draft red herring prospectus · 2018-07-20 · draft red herring prospectus dated: july 19, 2018...

DRAFT RED HERRING PROSPECTUS

Dated: July 19, 2018

Please read Section 32 of the Companies Act, 2013

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

100% Book Built Offer

Aakash Educational Services Limited

Our Company was incorporated in New Delhi, India on October 15, 2007 as “Aakash Educational Services Limited”, a public limited company under the Companies Act, 1956 with the Registrar of Companies,

National Capital Territory of Delhi and Haryana at New Delhi (“RoC”) and we received a certificate of commencement of business from the RoC on January 9, 2008. Our Company was converted into a private

limited company and its name was changed to “Aakash Educational Services Private Limited” and a fresh certificate of incorporation dated June 21, 2014 was issued by the RoC. Subsequently, our Company was converted into a public limited company and a fresh certificate of incorporation dated July 5, 2018 was issued by the RoC. Consequently, our Company’s name was changed to “Aakash Educational Services

Limited”. For further details on change of name and registered office of our Company, see “History and Certain Corporate Matters” on page 155.

Registered Office: Plot no. 8, Aakash Tower, Pusa Road, New Delhi 110 005, India

Tel: +91 11 4762 3400; Fax: + 91 11 4762 3472; Website: www.aakash.ac.in Contact Person: Veerendra Kumar Achanta, Company Secretary and Compliance Officer

E-mail: [email protected]

CIN: U80300DL2007PLC169398

OUR PROMOTERS: MR. J.C. CHAUDHRY AND MR. AAKASH CHAUDHRY

INITIAL PUBLIC OFFERING OF 18,500,000 EQUITY SHARES OF FACE VALUE OF ₹ 5 EACH (“EQUITY SHARE”) OF AAKASH EDUCATIONAL SERVICES LIMITED (“OUR COMPANY” OR “THE COMPANY”) FOR CASH AT A PRICE OF ₹ [●] PER EQUITY SHARE (THE “OFFER PRICE”) AGGREGATING TO ₹ [●] MILLION THROUGH AN OFFER FOR

SALE CONSISTING OF 14,427,015 EQUITY SHARES BY MR. J.C. CHAUDHRY AND 1,366,773 EQUITY SHARES BY MR. AAKASH CHAUDHRY (COLLECTIVELY THE “PROMOTER

SELLING SHAREHOLDERS”) AND 1,865,646 EQUITY SHARES BY MS. KAMLA CHAUDHRY, 389,530 EQUITY SHARES BY DR. AASHISH CHAUDHRY, 225,518 EQUITY SHARES BY

DR. MEINAL CHAUDHRY AND 225,518 EQUITY SHARES BY MS. NEETU CHAUDHRY (COLLECTIVELY THE “OTHER SELLING SHAREHOLDERS” AND TOGETHER WITH THE

PROMOTER SELLING SHAREHOLDERS, THE “SELLING SHAREHOLDERS”, AND SUCH OFFER, THE “OFFER” OR THE “OFFER FOR SALE”). THE OFFER INCLUDES A

RESERVATION OF UP TO [●] EQUITY SHARES, AGGREGATING TO ₹ [●] MILLION, FOR PURCHASE BY ELIGIBLE EMPLOYEES (AS DEFINED HEREINAFTER) NOT EXCEEDING 5% OF OUR POST-OFFER PAID-UP EQUITY SHARE CAPITAL (THE “EMPLOYEE RESERVATION PORTION”). THE OFFER LESS THE EMPLOYEE RESERVATION PORTION IS

HEREINAFTER REFERRED TO AS THE “NET OFFER”. THE OFFER AND THE NET OFFER SHALL CONSTITUTE [●]% AND [●]%, RESPECTIVELY OF THE FULLY-DILUTED POST-

OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.

THE FACE VALUE OF EQUITY SHARES IS ₹ 5 EACH. THE PRICE BAND, THE AMOUNT OF DISCOUNT, IF ANY, TO RETAIL INDIVIDUAL INVESTORS (THE “RETAIL DISCOUNT”)

AND THE ELIGIBLE EMPLOYEES BIDDING IN THE EMPLOYEE RESERVATION PORTION (THE “EMPLOYEE DISCOUNT”) AND THE MINIMUM BID LOT WILL BE DECIDED BY

OUR COMPANY, IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS TO THE OFFER (THE “BRLMS”), AND WILL BE ADVERTISED IN [●] EDITIONS OF THE

ENGLISH NATIONAL DAILY NEWSPAPER, [●] AND [●] EDITIONS OF THE HINDI NATIONAL DAILY NEWSPAPER, [●] (HINDI ALSO BEING THE REGIONAL LANGUAGE OF NEW

DELHI WHERE OUR REGISTERED OFFICE IS LOCATED), EACH WITH WIDE CIRCULATION, AT LEAST FIVE WORKING DAYS PRIOR TO THE BID/OFFER OPENING DATE AND

SUCH ADVERTISEMENT WILL BE MADE AVAILABLE TO THE BSE LIMITED (THE “BSE”) AND THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED (THE “NSE”, AND

TOGETHER WITH THE BSE, THE “STOCK EXCHANGES”) FOR THE PURPOSE OF UPLOADING ON THEIR RESPECTIVE WEBSITES.*

* Retail Discount of ₹ [●] to the Offer Price may be offered to Retail Individual Investors and an Employee Discount of ₹ [●] to the Offer Price may be offered to the Eligible Employees Bidding in the Employee Reservation Portion.

In case of any revision in the Price Band, the Bid/Offer Period will be extended by at least three additional Working Days after such revision of the Price Band, subject to the Bid/Offer Period not exceeding ten

Working Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a press release, and also by indicating

the change on the respective websites of the BRLMs and the terminals of the Syndicate Members (as defined hereinafter) and by intimation to the other Designated Intermediaries (as defined hereinafter).

The Offer is being made through the Book Building Process, in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (the “SCRR”) and in compliance with Regulation 26(2) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (the “SEBI ICDR Regulations”), wherein at least 75% of the Net Offer will be Allotted

on a proportionate basis to Qualified Institutional Buyers (“QIBs”, and such portion, the “QIB Portion”), provided that our Company may, in consultation with the BRLMs, allocate up to 60% of the QIB Portion

to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations (the “Anchor Investor Portion”), of which one-third will be reserved for domestic Mutual Funds only, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price, in accordance with the SEBI ICDR Regulations. Further, 5% of the QIB Portion (excluding the Anchor Investor

Portion) will be available for allocation on a proportionate basis only to Mutual Funds, and the remainder of the QIB Portion will be available for allocation on a proportionate basis to all QIBs (other than Anchor

Investors), including Mutual Funds, subject to valid Bids being received at or above the Offer Price. If at least 75% of the Net Offer cannot be Allotted to QIBs, then the entire application money shall be refunded

forthwith. Further, not more than 15% of the Net Offer will be available for allocation on a proportionate basis to Non-Institutional Investors and not more than 10% of the Net Offer will be available for allocation to Retail Individual Investors in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. Further, up to [●] Equity Shares will be available for allocation on a

proportionate basis to Eligible Employees, subject to valid Bids being received at or above the Offer Price. All potential investors, other than Anchor Investors, are required to mandatorily utilize the Application

Supported by Blocked Amount (“ASBA”) process by providing details of their respective bank accounts in which the corresponding Bid Amounts will be blocked by the self certified syndicate banks (“SCSBs”) to participate in the Offer. Anchor Investors are not permitted to participate in the Anchor Investor Portion through the ASBA process. For further details, see “Offer Procedure” on page 340.

RISKS IN RELATION TO THE FIRST OFFER

This being the first public offering of securities of our Company, there has been no formal market for the Equity Shares. The face value of the Equity Shares is ₹ 5 each and the Floor Price is [●] times of the face value and the Cap Price is [●] times of the face value. The Offer Price (determined and justified by our Company, in consultation with the BRLMs, as stated in “Basis for Offer Price” on page 83) 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 an active or sustained trading in the Equity Shares or regarding the price at

which the Equity Shares will be traded after listing.

