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Indian companies have done so well on the London Stock Exchange that the bourse is confident of more Indian companies tapping the exchange for future funding requirements.
Grant Thornton's India Watch small cap index (an index consisting of 31 Indian companies listed both on the LSE as well as its alternative investment market (AIM)) out performed the FTSE 100 and the FTSE 100 AIM.
The India Watch Index lost only 8.12 per cent in the third quarter of the calendar year 2011, against the 13.74 per cent loss booked by FTSE -100 and the 20.6 per cent loss shown by FTSE AIM 100.
“We expect Indian companies to raise money in the range of $ 1-1.5 billion over the next 12-18 months,” said Ms Tracey Pierce – Director of Equity Primary Markets, LSE Group.
London Stock Exchange is also in discussions with the NSE for cross listing of index derivatives – on the FTSE 100 and the Nifty-50 – on each other's exchanges, she said.
In the near future, LSE is confident of pulling off two issuances from India, one to list on LSE main exchange and the other on AIM by companies in the property and entertainment sectors.
“We also have plans to get more Indian financial intermediaries to our exchange. At present Religare is the only Indian intermediary registered to operate on the LSE,” said Ms Pierce
LSE was the preferred destination for Indian companies in the calendar year 2010. They raised $ 2.24 billion (73 per cent of all Indian equity capital raised overseas).
In addition, the international book for Indian GDRs in London was $ 8.85 billion in 2010 and $ 6.39 billion until July in 2011.
In 2011, Essar Energy raised $ 550 million through a convertible bond issuance while Kolar Gold raised $ 19 million on the AIM.
Greenko group, a company in the alternative electricity business, also raised $ 82 million in June 2011, in addition to the $ 65 million raised in November 2007.
Indian companies have been tapping the LSE since 1994 and prominent among them are SBI, Crompton Greaves, GAIL, Axis Bank, Ashok Leyland, Tata Steel and Great Eastern Energy.
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