Financial Daily from THE HINDU group of publications
Saturday, May 27, 2006
Financial Daily from THE HINDU group of publications Saturday, May 27, 2006 |
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Markets
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Stock Exchanges Rajesh Abraham
Mumbai , May 26 The London Stock Exchange will continue to attract Indian companies, despite a recent SEBI decision to discourage domestic companies to tap overseas funds through shares issuances, senior exchange officials said. "London totally dominated international listings last year. Nine out of 10 large international IPOs came to London. Seven out of the 10 top Indian GDRs also came to London Stock Exchange," Mr Martin Graham, Director of Market Services, told Business Line. Several more Indian companies are in the process of getting listed on the exchange, he said, without giving details. Mr Graham was here along with Mr Huge Sandeman, Senior Manager (Business Development), to participate in a seminar. Mr Graham felt that the Luxembourg bourse might be affected after the SEBI decision on qualified institutional placements (QIPs). "I can totally understand why the SEBI changed the rules in India. Companies went to Luxembourg to get around domestic lock-in. It was not a listing for strategic reasons. That does not affect our business." Companies come to the London exchange for strategic reasons, he said, adding: "The main thrust of what we are doing is help Indian companies to turn themselves into global leaders." A London listing also raised the profile of Indian companies. "Companies can also tap the huge amount of capital available more than anywhere else in London," Mr Graham said. The other attractions include the huge amount of liquidity (about 43 per cent of all international equity trading originates in London), gaining acquisition currency, and getting an entry into the big European and global markets. Some of the GDRs by Indian companies in recent months include Rolta India ($100 million), Federal Bank ($80 million), REI Agro ($30 million), Lloyd Electric & Engineering ($29 million), and Electrosteel Castings ($40 million). Indian issues admitted for trading in the last few months include Bajaj Hindustan ($135 million), Apollo Hospitals ($75 million), Gateway Distriparks ($80 million), and Nagarjuna Construction ($115 million). Commenting on the volatility on the stock markets, Mr Sandeman said that daily volatility is very minimal as 99 per cent of transactions come from professional institutional investors. On the proposed move by the SEBI to allow overseas companies to raise funds in India through Indian Depository Receipts (IDRs), the officials termed it as a "very good idea." Overseas companies that want to raise their profile in India or those who want to tap the acquisition currency in the country are likely to tap the IDRs, said Mr Sandeman.
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