Structured Private Equity for International Asset Reconstruction Company.

Avendus raises INR 900 million for International Asset Reconstruction Company Private Limited

Mumbai, November 11th 2008: International Asset Reconstruction Company Private Limited (IARC) today raised its second round of capital aggregating INR 900 million from various investors. The objective of raising capital is to augment the capital requirement in its asset reconstruction business.

The current round of investment was raised from leading institutions and banks in India and from foreign banks, namely HDFC Bank Limited, Tata Capital Limited, ICICI Bank Limited, Standard Bank Plc. (part of The Standard Bank Group, South Africa) and Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V. (FMO). Apart from the above, other existing individual shareholders also participated in the present round of investment

Avendus Capital was the exclusive financial advisor for the transaction.

Deal Value

USD 18 mn

Service

Private Equity

Sector

Financial Institutions Group

Date

November 2008

With the present round of capital infusion, IARC has adequate capital to meet the regulatory requirements and to capitalize on the increased opportunity in the NPA space. IARC has so far acquired financial assets of more than Rs 15 billion through bi-lateral deals with selling banks and financial institutions as well as successfully winning bids in auctions held by the selling banks

The Indian economy is at an inflexion point. Having seen significant credit growth in the last few years, the economy is witnessing a general slow-down. This overall slowdown coupled with tight liquidity conditions for weaker companies in certain industry sectors is expected to result in additional NPAs in the banking sector.

Mr. Birendra Kumar

MD & CEO of IARC

IARC is one of the leading Asset Reconstruction and Securitization Companies (ARC) in India, incorporated under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SRFAESI Act, 2002) and is engaged in the business of acquisition of Non-Performing Assets (NPAs) from the banking system and reconstruction and securitization thereof.

IARC is well-placed to capitalize this opportunity and expand rapidly in the competitive Indian distress market. The acquisitions will be both in the corporate as well as retail NPA segments for IARC with more focus on the corporate NPAs.

Incorporated in 2002, IARC is registered with the Reserve Bank of India u/s 3 of SRFAESI Act, 2002 as a Securitization and Reconstruction Company on 15th March 2007, and commenced business in August 2007. During its one year of operation, IARC has acquired financial assets aggregating INR 15 billion from the banking industry emerging as amongst the top ARCs in the country.

HDFC Bank Limited, a world-class Indian Bank and the recipient of Asian Banker Excellence’ award of Best Retail Bank in India in 2007 is engaged in provision of complete range of banking services to its retail and corporate customers.

Tata Capital Limited, part of the Tata Group, is one of the leading NBFCs in the country focusing on provision of retail loans, loans to SME sector and infrastructure companies. It’s also engaged in provision of wealth management and investment services, investment banking and treasury advisory services.

ICICI Bank Limited, the largest private sector bank in India, offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management.

Standard Bank Plc., London, part of The Standard Bank Group, South Africa, is a bank authorized and regulated by the United Kingdom Financial Services Authority. The Standard Bank Group Limited with its presence across 40 countries, is the largest bank domiciled in the Emerging Europe, Middle East and Africa regions, and is engaged in provision of personal and business banking, corporate and investment banking, and investment management and life insurance.

FMO, an International Development Bank of The Netherlands and governed by the Dutch Central Bank, is 51% owned by The State of Netherlands. FMO as part of its mission, it’s engaged in provision of long term funds to private companies and financial institutions in developing countries with an objective to stimulate sustainable economic growth and optimize development impact in developing countries.