Welspun Group Welspun Corp Ltd. WCL - Investor & Analyst meet Breaking the Million Ton Barrier

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1 WCL - Investor & Analyst meet Breaking the Million Ton Barrier 30 May 2013

2 Disclaimer Certain statements made in this presentation may not be based on historical information or facts and may be forward looking statements, including those relating to general business plans and strategy of Welspun Corp. Limited ( WCL"), its future outlook and growth prospects, and future developments in its businesses and its competitive and regulatory environment. Actual results may differ materially from these forward-looking statements due to a number of factors, inter alia including future changes or developments in WCL's business, its competitive environment, its ability to implement its strategies and initiatives and respond to technological changes and political, economic, regulatory and social conditions in India. This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer invitation, or a solicitation of any offer, to purchase or sell, any securities of WCL and should not be considered or construed in any manner whatsoever as a recommendation that any person should subscribe for or purchase any of WCL's securities. Neither this presentation nor any other documentation or information (or any part thereof) delivered or supplied under or in relation thereto shall be deemed to constitute an offer of or an invitation by or on behalf of WCL to subscribe for or purchase any of its securities. WCL, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. The information contained in this presentation, unless otherwise specified is only current as of the date of this presentation. WCL assumes no responsibility to publicly amend, modify or revise any forward looking statements contained herein, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this presentation, the information contained herein is based on management information and estimates. The information contained herein is subject to change without notice and past performance is not indicative of future results. WCL may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. This presentation may not be copied and disseminated in any manner. THE INFORMATION PRESENTED HERE IS NOT AN OFFER INVITATION OR SOLICITATION OF ANY OFFER TO PURCHASE OR SELL ANY SHARES OR ANY OTHER SECURITY OF WCL. This presentation is not for publication or distribution, directly or indirectly, in or into the United States, Canada or Japan. These materials are not an offer or solicitation of any offer of securities for purchase or sale in or into the United States, Canada or Japan.

3 Agenda FY13 SCORE CARD PROPOSED DEMERGER OF WCL VISION & WAY FORWARD

4 FY13 SCORE CARD PROPOSED DEMERGER OF WCL VISION & WAY FORWARD

5 FINANCIAL SCORE CARD

6 Financial highlights Consolidated Stable operational performance Challenging environment, however performance in line with expectations Particulars (In Rs. Mn) FY12 FY13 Net sales 89,766 1,08,701 Operational EBITDA 10,901 8,452 Reported EBITDA 11,246 10,289 EBITDA Adjusted* 12,488 11,562 PBT before exceptional 3, PAT Adjusted* 3,407 1,252 Cash PAT* 7,089 6,352 * Notes: a) Adjusted for forex losses of RS.1,278 mn in FY13 and Rs. 1,510 mn in FY12 b) Exceptional item of Rs. 1,091 mn in FY13 b) Cash PAT Adj = PBT before exceptionals + Depreciation Current taxes (incl MAT credit, if any) + Post-tax Forex loss /(gain) Equity dividend of Rs. 0.5/share declared; track record of dividend payments over the last five years 6

7 Financial highlights Global Pipes & Plates Continues to be strong Pipes business delivers strong results backed by all-time high volumes Particulars - (In Rs. Mn) FY12 FY13 Net sales 71,961 90,832 Operational EBITDA 9,732 8,407 Reported EBITDA 10,178 9,947 EBITDA Adjusted* 11,044 11,046 PBT before exceptional 4,386 2,832 PAT Adjusted* 3,218 2,745 Cash PAT* 7,612 8,524 * Notes: a) Adjusted for forex losses of RS.1,104 mn in FY13 and Rs. 1,134 mn in FY12 b) Exceptional item of Rs. 538 mn in FY13 c) Cash PAT Adj = PBT before exceptionals + Depreciation Current taxes (incl MAT credit, if any) + Post-tax Forex loss /(gain)

8 Net debt/equity at a comfortable level Particulars Rs. Mn FY12 FY13 Share capital 1,139 1,315 Net worth 48,816 56,578 Gross debt 53,407 55,772 Cash and current inv 29,686 24,537 Net debt 23,721 31,235 Share capital increase on account of conversion of existing CCDs issued to Grenele Ltd (Apollo) Net debt/equity comfortable at 0.55x Debt increase mainly on account of capex and higher working capital

9 Capex cycle close to completion US$ 80 mn capex for US ERW mill completed Remainder of Anjar Coating plant capex will be completed in FY14 Minimal capex going forward To improve cash flows in the future which will contribute to debt reduction

10 Working capital Days of sales FY12 FY13 Inventory Receivables Other current assets Current assets Trade payables Other current liabilities Current Liabilities Cash conversion cycle Better inventory management and strong execution results in lower inventory days Payable days lower due to reduction in acceptances

