THE ROAD TO FUTUREOPPORTUNITIES IN A

BEARISH MARKET

Group 3 :Aravindhan R - GMBA08A158Jimit Shah - GMBA08A119 Mohammed Said - GMBA08A171 Navin Bafna - GMBA08A125

KMCC - Background

KMCC is part of the Kotak group which covers almost all realms of banking and finance industry

Our advisory and execution offerings include:

•Private equity financing•Venture funding•Mezzanine financing•Preferential allotments•Buyouts•Pre-IPO•PIPES•Secondary sales•Block purchases

Sectors include:

•Banking and financial services•Pharmaceutical and healthcare•Energy and Infrastructure•FMCG•Automobiles, Aviation •Transportation•Telecom•Technology•Retailing•Media and Entertainment

KMCC

Global presence extends to New York, London, Mauritius and Dubai

IPO Offerings

Significant IPO deals and deal pipelines at present.

KMCC – DEALS

Kotak Investment Banking successfully completed the $ 300 mn GVKPIL QIP - largest ever QIP out of India

With 16 of the 20 largest Indian offerings, KMCC has consistently topped the league tables for lead management between fiscal 2000 and 2006

First Indian Investment Bank to be appointed by the GoI as a Co-lead Manager in their international divestment of GAIL through a GDR offering.

Sole advisors to Mantri Developers, Vimta Labs and Jindal Polyfilms in private equity transactions

Through its international subsidiaries, acted as joint global coordinator and joint book runner to the $ 100 million GDR issue of Kotak Mahindra Bank, $ 170 million GDR issue of CIPLA and $ 54 million GDR issue of Dhampur Sugar Mills Limited.

Sole financial advisor to Mahindra Group on acquisition of the Chakan unit of Amforge Financial advisors to M&M for their acquisition of a 67.9% stake in JECO Holding AG of

Germany, the largest outbound auto component acquisition by an Indian company. Successfully completed domestic equity offerings of Andhra Bank, Bank of Baroda, Union

Bank, GVK Power, M&M Financial Services and GSPL, Sun TV.

KMCC - Achievements

•Best Indian Investment Bank 2006 - Asset Asian Awards •Best Indian Investment Bank 2006&2007 - Finance Asia•Best Equity House in India 2003,2004 & 2005 – Euro Money •Best Equity House in India 2003 & 2004 – Asia Money•Best Equity House in India 2004 – IFR•Ranked number one in mergers and acquisitions by Bloomberg, for the period January -June 2004.

First Indian investment bank to register with the SEC in the US and the SFA in the UKConducted the first “French auction” in India of Indo-Japanese joint venture Maruti SuzukiLead managed the first book-built follow-on offering for Indian petrochemicals major IPCLLead managed the first issue under the 10% dilution guidelines for HCLLead managed the first media IPO with FII participation for HT MediaLead managed the first book-built IPO with standby underwriting for MarutiSuzuki

Macroeconomic & Industry Overview

GDP Growth

Growth of volume traded in secondary market (NSE)

Industry Overview

Indian Financial Sector Considerable broadening and deepening of the Indian financial markets Financial services accounted for approximately 14% of total GDP in

fiscal 2007. The combined average daily turnover of the BSE and the NSE for

different market segments has increased from approximately Rs. 4.8 billion in March 1996 to approximately Rs. 312.1 billion in March 2006.

Regulatory Developments Incorporation of Securities and Exchange Board of India (SEBI) Act,

1992 Issuers complying with eligibility criteria are allowed the freedom to

issue securities at market-determined rates. SEBI exercises control over the market through the issuance of

guidelines and rules for various capital market The SEBI Act established SEBI with the primary objective of protecting

the interests of investors in securities.

% volume by top brokers

Industry Overview

Internet Trading

Broking Industry in India

Approx 394 firms. On the basis of geographical

concentration, the West region has the maximum representation of 52%. Around 24% firms are located in the North, 13% in the South and 10% in the East

On the basis of terminals, 40% are located at Mumbai, 12% in Delhi, 8% in Ahmedabad, 7% in Kolkata, 4% in Chennai and 29% are from other cities

In terms of sub-brokers, around 55% are located in the South, 29% in West, 11% in North and 4% in East

Trading, IPO's and Mutual Funds are the top three products offered with 90% firms offering trading, 67% IPO's and 53% firms offering mutual fund transactions

