Granules India : Buyback - Tender offer

REGISTERED OFFICE

GRANULES INDIA LTD., 2nd Floor, 3rd Block, My Home Hub, Madhapur, Hyderabad - 500 081, Telangana, INDIA.

Tel: [phone], Fax: [phone], [e-mail], www.granulesindia.com

CIN: L24110TG1991PLC012471

`

Dated August 20, 2022

To,

National Stock Exchange of India Limited

BSE Limited

Symbol: NSE: GRANULES; BSE: 532482

Dear Sir,

Sub: Submission of Draft Letter of Offer (DLOF) for the buyback of equity shares of Granules India Limited ("Company").

Further to our letter dated August 09, 2022, wherein we informed that the Board of Directors of the Company, at its meeting held on August 09, 2022, approved the buyback of not exceeding 62,50,000 (Sixty Two Lakh and fifty Thousand only) fully paid-up equity shares of the Company, having a face value of Rs. 1/- ("Equity Shares'), representing 2.52% of the total number of Equity Shares in the paid-up equity share capital of the Company, at a price of Rs.400 (Four Hundred only) per Equity Share payable in cash for an aggregate amount not exceeding Rs.250,00,00,000 (Two Hundred and Fifty Crore only) ("Buyback Size"), on a proportionate basis through the tender offer route, in accordance with the Companies Act, 2013, as amended, and rules made thereunder, and the Securities and Exchange Board of India Buy-Back of Securities) Regulations, 2018, as amended ("Buyback Regulations") and other applicable laws. The Buyback size represents 9.93% and 9.92% of the aggregate of the Company's total paid-up equity share capital and free reserves as per the latest audited standalone and consolidated financial statements as of March 31, 2022, respectively.

A copy of the Draft Letter of Offer for the buyback of equity shares of the Company filed with the Securities and Exchange Board of India is enclosed with this letter.

We request you to kindly take the above on record.

Thanking You.

Yours sincerely,

For GRANULES INDIA LIMITED

Chaitanya

Tummala

Digitally signed by Chaitanya Tummala DN: c=IN, o=Personal, title=7263, pseudonym=aec1c37a71b869140c89d206c927 029c712aa65723eb81344995f3e30232cf01, postalCode=500013, st=Telangana, serialNumber=ae6c5085a4c307805711d3f1ab8 a1ff2da48346a26aa5fe898e52ec0775c3c69, cn=Chaitanya Tummala

Date: 2022.08.20 19:03:11 +05'30'

CHAITANYA TUMMALA (COMPANY SECRETARY & COMPLIANCE OFFICER)

DRAFT LETTER OF OFFER

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

This Draft Letter of Offer is being sent to you as a registered Equity Shareholder (as defined hereinafter) of Granules India Limited (the "Company") as on the Record Date (as defined hereinafter) in accordance with Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, as amended (the "Buyback Regulations"). If you require any clarifications about the action to be taken, you should consult your stockbroker or your investment consultant or the Manager to the Buyback i.e. Motilal Oswal Investment Advisors Limited or the Registrar to the Buyback i.e. KFin Technologies Limited (formerly known as "KFin Technologies Private Limited"). Please refer to the section on "Definitions of Key Terms" for the definition of the capitalized terms used herein.

Granules India Limited

Registered & Corporate Office: Second Floor, Block III, My Home Hub, Madhapur, Cyberabad,

Hyderabad - 500 081, Telangana

Tel. No.: [phone] | Facsimile: [phone]|Website:www.granulesindia.com

Corporate Identification Number (CIN): L24110TG1991PLC012471

Contact Person: Ms. Chaitanya Tummala, Company Secretary and Compliance Officer

E-mail: [e-mail]

