INTRODUCTION TO INDIAINFOLINE

IndiaInfoline founded in 1995 by Mr. Nirmal Jain (Chairman and Managing Director) as an
independent business research and information provider. It gradually evolved into a one-stop
financial services solutions provider. Our strong management team comprises competent and
dedicated professionals.

Indiainfoline is a pan-India financial services organization across 1,361 business locations and a presence
in 428 cities. its global footprint extends across geographies with offices in New York,
Singapore and Dubai. Indiainfoline is listed on the Bombay Stock Exchange (BSE) and the National
Stock Exchange (NSE).

Indiainfoline offer a wide range of services and products comprising broking (retail and institutional
equities and commodities), wealth management, credit and finance, insurance, asset management
and investment banking.

Indiainfoline is registered with the BSE and the NSE for securities trading, MCX, NCDEX and DGCX
for commodities trading, CDSL and NSDL as depository participants. Indiainfoline is registered as
a Category I merchant banker and are a SEBI registered portfolio manager. Indiainfoline also received
the FII license in IIFL Inc. IIFL Securities Pvt Ltd received approval from the Monetary Authority of
Singapore to carry out corporate advisory and dealing in securities operations.

Two subsidiaries India Infoline Investment Services and Moneyline Credit Limited are registered
with RBI as non-deposit taking non-banking financial services companies. Indiainfoline
Housing Finance Ltd, the housing finance arm, is registered with the National Housing Bank.
 HISTROY OF INDIAINFOLINE

The IndiaInfoline Group was originally incorporated on October 18, 1995 as Probity
research and Services Private Limited at Mumbai under the Companies Act, 1956 with
registration No. 11 93797. The IndiaInfoline Group commenced its operations as an
independent provider of information, analysis and research covering Indian businesses, financial
markets and economy, to institutional customers. Indiainfoline became a public limited company
on April 28, 2000 and the name of the Company was changed to Probity Research and Services Limited.
The name of the Company was changed to India Infoline.com Limited on May 23, 2000 and later
to India Infoline Limited on March 23, 2001.

In 1999, The IndiaInfoline Group identified the potential of the Internet to cater to a mass
retail segment and transformed our business model from providing information services to
institutional customers to retail customers. Hence indiainfoline launched our Internet portal,
www.indiainfoline.com in May 1999 and started providing news and market information,
independent research, interviews with business leaders and other specialized features.

In May 2000, the name of our Company was changed to India Infoline.com Limited to
reflect the transformation of our business. Over a period of time, indiainfoline have emerged as
one of the leading business and financial information services provider in India.

In the year 2000, The India Infoline Group leveraged its position as a provider of
financial information and analysis by diversifying into transactional services, primarily for online
trading in shares and securities and online as well as offline distribution of personal financial
products, like mutual funds and RBI Bonds. These activities were carried on by our wholly
owned subsidiaries.

The IndiaInfoline Groups broking services was launched under the brand name of
5paisa.com through our subsidiary, IndiaInfoline Securities Private Limited and
www.5paisa.com, the e-broking portal, was launched for online trading in july 2000. It
combined competitive brokerage rates and research, supported by Internet technology Besides
investment advice from an experienced team of research analysts, indiainfoline also offer real
time stock quotes, market news and price charts with multiple tools for technical analysis.
Acquisition of Agri Marketing Services Limited ("Agri")

In March 2000, The IndiaInfoline Group acquired 100% of the equity shares of Agri
Marketing Services Limited, from their owners in exchange for the issuance of 508,482 of
our
equity shares. Agri was a direct selling agent of personal financial products including mutual
funds, fixed deposits, corporate bonds and post-office instruments. At the time of our
acquisition,
Agri operated 32 branches in South and West India serving more than 30,000 customers with
a
staff of, approximately 180 employees. After the acquisition, indiainfoline changed the
company name to
India Infoline.com Distribution Company Limited.

The IndiaInfoline group, comprising the holding company, IndiaInfoline Ltd (NSE:
INDIAINFO, BSE: 532636) and its subsidiaries, is one of the leading players in the
Indian
financial ervices space. IndiaInfoline offers the entire gamut of financial services covering
investment products ranging from Equities and derivatives, Commodities, Portfolio
Management
Services, Mutual Funds, Life Insurance, Fixed deposits, Loans, Investment Banking, GoI
bonds
and other small savings instruments. It owns and manages the website,
www.indiinfoline.com,
which is one of India’s leading online destinations for personal finance, stock markets,
economy
and business.
 VISION
Our vision is to be the most respected company in the financial
services space.