11 Comfortably placed for debt repayments Repaid Rs. 1,700 mn of NCD Repaid ECB of US$50 mn in April 2012 Bought back FCCB of UD$68.5 mn Raised new NCD of Rs. 3,428 mn with repayments starting from FY20 Raised new ECB of US$100 mn with repayments starting from FY16 Effectively, replaced short term debt with longer term debt Debt maturing (Rs. mn) Remarks FY14 3,646 Includes US$50 mn of ECB; already paid in April 2013 FY15 9,427 Includes US$50 mn of ECB (April 14) and US$81.5 mn of FCCB (October 14) Sufficient cash balance Exploring further FCCB buyback

12 OPERATIONAL SCORE CARD PIPES AND PLATES

13 In '000 MT Volume highlights - At all-time highs 1.02 mn tons - All time high annual Sales Sales volume growth of 22% over FY12 Total Pipe Sales CAGR (FY09-FY13) : 10.0% , FY 09 FY 10 FY 11 FY 12 FY 13 13

14 In '000 MT Volume highlights - At all-time highs 1.01 mn tons - All time high Production in a year Total Pipe Production 1,200 1, CAGR (FY09-FY13) : 9.0% , FY 09 FY 10 FY 11 FY 12 FY 13 14

15 Order book highlights Strong visibility for next year Booked orders in excess of 1 mn MT in FY13 Closing Order Book of 657K MT of pipes as on 1 st April 2013 Pipe Order book in K MT Pipe Orders Booked Pipe Orders Executed Closing Pipe Orders Year MT (in '000 tons) MT (in '000 tons) MT (in '000 tons) FY FY FY FY FY ,022 1, Current order book at 757 K MT Prospective new bids of over 4 million MT 15

16 Current Order book details Order book by Product ERW 3% HSAW 59% LSAW 38% South East 8% Order book by destination India 20% MENA 37% Americas 31% Europe 4% 16 Saudi 15% Order book by source US 20% India 65%

17 Other Operational highlights in Pipes & Plates business US ERW Mill commissioned Received the API certification Customer accreditations ongoing Saudi mill received approvals from Saudi Aramco Currently, only local mill to be approved by Saudi Aramco Received orders over 100K MT from the client Capacity expansion of 50K tons in Spiral mill in Mandya completed, received API certification Anjar Coating plant close to completion Overall pipe capacity now at mn MTPA One of the largest line pipe players with multi-location facilities in India, Saudi Arabia and USA. Plates business: Production only on need basis 17

18 Welspun s Global Reach Serving more than 35 countries AMERICAS EUROPE & CIS Canada USA Mexico Bahamas Trinidad & Tobago Venezuela Colombia Peru Bolivia Spain Czech Rep. Tunisia Algeria Nigeria Libya Egypt Sudan Russia Iraq Qatar Iran UAE Saudi Oman India DOMESTIC China Bangladesh Myanmar Thailand Malaysia SOUTH EAST ASIA AUSTRALIA Indonesia Plant Locations Anjar, India Dahej, India Mandya, India Dammam, Saudi Little Rock, USA Marketing Offices Mumbai, India Delhi, India Dammam, Saudi Arabia Dubai, UAE Houston, USA MENA Plants Mktg Office Countries served

19 Journey to become the most respected Pipe Company in the World How Welspun will sustain How Welspun reached here Technology Product profile Approvals Accreditations Serving challenging orders People Zero Harm - Safety Niche markets -deep offshore/ sour pipelines Stringent client specifications Local presence in key markets Highly trained workforce Zero Tolerance Quality Standard Humble beginnings Today The future

20 FY13 SCORE CARD PROPOSED DEMERGER OF WCL VISION & WAY FORWARD

21 Rationale Key Considerations WCL is a Business conglomerate with interest in Pipes (Pipes & Plates), Steel (DRI) and Infra (Infra, O&G and Energy) Each business segment has its own plans and business dynamics Presently Welspun Corp business model is considered complex as multitude of business being run under the Parent company Welspun Corp. Objective Simplify the business models Provide flexibility to grow the different businesses with sharper focus on each of the businesses Business segments with different risk-return profiles need to be aligned separately 21

22 Proposed Resultant Structure Promoters Public Promoters Public 36% 64% 36% 64% WCL Listed WEPL Listed Pipes - WPI US Pipes - Saudi WNRL WITL Maxsteel WEL WIPPL AWEL WPL Leighton Pipes & Plates Business Group Infra + Steel + DRI Business Group

23 Highlights of Demerger Key Parameters Resolution Appointed Date 1 st April 2012 Demerged Company Resulting Company Court Scheme Jurisdiction Expected Completion Approvals Required Welspun Corp Limited (WCL) Pipes & Plates undertaking All other assets & liabilities including secured and unsecured loans (including outstanding ECBs and FCCBs) held at WCL level and subsidiaries related to Pipe Business Welspun Infra Enterprises Limited to be renamed as Welspun Enterprises Ltd (WEPL) Steel undertaking (Welspun Maxsteel Limited) Infra undertaking (Infra, O&G exploration and Energy) Scheme of Arrangement under section of the Companies Act To be compliant with the demerger definition under Section 2 (19AA) of Income Tax Act Gujarat High court 31 st January 2014 NOC from Stock Exchanges & SEBI Shareholders Approval Secured & Unsecured Creditors Approval

