November 2006

November 2006

Agenda Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

2

Apr-05

3 Aug-06

Jul-06

Jun-06

May-06

Apr-06

0

(Rs. in cr) Aug.06

Jul.06

Jun.06

May.06

Apr.06

469,665

556,797 477,255

742,390

737,832

734,842

487,580 492,664

Sep-06

Aug-06

Jul-06

Jun-06

May-06

Apr-06

Mar-06

Feb-06

Jan-06

Dec-05

Nov-05

Oct-05

8634

12454

11699

10744

10609

10399

12043

11280

10370

9920

9398

8789

7892

14000

Mar.06

Feb.06

Jan.06

800,000 523,803

395,845

433,651

399,750

Sep-05

7805

2000 Aug-05

4000

7635

6000

Jul-05

7194

6715

12000

Dec.05

100,000

Nov.05

200,000

50000 372,301

700,000

Oct.05

100000

Sep.05

300,000

308,160

600,000

Aug.05

500,000 271,242

Robust CM Market Growth Jun-05

6154

10000

Jul.05

400,000

May-05

Market Summary

Jun.05

Increased retail participation Primary market issuances continue to attract heavy flows

208,375

0

May.05

Continued Surge in FII flows Increased primary mobilisation by Mutual Funds Apr-05

Rising Markets Driven by : 8000

195,962

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 !!!

Apr.05

193871

173385

297213 223048

328126 264827

205424

228734

227238

179890 162253

226661

350000

Mar-06

Feb-06

Jan-06

Dec-05

Nov-05

Oct-05

Sep-05

300000

221636

184882

 

Aug-05

150000 169857

250000

Jul-05



130146



Jun-05

200000

120516



May-05

Indian Capital & Financial SENSEX – Hitting the all time high

Surge in F&O Market Volumes

0

(Rs. in cr)

Indian Capital & Financial

Market Summary

FII Investments 12

10.7

FII Investments ($ bn)

9.6 10

8.1 6.8

8 6 4

3 0.8

2 0 CY 2001

Mutual Fund Industry 60

52

Total AUM ($ bn)

50

30

23.1 18.2

20 10 0

Source: AMFI

4

32

40

FY 02-03

FY 03-04

FY 04-05

FY 05-06

CY 2002

CY 2003

CY 2004

CY 2005

CY 2006

Agenda Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

5

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 IL&FS 30%

FIIs & Public 33%

E*TRADE 27%

6

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  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



7

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

Delivering a diversified and integrated portfolio of innovative, customer-focused brokerage and – Superior Platform banking productsTechnology 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 Securities Securities

Key Milestones

 Commenced equity  Commenced equity broking brokingon onBSE BSE ORIX & K Raheja ORIX & K Raheja joined joinedas asnew new shareholders shareholders

1998–99

Merchant Merchant Banking Bankingand andDebt Debt on Net merges on Net merges with withIIL IIL

2000-2001 1999-2000

ETM as Strategic ETM as Strategic Investor and Investor and SAIF SAIFas asfinancial financial partner partner Commenced Commenced commodity commodity broking broking

2004-2005

First full year of First full year of equity equitybroking brokingon on NSE NSE

Commenced Commenced derivative derivativebroking broking on NSE on NSE

Acquired 4 Acquired 4 branches branchesof ofTata Tata TD Waterhouse TD Waterhouse

Commenced retail Commenced retail operations operationsat at Bangalore, Bangalore,Chennai Chennai &&Kolkata Kolkata

Launched Launched investment investment advisory advisoryproducts products

Acquired Acquired Insurance Insurance Training TrainingBusiness Business

10

Registered as Registered as Portfolio PortfolioManager Manager

Received the Best Received the Best Performing Performing National NationalFinancial Financial Advisor AdvisorAward Awardfor for 2006 by CNBC 2006 by CNBC Crossed over 250 Crossed over 250 retail retailoutlets outlets spanning 125 spanning 125 Indian Indiancities cities

2005-2006

2003–2004 2001-2002

Completed Completed business business restructuring restructuring

2006-2007

Completed IPO Completed IPO Completed GDR Completed GDR Strategic Strategic investment in investment in ESOP ESOPDirect Direct

Business Model

Universal Broker Client Category

Products

Portfolio Management Services HNI/MNI

Mass Affluent Retired Individuals

Corporate

Retail

Investment Counseling

Portfolio Advisory

Transaction and Distribution Products

Transaction and 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 Commodities

Distribution of Financial 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 Debt Broking Broking

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 Certifications

Buybacks

Management of

Private Equity Syndications

Rights Issues

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

17



Local office at Singapore



Set-up derivatives desk for Institutional Clients



Research team of 15 with a coverage of about 150 stocks

Management Team Name Mr R. C. Bawa

Mr Sandeep Presswala

Mr Sachin Joshi

Mr Girish Nadkarni

18

Age 52

39

40

37

Position

Brief Profile

Managing Director & CEO  Served as Deputy MD since August 2003

Chief Operating Officer

Chief Financial Officer

Chief Operating Officer



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



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



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



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

Agenda Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

19

Business Strategy OBJECTIVES

STRATEGIES

Grow Retail Business

 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

Capitalize on New Business Opportunities

-

Grow Institutional Brokerage and Merchant Banking

Targeted Presence in Key Overseas Markets

20

Obtained a brokerage license to distribute insurance products of third party insurers

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

 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

Capitalize on acquisition opportunities in Indian Markets

Sustainable Growth Drivers

 Grow branch and franchisee network across India Expand into smaller cities with significant untapped potential  Establish alliance with banks to increase market presence

Growth Plan 

21

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

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

22

Additional Proposed Total

55

90

145

157

70

227

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