTAs”

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

Designated RTA Locations in terms of circular no. CIR/CFD/POLICYCELL/11/2015 dated

November 10, 2015 issued by SEBI

“Registrar

Agreement”

The agreement dated August 18, 2017 entered into amongst our Company and the Registrar to the

Offer

“Retail Individual

Investors”/ “RII(s)”

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

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

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

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

received at or above the Offer Price

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

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

Institutional Investors are not allowed to withdraw or lower their Bids (in terms of quantity of

Equity Shares or the Bid Amount) at any stage. RIIs, Eligible HDFC Life Employees, Eligible

HDFC Employees and Eligible HDFC Shareholders who are RIIs can revise their Bids during the

Offer Period and withdraw their Bids until Offer Closing Date

“Self Certified

Syndicate Bank(s)” or

“SCSB(s)”

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

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

(www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries) and updated from time

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

“Selling

Shareholders”

Housing Development Finance Corporation Limited and Standard Life Mauritius

“Share Escrow

Agreement”

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

Agent and the Managers for deposit of the Selling Shareholders’ offered Equity Shares in escrow

“Specified Cities” or

“Specified Locations”

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

which is available on the website of the SEBI

(http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries) and updated from

http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediarieshttp://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries

8

Term Description

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

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

collect Bid cum Application Forms

“Syndicate” or

“member of the

Syndicate”

The Managers and the Syndicate Members

“Syndicate

Agreement”

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

Shareholders in relation to collection of Bids by the Syndicate

“Syndicate Bidding

Centres”

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

and Revision Forms

“Syndicate Members” Intermediaries registered with SEBI who are permitted to carry out activities as an underwriter,

namely, [●]

“UBS” UBS Securities India Private Limited

“Underwriters” [●]

“Underwriting

Agreement”

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

Shareholders on or after the Pricing Date

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

which commercial banks in Mumbai are open for business; provided however, with reference to

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

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

the time period between the Offer Closing Date and the listing of the Equity Shares on the Stock

Exchanges, shall mean all trading days of Stock Exchanges, excluding Sundays and bank

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

Industry related terms

Term Description

“Accretion of discount /

amortisation of premium”

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

the par value of that debt security.

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

insurance contracts

“Affiliated investments” Investments made to parties related to insurers

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

regular intervals for a certain period or for life.

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

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

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

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

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

“APE (Annualised Premium

Equivalent)”

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

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

during any period from both our individual and group customers. For the purposes of the

APE calculation, we consider all premiums received in our group business and any top-up

premiums as single premiums. The APE is adjusted for any new business cancellations

effected during the period

“Asset – Liability

Management”

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

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

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

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

insurer’s risk tolerance and other constraints

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

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

“Assets under management

(AUM)”

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

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

otherwise stated, AUM refers to Standalone AUM of HDFC Life

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

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

company (either through corporate agency or master policyholder arrangement),, through

which the bank sells or markets the insurance products of the Company to the bank's client

base

“Basic Earning Per Share” Net profit after tax for the period attributable to equity shareholders divided by the

9

Term Description

weighted average number of equity shares outstanding during the period

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

surplus distributed to the policyholders

“Certificate of Registration” Certificate granted by the IRDAI under the IRDA (Registration of Indian Insurance

Companies) Regulations, 2000, registering an insurance company to transact the classes of

business specified therein

“Certificate of Renewal of

registration”

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

IRDA/R6

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

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

year

“Cost or total cost” or

“Expense of Management”

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

doubtful debts and bad debts

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

contracts like reinsurance and financial derivatives

“Creditors”/ “Sundry

Creditors”

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

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

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

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

or in the present value of future profits

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

stated at the inception of the contract

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

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

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

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

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

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

mutual funds, Venture Capital Debt and Security Receipts

“Diluted Earning Per Share” Net profit after tax for the period attributable to equity shareholders divided by the

weighted average number of equity shares adjusted for the effects of all dilutive potential

equity shares, outstanding during the period,

“Discontinued Policy Fund /

Funds for discontinued

policies”

