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November 2006

November 2006 Agenda Indian Financial Market Overview Company Overview Business Strategy Highlights (Rs. in cr) (Rs. in cr) Indian Capital & Financial Market Summary SENSEX – Hitting the all time high

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November 2006

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  1. November 2006

  2. Agenda Indian Financial Market Overview Company Overview Business Strategy Highlights

  3. (Rs. in cr) (Rs. in cr) Indian Capital & Financial Market Summary SENSEX – Hitting the all time high 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 !!! • Rising Markets Driven by : • Continued Surge in FII flows • Increased primary mobilisation by Mutual Funds • Increased retail participation • Primary market issuances continue to attract heavy flows Robust CM Market Growth Surge in F&O Market Volumes

  4. Indian Capital & Financial Market Summary FII Investments FII Investments ($ bn) Mutual Fund Industry Total AUM ($ bn) Source: AMFI

  5. Agenda Indian Financial Market Overview Company Overview Business Strategy Highlights

  6. Shareholding Pattern 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.

  7. 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

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

  9. Distribution of Financial Products Investment Banking Portfolio Management Loan Syndication IIL Retail Broking Institutional Business Commodity Trading Online Trading Insurance Broking Product Portfolio

  10. 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 Key Milestones • ETM as Strategic Investor and SAIF as financial partner • Commenced commodity broking • Commenced equity broking on BSE • ORIX & K Raheja joined as new shareholders • Merchant Banking and Debt on Net merges with IIL 1998–99 2000-2001 2005-2006 2003–2004 1999-2000 2004-2005 2001-2002 2006-2007 • First full year of equity broking on NSE • Commenced retail operations at Bangalore, Chennai & Kolkata • 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

  11. Portfolio Management Services Investment Counseling Portfolio Advisory Transaction and Distribution Products Transaction and Distribution Products Business Model Universal Broker Products Client Category HNI/MNI Mass Affluent Retired Individuals Corporate Retail IIL uses the above Model to acquire and service clients

  12. Equities Investment Advisory Derivatives Portfolio Management IIL Distribution of Financial Products Commodities Depository Services Training Services Insurance Broking Our Retail Offerings üFull Service offering across asset class A Complete suite of products, offering wholesome investment Solutions

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

  14. Product Offering Institutional Business Investment Banking IIL Institutional Debt Broking Institutional Equity Institutional Business IIL has a significant growing presence in the institutional capital markets in India

  15. 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

  16. Investment Banking Execution Capabilities Initial public Offerings Buybacks ESOP Certifications Management of Rights Issues Private Equity Syndications Advisory Assignments

  17. 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

  18. Management Team

  19. Agenda Indian Financial Market Overview Company Overview Business Strategy Highlights

  20. 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 • Launch and grow on-line trading capabilities • Grow existing product lines like wealth management & securities related financing Grow Retail Business • 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 Sustainable Growth Drivers • Increase institutional relationship backed by enhanced research capabilities • Harness mid-market segment witnessing robust growth Grow Institutional Brokerage and Merchant Banking • 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 Targeted Presence in Key Overseas Markets Capitalize on acquisition opportunities in Indian Markets

  21. 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

  22. 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 Franchisees157 70 227

  23. Agenda Indian Financial Market Overview Company Overview Business Strategy Highlights

  24. 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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