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INDIABULLS HOUSING FINANCE LIMITED (IBHFL)

INVESTMENT RATIONALE

• The issue offers yields ranging from 8.60 % to 9.15% depending up on the Category of Investor and the option applied for.

• Opportunity to invest in one of the leading Housing Finance Company.

• Credit Rating of ‘CARE AAA’ by CARE and ‘BWR AAA’, Outlook: Stable by Brickwork Ratings India Private Limited

• The NCDs are proposed to be listed on the BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”).

COMPANY PROFILE

• IBHFL is one of the largest housing finance companies ("HFCs") in India. IBHFL is a non-deposit taking HFC registered with the NHB. It is a

notified financial institution under the SARFAESI Act.

• IBHFL focuses primarily on long-term secured mortgage-backed loans. The company offer housing loans and loans against property to the

target client. The Company also offers mortgage loans to real estate developers in India in the form of lease rental discounting for commercial

premises and construction finance for the construction of residential premises.

• As of March 31, 2016, the company had offices spread across over 110 locations in India. It also has two representative offices in Dubai and

London to target NRI clients. Its presence across Tier I, Tier II and Tier III cities in India allows it to interact with and service its customers at

the local level.

• Company’s standalone borrowings as at June 30, 2016 were Rs 65174.76 crores. The company relies on long-term and medium-term

borrowings from banks and other financial institutions, including external commercial borrowings, issuances of non-convertible debentures and

commercial papers.

• As at March 31, 2016, 2015, and 2014, its consolidated gross NPAs as a percentage of its consolidated AUM were 0.84%, 0.85% and 0.83%,

respectively, and its consolidated net NPAs (which reflect its gross NPAs less provisions for NPAs, except counter-cyclical provision) as a

percentage of its consolidated AUM were 0.35%, 0.36% and 0.36%, respectively. As of March 31, 2016, 2015 and 2014, its standalone capital

to risk (weighted) assets ratio ("CRAR") were 20.51%, 18.35% and 19.14%, respectively.

• For the Fiscal Years 2016, 2015 and 2014, its consolidated revenue from operations was Rs. 8289.93crores, Rs 6449.30 crores and Rs 5406.40

crores, respectively, and its consolidated profit after tax before share of profit attributable to minority interest was Rs 2344.75 crores, Rs

1901.24 crores and Rs 1568.54 crores respectively. Its consolidated revenue from operations and consolidated profit after tax grew at a CAGR

of 23.8% and 22.3%, respectively, from Fiscal Year 2014 to Fiscal Year 2016.

Source: Prospectus dated September 9, 2016 Disclaimer: Invest only after referring to the prospectus

g Key Strengths

• One of the largest HFCs in India with strong financial performance, capitalization and credit ratings Company’s market position and its focus on the affordable housing segment allow it to benefit from the growth potential in this segment arising from various government and policy initiatives. The company has long-term credit ratings of ‘AAA’ (for its long-term loans and non-convertible debentures) from CARE and Brickwork Ratings and ‘AA+’ (for its non-convertible debentures) from CRISIL and ICRA. The company also has the highest short-term credit rating of ‘A1+’ from ICRA, CARE, CRISIL and India Ratings and Research. Additionally, it has obtained a credit rating of ‘AAA’ from CARE Ratings and Brickwork Ratings in relation to its subordinated debt programme. The company believes that its strong financial record and high credit ratings position it to take advantage of the growth in the HFC industry, provide it with significant competitive advantages, contribute to the growth of its business and provide a high degree of comfort to its stakeholders including shareholders, lenders and rating agencies.

