Document

In the document given below “Firm”, “Anand Rathi” or “ARFSL” means Anand Rathi Financial Services Limited, each and any subsidiary or holding company from time to time of the Anand Rathi Financial Services Limited, and each and any subsidiary from time to time of a holding company of Anand Rathi Financial Services Limited.

Proprietary information & Confidentiality

The information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ARFSL. The information contained herein is from publicly available data or other sources believed to be reliable.

No part of this material may be copied or duplicated or redistributed without prior written consent.

Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities ("related investments").

The contents of this presentation are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for the products or other financial instruments. Our services will be rendered strictly in accordance with the SEBI (Portfolio Managers) Regulations, 1993. Please read the Disclosure Document prior to engaging our services.

The information, products, data, services, tools and documents contained or described on the document (the “Content”) are for information purposes only and constitute neither an advertisement or recommendation nor an offer or solicitation to buy or sell investment instruments, to effect any transaction or to enter into any legal relations.
The financial products mentioned in this document are not suitable for all investors. Prior to making investment decisions investors should conduct a thorough investigation and obtain all necessary professional advice for all issues, including your eligibility to make such investment in terms of the applicable law.

We recommend that investors independently assess, with a professional advisor, the specific financial risks as well as legal, regulatory, credit, tax and accounting consequences.

Local legal restrictions

The Content is not intended for use by or distribution to any individual or legal entity in any jurisdiction or country where such distribution, publication or use would be contrary to the law or regulatory provisions or in which members of the Anand Rathi Group of Companies (individually and together “Anand Rathi”) does not hold the necessary registration or license. Individuals or legal entities in respect of whom such prohibitions apply, whether on grounds of their nationality, their place of residence or on other grounds, must not use the document.

Anand Rathi provides no warranty and makes no representations of any kind whatsoever regarding the currency, accuracy or completeness of the content and the results to be obtained by any user.
Except to the extent required by current laws and/or regulations, Anand Rathi, including its directors, agents, employees or subcontractors: (1) disclaims any and all express or implied warranties and conditions including without limitation warranties and conditions as to quality and fitness for a particular purpose; and (2) does not warrant that any content (including any third party content), goods and services referred to therein will be uninterrupted or error free, that defects will be corrected.

Any data, including but not limited to financial market data, quotes, notices, research or other financial information in the document, have been obtained from carefully selected sources believed to be reliable. All such information is provided "as is" to the user without express or implied warranties of any kind, including warranties of quality, originality, non-infringement of intellectual property or fitness for any particular purpose.
Any expressions of opinion, estimates and projections are those of the authors at the date of writing. They do not necessarily reflect the view of Anand Rathi and are subject to change at any time without prior warning. Anand Rathi and its contractual partners may discontinue, or make changes in, the information, data and documents, and the products or services described herein, at any time without prior notice. Any information marked with a date is published as of this date only and no obligation or responsibility is undertaken to update or amend any such information.

TO THE MAXIMUM EXTENT PERMITTED BY CURRENT LAWS AND/OR REGULATIONS, Anand Rathi, INCLUDING ITS DIRECTORS, AGENTS, EMPLOYEES, SUB-CONTRACTORS AND ITS SALES PARTNERS DISCLAIM ANY AND ALL LIABILITY FOR LOSSES OR DAMAGES (DIRECT OR INDIRECT) OF ANY KIND WHATSOEVER ARISING DIRECTLY OR INDIRECTLYAS A RESULT OF THE CONTENT, ACCURACY, COMPLETENESS OR OTHERWISE OF THE CONTENT OR ANY LINKS OR THIRD PARTY CONTENT.

Research reports are meant for private circulation. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive these reports. Investors should seek independent financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended and should understand that statements regarding future prospects may not be realized.

Statements on this document may contain information obtained from third parties, including ratings from rating agencies such as Standard & Poor’s, CRISIL, ICRA and other similar rating agencies. Reproduction and distribution of third-party content in any form is prohibited except with the prior written permission of the related third-party. Third-party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD-PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD-PARTY CONTENT PROVIDERS shall not be liable for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or profits and opportunity costs) in connection with any use of THEIR CONTENT, INCLUDING ratings. Credit & Mutual Fund ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the market value of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice.

It may be noted that since the firm has not independently verified the accuracy or authenticity of such information or data, or for that matter the reasonableness of the assumptions upon which such data and information has been processed or arrived at; ARFSL does not in any manner assures the accuracy or authenticity of such data and information. Some of the statements & assertions contained in these materials may reflect ARFSL’s views or opinions, which in turn may have been formed on the basis of such data or information.

Anand Rathi and/or its board of directors, executive management and employees may have or have had interests or positions or traded or acted as market makers in securities referred in the document. Furthermore, such entities or persons may have or have had a relationship with or may provide or have provided corporate finance or other services to or serve or have served as directors of companies referred in the literature.

ARFSL and its affiliates may trade for their own accounts as market maker / jobber and/or arbitrageur in any securities of this issuer(s) or in related investments, and may be on the opposite side of public orders. ARFSL, its affiliates, directors, officers, and employees may have a long or short position in any securities of this issuer(s) or in related investments. ARFSL or its affiliates may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any entity mentioned in this presentation.

