Letter of OfferSeptember 13, 2008

For Equity Shareholders of the Company Only

LEAD MANAGERS TO THE ISSUE REGISTRAR TO THE ISSUE

ABN AMRO Securities(India) Private Limited81 Sakhar BhavanNariman PointMumbai 400 021Tel: +91 22 6632 5535Fax: +91 22 6632 5541Email:hindalco.rights@in.abnamro.comInvestor Grievance Id:Customercare.ecm@in.abnamro.comWebsite: www.abnamro.co.inContact person: Mr. Vivek AgarwalSEBI Registration:INM000010551

HINDALCO INDUSTRIES LIMITED(Originally incorporated on December 15, 1958 under the Companies Act, 1956 as Hindustan Aluminium Corporation Limited and

the name was changed to Hindalco Industries Limited with effect from October 9, 1989)

Registered Office: Century Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli, Mumbai 400 030, IndiaTel: +91 22 6662 6666; Fax: +91 22 2422 7586/2436 2516

Corporate Office: Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai 400 030, IndiaContact Person: Mr. Anil Malik, Company Secretary and Compliance Officer

E-mail: hilinvestors@adityabirla.com; Website: www.hindalco.com

Citigroup Global MarketsIndia Private Limited12th Floor, BakhtawarNariman PointMumbai 400 021Tel: +91 22 6631 9999Fax: +91 22 6646 6670E-mail: hindalco.rights@citi.comInvestor Grievance ID:investors.cgmib@citi.comWebsite: www.citibank.co.inContact Person: Mr. Rajiv JumaniSEBI Registration:INM000010718

Deutsche Equities IndiaPrivate LimitedDB HouseHazarimal Somani MargFort, Mumbai 400 001Tel: +91 22 6658 4600Fax: +91 22 2200 6765Email: hindalco.rights@db.comInvestor Grievance Id:db.redressal@db.comwebsite: www.db.com/IndiaContact person:Mr. Muffazal ArsiwallaSEBI Registration:INM000010833

DSP Merrill Lynch LimitedMafatlal Centre10th FloorNariman PointMumbai 400 021Tel: +91 22 6632 8000Fax: +91 22 2204 8518Email: hindalco_rights@ml.comInvestor Grievance ID:india_merchantbanking@ml.comWebsite: www.dspml.comContact Person: Mr. Tanuj MoreSEBI Registration:INM000002236

SBI Capital MarketsLimited202, Maker TowersE Cuffe ParadeMumbai 400 005Tel: +91 22 2217 8300Fax: +91 22 2218 8332Email :hindalco.rightsissue@sbicaps.comInvestor Grievance ID:investor.relation@sbicaps.comWebsite : www.sbicaps.comContact Person: Mr. Ajay SrivastavaSEBI Registration:INM000003531

Karvy ComputersharePrivate LimitedCyber Ville Plot no 17 - 24Near Image Hospital LaneVittal Rao NagarMadhapur Hyderabad 500 081Toll free no: 1-800-345-4001Tel: +91 40 2342 0815Fax: +91 40 2342 0814Email: mailmanager@karvy.comWebsite: www.karvy.comContact Person:Mr. M. Murali KrishnaSEBI Registration:INR000000221

FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF THE COMPANY ONLY

LETTER OF OFFER

ISSUE OF 525,802,403 EQUITY SHARES WITH A FACE VALUE OF Re. 1 EACH AT A PREMIUM OF Rs. 95 PER EQUITY SHAREAGGREGATING Rs. 50,477.03 MILLION TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF THREEEQUITY SHARES FOR EVERY SEVEN EXISTING EQUITY SHARES HELD BY THE EXISTING SHAREHOLDERS ON THE RECORDDATE, i.e., SEPTEMBER 5, 2008 (THE ISSUE). THE ISSUE PRICE IS 96 TIMES OF THE FACE VALUE OF THE EQUITY SHARES. THISBEING A FAST TRACK ISSUE UNDER CLAUSE 2.1.2A OF THE SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000,AS AMENDED, THE COMPANY HAS FILED THIS LETTER OF OFFER WITH THE DESIGNATED STOCK EXCHANGE WITH A COPYTO SEBI.

GENERAL RISKS

Investments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in this Issue unless they canafford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decisionin this Issue. For taking an investment decision, Investors must rely on their own examination of the Issuer and the Issue including the risksinvolved. The securities have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guaranteethe accuracy or adequacy of this document. Investors are advised to refer to Risk Factors on page xiii of this Letter of Offer beforemaking an investment in this Issue.

ISSUERS ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information withregard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Letter of Offer is true andcorrect in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly heldand that there are no other facts, the omission of which makes this Letter of Offer as a whole or any such information or the expression of anysuch opinions or intentions misleading in any material respect.

LISTING

The existing Equity Shares of the Company are listed on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange ofIndia Limited (NSE). The Company has received in-principle approvals from BSE and the NSE for listing the Equity Shares arising fromthis Issue vide their letters dated August 25, 2008. For the purposes of the Issue, the Designated Stock Exchange shall be NSE. Global DepositoryReceipts, which represent the Equity Shares of the Company, are listed on the Luxemburg Stock Exchange.

ISSUE PROGRAMMEISSUE OPENS ON LAST DATE FOR REQUEST FOR

SPLIT APPLICATION FORMSISSUE CLOSES ON

SEPTEMBER 22, 2008 OCTOBER 01, 2008 OCTOBER 10, 2008

C M Y K

C M Y K

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TABLE OF CONTENTS

EXCHANGE RATES...................................................................................................................................V

ABBREVIATIONS AND TECHNICAL TERMS ................................................................................... IX

RISK FACTORS ..................................................................................................................................... XIII

SUMMARY................................................................................................................................................... 1

THE ISSUE ................................................................................................................................................... 9

SELECTED FINANCIAL INFORMATION........................................................................................... 10

RECENT DEVELOPMENTS ................................................................................................................... 15

GENERAL INFORMATION.................................................................................................................... 21

CAPITAL STRUCTURE........................................................................................................................... 28

OBJECTS OF THE ISSUE........................................................................................................................ 39

BASIS FOR ISSUE PRICE ....................................................................................................................... 42

INDUSTRY OVERVIEW.......................................................................................................................... 45

OUR BUSINESS......................................................................................................................................... 57

REGULATIONS AND POLICIES ........................................................................................................... 87

HISTORY OF OUR COMPANY AND OTHER CORPORATE MATTERS...................................... 92

DIVIDENDS.............................................................................................................................................. 102

MANAGEMENT...................................................................................................................................... 103

OUR SUBSIDIARIES .............................................................................................................................. 119

RELATED PARTY TRANSACTIONS.................................................................................................. 146

FINANCIAL STATEMENTS ................................................................................................................. 147

STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY ...................................... 148

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ................................................................................................................ 150

SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND US GAAP ... 177

DESCRIPTION OF CERTAIN INDEBTEDNESS ............................................................................... 185

OUTSTANDING LITIGATIONS AND DEFAULTS ........................................................................... 188

GOVERNMENT APPROVALS ............................................................................................................. 264

STATUTORY AND OTHER INFORMATION.................................................................................... 267

TERMS OF THE ISSUE ......................................................................................................................... 282

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION....................................................... 306

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION............................................. 322

DECLARATION ...................................................................................................................................... 324

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