1. An Overview of Domestic and Overseas Markets In House Congress, Mumbai At Grand Hyatt, April 29, 2008

2. Avenues of raising capital in the domestic capital marketAvenues of raising capital in overseas marketsLegal framework and regulatory issuesA comparative of overseas stock exchangesFactors influencing the capital markets

3.  Domestic Stock Exchanges  Initial Public Offering (“IPO”)  Offer for Sale  Public Issue by Listed Companies including Rights Issue  Qualified Institutions Placement (“QIP”)  Preferential Allotment

4. Qualified Institutional Buyers (QIBs) Retail Investors Non Institutional Investors

5.  Companies Act, 1956  Securities and Exchange Board of India Act, 1992  SEBI (Disclosures and Investor Protection) Guidelines, 2000 (“DIP Guidelines”)  Securities Contracts (Regulation) Act, 1956  Listing Agreements with the Stock Exchanges  The Depositories Act, 1996  Foreign Exchange Management Act, 1999 (“FEMA”)

6.  Eligibility criteria for primary issuance (IPO or Offer for Sale) i. Rs. 3 Crores (Net Tangible Assets) in last 3 years ii. Rs. 1 Crore (Net Worth) in last 3 years iii. Distributable profits for 3 years in last 5 years iv. In case of change of name, 50% revenues from activity suggested by new name v. Aggregate of all issues in one financial year not to exceed 5 times issuer’s pre issue net worth

7.  Book Building Method  50% net offer to QIBs ;OR  ‘Project’ has 15% participation from financial institutions/scheduled commercial banks of which 10% comes from appraisers AND  10 Crores minimum post issue face value capital; OR  2 years of compulsory market making post issue

8.  Exemptions from eligibility criteria  a banking company  a corresponding new bank  an infrastructure company (conditions apply) ▪ Project must be appraised ▪ Not less than 5% of the project cost must be from appraisers  rights issue by a listed company

9.  Pricing  Free pricing of shares  Issuer company free to fix face value of the shares offered subject to: ▪ If price of share is Rs. 500 or more, then face value can be less than 10 but must be more than Re. 1 ▪ If price of share is less than Rs. 500 then face value of share must be Rs. 10

10.  Fast Track Method (Introduced by SEBI in November 2007)  Listed companies making a public offering  Rights Issue SEBI approval of prospectus not required if:  Issuer company is listed for last three years  Average market cap is greater than Rs 10,000 Crores  95% of investor grievances redressed (till last quarter)  No SEBI proceedings pending  Entire shareholding in dematerialized form

11. Other Requisites for public offerings

12. Issue of shares or of convertible securities by a company to a select group of persons under Section 81(IA) of the Companies Act, 1956. Conditions of preferential issue (Chapter XIII of DIP Guidelines) ▪ Pricing as per the DIP guidelines ▪ Continuous listing (Minimum public shareholding) ▪ Existing shares of proposed allottee(s) in demat form ▪ Lock in of pre-preferential allotment shareholding ▪ No sale and transfer any equity shares for past 6 months ▪ Non-transferability of instruments ▪ Allotment must be completed within 15 days

13. Issue of shares or of convertible securities by a company to Qualified Institutional Buyers (“QIBs”) (Chapter XIIIA of DIP Guidelines) Eligibility: ▪ Equity shares listed for one year preceding the date of notice to shareholders ▪ Minimum public shareholding to be maintained Note: ▪ No placement to QIB who is promoter or related to promoter ▪ Pricing as per the DIP guidelines ▪ Non applicability of Chapter XIII of DIP guidelines

14. Conditions:  Minimum Number of allottees:  2, where the issue size is less than or equal to Rs. 250 Crores  5, where the issue size is greater than Rs. 250 Crores  No single allottee shall be allotted more than 50% of the issue size.  Transfer restriction for 1 year (except on a stock exchange)  Minimum 10% allotment to mutual funds

15.  Credit rating required  Debenture trustee must be appointed  Debentures not to be issued for acquisition of shares or providing loan to any company belonging to the same group. (Not to apply to FCDs converting within 18 months)  Company to create Debenture Redemption Reserve (“DRR”)  Debentures to be redeemed as per offer document  Offer document to specify the assets on which security is created and ranking of the charge  Premium amount and time of conversion to be determined by issuer company and disclosed  Interest rate on debentures to be freely determined by issuer company

16.  SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997 (Takeover Code)  SEBI (Prohibition of Insider Trading) Regulations 1992  SEBI (Bankers to an Issue) Regulations, 1994  SEBI (Merchant Bankers) Regulations, 1992  SEBI (Underwriters) Regulations, 1993  SEBI (Registrars to an Issue and Share Transfer Agents)Regulations, 1993  SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003

17. New exchange for SMEs 21 days gap between closing and listing to be shortened to 7 days QIBs to pay 100% upfront for IPOs

18. Indian Companies can raise capital overseas by issue of: Note: Indian companies listing overseas must either before or simultaneously list on the Indian stock exchanges Global Depository Receipts (“GDRs”) American Depository Receipts (“ADRs”) Depository Receipts Foreign Currency Convertible Bonds (“FCCBs”) Foreign Currency Exchangeable Bonds (“FCEBs”) Euro Bonds Bonds

