The Nasdaq Portal Market, which was created in August last year to allow quick fund-raising by companies, is fast gaining popularity with India Inc. A total of 70 Indian companies have tapped this popular route, with Reliance Industries raising $3 billion.
It works like this. There is a section in the US called 144A securities, which was launched in August 15, 2007. Trading in 144A securities takes place only among qualified brokers, dealers and QIBs. Retail investors cannot participate in this segment.
Companies also save the time involved in filing the offer document with the Securities Exchange Commission.
The Nasdaq Portal Trading System, created by Nasdaq and 12 Wall Street banks, is becoming a hot favourite, said Jeffrey H Singer, senior vice-president, head of international, corporate client group of Nasdaq, in a briefing to select journalists.
"We have a strong pipeline of Indian companies making use of this route in 2008," he said, without disclosing any names.
This route offers Indian companies an opportunity to garner funds from big qualified buyers in the US, by far the biggest market for IPOs and other share offerings.
The 70 Indian companies that raised funds through this Portal route includes DLF ($2.3 billion), UTI Bank ($653 million), Idea Cellular ($555 million), IDFC ($520 million) and Mundra Ports ($451 million).
Others in the list are Suzlon Energy and Cairn. Except for Reliance Industries, other companies have raised the money either at the time of their IPOs or QIPs.
Nasdaq Portal Trading System has over 750 Portal designated equity securities. Other key features of this route is that it is a one-stop solution from negotiation through settlement in 144A securities. Nasdaq also plans to launch its debt system in phases this year.
Nasdaq, which has taken equity stakes in Philadelphia and signed a memorandum of understanding with the Shanghai Stock Exchange, did not participate in the equity stake sales by the two leading Indian stock exchanges, Bombay and National Stock Exchange.
"We will look at opportunities around the globe. And the decision will be based on valuations," Singer said.
Commenting on Indian companies to list on the Alternative Investment Market of London (AIM), Singer said that Nasdaq has bought a stake in OMAX.
This bourse has a platform called First North, which was exclusively meant for smaller companies. Nasdaq is hoping to attract Indian companies heading to AIM, he added.