More firms eye overseas listing, says Ernst & Young

Vishwanath Kulkarni New Delhi | Updated on March 12, 2018

Mainly by mining, power, steel and infrastructure firms

This could be the year of a big overseas initial public offering (IPO) push from Indian mining, power, steel and infrastructure firms. And they could be headed towards the London Stock Exchange.

Consulting firm Ernst and Young expects more Indian companies from these sectors to list overseas as they expand their global footprint by acquiring mineral assets.

“Confidence has improved in the market and we expect several Indian companies to go for an overseas listing towards the end of this year and early next year,” said Mr Michael Lynch-Bell, Global Mining and Metals Transactions Leader, Ernst and Young, UK

Besides helping raise capital, an overseas listing would bring in credibility and reputation as well, he added.

E&Y is helping several Indian companies on overseas listing.

“The equity markets overseas are interested in emerging market companies. There is an increasing appetite for initial public offers. There are already a lot of companies looking at the London IPO market, which is seen as one of the most-friendly destinations for Indian companies,” Mr Lynch-Bell said.

Cross-border deals

The Essar Group listed their energy firm Essar Energy on the London Stock Exchange after the 1.2 billion pound IPO in May last year. Vedanta Resources is another major firm listed on the LSE.

The Indian companies raised some $20 billion from domestic and overseas markets in 2010, triple the proceeds raised in 2009.

The volume of Indian outbound deals tripled to around 12 deals involving about $4.64 billion in 2010.

Major cross-border deals included the $2.740-billion buyout of Linc Energy-Galilee Basin Coal in Australia by Adani Mining Pty Ltd.

Mr Lynch-Bell expects the pace of overseas buyouts to continue in the current year also.

In early March, Lanco Infratech announced the buyout of Australia's Griffin Coal in an A$730-million deal.

Also, the Essar Group acquired the US-based Trinity Coal in a $600-million deal.

Published on March 20, 2011

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