MISSION
“To become a full-fledged financial services company known
for its quality of advice, personalized services and cutting edge
technology”
 BUSINES

India Infoline Securities Private Limited

Equities & Derivative Broking

India
Infoline
Depository Services Limited

Portfolio Management Services Content

related
services –
Equity
research &
Online
media
property
India Infoline.com Distribution Company Limited

Mobilization of personal investment products like

Mutual funds

RBI Bonds

Fixed Deposits etc.

owned

India Infoline Insurance Services Limited

Wholly

Corporate agents for ICICI Prudential Life

Insurance Company Limited

India Infoline Commodities Private Limited

Commodities Broking

India Infoline Investment Services Private Limited

Margin funding & Financing

Business model

Our range of products and services offerings today includes:

• Brokerage services in equities, derivatives and commodities

• Mobilization of Mutual Funds and retail distribution of personal investment

products
• Retail distribution of life insurance products
• Portfolio management services
• Fee-based content services

Brokerage services in equities, derivatives and commodities

Online brokerage

Indiainfoline offers to subscribers real-time trading on the NSE and BSE. Apart from this
indiainfoline also offer commodities trading on the MCX and NCDEX. Customers can
directly place orders to buy and sell securities through our automated order processing
system. All our branches are connected via VSAT. Our system intelligence automatically
checks the parameters of an order, together with the customer's available and necessary cash
balance and positions held, before executing an order. Indiainfoline update all transaction and
portfolio records to reflect trading activity on a real time basis.

Offline brokerage

Indiainfoline began offering offline brokerage services as a back up to our online brokerage
offering through our branches. This was mainly to address the Internet access problems faced
by some of our retail customers. Given the size of the offline market in India, the add-on
service was extended as a full offering. The customers can walk in and place orders with the
dealer in the branch as well as call up and place orders over the telephone with their
respective Relationship Manager/Dealer. The Risk Management system is centrally
controlled and orders placed through branches are passed through pre-order validation
process for availability and allocation of limits.

Mobilization of Mutual Funds and retail distribution of personal investment products

Indiainfoline offer retail distribution of personal financial products through our subsidiary
India Infoline.com Distribution Services Limited. Our branches also serve as retail
distributors for mutual funds, fixed income investments, RBI Bonds and other savings
products. Our employees solicit orders from customers, receive payment from the customer
made out to the product provider and submit the orders and the customer's payment to the
product provider. These branches also provide support to our online customers, and provide
customer contact points for our online business which indiainfoline believe helps in building
good customer relationships.

Indiainfoline have expanded our business to include online distribution of mutual funds. Our
online users are able to view and compare product offerings and download application forms,
which they then submit to the product provider. Indiainfoline earn a commission from the
product provider when a transaction takes place.

Retail distribution of Life Insurance products

Our subsidiary India Infoline Insurance Services Private Limited is an IRDA licensed
corporate agent for ICICI Prudential Life Insurance Company Limited. Indiainfoline hire
fresh as well as trained people for selling insurance. All staff engaged in directly selling
insurance has to undergo a training program as prescribed by IRDA and get certified. Besides
IRDA, our principal, ICICI Prudential Life Insurance Company Limited also imparts training
on insurance products as well as selling skills. Indiainfoline also have developed in house
training program on insurance and sales.

The channels used for insurance sales are:

• Telemarketing
• Branch walk-ins by customers
• Seminars and Workshops

Indiainfoline have emerged as the leading corporate agent of ICICI Prudential Life Insurance
Company Limited, which is a leading private sector insurance company in India.
Indiainfoline collected first year premium income of Rs 103.96 million in FY04, which was
287.42% higher than FY03. In the current financial year, indiainfoline have mobilized Rs
168.52 million in the first nine months ending December 2004.

Portfolio Management Services

Indiainfoline received our licence to offer Portfolio Management Services from SEBI from
April 1, 2004 and launched this service in August 2004. Indiainfoline believe that well
management and portfolio management services are a logical extension of our current
product offering and research background. Indiainfoline believe that the wealth management
industry in India is poised to witness rapid growth on the back of higher rate of savings,
multiple investment opportunities and changing demographics.
Indiainfoline have constituted an Investment Committee to manage the portfolios of the
customers. The portfolios are managed on a discretionary basis. Under the discretionary
services scheme, the choice, as well as the timing of the investment decisions rests solely
with the Portfolio Manager.