OFFER FOR BUYBACK OF UPTO 62,50,000 (SIXTY TWO LAKHS AND FIFTY THOUSAND ONLY) FULLY PAID-UP EQUITY SHARES OF FACE VALUE OF ₹1/- EACH ("EQUITY SHARES") OF GRANULES INDIA LIMITED (THE "BUYBACK"), REPRESENTING 2.52% OF THE TOTAL NUMBER OF EQUITY SHARES IN THE PAID-UP EQUITY SHARE CAPITAL OF THE COMPANY, AS ON MARCH 31, 2022, FROM ALL THE EQUITY SHAREHOLDERS/ BENEFICIAL OWNERS OF THE FULLY PAID- UP EQUITY SHARES OF THE COMPANY AS ON THE RECORD DATE I.E. AUGUST 23, 2022 ("RECORD DATE"), ON A PROPORTIONATE BASIS, THROUGH THE "TENDER OFFER" ROUTE USING THE STOCK EXCHANGE MECHANISM, AT A PRICE OF ₹ 400/- (RUPEES FOUR HUNDRED ONLY) PER EQUITY SHARE (THE "BUYBACK PRICE"), PAYABLE IN CASH, FOR AN AGGREGATE AMOUNT NOT EXCEEDING ₹ 250 CRORES (RUPEES TWO HUNDRED AND FIFTY CRORES ONLY), EXCLUDING TRANSACTION COSTS (THE "BUYBACK SIZE"). AS REQUIRED UNDER THE BUYBACK REGULATIONS, EQUITY SHARES TO BE BOUGHT BACK ARE DIVIDED INTO TWO CATEGORIES: (I) RESERVED CATEGORY FOR SMALL SHAREHOLDERS (AS DEFINED HEREINAFTER); AND (II) GENERAL CATEGORY FOR ALL OTHER ELIGIBLE SHAREHOLDERS

1. The Buyback is in accordance with Article 60 of the Articles of Association of the Company and Sections 68, 69, 70 and all other applicable provisions of the Companies Act, 2013, (the "Act"), and applicable rules made thereunder including the Companies (Share Capital and Debentures) Rules, 2014, ("Share Capital Rules"), Companies (Management and Administration) Rules, 2014, as amended, to the extent applicable, in compliance with the SEBI Buyback Regulations read with the SEBI Circulars and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("SEBI Listing Regulations"), and including any amendments, statutory modifications or re- enactments thereof, for the time being in force and subject to such other approvals, permissions, consents, exemptions and sanctions as may be necessary and subject to such conditions and modifications, if any, as may be prescribed or imposed by the appropriate authorities while granting such approvals, permissions, consents, exemptions and sanctions as may be required from time to time from any statutory and/ or regulatory authorities including but not limited to Securities and Exchange Board of India, National Stock Exchange of India Limited, BSE Limited, Registrar of Companies, Reserve Bank of India, etc.
2. The Buyback Size is 9.93% and 9.92% of the aggregate of the fully paid-up equity share capital and free reserves (including securities premium account) as per the audited standalone and consolidated financial statements of the Company as on March 31, 2022 respectively (the latest audited standalone and consolidated financial statements available for the financial year as on the date of the Board meeting approving the proposal of the Buyback, held on August 9, 2022) and is within the statutory limits of 10% of the total fully paid-up equity share capital and free reserves (including securities premium account) as per the latest audited standaloneand consolidated financial statementsof the Company for financial year ended March 31, 2022 respectively. The Equity Shares proposed to be bought back represent 2.52% of the total number of Equity Shares in the total paid-up Equity Share capital of the Company, as on March 31, 2022.
3. TheLetter of Offer will be sent to the Equity Shareholder(s)/ Beneficial Owner(s) holding Equity Shares of the Company ason theRecord Date i.e. Tuesday, August 23, 2022.
4. The procedure for tendering Equity Shares and settlement is set out in Clause 20 (Procedure for Tender Offer and Settlement) on page 39 of this Draft Letter of Offer. The Form of Acceptance-cum-Acknowledgement (the "Tender Form") alongwith share transfer form ("Form SH-4") is enclosed together with this Draft Letter of Offer.
5. The procedure for Acceptance is set out in Clause 19 (Process and Methodology for the Buyback) on page 35 of this Draft Letter of Offer. The payment of consideration is in cash to the Eligible Shareholders. For further details on mode of payment of consideration to the Eligible Shareholders, please refer to Clause 20 (Procedure for Tender Offer and Settlement) on page 39 of this Draft Letter of Offer.
6. Equity Shareholders areadvisedto refer to Clause 17 (Details of the Statutory Approvals) andClause21 (Note on Taxation) onpages 34 and 46 respectively of this Draft Letter of Offer, before tendering their Equity Shares in the Buyback.
7. A copy of the Public Announcement dated August 10, 2022, published on August 11, 2022, this Draft Letter of Offer and the Letter of Offer (including the Tender Form and Form No. SH-4) shall also be available on the website of the Company- www.granulesindia.comand is expected to be available on the websites of Securities and Exchange Board of India- www.sebi.gov.in, NSE (www.nseindia.com), BSE (www.bseindia.com), and Registrar to the Buyback (www.kfintech.com).

