Special Report on 'The Indian Economy'

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Special Report on 'The Indian Economy'

India's population is estimated to be approximately 1.176 billion with a GDP, on a purchasing power parity basis ("PPP"), of approximately US$ 4,447.758 billion (Rs. 198,325.5 billion) (Source: National Commission on Population, accessed on June 24, 2011; Report for Selected Countries and Subjects - India, International Monetary Fund, accessed on June 24, 2011).

In the past, India has experienced rapid economic growth, with its GDP growing at an average growth rate of 8.8% between Fiscal Year 2003 and Fiscal Year 2008. As a result of the global economic downturn, this high growth trajectory was impeded in Fiscal Year 2009, with the growth rate of India's GDP decelerating to 5.8% in the second half of Fiscal Year 2009, compared to 8.9% in Fiscal Year 2008. (Source: RBI, Macroeconomic and Monetary Developments: First Quarter Review: 2009-10 ("RBI First Quarter Review "))

However, in Fiscal Year 2010 and 2011, India's GDP grew by 8.0 % and 8.5%, respectively. (Source: Ministry of Statistics and Programme Implementation, India)

The table below sets out the comparison between India's real GDP growth in the 2009 and 2010 calendar years, and its expected GDP growth during the 2011 and 2012 calendar years, as compared to that of the United States, Japan, the United Kingdom, China and Brazil:

Real GDP Actual Projected 2009 2010 2011 2012

United States -2.6 2.8 2.8 2.9
Japan -6.3 3.9 1.4 2.1
United Kingdom -4.9 1.3 1.7 2.3
China 9.2 10.3 9.6 9.5
India 6.8 10.4 8.2 7.8
Brazil -0.6 7.5 4.5 4.1

(Source: International Monetary Fund, World Economic Outlook, April 2011)

The table above illustrates that in 2010 all the above mentioned countries registered positive real GDP growth, with India displaying a strong growth rate of 10.4%.

According to the IMF World Economic Outlook Update, April 2010, there have been four principal factors that have supported Asia's recovery: firstly, the rapid normalization of trade, following the financial dislocation in late 2008, benefited Asia's export-driven economies; secondly, the bottoming out of the inventory cycle, both domestically and in major trading partners such as the United States, is boosting industrial production and exports; thirdly, a resumption of capital inflows into the region has created abundant liquidity in many economies; and fourthly, domestic demand has been resilient, owing to strong public and private companies in many of the region's economies.

The IMF believes that, in both China and India, particularly, strong domestic demand will support the recovery. In India, the growth in real GDP will be supported by rising private demand, with consumption strengthening as a result of improvements in the labour market, and a boost to investment brought about by strong profitability, rising business confidence and favourable financing conditions.


Since 1991, India has witnessed comprehensive reforms across the policy spectrum in the areas of fiscal and industrial policy, trade and finance. Some of the key reform measures are:

- Industrial Policy Reforms: Removal of capacity licensing and opening up most sectors to Foreign Direct Investment ("FDI");
- Trade Policy Reforms: Lowering of import tariffs across industries, minimal restrictions on imports; and
- Monetary Policy and Financial Sector Reforms: Lowering interest rates, relaxation of restrictions on fund movement and the introduction of private participation in insurance sector.

In addition, FDI has been recognized as one of the important drivers of economic growth in the country. The Government of India has taken a number of steps to encourage and facilitate FDI, and FDI is allowed in many key sectors of the economy, such as manufacturing, services, infrastructure and financial services. For many sub-sectors, 100% FDI is allowed on an automatic basis, without prior approval from the Foreign Investment Promotion Board.

FDI inflows into India have accelerated since Fiscal Year 2007. From April 2000 through April 2011, FDI equity inflows into the services sector (both financial and non-financial) of India amounted to US$ 27,668 million (Rs. 1,233.72 billion). In addition, from April 2000 to April 2011, the cumulative amount of FDI equity inflows amounted to US$ 132,837 million (Rs. 5,923.20 billion). FDI inflows into India were US$ 37,838 million (Rs. 1,666.87 billion), US$ 37,763 million (Rs. 1,683.85 billion) and US$ 27,024 million (Rs. 1,205.00 billion) in Fiscal Years 2009, 2010 and 2011, respectively. (Source: Department of Industrial Policy and Promotion Fact Sheet, August 1991 to April 2011)


The RBI is the central regulatory and supervisory authority for the Indian financial system. The Board for Financial Supervision ("BFS"), constituted in November 1994, is the principal body responsible for the enforcement of the RBI's statutory regulatory and supervisory functions. SEBI and IRDA regulate the capital markets and the insurance sector respectively.

A variety of financial institutions and intermediaries, in both the public and private sector, participate in India's financial services industry. These include:

- commercial banks;
- Non-Banking Finance Companies;
- specialized financial institutions, such as the National Bank for Agriculture and Rural Development, the Export-Import Bank of India, the Small Industries Development Bank of India and the Tourism Finance Corporation of India;
- securities brokers;
- investment banks;
- insurance companies;
- mutual funds; and
- venture capital funds.


NBFCs are an important component of the overall Indian financial system. NBFCs are a group of institutions which perform the function of financial intermediation in a wide variety of ways, for example, by accepting deposits, making loans and advances and financing leasing and hire purchase transactions.

NBFCs typically advance loans to various wholesale and retail traders, small-scale industries and self- employed persons, which means that they offer a broad and diversified range of products and services. Key characteristics of NBFCs include:

- customer-oriented services;
- simplified procedures for transaction execution;
- attractive rates of return on deposits; and
- flexibility and timely reaction in meeting the credit needs of specified sectors.
The structure and operations of NBFCs are regulated by the RBI, within the framework of Chapter III B of the RBI Act and the directions issued by it under the RBI Act. As set out in the RBI Act, a "non- banking financial company" is defined as:
- a financial institution which is a company;
- a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or
- such other non-banking institution or class of such institutions, as the bank may, with the previous approval of the central Government and by notification in the Official Gazette, specify.

Under the provisions of the RBI Act, it is mandatory for a NBFC to be registered with the RBI. For such registration with the RBI, a company incorporated under the Companies Act and which wishes to commence business as an NBFC, must have a minimum net owned fund ("NOF") of Rs. 20,000,000.