• Access to diversified and cost effective funding sources Over the years, IBHFL has developed a diversified funding base and has established strong relationships with its lenders. Its lenders include PSU and private banks, mutual funds, insurance companies, provident funds, pension funds and other financial institutions. IBHFL believes that its strong financial performance, capitalisation levels and high credit ratings give considerable comfort to its lenders and enable it to borrow funds at competitive rates, thereby lowering its overall cost of borrowings

• Strong network and pan-India presence and brand Its geographical reach within India across Tier I, Tier II and Tier III cities allows it to target and grow its customer base. As at June 30, 2016, its presence in over 110 locations across India allows it to undertake loan processing, appraisal and management of customer relationships in an efficient and cost effective manner. The company believes that its customer-oriented approach and efficiencies have aided it in achieving customer loyalty and have established it as one of the leading HFCs in India. IBHFL was awarded “Business Superbrand” by Superbrand India 2016, “Best Affordable Housing Finance Company of the Year” by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) at the ASSOCHAM Housing Excellence Awards in Fiscal Year 2016, the “Housing Finance Company of the Year” by Accommodation Times in Fiscal Year 2016, the “Best Housing Finance Company” by Realty Plus in Fiscal Year 2016, the “Excellence in Home Loan Banking” by CMO Asia and Asian Confederation of Businesses, the "Best Housing Finance Company" of the Fiscal Year 2014 by ASSOCHAM, and the "Fastest Growing Housing Finance Company" in the year 2014 by National Real Estate Development Council (NAREDCO).

• Technology advancements aimed at increasing customer accessibility IBHFL is one the first home lenders to offer the e-Home Loans facility to the customers. The e-Home Loan is a technological endeavour that enables its home loan customers to avail of paperless loans through their computers or mobiles devices. With this technology, the entire process of loan origination (from loan application to approval) can be managed through the devices thus obviating the need for branch visits. This results in significant customer convenience as it provides for a seamless loans approval process remotely, and at times convenient to the customer. IBHFL also expect to be able to enhance its access to customers in regions where we do not have branches through its e-Home facility. Additionally, this also results in reduced operational costs and overheads aimed at increasing its margins.

Source: Prospectus dated September 9, 2016 Disclaimer: Invest only after referring to the prospectus

g ISSUE Structure

Issuer Indiabulls Housing Finance Limited Type of instrument/ Name of the security/ Seniority/Nature

Secured and Unsecured Redeemable Non-Convertible Debentures

Mode of the issue Public issue Lead Managers A. K. Capital Services Limited, YES Securities (India) Limited, Edelweiss Financial Services Limited, Axis Bank Limited, IIFL Holdings Limited,

IndusInd Bank Limited, SBI Capital Markets Limited and Trust Investment Advisors Private Limited Issue Public Issue by the Company of Secured NCDs and Unsecured NCDs aggregating up to Rs 3500 crores with an option to retain over-

subscription up to Rs 3500 crores for issuance of additional Secured NCDs and Unsecured NCDs aggregating up to Rs7000 crores. The Unsecured NCDs will be in the nature of Subordinated Debt and will be eligible for Tier II capital.

Base Issue Rs 3500 crores Option to retain Oversubscription Amount Rs 3500 crores Interest on application amounts received which are used towards allotment of NCDs

The Company shall pay interest on application amount, as per the Effective Yield applicable to the relevant Series of NCD (as per the Category of the Investor), allotted to the Applicants, other than to ASBA Applicants, subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended, as applicable, to any Applicants to whom NCDs are allotted pursuant Issue from the date of realization of the cheque(s)/demand draft(s) up to one day prior to the Deemed Date of Allotment.

Interest on application amounts received which are liable to be refunded

The Company shall pay interest at the rate of 6.00% p.a. on application amount which is liable to be refunded to the Applicants, other than to ASBA Applicants, in accordance with the provisions of the SEBI Debt Regulations and/or the Companies Act 2013, or other applicable statutory and/or regulatory requirements, subject to deduction of income tax under the provisions of the Income Tax Act, 1961, as amended, as applicable, to any Applicants to whom NCDs are allotted pursuant to the Issue from the date of realization of the cheque(s)/demand draft(s) up to one day prior to the Deemed Date of Allotment. However, the Company shall not be liable to pay any interest on monies liable to be refunded in case of (a) invalid applications or applications liable to be rejected, (b) applications which are withdrawn by the Applicant and/or (c) monies paid in excess of the amount of NCDs applied for in the Application Form.

