Mumbai Angels Network launches the first of its kind: Lifeline Infusion Program

Mumbai Angels Network launches the first of its kind: Lifeline Infusion Program "We understand that the current circumstances are completely unprecedented and it's getting increasingly difficult for Startups to defend and grow what they have nurtured all this time. Mumbai Angels understands its responsibility as the leading angel investing platform in the country to create innovative solutions for both our startups and investors and believes in leading from the front. We stand together with our startups as they weather through these turbulent times and adapt to the new reality. As a first step, we are proud to announce the Startup Lifeline Infusion Program. Key highlights Program: - - Detailed documents data room shared with members - Investments via SAFE, Convertible securities - Min Investment INR 50,000/- (No upper cap) - 40% Discount to the next round As a pioneering Angel Investing Network in India, we are a group that is unequivocally bullish on the long term outlook for the startup ecosystem. We believe in our founders and teams, and wish everyone the best in navigating through this extremely turbulent and stressful time. This too shall pass and we hope you emerge from this crisis stronger than ever before. Stay safe, healthy and informed. " - Nandini Mansinghka, Co-Promoter & CEO, Mumbai Angels Network

Mumbai Angels portfolio company, AdOnMo raises pre-series A of $3 mn led by BAce Capital

Mumbai Angels portfolio company, AdOnMo raises pre-series A of $3 mn led by BAce Capital

January 31, 2020 AdOnMo has recently raised $1.5 mn from BAce Capital backed by Ant Financial. BAce Capital is led by Mr. Kshitij Karundia (KK), who is a esteemed Mumbai Angels Networks member, along with Benny Chen. The company now has raised a total pre-series funding of $3mn after adding the funds raised by Mumbai Angels, Astarc Ventures and other Angel investors.

AdOnMo, started in 2017 by Sandeep Bommireddi and Sravanth Gajula in Hyderabad, specialises in OOH digital advertising, enabling targeted ads at relevant localities using Hyperlocal Intelligence & patented tech. AdOnMo provides outdoor advertising solutions that allow clients to display advertisements on LED screens mounted on taxis. AdOnMo will use the fresh funding to finance product development, talent recruitment, and team construction. The startup plans to further expand its operations in the Indian market. It currently has a presence in Mumbai, Hyderabad, New Delhi and Bengaluru.

“We wanted to take a radically different approach to the problems in the advertising industry. We have invested and would continue to invest heavily in technology advancements and make the media-tech space not just accountable, but constantly evolving and contextual,” said Sravanth Gajula, Co-founder of AdOnMo, in the statement.

Benny Chen, Managing Partner of BAce Capital, commented “Drawing parallels from the China story, we see a lot of potential in this space and we think it's very early times for it in India. AdOnMo is taking a unique approach to truly unify online and outdoor advertising using cutting edge technology. We are really excited to join hands with young & passionate AdOnMo team to digitalize India's growing smart cities and support the growth of it's digital economy.”

Gita Nayyar, Mumbai Angels Investor, said, “I had invested in AdOnmo as the founding team impressed me with their proposition and I believed there was considerable  growth potential. The association with BAce capital will help them grow significantly in new markets and segments. I would like to congratulate the team on securing this round of funding.”

Vijay Hede, Mumbai Angels Investor commented, “I am pleased with AdOnMo’s performance as the founders have delivered what they had promised when I invested. The additional funding from BAce Capital will help them expand into new geographies at a faster rate and further product development.”

Raj Rughani, Mumbai Angels Investor also added "It is a pleasure to be associated with able and dedicated promoters like Sravanth and Sandeep. The introduction of BAce Capital will greatly enhance commercialization opportunities with its international outreach. I look forward to supporting the business in its growth initiatives to cement its position as an enduring OOH Digital Advertising company, built in India",

Nandini Mansinghka, Co-promoter and CEO at Mumbai Angels Network commented, “We are very happy to be a part of the AdOnMo journey which will change the face of outdoor media. AdOnMo Digital OOH is an innovative technology which will disrupt the outdoor advertising industry in India. We wish AdOnMo the very best.”

