Circ re. buy - back of shares

Dear Sirs,

Sub: Buy-back of Shares

Further to our letter dated February 09, 2011, we wish to inform that the Board of Directors at the meeting held today, February 14, 2011 have approved a buy-back of its outstanding equity shares of Rs 10 each of the Company for an aggregate amount of up to Rs 1,000 crore (US $ 222 million) at a price not exceeding Rs 725 per equity share. The buy-back will be made from the open market through the Stock Exchanges.

The necessary Public Notice for buy-back pursuant to Section 77 (2) B of the Companies Act, 1956 and Regulation 5 (A) of the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998 will be published in newspapers and upon publication, a copy of the same will be forwarded to you.

A media release issued in this regard is enclosed.

Yours faithfully

For Reliance Infrastructure Limited

Ramesh Shenoy

Company Secretary

Encl.: as above

MEDIA RELEASE

Reliance Infrastructure Board approves share buy-back

of up to Rs. 1,000 crore (US$ 222 million).

Buy-back of shares upto Rs 725 per share

through transparent open market purchase

Buy-back Price represents approx. 17% premium

to current market price and 47% to the low price of Rs. 493

Current proposal represents more than 100% of the

aggregate amount of Rs 923 crore invested in last 3 buy-backs

RInfra stake in RPower alone represents

75% of RInfra's current market capitalisation

RInfra stock trading at min 32% discount to Consolidated book value of Rs 903

- Reflecting significant and unique value opportunity

Mumbai, February 14, 2011: The Board of Directors of Reliance Infrastructure Limited (Rinfra), at a meeting held today, approved a buy-back of its outstanding equity shares for an aggregate amount of up to Rs.1,000 crore (US$ 222 million).

RInfra will buy-back shares up to a maximum price of Rs.725, representing a premium of over 47% to the low of Rs. 493 recorded during the last year, and a premium of approx. 17% to the last closing share price.

On consolidated basis, the book value of the Company is Rs 903 per share. The closing price on Friday was Rs 617 representing that the stock is trading at a discount of 32% to consolidated book value.

The Company has done three buy-backs till date for an aggregate amount of Rs 923 crore and the current proposal reflects more than 100% of the aggregate amount invested in three previous buy-back proposals.

At last closing price, the value of RInfra shareholding in RPower is alone represents 75% of the current market capitalisation of RInfra.

RInfra will buy-back shares on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), through a transparent mechanism of open market purchases, from time to time.

The share buy-back will be made from the Company's substantial balances and internal accruals and is expected to:

·; reduce short term volatility in the Company's share price;

·; deter speculative activity in the Company's shares;

·; send a strong signal to the capital markets on the perceived under-valuation of the Company's share price; and

·; reiterate the confidence of management in future growth prospects of the Company.

The shares purchased under the buy-back program will be cancelled, as required under SEBI guidelines, leading to a reduction in the Company's outstanding equity capital.

The proposed buy-back is expected to lead to the following benefits:

·; RInfra stock is trading at a discount of 32% to consolidated book value - reflecting significant and unique value opportunity

·; Reduction in the outstanding number of equity shares, and consequently, an increase in earnings per share (EPS);

·; Improvement in Return on Net Worth (current consolidated net worth is ` 22,110 crore) and other financial ratios;

·; Reduction in floating stock, contributing to higher valuations, and enhancing long term price performance;

·; Reduction in volatility in the Company's stock price, leading to reduction in the cost of equity, and weighted average cost of capital (WACC);

·; No impact on leverage ratios, as the Company is debt free at a net level;

·; Positive impact on the Company's stock price, contributing to maximization of overall shareholder value.

RInfra's equity capital is Rs.267.42 crore, (as at Feb 14, 2011) and its market capitalisation is over Rs.16,400 crore (US$ 3.65 billion).

Reliance Infrastructure Limited

Reliance Infrastructure, a part of Reliance - Anil Dhirubhai Ambani Group, is India's largest infrastructure company.

Reliance Anil Dhirubhai Ambani Group currently has a market capitalization of around ` 120,000 crore (US$ 26.8 billion), net worth of around of ` 84,000 crore (US$ 18.8 billion), operating cash flow of over ` 12,000 crore (US$ 2.7 billion), net profit of over `7,000 crore (US$ 1.6 billion) and zero net debt.

Reliance Infrastructure Limited is India's leading utility company having presence in across the value chain of power business i.e. Generation, Transmission, Distribution, EPC and Trading and the largest infrastructure company by developing projects in all high growth areas in infrastructure sector i.e. Roads, Highways, Metro Rails, Airports and Speciality Real Estate.