New Delhi: Boosting India’s presence in the fast growing Alternative Investment Market (AIM) of the London Stock Exchange, three India-related companies are expected to make their debut on the bourse within next two months.
“We hope to see two or three issuers joining AIM by the end of this year,” Ibukun Adebayo, manager (India and International), International Business Development of the London Stock Exchange told PTI.
India-related companies are those which are either Indian domiciled, or foreign firms holding Indian assets, or Indian/foreign promoted investment companies with focus on the country. At present, there are 20 such firms listed on AIM.
The listing procedures related to those entities are said to be in advanced stages.
Though tight-lipped on the names of possible entities, Adebayo pointed out that “we would expect the number of issues in 2007 to be the same as in 2006.”
Last year, 10 India-related companies were listed at AIM and as of July this year, the number stands at seven.
Currently, there are only two Indian domiciled firms on AIM — Great Eastern Energy listed in December 2005 and Noida Toll Bridge listed in March 2006. Among the rest, 12 are Indian or foreign promoted investment firms, the latest addition being Dhir India Investments, which raised $50 million following its listing in July 2007.
Real estate investment company HIRCO, listed in December 2006, raised funds to the tune of 750 million dollars, the highest for any India-related firm. UTV Motion Pictures, Unitech Corporate Parks and Trinity Capital are also listed on AIM.
AIM is the London Stock Exchange’s international market for smaller growing companies. It was launched in 1995 and provided a platform to global firms to raise funds. In 2006, companies raised $26 billion from here.
However, seven India-centric companies listed on AIM so far this year have only managed to raise $725 million, with the real estate sector chipping in $500 million. Last year, India-related firms raked in $2.7 billion and about $2 billion were contributed by real estate funds.
Such a scenario is mainly due to the recent slowing down of the real estate sector. “The sector is cooling to a certain extent and most of the institutional investors have reached their threshold levels in pouring funds to it,” Ibukun said.
The largest sector represented on the exchange is mining, which raised $13.7 billion in 2006, whereas software and IT services raised only 2.3 billion dollars during.
According to Ibukun, one of the main reasons for such a trend is that technology stocks seek higher valuation and mostly are over-bullish. “AIM provides a fair valuation for the stocks, compared to those listed on Nasdaq (which) get higher valuation. This could one of the reasons for the current scenario,” he pointed out.