GENERAL RISK

Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Offer unless they can afford to take the risk of losing their entire investment. Investors

are advised to read the risk factors carefully before taking an investment decision in the Offer. For taking an investment decision, investors 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 (the “SEBI”), nor does the SEBI guarantee the

accuracy or adequacy of the contents of this Draft Red Herring Prospectus. Specific attention of the investors is invited to “Risk Factors” on page 15.

COMPANY AND 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. The Selling Shareholders, severally and not jointly, assume responsibility only for statements expressly and specifically made by such Selling Shareholder

in this Draft Red Herring Prospectus to the extent that such statements contain information in relation to the respective Selling Shareholder and their respective portion of the Equity Shares being offered by them in the Offer and confirms that such statements are true and correct in all material respects and not misleading in any material respect.

LISTING

The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on the BSE and the NSE. Our Company has received an ‘in-principle’ approval from each of the BSE and the NSE for the

listing of the Equity Shares pursuant to letters dated [●] and [●], respectively. For the purposes of the Offer, the Designated Stock Exchange will be the [●]. A signed copy of the Red Herring Prospectus and the Prospectus will be delivered for registration to the RoC in accordance with Section 26(4) of the Companies Act, 2013. For details of the material contracts and documents available for inspection from the date of

the Red Herring Prospectus up to the Bid/Offer Closing Date, see “Material Contracts and Documents for Inspection” on page 406.

BOOK RUNNING LEAD MANAGERS TO THE OFFER REGISTRAR TO THE OFFER

Kotak Mahindra Capital Company Limited 1st Floor, 27 BKC, Plot No. 27

“G” Block, Bandra Kurla Complex

Bandra (East), Mumbai 400 051

Maharashtra, India

Tel: +91 22 4336 0000

Fax: +91 22 6713 2447


Investor Grievance ID: [email protected]

Website: www.investmentbank.kotak.com

Contact Person: Ganesh Rane

SEBI Registration No.: INM000008704

Citigroup Global Markets India Private Limited 1202, 12th Floor

First International Financial Centre

G-Block, Bandra Kurla Complex

Bandra (East)

Mumbai 400 098

Maharashtra, India

Tel: +91 22 6175 9999

Fax: +91 22 6175 9961



Website: http://www.online.citibank.co.in/rhtm/citigroupglobals

creen1.htm

Contact Person: Nishit Dedhia

SEBI Registration No.: INM000010718

CLSA India Private Limited 8/F Dalamal House

Nariman Point

Mumbai 400 021

Maharashtra, India

Tel: +91 22 6650 5050

Fax: +91 22 2284 0271



Website: www.india.clsa.com

Contact Person: Rahul Choudhary

SEBI Registration number: INM000010619

Link Intime India Private Limited C-101, 1st Floor, 247 Park

L.B.S. Marg, Vikhroli (West)

Mumbai 400 083

Maharashtra, India

Tel: +91 22 4918 6200

Fax: +91 22 4918 6195


Website: www.linkintime.co.in

Investor Grievance ID:

[email protected]

Contact Person: Shanti Gopalkrishnan SEBI Registration No.: INR000004058

BID/OFFER PROGRAM OFFER/BID OPENING DATE:[●]

(1) OFFER/BID CLOSING DATE: [●]

(2)

(1) Our Company may, in consultation with the BRLMs, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor Investor Bid/Offer Period will be one Working Day prior to the

Bid/Offer Opening Date.

(2) Our Company may, in consultation with the BRLMs, consider closing the Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer Closing Date in accordance with the SEBI ICDR Regulations.

http://www.aakash.ac.in/mailto:[email protected]://www.investmentbank.kotak.com/http://www.online.citibank.co.in/rhtm/citigroupglobalscreen1.htmhttp://www.online.citibank.co.in/rhtm/citigroupglobalscreen1.htmhttp://www.india.clsa.com/http://www.linkintime.co.in/

TABLE OF CONTENTS

SECTION I: GENERAL ............................................................................................................................................. 1 DEFINITIONS AND ABBREVIATIONS .................................................................................................................... 1 CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ............. 10 FORWARD-LOOKING STATEMENTS ................................................................................................................... 13

SECTION II: RISK FACTORS ............................................................................................................................... 15

SECTION III: INTRODUCTION ........................................................................................................................... 44 SUMMARY OF INDUSTRY ..................................................................................................................................... 44 SUMMARY OF BUSINESS ....................................................................................................................................... 49 SUMMARY OF FINANCIAL INFORMATION ....................................................................................................... 52 THE OFFER ................................................................................................................................................................ 56 GENERAL INFORMATION ...................................................................................................................................... 58 CAPITAL STRUCTURE ............................................................................................................................................ 66 OBJECTS OF THE OFFER ........................................................................................................................................ 81 BASIS FOR OFFER PRICE ....................................................................................................................................... 83 STATEMENT OF SPECIAL TAX BENEFITS .......................................................................................................... 86 CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS ............................................................................ 89

SECTION IV: ABOUT OUR COMPANY .............................................................................................................. 92 INDUSTRY OVERVIEW ........................................................................................................................................... 92 OUR BUSINESS ....................................................................................................................................................... 129 KEY REGULATIONS AND POLICIES .................................................................................................................. 151 HISTORY AND CERTAIN CORPORATE MATTERS .......................................................................................... 155 OUR MANAGEMENT ............................................................................................................................................. 160 OUR PROMOTERS AND PROMOTER GROUP ................................................................................................... 176 OUR GROUP COMPANIES .................................................................................................................................... 181 RELATED PARTY TRANSACTIONS .................................................................................................................... 187 DIVIDEND POLICY ................................................................................................................................................ 188

SECTION V: FINANCIAL INFORMATION ...................................................................................................... 189 FINANCIAL STATEMENTS ................................................................................................................................... 189 FINANCIAL INDEBTEDNESS ............................................................................................................................... 275 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS .......................................................................................................................................................... 276

SECTION VI: LEGAL AND OTHER INFORMATION .................................................................................... 300 OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ............................................................... 300 GOVERNMENT AND OTHER APPROVALS ....................................................................................................... 306 OTHER REGULATORY AND STATUTORY DISCLOSURES ............................................................................ 310

SECTION VII: OFFER RELATED INFORMATION ........................................................................................ 325 TERMS OF THE OFFER .......................................................................................................................................... 325 OFFER STRUCTURE .............................................................................................................................................. 337 OFFER PROCEDURE .............................................................................................................................................. 340

SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ......................................... 385

SECTION IX: OTHER INFORMATION ............................................................................................................ 406 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .................................................................. 406 DECLARATION ....................................................................................................................................................... 409

1

SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless otherwise specified

or the context otherwise indicates, requires or implies, shall have the meanings as provided below. References to

any legislation, act, regulation, rule, guideline, policy, circular, notification or clarification shall be deemed to

include all amendments, supplements, re-enactments and modifications thereto from time to time, and any

reference to a statutory provision shall include any subordinate legislation made from time to time thereunder. If

there is any inconsistency between the definitions given below and the definitions contained in the General

Information Document (as defined hereinafter), the following definitions shall prevail.

