Seven Indian companies are planning to tap the Alternative Investment Market (AIM) on the London Stock Exchange (LSE) to raise capital. Of these, two companies would get listed shortly, said Alan Mackenzie, head, London Listings and Broking, Religare.
Global financial services provider Religare Enterprises Limited, as a nominated adviser to three of the seven companies, will facilitate them in raising about $250 million (Rs 1,135 crore) from the London market, according to Mackenzie, who is a part of an LSE panel that is here to hold a workshop to highlight the various capital raising instruments. The three companies are from power, mining and renewable energy sectors.
At present, 66 Indian or India-focused companies are listed on LSE. Collectively, they have raised $5.6 billion so far since their listing. In 2009, Indian companies raised London securities worth $1.4 billion.
According to Ibukun Adebayo, head of business development for India at LSE, most companies exploring the LSE route are non-information technology companies and have interests in clean technologies, renewable energies, natural resources, manufacturing and financial services.
“LSE’s future pipeline of Indian equity offerings is strong,” Adebayo said. While larger issuers will take either premium (share) or GDR listings on the exchange’s main market, smaller issuers will be attracted to AIM, a stock market for growth companies. Both would benefit from the liquidity that London offered, he said.
The preference for global depositary receipts (GDRs) over American depositary receipts (ADRs), too, is bringing several Indian companies to LSE. The interest is partly driven by increasing merger and acquisition activity in the market.
“Indian companies are making acquisition or investments in Africa, Europe and the US. London is well-positioned to finance the ambitions of Indian companies,” he said, adding London’s institutional investors had a significant appetite for moderately leveraged Indian multinationals.
So far, the largest Indian premium listing in London has been Vedanta’s $1-billion issue in 2003 and the largest GDR listing was Tata Steel’s $500-million issue in 2009.
