Indian companies planning to raise resources from the US markets without adhering to stringent US listing norms and the famous SarbanesOxley Act are now using Section 144A of the Securities and Exchange Commission (SEC) Act.
Although listing under the 144A does not allow retail investors to participate in trading, it allows companies to access the large pool of the US-based institutional investors, which remains the centre of gravity of the financial markets.
Many Indian companies that are eying a listing in the US are using the Nasdaq Portal, a separate window for the qualified institutional investors offered by the stock exchange to provide a trading platform for the underlying securities, said Jeffrey H Singer, senior vice president and head of international corporate client group in Nasdaq.
As many as five companies – DLF, Idea Cellular, Mudra Ports, UTI Bank and Infrastrucure Development Finance Company — that went public on domestic bourses in the recent times were also listed on Nasdaq Portal.
Around 130 Indian companies are compliant with the US accounting system and now aspire to list on the US bourses. However, they are reluctant to do so as the cost of adhering to US compliance is significantly higher. At the same time, while they list on domestic bourses, they are using the Nasdaq Portal, which is cheaper in terms of the cost of listing and provides access to a large pool of the qualified institutional investors, Singer said.
Nasdaq is currently in discussions with more than six Indian companies who are preparing to list on overseas markets. Without disclosing the names of these companies, Singer said that there were many companies -- who are either already listed on Indian bourses or in the process of doing their maiden public issues -- are looking at the Nasdaq Platform.