General Terms

Term

Description

The Company or our Company or

we or us or our

Aakash Educational Services Limited, a public limited company incorporated under the Companies

Act, 1956, whose registered office is situated at Plot No. 8, Aakash Tower, Pusa Road, New Delhi

110 005, India

Company Related Terms

Term

Description

Aakash ESOP Scheme The employee stock option scheme instituted by our Company, namely the Aakash Educational

Services Limited - Employee Stock Option Plan 2015, as amended. For details, see “Capital Structure” on page 66

Aakash Healthcare Aakash Healthcare Private Limited

Acquisition Agreement 1 Agreement dated April 1, 2008 between our Company and Mr. J.C. Chaudhry for acquisition by our

Company of the business of running coaching centers from Mr. J.C. Chaudhry

Acquisition Agreement 2 Agreement dated April 1, 2008 between our Company and Mr. Aakash Chaudhry for acquisition by

our Company of the business of running franchisee coaching centers at Mumbai under the name and

style of ‘Aakash Institute/Aakash IIT-JEE-Mumbai Franchise’ from Mr. Aakash Chaudhry

AoA or Articles or Articles of Association

The articles of association of our Company, as amended

Audit Committee The audit committee of our Board of Directors as described in “Our Management” on page 160

Auditors or Statutory Auditors The statutory auditors of our Company, namely B S R & Co. LLP, Chartered Accountants

Board or Board of Directors The board of directors of our Company or a duly constituted committee thereof

Corporate Social Responsibility Committee or CSR Committee

The corporate social responsibility committee of our Board of Directors as described in “Our Management” on page 160

Deed of Assignment Deed of assignment dated June 18, 2018 between our Company and J C Jagruti pursuant to which J C

Jagruti has assigned all rights, title and interest in certain trademarks, trademark applications and

copyrights related to the education business to our Company

Destination Home Destination Home Private Limited

Director(s) The director(s) of our Company

Equity Shares Equity shares of our Company of face value of ₹ 5 each

Executive Director(s) The executive Director(s) of our Company

Group Companies The companies that are covered under the applicable accounting standards and any other company

considered material by our Board of Directors, as disclosed in “Our Group Companies” on page 181 Independent Director(s) The independent Director(s) of our Company

IPO Committee The IPO Committee of our Board of Directors comprising Mr. J.C. Chaudhry, Mr. Aakash Chaudhry

and Dr. Pramath Raj Sinha and constituted to facilitate the process of the Offer

J C Jagruti J C Jagruti Private Limited

Key Management Personnel Key management personnel of our Company in terms of Regulation 2(1)(s) of the SEBI ICDR

Regulations and Section 2(51) of the Companies Act, 2013 and as disclosed in “Our Management” on

page 160

MoA/Memorandum/Memorandum

of Association

The memorandum of association of our Company, as amended

Nomination, Remuneration &

Compensation Committee

The nomination, remuneration & compensation committee of our Board of Directors as described in

“Our Management” on page 160

Non-executive Director(s) The non-executive Director(s) of our Company

Promoters The promoters of our Company, namely Mr. J.C. Chaudhry and Mr. Aakash Chaudhry

Promoter Group The entities and persons constituting the promoter group of our Company in terms of Regulation

2(1)(zb) of the SEBI ICDR Regulations, as disclosed in “Our Promoters and Promoter Group” on

page 176

Registered Office The registered office of our Company, which is located at Plot No. 8, Aakash Tower, Pusa Road, New

2

Term

Description

Delhi 110 005, India

Registrar of Companies or RoC The Registrar of Companies, National Capital Territory of Delhi and Haryana at New Delhi

Restated Financial Information The restated financial statements of our Company, which comprise the restated statement of assets and

liabilities as at and for the Financial Years ended March 31, 2018, 2017, 2016, 2015 and 2014, the

restated statement of profit and loss, the restated statement of changes in equity and the restated statement of cash flows as at and for the Financial Years ended March 31, 2018, 2017, 2016, 2015 and

2014, and the significant accounting policies, together with the annexures and the notes thereto, which

have been prepared in accordance with the Companies Act, 2013, and restated in accordance with the SEBI ICDR Regulations. The Restated Financial Information have been compiled:

(a) As at and for the Financial Years ended March 31, 2018 and 2017: from the audited financial statements of our Company as at and for the Financial Years ended March 31, 2018 and 2017

being the comparative period for the Financial Year ended March 31, 2018, prepared in accordance with Ind AS prescribed under Section 133 of the Companies Act, 2013, other

relevant provisions of the Companies Act and other accounting principles generally accepted in

India;

(b) As at and for the Financial Years ended March 31, 2016 and 2015: from the audited financial statements of our Company as at and for the Financial Years ended March 31, 2016 and 2015,

prepared in accordance with the Companies (Accounting Standards) Rules, 2006, as amended,

other relevant provisions of the Companies Act and other accounting principles generally accepted in India, which have been translated into figures as per Ind AS to align accounting

policies, exemptions and disclosures as adopted by our Company on its first time adoption of

Ind AS as on the Transition Date; and

(c) As at and for the Financial Year ended March 31, 2014: from the audited financial statements of our Company as at and for the Financial Year ended March 31, 2014, prepared in accordance

with Accounting Standards prescribed under Section 211 (3C) of the Companies Act, 1956 read

with the Companies (Accounting Standards) Rules, 2006, which have been translated into figures as per Ind AS to align accounting policies, exemptions and disclosures as adopted by

our Company on its first time adoption of Ind AS as on the Transition Date.

The Restated Financial Information for the Financial Years ended March 31 2016, 2015 and 2014 are

referred to as “the Proforma Ind AS Restated Financial Information” as per the guidance note issued

by ICAI.

Shareholders The holders of the Equity Shares, from time to time

Stakeholders’ Relationship

Committee

The stakeholders’ relationship committee of our Board of Directors as described in “Our

Management” on page 160

Surabhi Infra Surabhi Infra & Management Services Limited

Transition Date The beginning of the earliest period for which our Company has presented its balance sheet under Ind

AS in the first annual financial statements, being, April 1, 2016

Whole-time Director(s) Director(s) in the whole-time employment of our Company

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

Allotment or Allot or Allotted Unless the context otherwise requires, the transfer of the Equity Shares offered by the Selling Shareholders pursuant to the Offer for Sale to the successful Bidders

Allotment Advice Note or advice or intimation of Allotment sent to each successful Bidder who has been or is to be

Allotted the Equity Shares after the Basis of Allotment has been approved 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

SEBI ICDR Regulations and the Red Herring Prospectus, who has Bid for an amount of at least ₹ 100 million

Anchor Investor Allocation Price The price at which Equity Shares will be allocated to Anchor Investors at the end of the Anchor

Investor Bid/Offer Period in terms of the Red Herring Prospectus and the Prospectus, which will be decided by our Company, in consultation with the BRLMs

Anchor Investor Application Form The form used by an Anchor Investor to make a 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 Bid/Offer Period The day, one Working Day prior to the Bid/Offer Opening Date, on which Bids by Anchor Investors will be submitted and allocation to Anchor Investors will be completed

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, in

3

Term

Description

consultation with the BRLMs

Anchor Investor Portion Up to 60% of the QIB Portion, or up to [●] Equity Shares, which may be allocated by our Company, in consultation with the BRLMs, to Anchor Investors on a discretionary basis in accordance with the

SEBI ICDR Regulations. One-third of the Anchor Investor Portion will 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 and to authorize

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

ASBA Form

ASBA Bid A Bid made by an ASBA Bidder

ASBA Bidder Any Bidder 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 Bank(s), Refund Bank(s) and Public Offer Account Bank

Basis of Allotment The basis on which Equity Shares will be Allotted to successful Bidders under the Offer and which is

described in “Offer Procedure” on page 340

Bid An indication to make an offer during the Bid/Offer Period by ASBA Bidders pursuant to submission

of the ASBA Form, or during the Anchor Investor Bid/Offer Period by the Anchor Investors pursuant to submission of the Anchor Investor Application Form, to purchase the Equity Shares at a price within

the Price Band, including all revisions and modifications thereto, in accordance with the SEBI ICDR

Regulations. The term “Bidding” shall be construed accordingly

Bid Amount In relation to each Bid, 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 Bidder, as the case

may be, upon submission of such Bid cum Application Form. For Retail Individual Investors, the Bid

Amount will be net of any Retail Discount and for Eligible Employees, the Bid Amount will be net of any Employee Discount

The maximum Bid Amount under the Employee Reservation Portion by an Eligible Employee shall not exceed ₹ 500,000 (which will be net of any Employee Discount). However, the initial Allotment to an Eligible Employee in the Employee Reservation Portion shall not exceed ₹ 200,000 (which will be net of any Employee Discount). Only in the event of an under-subscription in the Employee Reservation Portion post the initial Allotment, such unsubscribed portion may be Allotted on a

proportionate basis to Eligible Employee Bidding in the Employee Reservation Portion, for a value in

excess of ₹ 200,000 (which will be net of any Employee Discount), subject to the total Allotment to an Eligible Employee not exceeding ₹ 500,000 (which will be net of any Employee Discount)

