Edelweiss Capital Limited: A Profile

January 2011 www.edelcap.com

CONTENTS

 Introduction

 Evolution of Edelweiss

 Business Overview

 Corporate Structure

 Shareholding Pattern

 Board of Directors

 Senior Management

 Financial Performance

 Credit Ratings

 Edelweiss Strengths

 Corporate Social Responsibility

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Edelweiss Capital Limited: A Profile

January 2011 www.edelcap.com

Introduction

Edelweiss Capital Limited (www.edelcap.com), incorporated on 21st November 1995, today has emerged as one
of India‟s leading diversified financial services group. The Edelweiss Group offers one of the largest range of
products and services spanning varied asset classes and diversified consumer segments. The Group‟s product
offerings are broadly divided into Investment Banking, Brokerage Services, Asset Management and Financing.
The company‟s research driven approach and consistent ability to capitalize on emerging market trends has
enabled it to foster strong relationships across corporate, institutional and HNI clients. Edelweiss Group now
employs around 2575 employees after Anagram acquisition, leveraging a strong partnership culture and unique
model of employee ownership. It now operates through 327 offices, 33 franchise led offices and over 1300+ sub-
brokers in all major cities in India after the recent acquisition of Anagram Capital. The Edelweiss Group is a
conglomerate of 48 entities including 43 Subsidiaries and 4 Associate companies (December ‟10), which are
engaged in the business of providing diverse financial services. It is a listed company since December 2007
under the symbols NSE: EDELWEISS, BSE: 532922 and Bloomberg: EDEL.IN.

Evolution of Edelweiss

Business Overview
Edelweiss‟ operations are broadly divided into Agency and Capital business lines. The Agency business line
includes Investment Banking, Broking - Institutional, HNI and Retail, Asset Management and Investment
advisory and distribution services. The Capital business line includes Financing and Treasury Operations. The
strategies employed ensure that there is a balanced mix of revenues among the three revenue streams viz.,
Agency fee & commission, Treasury operations income and Interest income, thereby achieving the intended
diversification in revenue streams.

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Edelweiss Capital Limited: A Profile

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Investment Banking

Edelweiss has one of the most extensive product offerings in Investment Banking in India, catering to different
market and client segments. The verticals within Investment Banking include Equity Capital Markets which
include IPOs/FPOs, QIPs, Rights and Open Offers, and Advisory services which offer Mergers & Acquisitions
Advisory, Private Equity Syndication, Structured Finance Advisory and Infrastructure Advisory. Edelweiss also
offers full bouquet of products in Debt Capital Markets including Debt Syndication and broking. Edelweiss enjoys
strong franchise with emerging and mid-market companies which is reflected in the # 1 ranking in both
Bloomberg tables for Mid-market Private Equity placements in CY2007 and Prime Database league tables for
IPOs in Mid-market segment in FY2008. It was adjudged winner in the Best Merchant Banker category in the
Outlook Money NDTV Profit Awards 2008. It is ranked # 2 in QIPs and # 3 in ECM (QIP+IPO/FPO+Rights) in
FY10 as per Prime Database. For CY10 it is ranked # 1 in ECM by number of deals below ` 400 crore as per
Prime Database. Its client segments now span from private to public sector and from Mid-caps to Large-caps
across different industries.

Broking

Institutional Equities
Edelweiss has one of the leading institutional equities businesses in India backed by a large and experienced
research team and a large and diversified client base with a market share of ~5%, among the highest in Indian
brokerage firms. Intense servicing, seamless execution and innovative research products have helped Edelweiss
build strong relationships with over 300 active institutional investors, including domestic institutional investors
and FIIs across different geographies. Edelweiss provides broad corporate access by arranging Investor
Conferences every year in different locations across the world with a strong investor and Indian corporates
participation.

Research coverage presently extends to 185 companies across 20 sectors accounting for over 70% of total
market capitalization representing one of the largest Research coverage universe. The quality and caliber of
research associated with Edelweiss is widely regarded across the institutional community. It has a strong
positioning in Thematic Research - identifying large structural themes across sectors, and its “India 2020”
thematic report issued in March ‟10 was a recent highlight. It is also considered a Thought Leader in Alternative
and Quant Research with over 15 regular products such as pair-trading strategies, corporate action tracker etc.
Edelweiss‟ commitment to provide cutting edge research has resulted in a pioneering effort to provide online
research to its clients through the portal www.edelresearch.com with smart features of sorting of information,
analysis and archiving.