Fee-based Content Services

Indiainfoline have a dedicated research and analyst team of professionals who survey,
gather and accumulate information and data, and provide their views and opinions, on
companies, industries, markets and people in the news, relying on their experience and
expertise developed over the years. Our Internet portal, currently hosts pages of
financial information and original research and analysis on Indian business, financial
markets and economy. The content available on our Internet portal includes updated
market news, market statistics, products and commodities database, analysis of Indian
companies and industry, coverage of Indian Mutual Funds, feature articles on the
Indian economy and Indian business, Leader Speak — interviews with prominent
figures in the business and political world. Indiainfoline monetize this property by
selling banners, panels, pop ups etc.
INDIAINFOLINE COMPETITIVE STRATEGY:

Indiainfoline are strategically positioned to leverage indiainfoline strength in the domestic

market, due to indiainfoline competitive advantages that include the following:
• Research

Indiainfoline have our roots in equity research. Indiainfoline original business model
was to provide research and information services on Indian business and capital
markets to institutional customers. Indiainfoline executive directors have equity
research and investment experience in leading banks and brokerage houses.
• Integrated technology platform

Since the launch of indiainfoline website, www.indiainfoline.com, and indiainfoline

online trading platform, www.5paisa.com, indiainfoline have invested in building a
technology platform. Indiainfoline use a mix of in-house and outsourced technologies
to offer a user-friendly interface for online trading. Indiainfoline Trader Terminal is
an application which allows customers to trade on both the BSE and the NSE.

Indiainfoline believe that our technology strengths will enable us to scale up the
business without a proportionate increase in operating costs.
• Multiple product offerings makes us a “one stop” shop

Indiainfoline provide a range of products and services to indiainfoline customers,

either directly or through any one of indiainfoline wholly owned subsidiaries. These
multiple offerings across multiple channels – either online through Internet or offline
through any of the branches or over the telephone enables us to emerge as a financial
“one stop” shop. This also offers significant cross selling opportunities, which helps
us in strengthening customer relationships and loyalty.

• Pan - India distribution network

 Indiainfoline have 73 branches across 36 towns and cities in India. These branches
help in customer acquisition as well as customer service. This is a part of a conscious
“bricks and clicks” strategy to reach out to indiainfoline customers.
• “India Infoline.com” and “5paisa.com” have developed into brands

India Infoline.com and 5paisa.com are well known brands amongst retail investors
across India. In all the cities that indiainfoline have expanded into, indiainfoline have
been able to leverage upon brand awareness and have established a customer base.
• Experienced management team

Indiainfoline management team has hands on experience in financial services,

especially targeted at retail sales and relationship management.
• Customer relationship management

Indiainfoline have developed a team of Customer Relationship Managers across India

to handle key customer accounts. These people are experienced in financial services
and have undergone in-house training. This allows them to offer unbiased advice on
not only equities but also on other investment products like mutual funds and
insurance.
• Robust Risk Management Systems:

Indiainfoline manage the risks associated with indiainfoline broking operations

through use of internally developed credit algorithms implemented through fully
automated risk management software and selective direct monitoring of certain
operating parameters. Indiainfoline automated risk management procedures rely
primarily on internally developed Risk Management System and systems provided by
indiainfoline vendors.

• Acquisition & Takeover

Indiainfoline strongly believe that to become a market leader in the investment

advisory and intermediation space, indiainfoline have to expand indiainfoline
business. In indiainfoline endeavor to do so and as per indiainfoline business strategy
indiainfoline may pursue inorganic growth.
 S.W.O.T. ANALYSIS

Strengths Weaknesses

Original research Lack of a banking arm to complete

Integrated technology platform the bank-broker-depository chain

“One Stop” shop Insignificant presence in institutional

segment
Pan - India distribution network

“India Infoline.com” and

“5paisa.com” have developed into

brands

Opportunities Threats

Changing demographics with Economic slowdown

higher disposable income and Volatile movement in indices and

increasingly complex financial events like May 17, 2004

instruments will drive demand for

Stock markets falls will have a

investment advisory services

cascading effect on our mutual fund

Rapid penetration of Internet and mobilization

computers means that technology

Increase/decrease in interest rates

enabled financial services will gain

can affect our debt/ income fund

market share
mobilizations

Future changes in personal taxation

rules can impact insurance sales

Increasing competition from large and

particularly foreign players

 • Strength:

Original research:
Indiainfoline provides weekly report, it is the ace of all reports. It offers a comprehensive
market overview and likely trends in the week ahead. It also presents few top picks based on
an in-depth analysis of technical and fundamental factors

This report provides an in-depth analysis of specific industries which are likely to outperform
others in the economy. It analyzes their strengths and weaknesses and ascertains their future
outlook

Integrated technology platform

Since the launch of our website, www.indiainfoline.com, and our online trading platform,
www.5paisa.com, we have invested in building a technology platform. Indiainfoline use a mix
of in-house and outsourced technologies to offer a user friendly interface for online trading.
Our Trader Terminal is an application which allows customers to trade on both the BSE and
the NSE, has features like real time streaming quotes, live intra-day tick by tick charts,
historical charts, price alerts, one click access to back office as well as research library and
other features.

