India beats China, Taiwan in ADR stakes

India topped the global chart for total amount raised through American depository receipts (ADRs) this year (January-July), beating China and Taiwan.

Three domestic companies, including the country's largest private lender, ICICI Bank, raised over $5 billion in the last couple of months from the US market, propelling India to the number one position, according to Thomson Financial.

Experts said the depth and appetite of the US market was deeper compared with other markets in the world, encouraging blue-chip domestic companies to tap the US market. China, which saw its companies mopping up $3.85 billion, was ranked second, followed by Taiwan ($2.56 billion).

In 1906, India raised funds worth $2.09 billion while China collected $2.18 billion and Taiwan $1.47 billion through this route. Indian companies have started favouring the ADR market in the last two years. There were no ADR issues in 2005 due to stringent norms, discouraging Indian companies from raising funds in the US.

"The pool of capital available in the US market is huge. It also helps companies diversify their investor base. Some of the financial institutions who have recently raised money already have an ADR programme there. It also indicates that companies are comfortable in reporting to their requirements. Over the next three years we will see a lot of fund raising by financial institutions, real estate, infrastructure and mid-cap manufacturing companies," said V Anantharaman, head of investment banking at Credit Suisse.

ICICI Bank made the biggest offering by an Indian company and mobilised over Rs 20,000 crore through a follow-on public offer and American depository receipts (ADRs) issue. The ADS issue of $42.24 billion, including a greenshoe option of $0.32 billion, was priced at $49.25 each.

Vendanta group's Sterlite Industries, a non-ferrous metal and mining firm, raised $2.01 billion on the New York Stock Exchange through an initial public offering.

"There are also a lot of companies deciding against going to the US market and they still have not changed their minds due to additional