24 Indicative Timeline Sr. Event Days 1 Approval of the Scheme by the Board of Directors X Application to BSE and NSE for its NOC and SEBI Observation X Application to FIPB, RBI, etc X Receipt of BSE/ NSE approval, SEBI Observation - (Upload the SEBI Observation and other Documents on the Company website with 24 hrs of receipt) X Filing of an application with the High Court of Judicature at Gujarat directions to convene meetings under Section391 of the Companies act,1956 X Receipt of High Court Directions X Dispatch of Notices to shareholders, secured creditors and unsecured creditors, along with Scheme and SEBI Observation Letter X Publishing notice in newspapers informing about the meetings X Holding of Court convened meetings X Filing of Chairman's report with the High Court X Companies to file Petition in the High Court X Receipt of approvals from FIPB, RBI and others, if any (to confirm with the lawyers) X High Court to admit Petition X Petitions to be filed with Regional Director X Receiving clearance from Regional Director X High Court order approving scheme X Receipt of High Court Order X Filing of Order with ROC (Scheme Effective) X Application for Listing X Application for Adudication of Court Order for stamp duty X + 265

25 Advisors assisting in the Demerger process Description Advisor Agency AXIS CAPTIAL Legal Amarchand Mangaldas Valuation & Share Swap Ratio Auditors Walker Chandiok & Co. (Part of Grant Thorton Network) MGB & Company

26 FY13 SCORE CARD PROPOSED DEMERGER OF WCL VISION & WAY FORWARD

27 Vision for WCL An employer of choice The organization with highest quality standards Widen global presence A preferred business partner to all its customers and suppliers MOST RESPECTED PIPE COMPANY IN THE WORLD Socially responsible and sustained value creator for all its stakeholders

Key Focus Areas Pipes business FOCUS ON Delivering Profitable Growth Growing Volumes without sacrificing margins Producing where

products and services to the customers Organisation structure reworked in order to be closer to the customer Enhancing market

America, Europe and North Africa MINIMAL CAPEX GOING FORWARD All planned capex completed or close to completion No new growth

28 Key Focus Areas Pipes business FOCUS ON Delivering Profitable Growth Growing Volumes without sacrificing margins Producing where it is cost-effective and selling where it is most profitable BETTER MARKETING FOCUS Targetted focus on delivering quality products and services to the customers Organisation structure reworked in order to be closer to the customer Enhancing market share in our strong turf North America, Middle East and India Increase market share in relatively new geographies - Latin America, Europe and North Africa MINIMAL CAPEX GOING FORWARD All planned capex completed or close to completion No new growth capex unless clear medium-term visibility No plans for new greenfield plants; any new venture will be brown field with potential shifting of existing plant

29 Status and Way forward for each businesses in WEPL Infra business Transfer of Infra EPC business to Leighton Welspun (LWIN) Received 7.5% stake in LWIN as consideration Welspun group stake in LWIN rises to ~40% from 35% Consolidation of EPC completed; synergy benefits to improve performance Self-sufficient business to meet its commitments and liabilities BOT business fully operational with positive cash flows after servicing debt obligations Extremely cautious on bidding for new projects

30 Status and Way forward for each businesses in WEPL Maxsteel business No interest and loan repayment obligation till September 2014 Gas situation likely to improve with new gas finds by Reliance in KG-D6 Reliance price negotiation with government in advance stage; increase in APM price likely to improve gas availability Exploring options of alternative gas through producer gas plants which can cater to 40% of gas requirement at an average price of ~US$ 7/MMBTU with net capex of Rs. 1,200 mn Mott MacDonald already carried out techno-economic study for the PGP price and the results are encouraging Oil & gas exploration No new acreages

31 Status and Way forward for each businesses in WEPL Energy business One of the largest renewable energy players in India Largest solar energy capacity in India Operational capacity of 130 MW in FY13 Operational capacity expected to rise to ~400 MW by 2014 Solar business already profitable Project locations across six states

32 On The Path of Global Leadership Thank You

33 Contacts For further details, please contact: Akhil Jindal Director Group Finance and Strategy Harish Venkateswaran GM - Group Finance and Strategy harish_venkateswaran@welspun.com Company Website:

Welspun Group. Welspun Corp Ltd (WCL) Investor Presentation World s Leading Pipe Manufacturer August 2014

Welspun Group. Welspun Corp Ltd (WCL) Investor Presentation World s Leading Pipe Manufacturer August 2014 1 Welspun Corp Ltd (WCL) Investor Presentation World s Leading Pipe Manufacturer August 2014 2 On The Path of Global Leadership WELSPUN CITY, ANJAR 3 WCL An Introduction Flagship company of the USD 3 Billion