Face value/Issue Price (in Rs) Rs 1,000 per NCD Put/Call option Not applicable Minimum Application size and in multiples of NCD thereafter

Rs 10,000 (10 NCDs) collectively across all series and in multiple of Rs 1,000 (one NCD) thereafter across all series

Market Lot/ Trading Lot One NCD Pay-in date Application Date. The entire Application Amount is payable on Application. Credit ratings The NCDs proposed to be issued under this Issue have been rated ‘BWR AAA’ with Stable Outlook by Brickwork and CARE AAA (Triple A) by

CARE. For the rationale for these ratings, see Annexure A & B of the Prospectus Listing The NCDs are proposed to be listed on NSE and BSE. The NCDs shall be listed within 12 Working Days from the date of Issue Closure. For

more information, see “Other Regulatory And Statutory Disclosures” in the prospectus. Issuance mode of the instrument* Both physical and dematerialised form Trading mode of the instrument In dematerialised form only Issue opening date 15-Sep-16 Issue closing date** 23-Sep-16 Security and asset cover The Secured NCDs proposed to be issued will be secured by a first ranking pari passu charge on the current assets (including investments) of

the Issuer, both present and future; and on present and future loan assets of the Issuer, including all monies receivable for the principal amount and interest thereon. The Secured NCDs will have an asset cover of one time on the principal amount and interest thereon. The Issuer reserves the right to sell or otherwise deal with the receivables, both present and future, including without limitation to create a charge on pari passu basis thereon for its present and future financial requirements, without requiring the consent of, or intimation to, the Secured NCD holders or the Debenture Trustee in this connection, provided that a minimum security cover of one time on the principal amount and interest thereon, is maintained. No security will be created for Unsecured NCD in the nature of Subordinated Debt

Deemed date of Allotment The date on which the Board or a duly authorized committee approves the Allotment of NCDs. All benefits relating to the NCDs including interest on NCDs shall be available to Investors from the Deemed Date of Allotment. The actual allotment of NCDs may take place on a date other than the Deemed Date of Allotment.

* In terms of Regulation 4(2)(d) of the SEBI Debt Regulations, the Company will undertake this public issue of the NCDs in dematerialised form. However, in terms of section 8(1) of the Depositories Act, the Company, at the request of the Investors who wish to hold the NCDs in physical form will fulfil such request. However, trading in NCDs shall be compulsorily in dematerialized form. ** The subscription list shall remain open at the commencement of banking hours and close at the close of banking hours for the period as indicated, with an option for early closure or extension by such period, as may be decided by the Board or the Bond Issue Committee. In the event of such early closure of or extension subscription list of the Issue, the Company shall ensure that notice of such early closure or extension is given to the prospective investors through an advertisement in a leading daily national newspaper on or before such earlier date or extended date of closure. Applications Forms for the Issue will be accepted only from 10:00 a.m. till 5.00 p.m. (Indian Standard Time) or such extended time as may be permitted by the Stock Exchanges, on Working Days during the Issue Period. On the Issue Closing Date, Application Forms will be accepted only from 10:00 a.m. till 3.00 p.m. (Indian Standard Time) and uploaded until 5.00 p.m. (Indian Standard Time) or such extended time as may be permitted by the Stock Exchanges.