HNI Broking
Edelweiss offers dedicated broking services to high net-worth individuals with a strong emphasis on building
long-term relationships with clients. Product offerings include specialized trading execution for active trading
clients and structured products backed by high quality execution and reporting.

Retail Broking & Distribution

Retail Broking and Distribution are the new initiatives of the Group under its Retail Business strategy. The
organic Retail broking business is through the online portal www.edelweiss.in and provides advisory and
research based broking services supported by high quality execution platform and best in class reporting. It
currently has over 90,000 clients under the online broking. Edelweiss has also completed the acquisition of
Anagram Capital Limited in July „10. This adds arounds 220,000 clients, over 1300 sub-brokers, 138 own offices
and 33 franchise led offices to Edelweiss group. The acquisition is in sync with the existing Retail Strategy of the
group with minimal overlap.

Distribution business focuses on giving advice and analyzing the best financial product options available in the
market. It involves the distribution of the full range of third party financial products and services including IPO
syndication for the retail customer. For the calendar year as well as 9 months ended 31st December 2010
Edelweiss is ranked # 1 in HNI category and # 3 in Retail category by amount mobilized in IPOs. It was also
ranked # 1 in both HNI and Retail categories in the recent IPO of MOIL Ltd by amount procured. (Rankings as per
Prime Database)

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Edelweiss Capital Limited: A Profile

January 2011 www.edelcap.com

Wealth Advisory & Investment Services

The Primary focus is on understanding each client's profile including life style, risk appetite, growth expectations,
current financial position and income requirements to create comprehensive and tailored investment strategies.
The broad range of offerings includes a truly multi-asset class allocation advisory to Structured Products,
Portfolio Management, Mutual Funds, Insurance, Derivatives Strategies, Direct Equity, Private Equity, and Real
Estate Funds etc.

Asset Management
Alternative Asset Management currently focuses largely on offshore institutional investors offering
advisory/management expertise for India focused Multi-Strategy Fund, Real Estate Fund and a Special
Opportunities Fund. Recent Initiatives that have been announced include setting up an ARC for which RBI
registration has been received. The product portfolio is planned to be expanded by offering a Distress Assets
Fund. On the Domestic AMC side, Edelweiss Mutual Fund has launched a mix of 10 schemes across equity and
debt funds. The current focus of this business is on broad basing the product portfolio and building investment
track record.

Financing

With a deep knowledge and understanding of capital markets backed by strong origination capabilities, the
Company‟s primary offering in the financing business includes collateralized loan products such as sponsor
funding, loans against shares, IPO financing, loans against ESOPs and margin funding etc. The sponsors of mid-
to-large corporates constitute its key clientele. Its prudent financing norms, strong risk management and a
conservative margin of safety (typical collateral cover ranges from 2x to 3x) ensures low non–performing loans.
Edelweiss continues to work on new product offerings around other asset classes. Edelweiss Housing Finance
Limited has recently commenced the business of Home Loan Finance and would help the group diversify the
collateral class.

Treasury
The Treasury operations in Edelweiss are similar to that of a Treasury in a Commercial Bank and focus on
liquidity management and capital preservation. This business adopts a multi–strategy/multi-book approach to
diversify and grow its portfolio while imparting liquidity in the balance sheet. The group follows a disciplined and
conservative approach to cash management with emphasis on strong risk policies. This has resulted in a low or
no correlation between the market returns and the treasury performance.

Corporate Debt Syndication

Our Debt Syndication Desk focuses on origination, sales, trading and research. It has gained a strong foothold
and visibility in the market.

 Ranked # 2 in CP Placement and Short Term Debt Placement for FY09

 Ranked # 4 in CP Placement and Short Term Debt Placement for FY10
 Also ranked # 3 in CP placement and Short Term Bonds Placement in 9MFY11
(Rankings as per Prime Database)

Its clients in the recent past include large corporates like Reliance Industries, SAIL, REC, PFC, PGC, Tata Capital,
Sundaram Finance, Yes Bank, State Bank and Bank of India.

Growth Initiatives
Edelweiss has announced that it is entering into an agreement with Tokio Marine Holdings, Inc., one of the
world‟s leading insurance groups headquartered in Japan, to establish a Life Insurance Joint Venture in India
subject to regulatory approvals. It has also completed the acquisition of Anagram Capital and it has also
launched home loans business recently. It also has received the RBI approval for setting up an asset
reconstruction company. These initiatives would lead to long term investment opportunities for the Group in the
financial services industry while enlarging its retail footprint.