Bid cum Application Form The Anchor Investor Application Form or the ASBA Form, as the case may be

Bid Lot [●] Equity Shares

Bid/Offer Closing Date Except in relation to any Bids received from the Anchor Investors, the date after which the Designated Intermediaries shall not accept any Bids, which will be notified in [●] editions of the English national

daily newspaper, [●] and [●] editions of the Hindi national daily newspaper, [●] (Hindi also being the

regional language of New Delhi, where our Registered Office is located), each with wide circulation. Our Company may, in consultation with the BRLMs, consider closing the Bid/Offer Period for QIBs

one Working Day prior to the Bid/Offer Closing Date in accordance with the SEBI ICDR Regulations

Bid/Offer Opening Date Except in relation to any Bids received from Anchor Investors, the date on which the Designated Intermediaries will start accepting Bids, which will be notified in [●] editions of the English national

daily newspaper, [●] and [●] editions of the Hindi national daily newspaper, [●] (Hindi also being the

regional language of New Delhi, where our Registered Office is located), each with wide circulation

Bid/Offer Period Except in relation to Anchor Investors, the period between the Bid/Offer Opening Date and the

Bid/Offer Closing Date, inclusive of both days, during which prospective Bidders can submit their

Bids, including any revisions thereof in accordance with the SEBI ICDR Regulations

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 Centers The centers at which at the Designated Intermediaries will accept the ASBA Forms, i.e., Designated

Branches for SCSBs, Specified Locations for Syndicate, Broker Centers for Registered Brokers,

Designated RTA Locations for RTAs and Designated CDP Locations for CDPs

Book Building Process or Book

Building Method

The book building process, as provided in Schedule XI of the SEBI ICDR Regulations, in terms of

which the Offer is being made

Book Running Lead Managers or

BRLMs

The book running lead managers to the Offer, namely Kotak, Citi and CLSA

Broker Centers The broker centers notified by the Stock Exchanges where ASBA Bidders can submit the ASBA

Forms to a Registered Broker. The details of such Broker Centers, along with the names and contact

details of the Registered Brokers are available on the respective websites of the Stock Exchanges (www.bseindia.com and www.nseindia.com)

CAN or Confirmation of Allocation

Note

A notice or intimation of allocation of the Equity Shares sent to Anchor Investors who will be

allocated the Equity Shares, after the Anchor Investor Bid/Offer Period

Cap Price The higher end of the Price Band, subject to any revision thereto, above which the Offer Price and the Anchor Investor Offer Price will not be finalized and above which no Bids will be accepted

Citi Citigroup Global Markets India Private Limited

http://www.bseindia.com/http://www.nseindia.com/

4

Term

Description

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

CLSA CLSA India Private Limited

Collecting Depository Participant

or CDP

A depository participant as defined under the Depositories Act, 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 the SEBI

Cut-off Price The Offer Price finalized by our Company, in consultation with the BRLMs, which may be any price within the Price Band. Only Retail Individual Investors and Eligible Employees Bidding in the

Employee Reservation Portion are entitled to Bid at the Cut-off Price. No other category of Bidders is

entitled to Bid at the Cut-off Price

Demographic Details The demographic details of the Bidders including the Bidder’s address, name of the Bidder’s

father/husband, investor status, occupation and bank account details

Designated Branches Such branches of the SCSBs which will collect the ASBA Forms used by the ASBA Bidders and a list of which is available on the website of the SEBI at

www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34 and updated from

time to time

Designated CDP Locations Such locations of the CDPs where Bidders can submit the ASBA Forms. The details of such Designated CDP Locations, along with names and contact details of the Collecting Depository

Participants eligible to accept ASBA Forms are available on the respective websites of the Stock

Exchanges (www.bseindia.com and www.nseindia.com)

Designated Date The date on which funds from the Escrow Account(s) are transferred to the Public Offer Account or

the Refund Account(s) as appropriate and the amounts blocked by the SCSBs are transferred to the

Public Offer Account or unblocked, as appropriate, after filing of the Prospectus with the RoC

Designated Intermediaries Syndicate, sub-Syndicate/agents, SCSBs, Registered Brokers, CDPs and RTAs, who are authorized to collect ASBA Forms from the ASBA Bidders, in relation to the Offer

Designated RTA Locations Such locations of the RTAs where Bidders can submit the ASBA Forms to the RTAs. The details of

such Designated RTA Locations, 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

www.nseindia.com)

Designated Stock Exchange [●]

Draft Red Herring Prospectus or DRHP

This draft red herring prospectus dated July 19, 2018 filed with the SEBI and issued in accordance with the SEBI ICDR Regulations, which does not contain complete particulars of the price at which

the Equity Shares will be Allotted and the size of the Offer, including any addenda or corrigenda

thereto

Eligible Employees All permanent and full-time employees of our Company (excluding such employees not eligible to invest in the Offer under applicable law, rules, regulations and guidelines) as of the date of filing of the

Red Herring Prospectus with the RoC and who continue to be employees of our Company until the

submission of the Bid cum Application Form and are resident and present in India as on the date of submission of the Bid cum Application Form

Eligible FPI(s) FPI(s) 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 Red Herring Prospectus constitutes an invitation to purchase the Equity Shares offered thereby

Eligible NRI(s) NRI(s) 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 constitutes an invitation to purchase the Equity Shares offered thereby

Employee Discount A discount of ₹ [●] to the Offer Price that may be offered to the Eligible Employees Bidding in the Employee Reservation Portion, by our Company in consultation with the BRLMs

Employee Reservation Portion The portion of the Offer, being up to [●] Equity Shares aggregating to ₹ [●] million, available for allocation to Eligible Employees, on a proportionate basis

Escrow Account(s) Account opened with the Escrow Collection Bank(s) and in whose favor the Anchor Investors will

transfer money through direct credit or NACH or NEFT or RTGS in respect of the Bid Amount when

submitting a Bid

Escrow Agreement The agreement to be entered into among our Company, the Selling Shareholders, the Registrar to the

Offer, the BRLMs, the Syndicate Members, the Escrow Collection Bank(s), the Public Offer Account

Bank and the Refund Bank(s) for, inter alia, collection of the Bid Amounts from Anchor Investors, transfer of funds to the Public Offer Account and where applicable, remitting refunds of the amounts

collected from Anchor Investors, on the terms and conditions thereof

Escrow Collection Bank(s) The bank(s) which are clearing members and registered with the SEBI as bankers to an issue and with

whom the Escrow Account(s) shall be opened, in this case being [●]

First Bidder 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, subject to any revision thereto, at or above which the Offer Price and the Anchor Investor Offer Price will be finalized and below which no Bids will be accepted and which

will not be less than the face value of the Equity Shares

General Information Document or GID

The General Information Document for Investing in Public Issues prepared and issued in accordance with the circular (No. CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by the SEBI, as

updated to reflect enactments and regulations to the extent applicable to a public issue, including

circular (No. CIR/CFD/POLICYCELL/11/2015) dated November 10, 2015 and circular (No. SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016 issued by the SEBI, as suitably modified

and included in “Offer Procedure” on page 340

http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34http://www.bseindia.com/http://www.nseindia.com/http://www.bseindia.com/http://www.nseindia.com/

5

Term

Description

Kotak Kotak Mahindra Capital Company Limited

Maximum RII Allottees The maximum number of RIIs 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

Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor Investor Portion), or [●] Equity Shares, which shall be

available for allocation only to Mutual Funds on a proportionate basis, subject to valid Bids being received at or above the Offer Price

Net Offer The Offer less the Employee Reservation Portion

Non-Institutional Investors or NIIs All Bidders (including Category III FPIs) that are not QIBs or Retail Individual Investors or Eligible

Employees Bidding in the Employee Reservation Portion and 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 more than 15% of the Net Offer, or [●] Equity Shares, which shall

be available for allocation on a proportionate basis to Non-Institutional Investors, subject to valid Bids being received at or above the Offer Price