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

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

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

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

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

tolerance level, over a specified time horizon

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

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

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

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

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

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

Actuaries of India is referred to as Indian Embedded Value

“Embedded Value Operating

Profit (EVOP)/ /(EVOE) and

Operating Return on

Embedded Value ”

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

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

created due to writing of new business and positive operating variance due to better

persistency and mortality experience, better expense efficiencies. It excludes changes in

the EV due to external factors like changes in economic variables and shareholder-related

actions like capital injection or dividend pay-outs. It is also referred to as Embedded Value

Operating Earnings (EVOE)

“Operating Return on

Embedded Value”

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

at the beginning of that period

“Embedded Value Report” The embedded value report dated August 17, 2017 prepared by Richard Holloway, partner

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

Practice Standard 10 issued by the Institute of Actuaries of India

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

Similarly, the reinsurer may accept or reject the reinsurance offered

“Fair value change ” (Unit

Linked)

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

including listed equity shares, mutual funds and debt securities

“Fair value change” (Other

than Unit Linked and

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

Additional Tier 1 Bonds and mutual funds

10

Term Description

Shareholders)

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

“Funds for Future

Appropriation”

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

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

at the valuation date

“Funds for Future

Appropriation” – provision for

lapsed policies unlikely to be

revived

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

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

shareholders after the revival period on these policies is completed

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

hospital expense benefits, whether in-patient or out-patient, on an indemnity,

reimbursement, service, pre-paid, hospital or other plans basis, including assured benefits

and long-term care

“Indian Insurance Company” Under the Insurance Act, any insurer being a company:

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

Insurance Laws (Amendment) Act, 2015;

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

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

manner as may be prescribed; and

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

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

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

or voting agreements

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

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

expired, matured or otherwise been surrendered or terminated

“Insurance Penetration” –Is the Insurance premium as % of GDP for any given period

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

offered by the insurance policy

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

reflected by the net surplus in the underlying policyholder segments

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

it will accept an application for insurance

“Insurer” An Indian Insurance Company or a statutory body established by an act of parliament to

carry on insurance business or an insurance co-operative society or a foreign company

engaged in re-insurance business through a branch established in India

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

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

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

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

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

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

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

value

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

of the acquisition cost of investment

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

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

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

2013

“Life Insurance Business” The business of effecting contracts of insurance upon human life, including any contract

whereby the payment of money is assured on death (except death by accident only) or the

happening of any contingency dependent on human life

“Linked liabilities (fund

reserves)”

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

is held under unit-linked business

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

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

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

11

Term Description

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

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

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

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

in the policy document.

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

maturity benefit is payable.

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

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

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

mortality benefit to the policyholder

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

health, used in pricing and computing policy liabilities

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

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

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

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

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

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

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

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

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

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

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

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

extent not adjusted or written off)

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

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

Accountants of India.

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

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

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

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

“Non-Participating Product /

Policy”

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

in surplus (profits) during the term of the policy

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

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

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

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

the risk

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

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

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

period.

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

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

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

“Participating Product /

Policy”

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

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

per the IRDAI regulations, is 90%

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

or manage investments of pension funds or superannuation schemes

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

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

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

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

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

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

premiums. Please also see “Mathematical Reserves”

“Present Value of Future

Profits” or “PVFP”

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

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

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

“Pre-tax Operating

Profit/Loss”

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

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

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

12

Term Description

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

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

standards following the death of a working family member

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

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

insurance contract

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

another insurance company (reinsurer) wherein mortality/morbidity risks above a specified

limit is transferred by the cedant to the reinsurer in exchange for a consideration. The

consideration paid/received is termed as reinsurance premium on reinsurance

ceded/accepted.

“Renewal Premium” Life insurance premiums falling due in the years subsequent to the first year of the policy

“Required Solvency Margin,

Available Solvency Margin

and Solvency Ratio”

Every in