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Edelweiss Capital Limited: A Profile

January 2011 www.edelcap.com

Corporate Structure

* Edelweiss Capital Limited has 100% holding in its subsidiaries unless specifically mentioned in parenthesis, as
on 31st December 2010.

Shareholding Pattern

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Edelweiss Capital Limited: A Profile

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Board of Directors
The Edelweiss Board comprises of three independent directors and one non-independent non-executive director
out of a total of six directors, each of whom brings in his own expertise in diverse areas. The focus is on strong
corporate governance. The directors of the company are:

Senior Management

Edelweiss has an experienced and capable Senior Management team with a strong track record of identifying
business opportunities and executing on strategy. The company has experienced business heads supported by a
deep layer of skilled middle managers. Most members of the senior management team have been with the
company for over five years. A four tier leadership pool covering over 5% of the organization provides stable
leadership across various businesses while building bench strength.

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Edelweiss Capital Limited: A Profile

January 2011 www.edelcap.com

Financial Performance at a Glance

Edelweiss over the past years has delivered strong operating and financial performance since its inception. It has
consistently demonstrated a strong track record of high growth and profitability. Its Revenues and PAT have
grown at an 11-year CAGR of 80% and 75% respectively till FY10.

As at the end of 31st December 2010 Edelweiss Group‟s Networth excluding minority interest stood at over
`23.05 billion (`27.90 billion including minority interest), indicating a strong balance sheet. Equity capital is the
primary source of funding for the group besides debt. The leverage as on 31st December 2010 is 1.93 times
including the Minority Interest indicating a healthy position whereby the balance sheet can be further levered
easily.

Consolidated Financial Performance of Edelweiss Capital Limited:

Edelweiss benefits from a strong and liquid balance sheet with a low leverage. A strong capital base and
adequate profitability year after year allows Edelweiss to constantly invest in new businesses with an eye on
future growth while scaling up the existing businesses. A large capital base also allows it to transact larger
volumes of broking and trading in the markets giving it a leadership position in Institutional Equities business. It
also enables the group to add debt capital as and when required at reasonable rates. Its market capitalization as
on 31st December ‟10 was over ` 35 billion and places the company among top 5 brokerage houses in the
country by market cap.

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Edelweiss Capital Limited: A Profile

January 2011 www.edelcap.com

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Edelweiss Capital Limited: A Profile

January 2011 www.edelcap.com

Highest Short–Term Credit Ratings

Edelweiss Capital Limited and three other group companies enjoy highest short term rating as under:
(As on 31st December „10)

Rating
Entity Rating
Agency
Edelweiss Capital Limited

LAA-/LAA- pn/
Long-Term Debt Programme ICRA
LAA- pp/Stable

Short-Term Debt Programme CRISIL P1+

Edelweiss Securities Limited

Short-Term Debt Programme CRISIL P1+

ECL Finance Limited

LAA- pp
Long Term Debt Programme ICRA
(SO)/Stable

Short-Term Debt Programme ICRA A1+

Long Term Debt Programme CRISIL AA-/AA-r Stable

Short-Term Debt Programme CRISIL P1+

Edelweiss Commodities Ltd. (formerly ECAL Advisors Ltd.)

Short Term Debt Programme CRISIL P1+

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Edelweiss Capital Limited: A Profile

January 2011 www.edelcap.com

Edelweiss Strengths

1. Brand: Edelweiss – the brand, today is a strong franchise in the capital markets backed by a consistent focus
on execution and innovation. It constantly emphasizes innovation which is reflected in leadership in new
products and asset classes and new client segments.

2. Edelweiss‟ Core Strategic Approach to business is founded on growth with profitability backed by
synergistic diversification across the businesses; Control and flexibility of cost, capital and balance sheet,
diversified revenue streams, strong risk management and organization build up by developing
leadership in bench and investing in culture which rewards thinking about long-term in a partnership cohesive
approach. It believes in growth through adjacent markets, adjacent asset classes, adjacent product classes and
adjacent client segments.

3. Integrated & Diversified Business Model: Edelweiss derives its strength from a distinct but
complementary set of diversified businesses which also protect the Group from any downward cyclical pressures.
To this end, Edelweiss continues to look to invest in long term business opportunities in financial services. Its
core business diversification approach is based on growth through adjacent markets and through widening the
product mix in existing businesses. The synergistic diversification ensures three broad streams of revenue, viz.
Agency fee & commission, Treasury operations income and Interest income generate a balanced mix of revenues.

