India Globalization Capital Expands Business Model

BETHESDA, Md., May 7 /PRNewswire-FirstCall/ — India Globalization Capital, Inc. (AMEX: IGC) , a company competing in the rapidly growing infrastructure industry in India, expands its business model.

“We have expanded our business model to include the supply of materials to the infrastructure industry. Over the next five years, India expects to spend around $500 Billion on modernizing its infrastructure. We are expanding our business model, which currently includes construction, to include the supply of material to the infrastructure industry in India. We are initially focusing on supplying rock aggregate and iron ore. We believe that this is an excellent time to position ourselves to serve these markets and take advantage of the anticipated growth,” said Ram Mukunda, CEO of IGC.

Rock aggregate is used in the construction of railroads, highways, power plants, dams and other infrastructure. Rock aggregate is produced by a process that involves drilling and blasting rock into smaller pieces. The smaller pieces of rock are then fed into large crushers that produce 40 mm stone, 20 mm stone, 6 mm stone and rock dust. Aggregate is used as a base for building roads, highways, airport runways, dams and railroads. They are also used as an aid in filtering water, erosion control, sewer systems and buildings. According to the Freedonia Group, India was the fourth largest aggregate market in the world after China, U.S. and Japan with annual demand of up to 1.1 billion metric tons. Most of India’s demand for aggregate is provided by small quarry and pit operators.

Our strategy is to build and operate between 10 and 15 rock quarries in states with heavy construction activity. Once built out, the quarries are expected to generate between $25 million and $35 million of annual revenue with net margins in the 25% to 30 % range. Our model is to partner with landowners and license owners who operate small crushers, but lack the expertise and processes to operate large crushers. We have agreements with five land and license owners and have secured a preliminary approval for equipment financing with an Indian bank. The team managing this line of business is drawn from existing engineers and managers who have fairly extensive quarrying experience.

“We are excited about this expansion as it draws from one of our core competencies, and the cash flow from operations is fairly immediate. We also have an opportunity to become a market leader, as this market is highly fragmented,” added Ram Mukunda.

About IGC

IGC is a construction and materials company operating in India. IGC builds roads, bridges highways and provides materials to the infrastructure industry in India.

The company has offices in Maryland, Mauritius, Nagpur, Cochin, Delhi and Bangalore. Copies of the Form S-3 and IGC’s other filings with the SEC containing information about IGC, our Indian operations and other relevant documents, are available at no charge at the SEC’s Internet site (http://www.sec.gov). For more information about IGC, visit the company’s web site at www.indiaglobalcap.com.

Forward-Looking Statements:

This press release may contain forward-looking statements. These statements reflect management’s current views and are subject to risks and uncertainties that could cause actual results to differ materially from those projected, expressed or implied in these statements. Factors, which could cause actual results to differ, relate to: (i) the ability of the parties to successfully execute on the contracts and business plan, (ii) our ability to raise additional capital and the structure of such capital including the exercise of warrants, and (iii) changes in the exchange rate between the US dollar and the Indian Rupee. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Other factors and risks that could cause or contribute to actual results differing materially from such forward looking statements have been discussed in greater detail in the company’s definitive proxy statement and supplement filed with the SEC and incorporated by reference into the Form S-3.

Website: http://www.indiaglobalcap.com