Reliance Infrastructure Fund

1. Reliance Infrastructure Fund An Open-Ended Equity Scheme NFO Opens on: 25th May 09 NFO Closes on: 23rd June 09

2. Table of Contents • Equity Markets • India Infrastructure • Funding Options • Investment Opportunities • Reliance Infrastructure Fund

3. Indian Equity Markets – Visible Change • Oct 2008 • Now - Major global banks failed, more probable - Liquidity evaporated - Risk aversion - Companies facing capital shortage - Election uncertainty in India - FIIs major sellers - Looks remote - Liquidity all around - Risk appetite returning - Equity raising easier, change in B/S - Biggest Election verdict since 1984 - FIIs becoming big buyers Now B/S : Balance Sheet

4. Equity Markets – Our View • The Catapult - Election - A big positive game changer - Accompanied by improving monetary and economic conditions - Governance, infrastructure and inclusive growth looks to be key goals of incumbent Government - FII/FDI inflows can be very strong - Earnings upgrades may follow - Sustainable attractive returns from Indian equities look possible • What can go wrong? - Another global financial catastrophe - Big disappointment in pace of Government actions over next 6 months

5. Everything Going For India • Youngest population in the world • Largest middle-class and consuming population • Domestic focused economy • Banking system proved to be amongst the healthiest • Global leader in services • Lowest cost producer in metals • Huge savings and investment rates • However…… Source: Internal - RMF Research

6. Infrastructure – Miles To Go World Bank’s “ Global Competitiveness Report 2007-08” • ‘Inadequate supply of infrastructure’ • - Most problematic factor for doing business in India • India ranked 48th out of 131 counties in the Global Competitive Index 2007 • - Ranked 67th on the quality of infrastructure • India lags behind in infrastructure facility usage compared to US & China Source: Published Media, Global Research 2007-08

7. Infrastructure Investment – China Vs India • 8.5% Of 2008 GDP(USD 380 Bn) 6% Of 2008 GDP(Rs. 267,356 Cr) Source: India Infoline, 2008, Exchange Rate: USD = 6.85 RMB

8. Infrastructure Investment – China Vs India • 8.5% Of 2008 GDP(USD 380 Bn) • 6% Of 2008 GDP(Rs. 267,356 Cr) Source: India Infoline, 2008, Exchange Rate: USD = 6.85 RMB

9. Realisation – Very Evident • Prime Minister Dr. Manmohan Singh • Our growth potential will be realized only if we can ensure that our infrastructure does not become a severe handicap • Ex – Finance Minister P. Chidambaram • Infrastructure development is essential to sustain high growth rates in future • Dy. Chairman – India Planning Commission • Montek Singh Ahluwalia • One of the critical constraints which holds back our growth rate is really the quality of infrastructure • Chairman – Tata Sons – Ratan Tata • We have a large deficit in almost every infrastructure sector whether airports, power, roads, etc. This is an area that needs large amounts of investment. • Ex-CEO Infosys, Nandan Nilekani • India has achieved excellence in human capital, but the country’s shabby infrastructure is proving to be a major stumbling block for the country’s development • CEO, BhartiAirtel, Sunil Mittal • Indian industry would expect significant initiatives in the area of resource mobilization for infrastructure projects Source: CLSA Research April 2008

10. Factors Driving Demand For Better Infrastructure Economic Factors Demographic Factors Global Integration Growing economy Rising disposable incomes Rising population Increasing urbanization Rising international trade and travel Power Rail WSS Ports Airports Roads Massive under capacity in railways for freight and passenger traffic Poor WSS is major contributor to diseases Inadequate road width, poor riding quality, low speeds 10-14% power shortages, frequent brown outs Delays, congestion, fuel wastage in air travel High turnaround time, poor connectivity at ports WSS: Water Supply & Sanitation Source: CLSA research, April 2008

11. Now Also Political Pressure Source: Election Commission 2009 GSDP: Gross State Domestic Product RE: Revised Estimates Source: RBI: A study of budgets of 2008-09 States with focus on higher development expenditure has proved to be a boon for the Ruling Party