4. Balance Sheet: Edelweiss benefits from a strong and liquid balance sheet with a low leverage. Its focus
while managing the Balance Sheet is on strong risk management and capital preservation. A strong capital
base of ` 27.90 billion and adequate profitability year after year allows Edelweiss to constantly invest in new
businesses with an eye on future growth while scaling up the existing businesses. Edelweiss is also shielded from
any adverse asset liability mismatch as its asset-side duration is less than 9 months whereas its liabilities have
duration of about 120 months. Low leverage on the balance sheet and highest short term credit ratings
allow it ample leeway to lever the balance sheet further. The flexibility in the cost structure enables it to
protect the margins, strong risk management focuses on preservation of capital and the group maintains
adequate liquidity cushion to ensure smooth business operations across cycles.

5. Edelweiss Business Model is to be able to adjust to downturn in markets with inherent cost flexibility and
be able to quickly convert growth opportunities into business when they reappear. Our business growth
perspective is aligned to the medium term of 3 to 5 years.

6. Board level Commitment: A board comprising of three independent and one non-independent non-
executive director out of a total of six directors, all of whom play a governing role and provide expertise and
insight into building Edelweiss into one of the most reputable organizations with an admirable compliance and
corporate governance ethos.

7. Management: Edelweiss has an experienced and stable senior management team. We also have a strong
middle management team, which comprises of a 50 member Senior Leadership Group and an 80 member
Leadership Group forming the bench strength. The four tier leadership pool thus covers over 5% of the total
employee strength of the group. Edelweiss constantly emphasizes training and developing leadership and its 100
seater Training Centre at Alibaug (near Mumbai) is now operational.

8. Employee Ownership: Edelweiss has a widely distributed employee ownership and was among the pioneers
in the financial services industry in instituting an employee stock option scheme. It now has one of the largest
ESOP pool in the financial services space in India and over 600 employees are covered through ESOPs. The
employees including key management own over 50% of the company.

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Edelweiss Capital Limited: A Profile

January 2011 www.edelcap.com

Corporate Social Responsibility

At Edelweiss, Corporate Social Responsibility is a part of its DNA and it focuses on initiatives that help to build a
better, more equitable and sustainable society. For Edelweiss, CSR means giving back to the society - beyond
the call of the business.

EdelGive Foundation, the CSR wing of Edelweiss, has accordingly been formed to create an effective institutional
platform to provide structure and direction to the philanthropic activities of Edelweiss, its employees, its clients
and its associates. Its primary focus is on creating educational, employment and sustainable livelihood
opportunities for underprivileged youth and it brings an „institutional banking and venture capital” rationale and
thinking to the social sector. Edelweiss leverages its strengths - the ability and expertise to act as a bridge
between providers and consumers of capital - to achieve the objective of addressing the primary needs of the
social sector.

EdelGive Foundation focuses on the twin areas of education and livelihood and leverages Edelweiss‟ intellectual
capital by encouraging Edelites to volunteer and use their skills to support non-profits in developing MIS
systems, reviewing their accounting and reporting systems and building five-year strategic and financial plans.

Edelweiss Social Innovation Honours is a CSR initiative to encourage NGOs who are working to improve the
status of the girl child in the areas of health, education and employability. The Social Innovation Honours for the
year 2009-10 received overwhelming response with over 280 entries out of which 5 NGO were selected for the
award for their innovative work to empower women.

Edelweiss has been rated among the top 5% of companies in terms of CSR by Karmyog.com.

*******

This presentation is for information purposes only and does not constitute an offer or recommendation to buy or sell any securities or financial
products of Edelweiss. Any action taken by you on the basis of the information contained herein is your responsibility alone and Edelweiss or its
directors or employees will not be liable in any manner for the consequences of such action taken by you. This presentation may contain certain words
or phrases that are forward - looking statements, based on current expectations of the management of Edelweiss Capital Ltd. or any of its subsidiaries
and associate companies (“Edelweiss”). Actual results may vary significantly from the forward-looking statements contained in this presentation due to
various risks and uncertainties. The information contained herein is as of the date referenced and Edelweiss does not undertake any obligation to
update these statements. Edelweiss has obtained all market data and other information from sources believed to be reliable or are its internal
estimates, although its accuracy or completeness cannot be guaranteed.

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