Seeking to tap the fast emerging trend of companies raising funds from overseas markets, the London Stock Exchange is eyeing a large number of Indian firms to list there with sops like no track-record, minimum market cap or net positive earnings.
"As we are targeting young and growing companies, we do not require any track-record, minimum market cap and positive earnings...We believe in common-sense regulation," London Stock Exchange Manager International Business development (India and International) Ibukun Adebayo said in the Capital.
For the year 2006, companies raised a whopping 26 billion dollars on LSE's junior market, Alternative Investment Market (AIM) -- just 78 million dollars less than the amount raised at the prestigious NASDAQ of United States, he said.
Indian and India-focused companies raised more than 10 per cent of the total amount, Adebayo added, who had come to address a seminar on Opportunities for Indian Corporates in Foreign Capital Markets in the Capital.
The cost of raising funds at the AIM is significantly lower than places like Frankfurt, Luxemburg and the US and that alone accounts for many foreign firms choosing AIM.
While NASDAQ and other stock markets demand a minimum market capitalisation of 50 million dollars, AIM offers companies a pool of sophisticated investors and relaxed regulations to help companies reach their targets taking shareholders' interest into account.
As many 21 Indian companies are listed on the AIM and more are seeking admission as the requirement for funds cannot be fulfilled from domestic resources alone, Adbeyao said.
"India is a growth story and the demand for shares of the companies remains quite high amongst the institutional investors at London," Adebayo said.
While NASDAQ and other stock markets demand a minimum market capitalisation of 50 million dollars, AIM offers companies a pool of sophisticated investors and relaxed regulations to help companies reach their targets taking shareholders' interest into account.
As many 21 Indian companies are listed on the AIM and more are seeking admission as the requirement for funds cannot be fulfilled from domestic resources alone, Adbeyao said.
"India is a growth story and the demand for shares of the companies remains quite high amongst the institutional investors at London," Adebayo said.
Companies like Eros International, which is engaged in Bollywood film content distribution and raised 27 million pounds (Rs 225 crores), are performing well.
Indian real estate companies and investment funds have clearly been the flavour of the season for the AIM as 2006 saw Unitech Corporate Parks, Hirco, Ishaan, Evolvence and Kubera Cross Border Fund raise over 1 billion dollars.
Another company engaged in the real estate sector is going to raise close to 50 million dollars in the next two weeks, Adebayo said refusing to name the firm.