Offer or Offer for Sale The initial public offering of 18,500,000 Equity Shares for cash at a price of ₹ [●] each, aggregating to ₹ [●] million by way of an offer for sale by the Selling Shareholders. The Offer comprises the Net Offer to the public of [●] Equity Shares aggregating to ₹ [●] million and the Employee Reservation Portion of [●] Equity Shares aggregating to ₹ [●] million for purchase by Eligible Employees

Offer Agreement The agreement dated July 19, 2018 entered into among our Company, the Selling Shareholders and the

BRLMs, pursuant to which certain arrangements are agreed to in relation to the Offer

Offer Price The final price at which Equity Shares will be Allotted to successful Bidders (except Anchor Investors) as determined in accordance with the Book Building Process and determined by the Company in

consultation with the BRLMs, in terms of the Red Herring Prospectus. Equity Shares will be Allotted

to Anchor Investors at the Anchor Investor Offer Price in terms of the Red Herring Prospectus

A Retail Discount of ₹ [●] per Equity Share on the Offer Price may be offered to Retail Individual Investors

An Employee Discount of ₹ [●] per Equity Share on the Offer Price may be offered to Eligible Employees Bidding in the Employee Reservation Portion

Other Selling Shareholders Ms. Kamla Chaudhry, Dr. Aashish Chaudhry, Dr. Meinal Chaudhry and Ms. Neetu Chaudhry

Price Band Price band of a minimum price of ₹ [●] per Equity Share (i.e., the Floor Price) and the maximum price of ₹ [●] per Equity Share (i.e., the Cap Price), including any revisions thereof. The Price Band and the minimum Bid Lot for the Offer will be decided by our Company, in consultation with the BRLMs and shall be advertised in [●] editions of the English national daily newspaper [●] and [●] editions of the

Hindi national daily newspaper [●] (Hindi also being the regional language of New Delhi, where our

Registered Office is located), each with wide circulation, at least five Working Days prior to the Bid/Offer Opening Date

Pricing Date The date on which our Company, in consultation with the BRLMs, will finalize the Offer Price

Promoter Selling Shareholders Mr. J.C. Chaudhry and Mr. Aakash Chaudhry

Prospectus The prospectus for the Offer to be filed with the RoC on or after the Pricing Date in accordance with Section 26 of the Companies Act, 2013 and the SEBI ICDR Regulations, containing, inter alia, the

Offer Price, the size of the Offer and certain other information, including any addenda or corrigenda

thereto

Public Offer Account ‘No-lien’ and ‘non interest-bearing’ bank account opened in accordance with Section 40(3) of the

Companies Act, 2013, with the Public Offer Account Bank to receive money from the Escrow

Account(s) and the ASBA Accounts maintained with the SCSBs on the Designated Date

Public Offer Account Bank Escrow Collection Bank(s) with which the Public Offer Account shall be opened, being [●]

QIB Portion The portion of the Offer being at least 75% of the Net Offer, or [●] Equity Shares, which shall be

Allotted on a proportionate basis to QIBs, including the Anchor Investor Portion (in which allocation

shall be on a discretionary basis, as determined by our Company, in consultation with the BRLMs),

subject to valid Bids being received at or above the Offer Price or the Anchor Investor Allocation

Price, as applicable

Qualified Institutional Buyers,

QIBs or QIB Bidders

Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI ICDR Regulations

Red Herring Prospectus or RHP The red herring prospectus for the Offer to be issued by our Company in accordance with Section 32 of

the Companies Act, 2013 and the SEBI ICDR Regulations, which will not have complete particulars of

the price at which the Equity Shares will be Allotted and the size of the Offer, including any addenda or corrigenda thereto. The Red Herring Prospectus will be filed with the RoC at least three days before

the Bid/Offer Opening Date and will become the Prospectus upon registration with the RoC after the

Pricing Date

Refund Account(s) ‘No-lien’ and ‘non interest-bearing’ bank account opened with the Refund Bank(s) from which refunds (excluding refunds to ASBA Bidders), if any, of the whole or part of the Bid Amount may be made to

the Anchor Investors

Refund Bank(s) Escrow Collection Bank(s) with which Refund Account(s) shall be opened, being [●]

Registered Brokers The stock brokers registered with the stock exchanges having nationwide terminals, other than the

Members of the Syndicate and eligible to procure Bids in terms of circular (No. CIR/CFD/14/2012)

dated October 4, 2012 issued by the SEBI

Registrar Agreement The agreement dated July 9, 2018, entered into among our Company and the Registrar to the Offer in relation to the responsibilities and obligations of the Registrar to the Offer pertaining to the Offer

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

6

Term

Description

Agents or RTAs Designated RTA Locations in terms of circular (No. CIR/CFD/POLICYCELL/11/2015) dated November 10, 2015 issued by the SEBI

Registrar to the Offer or Registrar Link Inktime India Private Limited

Retail Discount A discount of ₹ [●] to the Offer Price that may be offered to the Retail Individual Investors by our Company in consultation with the BRLMs, at the time of making a Bid

Retail Individual Investors or RIIs Individual Bidders other than Eligible Employees Bidding in the Employee Reservation Portion who have Bid for Equity Shares for an amount of not more than ₹ 200,000 in any of the bidding options in the Net Offer (including HUFs applying through the karta and Eligible NRIs) and does not include

NRIs (other than Eligible NRIs)

Retail Portion The portion of the Offer being not more than 10% of the Net Offer, or [●] Equity Shares, which shall

be available for allocation to Retail Individual Investors in accordance with the SEBI 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 previous Revision Forms. QIBs and Non-Institutional Investors are not

allowed to withdraw or lower their Bids (in terms of the quantity of Equity Shares or the Bid Amount) at any stage. Retail Individual Investors and Eligible Employees Bidding in the Employee Reservation

Portion can revise their Bids during the Bid/Offer Period and withdraw their Bids until Bid/Offer

Closing Date

Self Certified Syndicate Banks/SCSBs

The banks registered with the SEBI and offering services in relation to ASBA, a list of which is available on the website of the SEBI at

www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognizedFpi=yes&intmId=34 and updated from

time to time

Share Escrow Agent The share escrow agent appointed pursuant to the Share Escrow Agreement, being [●]

Share Escrow Agreement The agreement to be entered into among our Company, the Selling Shareholders and the Share Escrow

Agent in connection with the transfer of Equity Shares under the Offer for Sale by the Selling

Shareholders and the credit of such Equity Shares to the demat account of the Allottees

Selling Shareholders Together, the Promoter Selling Shareholders and the Other Selling Shareholders

Specified Locations

Bidding Centers where the Syndicate will accept ASBA Forms, a list of which is available at the

website of the SEBI at

www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35 and updated from time to time

Syndicate/Members of the

Syndicate

The BRLMs and the Syndicate Members

Syndicate Agreement The agreement to be entered into among the BRLMs, the Syndicate Members and our Company in relation to the collection of Bid cum Application Forms by the Syndicate

Syndicate Members

Intermediaries registered with the SEBI who are permitted to carry out activities as an underwriter,

being [●]

Underwriters [●]

Underwriting Agreement The agreement to be entered into among the Underwriters, our Company and the Selling Shareholders

on or after the Pricing Date but prior to the filing of the Prospectus with the RoC

Working Day(s) All days other than the second and the fourth Saturday of a month or a Sunday or a public holiday on which commercial banks in Mumbai, India are open for business, except with reference to

announcement of the Price Band and the Bid/Offer Period, “Working Day(s)” will mean all days,

excluding all Saturdays, Sundays and public holidays on which commercial banks in Mumbai, Maharashtra, India are open for business and with reference to the time period between the Bid/Offer

Closing Date and the listing of the Equity Shares on the Stock Exchanges, “Working Day(s)” shall

mean all trading days of Stock Exchanges, excluding Sundays and bank holidays, as per the circular (No. SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016 issued by the SEBI

Industry/Business Related Terms

Term

Description

Aakash Centers Our classroom centers, including Owned Centers and Franchisee Centers

