December 2010
Certain statements included in this presentation may constitute "forward-looking statements" in respect of the Company s operations, performance, prospects and/or financial condition. By their nature, forward looking statements involve a number of risks, uncertainties and assumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast. This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares of the Company. Past performance cannot be relied upon as a guide to future performance. Information in this presentation reflects the knowledge and information available at the time of its preparation. 2
Section A : Overview 4 IL&FS Group IIML Overview Business Model Key Contributors Leadership Team Section B : Funds 11 Key Milestones Funds across Spectrum Exit Experience Section C : Financial Performance 19 Past Performance Growth in AUM Consolidated Financials 3
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Earliest Infrastructure Developers Formed in 1988 Initial participants were Indian Banks and Institutions International Institutional Investors inducted over the years ORIX Corporation (Japan), Abu Dhabi Investment Authority Earlier stakeholders include IFC, Govt. of Singapore, HSBC Unique Positioning Multiplicity of roles : As sponsor, developer, advisor, and financier Promoted over 50 sector dedicated Special Purpose Vehicle companies Developing infrastructure projects worth over $ 30 billion In-house capabilities to take projects from concept to commissioning Pioneering Development Role Play Promoted India s first private sector toll road and water supply project Sponsored India s first infrastructure focused PE fund with AIG Early entrants in niche growth areas like waste management, renewable energy, education with a strong social orientation Project development partnerships with various State Governments Advisor to Central and State Governments for developing legal and policy frameworks 5
Infra Development Financial Services IL&FS Infrastructure Development Corp IL&FS Financial Services IL&FS Securities Services Private Equity Fiduciary Services IL&FS IL&FS Investment Managers Service SPVs IL&FS Trust Company Ecosmart (Environment), IETS (Education), ITL (Technology), IPMSL (Property Mgmt) Infrastructure SPVs ITNL (Roads), IEDCL (Power), IMCL (Ports), NTADCL (Water), IWMUSL (Waste Mgmt) etc 6
IL&FS Group, enjoys a pre-eminent position in the infrastructure and financial services sectors Seen the Indian PE world expand from less than US$ 20 mn to more than US$ 15 bn Investment spectrum spans VC to PE; Buy- Strong relationships with Governments, outs to PIPEs Multi-lateral and domestic Financial Cross sectoral presence across 15 Institutions and Corporates IIML Funds General Purpose PE Real Estate Infrastructure Team experience straddles fund Manages US$ 3.2 bn for and economic cycles marquee international Limited Over 140 investments since 1998 Partners and domestic Institutions 66 exits / liquidity events About 90% of capital has an average Realized gross US$ IRR of 25% p.a. contractual life of 7 years 3 Funds fully divested Fund size have increased with experience; wider and deeper strategy to propel growth 7
Revenue Stream Management Fee: - Typically 1.5-2% of AUM for the fund life - Highly visible, annuity revenue stream over 6-10 years Carry: - Performance upside through profit share - Hurdle rate ranges between 8-11% p.a. - Carry is 20% of profits from investments - A upside component as Fund size / Asset under Management increases Investment Model - Long-term investment horizon of 3-5 years - Majority investments in unlisted companies - Active investors with clear focus on value creation - Mitigates risk of stock market volatility Indirect exposure to growth potential of large unlisted companies Better positioned to create upsides vs managers of other asset classes Documented advantages of PE participation in the value of unlisted companies Higher degree of value add and relatively early stage of investment provides significant upside at exit 8
Banks/ Institutions Insurance /Pension Funds Others This is not an exhaustive list of contributors. In most instances, names of contributors can not be revealed on account of confidentiality 9
Mr. Shahzaad Dalal Vice Chairman 26 years of financial markets and investment experience MBA from Northeast Louisiana University Dr. Archana Hingorani CEO and Executive Director 24 years of experience in the financial services industry, including teaching finance and research MBA and PhD. University of Pittsburgh Private Equity Investment Team Size : 40 Real Estate Legal, Accounts & Risk Team Size : 16 Infrastructure IIML Employees own over 10% in the Company (based on shares held and options issued) 10