A NOF refers to funds (paid-up capital and free reserves, less accumulated losses, deferred revenue expenditure and other intangible assets) less, (i) investments in shares of subsidiaries/companies in the same group or all other NBFCs; and (ii) the book value of debentures/bonds/outstanding loans and advances, including hire-purchase and lease finance made to, and deposits with, subsidiaries/companies in the same group, in excess of 10% of the owned funds.

The registration process involves the submission of an application by the company in a prescribed format along with the necessary documents for the RBI's consideration. If the RBI is satisfied that the conditions set out in the RBI Act are fulfilled, it issues a "Certificate of Registration" to the company. Not all NBFCs are entitled to accept public deposits. Only those NBFCs holding a valid Certificate of Registration with authorization to accept public deposits can accept and hold public deposits. In addition to having the minimum stipulated NOF, NBFCs should also comply with directions issued by the RBI, which include investing a portion of the funds in liquid assets as well as maintaining reserves and ratings. The NBFCs accepting public deposits should comply with the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998, as issued by the RBI, which stipulate that:

- NBFCs are allowed to accept or renew public deposits for a minimum period of 12 months and maximum period of 60 months;

- NBFCs cannot accept deposits repayable on demand;

- NBFCs cannot offer interest rates higher than the ceiling rate prescribed by RBI from time to time;

- NBFCs cannot offer gifts, incentives or any other additional benefit to the depositors;

- NBFCs should have a minimum of an investment grade credit rating;

- NBFCs deposits are not insured; and

- The repayment of deposits by NBFCs is not guaranteed by RBI.

NBFCs are required to adhere to the Prudential Norms Directions which, amongst other requirements, prescribe guidelines regarding income recognition, asset classification, provisioning requirements, constitution of audit committee, capital adequacy requirements, concentration of credit/investment and norms relating to infrastructure loans.

NBFCs are also required to put in place appropriate internal principles and procedures in determining interest rates and processing and other charges in terms of the RBI circular dated May 24, 2007. In addition to the aforesaid, NBFCs are required to adopt an interest rate model for regulating the rates of interest charged by the them in accordance with the Master Circular on Fair Practices Code dated July 1, 2011 issued by the RBI to all NBFCs. See the section titled "Regulations and Policies in India" on page 197 of this Red Herring Prospectus.

Initially, NBFCs were classified into the following categories by the RBI:

(a) equipment leasing companies - any financial institution whose principal business is that of leasing equipment or the financing of equipment leasing;

(b) hire-purchase companies - any financial intermediary whose principal business relates to hire- purchase transactions or financing of hire-purchase transactions;

(c) loan companies - any financial institution whose principal business is that of providing finance, whether by making loans or advances or otherwise for any commercial activity other than its own (excluding any equipment leasing or hire-purchase finance activity); and

(d) investment companies - any financial intermediary whose principal business is that of buying and selling securities.

However, with effect from December 6, 2006, these types of NBFCs have been reclassified as follows:

(a) Asset finance companies - NBFCs whose principal business is that of financing the physical assets which support various productive and economic assets in India. "Principal business" for this purpose means that the aggregate of financing real/physical assets supporting economic activity and income arising therefrom is not less than 60% of total assets and total income respectively;

(b) Investment companies - NBFCs whose principal business is that of the acquisition of securities; and

(c) Loan companies - NBFCs whose principal business is that of providing finance whether by making loans or advances or otherwise for any activity other than its own, but does not include an equipment leasing company or a hire-purchase finance company.

(Source: Non-Banking Financial Companies (NBFCs), accessed on June 24, 2011)

The above mentioned companies may be further classified into those accepting deposits and those not accepting deposits. (Source: RBI - Non-Banking Financial Companies FAQs www.rbi.org.in/scripts/FAQView.aspx?Id=71, accessed on June 24, 2011)

In addition, and following the Second Quarter Review of the Monetary Policy for the Year 2009-10, the RBI introduced a fourth category of NBFCs known as "Infrastructure Finance Companies", which were defined as, entities which hold a minimum of 75% of their total assets for the purposes of financing infrastructure projects. See the section titled "Providers of Infrastructure Finance - Infrastructure Finance Companies", below. (Source: RBI - Second Quarter Review of Monetary Policy for the Year 2009-10, accessed on June 24, 2011)

The indicative list of commercial activities that NBFCs typically undertake in India is illustrated in the following diagram:

Core Investment Companies

NBFCs carrying on the business of the acquisition of shares and securities, and which hold not less than 90% of its net assets in the form of investments in equity shares, preference shares, bonds, debentures, debt or loans in group companies and are in compliance with other conditions provided in the Core Investment Companies (Reserve Bank) Directions, 2011, are eligible to be classified as CICs.

Every CIC-ND-SI that complies with the conditions described in the Core Investment Companies (Reserve Bank) Directions, 2011 is exempted from complying with requirements of maintaining the statutory minimum NOF and certain requirements of the Prudential Norms Directions, including requirements of capital adequacy and exposure norms. For further details, refer to the section titled "Regulations and Policies in India" on page 197 of this Red Herring Prospectus.


Providers of Infrastructure Finance

The primary providers of infrastructure finance in India are financial institutions, public sector banks and other public sector institutions, private banks, foreign banks and multilateral development institutions.

Financial institutions

Financial institutions provide medium- and long-term financial assistance across various industries to establish new projects and for the expansion and modernization of existing facilities. These institutions provide both fund-based and non-fund based assistance in the form of loans, underwriting, direct subscription to shares, debentures and guarantees. The primary long-term lending institutions include India Infrastructure Finance Company Limited, IFCI Limited, Industrial Development Bank of India Limited and Small Industries Development Bank of India.

Specialized financial institutions

In addition, there are various specialized financial institutions which cater to the specific needs of various sectors. These include the National Bank for Agricultural and Rural Development, Export-Import Bank of India, IFCI Venture Capital Funds Limited (formerly the Risk Capital and Technology Finance Corporation Limited), Tourism Finance Corporation of India Limited, Housing and Urban Development

Corporation Limited, Power Finance Corporation Limited, Infrastructure Leasing & Financial Services Limited, Rural Electrification Corporation Limited and Indian Railway Finance Corporation Limited.

State level financial institutions

State financial corporations, such as Maharashtra State Financial Corporation, Delhi Financial Corporation and Madhya Pradesh Financial Corporation, were set up to finance and promote small and medium term enterprises at a state level and they form an integral part of the institutional financing system. There are also state industrial development corporations operating at state level, which provide finance primarily to medium- to large-sized enterprises. These include Maharashtra Industrial Development Corporation, Gujarat Industrial Development Corporation and Madhya Pradesh Industrial Development Corporation.

