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India Infoline LimitedResults for Quarter ended December 31, 2010

February 5, 2011

• Performance highlights

• Business review

• Corporate overviewCorporate overview

• Industry update

2

Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)

Results for Quarter ended December 31, 2010

Performance highlights – Quarter ended Dec 31, 2010

Overall consolidated financial performanceOverall consolidated financial performanceFor the quarter, Income stood at `4,596 mn, up 59% yoy and 35% qoqEBIDTA margin was 47.8% as compared to 39.9% in the previous quarterPAT stood at `671 mn up 13% yoy and 24% qoq

Equities Broking and related Average daily turnover was around `62 bn, up 66 % yoy, up 34 % qoqIIFL market share in NSE was 4.2% during the quarterThe Wealth Management business continues to grow. The assets under advisory are over `150 bnDuring the quarter, our Investment Banking team handled Qualified Institutional Placements (QIPs) of three mid‐sized companies

Financing and InvestingThe aggregate loan book size increased to around `30 bn from `25.7 bn in the last quarterNPAs on the book continue to remain less than 1%

Insurance, Marketing and Distribution Insurance premium mobilization in the quarter was around `666 mn, up 7 % yoy

During the quarter, share of ULIP has increased from 8% to 26%

3Results for Quarter ended December 31, 2010

Financial highlights: Quarter ended Dec 31, 2010

` Mn Q3FY11 Q2FY11 Q‐Q Q3FY10 Y‐Y

Equities, Broking and related income 1,870.1 1,634.0 14.5% 1,929.1 (3.1%)

Financing and Investing income 2,253.3 1,252.7 79.9% 598.4 276.6%

Marketing and Distribution income 471 1 507 0 (7 1%) 366 3 28 6%Marketing and Distribution income 471.1 507.0 (7.1%) 366.3 28.6%

Other income 1.8 5.4 (66.5%) 3.5 (47.9%)

Total Income 4,596.3 3,399.1 35.2% 2,897.3 58.6%

A. Direct cost 695.7 444.6 56.5% 423.8 64.2%

B. Employee cost 1,041.8 986.8 5.6% 828.2 25.8%

C. Administration expenses 659.8 610.1 8.1% 516.4 27.8%

EBITDA 2,199.0 1,357.6 62.0% 1,128.9 94.8%

Interest 1,042.3 385.3 170.5% 10.4 9969.4%

Depreciation and amortization 150.6 155.3 (3.0%) 150.0 0.4%

Profit / (Loss) before tax 1,006.1 817.0 23.1% 968.5 3.9%

Provision for taxation 322.7 267.5 20.6% 341.7 (5.6%)Provision for taxation 322.7 267.5 20.6% 341.7 (5.6%)

Profit/(Loss) after tax before minority 683.4 549.5 24.4% 626.8 9.0%

Minority Interest 12.8 8.1 58.6% 31.7 (59.6%)

Profit/(Loss) after tax 670.6 541.4 23.9% 595.1 12.7%


Financial highlights: April to December, 2010

` Mn 9MFY11 9MFY10 Y‐Y

Equities, Broking and related income 5,047.4 5,370.8 (6.0%)

Financing and Investing income 4,603.8 1,949.4 136.2%

Marketing and Distribution income 1 395 1 814 0 71 4%Marketing and Distribution income 1,395.1 814.0 71.4%

Other income 9.0 6.6 35.9%

Total Income 11,055.3 8,140.8 35.8%

A. Direct cost 1,617.7 1,170.8 38.2%

B. Employee cost 2,948.3 2,207.1 33.6%

C. Administration expenses 1,842.5 1,418.8 29.9%

EBITDA 4646.8 3344.1 39.0%

Interest 1,710.5 173.1 888.2%

Depreciation and amortization 460.0 415.6 10.7%

Profit / (Loss) before tax 2,476.3 2,755.4 (10.1%)

Provision for taxation 802.9 938.3 (14.4%)Provision for taxation 802.9 938.3 (14.4%)

Profit/(Loss) after tax before minority 1,673.4 1,817.1 (7.9%)

Minority interest 29.9 125.0 (76.0%)

Profit/(Loss) after tax 1,643.5 1,692.1 (2.9%)



