November 2006

Agenda

Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

2
3




100000
150000
200000
250000
300000
350000

50000

0
Apr-05 120516
May-05 130146



Jun-05 169857
Jul-05 184882
Aug-05 221636
Sep-05 226661
Oct-05 179890
Nov-05 162253
Dec-05 227238
Jan-06 228734
Feb-06 205424
Mar-06
328126
Apr-06 264827
Rising Markets Driven by :

Increased retail participation

May-06 Continued Surge in FII flows
297213
Jun-06 223048
the best is yet to come !!!

Jul-06 173385

Robust CM Market Growth

Aug-06
193871
year as far as capital markets are

Increased primary mobilisation by Mutual Funds

(Rs. in cr)
concerned, and of course we believe,
Market Summary
Just to sum it up, India has had a dream

Primary market issuances continue to attract heavy flows

10000
12000
14000

2000
4000
6000
8000

100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000

0
Apr-05 6154
Apr.05 195,962
May-05 6715
May.05 208,375
Jun-05 7194
Jun.05 271,242
Jul-05 7635
Jul.05 308,160
Indian Capital & Financial

Aug-05 7805
Aug.05 372,301
Sep-05 8634
Sep.05 399,750
Oct-05 7892
Oct.05 433,651
Nov-05 8789
Nov.05 395,845
Dec-05 9398
Dec.05 523,803
Jan-06 9920
Jan.06 487,580
Feb-06 10370
Feb.06 492,664
Mar-06 11280
Mar.06
734,842 Apr-06
Apr.06 12043
737,832 May-06 10399
May.06
742,390 Jun-06 10609
Jun.06
556,797 Jul-06 10744
Jul.06
477,255
Aug-06 11699
Aug.06
469,665 Sep-06
Surge in F&O Market Volumes

12454
SENSEX – Hitting the all time high

(Rs. in cr)
 Indian Capital & Financial
Market Summary 12
FII Investments
10.7
9.6
10

FII Investments ($ bn)

8.1

8 6.8

4 3

2 0.8

0
CY 2001 CY 2002 CY 2003 CY 2004 CY 2005 CY 2006

Mutual Fund Industry

60 52

50

40 32
Total AUM ($ bn)

23.1
30
18.2

20

10

0
FY 02-03 FY 03-04 FY 04-05 FY 05-06

Source: AMFI

4
 Agenda

Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

5
 IL&FS
An Introduction
Investsmart
• 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
IL&FS
FIIs & Public
30%
33%

SAIF
10%
E*TRADE
27%

6
 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
 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
 The Indian Innovation Award-2005: Awarded to IL&FS by President of India

7
 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

Delivering a diversified and integrated portfolio of innovative, customer-focused brokerage and

– Superior
banking productsTechnology Platform
and services to Retail, Corporate and Institutional Clients

8
 Product
Portfolio
Distribution of Financial Products Investment Banking

Portfolio Management Loan Syndication

IIL
Institutional Business Retail Broking

Commodity Trading Online Trading

Insurance Broking

9
 Acquired Apeejay
Acquired Apeejay
Key Milestones Securities
Securities
Completed
Completed
business
business
restructuring
ETM as Strategic restructuring
ETM as Strategic Received the Best
Investor and Received the Best
Investor and
SAIF Performing
 Commenced equity
 Commenced equity Merchant
Merchant SAIFas
asfinancial
financial Performing
National
broking
brokingon
onBSE Banking partner NationalFinancial
Financial
BSE Bankingand
andDebt
Debt partner
Advisor
ORIX & K Raheja on Net merges Commenced AdvisorAward
Awardforfor
ORIX & K Raheja on Net merges Commenced 2006 by CNBC
with 2006 by CNBC
joined
joinedas
asnew
new withIIL
IIL commodity
commodity
shareholders broking Crossed over 250
shareholders broking Crossed over 250
retail
retailoutlets
outlets
spanning 125
spanning 125
Indian
Indiancities
cities
1998–99 2000-2001 2003–2004 2005-2006

