Indian firms putting off AIM listing

Indian companies are going slow on their listing plans in the Alternative Investment Market (AIM), the London Stock Exchange (LSE)'s international market for smaller growing companies.

Investors on AIM are mainly institutional, including several specialist and tracker funds focussing on AIM. At least two Indian companies from the infrastructure and power sector have deferred their listing plans until better market conditions prevail.

In 2007, nine Indian companies and funds, including Indian or foreign-promoted Indian companies and foreign companies holding Indian assets, got listed on AIM. No Indian-domiciled companies had got listed.

In the first quarter of the last calendar year, three Indian companies raised close to $400 million (Rs 1,600 crore) on AIM, LSE data indicate. This year, so far, there has not been a single Indian company that has listed.

The last one to do so was DQ Entertainment, which got listed in December 2007. The AIM All Share Index has fallen from 1052.50 points on January 2 to 980.80 points on April 18, a fall of 6.81 per cent or 71.7 points.

AIM officials maintain that the pipeline for their professional securities market remains robust. "Market turmoil affects public offers globally. It is natural for companies to wait for better and stable conditions that will ensure their offers are received well by all investor classes. The India pipeline for AIM and the Professional Securities market remain robust. We have not heard anything to suggest otherwise," said Ibukun Adebayo, manager "" India and International, International Business Development, LSE.

Law firms advising companies to list on AIM say there has been a definite waning of interest in getting listed now but say it is only because of bad market conditions.

"There has been a drop in the number of companies listing on AIM because of choppy market conditions. This is not to say they are bad businesses but investors are just reluctant at this point," said Mike Edwards, director of Cains, an Isle of Man -headquartered international law firm.

Last year, it was the media and real estate-related companies that listed at AIM but this year, power and infrastructure seem to be the flavour, mirroring the trend in the primary markets in India.

In November last year, nominated advisor on AIM and UK-based international accounting and business advisory firm, Grant Thornton, was in talks with 60 companies for a possible listing.

Media reports indicate that a slew of media companies had also evinced interest in listing on the smaller platform after the success of Raghav Behl-promoted Indian Film Company in June 2007.