19.  Companies Act, 1956  SEBI DIP Guidelines  Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme 1993 (“FCCB Scheme”)  Issue of Foreign Currency Exchangeable Bonds Scheme,2008  Foreign Exchange Management Act, 1999 (“FEMA”)  Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004  External Commercial Borrowing Policy (“ECB Policy”)  Foreign Direct Investment Policy (“FDI Policy”)

20.  DRs represent shares of an Indian company trading on a foreign stock exchange  The DR holders are part of foreign holding in a company but unlike FDI, investors in DRs do not enjoy voting rights  DRs of most Indian companies experienced a sharp fall due to market meltdown. However, recently the DRs have recovered and trading turnovers have improved.  DRs have become popular because of two-way fungibility  No prior approval of SEBI, RBI or government is required for issue of DRs  No restrictions on the use of proceeds except investment in real estate and the stock markets

21.  Foreign currency convertible bonds are debt instruments which are convertible into equity of the company at a later point of time  Both FDI and ECB policies are applicable  Coupon rate must not exceed 300 basis points over SBI PLR  RBI approval required for companies other than companies who can access ECB under automatic route and for all companies raising more than US$ 500 million  Restriction on use of proceeds  US$ 20 million can be raised for rupee expenditure  Proceeds to be parked abroad till required in India  Preferred by companies for raising funds for overseas expansions and acquisitions

22.  FCEB Scheme was notified on February 15, 2008  A security offered by an issuing company and subscribed to by investors living outside India and exchangeable into equity shares of another company, which is called the offered company.  The issuing company must be a part of the promoter group and must hold the equity shares being offered at the time of issuing FCEBs. The offered company has to be a listed company, which is engaged in a sector eligible to receive FDI and eligible for ECB.

23.  RBI is still considering the instrument  No guidelines for FCEBs issued by RBI yet  RBI is unsure how FCEBs would work within existing framework of ECB Policy  Lack of transparency regarding use of the funds according to RBI  Issues on monitoring of the FDI cap on companies when bonds raised by one company gets converted into equity of another company.

24. Choice of stock exchange depends upon:  New York Stock Exchange (NYSE) ▪ NYSE has 11 Indian companies listed on NYSE. ▪ Positive: IFRS accounting norms permitted ▪ Negative: SOX compliance is very costly. Only very large companies therefore list on NYSE Depth of the Market Availability of Funds Regulatory Requirements

25.  NASDAQ ▪ Listing is expensive ▪3 Indian companies listed  London Stock Exchange (LSE) (Main Market) ▪ Caters to large companies ▪ Has been a favorite with large Indian companies ▪ Regulatory requirements are stringent  Alternative Investment Market (AIM) ▪ Constituted in 1995, London’s AIM has been very successful in attracting overseas companies/funds ▪ lower entry barriers ▪ a lighter touch on regulation and compliance ▪ comparative flexibility

26.  Luxembourg Stock Exchange (LuxSE) ▪ Traditional favourite ▪ Listing is expeditious ▪ Cost of raising funds at Luxembourg is lower, compared to NYSE or NASDAQ ▪ Compliance requirements are less stringent  Singapore Stock Exchange (SGX) ▪ Listing is less expensive ▪ Has large appetite for certain sectors such as shipping ▪ Regional hub  Hong Kong Stock Exchange (HKEx) ▪ Offers world-class listing platform ▪ Costs of listing and compliance are competitive

27.  Dubai International Financial Exchange (DIFX) ▪ Set up in September 2005 ▪ Fast attracting attention especially of SMEs ▪ Expeditious listing ▪ Closer home and good liquidity  Tokyo Stock Exchange (TSE) ▪ Japan is keen to promote TSE and Japanese Depository Receipts (“JDRs”) and attract foreign companies  Asia Pacific Technology Exchange (APTEX) ▪ New Australian stock exchange with a focus on technology ▪ Plans to become fully operational by second half of 2008

28. Economy of the CountryMoney SupplyInterest RateCorporate ResultsGlobal Capital Market ScenarioForeign Funds InflowStrength/Weakness of the Local Currency

29. GDP growth forecast for India: 2008-09 CMIE 9.5% IBs 7.0 to 8.4% IMF 7.9% GDP growth in India: 2007-08 – 8.7% Inflation scenario for India: 2008-09 CMIE 5.5% RBI comfort level (Feb ‘08) 5% Trade Deficit has widened over the past year

30. Rs. 39,98,887 Crores Money supply in the economy as on March 03, 2008 Interest Rates Representing a Y on Y increase of 21% Bank Lending Rates (2007-08) 12.75% to 13.25% Repo Rate: 7.75% Reverse Repo Rate: 6% Exchange Rate Rs./ $ Year Rs. /$ 2006-07 45.28 2007-08 Qtr 1 41.25 Qtr 2 40.54 Qtr 3 39.47 Qtr 4 39.83 2008-09 39.95 (Week ending Apr 18) RBI purchased US$ 75.4 billion from currency market in 2007-08 till Feb ‘08 Total foreign funds inflow in 2006-07 : US$ 29.1 billion Total foreign funds inflow is 2007-08 (till Feb ’08) : US$ 56.4 billion

31. Although there are negative factors like the gloomy global markets, pressure on the export market due to rupee appreciation, rising inflation rate on one hand, on the other hand India has a strong growth story Lets hope good times are ahead!