ACST Admission Cum Scholarship Test

Agile Boards Interactive boards at Aakash Centers

AIATS All India Aakash Test Series

ANTHE Aakash National Talent Hunt Examination

ATQ Aakash Talent Quest

CBSE Central Board of Secondary Education

CRISIL CRISIL Research, a division of CRISIL Limited

CRISIL Report A report titled “Assessment of Coaching Industry in India” dated July 12, 2018 prepared by CRISIL

Franchisee Third party franchisees

Franchisee Agreement Franchisee agreement entered into with our Franchisees

Franchisee Center Aakash Center operated by Franchisee

HBSCE National standard examination in astronomy/biology/chemistry/physics, co-ordinated by the Homi

Bhabha Centre for Science Education

IMO International Mathematics Olympiads

http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognizedFpi=yes&intmId=34http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35

7

Term

Description

JEE Joint Engineering Entrance

JSTSE Junior Science Talent Search Examinations

KVPY Kishore Vaigyanik Protsahan Yojna

Long-Term Courses Two-year courses, one-year courses and repeater courses

NAT National Academic Team

NEET National Eligibility cum Entrance Test

Net Fees Fees, net of any concessions and refunds, collected from the students by our Franchisees

NSEJS National Standard Examinations in Junior Science

NSEs National Standard Examinations

NSO National Science Olympiad

NTSE National Talent Search Examinations

Owned Center Aakash Center operated by our Company

Profit Profit for the year as restated

Student Count Number of students who have paid at least one instalment of the tuition fee component for that course

in that fiscal year, in addition to the admission fee and registration fee in that fiscal year or earlier

fiscal year in respect of the Long-Term Courses at Owned Centers or Franchisee Centers, and includes

carry forward students (i.e. students who were enrolled in the previous year(s) and remained enrolled

in the current fiscal year) and students who paid but subsequently dropped out

Conventional Terms/Abbreviations Term

Description

AGM Annual General Meeting

Alternative Investment Funds or

AIFs

Alternative investment funds as defined in, and registered under, the SEBI AIF Regulations

Arbitration Act The Arbitration and Conciliation Act, 1996

AS or Accounting Standards Accounting Standards as notified by Companies (Accounting Standards) Rules, 2016

BSE BSE Limited

CAGR Compounded Annual Growth Rate

Category I FPIs FPIs registered as “Category I foreign portfolio investors” under the SEBI FPI Regulations

Category II FPIs FPIs registered as “Category II foreign portfolio investors” under the SEBI FPI Regulations

Category III FPIs FPIs registered as “Category III foreign portfolio investors” under the SEBI FPI Regulations

CCI Competition Commission of India

CDSL Central Depository Services (India) Limited

CIN Corporate Identity Number

Companies Act The Companies Act, 1956, to the extent effective and the Companies Act, 2013, to the extent notified,

as applicable

Companies Act, 2013 The Companies Act, 2013, to the extent notified, read with the rules, regulations, clarifications and modifications thereunder

Companies Act, 1956 The Companies Act, 1956, to the extent effective read with rules, regulations, clarifications and

modifications thereunder

Competition Act The Competition Act, 2002

COPRA Consumer Protection Act, 1986

Depositories NSDL and CDSL

Depositories Act The Depositories Act, 1996

DIN Director Identification Number

DIPP Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of

India

DP or Depository Participant A depository participant as defined under the Depositories Act

DP ID Depository Participant’s identification number

EGM Extraordinary General Meeting

EPS Earnings Per Share

EPF Act Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

ESI Act Employees’ State Insurance Act, 1948

FCNR Account Foreign Currency Non-Resident Account, and has the meaning ascribed to the term “FCNR(B)

account” under the Foreign Exchange Management (Deposit) Regulations, 2016

FDI Foreign Direct Investment

FDI Policy The ‘Consolidated FDI Policy Circular of 2017’ (No. 5(1)/2017-FC-1) issued by the DIPP, which took effect from August 28, 2017

FEMA

The Foreign Exchange Management Act, 1999, read with the rules and regulations thereunder

FEMA Regulations The Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017

Financial Year or Fiscal or Fiscal

Year or FY

Unless stated otherwise, the period of 12 months ending March 31 of that particular year

FIR First information report

8

Term

Description

FPIs Foreign Portfolio Investors as defined under the SEBI FPI Regulations

FVCI Foreign venture capital investors as defined in, and registered with, the SEBI under the SEBI FVCI Regulations

GAAR General anti-avoidance rules

GDP Gross Domestic Product

GST Goods and Services Tax

HUF Hindu undivided family

IBC Insolvency and Bankruptcy Code, 2016

ICAI The Institute of Chartered Accountants of India

ICDS Income Computation and Disclosure Standards notified by the Ministry of Finance on March 31, 2015

IFRS International Financial Reporting Standards of the International Accounting Standards Board

Income-tax Act The Income-tax Act, 1961

Ind AS The Indian Accounting Standards referred to and notified under Section 133 of the Companies Act

Ind AS Rules The Companies (Indian Accounting Standards) Rules, 2015

Previous GAAP Generally accepted accounting principles in India that were notified by the MCA under the

Companies (Accounting Standards) Rules, 2006, and amended pursuant to the relevant provisions of

the Companies Act

IPC Indian Penal Code, 1860

IPO Initial public offering

IRDAI Insurance Regulatory and Development Authority of India

IRDAI Investment Regulations Insurance Regulatory and Development Authority of India (Investment) Regulations, 2016

IST Indian Standard Time

IT Act Information Technology Act, 2000

KYC Know Your Customer

Listing Agreement The agreement to be entered into between our Company and each of the Stock Exchanges in relation

to listing of the Equity Shares on such Stock Exchanges

MAT Minimum alternate tax

MCA Ministry of Corporate Affairs, Government of India

Mn/mn Million

Mutual Fund(s) Mutual fund(s) registered with the SEBI under the Securities and Exchange Board of India (Mutual

Funds) Regulations, 1996

N.A. or NA Not applicable

NACH National Automated Clearing House

NAV Net asset value

NEFT National Electronic Fund Transfer

NR or Non-Resident A person resident outside India, as defined under the FEMA, including Eligible NRIs, FPIs and FVCIs

registered with the SEBI

NRE Account Non-Resident External Account, as defined under the Foreign Exchange Management (Deposit)

Regulations, 2016

NRI A person resident outside India, who is a citizen of India or an ‘Overseas Citizen of India’ cardholder within the meaning of section 7(A) of the Citizenship Act, 1955

NRO Account Non-Resident Ordinary Account, as defined under the Foreign Exchange Management (Deposit)

Regulations, 2016

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

OCB/Overseas Corporate Body A company, partnership, society or other corporate body owned directly or indirectly to the extent of

at least 60% by NRIs including overseas trusts, in which not less than 60% of beneficial interest is

irrevocably held by NRIs directly or indirectly and which was in existence on October 3, 2003 and immediately prior to such date had taken benefits under the general permission granted to OCBs under

the FEMA. OCBs are not allowed to invest in the Offer

P&L Profit and loss

p.a. Per annum

P/E Ratio Price/Earnings Ratio

PAN Permanent Account Number allotted under the Income-tax Act

PAT Profit after tax

Regulation S Regulation S under the U.S. Securities Act

RoNW Return on Net Worth

RoW Rest of the World

RTGS Real Time Gross Settlement

Rule 144A Rule 144A under the U.S. Securities Act

SCRA The Securities Contracts (Regulation) Act, 1956

SCRR The Securities Contracts (Regulation) Rules, 1957

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

SEBI Act The Securities and Exchange Board of India Act, 1992

SEBI AIF Regulations The Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012

SEBI Depository Regulations The Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996

SEBI FPI Regulations The Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014

SEBI FVCI Regulations The Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000

9

Term

Description

SEBI Ind AS Transition Circular Circular No. SEBI/HO/CFD/DIL/CIR/P/2016/47, dated March 31, 2016 issued by the SEBI

SEBI ICDR Regulations The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009

SEBI Listing Regulations The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)

Regulations, 2015

SEBI Mutual Fund Regulations The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996

SEBI Portfolio Manager

Regulations The Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993

SEBI SBEB Regulations The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014

