OTCEI plans to become the Indian Nasdaq

The Over The Counter Exchange of India (OTCEI) is planning an aggressive campaign to target the information technology companies in a bid to become India's answer to US Nasdaq. Terming it as the Exchange for Technology and Growth Stocks, OTCEI has begun making presentations to entrepreneurs and venture capitalists to attract companies for listing on the exchange.

Speaking on this, Joseph Hadrian Bosco, Managing Director, OTCEI, said, "Innovative and technology driven companies are critical to developing economies like India, which is undergoing a major technological revolution. With their abilities to generate employment and drive the economy, it is essential that these companies not only expand existing operations but also set up new units. The key issue for these companies is raising timely, cost effective and long term capital to sustain their operations and enhance growth. Such companies, particularly those that have been in operation for short time, are unable to raise funds through the traditional financing methods, because they have not yet attained the stage at which they could be evaluated by the financial world."

According to OTCEI, it will play a major role in the coming days by encouraging listing of companies that are innovative, demonstrate growth opportunities and at the same time exhibit good corporate governance. The exchange will attract listings in these sectors from entrepreneurs with viable projects and guide these companies through the process of sourcing funds. OTCEI will provide the entrepreneur with the expertise of its officials to make the process of sourcing funds a convenient and simple experience and also ensure that all the regulatory requirements are met. Joseph says that OTCEI is the only exchange to offer listing to companies with paid up capital below Rs 3 crore and three-year track record of the company is not mandatory. The idea is to first have a due diligence from the merchant bankers about the company, then refer it to the chartered accountants. The company and its promoters will also have to give an information disclosure, which will be like the Form 10K report of Nasdaq, says Bosco. After they get all the clearances, the company will be referred to the screening committee, which will recommend its listing at the OTCEI.

OTCEI is also introducing a new market called Growth Equity Market (GEM), where it enables businesses to seek proper valuation and see their shares more widely traded without formally listing their shares on the stock exchanges. In this, OTCEI would provide an opportunity for investments of venture capital and private equity funds. "In GEM, retail investor will not be entertained in unlisted securities. This market is for image building, brand building and information made public. It promotes organized trading in unlisted securities by bringing scattered investors on to a common trading platform and introducing a greater level of transparency in the unlisted securities market." says Joseph.

OTCEI has offices in four metros and it plans to have offices in Bangalore and Hyderabad in the next couple of months.