Magma Shrachi Finance in deal with Intl Tractors

Kolkata, August 10, 2007: Magma Shrachi Finance Ltd. (MSFL), one of the fastest growing financial services companies in India, today signed an agreement with International Tractors Ltd. (ITL) to form 'Magma ITL Finance Ltd.' a Joint Venture (JV) Company to finance Sonalika Tractor buyers on an exclusive basis across India. MSFL will have a 74% shareholding in the JV while ITL will hold the remaining 26%.

Magma ITL Finance will focus primarily on funding Sonalika tractor buyers on an exclusive basis throughout the country. It will draw support from MSFL's strong distribution network in rural India spread across 20 states through 155 branches combined with ITL's countrywide network of 600 dealers and 400 sub-dealers. Following the rollout, Magma ITL Finance will attain a wide presence in the rural and semi-urban markets, which it intends to further leverage to increase the scope of its financing activities in the agri-sector.

MSFL has a diversified product portfolio comprising of Commercial Vehicle Finance, Utility Vehicle Finance, Construction Equipment Finance, Used Commercial Vehicle Finance and Strategic Construction Equipment Finance. With a strategic intent, the Company has been focusing on the rural and semi-urban markets and it will further its association with its core markets by adding Tractor Financing to its portfolio.

International Tractors Ltd., owners of Sonalika brand of tractors, is one of the leading tractor manufacturing companies in India with sales of Rs. ~1,145 crore in 2006-07. Sonalika has captured substantial market share within a short period.

Commenting on the setting-up of Magma ITL Finance Ltd, Mr. Sanjay Chamria, Vice Chairman and Managing Director, Magma Shrachi Finance Limited, said: "We are delighted to partner with ITL, given that both of us have naturally complementary products and services which can further augment our business capabilities. We believe there is immense opportunity in the rural areas for our financial products. Owing to our expertise to operate in such areas and given our diversified product profile, we have been able to grow our Company at a rapid pace. We are happy to take our relationship with rural markets one-step forward by entering the Tractor Finance segment by partnering another rapidly growing Company. Both Magma and ITL have a fair understanding of the rural markets and bring together corresponding strengths that can be combined to offer a high quality product that is competitively and attractively packaged for the rural market.

"The agriculture sector has not been a major contributor to the rapid growth witnessed by our country due to inadequate funding and low level of technology. Hence, we feel that the objective of our JV is fully aligned with the country's need to further lift growth rates in the agricultural sector through better technology and funding."

About Magma Shrachi Finance Limited: Magma Shrachi Finance Limited (MSFL) is one of the fastest growing financial services company in India. It has a well-diversified product portfolio comprising Commercial Vehicle Finance, Car & Utility Vehicle Finance, Construction Equipment Finance, Used Commercial Vehicle Finance, Strategic Construction Equipment Finance and Fee Based Business with assets under management of over Rs. 59 billion as on 31 March 2007. The Company follows an excellent credit appraisal policy through well-laid processes, which has helped it build a quality asset base over the years.

MSFL currently operates through 155 branches in 20 states and employs about 2,630 people. The Company has a focus on rural and semi urban India which generates major part of its business. It has a pan India presence with a strong network in North, East, Central and South regions with an increasing presence in the West.