SEBI Stock Broker Regulations The Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992

SEBI Takeover Regulations The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

SEBI VCF Regulations The Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996

SICA The erstwhile Sick Industrial Companies (Special Provisions) Act, 1985

Sq. ft./sq.ft. Square feet

Stamp Act The Indian Stamp Act, 1899

State Government The government of a State of India

Stock Exchanges The BSE and the NSE

STT Securities Transaction Tax

Supreme Court The Supreme Court of India

Systemically Important Non-Banking Financial Company

In the context of a Bidder, a non-banking financial company registered with the RBI and having a net worth of more than ₹ 5,000 million as per its last audited financial statements

TAN Tax Deduction and Collection Account Number allotted under the Income-tax Act

TDS Tax deducted at source

Trade Marks Act Trade Marks Act, 1999

U.S. GAAP Generally Accepted Accounting Principles in the United States of America

U.S. Investment Company Act The United States Investment Company Act of 1940

U.S. Person U.S. Person as defined under Regulation S

U.S. Securities Act The United States Securities Act of 1933

VAT Value Added Tax

VCFs Venture capital funds as defined in and registered with the SEBI under the SEBI VCF Regulations

Wilful Defaulter(s) Wilful defaulter as defined under Regulation 2(1)(zn) of the SEBI ICDR Regulations

Year/calendar year Unless context otherwise required, shall mean the twelve month period ending December 31

The words and expressions used but not defined herein will have the meanings assigned to such terms under the

SEBI Act, the SEBI ICDR Regulations, the Companies Act, the SCRA, the Depositories Act and the rules and

regulations made thereunder.

In “Main Provisions of the Articles of Association” on page 385, defined terms have the meaning given to such

terms in the Articles of Association. Notwithstanding the foregoing, terms in “Statement of Special Tax Benefits”,

“Regulations and Policies”, “History and Certain Corporate Matters”, “Financial Statements”, and “Outstanding

Litigation and Material Developments” on pages 86, 151, 155, 189 and 300, respectively, will have the meanings

given to such terms in these respective sections.

10

CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Certain Conventions

All references to “India” contained in this Draft Red Herring Prospectus are to the Republic of India and its

territories and possessions and all references herein to the “Government”, “Indian Government”, “GoI”, “Central

Government” or the “State Government” are to the Government of India, central or state, as applicable.

Unless otherwise specified, any time mentioned in this Draft Red Herring Prospectus is in Indian Standard Time

(“IST”). Unless indicated otherwise, all references to a year in this Draft Red Herring Prospectus are to a

calendar year.

Unless stated otherwise, all references to page numbers in this Draft Red Herring Prospectus are to the page

numbers of this Draft Red Herring Prospectus.

Financial Data

Unless stated or the context requires otherwise, the financial data included in this Draft Red Herring Prospectus is

derived from the Restated Financial Information. For further information, see “Financial Statements” on page

189.

Our Company’s Financial Year commences on April 1 of the immediately preceding calendar year and ends on

March 31 of that particular calendar year, so all references to a particular Financial Year or Fiscal Year, unless

stated otherwise, are to the 12 months period commencing on April 1 of the immediately preceding calendar year

and ending on March 31 of that particular calendar year.

Certain data included in this Draft Red Herring Prospectus in relation to operating metrics, financial and other

business related information not otherwise included in the Restated Financial Information has been reviewed and

verified by Nangia and Co. LLP, Chartered Accountants.

The GoI has adopted the Indian accounting standards (“Ind AS”), which are converged with the

International Financial Reporting Standards of the International Accounting Standards Board (“IFRS”) and

notified under Section 133 of the Companies Act, 2013. In terms of the Ind AS Rules, we are required to prepare

our financial statements in accordance with Ind AS for periods beginning on or after April 1, 2017 with a

Transition Date of April 1, 2016 in accordance with the MCA Notification No. G.S.R. 111(E) dated February 16,

2015.

India has adopted the IFRS-converged accounting standards, and not IFRS. Ind AS, therefore, differs in certain

respects from IFRS and other accounting principles and standards with which investors may be more familiar.

While in accordance with the SEBI Ind AS Transition Circular, we have provided a reconciliation of Ind AS and

Previous GAAP numbers, our Company has not provided reconciliation of its financial information to U.S.

GAAP. If we were to prepare our financial statements in accordance with such other accounting principles or

U.S. GAAP, our results of operations, financial condition and cash flows may not be consistent with Ind AS

numbers. Prospective investors should consult their own professional advisers for an understanding of the

differences between these accounting principles and those with which they may be more familiar. The degree to

which the financial information included in this Draft Red Herring Prospectus will provide meaningful

information is entirely dependent on the reader’s level of familiarity with Indian accounting policies and

practices, the Companies Act and the SEBI ICDR Regulations. Any reliance by persons not familiar with these

accounting principles and regulations on our financial disclosures presented in this Draft Red Herring Prospectus

should accordingly be limited. For details of the differences between Ind AS and other accounting standards and

the risks associated with the same, see “Risk Factors — 33. Significant differences exist between Ind AS and other

accounting principles, such as U.S. GAAP, which investors may be more familiar with and may consider material

to their assessment of our financial condition” and “Risk Factors — 34. There may be an impact on our financial

statements due to the application of Ind AS 115, Revenue from Contracts with Customers, on revenue

recognition, transition and disclosures from April 1, 2018” on pages 34 and 34, respectively.

11

All figures in decimals (including percentages) have been rounded off to one or two decimals. However, where

any figures may have been sourced from third-party industry sources, such figures may be rounded-off to such

number of decimal points as provided in such respective sources. In this Draft Red Herring Prospectus, (i) the

sum or percentage change of certain numbers may not conform exactly to the total figure given; and (ii) the sum

of the numbers in a column or row in certain tables may not conform exactly to the total figure given for that

column or row. Any such discrepancies are due to rounding off.

Unless stated or the context requires otherwise, any percentage amounts, as included in “Risk Factors”, “Our

Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on

pages 15, 129 and 276, respectively, and elsewhere in this Draft Red Herring Prospectus have been calculated on

the basis of the Restated Financial Information.

Currency and Units of Presentation

All references to “₹ ” or “Rupees” or “Rs.” are to Indian Rupees, the official currency of the Republic of India.

All references to “US$” or “USD” are to United States Dollars, the official currency of the United States of

America.

Certain numerical information has been presented in this Draft Red Herring Prospectus in “million” units.

1,000,000 represents one million and 1,000,000,000 represents one billion. However, where any figures that may

have been sourced from third-party industry sources are expressed in denominations other than millions, such

figures appear in this Draft Red Herring Prospectus expressed in such denominations as provided in their

respective sources.

Exchange Rates

This Draft Red Herring Prospectus contains conversions of certain other currency amounts into Indian Rupees

that have been presented solely to comply with the SEBI ICDR Regulations. These conversions should not be

construed as a representation that these currency amounts could have been, or can be converted into Indian

Rupees, at any particular rate or at all.

The table below sets forth, for the dates indicated, information with respect to the exchange rate between the

Rupee and the respective foreign currencies.

Currency

Exchange rate as at

March 28, 2018(1)

(₹ )

March 31, 2017

(₹ )

March 31, 2016

(₹ )

March 31, 2015

(₹ )

March 28(2), 2014

(₹ )

1 USD 65.04 64.84 66.33 62.59 60.10

(Source: www.rbi.org.in)

(1) The reference rate is not available for March 31, 2018 being a Saturday and March 30, 2018 and March 29, 2018 being public

holidays.

(2) The reference rate is not available for March 31, 2014, March 30, 2014 and March 29, 2014, being a public holiday, Sunday and Saturday, respectively.

Industry and Market Data

Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus have been obtained

or derived from publicly available information as well as industry publications and sources such as a report dated

July 12, 2018 and titled “Assessment of Coaching Industry in India” (the “CRISIL Report”) that has been

prepared by CRISIL, which report has been commissioned by our Company for the purposes of confirming our

understanding of the industry in connection with the Offer.

