Mumbai

The Board of Directors of Welspun India, today, allotted shares/warrants pursuant to the preferential issue to Dunearn Investments (Mauritius) Pte Ltd (a wholly-owned subsidiary of Temasek Holdings of Singapore) and the Promoters of Welspun India Ltd. The preferential issue was approved by the Board earlier on February 21st, 2005 and followed by the approval of the members in the Extra Ordinary General meeting held on March 20th, 2005.
Details of the allotment are as under :

• 9,079,463 no. equity shares @ Rs 130.25 per share aggregating Rs.1183 million (equiv. US$ 27 million) to Dunearn Investments (Mauritius) Pte Ltd.
• 1,681,382 convertible warrants @ Rs.130.25 per share aggregating Rs.219 million (equiv. US$ 5 million to Dunearn Investments (Mauritius) Pte Ltd.; and
• 2,017,658 convertible warrants @ Rs.130.25 per share aggregating Rs. 262.8 million (equiv. US$ 6 million) to the Promoters of Welspun India Ltd.

The warrants would carry an option to convert into equity shares at Rs.130.25 per share anytime within 18 months from the date of allotment of warrants.

The funds would be utilized to part finance the Company's growth plan and/or expanding its weaving capacity and also enhance its spindle facility. The uses of funds include investments in brand development and retail initiatives in India as well as global distribution alliances. The above growth will be financed partly through the proposed issuance and the balance through debt @ 2-3 % interest (TUF Loans).

Salient decisions of the Board meeting

• Inducted Mr. Padmanabh Sinha as nominee director representing Dunearn Investments (Mauritius) Pte Ltd.
• Allotted 25,79,000 equity shares to the Promoters in respect of the warrants issued to them pursuant to the earlier preferential issue which was also subscribed by ICICI Ventures. The warrants were converted @ Rs.95/- per share.
• Mr.M.G.Diwan – ceased to be director of the Company.
• Initiatives taken to repay high cost borrowings from Financial Institutions.
• Approved purchase of 7,50,000 shares of Welspun Zucchi Textiles Limited (WZTL- a Joint Venture of the Company) from the Co Promoters of WZTL (subject to members approval).The presence of TEMASEK and ICICI VENTURE nominees on the Board would further strengthen the Company’s business model, strategic vision and management processes.

Update on Welspun India Limited

The Company’s Rs. 5.75 billion expansion project at Anjar, Gujarat for Terry Towels, Bed Sheeting and Cotton Spinning is as per schedule. In the Terry Towel unit, all the 96 looms have started commercial production and the Company has already shipped more than 1000 tons to prestigious clients in USA. The Sheeting and Spinning units are expected to be operational by April, 2005. On the domestic front, the Company’s retail initiative “Spaces” had recently opened its first “Spaces Home & Beyond” store in Inorbit Mall, Mumbai and now has 5 exclusive brand outlets and a factory outlet, in cities across India.