Source: Prospectus dated September 9, 2016 Disclaimer: Invest only after referring to the prospectus

g SPECIFIC TERMS FOR EACH SERIES OF SECURED NCDs

Series I II III IV V VI VII Interest type Fixed Fixed Fixed Fixed Fixed Fixed Fixed Interest reset process NA NA NA NA NA NA NA Frequency of Interest Payment Annual Cumulative Annual Cumulative Monthly Annual Cumulative Minimum Application Rs 10,000 (10 NCDs) across all Series collectively In Multiples thereafter Rs 1,000 (1 NCD) Face Value of NCDs (Rs/ NCD) Rs 1,000 Issue Price (Rs/ NCD) Rs 1,000 Mode of Interest Payment Through various options available Tenor 3 Years 5 Years 10 Years Coupon (%) for NCD Holders in Category I and Category II 8.55% NA 8.75% NA 8.51% 8.85% NA Coupon (%) for NCD holders in Category III 8.65% NA 8.90% NA 8.65% 9.00% NA Coupon (%) for NCD holders in Category IV 8.70% NA 8.90% NA 8.65% 9.00% NA Effective Yield (per annum) For NCD holders in the Category I and the Category II 8.55% 8.55% 8.75% 8.75% 8.85% 8.85% 8.85% For NCD holders in the Category III 8.65% 8.65% 8.90% 8.90% 9.00% 9.00% 9.00% For NCD holders in the Category IV 8.70% 8.70% 8.90% 8.90% 9.00% 9.00% 9.00% Put and call option N/A Redemption Date (Years from the Deemed Date of Allotment) 3 years 5 years 10 years Redemption Amount (Rs/NCD) For NCD holders in the Category I and the Category II Rs 1,000 Rs 1,278.47 Rs 1,000 Rs 1,521.41 Rs 1,000 Rs 1,000 Rs 2,336.07 For NCD holders in the Category III Rs 1,000 Rs 1,282.01 Rs 1,000 Rs 1,531.93 Rs 1,000 Rs 1,000 Rs 2,368.48 For NCD holders in the Category IV Rs 1,000 Rs 1,283.78 Rs 1,000 Rs 1,531.93 Rs 1,000 Rs 1,000 Rs 2,368.48

*The Company shall allocate series VI NCDs wherein the Applicants have not indicated their choice of the relevant NCD series

SPECIFIC TERMS FOR EACH SERIES OF UNSECURED NCDs** Series VIII IX X Interest type Fixed Fixed Fixed Interest reset process NA NA NA Frequency of Interest Payment Monthly Annual Cumulative Minimum Application Rs 10,000 (10 NCDs) across all Series collectively In Multiples thereafter Rs 1,000 (1 NCD) Face Value of NCDs (Rs/ NCD) Rs 1,000 Issue Price (Rs/ NCD) Rs 1,000 Mode of Interest Payment Through various options available Tenor 10 Years Coupon (%) for NCD Holders in Category I and Category II 8.65% 9.00% NA Coupon (%) for NCD holders in Category III and Category IV 8.79% 9.15% NA Effective Yield (per annum) For NCD holders in the Category I and the Category II 9.00% 9.00% 9.00% For NCD holders in the Category III and Category IV 9.15% 9.15% 9.15% Put and call option N/A Redemption Date (Years from the Deemed Date of Allotment) 10 years Redemption Amount (Rs/NCD) For NCD holders in the Category I and the Category II Rs 1,000 Rs 1,000 Rs 2,368.48 For NCD holders in the Category III and the Category IV Rs 1,000 Rs 1,000 Rs 2,401.30

*The Company shall allocate series IX NCDs wherein the Applicants have not indicated their choice of the relevant NCD series. **Unsecured NCDs offered under the Issue will be in the nature of subordinated debt. Therefore, in accordance with the Housing Finance Companies (NHB) Directions, 2010, Notification No. NHB.HFC.DIR.1/CMD/2010, as amended from time to time, Unsecured NCDs will be subordinated to the claims of other creditors and are free from restrictive clauses and are not redeemable at the instance of the debenture holder or without the consent of the supervisory authority of the HFC. Investors in the Issue who fall under Category IV and who are senior citizens on the Deemed Date of Allotment shall be eligible for additional coupon of 0.10% per annum provided the NCDs are held by the investors on the relevant record date applicable for payment of respective coupon and/ or redemption of NCDs across all series.