Public sector banks and other public sector institutions

Public sector banks make up the largest category of banks in the Indian banking system. The primary public sector banks operating in the infrastructure finance sector include IDBI Bank, State Bank of India, Punjab National Bank, Canara Bank and the Bank of Baroda. Other public sector entities, for example, the Life Insurance Corporation of India, also provide financing to the infrastructure sector.

Private sector banks

After completion of the first phase of the bank nationalization in 1969, the majority of Indian banks were public sector banks. Some existing private sector banks, which showed signs of an eventual default, were merged with state-owned banks. In July 1993, as part of the banking reform process and to induce competition in the banking sector, the RBI permitted entry by the private sector into the banking system resulting in the introduction of nine private sector banks which are collectively known as the "new" private sector banks.

Infrastruct ure Finance C ompani es

In February 2010, the RBI introduced IFCs as a new category of infrastructure funding entities. NBFC- NDs which satisfy the following conditions are eligible to apply to the RBI to seek IFC status:

- a minimum of 75% of its assets deployed in infrastructure loans;

- net owned funds of at least Rs. 3,000.00 million;

- minimum credit rating "A" or an equivalent rating by CRISIL, FITCH, CARE, ICRA or any other credit agencies accredited by the RBI; and

- Capital to Risk (Weighted) Assets Ratio of 15% (with a minimum Tier 1 capital of 10%).

IFCs enjoy benefits which include a lower risk weight on their bank borrowings (from a flat 100% to as low as 20% for AAA-rated borrowers), higher permissible bank borrowing (up to 20% of the bank's net worth compared to 15% for an NBFC that is not an IFC), access to external commercial borrowings (up to 50% of owned funds under the automatic route) and relaxation in their single party and group exposure norms. These benefits should enable a highly rated IFC to raise more funds, of longer tenors and at lower costs, and in turn to lend more to infrastructure companies.

For further details, refer to the section titled "Regulations and Policies in India" on page 197 of this Red Herring Prospectus.

Sectoral Focus

The Planning Commission estimates that approximately Rs. 20.5 trillion will be required in the 11th Five Year Plan. The major contributors are expected to be the electricity, roads, telecommunications, railways and irrigation sectors. The table below sets forth the details of these projected investments (the figures in brackets indicate the percentage of the total):

Tenth Plan Eleventh Plan Sector Original Actual Original Revised Projections Investments Projections Projection (Rs. millions at 2006-07 prices)

Electricity (incl. NCE) 2,918,500 3,402,370 6,665,250 6,586,300

(33.49) (37.55) (30.42) (32.06)

Roads & Bridges 1,448,920 1,271,070 3,141,520 2,786,580

(16.63) (14.03) (15.28) (13.57)

Telecommunications 1,033,650 1,018,890 2,584,390 3,451,340

(11.86) (11.25) (12.57) (16.80)

Railways (incl. MRTS) 1,196,580 1,020,910 2,618,080 2,008,020

(13.73) (11.27) (12.73) (9.78)

Irrigation (incl. Watershed) 1,115,030 1,067,430 2,533,010 2,462,340

(12.80) (11.78) (12.32) (11.99)

Water Supply & Sanitation 648,030 601,080 1,437,300 1,116,890

(7.44) (6.63) (6.99) (5.44)

Ports (incl. Inland waterways) 140,710 229,970 879,950 406,470

(1.61) (2.54) (4.28) (1.98)

Airports 67,710 68,930 309,680 361,380

(0.78) (0.76) (1.51) (1.76)

Storage 48,190 56,430 223,780 89,660

(0.55) (0.62) (1.09) (0.44)

Oil & gas pipelines 97,130 323,670 168,550 1,273,060

(1.11) (3.57) (0.82) (6.20)

TOTAL 8,714,450 9,060,740 20,561,500 20,542,050

The Power Sector

Electricity demand has grown at a CAGR of 7% between Fiscal Year 2005 and Fiscal Year 2010. Power demand is expected to grow at a CAGR of 7.8% between Fiscal Year 2010 and Fiscal Year 2015. This growth in demand is due to growth in India's GDP and increased power generation in India, which is expected to lead to increased and improved availability of power. (Source: CRISIL Research, Power Annual Review, November 2010 ("Power Annual Review, November 2010"))

CRISIL Research estimates capacity additions in the power sector to be approximately 82 GW over the next five years between Fiscal Year 2011 and Fiscal Year 2015. In addition, captive capacity additions of 13.0 GW are estimated for the same period. The private sector is expected to lead these capacity additions with a share of 45.5 GW. (Source: Power Annual Review, November 2010)

Capacity additions forecast

MW 2010-11 P 2011-12 P 2012-13 P

Central 3,690 5,736 5,262

State 3,112 2,800 3,510

Private 4,285 6,397 7,620

Total 11,087 14,933 16,392

Captive 2,362 2,722 2,351

Total (including captive) 13,449 17,655 18,743

2013-14 P 2014-15 P Total

Central 3,021 3,705 21,414

State 3,103 2,648 15,173

Private 12,675 14,545 45,522

Total 18,799 20,898 82,109

Captive 2,673 2,865 12,973

Total (including 21,472 23,763 95,082 captive)

P - Projected

(Source: CRISIL Research, Power Update, June 2010 ("Power Update, June 2010"))

These capacity additions are expected to present an investment potential of Rs. 9.3 trillion over the next five years, with generation (both utilities and captive) contributing a portion of Rs. 5.8 trillion. (Source: Power Update, June 2010)

Though generation capacity addition in the first half of Fiscal Year 2011 continued from the momentum gained in Fiscal Year 2010, fuel supply has emerged as a major challenge with plant load factors dropping across sectors. This is especially worrisome considering that fuel supply is posing challenges even though capacity additions still lag government targets. (Source: Power Annual Review, November 2010)

Investment in the transmission and distribution sector (the "T&D Sector") is expected to grow at a CAGR of 16% over the next five years, vis--vis a CAGR growth of approximately 15% in generation.

