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Great Indian rush for US listing

A large number of Indian firms are making a beeline for US exchanges in the wake of WNS' listing on the NYSE.

india Updated: Aug 07, 2006 17:30 IST

A large number of Indian companies are seeking to list their shares on foreign exchanges, particularly in the US, on the back of the successful listing of BPO major WNS on the New York Stock Exchange (NYSE) and continuing expansion by domestic companies into the overseas markets.

Over 100 Indian companies have started posting earnings as per the US GAAP (Generally Accepted Accounting Principles) guidelines and all of them are mulling listing on the US stock exchanges, investment banking sources said.

With Indian companies continuing to expand their footprints on the US shores and overseas revenues playing a larger role in their balance sheets, particularly in the IT sector, the companies are increasingly getting attracted to the brand value addition and exposure a US listing provides, they said.

This emerging trend is driving both the NYSE and Nasdaq to go the extra mile in their bid to woo Indian companies to get listed in the US, promising fair and transparent exchange markets.

Both the exchanges are in talks with several Indian companies for a US listing.

Nasdaq Stock Market President and CEO Robert Greifeld told PTI from New York: "We are currently in talks with several Indian companies drawn from various sectors and are confident that we will see more Indian companies listing on Nasdaq in the future."

"India poses an exciting opportunity among the various countries in the world today. The country's GDP is firmly on an 8 per cent plus growth path and it offers a huge opportunity for business," he said.

There are seven Indian companies already listed on the Nasdaq, while 10 companies are trading on the NYSE, including WNS which got listed last week.

The IPO received an overwhelming response in the US market and was priced at 20 dollars per ADS, which was above the market expectations. The issue was oversubscribed by over ten times.

The company's co-founder and group CEO Neeraj Bhargava, who also rung the opening bell at the NYSE to mark the company's listing, said after this listing WNS had no plans to list its shares in India.

Bhargava said the preference for a US listing was partly driven by the strong brand value that NYSE provides.

WNS is the first India-based "pure play" BPO company to list on the NYSE, while another BPO major EXL Service is in the process of listing its shares on Nasdaq.

The Nasdaq CEO said, "Our commitment to India is evident from the fact that we are the first and the only overseas exchange to have a full-fledged liasion office in India. Our Bangalore office provides support on the ground to Indian companies that are listed on Nasdaq."

Indicating Nasdaq's involvement with Indian companies, he said the stock exchange also advises target companies on matters relating to iUS GAAP accounting, Sarbanes Oxley requirements and is closely working with them to chart out a roadmap that could lead to their listing on Nasdaq.

Market analysts said that a listing in the US encouraged greater analyst coverage and visibility for an Indian company, which would play an important role in building the company's brand in the US. 

Greifeld, who was present on the occasion, said Infosys was a shining example of what could be achieved with a clear and compelling vision, talented workforce and world-class corporate governance.

Out of a total of around 120 Indian companies listed overseas, only a handful are listed in the US markets. Nasdaq has seven Indian companies on its exchange with a market cap of around $32 billion (nearly Rs 1,47,200 crore) including -- Infosys, Sify and Rediff. Overall, there are about 3,200 companies listed on the Nasdaq, including 332 international companies.

"In many ways Indian companies are still experimenting with the US option and as they seek to go global, we could expect many more Indian listings in the US and on Nasdaq," Greifeld said.

Greifeld believes that the US capital markets are the most robust in the world and in time more Indian companies will gravitate toward the investor base and the visibility that the US markets provide.

Nasdaq seems to be stealing the thunder from its competitor NYSE for now, as far as IPOs are concerned. Greifeld said Nasdaq had 23 international listings compared to NYSE's 12 in 2004 and in 2005 the formwe had 22 international IPOs as against the latter's 9.

In July, Nasdaq launched its new listing tier, the Nasdaq Global Select Market, which has approximately 1,200 companies including Infosys, Cognizant and Covansys.