About Mumbai Angels Network: Started in 2006, Mumbai Angels Network (MA Network) is India’s premier platform focused on new venture investing. The network is today 400+ members strong, across 8 chapters (Mumbai, Delhi, Bangalore, Kolkata, Hyderabad, Jaipur, Goa and Pune). It has a 135+ strong portfolio with 30+ exits and has invested 150+ crores.

Detailed Q&A for Blogpsot

Q: What is dematerialisation?

A: Dematerialisation is the process of converting physical certificates into electronic format.

Q: Why do we need to dematerialise our shares? What are the benefits?
A: Physical shares require administrative bandwidth to maintain proper records. Physical shares also incur expenses associated with paper for certificate, printing of certificate and distribution of certificates to investors. After investing time and money, physical certificates are still at risk of duplication, damages, loss & theft, etc.

Dematerialisation solves these problems and also provides benefits like:

●       Improvement in corporate governance and increased transparency in the shareholding structure

●       Lowers costs related to printing and distribution of shares to investors

●       Easy transfer of funds - electronically facilitation of corporate actions like buyback, dividend payment, etc. as an investor’s demat account can be linked to their bank account.

●       Effective communication: DPs sends SMS regarding transactions and modifications in account details to the mobile number registered in the demat account.

Q: How much do the portfolio company will have to pay?

A: Charge for the first year will be  Rs33,100 /-  + GST for any company that has ordinary equity shares and single class of preferential shares with nominal value of admitted security less than Rs2.5cr. The company will also need to deposit a security deposit equivalent to two years of annual custodial fees (starting Rs10,000) with the Depository participant.

Q: Is there a recurring charge to be paid by the portfolio company?

A: Recurring charge are to be paid to Depository participant (DP) and Registrar and share transfer agent (RTA) and will be Rs12,500/- + GST per annum for any company that has equity shares and single class of preferential shares with nominal value of admitted security less than Rs2.5cr.

●       Annual maintenance charges/ custodial charges to be paid to DP:

Nominal value of admitted securities	Annual Custodial Charges + applicable taxes (Rs)
Upto Rs2.5 crore	5,000
Above Rs2.5 crore and upto Rs5 crore	9,000
Above Rs5 crore and upto Rs10 crore	22,500
Above Rs10 crore and upto Rs20 crore	45,000
Above Rs20 crore	75,000

●       Annual recurring charges to be paid to RTA

○        For ordinary equity shares: Annual maintenance fees of Rs. 5,000/- + GST per ISIN would be charged up to 100 shareholders.

○        Preference shares: Annual maintenance fees of Rs 2,500/- + GST per ISIN would be charged up to 100 shareholders.

Q: Will this eliminate our requirement to collect physical shares in the next round?

A: Yes, new shares issues and transfers will be done electronically and directly in the investor’s demat account.

Q: What is an ISIN?

A: ISIN (International Securities Identification Number) is a unique 12 digit alphanumeric

identification number allotted for security. Equity fully paid up, equity‐partly paid up, equity with differential voting /dividend rights issued by the same issuer will have different ISINs.

Q: Who are the parties involved in getting ISIN and demat?

A: The process involves the Depository participant (DP), Register and share agent (RTA), Mumbai Angels, the company, and investors.

Q: Who is a depository participant? What are different types of depositories?

A: A depository is responsible for holding the securities of a shareholder in the electronic

form. These securities could be in the form of bonds, government securities and mutual

fund units, which are held by a registered Depository Participant (DP). Currently there are

two Depositories registered with SEBI:

• National Securities Depository Limited (NSDL) and the other

• Central Depository Service (India) Limited (CDSL).

Q: Who is a Registrar and Transfer Agent (RTA)?

A: An RTA is an agent of the issuer. RTA acts as an intermediary between the issuer and

depository for providing services such as dematerialization, rematerialization, initial

public offers (IPO) and corporate actions.