	MANAGER TO THE BUYBACK			REGISTRAR TO THE BUYBACK
	Motilal Oswal Investment Advisors Limited			KFin Technologies Limited
			(formerly known as "KFin Technologies Private Ltd")
	Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot,
		Selenium Tower B, Plot 31-32, Financial District,
	Prabhadevi, Mumbai- 400 025, Maharashtra, India
		Nanakramguda, Serilingampally, Hyderabad - 500 032
	Tel. No.: [phone]
			Tel No.: [phone] | Toll free No.: 18003094001
	Email: [e-mail]
		Email: [e-mail]
	Investor Grievance E-mail:[e-mail]
		Website:www.kfintech.com
	Website: www.motilaloswalgroup.com
			Investor Grievance Email: [e-mail]
	Contact person: Kirti Kanoria/Ritu Sharma
			Contact Person: Mr. Murali Krishna
	SEBI Registration No.: INM000011005
			SEBI Registration No.: INR000000221
	CIN: U67190MH2006PLC160583
			CIN: U72400TG2017PLC117649
	BUYBACK OPENS ON:		[●], [●], 2022		BUYBACK CLOSES ON:	[●], [●], 2022

LAST DATE/ TIME OF RECEIPT OF COMPLETED TENDER FORMS AND OTHER SPECIFIED DOCUMENTS INCLUDING PHYSICAL SHARE CERTIFICATES BY THE

REGISTRAR TO THE BUYBACK: [●], [●], 2022 by 5.00 PM IST

Contents

1.		SCHEDULE OF ACTIVITIES ...........................................................................................................................................................	3
2.	DEFINITION OF KEY TERMS ........................................................................................................................................................	3
3.		DISCLAIMER CLAUSE ..................................................................................................................................................................	6
4.	TEXT OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS ..............................................................	8
5.	DETAILS OF THE PUBLIC ANNOUNCEMENT .............................................................................................................................	12
6.	DETAILS OF THE BUYBACK........................................................................................................................................................	12
7.	AUTHORITY FOR THE BUYBACK................................................................................................................................................	14
8.	NECESSITY FOR THE BUYBACK..................................................................................................................................................	14
9.	MANAGEMENT DISCUSSION AND ANALYSIS AND THE LIKELY IMPACT OF BUYBACK ON THE COMPANY...............................	15
10.	BASIS OF CALCULATING THE BUYBACK PRICE......................................................................................................................	21
11.	SOURCES OF FUNDS FOR THE BUYBACK..............................................................................................................................	22
12.	DETAILS OF THE ESCROW ACCOUNT AND THE AMOUNT DEPOSITED THEREIN..................................................................	22
13.	CAPITAL STRUCTURE AND SHAREHOLDING PATTERN .........................................................................................................	22
14.	BRIEF INFORMATION OF THE COMPANY.............................................................................................................................	24
15.	FINANCIAL INFORMATION ABOUT THE COMPANY .............................................................................................................	31
16.	STOCK MARKET DATA ..........................................................................................................................................................	33
17.	DETAILS OF THE STATUTORY APPROVALS ...........................................................................................................................	34
18.	DETAILS OF THE REGISTRAR TO THE BUYBACK AND COLLECTION CENTRES .......................................................................	35
19.	PROCESS AND METHODOLOGY FOR THE BUYBACK ............................................................................................................	35
20.	PROCEDURE FOR TENDER OFFER AND SETTLEMENT ..........................................................................................................	39
21.	NOTE ON TAXATION ............................................................................................................................................................	46
22.	DECLARATION BY THE BOARD OF DIRECTORS .....................................................................................................................	49
23.	AUDITOR'S CERTIFICATE ......................................................................................................................................................	49
24.	DOCUMENTS FOR INSPECTION............................................................................................................................................	52
25.	DETAILS OF THE COMPLIANCE OFFICER ..............................................................................................................................	53
26.	DETAILS OF THE REMEDIES AVAILABLE TO THE EQUITY SHAREHOLDERS/ BENEFICIAL OWNERS.......................................	53
27.	DETAILS OF INVESTOR SERVICE CENTRE..............................................................................................................................	53
28.	DETAILS OF THE MANAGER TO THE BUYBACK.....................................................................................................................	54

29. DECLARATION BY THE DIRECTORS REGARDING AUTHENTICITY OF THE INFORMATION IN THIS DRAFT LETTER OF OFFER 54

30.

