November 2006

Agenda
Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

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100000 150000 200000 250000 300000 350000 50000

Market Summary

Indian Capital & Financial

0 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 0 Apr.05 May.05 Jun.05 Jul.05 Aug.05 Sep.05 Oct.05 Nov.05 Dec.05 Jan.06 Feb.06 Mar.06 Apr.06 May.06 Jun.06 Jul.06 Aug.06

Just to sum it up, India has had a dream year as far as capital markets are concerned, and of course we believe, the best is yet to come !!!

120516 130146 169857 184882 221636 226661 179890 162253 227238 228734 205424 328126 264827 297213 223048 173385 193871

Increased retail participation Primary market issuances continue to attract heavy flows

Rising Markets Driven by :

y y

Robust CM Market Growth

Continued Surge in FII flows Increased primary mobilisation by Mutual Funds

(Rs. in cr)
100,000 200,000 300,000

10000

12000

14000

195,962 208,375 271,242 308,160 372,301 399,750 433,651 395,845 523,803 487,580 492,664 734,842 737,832 742,390 556,797 477,255 469,665
May-05

400,000

500,000

600,000

700,000

800,000
Apr-05

2000

4000

6000

8000

6154

SENSEX Hitting the all time high

6715 7194 7635 7805 8634 7892 8789 9398 9920 10370 11280 12043 10399 10609 10744 11699

Surge in F&O Market Volumes

Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06

(Rs. in cr)

12454

Indian Capital & Financial

Market Summary
12 10 8 6 4 2 0 CY 2001 CY 2002 3 0.8

FII Investments
10.7 9.6 8.1 6.8

CY 2003

CY 2004

CY 2005

CY 2006

Mutual Fund Industry

60 50 40 30 20 10 0 23.1 18.2 32 52

Source: AMFI

FY 02-03

FY 03-04

FY 04-05

FY 05-06

Agenda
Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

IL&FS Investsmart

An Introduction
One of the leading financial services companies in India
Focused on retail broking (including margin financing), distribution of financial products and IPO financing Significant growing presence in Merchant Banking, & Institutional Brokerage Businesses

Pan India presence with a network of 259 outlets (including business associates) spread across 124 major cities in India

Total Income in FY 06 of Rs. 2170 mn. and net profit of Rs. 691 mn.
Shareholding Pattern
FIIs & Public 33% IL&FS 30%

E*TRADE 27%

SAIF 10%

Promoter History -

IL&FS
 

Promoted by Infrastructure Leasing and Financial Services Ltd Shareholders of IL&FS include SBI, ORIX-Japan, IFC-Washington, Credit Commercial de France, Indivest Pte Ltd(an Affiliate of Govt. of Singapore) Business operations of the promoter
y Infrastructure and Development Services : Sectors such as Surface Transport and Transportation Systems,Water Supply, Hydro Power, Special Economic Zone, Port and Environment & Social Management Group. Investment Banking : Strategy, Asset Financing, Corporate Advisory, Capital Markets, Project Financing Made contributions to the following trusts: IL&FS Infrastructure Equity Fund, IL&FS Investment Trust I, II, IV

y y


The Indian Innovation Award-2005: Awarded to IL&FS by President of India

Strategic Partner
E*TRADE Pioneer in the field of Internet Broking Global Leader Covers 3.5 million customers and 2.7 million households worldwide Presence in over 12 countries Superior Technology Platform

Delivering a diversified and integrated portfolio of innovative, customer-focused brokerage and banking products and services to Retail, Corporate and Institutional Clients

Product Portfolio
Distribution of Financial Products Investment Banking

Portfolio Management

Loan Syndication

IIL
Institutional Business Retail Broking

Commodity Trading

Online Trading

Insurance Broking
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Key Milestones
 ETM as Strategic Investor and SAIF as financial partner  Commenced commodity broking

 Acquired Apeejay Securities  Completed business restructuring  Received the Best Performing National Financial Advisor Award for 2006 by CNBC  Crossed over 250 retail outlets spanning 125 Indian cities

 Commenced equity broking on BSE  ORIX & K Raheja joined as new shareholders

 Merchant Banking and Debt on Net merges with IIL

199899 1999-2000
 First full year of equity broking on NSE  Commenced retail operations at Bangalore, Chennai & Kolkata

2000-2001 2001-2002

20032004 2004-2005

2005-2006 2006-2007

 Commenced derivative broking on NSE  Launched investment advisory products  Registered as Portfolio Manager

 Acquired 4 branches of Tata TD Waterhouse  Acquired Insurance Training Business

 Completed IPO  Completed GDR  Strategic investment in ESOP Direct

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Business Model

Universal Broker
Client Category Products
Portfolio Management Services HNI/MNI Investment Counseling

Mass Affluent Retired Individuals Portfolio Advisory

Corporate

Transaction and Distribution Products

Retail

Transaction and Distribution Products

IIL uses the above Model to acquire and service clients

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Our Retail

Offerings
 Full Service offering across asset class
Equities Investment Advisory Derivatives Portfolio Management