• Business review


• Industry update

6



Equities

M k t h NSE i d t 4 2% i Q3FY11Market share on NSE increased to 4.2% in Q3FY11

Average daily turnover up 66% yoy in Q3FY11 to around `62 bn

Present in over 2,700 business locations through branches and sub‐brokers

We launched of our latest version of the Trader Terminal which has a lightning fast execution speed, world class user interface and a single‐click access to our world‐class research

Average Daily Turnover (` mn) Market share on NSE (in %)


Commodities

C diti k t h i d t 2 1% i Q3FY11Commodities market share increased to 2.1% in Q3FY11

Average daily turnover up 79% yoy in Q3FY11 to around `8 bn

The commodities market turnover has increased by 12% over the last quarter

Average Daily Turnover (` mn) Market share (in %)

6,547

7,801

7,000

8,000

9,000

2.0%2.1%

2.0%

2.2%

4,367 4,660

5,206

4,000

5,000

6,000

1.6% 1.7%

1.8%

1.6%

1.8%

1,000

2,000

3,000

1.2%

1.4%


‐

Dec 09 Mar 10 June 10 Sep 10 Dec 10

1.0%

Dec 09 Mar 10 June 10 Sep 10 Dec 10

ResearchOver 150 stocks under coverageg

Our in‐depth, thematic research has been well received. Our recent research reports include:

INCH Chartbook: Sizing Up India and China

India Gas: High on Gas – A detailed analysis on how natural gas will transform India’s energyIndia Gas: High on Gas A detailed analysis on how natural gas will transform India s energy consumption

Singapore Commodities – A detailed report on three leading Singapore‐based commodity traders

IIFL’s 2nd Global Investors’ Conference, ‘Enterprising India II’ is scheduled to be held in Mumbai this month. We have received an overwhelming response from global investors, corporates and eminent leaders

Research offerings – a few reportsResearch offerings a few reports

Black Diamond: A detailed analysis of India’s coal industry

Discover Sri Lanka: A primer on this promising

market

Rigorous company research that goes far

beyond the basics

INCH Chartbook: Sizing Up India and

China

High on Gas: How natural gas will transform India’s

energy consumption

Three leading Singapore-based

commodity traders


Insurance

b l d `Insurance premium mobilization in Q3FY11 was around `666 mn, up 7% yoy

During the quarter, share of ULIP has increased from 8% to 26% due to launch of new low charge products by manufacturers

Th h d b th l t ill b fit th d t th th f d t lThe changes made by the regulator will benefit the consumers and strengthen the fundamentals of the industry in the long term

Changing product mix Marketing and Distribution income (` mn)

Q2FY11 Q3FY11507 0

600

8%

18%1%

26% 366.4

479.0

417.0

507.0471.1

300

400

500

73% 73%

1%

100

200

300

10

Guaranteed return ULIPs ULIP Pension Health


0

Dec 09 Mar 10 Jun 10 Sep 10 Dec 10

Endowment

Financing and Investing

Th l tf li D b 31 2010 i d t d `30 bThe loans portfolio as on December 31, 2010 increased to around `30 bn

99% of the loan portfolio is secured against collateral of mortgages, shares, debentures and other securities

b f h l d b k f ll d b f d lMortgages contribute to 52% of the lending book, followed by margin funding, loan against securities and personal loans at 27%, 20% and 1% respectively

Loan Portfolio (` bn) Portfolio break‐upLoan Portfolio (` bn) Portfolio break‐up

Q2FY11

25 5

29.730

35

1%

Q3FY11

2%

43%

21%

12.0

16.3

19.5

25.5

15

20

251%

52%

20%

34%

Personal Loan Mortagage Loan

12.0

0

5

1027%

Mortgage Loan

11

Personal Loan Mortagage Loan

Margin Funding LAS/Debenture

0

Dec 09 Mar 10 Jun 10 Sep 10 Dec 10


Mortgage Loan

NPA th b k ti t i l th 1%

Financing and Investing

NPAs on the books continue to remain less than 1%

Net interest margin and loan spreads, both are at healthy levels

During the quarter, we commenced Healthcare Financing. The products being offered include project financing for brown field expansion medical equipment & ancillary equipment finance re‐project financing for brown field expansion, medical equipment & ancillary equipment finance, refinance on existing equipment

