First Day of Dealings

India Outsourcing Services PLC
06 December 2004


For immediate release                                            6 December 2004



                         INDIA OUTSOURCING SERVICES PLC
                     ('India Outsourcing' or 'the Company')


           First Day of Dealings on the Alternative Investment Market
                          of the London Stock Exchange


India Outsourcing Services plc (AIM: IOS), a company formed to capitalise on
acquisition and investment opportunities in the Indian business process
outsourcing (BPO) market, is pleased to announce its flotation today on the
Alternative Investment Market (AIM) by way of a Placing.


Highlights


   •     The Company's Chief Executive is Amit Pau, who has more than 10 years'
         experience as an executive in the global telecoms industry. He was 
         formerly managing director of Vodafone Multi-Media and a Non-Executive 
         Director of Vodafone Spain and of Radamec Group plc. The Company's 
         Board includes Haresh Kanabar, Blue Star Capital's Chief Executive, as 
         Chairman and Nigel Robertson, Blue Star Capital's Chairman, as 
         Non-Executive Director.


   •     Blue Star Capital (AIM: BLU), the recently floated investment company,
         was instrumental in the formation of India Outsourcing and will hold 
         56.7 per cent of the shares in the Company following its flotation.


   •     India Outsourcing has been established to capitalise on acquisition and
         investment opportunities in India's BPO market, which has grown rapidly
         with the rise of 'offshoring'. The BPO market includes a wide range of 
         services including call centres, help desks, back office operations, IT
         services and customer service operations. The global BPO market is 
         forecast to grow to a market size of between $200 billion and $250 
         billion in 2008 (source: IDC).


   •     To date, more than 225 Fortune 500 companies use Indian BPO service
         providers. The Confederation of British Industry estimates that 29 per 
         cent of British firms have transferred jobs offshore and predicts that 
         59 per cent are likely to do so in the next two years. According to 
         recent studies, the Indian IT Enabled Services BPO industry grew at 
         about 54 per cent during 2003-2004, recording revenues of US$3.6 
         billion in that period (source: NASSCOM).


   •     India Outsourcing has raised gross proceeds of £500,000 by way of a
         Placing.


   •     The Company has no trading businesses although a number of potential
         targets have been identified.


   •     Durlacher is the Company's nominated adviser and broker.


Commenting on the flotation, Haresh Kanabar, India Outsourcing's Chairman, said:
'We have been delighted by the high level of interest in the fundraising for
India Outsourcing, which reinforces our view that investors are seeking exposure
to India's rapidly growing outsourcing market. We look forward to making our
first acquisition in India and to creating value for shareholders.'



                              PLACING STATISTICS

Number of existing Ordinary Shares prior to the Placing               5,000,000

Placing Price                                                         5p

Number of Placing Shares                                              10,000,000

Number of Ordinary Shares in issue 
following the Placing and Admission                                   15,000,000

Percentage of enlarged issued share capital subject to the Placing    66.66%

Market capitalisation at the Placing Price                            £750,000

Gross proceeds of the Placing                                         £500,000

Estimated Net proceeds of the Placing receivable by the Company       £395,000



For further information:

India Outsourcing Services plc                       Tel: [phone]
Haresh Kanabar
Amit Pau

Durlacher                                            Tel: [phone]
Jonathan Retter
Katherine Roe

Buchanan Communications                              Tel: [phone]
Mark Court
Elly Williamson



                      This information is provided by RNS
            The company news service from the London Stock Exchange       SCUUGCGPUPCGBA