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Saffron Fund II, Standard Chartered IL&FS Asia Fund IL&FS India Realty Fund II; IL&FS Milestone Fund II IL&FS Milestone Fund Pan Asia Project Development Fund 2007 IL&FS India Realty Fund- I 2006 2009 2008 2005 2004 India Project Development Fund 2001 2002 2003 Tara India Fund III; Urjaankur Fund Saffron Yatra Fund India Auto Ancillary Fund 1999 2000 Leverage India Fund 1998 1997 South Asia Regional Apex Fund 1995 1996 AIG India Sectoral Equity Fund 1994 12
Private Equity Real Estate Infrastructure Two active funds aggregating US$ 378 mn First Fund fully divested; distributed carry Established 2005; first of the real estate funds in India Funds aggregating US$ 2.0 bn JV partnership in yield based Funds Acquired two RE funds aggregating $ 400 mn in 2010 one of which is a Euro 220 mn Euronext listed fund (Yatra Capital) Pan Asia focused Infrastructure Funds Two active Fund aggregating US$ 703 mn JV partnership for the core infrastructure fund A diversified portfolio with a vast experience in managing funds across all the sectors and business cycles 13
IIML s Experience Investee Companies US$ 262 mn invested in 49 transactions Early investors in Retail, Shipyard, Media Name Vintage Corpus (US$ mn) Investments Across Sectors Growth PE Funds AIG Indian Sectoral Equity Fund 1996 91 Life Sciences 10% IT & ITES 24% Leverage India Fund 2004 153 Tara India Fund III 2007 225 RMCS 25% VC / Sector Specific Funds India Auto Ancillary Fund 1998 15 South Asian Regional Apex Fund 1995 25 Manufacturing 41% 14
IIML s Experience Investee Companies Pioneer in India - First RE fund launched in 2005 Early investors in SRA & Industrial Parks US$ 1.3 billion already deployed in 58 transactions Name Vintage Corpus (US$ mn) Investments Across Funds Core Real Estate Funds IL&FS India Realty Fund I 2006 525 Saffron Yatra 16% Saffron II 2% IL&FS India Realty Fund II 2007 895 Saffron Funds 2007/09 393 Milestone II 4% Milestone I 7% IIRF I 45% Yield Based Funds IL&FS Milestone Fund I & II 2007 220 IIRF II 26% 15
IIML s Experience Investee Companies Over US$ 456 mn invested in 34 transactions Early investors in Telecom, Roads, City Gas, Rail Two Funds fully divested ; generated a gross return of 23% p.a. and 27% p.a. respectively Name Vintage Corpus (US$ mn) Investments Across Sectors Infrastructure Funds Telecom 5% AIG Indian Sectoral Equity Fund 1996 91 Ancillary 34% SCI Asia Infra Growth Fund 2008 658 Project Development Funds Energy 34% India Project Deve. Fund 2000 16 Pan Asia Project Deve. Fund 2006 45 Logistics 6% Water 5% Ports 8% Transportation 8% 16
Return Profile Deep experience and consistent performance Returns Number of IRR Multiple Investments Realized Investments 48 25% 2.0 x In addition, 18 investments have had liquidity events Liquidity Across a mix of strategies Trade Sale 15% Buyback 23% Strategic Sale 23% Listed / IPO 39% 17
Company Sector Gross IRR (%) (In US$ terms) Gross Multiple Shopper's Stop Consumer Services 22.5 3.6 imetrex Technologies IT 31.9 3.4 Indiagames IT 72.0 14.0 ibn18 Broadcast Limited Media 34.0 2.6 Hotel Leela Venture Hospitality 85.9 2.3 Max Telecom Ventures Telecom 19.9 4.0 Noida Toll Bridge Roads 23.5 3.0 ABG Shipyard Manufacturing 72.5 4.2 SpiceJet Aviation 25.6 1.8 Indraprastha Gas Energy 64.9 7.0 18
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AUM increased 19x Revenues increased by 22x PAT increased by 21x Dividend increased at a CAGR of 27% (Total Payout of Rs 62.5 per share (for one share of Rs 10 in 2000) Stock Price grew 57x (Compared to Sensex growth of 5x) 20
Total AUM US$ billion AUM grew at a CAGR of 60% during FY2006 to FY2011 Private Equity 13% AUM Break-up FY 2011 Infrastructure 23% Real Estate 64% 21
(Rs Mn) FY 2007 FY 2008 FY 2009 FY 2010 Total Income 601 1,057 1,642 1,759 Total Costs 221 592 796 803 PBT 380 465 846 956 PAT 178 319 623 741 PAT Margin (%) 30 30 38 42 Net Worth 440 710 928 1,368 EPS (Rs)* 1.5 1.6 3.1 3.7 Dividend (%)** 40 55 70 75 * Adjusted for 1:2 Bonus Issues in FY 2007 and FY 2009, 5:1 share split in FY 2009 ** Percentage of Face value of share of Rs 2 each Rs million 22
IIML has a successful business model built assiduously over the last decade Fund Manager of repute A port of first call for investees Business model to be replicated resulting in enhanced AUM / revenues through Larger follow on funds New emerging opportunities Extending Geographies Substantial increase in activity levels on all counts in the next 2-3 years Enhanced Fund raising High level of investment deal flow More investments to reach liquidity / exit stage Carry in the medium term 23