Net Interest Margin and Loan Spread (%) Gross and Net NPA (%)

0.8%0.8%

0.9%

Gross NPA Net NPA

13 8%16%

NIM Spread

0.6%

0.7%

0.5%

0.5%

0.5%

0.7%

0.4%0.4%

0.5%

0.6%

0.7%13.8%12.8%

10.3%

7.2%9 0%8%

10%

12%

14%

0.1%

0.2%

0.3%

9.0%

7.6%7.0%

4.9%

0%

2%

4%

6%

12

0.0%

FY10 Q1FY11 Q2FY11 Q3FY11


0%

FY10 Q1FY11 Q2FY11 Q3FY11

Wealth management

Assets under advisory over `150 bnAssets under advisory over `150 bn

Introduced Family Office – A multi‐manager investment platform offering a complete wealth structuring solution including inter‐generational transfer, to clients

Have continuously invested in upgradation of systems, technology and processes and built aHave continuously invested in upgradation of systems, technology and processes and built a robust platform supporting multiple asset classes

Product Platform

Debt

Bonds & Other Debt

Equity

Direct Equity

Real Estate

RE Advisory

RE managed Accounts

Cash

Cash & Cash Equivalents

Debt Mutual Funds

Debt Structured Products

Debt Managed A/c’s

Equity Mutual Funds

Equity Managed A/c’s

Equity Structure Products

RE managed Accounts (Discretionary PMS)

(DPMS)(DPMS)

Private Equity Transactions

Managed Accounts (Discretionary PMS)

Loan Assignments


Separate Demat

Investment banking

Our Investment Banking team handled Qualified Institutional Placements (QIPs) of three mid‐Our Investment Banking team handled Qualified Institutional Placements (QIPs) of three midsized companies

The company continues to invest in strengthening its investment banking team and infrastructure

The deal flow in primary and secondary market has declined significantly during the quarterThe deal flow in primary and secondary market has declined significantly during the quarter

Deal Snapshot: 9MFY11

GDRRs3 040mnRs 2 000mn

QIPRs 1 350mn

QIP

2010

Cox & Kings India Ltd.

Rs3,040mnRs.2,000mn

Vardhman Textiles Ltd.

2010

Rs.1,350mn

Tilaknagar Industries Ltd.

2010

RightsRs11 563mn

IPORs 774mn

IPORs 2,000mn

2010

BRLMSole BRLM

20102010BRLM

VideoconIndustries Limited

Rs11,563mn

Talwalkars Better Value Fitness Limited

Parabolic Drugs Limited

2010


Lead Manager

2010

Sole BRLM

2010Member of the

Syndicate

International Operations

IIFL d b ki ti i C l b d SiIIFL commenced broking operations in Colombo and Singapore

The company donated its entire first week commissions from trading operations in SGX to Community Chest, Singapore

d d f d d d lIIFL received FSA License in London, UK for advising on investments and arranging deals in investments for eligible counterparty and Professional Investors

Our international footprintIIFL Securities research products

INCH Chartbook: Sizing Up India and

Three leading Singapore based

New York

London

Sizing Up India and China

Singapore-based commodity traders

Dubai

Singapore

Colombo



• Business review


• Industry update

16



EvolutionIncome (` mn)1995 Commenced operations as an Equity Research firm ( )1995

1997Launched research products of leading Indian companies, key sectors and the economyClient included leading FIIs, banks and companies

1999 Launched www.indiainfoline.com 3 974

9,280 8,775

11,239 11,055

Net Profit (` mn)

1999

2000Launched online trading through www.5paisa.comStarted distribution of life insurance and mutual fund

2003 Launched proprietary trading platform Trader Terminal for retail customers

7422,021

3,974

FY05 FY06 FY07 FY08 FY09 FY10 9MFY11

Net Profit (` mn)for retail customers

2004Acquired commodities broking licenseLaunched Portfolio Management Service

2005 Maiden IPO and listed on NSE, BSE1,599 1,448

2,320

1,643

2006Acquired membership of DGCXCommenced the lending business

2007Commenced institutional equities business under IIFLFormed Singapore subsidiary, IIFL (Asia) Pte Ltd

h d l hNetworth (` mn)