12. Manifestos Unanimous On Infrastructure BJP - Commits to an agenda for change guided by three goals: Good Governance, Development & Security - Investing heavily in infrastructure projects are at the top of our agenda DMK • - Implement the Sethu Samundaram project early • - Super fast bullet train service between Chennai, Madurai & Coimbatore • Dedicated freight corridor is to be implemented between Chennai & New • Delhi Trinamool Congress The party aimed at forming a secular, progressive and stable government at the centre which would focus on economic reforms, industry, agricultural development and adopt pro-people policies Left -Reviewing of privatisation of infrastructure through PPP - Emphasis on rural infrastructure - Increased outlay on rural roads, electrification etc PPP: Public Private Partnership Source: Media Reports, Election Manifesto of Respective Parties

13. Congress Manifesto • Manifesto makes intentions clear • Increase public investment in infrastructure • Ensure that India adds at least 12000-15000 MW of power capacity every year • Rural electrification & reduction in distribution losses • Implement a scheme to supply energy to poor families at affordable prices • Promises a very significant increase in the share of nuclear power • Connect villages through broadband network within 3 years Source: Congress Manifest 2009 Strongest Government platform in India over the last 2 decades..& the opportunities could be substantial

14. Government approval to 37 infrastructure projects worth Rs.70,000 Cr from August, 2008 to January, 2009 alone Under PPP mode, 54 Central sector infrastructure projects, in-principal or final approval and 23 projects approved for viability gap funding in 2008-09 IIFCL to refinance up to 60 % of commercial bank loans for PPP projects involving investment of Rs.1,00,000 Cr in infrastructure over the next 18 months Intentions Evident In Interim Budget 2009 IIFCL: India Infrastructure Finance Company Limited, PPP: Public Private Partnership Source: http://indiabudget.nic.in

15. The Size Of Opportunity Source: India Infoline Research, Department of shipping India, National Bureau of statistics China

16. XIth FYP – Infrastructure Investment Rs. Crore(At 2006-07 prices), Exchange Rate of Rs.41/$ (2006-07) Source: Investment in Infrastructure during the Eleventh Plan published by The Secretariat for the Committee on Infrastructure FYP : Five Year Plan

17. The projected investment in infrastructure sector in the XIIth FYP would be USD 1,128 Billion Much Bigger Outlay In The XIIth FYP Rs. Crore(At 2006-07 prices), Exchange Rate of Rs.41/$ (2006-07) Source: Planning Commission of India Estimates: GDP to grow at 9% per year, GCFI as % of GDP to increase from 9% in 2011-12 to 10.25% in 2016-17 FYP : Five Year Plan, GCFI: Gross Capital Formation In Infrastructure

18. Plans Fine – Show Me The Money • Question marks on infrastructure spending • Huge budgetary and fiscal deficit • Past record on foreign flows so-so and not very robust • However, future looks brighter • Avenues to control deficit in sight • PPP • Foreign investments PPP: Public Private Partnership Source: Internal - RMF Research

19. Fiscal Deficit – Likely To Reduce Going Forward Subsidies as a contributor to fiscal deficit is expected to decrease Source: Ministry of Finance, Kotak Institutional Equities Estimates Expected revenue from 3G spectrum auction Source: Internal - RMF Research

20. Divestment… Divestment of minority stake in listed PSUs to reduce fiscal burden Divestment of profitable unlisted PSUs like BSNL, DVC etc Sale of residual minority stake in privatised PSUs like VSNL(26%), Balco(49%) & Hindustan Zinc(29%) Source: Bloomberg , Note: The name of the companies mentioned above are for illustration purposes only DVC: Damodar Valley Corporation, PSU: Public Sector Undertaking

21. Cash – Rich PSUs • Will be key infra-developers without needing resources from Government budget : • - NTPC: Cash on books as on FY08 is Rs15,360 Crs • It can develop 20GW of capacity without raising capital • - ONGC: Cash on books as on FY 08 is Rs 18,652 Crs • - Railways: Generating cash of over Rs20,000crs every year • - Others like BSNL, AAI, DVC also have enough cash to fund their projects Source: Internal - RMF Research Note: The name of the companies mentioned above are for illustration purposes only AAI: Airport Authority of India, DVC : Damodar Valley Corporation

