22 October 2007
CRISIL IPO grade 4/5 assigned to the IPO of Edelweiss Capital Ltd.

Proposed public issue of 8,386,147 equity shares of face value Rs 5 at a targeted price of Rs * per share

CRISIL has assigned a CRISIL IPO Grade "4/5" (pronounced 'four on five') to the proposed initial public offer of Edelweiss Capital Ltd (ECL). This grade indicates that the fundamentals of the issue are above average, relative to other listed equity securities in India.

The grading reflects the company management's ability as seen in its success in building one of the largest institutional equities derivatives desks in India. It also factors the company's strategy of supporting its institutional equities broking and investment banking businesses through breadth of research coverage and its strength in arbitrage trading on its proprietary book. The grading takes into account the company's strong business relationships with foreign institutional investors (FIIs) in the institutional equities broking segment and its sound corporate governance structure. The grading is tempered by the fact that the company's earnings continue to be dependent on their skills in identifying arbitrage opportunities in its proprietary trading business, where yields have fallen over the years but have remained reasonably stable over the last 18 months. Further, the grading reflects the fact that ECL has created a good position in the mid-size space of Indian investment banking, an area with significant growth potential, but competition is expected to intensify in this space.

About the company ECL, promoted by Mr. Rashesh Shah and Mr. Venkatchalam Ramaswamy, was incorporated as a public limited company on November 11, 1995. It has a merchant banking licence from the Securities and Exchange Board of India (SEBI). As of March 2007, the company was predominantly engaged in institutional equities broking, investment banking and proprietary arbitrage trading activities. It also has a small presence in insurance broking, asset management and investment advisory services, wealth management and wholesale financing activities.

Since commencement of business in 1996, ECL has grown from a boutique investment bank into a multi-activity financial services company organised under agency and capital business lines and operates through the company and its nine subsidiaries.

For the year ended March 2007, the company's consolidated total income and net profits were Rs 3,712.53 million and Rs 1,090.08 million, respectively.

About CRISIL IPO Grading
CRISIL IPO (Initial Public Offering) Grading is an opinion on the fundamentals of the graded issue that reflects CRISIL's independence and expertise. This opinion is expressed as a relative assessment in relation to other listed equity securities in India. The assessment is based on a grading exercise carried out by industry specialists from CRISIL Research. A CRISIL IPO Grade 5/5 indicates strong fundamentals and a CRISIL IPO Grade 1/5 indicates poor fundamentals. CRISIL IPO Grading reflects its assessment of the graded company's equity fundamentals as distinct from an assessment of debt fundamentals. A CRISIL IPO Grade should not be construed to mean a comment on the price of the graded security nor is it a recommendation to invest or not to invest in the graded security.

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October 22, 2007