India Business Excellence Fund invests Rs. 190 million in IMP Powers Limited

Company Brief

New Delhi, September 18, 2007

Funds managed and advised by Motilal Oswal Venture Capital Advisors Private Limited (MOVCAPL), have invested Rs. 190 million in IMP Powers Limited.

IMP Powers Limited (IMP) offers an opportunity to invest in the high growth transformer sector. IMP is one of the oldest player in the power equipments segment with a product portfolio of various types of transformers, industrial meters and testing equipments. Transformers constitute about 95% of its FY2007 sales. The Company has successfully turned around after a bad phase in 2000-2005. Subsequent to the turnaround, it has achieved a CAGR of about 55% in sales over last 2 years. The EBIDTA margins have improved to a current level of 16.6% for FY 07 as against a low of 4.2% in FY 05 because of growth in sales and operational efficiency. Further the company has a very healthy order book position.

The Company is undertaking an expansion project with a capital outlay of Rs 280 mn including working capital. The project includes expansion of its manufacturing facilities situated at Silvassa ( U.T) from existing 3,600 MVA to 6,000 MVA. The Funds managed & advised by MOVCAPL have invested Rs 190 mn to part finance the expansion project. Brescon Corporate Advisors Ltd., were the financial advisors to the company on this deal. Further, promoters of the company & Brescon Corporate Advisors Ltd have subscribed to warrants to finance the balance of the capex program.

According to industry estimates, the transformer industry has been growing at approximately 25% CAGR for last two years and is expected to maintain this momentum for next 2-3 years. This growth will be driven predominantly by domestic market requirements and partly by exports to the Middle East, Africa, Europe and the United States.

As per the Government of India's plan, 78,000 MW of power generation capacity will be added in 11 th Five-year plan. In addition, improvements in transmission and distribution sector coupled with the replacement demand will also add to the urgent need for transformers. MOVCAPL believes that the IMP's management has the requisite experience and capability to capitalize on the current growth opportunity in the sector.

As per Raamdeo Agrawal, Chairman of MOVCAPL, ``India is rapidly moving from a USD 1 trillion economy to a USD 2 trillion economy, and the power sector will play a pivotal role in this movement. Companies like IMP which have established a strong brand and goodwill over the last 4 decades, will hugely benefit from this growth in the power sector. The company had been through a difficult phase in the past and it is this experience that will put the company in good stead to capitalize on the current growth momentum.''

According to Ajay Dhoot, Managing Director of IMP, "We are very excited about the growth prospects of the company, on the back of the growth in the power sector. We have a strong order pipeline and going forward we see it building up faster than ever before. ''

Aaditya Dhoot, Joint Managing Director, further adds "The investment from Motilal Oswal will help us in ramping up our capacities to service the bulging order book particularly in the 132 to 220 KV transformers. We believe Motilal Oswal is a partner in the long run and would assist us with their strategic inputs.

About Motilal Oswal Venture Capital Advisors Pvt. Ltd.

Motilal Oswal Venture Capital Advisors Pvt. Ltd. (MOVCAPL) is a wholly owned subsidiary of Motilal Oswal Financial Services Ltd. (MOFSL), a global, diversified financial services group with businesses in securities, commodities, investment banking and venture capital.

MOFSL has launched the India Business Excellence Fund (IBEF), a US$ 100 mn India focused Private Equity Fund which will be managed by MOVCAPL. The latter believes that with the right strategy, management and operational assistance, IBEF's portfolio companies will be able to leverage their existing market position and create significant value over a period of 3-5 years.

Over the last 20 years, MOFSL has been successful in building a comprehensive equity research team, vast distribution network and deep corporate and institutional relationships. These coupled with the experience of successfully managing a business will be leveraged by IBEF to become a financial investor of choice for companies looking for private equity investments.

For furter details please contact:

Mona Mohan

Motilal Oswal Securities Ltd

3980 4218