Q: What is the process?

A: The process to get shares in demat account can be divided into two sub-process:

●       Process for the company: Getting ISIN for securities

○        The company will have to submit a list of documents (details in annex) and fees to get its securities (ordinary equity, preference shares, etc.) admitted to the Depository participant.

○        Depository participant after verifying the documents will issue ISIN (International Securities Identification Number) for each type of security.

●       Process for the investor to convert physical share to demat

○        After issuance of ISIN, the Investors will have to submit completed Dematerialisation Request Form (DRF) along with their physical share certificates to the Depository participant.

○        Depository participant then send DRF to the RTA to verify details and convert physical shares to electronic form.

Q: How long does the process take?

A: Process for getting ISIN for securities will take 15-30 days based on readiness of paperwork while converting physical shares to electronic form will take 7-14 days.

Q: What happens to the physical certificates after they are dematerialized?

A: After dematerialization, physical certificates may be retained / destroyed by the Issuer /

RTA.

Q: Where is Dematerialisation Request Form DRF available?

A: Dematerialisation Request Form (DRF) are available with the Depository participant and can be accessed online at link to DRF from at CDSL.

Q: What are the components of the charges?

A: Fee comprises one-time joining fees and annual maintenance fee and is payable to Depository participant (DP), Register and share agent (RTA), and Mumbai Angels.

●       One-time fee is payable DP, RTA, and Mumbai Angels

●       Annual maintenance fee is payable to depository DP and RTA 

Q: How much do we pay to the Depository participant?

A: Fee payable to Depository participant are given below:

●       One time processing fee of Rs15,000/- + applicable taxes per company

●       One-time fee of Rs600/- per company for Tripartite agreement (for franking and e-stamping / on stamp paper)

●       Annual maintenance charges/ custodial charges:

Nominal value of admitted securities	Annual Custodial Charges + applicable taxes (Rs)
Upto Rs2.5 crore	5,000
Above Rs2.5 crore and upto Rs5 crore	9,000
Above Rs5 crore and upto Rs10 crore	22,500
Above Rs10 crore and upto Rs20 crore	45,000
Above Rs20 crore	75,000

●       The company will also be required to maintain a security deposit of not less than two years annual custodial fees (given in the above table) with the Depository participant.

Q: How much does the Register and share agent (RTA) charge?

A: Fee to be paid to RTA depends upon the number and type of securities to be admitted by the company i.e. ordinary shares, preferential shares, etc.

For ordinary equity shares:

●       Annual maintenance fees of Rs. 5,000/- + GST per ISIN would be charged up to 100 shareholders.

●       Corporate action charges will be Rs. 1,000/- + GST per Corporate Action for allotment & issue of fresh securities.

●       Reimbursement of expenses on an actual basis ( like courier, postage, CD ROMs, Labor charges, binding, sealing conveyance and travel, courier etc.)

Preference shares:

●       Annual maintenance fees of Rs 2,500/- + GST per ISIN would be charged up to 100 shareholders.

●       Corporate action charges will be Rs 1,000/- + GST per Corporate Action for allotment, issue & redemption/conversion of securities.

●       Reimbursement of expenses on an actual basis ( like courier, postage, CD ROMs, Labor charges, binding, sealing conveyance and travel, courier etc.).

●       Preference shares having different maturity dates are classified as different securities and ISIN needs to issued for each type of preferential shares. 

Q: How much does Mumbai Angels Network charge?

A: Mumbai Angels Network will charge one-time processing fees of Rs 5,000/- + GST per company. The charge is to compensate Mumbai Angels for time and effort for Mumbai Angels in driving this initiative and support through the process.

Q: Can we bypass RTA and directly engage with Depository participants?

A: Technically Yes, RTA can be bypassed but the company will have to obtain direct in-house connectivity with Depository participants which requires significant investment.

