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24 July2009

Naya Bharat Property Company plc

Second Quarter 2009 Summary

The unaudited Net Asset Value ('NAV') of the Naya Bharat Property Company plc (the 'Company') stood at USD 0.46 per share on 30 June 2009. This represents a rise of 100.0% over the second quarter of the year. The Company's share price increased by 175.5% over the same period as its discount to asset value narrowed further. 

The strong gains of the second quarter reflect a variety of factors. The Indian economy is again showing some signs of strength with, for example, industrial production growing by 1.4% over the year to April, having previously fallen by 0.8% over the year to March. At the same time, a continual decline in the rate of inflation, which has now turned negative, has allowed the central bank to cut interest rates to historic lows. This provides a particular benefit to the real estate sector. Lower mortgage rates and property price cuts have improved affordability. Both these factors and continued wage growth have resulted in encouraging sales volumes from recent residential launches. Companies are also benefiting from an improved balance sheet following debt restructuring, equity issues and asset sales. 

These economic factors have been very supportive of share prices generally whilst political developments have also improved the outlook for the domestic economy. In a result not generally anticipated, the Indian general election saw the ruling Congress party returned to power with a far stronger mandate than before. Although still falling short of an absolute majority, the result is important for the markets as it means that Congress need no longer rely upon the support of some of the more left-leaning smaller parties for its majority. Reforms in such areas as insurance, pensions and state-ownership, which had previously been blocked by these smaller parties, are therefore very much back on the agenda. If implemented, we expect that such reforms should ultimately boost economic activity. 

On the back of these developments, share prices rose dramatically with real estate companies leading the way. Orbit Corporation, the Mumbai-based company that specialises in the redevelopment of existing properties to a very high standard, more than doubled in value in the two weeks following the declaration of the election result. Over the quarter as a whole, the Orbit share price more than tripled in value. HDIL, the largest Mumbai-based real estate player, also saw its share price more than triple over the same period. 

A number of changes were made to the composition of the portfolio over the second quarter. Some profits were taken and a holding in IFCI, India's oldest financial institution, with a significant exposure to real estate, was divested making way for more attractive opportunities elsewhere. These included Sobha Developers, Phoenix Mills and Unitech Corporate Parks.

Sobha Developers is a Bangalore-based residential real estate company with an excellent reputation for high-quality construction and a strong brand in its own market. The company had previously overextended itself through the acquisition of a large land bank, and had become excessively leveraged. However, the company has recently issued new capital and is now on a firmer financial footing, something that we believe is as yet not fully reflected in its share price. 

Phoenix Mills is the most prominent player in the retail real estate sector. The company has well-established properties in Mumbai that provide steady yields. The company has plans for several new projects in Mumbai and other cities that it will roll-out as and when market conditions permit. The stock was bought at a significant discount to the value of its existing properties and the cash on the balance sheet, providing a substantial margin of safety. The new projects could add further value. 

Unitech Corporate Parks is a leading commercial market developer with a focus on the high growth IT (Information Technology) and ITES (Information Technology Enabled Services) sectors. Its current portfolio comprises an IT Park in Noida as well as projects in IT Special Economic Zones in Noida, Gurgaon and Kolkata. These are expected have a total leasable area of 21.5 million square feet upon completion and have been valued at GBP 469 million, a substantial premium to the current share price. The company has a very strong cash position, which accounts for almost all its market capitalization, ascribing little value to its current operations.

The Company's ten largest investments as at 30 June 2009 are given in the table below, together with their weight within the overall portfolio at that time. The Company currently holds no unlisted or pre-IPO investments. 

TOP HOLDINGS                                             WEIGHT

Unitech                                                             17.7%

Indiabulls Real Estate                                   15.8%

HDIL                                                                  14.5%

DLF                                                                    14.4%            

Peninsula Land                                                 3.3%

Ascendas India Trust                                       3.0%

Phoenix Mills                                                      2.8%

Ansal Housing                                                   2.2%

Sobha                                                                  2.1%

Orbit Corporation                                               2.1%

Enquiries:

Charlemagne Capital Varda Lotan / Christopher Fitzwilliam Lay	020 7518 2100 marketing@charlemagnecapital.com www.charlemagnecapital.com
Panmure Gordon Hugh Morgan / Stuart Gledhill	020 7459 3600
Smithfield Consultants John Kiely / Gemma Froggatt	020 7360 4900

Notes to editors:

Naya Bharat Property Company is a property company focused on investing in real estate companies in India. The Company seeks to take advantage of perceived capital market pricing anomalies by investing in established listed property investors/developers at substantial discounts to their net asset values. In this way, investors in the Company will potentially benefit from both the reduction in the discount to NAV and the anticipated robust performance of the physical property market. In addition, special situations in unlisted/pre-IPO and property-rich small capitalisation stocks can be sought.

In February 2007 the Company raised c. USD 60 million.

The Company's investment manager is Charlemagne Capital (IOM) Limited which is regulated by the Isle of Man Financial Supervision Commission for investment and corporate service provider business. The Charlemagne Group specialises in managing funds in public and private equity in global emerging markets.

Disclaimer

This document does not constitute an offer to sell or solicitation of an offer to buy shares in the Company and subscriptions for shares in the Company may only be made on the terms and subject to the conditions (and risk factors) contained in the prospectus of the Company. Potential investors should carefully read the prospectus to be issued by the Company which contains significant additional information needed to evaluate an investment in the Company. This document has not been approved by a competent supervisory authority and no supervisory authority has consented to the issue of this document. The information in this document is confidential and it should not be distributed or passed on, directly or indirectly, by the recipient to any other person without the prior written consent of Charlemagne Capital (UK) Limited. This document and shares in the Company shall not be distributed, offered or sold in any jurisdiction in which such distribution, offer or sale would be unlawful and until the requirements of such jurisdiction have been satisfied. This document is not intended for public use or distribution. The purchase of shares in the Company constitutes a high risk investment and investors may lose a substantial portion or even all of the money they invest in the Company. An investment in the Company is, therefore, suitable only for financially sophisticated investors who are capable of evaluating the risks and merits of such investment and who have sufficient resources to bear any loss that might result from such investment. If you are in any doubt about the contents of this document you should consult an independent financial adviser. Investors in the Company should note that: past performance should not be seen as an indication of future performance; investments denominated in foreign currencies result in the risk of loss from currency movements as well as movements in the value, price or income derived from the investments themselves; and there are additional risks associated with investments (made directly or through investment vehicles which invest) in emerging or developing markets. Charlemagne Capital (UK) Limited does not guarantee the accuracy, adequacy or completeness of any information contained herein and is not responsible for any omissions or for the results obtained from such information. The information is indicative only and is for background purposes and is subject to material updating, revision, amendment and verification. All quoted returns are illustrative. No representation or warranty, express or implied, is made as to the matters stated in this document and no liability whatsoever is accepted by Charlemagne Capital (UK) Limited or any other person in relation thereto.

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