Over the next five years, CRISIL Research expects total investment in the generation segment (i.e. utilities) to be approximately Rs. 5.1 trillion, with the private sector likely to account for approximately 57% of it. Whilst an investment of approximately Rs. 0.75 trillion is anticipated in respect of captive generation and an investment of Rs. 3.4 trillion is expected in the T&D sector. (Source: Power Annual Review, November 2010)

Roads Sector

According to CRISIL Research, government investment in the roads and highway sector over the next five years is likely to be approximately Rs. 6.3 trillion. National highways are expected to comprise a large share of the total investments at approximately 43% followed by state highways and rural roads at approximately 30% and 27%, respectively. (Source: CRISIL Research, Roads and Highways Annual Review, June 2010 ("Roads and Highways Annual Review, June 2010"))

Of the Rs. 6.3 trillion funding required in the roads and highways sector over the next five years, approximately Rs. 4.4 trillion is expected to be contributed by the public sector mainly in the form of grants and annuity payments. While the remaining Rs. 1.9 trillion is expected to be funded by the private sector primarily through BOT-Toll and BOT-Annuity contracts. (Source: Roads and Highways Annual Review, June 2010)

As road projects are highly leveraged, banks and financial institutions play a vital role in financing road projects. The outstanding portfolio of banks for roads and ports has grown at a compounded rate of 29% in the last five years. During this period, the total incremental lending by banks to the roads and ports sectors amounted to Rs. 3145 billion. (Source: Roads and Highways Annual Review, June 2010)

In addition, the Government has approved refinancing through IIFCL amounting to Rs. 1 trillion towards infrastructure sectors, out of which nearly Rs. 30 billion has been refinanced in Fiscal Year 2010 pursuant to the Union Budget 2010-11. (Source: Roads and Highways Annual Review, June 2010)

Ports Sector

With the Indian economy expected to continue on its growth path, the country's external trade is also likely to keep growing. Thus Indian ports are expected to see an increase in traffic over the next few years. CRISIL Research estimates this traffic will grow at a CAGR of approximately 7% to 978 million tonnes from Fiscal Year 2010 to Fiscal Year 2012, led by coal and container traffic (Source: CRISIL Research, Ports Update, November 2010. ("Ports Update, November 2010")).

Traffic at Non-major ports is expected to grow at 12.8% to 367 million tonnes from Fiscal Year 2010 to Fiscal Year 2012, mainly driven by coal traffic since many power plants are being established in close proximity to the non-major ports and given congestion, connectivity issues and other operational inefficiencies at major ports. CRISIL Research estimates that traffic at major ports will grow at 4.4% to 611 million tonnes in Fiscal Year 2012. (Source: Ports Update, November 2010)

Between Fiscal Year 2011 and Fiscal Year 2015, CRISIL Research expects approximately Rs. 838 billion to be invested in the ports sector, with approximately Rs. 469.00 billion expected to be invested towards planned capacity addition of 328 million tonnes in major ports such as Paradip, Visakhapatnam, Chennai and the Jawaharlal Nehru Port Trust by Fiscal Year 2015. Whilst an investment of Rs. 369.00 billion is expected to be invested in non-major ports towards a planned capacity expansion of 491 million tonnes in the same period. This includes new ports such as Dhamra and Kalinga and additional capacity ports such as Mundra and Krishnapatnam. (Source: Ports Update, November 2010)

Oil and Gas Sector

The consumption of all petroleum products in India has risen from 121 MMT in Fiscal Year 2007 to 138 MMT in Fiscal Year 2010. It is further projected that in Fiscal Year 2011 demand for petroleum products was approximately 142 MMT.

The table below sets forth the consumption of petroleum products for the periods indicated:

PRODUCTS 2001- 2002- 2003- 2004- 2005- 02 03 04 05 06 ('000 MT)

LPG 7,728 8,351 9,305 10,245 10,456

MS 7,011 7,570 7,897 8,251 8,647

NAPHTHA/N G L 11,755 11,962 11,868 13,993 12,194

ATF 2,263 2,271 2,484 2,813 3,299

SKO 10,431 10,404 10,230 9,395 9,541

HSD 36,546 36,645 37,074 39,650 40,191

LDO 1,592 2,064 1,619 1,477 883

LUBES 1,137 1,250 1,427 1,336 2,081

FO/LSHS 12,982 12,738 12,945 13,540 12,829

BITUMEN 2,584 2,986 3,373 3,339 3,508

PET COKE 1,798 2,563 2,877 3,129 4,928

OTHERS 4,604 5,321 6,652 4,467 4,658

TOTAL 100,432 104,126 107,751 111,634 113,213

2006- 2007- 2008- 2009-10 07 08 09

LPG 10,849 12,010 12,191 13,121

MS 9,286 10,332 11,258 12,818

NAPHTHA/N G L 13,886 13,294 13,911 10,239

ATF 3,983 4,543 4,423 4,627

SKO 9,505 9,365 9,303 9,304

HSD 42,897 47,669 51,710 56,320

LDO 720 668 552 457

LUBES 1,900 2,290 2,000 2,657

FO/LSHS 12,618 12,717 12,588 11,589

BITUMEN 3,833 4,506 4,747 4,919

PET COKE 5,441 5,950 6,166 6,750

OTHERS 5,834 5,604 4,750 5,394

TOTAL 120,749 128,946 133,599 138,196

(Source: Petroleum Planning & Analysis Cell "PPAC", accessed on June 24, 2011)

On a per capita basis, energy consumption in India is relatively low in comparison to the rest of the world. In 2008, India's per capita primary energy consumption was approximately 17.5 million BTUs, compared to a global average of approximately 73.6 million BTUs. Currently, there is however a mismatch between the demand and supply for both natural gas and crude oil in India, with the demand for both sources of energy outweighing the domestic production. (Source: The U.S. Energy Information Administration, June 2011, accessed on June 24, 2011)

Telecommuni cations Sector

The telecommunications sector has grown at a rapid pace in the last five years, largely due to the growth of the mobile services segment. In Fiscal Year 2011, the mobile subscriber base grew to 827 million from 52 million in Fiscal Year 2005. (Source: Press Release No. 38/2011, Telecom Regulatory Authority of India, accessed on June 24, 2011).