Senior Citizen(s) have to provide self -attested copy of PAN as additional KYC document irrespective of the mode of application either through demat or physical for the eligibility of additional coupon of 0.10% per annum. In case of non receipt of copy of PAN along with the application form while applying for the NCDs of the Issue, the additional coupon of 0.10% p.a. will not be applicable.

Source: Prospectus dated September 9, 2016 Disclaimer: Invest only after referring to the prospectus

g Allocation Ratio

QIB Portion Corporate Portion High Net Worth Individual Portion Retail Individual Investor Portion 20% of the Overall Issue Size 20% of the Overall Issue Size 30% of the Overall Issue Size 30% of the Overall Issue Size

Who can apply? Category I Category II Category III Category IV

Institutional Investors Non Institutional Investors High Net-worth Individual Investors (“HNIs”),

Retail Individual Investors

• Public financial institutions, scheduled commercial banks, Indian multilateral and bilateral development financial institution which are authorised to invest in the NCDs;

• Provident funds, pension funds, superannuation funds and gratuity funds, which are authorised to invest in the NCDs;

• Venture Capital Funds/ Alternative Investment Fund registered with SEBI;

• Insurance Companies registered with IRDA; • State industrial development corporations; • Insurance funds set up and managed by the army, navy, or

air force of the Union of India; • Insurance funds set up and managed by the Department of

Posts, the Union of India; • National Investment Fund set up by resolution no. F. No.

2/3/2005-DDII dated November 23, 2005 of the Government of India published in the Gazette of India; and

• Mutual Funds.

• Companies within the meaning of section 2(20) of the Companies Act, 2013; co-operative banks, and societies registered under the applicable laws in India and authorised to invest in the NCDs;

• Statutory Bodies/Corporations, • Regional Rural Banks • Public/private charitable/ religious trusts which are

authorised to invest in the NCDs; • Scientific and/or industrial research organisations,

which are authorised to invest in the NCDs; • Partnership firms in the name of the partners; • Limited liability partnerships formed and registered

under the provisions of the Limited Liability Partnership Act, 2008 (No. 6 of 2009);

• Association of Persons; and • Any other incorporated and/ or unincorporated body

of persons

• Resident Indian individuals and Hindu Undivided Families through the Karta applying for an amount aggregating to above Rs 10 Lacs across all series of NCDs

• Resident Indian individuals and Hindu Undivided Families through the Karta applying for an amount aggregating up to and including Rs 10 Lacs across all series of NCDs

Who are not eligible to apply for NCDs? The following categories of persons, and entities, shall not be eligible to participate in the Issue and any Applications from such persons and entities are liable to be rejected:

1. Minors without a guardian name*(A guardian may apply on behalf of a minor. However, Applications by minors must be made through Application Forms that contain the names of both the minor Applicant and the guardian);

2. Foreign nationals, NRI inter-alia including any NRIs who are (i) based in the USA, and/or, (ii) domiciled in the USA, and/or, (iii) residents/citizens of the USA, and/or, (iv) subject to any taxation laws of the USA;

3. Persons resident outside India and other foreign entities; 4. Foreign Institutional Investors; 5. Foreign Portfolio Investors; 6. Foreign Venture Capital Investors 7. Qualified Foreign Investors; 8. Overseas Corporate Bodies; and 9. Persons ineligible to contract under applicable statutory/regulatory requirements.

*Applicant shall ensure that guardian is competent to contract under Indian Contract Act, 1872

Allotments in Under Subscription: Under subscription, if any, in any Portion, priority in allotments will be given in the following order:

i. Retail Individual Investor Portion ii. High Net worth Individual Portion iii. Corporate Portion iv. QIB Portion

Within each Portion, priority in Allotments will be given on a first-come-first-serve basis, based on the date of upload of each Application into the electronic system of the Stock Exchange. Allotments in case of oversubscription:

In case of an oversubscription, allotments to the maximum extent, as possible, will be made on a first-come first-serve basis and thereafter on proportionate basis, i.e. full allotment of NCDs to the Applicants on a first come first basis up to the date falling 1 (one) day prior to the date of oversubscription and proportionate allotment of NCDs to the Applicants on the date of oversubscription (based on the date of upload of each Application into the Electronic Book with Stock Exchange, in each Portion).

