Placing

India Outsourcing Services PLC
09 February 2006


For immediate release                                           9 February 2006


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

                        Placing to raise £3.0 million

         Consolidation of Shares, Grant of Options and Admission to AIM
                     Notice of Extraordinary General Meeting

India Outsourcing Services plc (AIM: IOS), a company formed to capitalise on
acquisition and investment opportunities primarily within the Indian business
process outsourcing ('BPO') industry, is pleased to announce that it has,
through Daniel Stewart, conditionally placed 6,666,667 new ordinary shares (the
'Placing Shares') raising a total of £3.0 million before expenses ('the Placing
'). The Placing Shares are being placed at 45p a share, on the basis of the
proposed consolidation of every 10 ordinary shares of 1p each into 1 ordinary
share of 10p. Application has been made to AIM for the Placing Shares and for
the Ordinary Shares of the Company to be admitted to trading, which is expected
to commence on 7 March 2006.

Highlights

The Placing to raise a total of £3 million before expenses will allow the
Company to pursue its strategy of identifying, evaluating and, ultimately,
completing acquisitions in the business process outsourcing industry primarily
within India.

India Outsourcing intends to acquire a small number of companies that
demonstrate qualities including strong growth prospects, recurring revenue
streams, scalable delivery platforms and established client relationships.

The Indian BPO market is estimated to have grown by about 40 per cent during
2004/5 to reach $5 billion and is forecast to reach $21 billion by 2008 (source:
NASSCOM - McKinsey). The global BPO market is forecast to reach $230 billion in
2008 (source: Deloitte Consulting, India).

Since its flotation on AIM in December 2004, India Outsourcing has made
significant progress in identifying suitable acquisitions and the Directors
believe the Placing will increase the credibility of the Company with vendors of
potential targets, will broaden the Company's institutional shareholder base and
provide increased working capital.

The Company has identified support services to the healthcare sector and the
document management sector of the Indian BPO industry as being of particular
interest.

It is proposed to consolidate the ordinary shares of the Company so that every
10 ordinary shares of 1p each will become 1 ordinary share of 10p each. The
share consolidation will be included in resolutions to be put before an
Extraordinary General Meeting ('EGM') of the Company to be convened on 6 March
2006.

It is proposed that Amit Pau will be granted options over Ordinary Shares of 10p
equivalent to 10 per cent of the enlarged issued share capital, at an exercise
price of 45p per share amounting to a total of 847,916 Ordinary Shares of 10p,
which will vest over a period of three years.

The Company is seeking readmission of its Ordinary Shares to AIM following
approval of the resolutions of the EGM.

Amit Pau, Chief Executive of India Outsourcing Services, commented: 'We have
been delighted by the support we have received from new institutional and
existing investors who are excited by the potential of the BPO industry in
India.  We now look forward to building on the progress that we have made so far
in identifying a suitable acquisition target and in delivering value to all our
shareholders through the successful execution of our strategy.'

For further information:

India Outsourcing Services plc                       Tel: [phone]
Haresh Kanabar, Chairman
Amit Pau, Chief Executive

Daniel Stewart & Company plc                         Tel: [phone]
Lindsay Mair
Nicholas Marren

Buchanan Communications                              Tel: [phone]
Mark Court/Elly Williamson


Details of the EGM

The EGM of the Company will be held at the offices of Daniel Stewart & Company
plc, Becket House, 36 Old Jewry, London EC2R 8DD at 10am on 6 March 2006 at
which resolutions will be proposed to approve the continuation of the Company
for a further 12 months and of its stated strategy, admission to AIM of the
Ordinary Shares, consolidation of the Company's share capital, increase the
authorised share capital of the Company, authorise the Directors to allot up to
9,380,000 ordinary shares and to dis-apply pre-emption rights over up to
1,865,417 ordinary shares (in addition to the Placing Shares and the Grant of
Options).

The Grant of Options is a related party transaction for the purpose of the AIM
rules and accordingly Haresh Kanabar and Nigel Robertson, 'the Independent
Directors', consider that having consulted with its nominated adviser the terms
of the Grant of Options is fair and reasonable insofar as you are concerned. In
advising the Independent Directors, Daniel Stewart has relied on their
commercial assessments.

Amit Pau (Chief Executive) and Blue Star Capital Plc (which is associated with
Nigel Robertson, a Director) has subscribed for an aggregate of £350,000 in the
Placing, which constitutes a related party transaction for the purpose of the
AIM rules and accordingly, Haresh Kanabar, 'the Independent Director', considers
that having consulted with its nominated adviser the Placing is fair and
reasonable insofar as Shareholders are concerned. In advising the Independent
Director, Daniel Stewart has relied on his commercial assessments.

Accordingly the Independent Director recommends that you vote in favour of the
Resolutions to be proposed at the EGM.

Daniel Stewart & Company plc acts as nominated adviser and broker to the
Company.


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