The company will have to procure computer hardware as per the configuration specified by CDSL and would have to register itself with CDSL and submit requisite documents. CDSL's system is based on centralised database architecture with on-line connectivity with RTAs. Because of this centralisation, the cost for setting up RTA connectivity is significantly less without compromising in any manner on security and safety of the system. RTAs also need not incur high recurring costs in terms of maintaining back-ups and the related data storage. These advantages provide the wherewithal to RTAs to offer services to issuer companies at a significantly lower cost.

 Q: Do we require a different demat account for every security issued?

A: Single demat account with CDSL (Central Depository Services (India) Limited) will be required for all the dematerialised shares of Mumbai Angels Network invested companies.  

Q: Do dematerialized securities have certificate number, distinctive range number or

certificate numbers?

A: No. Dematerialized securities do not have any of the numbers mentioned above. Securities held in demat form are fungible, which means that any share of an ISIN is similar to any other share of that ISIN.

Q: Can electronic holdings be converted back in physical certificate form?

A: Yes. It can be done through Rematerialisation, which is the process of converting electronic holdings back into physical certificates.

Q: Is it compulsory to mention the ISIN of the security while filling up the DRF?

A: Yes. The ISIN of the security should be mentioned in the DRF, to ensure that the correct

security is dematerialized. ISIN can also be be obtained from the DP or from CDSL’s website, www.cdslindia.com and NSDL’s website, www.nsdl.co.in

Q: Who is the registered owner of Securities?

A: When securities of a company are held in physical form by an investor, his/ her name is

recorded in the books of the company as a ‘Registered Owner’ of the securities. When physical shares are converted into electronic form, the depository becomes ‘Registered owner” in the books of the company and investor’s name is removed from books of the company.

Q: Can a demat account be opened in the name of Joint Holders?

A: Yes. A demat account can be opened in a single name or in joint holders’ name. There can be maximum three account holders i.e. one main holder and two joint holder

Q: What are the list of documents required?

A: Following documents and forms are required. RTA and Mumbai Angles will help you in filling required forms and guide in getting other required documents.

1.      Master Creation Form (Each & every page of the MCF should be on the letter head of the Company along with Company rubber stamp & signature of the Co Official ) 

2.      Certified copy of  Certificate of Incorporation

3.      Soft copy of security details on letter head of Company  (Format to be provided by RTA)

4.      Board Resolution along with Specimen Signature  (Format to be provided by RTA)

5.      Undertaking-cum-Indemnity on letter Head of Company  (Format to be provided by RTA)

6.      Letter for freezing/unfreezing of securities on letter head of company

7.      Certified copy of TAN & GST Certificate

8.      Certified copy of the Memorandum of Association &  Articles of Association

9.      Certified copy of Annual report for last financial year

10.  Net worth Certificate  (Format to be provided by RTA)

11.  Tripartite agreement  (Format to be provided by RTA)   

Important Instructions for executing Tripartite Agreement:

1.      Agreements should be executed on the stamp paper/franking of Rs. 600/-.

2.      All pages of the agreement should be stamped and signed by Issuer and RTA.

3.      Name and signature of the witness (Issuer and RTA) should be present on the last page of the Agreement.

4.      You are required to send the 1 Original + 2 Photo Copies of the Tripartite Agreement  , duly stamped and signed in Original by both Issuer and RTA.

Frequently Asked Questions

1. Why do we need to dematerialise our shares?
2. What is the process?
3. What are the components of charges?
4. How much do we have to pay to the Depository Participant? (give full form for both)
5. How much does the RTA Charge?
6. How much does Mumbai Angels Network Charge?
7. What is the overall range of charges?
8. Is there a recurring charge every year?
9. Do we require a different demat account for every security issued?
10. How long does the process take?
11. Will this eliminate our requirement to collect physical shares in the next round?

Q: What are the benefits of availing depository services?