CRISIL Research estimates revenues of mobile service providers grew by approximately 20% year-on- year in Fiscal Year 2009. (Source: CRISIL Research, Telecom Services Annual Review, January 2010 (" Telecom Services Annual Review, January 2010")) During December 2009 to March 2010, revenue growth dropped to -6% year-on-year, despite a 11.24% growth in its subscriber base, reflecting growing competition and pricing pressure in the market, leading to declining average revenue per user. (Source: CRISIL Research, Telecom Services Update, July 2010)

CRISIL Research estimates cumulative investments of Rs. 2.5 trillion to flow into the telecommunications sector between Fiscal Year 2010 and Fiscal Year 2014. With the mobile subscriber base expected to expand at an 11% CAGR during the same period, over 90% of the projected investments are expected to be utilized in the mobile services sector, a large proportion of which will be committed to active equipment. (Source: Telecom Services Annual Review, January 2010)


Construction Equipment Finance Overview

Construction activity forms an important part of a growing economy such as India. The share of construction in GDP of India has increased from 6.0% in Fiscal Year 2003 to 8.1% in Fiscal Year 2011. The increase in the share of the construction sector in GDP has primarily been due to increased government spending on physical infrastructure in the last few years, with programmes such as the National Highway Development Programme, Pradhan Mantri Gram Sadak Yojana and Bharat Nirman Programme. (Source: Ministry of Statistics and Programme Implementation, India http://mospi.nic.in/Mospi_New/upload/GDP50_08_R_curr_9.9.09.pdf and

http://mospi.nic.in/Mospi_New/upload/PRESSNOTE-Q4%202010-11%2030%20 May%202011.pdf;;

11th Five Year Plan for Agriculture, Rural Development, Industry, Services and Physical Infrastructure (the "11th Five Year Plan"),

http://planningcommission.nic.in/plans/planrel/fiveyr/11th/11_v3/11th_ vol3.pdf,accessed on June 24, 2011)

The following table set forth the revised estimates of GDP by economic activity:

(At 2004-2005)

Industry 2008-09 2009-10 2010-11 (in Rs. crore)

1. Agriculture, forestry & fishing 654,118 656,975 700,390

2. Mining & quarrying 97,244 103,999 110,009

3. Manufacturing 655,775 713,428 772,960

4. Electricity, gas & water supply 83,344 88,654 93,665

5. Construction 332,557 355,918 384,629

6. Trade, hotels, transport and communication 1,087,575 1,193,282 1,315,656

7. Financing, insurance, real estate & business 706,712 771,763 848,103 services

8. Community, social & personal services 545,184 609,724 652,431

GDP at factor cost 4,162,509 4,493,743 4,877,842

Percentage change over previous year 2009-10 2010-11

1. Agriculture, forestry & fishing 0.4 6.5

2. Mining & quarrying 6.9 5.8

3. Manufacturing 8.8 8.3

4. Electricity, gas & water supply 6.4 5.7

5. Construction 7.0 8.1

6. Trade, hotels, transport and communication 9.7 10.3

7. Financing, insurance, real estate & business 9.2 9.9 services

8. Community, social & personal services 11.8 7.0

GDP at factor cost 8.0 8.5

(Source: Ministry of Statistics and Programme Implementation, India Press Note 'Estimates of Gross Domestic Product for the Third Quarter of 2010-11 http://mospi.nic.in/Mospi_New/upload/PRESSNOTE- Q4 %202010-11%2030%20May%202011.pdf, accessed on June 24, 2011)

The contribution of the construction industry to the GDP at current prices in Fiscal Year 2011 was Rs. 5,918.6 billion, registering an increase of 18.0% from the previous year. The construction industry is experiencing an upsurge in the quantum of the work load, and has grown at the CAGR of 17.5% since Fiscal Year 2006. (Source: Ministry of Statistics and Programme Implementation, India http://mospi.nic.in/Mospi_New/upload/GDP50_08_R_curr_9.9.09.pdf and

http://mospi.nic.in/ Mospi_New/upload/PRESSN OTE-Q4%202010- 11%2030 %20May%202011.pdf, accessed on June 24, 2011)

The construction industry in India is faced with high operation, maintenance, and financial costs. This aspect is further exacerbated by inadequate access to institutional finance, especially for small contractors who execute over 90% of the total construction works in India. It is estimated that a total investment of Rs. 14,500 billion will be required in the eleventh five year plan of India for execution of the planned infrastructure construction. In addition, Rs. 1,800 billion will be required for construction equipment. (Source: 11th Five Year Plan,

http://planningcommission.nic.in/plans/planrel/fiveyr/11th/11_v3/ 11th_vol3.pdf, accessed on June 24, 2011)

In the private sector, approximately 200 manufacturers cater to the construction equipment market. Public limited companies (including public sector units) constitute approximately 71% of the sector, while private limited companies or joint ventures constitute approximately 29%. India imported construction machinery worth approximately US$ 362 million (Rs. 16,141 million) in 2009-10. (Source: India Brand Equity Foundation, Construction Equipment, November 2010,

http://www.ibef.org/download/Construction_Equipment _270111.pdf, accessed on June 24, 2011)

Transport Equipment Finance Overview

On a global scale, the Indian automotive industry is the second largest two-wheeler market in the world, the fifth largest commercial vehicle market in the world, and the ninth largest passenger vehicle market in the world. (Source: India in Business - Auto Industry, http://www.indiainbusiness.nic.in/industry- infrastructure/industrial-sectors/automobile.htm, accessed on June 24, 2011) As one of the largest industrial sectors in India, turnover of the automotive industry represents approximately 5.0% of India's GDP, while contributing nearly 17.0% to total indirect taxes. Although the automotive industry provides direct and indirect employment to over 13 million people, the penetration levels for vehicles in India are amongst the lowest in the world. (Source: The Automotive Mission Plan, 2006-16, http://www.siamindia.com/upload/AMP.pdf, accessed on June 24, 2011)

The transport equipment finance segment has experienced growing demand due to several factors, which include:

- a large network of roads being constructed across the country thereby facilitating better connectivity between destinations;

- construction of four lane and six lane highways, expressways and bypass roads which has reduced congestion and improved turnaround time of commercial vehicles;

- increasing GDP growth rates that necessitate transportation requirements for industries;

- Government regulations prohibiting use of commercial vehicles that are more than eight years old;

- several international manufacturers setting up production units in India such as Volvo, Mercedes Benz, Tatra;

- shift in the market towards usage of high tonnage vehicles capable of carrying long cargo volumes speedily;

- majority of the commercial vehicles sold are with financial assistance either from banks or NBFCs; and

- small road transport operators have been included in the priority sector list issued by the RBI (however, and with effect from April 1 2011, only bank loans to NBFC-MFIs will be eligible for classification as priority sector advances, according to the RBI's Monetary Policy Statement for 2011-2012 issued on May 3, 2011.).