“one stop” shop :

Indiainfoline provide a range of products and services to our customers, either directly or
through any one of our wholly owned subsidiaries. Our offerings range from information
services

Indiainfoline are a SEBI registered Portfolio Manager and Depositary Participant with
National Securities Depository Limited (NSDL). Indiainfoline are a corporate agent for ICICI
Prudential Life Insurance Company Limited. These multiple offerings across multiple
channels – either online through Internet or offline through any of the branches or telephone
enables us to emerge as a financial “one stop” shop.
 • Weakness:

Lack of a banking arm :

HDFC, ICICI direct provide their customers three types of account (de-mat a/c, trading
a/c, bank a/c) but Indiainfoline provide only De-mat a/c and Trading a/c. so the lead time in
transaction generation is more in indiainfoline

Presence in institutional segment:

The company doesn’t have significance presence in institutional organization as compare to

other players of the same industry; competing firms effectively utilize their subsidiaries’
customer into the potential customers.

• Opportunity:

Increasing financial instruments:

To capture the more market the company can increase the financial instruments and make it
wider in terms of requirement of customer and customized instruments may help to
strengthen the compatibility power of organization.

Rapid technology services:

• As it implies the infoline.com and 5paise.com, still the more opportunity in the field
of technology, recently NSE started Mobile trading so the indiainfoline can become
the register broker of NSE to provide mobile trading to their customers.
 • Threats:

Economic slowdown:

Like recently, the global recession affects the Indian economy as well as stock market. So the
economic slow down suck the profitability of the organization.

Another threat can be the Volatile movement in indices events, Stock markets falls will have
a cascading effect on our mutual fund mobilization, and Increase/decrease in interest rate can
affect our debt / income fund mobilizations, Future changes in personal taxation rules can
impact insurance sales, increasing competition from large and particularly foreign players

And last but not he least, the cut thought competition is the biggest threat for any industry
including the stock market industry. All the giant players are cut down their brokerage
charges and provide various types of customer services. So to survive in this industry one
needs to have a fundamentally sound management system.
 PORTER’S 5 FORCES MODEL

POTENTIAL ENTERANT
Investmart

Cipher

Refco Group Ltd.

SUPPLIERS COMPETITORS BUYERS

Web maintainers Share Khan,ICICI Web Small Investors

Trade Ltd
NSCL Franchise/Business
Kotak Securities Ltd Partners
CSDL
India Bulls HNI’s,MF Companies
NSE, BSE, MCX
Motilal Oswal Securities HUF
NCDEX Ltd
Institutional
HDFC Securities Ltd Investors

SUBSTITUTES
Mutual Funds

Insurance

Bank FD
Intensity of Competition:

Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations. Not only the stock
broking firms provide tough completion to each other but now a day various foreign banks
like ABN Amro and others are planning to enter the Indian retail brokerage industry. And the
Online Trading Competes with Traditional Brokerage:
There is an increasing demand for online trading due to consumers growing preference for
internet as compared to approaching the brokers.

Threat of New Entrants

Entry of Foreign Players

New forms of trading including T+2 settlement system, dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter the Indian
industry. The foreign players like Refco Group and Cipher will exists in near future.

Buyer Power:
Lack of Expertise Curtails Bargaining Power Retail investors often lacks the knowledge and
expertise in the financial sector that calls them to approach the broking houses. Mainly the
bargaining power of supplier remains with the category of customers like HNI’s having the
maximum bargaining power to the organization and less with the small investors.

Supplier Power:
There is a growing dependence of corporate on broking houses with the rising number of
IPOs coming to the market and there is an increased dependency on IPOs. Mainly the
bargaining power of suppliers in broking industry is remain with the various stock exchanges.
Substitutes:

Now a days Various alternative forms of investment including fixed deposits with banks and
post offices etc act as substitutes to retail broking products and services.
 FINDINGS

Brokerage of Indiainfoline is higher than Others broking firms like Religare, Motilal
Oswal, India bulls, they are charging 0 .03% for Intraday and 0 .30% for Delivery where India
Infoline is taking 0 .05% for Intraday and 0 .50% for Delivery.

Margin money of Indiainfoline is higher than other firm like Indiabulls, Geojit, Motilal
Oswal, there is no restriction of margin money. But in India Infoline, the minimum margin
money should be rs..5000/2555

Exposure is less than other firms. India Infoline offers eight times exposure on margin where
as Religare and India bulls offer twenty times exposure on margin money.

HDFC, ICICI direct provide their customers three types of account (de-mat a/c, trading
a/c, bank a/c) but Indiainfoline provide only De-mat a/c and Trading a/c.

Religare takes Rs.299 for lifetime services, where as Indiainfoline takes Rs.555.