India Globalization Capital Subsidiary Awarded $12.75M Construction Contract by Sahara Infrastructure and Housing

Wednesday June 25, 9:26 am ET

Company increases backlog of orders from $349M to about $362M

BETHESDA, Md., June 25 /PRNewswire-FirstCall/ -- India Globalization Capital, Inc. (Amex: IGC - News), a company developing infrastructure in India, announced that its subsidiary, Sricon Infrastructure, was awarded a $12.75 million construction contract by Sahara Infrastructure and Housing, for civil engineering and construction in a 106-acre planned township in Nagpur City, India.

The contract, which includes structural construction of thirteen buildings, will commence in the quarter ending September 2008 and will continue for a period of two years. This latest contract increases the company's backlog of orders from approximately $349 million to approximately $362 million.

"With the three recent contract wins of around $120 million, we have reaffirmed our guidance for the fiscal year ending March 31, 2009 of revenue between $110 million to $125 million and earnings between $7 million to $9 million, not including any one-time or non cash charges," said Ram Mukunda, CEO of IGC. We are trading around 5 times earnings while our peer group is trading at much higher multiples. With the current backlog we expect to grow over 30% for fiscal year ending March 31, 2010," he continued.

Mukunda added, "We are currently also pursuing around $347 million worth of new contracts, which, if we are successful in winning, would increase our 2010 projections considerably."

Sricon, based in Nagpur, the largest city in central India, has engaged in civil engineering construction activities since 1974. This construction contract adds to and diversifies the company's pipeline of activities, which include road widening projects and industrial infrastructure development of power plants and water supply systems, as well as mining and quarrying activities. Sricon is qualified technically and through prior experience to bid on contracts valued up to $116M per contract.

About IGC

Based in Bethesda, Maryland, IGC operates through two infrastructure companies in India, Sricon Infrastructure Private Limited ("Sricon") and Techni Bharathi, Limited ("TBL"). IGC owns sixty-three percent of Sricon and seventy-seven percent of TBL. IGC has three core competencies: 1) highway and other heavy construction, 2) mining & quarrying and 3) civil construction and engineering of high temperature plants. The Company's medium term plans are to expand each of these lines of business.

Most of IGC's operations are based 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 win new contracts, execute on 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.

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