The commercial vehicle industry is segmented into "light commercial vehicles" (for vehicles with gross vehicle weight of less than 7.5 tonnes) and "medium and heavy commercial vehicles" (for vehicles weighing more than 7.5 tonnes). The performance of the medium and heavy commercial vehicle industry bears a high correlation with industrial growth, and is driven by economic development, improved road infrastructure (such as the Golden Quadrilateral) for long haulage transportation, and a favourable regulatory environment. In this regard, it is estimated that the sharp rise in demand in 2006 and 2007 was partly attributable to the strict enforcement of overloading restrictions and age norms.

The performance of the light commercial vehicle industry tends to be less cyclical in nature, and is driven by GDP growth and demand for last mile distribution. The LCV goods vehicle segment has grown strongly in the past few years, with the introduction of the sub-one tonne category (post the launch of Tata Ace in 2005 and 2006). For the months of April to November in 2010 and 2011 the LCV segment grew by 27.6% (year-on-year).

This growth was driven by new model launches by Mahindra and Piaggio and growth in the agriculture, FMCG and consumer durables sectors. Going forward, the LCV segment is expected to grow by approximately 24% to 26% in Fiscal Year 2011 and approximately 18% to 20% in Fiscal Year 2012. (Source: CRISIL Research, Commercial Vehicles Update, December 2010 ("Commercial Vehicles Update, December 2010")

The following table illustrates the sale of commercial vehicles for the periods indicated:

Commercial Vehicles Sales Number of Vehicles Trends

Category 2003- 2004- 2005- 2006- 2007- 2008- 2009- 2010-11 04 05 06 07 08 09 10

Comme -rcial Vehicles 260,114 318,430 351,041 467,765 490,494 384,194 532,721 676,408

(Source: Society of Indian Automobile Manufacturers, http://www.siamindia.com/scripts/domestic-sales- trend.aspx, accessed on June 17, 2011)

The cumulative production data for April to March 2011 shows production growth of 27.45% over the same period last year. In March 2011 as compared to March 2010, production grew at 20.62%. The industry produced 17,916,035 vehicles of which share of two wheelers, passenger vehicles, three wheelers and commercial vehicles were 75%, 17%, 4% and 4%, respectively. (Source: Society of Indian Automobile Manufacturers, http://www.siamindia.com/scripts/production-trend.aspx, accessed on June 24, 2011)

The vehicle finance industry registered healthy growth in Fiscal Year 2010. CRISIL Research estimates that disbursements towards new vehicles have risen to Rs. 796.00 billion, representing a year-on-year growth of 34%. CRISIL Research further estimates that disbursements towards commercial vehicles are expected to grow by 32% and 23% in Fiscal Year 2011 and Fiscal Year 2012, respectively. (Source: CRISIL Research, Retail Finance-Auto Annual Review, November 2010 ("Retail Finance-Auto Annual Review, November 2010"))

The following table sets forth the financial disbursements in the vehicle finance industry for the periods indicated:

Rs. billion 2008-09 2009-10 Y-O-Y 2010-11 Y-O-Y 2011-12 Y-O-Y E E Growth P Growth P Growth

Cars 246 331 34.6% 454 37.2% 582 28.2%

Utility vehicles 78 109 39.7% 154 41.3% 184 19.5%

Commercial vehicles 194 272 40.2% 360 32.4% 443 23.1%

Two-wheelers 72 84 16.7% 105 25.0% 115 9.5%

Total new vehicle finance 590 796 34.9% 1,073 34.8% 1,324 23.4% market

E: Estimated; P: Projected

(Source: Retail Finance-Auto Annual Review, November 2010)

The following table illustrates the growth in commercial vehicles finance disbursements for the periods indicated:

Rs. billion 2008-09 2009-10 Y-O-Y 2010-11 Y-O-Y 2011-12 Y-O-Y E E Growth P Growth P Growth

New LCV Finance market 48 71 47.9% 103 45.1% 135 31.1%

New MHCV Finance market 146 201 37.7% 257 27.9% 308 19.8%

New CV Finance market 194 272 40.2% 360 32.4% 443 23.1%

LCV: Light commercial vehicles; MHCV: Medium and heavy commercial vehicles; E: Estimated; P: Projected. (Source: Retail Finance-Auto Annual Review, November 2010)

The commercial vehicles industry is expected to grow by 23-25% in Fiscal Year 2011 due to sustained growth in economic activity and rise in consumption expenditure. The industry is expected to grow by 16- 18% in Fiscal Year 2012 owing to sustained freight demand in line with the expected GDP growth of 8- 9%. (Source: Commercial Vehicles Update, December 2010)

The following diagram illustrates the year-on-year growth of the commercial vehicle industry for the periods indicated:

(Source: CRISIL Research, Commercial Vehicles Annual Review, August 2010)

Rural Finance Overview

According to the 2001 Census Data, approximately 72.2% of the Indian population live in rural areas. (Source: Census India - Census Data 2001,

http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/rural.aspx, accessed on June 24, 2011). The rural economy of India is largely dependent on agriculture and allied activities.

Agriculture provides the principal means of livelihood for over 58.4% of India's population and contributes approximately one-fifth to the total GDP. (Source: Government of India - Agriculture, http://india.gov.in/sectors/agriculture/index.php, accessed on June 24, 2011)

The Government of India, along with the state governments, have implemented strategies and programmes directed at enabling farmers to own tractors, power tillers, harvesters and other agricultural machinery. (Source: Government of India - Agricultural Mechanisation

http://india.gov.in/sectors/agriculture/agricultural_mechanisation.php, accessed on June 24, 2011). Since the rural economy is linked to agriculture, rural finance is primarily linked to financing agriculture and allied activities and financing equipment, particularly tractors and other farm equipment.