Source: Prospectus dated September 9, 2016 Disclaimer: Invest only after referring to the prospectus

g

Modes of Making Application Applicants may use any of the following facilities for making Applications:

1. ASBA Applications through the Members of Consortium, or the Trading Members of the Stock Exchange only in the Specified Cities (namely, Mumbai, Chennai, Kolkata, Delhi, Ahmedabad, Rajkot, Jaipur, Bengaluru, Hyderabad, Pune, Vadodara and Surat) (“Syndicate ASBA”). For further details, see “- Submission of ASBA Applications” in prospectus.

2. ASBA Applications through the Designated Branches of the SCSBs. For further details, see “- Submission of ASBA Applications” in the prospectus and

3. Non-ASBA Applications through the Members of Consortium or the Trading Members of the Stock Exchange at the centres mentioned in Application Form. For further details, see “Submission of Non-ASBA Applications (other than Direct Online Applications)” in the prospectus.

4. Non-ASBA Applications for Allotment in physical form through the Members of Consortium, Consortium Members, sub-brokers or the Trading Members of the Stock Exchange at the

centres mentioned in Application Form. For further details, please refer to “Submission of Non-ASBA Applications for Allotment of NCDs in the Physical Form” in the prospectus. Please note that clarifications and/or confirmations regarding the implementation of the requisite infrastructure and facilities in relation to direct online applications and online payment facility have been sought from the Stock Exchange and is subject to confirmation from Stock Exchange.

Key Operational and Financial Parameters (Consolidated) (Rs.in crores) Parameters FY 2016 FY 2015 FY 2014 Networth# 10626.78 6565.18 5638.86 Total Debt of which Non Current Maturities of Long Term Borrowing 35521.26 29105.45 20165.52 Short Term Borrowing 14310.82 11861.48 9147.40 Current Maturities of Long Term Borrowing 11253.24 6520.52 6226.60 Net Fixed Assets 68.56 54.13 46.91 Non Current Assets (Excluding Fixed Assets) 54666.67 41119.11 32054.93 Cash and Cash Equivalent 2901.70 3490.29 4419.04 Current Investments 9968.52 6140.86 2922.34 Current Assets ( Excluding Cash and Cash Equivalent & Current Investments) 8763.39 6358.24 4905.15 Current Liabilities ( Excluding Short term borrowing , Current Maturities of Long Term Borrowing)

3740.93 2389.64 2801.39

Non Current Liabilities 915.82 720.36 368.61 Assets Under Management 68682.55 52235.03 41169.40 Off Balance Sheet Assets - - - Interest Income (Including Treasury Income) 8764.98 6911.57 5656.82 Interest Expenses* 4971.43 3944.20 3282.38 Provisioning & Write-offs (net of recoveries) 506.86 300.27 229.74 PAT 2344.75 1901.24 1568.54 Gross NPA (%)** 0.80% 0.80% 0.80% Net NPA (%)*** 0.30% 0.40% 0.40% Tier I Capital Adequacy Ratio (%)-Standalone 17.90% 15.20% 15.10% Tier II Capital Adequacy Ratio (%)-Standalone 2.70% 3.10% 4.10%

* Interest Expenses means the total finance cost **Gross NPA % = Gross NPA / (Assets Under Management less Off Balance Sheet Assets) ***Net NPA % = (Gross NPAs less provisions for NPAs, except counter-cyclical provision) / (Assets Under Management less Off Balance Sheet Assets) # Net Worth=Share Capital+Reserves and Surplus+Money received against Share Warrants+Minority Interest-Goodwill on Consolidation

Source: Prospectus dated September 9, 2016 Disclaimer: Invest only after referring to the prospectus