Industry publications generally state that the information contained in those publications has been obtained from

sources believed to be reliable but that their accuracy, adequacy, completeness or underlying assumptions are not

guaranteed and their reliability cannot be assured. Although we believe that industry and market data used in this

Draft Red Herring Prospectus is reliable, it has not been independently verified by our Company, our Directors,

our Promoters, the Selling Shareholders, the BRLMs or any of their respective affiliates or advisors. The data

http://www.rbi.org.in/

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used in these sources may have been reclassified by us for the purposes of presentation. Data from these sources

may also not be comparable. Industry sources and publications are also prepared based on information as at

specific dates and may no longer be current or reflect current trends. Industry sources and publications may also

base their information on estimates and assumptions that may prove to be incorrect. The extent to which the

industry and market data presented in this Draft Red Herring Prospectus is meaningful depends upon the reader’s

familiarity with, and understanding of, the methodologies used in compiling such information. There are no

standard data gathering methodologies in the industry in which our Company conducts business and

methodologies and assumptions may vary widely among different market and industry sources. Such data

involves risks, uncertainties and numerous assumptions and is subject to change based on various factors,

including those disclosed in “Risk Factors” on page 15. Accordingly, no investment decision should be solely

made on the basis of such information.

CRISIL has requested the following disclaimer for inclusion of the information in the CRISIL Report in this

Draft Red Herring Prospectus:

“CRISIL Research, a division of CRISIL Limited (“CRISIL”) has taken due care and caution in preparing this

report (the “Report”) based on the information obtained by CRISIL from sources which it considers reliable (the

“Data”). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data or the

Report and is not responsible for any errors or omissions or for the results obtained from the use of the Data or

the Report. The Report is not a recommendation to invest or disinvest in any entity covered in the Report and no

part of the Report should be construed as expert advice or investment advice or any form of investment banking

activity (within the meaning of any law or regulation). CRISIL especially states that it has no liability whatsoever

to the subscribers, users, transmitters or distributors of the Report. Without limiting the generality of the

foregoing, nothing in the Report will be construed as CRISIL providing, or intending to provide, any services in

jurisdictions where CRISIL does not have the necessary permission or registration to carry out its business

activities in this regard. Aakash Educational Services Limited will be responsible for ensuring compliances and

consequences of non-compliances for use of the Report or part thereof outside India. CRISIL Research operates

independently of, and does not have access to information obtained by CRISIL’s Ratings Division or CRISIL Risk

and Infrastructure Solutions Ltd (the “CRIS”), which may, in their regular operations, obtain information of a

confidential nature. The views expressed in the Report are that of CRISIL Research and not of CRISIL’s Ratings

Division or CRIS. No part of the Report may be published or reproduced in any form without CRISIL’s prior

written approval.”

For details of risks in relation to the industry report, see “Risk Factors – 29. This Draft Red Herring Prospectus

contains information from industry sources including a report commissioned from CRISIL. Prospective investors

are advised not to place undue reliance on such information” on page 33.

Further, certain industry related information in “Risk Factors”, “Summary of Industry”, “Summary of Business”,

“Industry Overview”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and

Results of Operations” on pages 15, 44, 49, 92, 129 and 276, respectively, has been derived from the CRISIL

Report.

In accordance with the SEBI ICDR Regulations, “Basis for Offer Price” on page 83 includes information relating

to our listed peer group companies. Such information has been derived from publicly available sources, and

neither we, nor the BRLMs have independently verified such information.

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FORWARD-LOOKING STATEMENTS

This Draft Red Herring Prospectus contains certain forward-looking statements. These forward-looking

statements generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”,

“estimate”, “intend”, “objective”, “plan”, “project”, “propose”, “seek to”, “likely”, “will”, “will continue”, “will

pursue”, or other words or phrases of similar import. Similarly, statements that describe our Company’s

strategies, objectives, plans or goals are also forward-looking statements. All forward-looking statements are

subject to risks, uncertainties and assumptions about our Company that could cause actual results to differ

materially from those contemplated by the relevant forward-looking statement.

Actual results may differ materially from those suggested by the forward-looking statements due to risks or

uncertainties associated with our expectations with respect to, but not limited to, regulatory changes pertaining to

the industry in which our Company operates and our ability to respond to them, our ability to successfully

implement our strategy, our growth and expansion, technological changes, our exposure to market risks, general

economic and political conditions in India and globally which have an impact on our business activities or

investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest

rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in

India and globally, changes in laws, regulations and taxes, changes in competition in our industry, incidence of

natural calamities and/or acts of violence. Important factors that could cause actual results to differ materially

from our Company’s expectations include, but are not limited to, the following:

our ability to attract and retain students is heavily dependent on factors including our reputation, our ability to maintain and improve on the number of quality selections in the entrance examinations, and

our ability to maintain a high level of service quality;

we are dependent on our faculty members and our ability to attract and retain them. Any decrease in the number of our faculty members may affect our operations and business;

our inability to adapt and update our course study material and coaching and testing methods in accordance with the changing curriculum, nature of questions and examination patterns in a timely and

effective manner may materially and adversely affect our business and financial condition;

any decrease in perceived or actual benefits by potential students may discourage students from pursuing the medical and engineering course, reducing demand for our courses;

any introduction of new laws and regulations for the test preparatory service industry may have an adverse impact on our business, and increase our compliance requirements and costs, which may affect

our business adversely in the future;

we may not be able to renew, maintain or obtain the requisite approvals and registrations;

our business may be adversely affected if we are unable to maintain and develop our Aakash brand;

we may have limited control by us on the operations and risk of discontinuation of the Franchisees, which may impact our reputation, business and financial condition adversely;

we are dependent on a few Franchisee Centers and Franchisees for a substantial part of our franchise business revenue as these Franchisees own multiple Franchisee Centers;

any breach of our students’ safety and security may negatively impact our reputation, business and financial condition;

we are dependent on the services of our Promoters, Mr. J.C. Chaudhry and Mr. Aakash Chaudhry and other key members of our management team. Any loss of their services may impair our ability to operate

effectively and may have an adverse impact on our business and financial condition;

we may not be able to implement our growth strategy successfully and may be unable to sustain growth at historical levels;

as a substantial portion of our revenue is from the test preparatory services conducted for the medical and engineering entrance examinations, our revenues may be materially adversely affected if, for

regulatory or other reasons, we discontinue any of these courses; and

our insurance coverage may not adequately protect us against certain operating hazards.

For further discussion of factors that could cause the actual results to differ from the expectations, see “Risk

Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of

Operations” on pages 15, 129 and 276, respectively. By their nature, certain market risk disclosures are only

estimates and could be materially different from what actually occurs in the future. As a result, actual gains or

losses in the future could materially differ from those that have been estimated.

14

We cannot assure investors that the expectation reflected in these forward-looking statements will prove to be

correct. Given the uncertainties, investors are cautioned not to place undue reliance on such forward-looking

statements and not to regard such statements as a guarantee of future performance.

Forward-looking statements reflect the current views of our Company as at the date of this Draft Red Herring

Prospectus and are not a guarantee of future performance. These statements are based on our management’s

beliefs and assumptions, which in turn are based on currently available information. Although we believe the

assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions

could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect.

None of our Company, our Directors, our Promoters, the Selling Shareholders, the Syndicate or any of their

respective affiliates has any obligation to update or otherwise revise any statements reflecting circumstances

arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions

do not come to fruition. In accordance with the SEBI requirements, our Company will ensure that investors are

informed of material developments from the date of the Red Herring Prospectus until the date of Allotment. The

Selling Shareholders will, severally and not jointly, ensure that investors are informed of material developments

in relation to statements and undertakings made by them in relation to themselves and their respective portion of

the Equity Shares offered in the Offer from the date of the Red Herring Prospectus until the date of Allotment.

15

SECTION II: RISK FACTORS

An investment in the Equity Shares involves a high degree of risk. Investors should carefully consider all the

information in this Draft Red Herring Prospectus, including the risks and uncertainties described below, before

making an investment in the Equity Shares. The risks and uncertainties described in this section are not the only

risks that our Company currently faces. Additional ris