HOV IPO Basis of Allotment

HOV Services Limited

(Incorporated as Private Limited Company under the Companies Act, 1956 on January 10, 1989 under the name Codec Communications Private Limited and subsequently changed to HOV Services Private Limited on February 27, 2006. The Company became a public company on January 5, 2006 and the name of the Company was changed to HOV Services Limited on March 9, 2006.)

Registered Office: 3rd Floor, Sharda Arcade, Pune Satara Road, Bibwewadi, Pune 411037, Maharashtra, India
Tel: (9120) 24221460; Fax: (91 20) 24221470;E-mail: investor.relations@hovservices.com Website:www.hovservices.com

BASIS OF ALLOCATION

PUBLIC ISSUE OF 4,050,000 EQUITY SHARES OF AS. 10;-EACH FOR CASH AT A PRICE OF AS. 200/-PER EQUITY SHARE (INCLUDING SHARE PREMIUM OF RS. 190/- PER EQUITY SHARE) AGGREGATING TO RS 810 MILLION (REFERRED TO AS 'THE ISSUE'). THE ISSUE CONSTITUTES 32.30% OF THE FULLY DILUTED POST ISSUE PAID-UP CAPITAL OF THE HOV SERVICES LIMITED (^'COMPANY' OR 'ISSUER').

THE FACE VALUE PER EQUITY SHARE IS RS.10/-. THE ISSUE PRICE PER EQUITY SHARE IS
RS. 200/- AND IT IS 20 TIMES THE FACE VALUE.

The Issue made through the 100% Book Building Process wherein at least 50% of the Issue was to be allocated on a proportionate basis to Qualified Institutional Buyers ('QIBs') (including 5% of the QIB portion that was to specifically be allotted to mutual funds), further, up to 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and up to 35% of the Issue shall be available for allocation on a proportionate basis to Retail Bidders, subject to valid bids being received at or above the Issue Price.

The Issue received 20,692 applications for 10,160,110 equity shares resulting in 2.51 times subscription. The details of the applications received in the Issue from Qualified Institutional Buyers, Non-Institutional Investors and Retail Individual Investor categories are as under: (Before technical rejections)

Final Demand
A sample of the final demand at different bid prices is as under:

The Basis of Allocation was finalized in consultation with the National Stock Exchange of India Limited ('NSE') on September 19, 2006.

A. ALLOCATION TO RETAIL INDIVIDUAL INVESTORS (AFTER TECHNICAL REJECTIONS)

This category was subscribed 2.06 times. The total number of shares allotted in this category is 1689025 Equity Shares including  271525 equity shares being the unsubscribed portion of Non-Institutional Investors category was added in the Retail Individual Investors category. The total number of allottees in this category is 18259. The category-wise details of the Basis of Allocation are as under:

B. ALLOCATION TO NON INSTITUTIONAL INVESTORS (AFTER TECHNICAL REJECTIONS)

This category was subscribed to the extent of 0.55 times. Hence full .and firm allotments have been made against all valid applications. The total number of shares allotted in this category is 335975 Equity Shares and the total number of allottees is 64. The unsubscribed portion of 271525 equity shares has been added to Retail Individual Investors category.

C. ALLOCATION TO QIBs

This category was subscribed 3.09 times. Allocation to QIBs have been done on a proportionate basis. As per the SEBI guidelines, Mutual Funds were initially allotted 5% of the quantum of shares available (1,01,250) and other QIBs and unsatisfied demands of Mutual Funds were allotted the remaining available shares (19,23,750) on proportionate basis. The total number of allottees in this category is 18.

The Committee of Directors of the Company at it's Meeting held at Hyderabad on September 20, 2006 has approved the basis of allocation of shares of the Issue and has allotted the shares to various successful applicants.

The Refund Orders and allotment advice and notice have been dispatched to the address of the investors as registered with the depositories. In case the same is not received within ten days, investors may contact at the address given below. The Refund Orders have been over-printed with the Bank Mandate details as registered, if any, with the depositories. The shares allocated to successful applicants are being credited to their beneficiary accounts subject to validation of the account details with the depositories concerned. The company is taking steps to get the equity shares admitted for trading on Bombay Stock Exchange Limited and National Stock Exchange of India Limited within seven working days from the date of approval of the basis of allocation.

INVESTORS PLEASE NOTE
This details of the allocation made would be hosted on the website of Registrars to the Issue, Karvy Computershare Private Limited at www.karvy.com or http://kcpl.karvy.com
All future correspondence in this regard may kindly be addressed to the Registrars to the issue quoting full name of the First/ Sole applicant, Serial number of the bid-cum-application form, number of shares bid for, name of the Member of the Syndicate and Place where the bid was submitted and payment details atthe address given below:

Karvy Computer share Private Limited,
Unit: HOV Services, Karvy House, 46, Avenue 4, Street No.1,
Banjara Hills, Hyderabad 500 034
Email: hov.ipo@karvy.com and mailmanager@karvy.com

TOLL FREE - HELPLINE NUMBER 1-600-3454001