217492

756

FY05 FY06 FY07 FY08 FY09 FY10 9MFY11

14,892 15,447 16,05317,9952008

Launched IIFL WealthTransitioned to insurance broking model

2009Acquired registration for Housing FinanceSEBI in‐principle approval for Mutual Fund Obtained Venture Capital license

( )

17

5221,943

3,251

FY05 FY06 FY07 FY08 FY09 FY10 H1FY11

Obtained Venture Capital license

2010Received membership of the Singapore Stock ExchangeReceived membership of the Colombo Stock Exchange


9MFY11

Business Model

•Wealth management• Financial advisory• Financing

Our service offerings

Equities

• Equities, commodities broking•Mutual funds distribution• Insurance distribution Financing

Retail Affluent

Equities

Insurance

Insurance distribution• Loans

CUSTOMERSEGMENTS

Credit & finance

Wealth management

InstitutionalCorporate

Wealth management

Asset management

• Institutional equities•Derivatives

• Investment banking•Corporate debt

Investment banking


Corporate Structure

India Infoline Ltd.(Bloomberg: IIFL IN)

India Infoline Commodities

India Infoline Investment Services

India InfolineMedia & Research Services

IIFL RealtyIIFL (Asia) PteIIFL Wealth Management

IIFL VenturesIIFL CapitalIndia Infoline Marketing& Services

Moneyline Credit

India Infoline Housing Finance

India Infoline Distribution

Co.

India Infoline Insurance Brokers

India Infoline Insurance Services

19

* The above chart does not cover all group companies


Vision and Strategy

Vision

“To become the Most Respected Company in the financial services space”

Continuously assimilate,

analyse and apply

Drive stickiness through high

quality research & service

Business Strategy Customer Strategy

Attract exceptionally

talented and driven people

People Strategy

analyse and apply

knowledge to power

superior financial decisions

Focus on core competence in

quality research & service

Maintain cutting‐edge

proprietary technology

Wide, multi‐modal network

talented and driven people

Ensure conducive

environment

Liberal Ownership‐sharingfinancial services

Ensure de‐risked business

through multiple products

d di t

Wide, multi modal network

serving as one‐stop shop to

customers

Liberal Ownership sharing

and diverse revenue streams


Management Team

T ith i bl d i d f i l d ti lTeam with impeccable academic and professional credentialsOpen door, transparent and performance oriented cultureIncreasing level of employee ownership

Management Team

Chairman and Managing Director Nirmal Jain Executive Director R. Venkataraman

Institutional Equities

Investment Banking

Consumer Finance

H. Nemkumar

Ajit Menon, Donald D’Souza

Pratima Ram

Finance

Compliance

Operations

LP Aggarwal

R Mohan

Narendra JainConsumer Finance

Retail Broking

Wealth Management

Pratima Ram

Nandip Vaidya

Karan Bhagat

Operations

Audit & Risk

Human Resources

Narendra Jain

Upendra Jaiswal

Capt Rahul Sharma

International Operations Bharat Parajia Technology Sankarson Banerjee

Offshore Asset ManagementDeepesh Pandey, Manish Srivastava

Insurance Distribution Mukesh Kumar Singh

21

Corporate FunctionsVerticals

g


Corporate governanceEminent independent directors of group companies

A.K. Purwar Independent Director• Joined State Bank in 1968 and became chairman in 2002• Became Chairman of Indian Banks Association in the year 2005‐06• Received CEO of the year’ and ‘Outstanding Achiever of the year’ award

Name Designation Brief Profile

Nilesh Vikamsey

Kranti Sinha

Independent Director


y g y

• Chartered Accountant and partner of Khimji Kunverji & Co• Part of the Managing Council and heading the Corporate Members

Committee of the Chamber of Tax Consultants (CTC)

• Director and Chief Executive of LIC Housing Finance Limited ‐1998 to 2002 • Concurrently was the MD of LICHFL Care HomesKranti Sinha

M. N. Singh



• Concurrently was the MD of LICHFL Care Homes• Served as Deputy President of Governing Council of Insurance Institute

• Joined the ‘Indian Police Service’ in 1967• Worked as the chiefs of the crime branch of Mumbai Police, State CID and

Anti‐Corruption Bureau

Category‐wise shareholding (%)