India is the largest manufacturer of tractors in the world. (Source: India in Business - Auto Industry, http://www.indiainbusiness.nic.in/industry-infrastructure/industrial-sect ors/automobile. ht m, accessed on June 24, 2011)

The key factors which affect rural demand, particularly in relation to tractors, are depicted in the diagram below:

(Source: CRISIL Research, Tractors Annual Review, September 2010 ("Tractors Annual Review, September 2010"))

CRISIL Research estimates total tractor volumes to grow by 17-19% in Fiscal Year 2011, with domestic sales growing by 15-16% and exports increasing by 42-45%. Sustained growth in farm income levels with expectation of good crop is expected to aid growth. According to CRISIL Research, the industry has grown at a CAGR of 18-20% from Fiscal Year 2005 to Fiscal Year 2010, to reach a size of around Rs. 200 billion in Fiscal Year 2010. The Indian tractor industry is expected to reach Rs. 320-330 billion by Fiscal Year 2015, a CAGR of 8-10%. (Source: Tractors Annual Review, September 2010)

The following diagram illustrates the agricultural credit extended, and changes in agricultural credit, for the periods indicated:

(Source: Tractors Annual Review, September 2010)

Microfinance Over view

Microfinance in the Indian context is formally defined as the provision of financial credit through loans of up to Rs. 50,000 (US$ 1,121) to households that are traditionally considered not to be credit worthy, and typically lack access to banking and related financial services. (Source: Inverting the Pyramid, 2009, Indian Microfinance Coming of Age, Intellecap ("Inverting the Pyramid"))

In the past two decades, different types of financial service providers have emerged, including non- government organizations; cooperatives, community-based development institutions such as SHGs and credit unions, commercial and state banks and MFIs.

The MFI channel includes organizations under a host of different legal forms that can be classified into two groups: for-profit organizations and not-for-profit organizations.

The measure of a person who is poor or is living in poverty is generally classified across various thresholds of daily income. The World Bank uses reference lines set at US$ 1.25 (Rs. 55.74) and US$ 2 (Rs. 89.18) per day at 2005 PPP terms. While the international poverty line is assumed at US$ 1.25 (Rs. 55.74) a day, a less frugal standard of US$ 2 (Rs. 89.18) per person per day is applied for developing countries or regions such as Latin America and Eastern Europe. (Source: World Bank, http://web.worldbank.org, accessed on July 4, 2011)

In 2008, the World Bank estimated that 1.4 billion people in the developing world were living on less than US$ 1.25 (Rs. 55.74) in 2005, and 2.6 billion people were living on less than US$ 2.00 (Rs. 89.18) per day. The World Bank also estimated that 41.6% of the population in India is below the US$ 1.25 (Rs. 55.74) a day PPP and 75.6% of the population are below the US$ 2.0 (Rs. 89.18) a day PPP poverty line, as of 2005. On a population of nearly 1.1 billion, this translates to nearly 832 million poor people below US$ 2.00 (Rs. 89.18) a day PPP, or approximately 177 million poor households, in India, assuming an average family size of 4.7. (Source: World Bank, http://data.worldbank.org, accessed on July 4, 2011)

Recent developments in the microfinance industry

The state of Andhra Pradesh is said to have a unique position of leadership within Indian microfinance, evidenced by the presence of the four largest MFIs in India in the state. The state government made significant investments in subsidizing financial inclusion through self help group ("SHGs") programmes. However, tensions between the Andhra Pradesh government and MFIs grew, as MFIs began to increase financing to their customers. (Source: Intellecap, Indian Microfinance Crisis, 2010: Turf War or a Battle of Intentions, October 2010)

As a result, on October 15, 2010, the Government of Andhra Pradesh promulgated the Andhra Pradesh Micro Finance Institutions (Regulation of Money Lending) Ordinance, 2010 (the "MFI Ordinance") to protect women SHGs in Andhra Pradesh from exploitation by private MFIs through usurious interest rates and coercive means of recovery by regulating money lending transactions by MFIs and for achieving greater transparency with respect to such transactions in Andhra Pradesh.

Subsequently, with effect from January 1, 2011, the Government of Andhra Pradesh introduced the Andhra Pradesh Micro Finance Institutions (Regulation of Money Lending) Act, 2011 (Act No. 1 of 2011) (the "MFI Act"). The MFI Act provides for inter alia the registration and cancellation of registration of microfinance institutions, filing of periodic returns by microfinance institutions, limits on interest recoverable by microfinance institutions, prohibition on security for loans provided to SHGs and prior approval for grant of further loans to SHGs. For further details, refer to the sections titled, "Risk Factors" and "Regulations and Policies in India" on pages 18 and 197 of the Red Herring Prospectus, respectively.

The board of directors of the RBI, at their meeting held on October 15, 2010 formed a sub-committee of the board (the "Malegam Committee") to study issues and concerns in the microfinance sector in so far as they related to the entities regulated by the RBI. The Malegam Committee submitted its report on the issues and concerns in the MFI sector on January 19, 2011. Key recommendations set out in the report include the creation of a separate category of NBFCs operating in the microfinance sector, such NBFCs being designated as NBFC-MFI, which should lend to an individual borrower only as a member of a JLG and should have the responsibility of ensuring that the borrower is not a member of another JLG. Not more than two MFIs should lend to the same borrower and bank advances to MFIs shall continue to enjoy "priority sector lending" status. For further details please see "Regulations and Policies in India - Report of the Sub-Committee of the Central Board of Directors of Reserve Bank of India to Study Issues and Concerns in MFI Sector" on page 201 of the Red Herring Prospectus.

Furthermore, the Central Government has, on July 6, 2011, released the proposed draft of the Micro Finance Institutions (Development and Regulation) Bill, 2011, (the "Draft MFI Bill") aimed at providing access to financial services for the rural and urban poor and promoting the growth and development and regulation of micro finance institutions. The Draft MFI Bill is subject to public comment and further, is subject to the approval of the Indian Parliament as well as the assent of the President of India. For further details please see "Regulations and Policies - Draft MFI Bill" on page 201 of this Red Herring Prospectus.

Distribution of Financial Products Overview

Financial products in India are distributed by corporate houses specializing in broking and distribution, as well as by individuals. The key financial products which are distributed in India are investment and risk assurance products, including the following:

(1) Equity and Futures and Options ("F&O"), listed on recognized exchanges;

(2) Mutual Funds;

(3) Life Insurance Policies;

(4) Fixed deposits of NBFCs and corporates; and

(5) General insurance policies (such as health insurance and motor insurance). Equity and F&O are mainly distributed by SEBI registered brokers and sub-brokers.


The functions of a mutual fund in India are managed by the trustees and an AMC. The investments made by the fund are managed on a regular basis by fund managers employed by the AMC. The fund manager constructs the portfolio in light of the fund's objectives and size, internal guidelines, prudential exposure norms and regulatory restrictions, and the liquidity required for income distribution or redemption. The income earned through these investments and the capital appreciations realised are shared by its unit holders in proportion to the number of units owned by them.

