Domestic firms to raise $3 billion on AIM

Domestic companies are expected to raise $3 billion during the current financial year on the Alternative Investment Market (AIM), a fund-raising international market place for small and growing companies created by the London Stock Exchange.

Pankaj Karna, partner of Grant Thornton, a corporate advisory firm, said: "Indian companies are opting for customised structured rather than plain vanilla debt or equity. During the financial year 2007, around 11 Indian companies raised $2.3 billion on the AIM and we expect it to reach $3 billion in this financial year."

With many Indian companies planning to establish a global footprint, there has been an increasing demand for growth capital. With the outbound acquisitions on the rise from India, these firms are using targeted firms as a platform to gain access to the US and EU markets.

According to an industry analyst, AIM is an attractive option for startups and growth companies as it is soft on market capitalisation and trading track record.

AIM, started in 1995, currently has around 300 companies trading with a total market capitalisation of close to $100 billion.

Fiona Owen, Director, Grant Thornton Capital Markets, said: "There has been a sharp increase in financial institutions appetite for secondary markets which is fuelling this."