November 2006

2

Agenda

Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

3

SENSEX – Hitting the all time high

Surge in F&O Market VolumesRobust CM Market Growth

Indian Capital & Financial Market Summary

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

12454

11699

10744

10609

10399

12043

11280

10370

9920

9398

8789

7892

8634

7805

7635

7194

6715

6154

0

2000

4000

6000

8000

10000

12000

14000

Apr-

05

May-0

5

Jun-0

5

Jul-05

Aug-0

5

Sep-0

5

Oct-

05

Nov-0

5

Dec-0

5

Jan-0

6

Feb-0

6

Mar-

06

Apr-

06

May-0

6

Jun-0

6

Jul-06

Aug-0

6

Sep-0

6

1938

71

1733

852230

482972

13

2648

2732

8126

2054

24

2287

34

2272

38

1622

5317

989022

6661

2216

36

1848

82

1698

57

1301

46

1205

16

0

50000

100000

150000

200000

250000

300000

350000

Apr

-05

May

-05

Jun-

05

Jul-0

5

Aug

-05

Sep

-05

Oct

-05

Nov

-05

Dec

-05

Jan-

06

Feb

-06

Mar

-06

Apr

-06

May

-06

Jun-

06

Jul-0

6

Aug

-06

(Rs. in cr)

469,

66547

7,25

555

6,79

7

742,

390

737,

832

734,

842

492,

664

487,

580

523,

803

395,

845

433,

651

399,

750

372,

301

308,

160

271,

242

208,

375

195,

962

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Apr

.05

May

.05

Jun.

05

Jul.0

5

Aug

.05

Sep

.05

Oct

.05

Nov

.05

Dec

.05

Jan.

06

Feb

.06

Mar

.06

Apr

.06

May

.06

Jun.

06

Jul.0

6

Aug

.06

(Rs. in cr)

4

FII Investments

Mutual Fund Industry

Source: AMFI

Indian Capital & Financial Market Summary

3

0.8

8.1

9.6

10.7

6.8

0

2

4

6

8

10

12

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

FII

Inv

estm

ents

($

bn)

23.1

18.2

32

52

0

10

20

30

40

50

60

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

Tot

al A

UM

($

bn)

5

Indian Financial Market Overview

Company Overview

Business Strategy

Highlights

Agenda

6

IL&FS 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.

An Introduction

IL&FS30%

SAIF10%

E*TRADE27%

FIIs & Public33%

Shareholding Pattern

7

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

Promoter History - IL&FS

8

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

banking products and services to Retail, Corporate and Institutional Clients

Strategic Partner

9

Product Portfolio

IIL

Commodity TradingCommodity Trading

Distribution of Financial ProductsDistribution of Financial Products Investment BankingInvestment Banking

Portfolio ManagementPortfolio Management

Institutional BusinessInstitutional Business

Loan SyndicationLoan Syndication

Retail BrokingRetail Broking

Insurance BrokingInsurance Broking

Online TradingOnline Trading

10

Key Milestones

1998–99

1999-2000

2000-2001

2004-2005

2003–2004

First full year of equity broking on NSE

Commenced retail operations at Bangalore, Chennai & Kolkata

First full year of equity broking on NSE

Commenced retail operations at Bangalore, Chennai & Kolkata

Commenced equity broking on BSE

ORIX & K Raheja joined as new shareholders

Commenced equity broking on BSE

ORIX & K Raheja joined as new shareholders

Commenced derivative broking on NSE

Launched investment advisory products

Registered as Portfolio Manager

Commenced derivative broking on NSE

Launched investment advisory products

Registered as Portfolio Manager

Acquired 4 branches of Tata TD Waterhouse

Acquired Insurance Training Business

Acquired 4 branches of Tata TD Waterhouse

Acquired Insurance Training Business

ETM as Strategic Investor and SAIF as financial partner

Commenced commodity broking

ETM as Strategic Investor and SAIF as financial partner

Commenced commodity broking

2001-2002

Merchant Banking and Debt on Net merges with IIL

Merchant Banking and Debt on Net merges with IIL

Completed IPO

Completed GDR

Strategic investment in ESOP Direct

Completed IPO

Completed GDR

Strategic investment in ESOP Direct

2005-2006

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

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

2006-2007

11

Client Category

Transaction and

Distribution Products

Transaction and

Distribution Products

Portfolio Advisory

Portfolio Management Services

Investment Counseling

Products

Retail

Corporate

Mass Affluent

Retired Individuals

HNI/MNI

IIL uses the above Model to acquire and service clients

Business Model Universal Broker

12

Our RetailOfferings     Full Service offering across asset class

IIL

Depository ServicesDepository Services

EquitiesEquities Investment AdvisoryInvestment Advisory

DerivativesDerivatives

CommoditiesCommodities

Portfolio ManagementPortfolio Management

Distribution of Financial Products

Distribution of Financial Products

Insurance BrokingInsurance Broking

Training ServicesTraining Services

A Complete suite of products, offering wholesome investment Solutions

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

IIL has a significant growing presence in the institutional capital markets in India

Institutional Debt Broking

Institutional Debt Broking

Investment Banking

Investment Banking

Institutional BusinessInstitutional Business

IILInstitutional EquityInstitutional Equity

Product Offering Institutional Business

15

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

Investment BankingPerformance Parameters

16

Execution Capabilities

ESOP Certifications

Private Equity Syndications

Advisory Assignments

Rights Issues

Buybacks

Initial public Offerings

Management of

Investment Banking

17

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

Institutional EquityPerformance Parameters

18

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

Presswala

39 Chief Operating Officer 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

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

Management Team

19

Company Overview

Business Strategy

Highlights

Indian Financial Market Overview

Agenda

20

STRATEGIES

Capitalize on New Business Opportunities

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

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

Increase institutional relationship backed by enhanced research capabilities

Harness mid-market segment witnessing robust growth

Grow Institutional Brokerage and Merchant Banking

Su

stai

nab

le G

row

th D

rive

rs

OBJECTIVES

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 MarketsCapitalize on acquisition opportunities in Indian Markets

Business Strategy

21

Several measures planned to sustain the growth engine

Growth Plan

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

Accelerated expansion through mini branches and select franchisees planned

NetworkExpansion

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

23

Company Overview

Business Strategy

Highlights

Indian Financial Market Overview

Agenda

24

Strong Risk Management andExperienced and stable Management Team

Highlights

HighlightsHighlights

Robust Capital Market Outlook

Established Presence - Attractive Play on the Indian Securities Market

Strategic Investors With Access to Resources, Markets and Investors

Full service Investment Bank with strong retail focus

Strong Brand, Credibility and Innovative Product Offerings

Diversified Revenue Stream