Bangalore: Europe’s independent private banking group, Sal Oppenheim jr & Cie KGaA, is looking to help Indian clean-technology companies list on the Frankfurt Stock Exchange, also known as FWB, one of the world’s largest trading centres for securities.
Sal Oppenheim’s managing director for equity capital markets, Carsten Klante, says high liquidity, balanced regulation, reasonable transactions costs, along with global investor reach and high awareness for clean technology makes Germany an attractive listing venue.
With €152 billion (Rs10 trillion) worth of assets under management, the banking group has, since 1998, participated in more than 100 initial public offerings (IPOs), acting as a lead manager in 15 of them. It was the global coordinator and sole book runner for ZhongDe Waste Technology AG’s IPO last year, which made ZhongDe the first Chinese firm to be listed on the prime standard at the Frankfurt Stock Exchange.
India-bound: Carsten Klante, managing director, equity capital markets at Sal Oppenheim, is making a pitch for the Frankfurt stock exchange.
Sal Oppenheim is now concentrating on the emerging markets, and is collaborating with Bangalore-based venture capital firm Sandalwood Partners to explore clean tech opportunities in India. In an interview with Mint, Klante talked about how the Frankfurt exchange could be an attractive alternative to Indian companies and why the bank is focusing on clean-tech firms. Edited excerpts:
Why do you think Indian companies would be interested in getting listed on FWB?
The market sentiments in India are not very strong right now. Though low price-earnings ratio indicates attractiveness for investors, it also lowers the potential valuation for companies looking at going public and raises cost of capital. For companies, particularly in the space of clean technology, or renewable energy, there is now an alternative—to seek listing at the FWB, where investors are looking out for such companies.
We are keen on clean-tech companies which could either be listed or unlisted in India and have a size of €75 million, though we can also consider companies with a size of €50 million if they have a unique technology and a strong team.
We are currently in talks with 15 to 20 companies in India and I am confident that at least one Indian company would get listed on the FWB next year. We will be a long-term player in India and know that some companies would not have a size in that range, but they can scale up in three-four years.
Why would FWB be attractive to Indian clean-tech companies?
Being one of the first Indian regulated IPO would imply a high public awareness and attention from institutional investors. Also, IPOs from the emerging markets are very sought after in Germany, particularly after the IPO of ZhongDe.
Meanwhile, a listing in Germany can be used as a launch pad for expansion in Europe or anywhere else.
Listing cost at the FWB is also lower than in the US or UK. In Germany, cost of going public could be 6-8% of the money raised, while in the US, you end up paying 6-7% of that to the bank alone, while other costs take away another 1-3%. In (the) UK, the cost of lawyers is high. About four-six months’ time is needed for an IPO in Germany.
Why are you concentrating only on clean-tech companies from India?
Clean tech is not a niche segment anymore and there is an increase in demand for this. Besides this, Germany is very strong in this technology. We want to start with clean-tech firms in India as we do not want to overstretch our resources in the market.
Later, we will look (to) facilitate listing of chemical, pharmaceutical, technology and industrial engineering companies. We do not think real estate firms will make sense for us as European investors cannot judge them. We will also concentrate on merger and acquisition activity of these companies in India.