1999-2000 2001-2002 2004-2005 2006-2007

First full year of Commenced Acquired 4 Completed IPO

First full year of Commenced Acquired 4 Completed IPO
equity
equitybroking
brokingon derivative
derivativebroking branches
on broking branchesof
ofTata
Tata Completed GDR
NSE on NSE TD Waterhouse Completed GDR
NSE on NSE TD Waterhouse
Commenced retail Launched Acquired Strategic
Commenced retail Launched Acquired Strategic
operations investment in
operationsat investment Insurance investment in
at investment Insurance ESOP
Bangalore,
Bangalore,Chennai
Chennai advisory
advisoryproducts
products Training
TrainingBusiness
Business ESOPDirect
Direct
&&Kolkata
Kolkata Registered as
Registered as
Portfolio
PortfolioManager
Manager

10
 Business Model
Universal Broker
Products
Client Category

Portfolio Management Services

Investment Counseling
HNI/MNI

Mass Affluent
Portfolio Advisory
Retired Individuals

Transaction and
Corporate
Distribution Products

Transaction and
Retail
Distribution Products

IIL uses the above Model to acquire and service clients

11
 Our Retail
Offerings
     Full Service offering across asset class

Equities Investment Advisory

Derivatives Portfolio Management

IIL
Distribution of Financial
Commodities
Products

Depository Services Training Services

Insurance Broking

AA Complete
Complete suite
suite of
of products,
products, offering
offering wholesome
wholesome investment
investment
Solutions
Solutions
12
 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
Investment
Banking
Banking

Institutional
InstitutionalEquity
Equity IIL Institutional
InstitutionalDebt
Broking
Broking
Debt

Institutional
Institutional Business
Business

IIL has a significant growing presence in the institutional capital markets in India
14
 Investment Banking
Performance Parameters
 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, Media, Software, Paper, Textiles, Steel, Sugars and
Shipping to name a few.
 Ranked 5th in the league of Investment Bankers in No. of Book Built IPO’s executed for the
year
 Product reach extended with successful completion of a few M&A transactions, GDR
advisory mandates and Private Equity transactions

15
 Investment Banking
Execution Capabilities
Initial public
Offerings

ESOP
Buybacks
Certifications

Management
of

Private Equity
Rights Issues
Syndications

Advisory
Assignments

16
 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, FII’s 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

17
Management Team
Name Age Position Brief Profile

Mr R. C. Bawa 52 Managing Director & CEO  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 39 Chief Operating Officer  Served as COO since October 1999

Presswala  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

18
 Agenda

Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

19
Business Strategy
OBJECTIVES STRATEGIES
 Grow branch and franchisee network across India
- Expand into smaller cities with significant untapped potential
 Establish alliance with banks to increase market presence
Grow Retail Business
 Launch and grow on-line trading capabilities
 Grow existing product lines like wealth management & securities related
financing

Sustainable Growth Drivers

 Expand into related financial services such as commodities broking and
financing services and insurance brokerage
Capitalize on New
- Established a subsidiary with membership of NCDEX & MCX
Business Opportunities
- Obtained a brokerage license to distribute insurance products of third
party insurers

Grow Institutional Brokerage  Increase institutional relationship backed by enhanced research capabilities
and Merchant Banking  Harness mid-market segment witnessing robust growth

 Plan to establish offices in key overseas markets, such as Singapore, Hong

Targeted Presence in Key Kong, Dubai, London and New York
Overseas Markets  Target growth opportunities for institutional brokering, private equity,
syndication and NRI wealth management

Capitalize on acquisition opportunities in Indian Markets

20
 Growth
Plan
Several measures planned to sustain the
growth engine
 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

21
 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 Additional Proposed Total

Branches 55 90 145
Franchisees 157 70 227

22
 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

24