ENCLOSURES: OFFER FORM.................................................................................................................................................

54

2

1. SCHEDULE OF ACTIVITIES

	Activity			Schedule of activities
			Date			Day
	Date of the Board meeting to approve the proposal for Buyback of Equity Shares		August 9,			Tuesday
	2022
	Date of Public Announcement for the Buyback		August 10,			Wednesday
	2022
	Date of publication of Public Announcement for the Buyback		August 11,			Thursday
	2022
	Record Date for determining the Buyback Entitlement and the names of Eligible Shareholders		August 23,			Tuesday
	2022
	Buyback opens on/ date of opening of Buyback		[●], 2022			[●]
	Buyback closes on/ date of closing of Buyback		[●], 2022			[●]
	Last date of receipt of completed Tender Forms and other specified documents including		[●], 2022			[●]
	physical share certificates by the Registrar to the Buyback
	Last date of verification of Tender Forms by the Registrar to the Buyback		[●], 2022			[●]
	Last date of intimation to the Designated Stock Exchange regarding Acceptance or non‐		[●], 2022			[●]
	acceptance of tendered Equity Shares
	Last date of settlement of bids on the Designated Stock Exchange		[●], 2022			[●]
	Last date of dispatch of share certificate(s) by the Registrar to the Buyback/ unblocking/ return
	of unaccepted demat Equity Shares by Designated Stock Exchange to Seller Member/ Eligible		[●], 2022			[●]
	Shareholders
	Last date for payment of consideration to Eligible Shareholders who participated in the Buyback		[●], 2022			[●]
	Last date of extinguishment of Equity Shares bought back		[●], 2022			[●]

Note: Where last dates are mentioned for certain activities, such activities may happen on or before the respective last dates.

2. DEFINITION OF KEY TERMS

This Draft Letter of Offer uses certain definitions and abbreviations which, unless the context otherwise indicates or implies or specified otherwise, shall have the meaning provided below. References to any legislation, act, regulations, rules, guidelines or policies shall be to such legislation, act, regulations, rules, guidelines or policies as amended, supplemented, or re-enacted from time to time and any reference to a statutory provision shall include any subordinate legislation made from time to time under that provision. The words and expressions used in this Draft Letter of Offer, but not defined herein shall have the meaning ascribed to such terms under the Buyback Regulations, the Act, the Depositories Act, and the rules and regulations made thereunder.

	Term			Description
	Acceptance / Accept /			Acceptance of Equity Shares tendered by Eligible Shareholders in the Buyback Offer.
	Accepted
	Acquisition Window			The facility for acquisition of Equity Shares through mechanism provided by the Designated Stock
			Exchange in the form of a separate window in accordance with the SEBI Circulars.
	Act or Companies Act			The Companies Act, 2013, as amended including the rules and regulations made thereunder.
	Additional Equity Shares			Additional Equity Shares tendered by an Eligible Shareholder over and above the Buyback
			Entitlement of such Eligible Shareholders not exceeding the Equity Shares held by such Eligible
	or Additional Shares
			Shareholder as on the Record Date.
	Articles / AOA/ Articles			Articles of Association of the Company, as amended from time to time
	of Association
	Board or Board of			Board of Directors of the Company (which term shall, unless repugnant to the context or meaning
	Directors			thereof, be deemed to include a duly authorized 'Committee' thereof).
	Board Meeting			Meeting of the Board of Directors of the Company held on August 9, 2022 approving the Buyback.
	BOI			Body of Individuals
	BSE			BSE Limited
				Offer for buy back of upto 62,50,000 (Sixty Two Lakhs and Fifty Thousand) Equity Shares at a price
	Buyback /Buyback			of ₹ 400/- (Rupees Four Hundred Only) per Equity Share, payable in cash, from the Eligible
			Shareholders on a proportionate basis through the Tender Offer route in terms of the Buyback
	Offer/ Offer
			Regulations read with SEBI Circulars for an aggregate amount not exceeding ₹ 250 crores (Rupees
				Two Hundred and Fifty Crores Only).
	Buyback Closing Date			[●], [●], 2022 being the last date up to which the tendering of Equity Shares by Eligible Shareholders
			will be allowed.