22. PPP Concept Gaining Credence Growth Rate of PPP Projects by value in the last 3 years over previous 8 years is 104% More than 117 PPP deals closed in last 3 years when compared to 104 in the previous 8 years Source: Company, DEA PPP Database and Citi Investment Research and Analysis, PPP: Public Private Partnership

23. Government is targeting around 30% of the total funding to come from PPP Schemes - As compared to 17% in Xth FYP - 4x times the investment by private sector in the Tenth FYP In XIth FYP, almost all sectors like power, roads, railways, airports etc, are going to witness increased private participation PPP & Privatisation Rs. Crore(At 2006-07 prices) Source: Planning Commission of India PPP : Public Private Partnership, FYP : Five Year Plan

24. Funding Pattern - XIth FYP Rs. Crore(At 2006-07 prices) Source: Planning Commission of India • Private Funding Gains Importance FYP : Five Year Plan

25. Success Stories Of Infrastructure Privatisation Mundra Port New Hyderabad Airport Mumbai – Pune Expressway

26. Case For Foreign Investments In Infrastructure • Attractive returns - 16% in power (through PPA Arrangement), attractive double digits in others over a 20-30 year period • Potential to invest huge sums of money given India’s need for infrastructure • Stable political environment with the current decisive mandate • Currency outlook - stable to appreciating Rupee • Liberal policies – FDI allowed 74% to 100% in most infrastructure sectors PPA: Power Purchase Agreement Source: Internal - RMF Research, CERC

27. FDI – India Can Attract Much More ♂ China attracted 9X FDI as compared to India Source: Department of Industrial Policy & Promotion, Internal - RMF Research

28. Private Equity – An Important Source Of Funding Source: Grant Thornton

29. Infrastructure Fund – Why Now ? • 2008 • Now Despite recent spurt, still attractive Political stability for five years Some stability. Investors will move to higher growth economies Interest rates plunge, debt available, investors looking for equity investments • Valuations very stretched • Political concerns at peak • Global scenario –very scary and hazy • Raising debt and equity impossible – a must for infrastructure

30. Valuations: Reasonable given growth prospects Source: Bloomberg Note: The name of the companies mentioned above are for illustration purposes only We do not recommend any action based on the above illustration % Change in price from 2007-08 high is compared to prices as on 22nd May 09

31. IntroducingReliance Infrastructure Fund

32. Investment Strategy • Investment in Equities of Infrastructure Companies : 65%-100%* • Investment in Debt & Money Market Securities : 0% - 35%* • Multi – Cap Strategy • Investment with a medium to longer term horizon * Please refer detailed asset allocation on slide no 33

33. Scheme Features The primary investment objective of the scheme is to generate long term capital appreciation by investing predominantly in equity & equity related instruments of companies engaged in infrastructure & infrastructure related sectors & which are incorporated or have their area of primary activity, in India & the secondary objective is to generate consistent returns by investing in debt & money market securities Investment Objective Nature of Scheme An Open Ended Equity Scheme BSE 100 Benchmark Equity & Equity Related Securities including derivatives engaged in infrastructure sectors & infrastructure related sectors# 65%-100% Debt & Money Market Securities ** 0% - 35% Proposed Asset Allocation Fund Manager Sunil Singhania New Fund Offer Price: Rs.10/- per unit plus applicable load ** including securitised debt up to 30% #An overall limit of 100% of the portfolio value has been introduced for the purpose of equity derivatives in the scheme. The margin money requirement for the purpose of derivative exposure will be as per the SEBI Regulations. The derivate exposure will be restricted to such limit so that the scheme does not leverage upon margin requirements