IIL
Commodities Distribution of Financial Products

Depository Services

Training Services

Insurance Broking

A Complete suite of products, offering wholesome investment Solutions

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Achievements

Chosen as The Best Performing National Financial Advisor Retail Segment at the CNBC TV 18 National Financial Advisor Award 2006

13

Product Offering Institutional Business

Investment Banking

Institutional Equity

IIL
Institutional Business

Institutional Debt Broking

IIL has a significant growing presence in the institutional capital markets in India
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Investment Banking Performance Parameters

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Raised over Rs 14 bn from capital market through IPOs and follow-on offerings Mobilised around 1 mn IPO applications Acted as Advisors to 9 ESOP mandates Executed transactions across a spectrum of industries including Logistics, Auto Ancillary, Construction, Food Processing, Shipping to name a few. Ranked 5th in the league of Investment Bankers in No. of Book Built IPOs executed for the year Product reach extended with successful completion of a few M&A transactions, GDR advisory mandates and Private Equity transactions Media, Software, Paper, Textiles, Steel, Sugars and

Investment Banking
Execution Capabilities
Initial public Offerings

ESOP Certifications

Buybacks

Management of

Private Equity Syndications

Rights Issues

Advisory Assignments
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Institutional Equity
Performance Parameters

Improved Performance : Recorded a total income of Rs 139.28 mn in the current financial year compared to Rs 85.51 mn in 2004-05, a growth of 63%

Empanelments with more than 100 institutions including banks, mutual funds, FIIs and corporate treasuries. 32 new empanelments, strong traction seen

4 member sales team and 7 member sales trader team to cater to institutional clients with one dedicated team member for US, UK and South East Asia Market

Local office at Singapore Set-up derivatives desk for Institutional Clients Research team of 15 with a coverage of about 150 stocks

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Management Team
Name Mr R. C. Bawa Age 52 Position Managing Director & CEO Brief Profile
  

Served as Deputy MD since August 2003 Has more than 20 years of experience in Indian Banking Sector Holds a Masters degree in Arts and post graduate diploma in Personal Management and Industrial Relationship

Mr Sandeep Presswala

39

Chief Operating Officer

  

Served as COO since October 1999 Has over 14 years of experience in Capital Markets Holds a Bachelors Degree in Commerce from Bombay University and is a Chartered Accountant

Mr Sachin Joshi

40

Chief Financial Officer

  

Served as CFO since October 1999 Has over 16 years of Financial Management experience Holds a Bachelors degree in Commerce and is a LLB(Gen), Chartered Accountant and Cost and Works Accountants

Mr Girish Nadkarni

37

Chief Operating Officer

 

Has over 15 years of industry experience in financial services Holds a PGDM from IIM-A, Bachelors in Commerce from Mumbai University and is a Cost and Works Accountant

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Agenda
Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

19

Business Strategy
OBJECTIVES STRATEGIES
 Grow branch and franchisee network across India Grow Retail Business Expand into smaller cities with significant untapped potential  Establish alliance with banks to increase market presence  Launch and grow on-line trading capabilities  Grow existing product lines like wealth management & securities related financing  Expand into related financial services such as commodities broking and financing services and insurance brokerage Established a subsidiary with membership of NCDEX & MCX Obtained a brokerage license to distribute insurance products of third party insurers

Capitalize on New Business Opportunities

Grow Institutional Brokerage and Merchant Banking

 Increase institutional relationship backed by enhanced research capabilities  Harness mid-market segment witnessing robust growth

Targeted Presence in Key Overseas Markets

 Plan to establish offices in key overseas markets, such as Singapore, Hong Kong, Dubai, London and New York  Target growth opportunities for institutional brokering, private equity, syndication and NRI wealth management

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Capitalize on acquisition opportunities in Indian Markets

Sustainable Growth Drivers

Growth Plan
Several measures planned to sustain the growth engine

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Complete business restructuring Increase Margin Portfolio book to Rs. 7.5 bn Accelerate branch expansion through setup of mini branches Reach an AUM of Rs. 20 bn in MF assets Scout for acquisitions Strong focus on building new businesses : commodities, online trading Launch international operations in Singapore. Complete Dubai approvals Improve internal efficiencies : performance monitoring, operations support, development of integrated middle office trading system Consolidate in the niche position in mid market corporate segment and graduate to large sized deals Exploit cross selling opportunities Deepen the focus on research and corporate relationships to grow institutional business

Network Expansion
Accelerated expansion through mini branches and select franchisees planned
Rapid branch expansion on a smaller format (mini branches) planned in Mumbai, Delhi and Tier II cities Existing franchisee relationships to be developed, growth from new franchisees to be selective Current Branches Franchisees 55 157 Additional Proposed 90 70 Total 145 227

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Agenda
Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

23

Highlights
Robust Capital Market Outlook Established Presence Attractive Play on the Indian Securities Market Full service Investment Bank with strong retail focus Highlights Diversified Revenue Stream Strong Brand, Credibility and Innovative Product Offerings Strategic Investors With Access to Resources, Markets and Investors Strong Risk Management and Experienced and stable Management Team

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