S.A.L. Steel Limited

Registered Office : 5/1, Shreeji House, 5th floor, Behind M.J. Library, Ashram Road, Ahmedabad 380 006 Tel: +91-79-55308100 Fax: +91-79-55308120
(Incorporated on November 6, 2003 under the Companies Act, 1956 as a Private Limited Company, Received fresh certificate of Incorporation consequent to conversion from Private Limited to Public Limited on December 17,2003)

BASIS OF ALLOCATION

PUBLIC ISSUE OF 4,20,00,000 EQUITY SHARES OF Rs. 10/- EACH AT A PRICE OF Rs.14/- PER SHARE FOR CASH AGGREGATING RS.58.80 CRORES. THE NET OFFER TO THE PUBLIC i.e., 3,78,00,000 EQUITY SHARES WOULD CONSTITUTE 44.48% OF THE POST ISSUE PAID-UP CAPITAL OF THE COMPANY.
THE FACE VALUE OF THE EQUITY SHARES IS Rs.10 AND THE ISSUE PRICE IS 1.4 TIMES OF THE FACE VALUE.

The issue was made through the 100% book-building scheme wherein upto 50% of the Net Offer to Public (subject to mandatorily minimum 10%) was to be allocated on a discretionary basis to Qualified Institutional Buyers. Further, not less than 25% of the issue was to be made available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 25% of the Issue was to be made available for allocation on a proportionate basis to Retail Bidders, subject to valid Bids being received at or above the Issue Price. Of which, 42,00,000 Equity shares have been reserved for the shareholders of Shah Alloys Limited.

S.A.L Steel Limited received 1,71,006 bids for equity shares resulting in 18.83 times subscription. The details of the applications received in the issue from Shareholders of Shah Alloys Limited., Retail, Non-Institutional and Institutional categories as under:

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

The Basis of Allotment was finalised in consultation with The National Stock Exchange of India Limited("NSE") on November 18,2004.

A)Shareholders of Shah Alloys Ltd.
The Basis of Allocation to the shareholders of Shah Alloys Ltd, who have bid at cut-off or at the Issue Price of Rs.14/- per Equity Share, was finalized in consultation with NSE. The total number of shares allotted in this category is 42,00,000.

B)Allocation to Retail Investors
The Basis of Allocation to the Retail Investors, who have bid at cut-off or at the Issue Price of Rs.14/- per Equity Share, was finalized in consultation with NSE. The total number of shares allotted in this category is 17010000 Equity Shares.The category-wise details of the Basis of Allocation is under:

C)Allocation to Non Institutional Investors
The Basis of Allocation to the Non Institutional Investors, who have bid for at the Issue Price of Rs.14/- per Equity Share, was finalized in consultation with NSE. The total number of shares allotted in this category is 94,50,000 Equity Shares.A sample of category-wise details of the Basis of Allocation is as under:

D) Allocation to QIBs

The Board of Directors of S.A.L Steel Limited at its Meeting held at Hyderabad, Andhra Pradesh on November 18, 2004 has approved the basis of allocation of shares and allotted the shares to various successful applicants.

The Refund Orders have been despatched by November 20, 2004 to the address of the Investors as registered with the depositories and the same are expected to be delivered in the next 10 days. The refund orders have been printed with the Bank mandate details as registered if any, with the depositories. The shares allocated to the successful applicants have been credited to their beneficiary accounts subject to validation of the account details with the depositories concerned. S.A.L Steel Limited is taking steps to get the Equity Shares admitted for trading on The National Stock Exchange of India Limited and the The Stock Exchange, Mumbai within seven working days from the date of approval of basis of allocation.

INVESTORS PLEASE NOTE
The details of the allocation made has been hosted on the website of Registrars to the Issue, Karvy Computershare Private Limited at www.karvy.com or Http://kcpl.karvy.com/karisma

All future correspondence in this regard may kindly be addressed to the Registrar to the issue quoting full name of the Firs/Sole applicant, eight digit 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: S.A.L. Steel Limited, Karvy House,
46, Avenue 4, Street No.1, Banjara Hills,
Hyderabad - 500034
Email: sslipo@karvy.com
Website: www.karvy.com

THE LEVELS 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 SAL STEEL LIMITED.