Portfolio Performance

The past is not an indication of the future performance of an investment. The value of investments may be subject to fluctuations and investors may not get back the amount invested. Changes in rates of foreign exchange may also cause the value of investments to go up or down.

These Terms are for the benefit of Anand Rathi, its successors and assigns. Anand Rathi may assign or transfer any of its rights under these Terms. Anand Rathi may delegate or subcontract the performance of any obligation under these Terms.

Risks investing in Equity Markets

Investment in securities is risky and there is no assurance of returns or preservation of capital. Neither the firm, nor its directors, employees, agents nor representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost capital, lost revenue or lost profits that may arise from or in connection with the use of this information.

Presentations may include forward-looking statements. These statements represent the Firm’s belief regarding future events that, by their nature, are uncertain and outside of the Firm’s control. The Firm’s actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements. The details of the past investments / fund/s have been provided only on an indicative basis and no assurance or guarantee is being made by the Investment Manager about the actual results. Actual results may differ materially from those suggested by the forward looking

statements due to uncertainties associated with but not limited to market risks, general economic and political conditions, which may have an impact and actual results could materially differ from those that have been estimated/indicated.

Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Past performance is not necessarily a guide to future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report.
The statements in any presentation are current only as of its date.

Other Specific Risks

  • Market risk: ​The value of its investments decline because of unavoidable risks that affect the entire market
  • Liquidity risk  ​: ​The fund can’t sell an investment that’s declining in value because there are no buyers.
  • Credit risk: ​If a bond issuer can’t repay a bond, it may end up being a worthless investment.
  • Interest rate Risk: ​​The value of fixed income securities generally falls when interest rates rise.
  • Country risk: ​The value of a foreign investment declines because of political changes or instability in the country where the investment was issued.
  • Currency Risk: ​Investments denominated in a currency other than the Indian Rupee, If the other currency declines against the Indian Rupee, the investment will lose value.

Investment in securities is risky and there is no assurance of returns or preservation of capital. Neither the firm, nor its directors, employees, agents nor representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost capital, lost revenue or lost profits that may arise from or in connection with the use of this information.

Presentations may include forward-looking statements. These statements represent the Firm’s belief regarding future events that, by their nature, are uncertain and outside of the Firm’s control. The Firm’s actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements. The details of the past investments / fund/s have been provided only on an indicative basis and no assurance or guarantee is being made by the Investment Manager about the actual results. Actual results may differ materially from those suggested by the forward looking

statements due to uncertainties associated with but not limited to market risks, general economic and political conditions, which may have an impact and actual results could materially differ from those that have been estimated/indicated.

Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Past performance is not necessarily a guide to future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report.
The statements in any presentation are current only as of its date.

Risks Involved with Structured Products

A key part of the structured products are the Debentures issued by Anand Rathi Global Finance Limited (ARGFL) (Also referred to as “issuer” in the document below.

Prospective investors should consider carefully all the risk factors in the “Disclosure Document” which is provided while issuing the debenture, for evaluating the Issuer and its business and the Debentures before making any investment decision relating to the Debentures.
For taking an investment decision, the investors must rely on their own examination of the debenture issuing company and the “Nature of the Issue” including the risks involved.

The Debentures have not been recommended or approved by Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this Disclosure Document. These Debentures are not proposed to be listed on any stock exchange in India and shall not be rated by any credit rating agency.

Potential investors in debentures issued by Anand Rathi, should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations arising from an investment in the Debentures and such potential investors should possess the appropriate resources to analyse such investment and the suitability of such investment to their respective particular circumstances based upon whatever investigations it deems necessary. It is the responsibility of investors to also ensure that they will sell these Debentures in future in strict accordance with this Disclosure Document and other applicable laws, so that the sale does not constitute an offer to the public within the meaning of the Companies Act, 2013.

Any investor who has invested in an ANAND RATHI issued debenture accepts

He has been afforded an opportunity to request and to review and has received all additional information considered by an individual to be necessary to verify the accuracy of or to supplement the information shared when investing in a debenture

Such person has not relied on the Banker and/or its affiliates that may be associated with the Debentures in connection with its investigation of the accuracy of such information or its investment decision

Unless the context requires otherwise, the risk factors described below apply to the Anand Rathi as an Issuer only. If any one of the following stated risks actually occurs, the Issuer’s business, financial conditions and results of operations could suffer and, therefore, the value of the Issuer’s Debentures could decline.

Unless specified or quantified in the relevant risk factors, the Issuer is not in a position to quantify the financial or other implications of any risk mentioned herein below:

No Principal Protection

Debentures are not principal protected. Investors may lose all or part of their investment.

No Credit Rating

The issue of Debentures by Anand Rathi has not been rated by any credit rating agency

No Listing on any stock Exchange(s)

The issue of Debentures will not be listed in any stock exchange(s).

Payment of Coupon

Investors should note that no periodic Coupon payments or other distributions may be made during the term of the Debentures.

