Agreement in line with Maruti’s strategy to sell more cars in the semi urban and rural markets, Magma strongholds

Kolkata, September 20, 2006: Maruti Udyog Limited (Maruti), country’s largest car maker today signed up with Magma Shrachi Finance Limited (Magma), the fastest growing financial services company to finance Maruti cars across the country. The agreement was signed today by Jagdish Khattar, Managing Director of Maruti Udyog Limited and Sanjay Chamria, Managing Director of Magma Shrachi Finance Limited at a function held in Kolkata.

Commenting on the occasion, Jagdish Khattar, Managing Director, Maruti Udyog Limited said: Maruti is determined to motorise India and tap the opportunity in rural and semi urban markets. We have the right products and the network for it. The missing link is car finance, which will now be provided by our partner, Magma. Their innovative systems and work practices, geared to rural and semi urban markets, will help us expand the base of first time car buyers

Sanjay Chamria, Managing Director, Magma Shrachi Finance Limited said: “This is a big day for Magma Leasing as we sign the agreement with Maruti Udyog, country’s market leader in automobiles. Magma specialises in financing new and pre-owned vehicles in the semi urban and rural areas which is the fastest growing market in the country. Magma will finance the entire range of Maruti cars through its own network. With the imminent merger of Magma and Shrachi Infrastructure Finance, the company will phenomenally grow its reach to increase financing Maruti cars in the hinterlands which is Maruti’s focus area now. With an increased reach through 146 branches, we will compliment Maruti’s plans very well.”

Leveraging Magma's reach in semi-urban and rural markets

Magma Leasing has a strong infrastructure in semi urban and rural India. Apart from own 68 offices in 16 states; the company has presence in over 1000 marketing clusters through channel partners. Maruti's recent thrust on 'C' and 'D' segment towns is already catered by Magma. Infact in the semi-urban and rural markets to which Magma majorly caters, it is already one of the biggest financers of Maruti vehicles.

Magma- SIFL merger to add strength to the agreement

With the recent announcement of a merger of Magma and Shrachi Infrastructure Finance, the merged entity will provide a great opportunity to Maruti Udyog in terms of further deeper reach and greater volume. The merged entity will finance Maruti vehicles from 146 branches, almost evenly distributed between the regions with stronger access to north and south, the biggest markets for Maruti vehicles.

About Maruti Udyog Limited:

Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation of Japan, is India's largest passenger car company, accounting for almost 55 per cent of the domestic car market. The company has a sales network of 365 outlets in 230 towns, and it provides maintenance support to customers at 2100 workshops in over 1100 towns and cities. Maruti has been rated first in customer satisfaction for six years in a row in J D Power's Surveys, and is among India's six Most Respected Companies as per Businessworld magazine. Listed on Bombay Stock Exchange and National Stock Exchange, Maruti's Total Income in 2005-06 was $ 2.77 billion and Net Profit, $ 264 million. (US$ = Rs 45)

About Magma Shrachi Finance Limited:

Magma Shrachi Finance Limited is the fastest growing financial services company in India having grown at a CAGR of 65% during the past five years. It has a well diversified product portfolio comprising of Commercial Vehicle Finance, Car & Utility Vehicle Finance, Construction Equipment Finance, Used Commercial Vehicle Finance, Strategic Construction Equipment Finance and Fee Based Business having disbursements of Rs 1820 crore for FY2006. The Company follows an excellent credit appraisal policy through well-laid processes, which has helped it build a quality asset base over the years.

Magma currently operates through 68 branches in 16 states and employs about 1,500 people. The Company has a focus on rural and semi urban India which generates major part of its business. It has a strong network in North, East and Central regions with an increasing presence in South and West.

Recent merger announcement of Shrachi Infrastructure Finance with Magma Leasing

Shrachi Infrastructure Finance Limited (SIFL), an established NBFC, having strong network in south, east and central India with growing presence in the west will merge with Magma Leasing. Board of directors of both companies approved the merger plan on 25 August 2006. SIFL is currently a sizable player in financing commercial vehicles and three and two wheelers. The merged entity will be one of the biggest retail financing company in the country with over 2200 people in 146 branches. The combined entity's assets under management will be worth over Rs 4500 crore (US$ 1 billion). The combined entity will have a very strong rural and semi urban base with over 80% of the branches located outside city limits. The combined entity has a customer base in excess of 1.5 Lac.