34. Scheme Features Load Structure : During New Fund Offer & Continuous Offer including SIP Installments Choice of Plans/Options Retail & Institutional Plan Growth Plan: Growth & Bonus Option Dividend Plan : Dividend Payout Option Dividend Reinvestment Option • For Retail Plan: • Entry Load: • For subscription below Rs. 2 Crs – 2.25% • For subscription of Rs.2 Crs & above & below Rs.5 Crs – 1.25% • For subscription of Rs.5 Crs & above - Nil • Exit Load: • For subscriptions of less than Rs 5 Crs per purchase transactions • 1% If redeemed/ switched on or before completion of 1 year from • the date of allotment • Nil If redeemed/ switched after completion of 1 year from the date • of allotment • For subscriptions of more than Rs. 5 Crs : Nil • For Institutional Plan: • Entry Load : Nil • Exit Load : Nil Minimum Application Amount For Retail Plan : Rs.5000/- For Institutional Plan: Rs.5 Crs SIP Available : Retail Plan Mode of Payment : Only through Direct Electronic Debit to the investor’s bank account. This facility is offered only to the investors having bank accounts in HDFC Bank, Axis Bank Waiver of Load for Direct Applications : As per SEBI Circular no. SEBI/MD/CIR no. 10/112153/07 dated December 31, 2007, no entry load shall be charged for direct applications received by the Asset Management Company (AMC) i.e. applications received through internet, submitted to AMC or collection centre/Investor Service Centre that are not routed through any distributor/agent/broker

35. Risk Factors The views expressed herein are the personal views of the Fund Managers. The views constitute only the opinions and do not constitute any guidelines or recommendation on the course of the action to be followed. Readers are strongly advised to verify the contents before taking any investment decision based on this opinion. The above is meant for general reading purpose only and is not meant to serve as a professional guide for the readers. The readers should exercise due caution and/or seek independent professional advice before making any investment decision or entering into any financial obligation based on information, statement or opinion which is expressed herein. These are not necessarily the views of Reliance Capital Asset Management Ltd. Neither the AMC, the trustees, the Fund nor any of their affiliates or representatives assume any responsibility/liability for the accuracy, completeness, adequacy and reliability of information provided herein. The information contained herein has been obtained from sources published by third parties. While such publications are believed to be reliable and we have made best efforts to avoid any errors or omissions, however, neither the AMC, the Trustees, the Fund nor any of their affiliates or representatives assume any responsibility for the accuracy, completeness, adequacy and reliability of such information. Sponsor: Reliance Capital Limited. Trustee: Reliance Capital Trustee Co. Limited. Investment Manager: Reliance Capital Asset Management Limited. Statutory Details: The Sponsor, the Trustee and the Investment Manager are incorporated under the Companies Act 1956. Scheme Specific Risk Factors: Portfolio Turnover : Given the nature of the scheme, the portfolio turnover ratio may be very high and the AMC may change the portfolio according to the asset allocation commensurate with the investment objective of the scheme. The effect of high portfolio turnover could be higher brokerage and transaction costs. Due to these factors the NAV of scheme might be impacted. Terms of Issue: The Units are available at Rs. 10/- per unit plus applicable load during the New Fund Offer Period and thereafter at applicable NAV based prices. The AMC will calculate and disclose the first NAV not later than 30 days from the closure of the New Fund Offer Period. Subsequently, the NAV will be calculated and disclosed at the close of every working day which shall be published in at least in two daily newspapers and also uploaded on AMFI site i.e. www.amfiindia.com and Reliance Mutual Fund website i.e. www.reliancemutual.com. General Risk Factors: Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the future performance of the Scheme. Reliance Infrastructure Fund is only the name of the Scheme and does not in any manner indicate either the quality of the Scheme; it's future prospects or returns. The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond their initial contribution of Rs.1 lakh towards the setting up of the Mutual Fund and such other accretions and additions to the corpus. The Mutual Fund is not guaranteeing or assuring any dividend. The Mutual Fund is also not assuring that it will make periodical dividend distributions, though it has every intention of doing so. All dividend distributions are subject to the availability of the distributable surplus in the Scheme. For details of scheme features apart from those mentioned above and scheme specific risk factors, please refer to the provisions of the scheme information document. Scheme information document and KIM cum application form is available at all the DISCs/ Distributors of RMF/www.reliancemutual.com. Please read the scheme information document carefully before investing. The information contained herein has been obtained from sources published by third parties.

36. Thank you