Interest Rate Risk

Since ARGFL is engaged in lending and financing activities, its business and income will largely be dependent on interest income from its operations. Interest rates are highly sensitive to many factors, including the monetary policies of RBI, deregulation of the financial sector in India, domestic and international economic and political conditions, inflation and other factors beyond the control of ARGFL. Due to these factors, interest rates in India have historically experienced a relatively high degree of volatility. There can be no assurance that significant interest rate movements will not have an effect on the results of its operations.

Changes in the composition of the Underlying

The value of the Underlying on any day will reflect the value of its constituents on such day. Changes in the composition of the Underlying and factors (including those described herein) which either affect or may affect the value of the constituents, will affect the value of the Underlying and therefore may affect the return on an investment in the Debentures.

Early Termination for Extraordinary Reasons, Illegality and Force Majeure

If the Issuer determines that, for reasons beyond its control, the performance of its obligations under the Debentures has become illegal or impractical in whole or in part for any reason, or the Issuer determines that, for reasons beyond its control, it is no longer legal or practical for it to maintain its hedging arrangements with respect to the Debentures for any reason, the Issuer may at its discretion and without obligation terminate early the Debentures. If the Issuer terminates early the Debentures, the Issuer will, if and to the extent permitted by applicable law, pay the holder of each such Debenture an amount determined by the Calculation Agent.

Credit Risk

Any lending and investment activity by the Issuer is exposed to credit risk arising from repayment default by borrowers and other counterparties. The Issuer has a systematic credit evaluation process to monitor the performance of its asset portfolio on a regular and continual basis to detect any material development, and constantly evaluate the changes and developments in sectors in which it has substantial exposure and to take timely appropriate remedial actions. The Issuer also undertakes periodic reviews of its entire asset portfolio with a view to determine the portfolio valuation, identify potential areas of action and devise appropriate strategies thereon. Despite these efforts, there can be no assurance that repayment default will not occur and in such circumstances may have an effect on its results of operations.

Model Risk

Investment in the Non Principal Protected Debentures is subject to model risk. Returns on the Debentures are based on complex mathematical models involving multiple derivative exposures which may or may not be hedged and the actual behaviour of the Underlying / Reference Index selected for hedging may significantly differ from returns predicted by the mathematical models.

Tax Considerations and Legal Considerations

Special tax considerations and legal considerations may apply to certain types of investors. Prospective investors are urged to consult with their own tax and legal advisors to determine any tax and legal implications of this investment.

Accounting Considerations

Special accounting considerations may apply to certain types of taxpayers. Prospective investors are urged to consult with their own accounting advisors to determine implications of this investment.

Creditworthiness of the Issuer

The value of the Debentures is expected to be affected, in part, by Investors' general appraisal of the Issuer's creditworthiness. Any reduction in the creditworthiness of the Issuer could result in a reduction in the value of the Debentures. If a bankruptcy proceeding is commenced in respect to the Issuer, the return to a Debenture Holder may be limited and any recovery will likely be substantially delayed. The principal amount is subject to the credit risk of the Issuer whereby the investor may or may not recover all or part of the funds in case of default by the Issuer.

Potential Conflicts of Interest

Investors should ensure that they understand and accept the identities of the parties and the roles they play in relation to the Non-Principal Protected Debentures, as disclosed in this Information Memorandum.
The Company may appoint itself or an affiliate as its Calculation Agent or other agent, for the purposes of calculating amounts payable or deliverable to holders under these Debentures. Under certain circumstances, the agent as an affiliate and its responsibilities as calculation agent for the Debentures could give rise to conflicts of interest. The Calculation Agent is required to carry out its duties in good faith and using its reasonable judgment. However, because the Company may control the affiliate, potential conflicts of interest could arise. The Issuer also may enter into an arrangement with an affiliate to hedge market risks associated with its obligations under the Debentures. Such an affiliate would expect to make a profit in connection with this arrangement. The Company may not seek competitive bids for such arrangements from unaffiliated parties. The Company and its affiliates have no obligation to disclose such information or activities; provided that the Issuer will make every good faith effort not to take advantage of any price-sensitive information.

Material changes in regulations

ARGFL, registered NBFCs is subject to detailed supervision and regulation stipulated by the RBI, though currently NBFCs not accepting public deposits are exempt from certain provisions. In addition, the Company is generally subject to changes in Indian law, as well as to changes in regulations and policies and accounting principles. Any changes in the regulatory framework affecting NBFCs could adversely affect the profitability of the Company or its future financial performance by requiring a restructuring of its activities, increasing costs or otherwise. The Company is subject to certain statutory, regulatory, exposure and prudential norms and this may limit the flexibility of the Company’s loans, investments and other products.

Conditions in the Indian Equity market may affect the coupon on the Debentures

The Indian securities markets are smaller than securities markets in more developed economies and the regulation and monitoring of Indian securities markets and the activities of investors, brokers and other participants differ, in some cases significantly, from those in the more developed economies. The Indian stock exchanges have also experienced problems that have affected the market price and liquidity of the securities of Indian companies. In addition, the governing bodies of the Indian stock exchanges have from time to time restricted securities from trading, limited price movements and restricted margin requirements. If similar problems occur in the future, the market price and liquidity of the equity shares could be adversely affected, thereby affecting the indices.