The Hindu Business Line : More Indian cos likely to list on AIM of UK

Favoured choice
Lesser entry barriers make the Alternative Investment Market more attractive than other exchanges.
There are no minimum requirements with respect to initial equity required, market capitalisation and trading history.

New Delhi , Aug. 26

The UK-based Alternative Investment Market (AIM) is increasingly the favoured bourse of choice for companies, particularly those from emerging markets, seeking to raise funds. In fact, analysts point out that the next couple of years will see a number of Indian firms listing on the AIM.

2 Indian cos

Currently, there are only two Indian companies on the AIM - Noida Toll Bridge and Great Eastern Energy Corporation - but the number may increase to as high as 19 in the next year or so, Mr Vishesh C. Chandiok, Partner and Director - International Business, Grant Thornton, said.

Grant Thornton advice

He added that Grant Thornton itself was currently advising about 30 Indian companies for listing on the AIM. Out of these 30, interestingly 12-13 are real estate/retail firms, six IT/ITeS firms and two pharma companies.

"On an average, these companies are looking to raise about $30-40 million," Mr Chandiok said.

Lesser entry barriers make the AIM more attractive than other exchanges. There are no minimum requirements with respect to initial equity required, market capitalisation and trading history, Mr Pankaj Karna, Partner & Head of M&A Advisory, Grant Thornton said. In fact, AIM has been successful in attracting new companies to list, with an increase in average companies listed of 357 in 2005.

Favourable conditions

A study by Grant Thornton finds that growth markets will also continue to offer favourable conditions for fledgling and high growth companies, with global new markets supporting companies with a combined market capitalisation of $4,224 billion during 2005.

Despite a decline in year-on-year growth, Nasdaq continued its three-years' lead with 3,187 companies listed in 2005.

According to Grant Thornton's 2006 `Global new markets guide - Insight into international capital markets', AIM grew by 41 per cent with 1,232 companies listed and can be seen as one of the star performers of the year.

Steady year-on-year growth has also been recorded for Korea's Kosdaq and elsewhere in the Asia Pacific region Singapore's Sesdaq supported 167 companies - an increase of 13 per cent over 2004.

India too is enjoying the regional upswing and capitalisation on the National Stock Exchange has increased a phenomenal 152 per cent over two years to stand at $667 billion.

In comparison, the BSE had a market capitalisation of $725 billion. According to Mr Chandiok, the significant increase in international investors and strong market conditions are likely to see a continuation in this trend.

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