Basis of Allotment
Kernex Microsystems

Kernex Microsystems (India) Limited

(Incorporated as Kernex Microsystems (India) Limited on September 16, 1991 under the Companies Act, 1956 and
converted to Public Limited Company on June 30, 2000.

Regd. Office : "THRUSHNA", Plot No. 7, Software Units Layout, Infocity, Madhapur, Hyderabad 500 081.

Tel:+91 -40- 2311 3192-94, Fax:+91-40-2311 3189. Website: www.kernex..in Email: ipo@kernex.in

BASIS OF ALLOCATION

Public Issue of 3,960,444 equity shares of Rs,10/- each for cash at a price of Rs. 250/- per equity share aggregating Rs. 990.11 millions (referred to as "The Issue"). The issue will constitute 34.85% of the fully diluted post issue capital of the company.

THE FACE VALUE PER EQUITY SHARE IS RS.10/- EACH FOR CASH AT A PRICE OF RS.250/- EACH AND THE ISSUE PRICE IS 25 TIMES OF THE FACE VALUE.

The Issue made through the 100% Book Building Process wherein up to 50% of the Issue to the public was to be allocated on a discretionary basis to Qualified Institutional Buyers ("QIBs")., Further, not less than 15% of the Net Issue to the public shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue to the public 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 117303 applications for 90911675 equity shares resulting in 22.95 times subscription. The details of the apolications received in the Issue from Qualified Institutional Buyers, Non Institutional and Retail Investor categories are as under:

Category No. of Applications No. of Shares Subscription
Qualified Institutional Buyers 67 26055800 13.15
Non Institutional Investors 371 43733525 73.61
Retail Investors 116865 21122350 15.23

Final Demand:

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

Bid Price No. of Shares % to Total Cumulative
Total		 Cumulative
% to Total
225 42450 0.05 93724250 100.00
226 50 0.00 93681800 99.95
227 175 0.00 93681750 99.95
229 25 0.00 93681575 99.95
230 248400 0.27 93681550 99.95
232 150 0.00 93433150 99.69
233 50 0.00 93433000 99.69
234 350 0.00 93432950 99.69
235 66675 0.07 93432600 99.69
236 50 0.00 93365925 99.62
237 50 0.00 93365875 99.62
238 25 0.00 93365825 99.62
240 242150 0.26 93365800 99.62
243 400 0.00 93123650 99.36
245 3075 0.00 93123250 99.36
246 25 0.00 93120175 99.36
247 100 0.00 93120150 99.36
248 475 0.00 93120050 99.36
249 1275 0.00 93119575 99.35
250 & Cut Off 93118300 99.35
93724250 100.00

The Basis of Allotment was finalized in consultation with Bombay Stock Exchange Limited ("BSE") on 14th December, 2005.

(A) Allocation to Retail Investors

The Basis of Allocation to the Retail Investors, who have bid at cut-off or at and above the Issue Price of Rs.250/- per Equity Share, was finalized in consultation with BSE. The category was over subscribed 14.85 times. The total number of shares allotted in this category is 1386157 Equity Shares. The category-wise details of the Basis of Allocation are as under:

Category

 

 No.
of
Applns.		 %to
Total		 Total
No. of
Shares
Applied		 % to
Total		 No. of
Shares
Allocated		 Ratio Total
Shares
Allocated
25 8844 7.77 221100 1.07 25 1:14 15800
50 8274 7.27 413700 2.01 25 3:22 28200
75 3548 3.12 266100 1.29 25 10:49 18100
100 9392 8.25 939200 4.56 25 7:26 63225
125 2297 2.02 287125 1.39 25 1:3 19150
150 3380 2.97 507000 2.46 25 2:5 33800
175 53441 46.96 9352175 45.43 25 8:17 628725
200 4924 4.33 984800 4.78 25 7:13 66275
225 361 0.32 81225 0.39 25 3:5 5425
250 345 0.30 86250 0.42 25 2:3 5750
275 102 0.09 28050 0.14 25 3:4 1925
300 437 0.38 131100 0.64 25 4:5 8750
325 85 0.07 27625 0.13 25 6:7 1825
350 339 0.30 118650 0.58 25 14:15 7900
375 2715 2.39 1018125 4.95 25 FIRM 67875
1 1:44 62
400 15310 13.45 6124000 29.75 27 FIRM 413370

B. Allocation to Non Institutional Investors

The Basis of Allocation to the Non institutional, who have bid at and above the Issue Price of Rs.250/- per Equity Share, was finalized in consultation with BSE. The category was subscribed 72.61 times. The total number of shares allotted in this
category is 594067 Equity Shares. The details of basis of allocation of some of the categories areas under:

Category No.
of
Applns.		 % to
Total		 Total
No. of
Shares
Applied		 % to
Total		 No. of
Shares
Allocated		 Ratio Total
Shares
Allocated
425 4 1.10 1700 0.00 25 1:4 25
450 2 0.55 900 0.00 25 1:2 25
500 11 3.01 5500 0.01 25 3:11 75
600 16 4.38 9600 0.02 25 1:3 125
800 8 3.19 MM? 0.01 25 3.8 75
4000 15 4.11 60000 0.14 55 FIRM 825
10000 7 1.92 70000 0.16 138 FIRM 966
25000 2 0.55 50000 0.12 345 FIRM 690
100000 2 0.55 200000 0.46 1377 FIRM 2754
400000 3 0.82 1200000 278 5509 FIRM 16527
1000000 1 0.27 1000000 2.32 13772 FIRM 13772
3000000 1 0.27 3000000 6.95 41317 FIRM 41317
3960000 1 0.27 3960000 9.18 54425 FIRM 54425

C. Allocation to QIBs

Category Fls and
Banks		 MFs Flls Insurance
Companies		 Total
No. of Shares 772000 390000 793220 25000 1986220

The Committee of Directors for IPO of the company at it's Meeting held at Hyderabad on 14th December, 2005 has approved the basis of allocation of shares and allotted the shares to various successful applicants.

The Refund Orders will be 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 at the address given below:

Karvy Computershare Private Limited
Unit: Kernex, Karvy House,
46, Avenue 4, Street No.1, Banjara Hills, Hyderabad - 500034, Fax: 040-23311968
Email: kernex.ipo@karvy.com and mailmanager@karvy.com

Toll Free - Helpline Numbers 1-600-3454001



Place: Hyderabad
Date: 16-12-2005

For Kernex Microsystems (India) Limited
Sd/-
I. Srinivas
Company Secretary

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARE ON LISTING OR THE BUSINESS PROSPECTS OF KERNEX MICROSYSTEMS (INDIA) LIMITED KERNEX MICROSYSTEMS (INDIA) LTD.
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