3

	Term			Description
	Buyback Committee			The Buy Back Committee of the Board is constituted and authorized for the purposes of the Buy
			Back by a resolution passed by the Board at its meeting held on August 9, 2022. The Buyback
	/ Share Buyback
			Committee comprises of Krishna Prasad Chigurupati, Chairman & Managing Director, Arun Rao
	Committee / Committee
			Akinepally, Independent Director and Sandip Neogi, Chief Financial Officer.
	Buyback Opening Date			[●], [●], 2022, being the date from which the tendering of Equity Shares by Eligible Shareholders
			will be allowed.
	Buyback Entitlement/			The number of Equity Shares that an Eligible Shareholder is entitled to tender in the Buyback, based
			on the number of Equity Shares held by such Eligible Shareholder, on the Record Date and the ratio
	Entitlement
			/ percentage of Buyback applicable to such Shareholder.
				The period between the date of board resolution authorizing the Buyback of the Equity Shares of
	Buyback Period			the Company, till the date on which the payment of consideration to Eligible Shareholders who
				have accepted the Buyback offer will be made.
	Buyback Price or Offer			Price at which Equity Shares will be bought back from the Eligible Shareholders i.e. ₹ 400/- (Rupees
	Price			Four Hundred Only) per Equity Share, payable in cash.
				Number of Equity Shares proposed to be bought back i.e. upto 62,50,000 (Sixty Two Lakhs and Fifty
	Buyback Size/ Offer Size			Thousand) fully paid-up Equity Shares multiplied by the Buyback Price i.e. a price of ₹ 400/- (Rupees
			Four Hundred Only) per Equity Share aggregating upto ₹ 250 crores (Rupees Two Hundred and Fifty
				Crores Only). The Buyback Size excludes Transaction Costs.
	Buyback Regulations/			The Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018 including any
	SEBI Buyback			amendments, statutory modifications or re-enactments thereof, for the time being in force and the
	Regulations			SEBI Circulars.
	CDSL			Central Depository Services (India) Limited
	Clearing Corporation			Indian Clearing Corporation Limited
	Companies Act or Act			Companies Act, 2013, as amended and applicable rules thereunder.
	"Company" or "Our
	Company" or "we" or			Granules India Limited, unless the context states otherwise.
	"us" or "our"
	Company's Broker			Motilal Oswal Financial Services Limited
	Company's Demat			A demat account of the Company wherein demat shares bought back in the Buyback would be
	Account			transferred
	Compliance Officer			Ms. Chaitanya Tummala
	Depositories			NSDL and CDSL
	Designated Stock			The designated stock exchange for the Buyback is BSE Limited.
	Exchange
	DIN			Director Identification Number
	DP			Depository Participant
	Director			Director(s) of the Company
	Draft Letter of Offer/			This Draft Letter of Offer dated August 19, 2022 filed with SEBI containing disclosures in relation to
	DLOF			the Buyback as specified in Schedule III of the Buyback Regulations.
	Eligible Shareholders/			Person(s) eligible to participate in the Buyback Offer and would mean all equity shareholders/
			beneficial owner(s) of Equity Shares of the Company as on Record Date i.e. Tuesday, August 23,
	Eligible Person/ Eligible
			2022 and excludes Equity Shareholders/ Beneficial Owners of the Equity Shares who are not
	Sellers
			permitted under applicable law to tender Equity Shares in the Buyback.
	Equity Shares/ Shares			Fully paid-up equity shares of the Company each having a face value of ₹1 (Rupee One Only).
	Escrow Account			The Escrow Account titled ""Granules India Limited Buy Back Offer 2022 - Escrow Account" opened
			with the Escrow Agent in terms of the Escrow Agreement.
	Escrow Agent			Axis Bank Limited
	Escrow Agreement			The Escrow Agreement dated August 9, 2022 entered into between the Company, the Manager to
			the Buyback and the Escrow Agent.
	Escrow Amount			An amount determined in accordance with the Regulations 9(xi) of Buyback Regulations.
	FCNR account			Foreign Currency Non-Resident Account
	FEMA			Foreign Exchange Management Act, 1999, as amended including the regulations, circulars,
			directions and notifications issued thereunder.
	FIIs			Foreign Institutional Investors means an institution who is registered under the Securities and
			Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, as amended.
	FPI(s)			Foreign Portfolio Investors as defined under the Securities and Exchange Board of India (Foreign
			Portfolio Investors) Regulations, 2019, as amended.
	General Category			Eligible Shareholders other than the Small Shareholders
	IT Act/ Income Tax Act			Income-tax Act, 1961, (including any statutory modifications or re-enactment thereof).

4