A: The benefits are enumerated below:‐

o A safe and convenient way to hold securities;

o Immediate transfer of securities;

o No stamp duty on transfer of securities;

o Elimination of risks associated with physical certificates such as bad delivery, fake

securities, delays, thefts etc.

o Reduction in paperwork involved in transfer of securities;

o Reduction in transaction cost;

o No odd lot problem, even one share can be traded;

o Nomination facility;

o Change in address recorded with DP gets registered with all companies in which investor

holds securities electronically eliminating the need to correspond with each of them

separately;

o Transmission of securities is done by DP eliminating correspondence with companies;

o Automatic credit into demat account of shares, arising out of

bonus/split/consolidation/merger etc;

o Holding investments in equity and debt instruments in a single account.

Details of fees:

Fee comprises of one time joining fees and annual maintenance charge payable to DP, RTA and Mumbai Angels:

DP charges: 

●       Non-refundable one time processing fee of Rs15,000/- + applicable taxes per company

●       One-time fee of Rs 600 per company for Tripartite (for franking and e-stamping / on stamp paper) or bi-partite (for franking and e-stamping / on stamp paper) and (In House RTA Declaration ) agreement.

●       Annual custodial Charges:

Nominal value of admitted securities (Rs)	Annual Custodial Charges payable by an Issuer to CDSL (Rs) (+ applicable taxes)
Upto 2.5 crore	5,000
Above 2.5 crore and upto 5 crore	9,000
Above 5 crore and upto 10 crore	22,500
Above 10 crore and upto 20 crore	45,000
Above 20 crore	75,000

4) Security Deposit: The company has to maintain security deposit of not less than two years annual custodial fees.

RTA charges:

For ordinary equity shares:

●       Annual maintenance fees of Rs. 5,000/- per ISIN would be charged up to 25 shareholders.

●       Corporate action charges will be Rs. 1,000/- per Corporate Action for allotment & issue of fresh securities.

●       Reimbursement of expenses incurred such as courier, postage, computer stationery, floppies, CD ROMs, Labor charges, binding, sealing conveyance and travel, courier etc. will be charged on actual basis

Preference shares:

●       Annual maintenance fees of Rs 2,500/- per ISIN would be charged up to 15 shareholders.

●       Corporate action charges will be Rs 1,000/- per Corporate Action for allotment, issue & redemption/conversion of securities.

●       Reimbursement of expenses incurred such as courier, postage, computer stationery, floppies, CD ROMs, Labor charges, binding, sealing conveyance and travel, courier etc. will be charged on actual basis

Mumbai Angels:

Annual maintenance fee of Rs 5,000/- per company.

*all the above charges will attract respective GST.

List of documents required:

12.  Master Creation Form (Each & every page of the MCF should be on the letter head of the Company along with Company rubber stamp & signature of the Co Official ) 

13.  Certified copy of  Certificate of Incorporation

14.  Soft copy of security details on letter head of Company  (Format to be provided by RTA)

15.  Board Resolution along with Specimen Signature  (Format to be provided by RTA)

16.  Undertaking-cum-Indemnity on letter Head of Company  (Format to be provided by RTA)

17.  Letter for freezing/unfreezing of securities on letter head of company

18.  Certified copy of TAN & GST Certificate

19.  Certified copy of the Memorandum of Association &  Articles of Association

20.  Certified copy of Annual report for last financial year

21.  Net worth Certificate  (Format to be provided by RTA)

22.  Tripartite agreement  (Format to be provided by RTA)   

Important Instructions for executing Tripartite Agreement:

5.      Agreements should be executed on the stamp paper/franking of Rs. 600/-.

6.      All pages of the agreement should be stamped and signed by Issuer and RTA.

7.      Name and signature of the witness (Issuer and RTA) should be present on the last page of the Agreement.

8.      You are required to send the 1 Original + 2 Photo Copies of the Tripartite Agreement  , duly stamped and signed in Original by both Issuer and RTA.

MA Network’s Portfolio Team will support the company through the entire demat process to ensure smooth transition from paper to electronic shares