History of the Mutual Fund Industry

The history of mutual funds in India can be broadly divided into four distinct phases:

First Phase - 1964-87 (The formation of the Unit Trust of India)

The Unit Trust of India ("UTI") was established as a statutory corporation in 1963 by an act of Parliament. It was initially regulated by the RBI and then, beginning in 1978, by the Industrial Development Bank of India ("IDBI"). According to the AMFI, the first fund launched by UTI was Unit Scheme 1964. At the end of 1988, UTI had Rs. 67 billion of AUM.

Second Phase - 1987-1993 (Entry of other state owned funds)

In 1987, other mutual funds were set up by state owned banks and insurance companies. State Bank of India Mutual Fund was established in June 1987 followed by Canbank Mutual Fund (December 1987), Punjab National Bank Mutual Fund (August 1989), Indian Bank Mutual Fund (November 1989), the Bank of India (June 1990), the Bank of Baroda Mutual Fund (in October 1992), Life Insurance Corporation of India (June 1989) and General Insurance Corporation of India (December 1990). According to AMFI, at the end of 1993, the mutual fund industry had AUM of Rs. 470 billion.

Third Phase - 1993-2003 (Entry of privately owned funds)

In 1993, the SEBI promulgated the Securities and Exchange Board of India (Mutual Fund) Regulations 1993 ("1993 Regulations"), pursuant to which all mutual funds, except UTI, were to be registered and regulated by SEBI in accordance with its provisions. The 1993 Regulations allowed privately owned entities to enter the mutual funds industry and compete with state owned funds. In 1996, SEBI promulgated a more comprehensive set of regulations, which substituted and replaced the 1993 Regulations. The SEBI (Mutual Fund) Regulations 1996 remains in force today. For details on the regulatory framework of mutual funds in India, refer to the section titled "Regulations and Policies in India" on page 197 of this Red Herring Prospectus.

The entry of private owned funds marked the start of a new era in the Indian mutual fund industry. It gave the Indian investor the opportunity to choose from a wider variety of funds in which to invest. In July 1993, the erstwhile Kothari Pioneer (now merged with Franklin Templeton) became the first registered private sector mutual fund.

The number of mutual fund providers steadily increased and many foreign mutual funds started setting up funds in India. The industry also witnessed a phase of consolidation among privately owned mutual fund providers. According to AMFI, at the end of January 2003, there were 33 mutual fund providers, with total assets of Rs. 1,218 billion, of which Unit Trust of India (excluding the assured and monthly plans, as described below) represented Rs. 138.9 billion.

Fourth Phase - February 2003 to Present (Bifurcation of UTI and Growth of AUM)

In July 2001, amidst the global recession and equity markets downturn, UTI suspended dealings in its flagship fund, Unit Scheme 1964 ("US-64"), because there was a material gap between the underlying net asset value of the fund and the repurchase price of the units. The Government of India intervened to protect the interests of the unit holders, and in October 2002, the Unit Trust of India Act, 1963, was repealed by Parliament pursuant to the UTI (Transfer of Undertaking and Repeal) Act, 2002 (the "2002 Act"). As a result, UTI was bifurcated into two separate entities. The first entity was the Specified Undertaking of Unit Trust of India ("SUUTI"), which was vested with the assets of UTI's US-64 and assured return funds. After bifurcation SUUTI issued tax-free bonds to the investors in its US-64 and assured return funds who did not elect to receive cash in exchange for their fund units. The bonds matured in 2008 and 2009. The second entity established was UTI Mutual Fund, which was established as a SEBI registered mutual fund with State Bank of India, Life Insurance Corporation of India, Punjab National Bank and Bank of Baroda as its sponsors (collectively, the "Sponsors").

Pursuant to the 2002 Act and a transfer agreement dated January 15, 2003, among the President of India and the Sponsors, 37 SEBI compliant funds, five overseas funds and the Senior Citizens Unit Plan, 1993, of Unit Trust of India were transferred to the UTI Mutual Fund. UTI Asset Management Company Private Limited was incorporated in November 2002 and appointed by UTI Trustee Company Private Limited (the trustee of the UTI Mutual Fund) to manage the funds of UTI Mutual Fund. UTI Asset Management Company Private Limited commenced operations with effect from February 1, 2003.

After the bifurcation of the UTI and entry of domestic and international privately owned fund providers, the industry entered into a phase of consolidation and growth. Examples of the consolidation that has taken place in the Indian mutual fund industry include Franklin Templeton Mutual Fund's acquisition of Pioneer ITI Mutual Fund in 2002 and Birla Sun Life Financial Services' acquisition of Alliance Capital Asset Management (India) Private Limited in 2003.

According to AMFI, at the end of 2004, there were 29 mutual fund providers managing assets of Rs. 1,531 billion invested in 421 different individual funds. As of March 2011, there were 43 individual registered mutual fund providers, with a total average AUM, for the period of January to March 2011, excluding funds of funds, of Rs. 7,005 billion. (Source: Association of Mutual Funds in India, http://www.amfiindia.com/showhtml.aspx?page=mfindustry and

http://www.amfiindi a. com/AUMReport_Rpt_Po.aspx?dtAUM=01-Jan-2011&qt=January- March 2011&rpt=fwise, accessed on June 24, 2011)

The following graph illustrates the growth of assets under management over the periods indicated:

(Source: Association of Mutual Funds in India, http://www.amfiindia.com/showhtml.aspx?page=mfindustry and http://www.amf ii ndia.com/ spages/aqu-vol9-issueIV.pdf, accessed on June 24, 2011)

Source:L & T Finance Holdings Ltd. - 27/07/2011

The information in this section has not been independently verified by us, the Lead Managers or any of our or their respective affiliates or advisors. The information may not be consistent with other information compiled by third parties within or outside India. Industry sources and publications generally state that the information contained therein has been obtained from sources it believes to be reliable, but their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Industry and government publications are also prepared based on information as of specific dates and may no longer be current or reflect current trends. Industry and government sources and publications may also base their information on estimates, forecasts and assumptions which may prove to be incorrect. Accordingly, investment decisions should not be based on such information.

CRISIL DISCLAIMER: CRISIL Limited has used due care and caution in preparing the reports cited in this section. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of the reports cited in this section may be published/reproduced in any form without CRISIL's prior written approval. CRISIL is not liable for investment decisions which may be based on the views expressed in the reports cited in this section. CRISIL Research operates independently of, and does not have access to information obtained by CRISIL's Rating Division, which may, in its regular operations, obtain information of a confidential nature that is not available to CRISIL Research.

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