Board Committees Key Role

Board Committees

11.7%

MFs, UTI,Audit Committee Supervise financial reporting process and ensure

compliance with statutory requirements

Compensation Committee

Review compensation of Executive & Non – Executive Directors and senior employees

Sh T f & R i i t i d d l t

31.3%

27.0%

Promoter & Promoter Group

Public &

, ,FI, Banks

FIIs

22

Share Transfer & Investor Grievance

Review investor grievances and ensure redressal to the satisfaction of the shareholders


30.0%

Others

How we differentiate ourselves

• Promoted by first generation professional entrepreneurs• Highly qualified and experienced Management team

Managerial depth

• Net worth approximately `18 bn• Significant unutilized capacity to leverage

Well‐capitalized

• Present at over 2 700 business locations across 500 cities across India• Present at over 2,700 business locations across 500 cities across India• Global footprint covers Colombo, Dubai, New York and Singapore

Distribution reach

• The top management is driven by pride and reward of ownershipOwner‐mindset

• To think and work like an owner is part of organization’s DNAOwner mindset

• Uniquely placed with proprietary front, mid and back office software• Effectively harnessed technology to provide superior customer experience

Technology edgeEffectively harnessed technology to provide superior customer experience

• De‐risked and diversified business model across multiple revenue streams•Multiple products across all segments of financial services

De‐risked



• Business review


• Industry update

24



Equities

Daily derivatives market turnover (US$bn)Daily cash market turnover (US$bn) Daily derivatives market turnover (US$bn)Daily cash market turnover (US$bn)

Source: Bloomberg, IIFL Research

Institutional Share of cash market volumes Increasing share of derivatives turnover in market

Source: Bloomberg, IIFL Research

25

Source: Bloomberg, IIFL Research. Based on provisional data from the exchanges Source: Bloomberg, IIFL Research


InsuranceAPE market share (%) – Dec 2010APE yoy growth (%) – Dec 2010

Source: IRDA

APE growth YTD yoy (%) – Dec 2010 Annual life insurance premiums in USD bn (2008)

Source: IRDA

1186511

11196

665349

22

26Source: IRDA

578343

181

0 100 200 300 400 500 600 700Source: IIFL Research


Mutual funds

Top 5 AMCs contribution (` bn) – Dec 2010Total AUM for the industry (` bn) – Dec 2010 Top 5 AMCs contribution (` bn) Dec 2010Total AUM for the industry (` bn) Dec 2010

Source: AMFI

AUM by asset class (` bn)Source: AMFI

Domestic equity MFs have seen net outflows YTD (` bn)

27

Source: IIFL ResearchSource: AMFI


Capital raising and Fund flowsCapital raised through QIPs (` bn) Capital raised through IPOs (` bn)

FDI inflows (US$bn)Net FII flows (US$bn)

Source: Bloomberg, IIFL Research Source: Bloomberg, IIFL Research

28

Source: Bloomberg, IIFL Research Source: RBI, CMIE, IIFL Research


Thank you

Published in February 2011. © India Infoline Ltd 20010‐11.

India Infoline Ltd. All rights reserved. Regd. Off: IIFL House, Sun Infotech Park, Road No. 16V, Plot No.B‐23, Thane Industrial Area, Wagle Estate, Thane – 400604.Tel.: +(91 22)4007 7000 Fax: 2685 0451.

This report is for information purposes only and does not construe to be any investment, legal or taxation advice. It is not intended as an offer or solicitation forthe purchase and sale of any financial instrument. Any action taken by you on the basis of the information contained herein is your responsibility alone and IndiaInfoline Ltd (hereinafter referred as IIL) and its subsidiaries or its employees or directors, associates will not be liable in any manner for the consequences of suchaction taken by you. We have exercised due diligence in checking the correctness and authenticity of the information contained herein, but do not represent thatit is accurate or complete. IIL or any of its subsidiaries or associates or employees shall not be in any way responsible for any loss or damage that may arise to anyperson from any inadvertent error in the information contained in this publication The recipients of this report should rely on their own investigations IIL and/or

29

person from any inadvertent error in the information contained in this publication. The recipients of this report should rely on their own investigations. IIL and/orits subsidiaries and/or directors, employees or associates may have interests or positions, financial or otherwise in the securities mentioned in this report.

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