Religare Capital Markets Ltd (RCML), the investment banking subsidiary of Religare Enterprises Ltd, is in ‘active dialogue’ with 15-20 companies for listing on the Alternative Investment Market, the London Stock Exchange's international market for growth stage companies.
According to RCML managing director (investment banking division) Nikhil Bahel, AIM would suit the needs of small to medium-sized, growth stage companies with a market capitalisation of $200 million to $500 million.
The company has entered into a partnership with the London Stock Exchange at the beginning of this year, and is organising a series of seminars to create awareness about the London listing options among domestic corporate houses.
Bahel said, “Market conditions in India are conducive at present in the IPO market. Smaller companies are not going to be able to raise funds because big ones are waiting. Private equity and external commercial borrowings are very tough for them. For them, AIM would be a viable option.”
On LSE, there are about three Indian companies listed and 27 on AIM. LSE's regulatory requirements include a three-year track record and minimum 25 per cent dilution in equity, among others, while these do not apply for raising capital on AIM.
He said the London markets had more institutional equity money than elsewhere, with more types of investors like banks and pension funds and also specialised funds focusing on specific geography or industry sectors.
According to Bahel, the costs of listing would be 6-8 per cent of the amount raised, with the costs being more for smaller amounts. He said the AIM was a stepping stone for smaller companies with minimal regulatory filings at secondary and later issues, and listing on AIM would make a shift to LSE relatively easier.
RCML was also close to a similar tie-up with the Singapore stock exchange, and expects it to be in place next year.
