Santosh Menon
NEW DELHI: The London Stock Exchange, fighting a hostile takeover bid and
seeking to draw foreign equity issues, said on Tuesday that up to six Indian
firms would list on it over the next 12-18 months.
"The companies we are in discussion with come from a broad range of
sectors," said Caroline Goodman, deputy head of LSE's global business
development. She did not name the companies.
Top LSE officials, led by deputy chairman Ian Salter, are in India to
showcase London as the best place to raise capital or to list despite Indian
companies' increasing preference to tap the US equity markets for funds.
"London has more funds under management than any other city and the
London Stock Exchange at its heart has more international listings than any
other stock market including Nasdaq and New York Stock Exchange (NYSE),"
Slater said, showing LSE statistics at a business gathering here.
He said that a total over $900 billion had been raised in the London market
in the last five years.
Twenty Indian firms spanning a range of sectors have listed on the LSE to
date raising a total of $2.8 billion. This year, two Indian firms Aptech Ltd.
and SSI Ltd. listed on the LSE.
Hardselling London
The exchange officials, who have held discussions with 30-40 local firms, said
the LSE offered Indian companies a larger pool of international capital, greater
liquidity for their stock and was much less volatile than the NYSE or the Nasdaq.
"For an Indian company looking for funds for growth or acquisition, it
makes sense to make London the first port of call," Goodman said.
The exchange, fighting a hostile takeover bid by Swedish bourse operator OM
Gruppen, is trying to counter a growing perception among Indian firms that the
US market is a better source for overseas capital and offers a better global
profile with its tough disclosure and accounting norms.
In the early 1990s, when India allowed local companies to raise capital
overseas, Indian firms mainly raised funds in the form of global depository
receipts (GDRs) from London and European markets.
But in the last two years, local companies, especially software firms, have
increasingly preferred to tap the US markets in the belief that a listing there
will help them create a local identity among their customers.
A US listing also gives technology companies a stock currency to pay for
expensive acquisitions in a US-traded stock, instead of cash.
(C) Reuters Limited 2000.