Peer Performance

India Bulls – MOST – EDELWEISS - RELIGARE

Companies P/E EPSMarket

Cap CMPListing price Price band

India bulls 13.05 22.91 1885.5 74.7 300 Rs.270 and Rs.330

Edelweiss 15.29 39.26 4473.5 595 825 Rs 725 and Rs 825

Motilal oswal 88.33 1.22 1,527.43 107.6 825 Rs 725 and Rs 825

Geojit 19.71 2.3 948.3 45.3 - -

Religare 32 12.09 2,945.69 388.5 185 Rs 160 to Rs 185

JM financial 2.8 454.15 3820.5 1273 - -

Company valuation

Pre-Dilution Post-Dilution

No of Shares 610,710,000 700,000,000

PAT 12,019 12,019

EPS 19.68 17.17

Price Equity Ratio 10.2 11.6

Price (INR) 200 200

Equity Dilution (%) 13% 12.76%

No of Shares issued (no of shares) 89,290,000 89,290,000

IPO value (crore) 1,786 1,786

Valuation of I-Sec (crore) 14,000 14,000

Upper Band Lower Band

Price 240 200

Equity Dilution (no of shares) 89,290,000 89,290,000

IPO Value (crore) 2,143 1,786

I-Sec Valuation (crore) 16,800 14,000

Price

200 - 240

Value

1786-2143 cr

MC 14-16.8bn INR

3.5-4.2bn US$

Dilution of 12.76%

The present Issue of 8,92,90,000 Equity Shares, at a price of INR 200 for cash aggregating INR million is being made through the 100% Book Building Process.

Equity Shares of Rs10 each. The Issue would constitute 12.76% of the fully diluted post Issue paid up equity capital of the Issuer.

  QIBs Non-

Institutional Retail Individual

Employee Reservation

Portion

Number of Equity Shares available for allocation.

A minimum of 5,35,74,000 shares to the QIBs as specified

Up to 8,036,100 Equity Shares or Issue less allocation to QIB Bidder and Retail Individual Bidders.

Up to 26,787,000 Equity Shares or Issue less allocation to QIB Bidders and Non- Institutional Bidders

Up to 892,900 EquityShares

Percentage of Issue Size available for Allotment/ Allocation 60% 9% 30% 1%

Basis of Allotment/ Allocation if respective category is oversubscribe

Proportionate (Mutual funds 20% min) Proportionate Proportionate Proportionate

Minimum BidBid Amount exceeds Rs 100,000

Bid Amount exceeds Rs 100,000

in multiples of 8 equity share

in multiples of 8 equity share

Maximum BidNet Issue subject to applicable limits.

Net Issue subject to applicable limits.

Amount does not exceed Rs 100,000.

Not to exceed the employee reservation

Mode of Allotment Demat Demat Demat Demat

Bid Lot

8 Equity Shares inmultiples of 8 Equity Shares

8 Equity Shares inmultiples of 8 Equity Shares

8 Equity Shares inmultiples of 8 Equity Shares

8 Equity Shares inmultiples of 8 Equity Shares

Allotment Lot same as above same as above same as above same as aboveTrading Lot 1 equity share 1 equity share 1 equity share 1 equity shareWho can Apply as per guidelines as per guidelines as per guidelines as per guidelines

Financial Innovation is the key Considering the market sentiments we

are of the opinion that a plain vanilla IPO may not be lucrative to the investors.

The call of the time is that you come up with an unique offering which works as a bate to prospective investors and entices them to invest into the IPO.

Financial Innovation - Detachable Warrant

With each equity share the investor will be getting one warrant, which would be exercised 12 months from the issue.

It would be exercised at 10% discount if the stock is trading at a price below the one at which, it was issued. 

But if the share price is trading at a price above the issue price, then investor would get it at 10% discount.

* Warrant conversion price would be computed from the future market price of the share

GDR/SDR in Singapore Exchange We as a global I-bank can offer securities

in Singapore through the SDR route.

Considering the present scenario, the SDR route seems very opportunistic and help the company to raise the capital and feed its ambitious growth plans

Each SDR would have 5 shares as the underlying asset priced in the band of approximately 40 SGD.

Thank you

Group 3 :

Aravindhan R GMBA08A158Jimit Shah GMBA08A119 Mohammed Said GMBA08A171 Navin Bafna GMBA08A125