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India Inc eyes listings beyond Nasdaq, NYSE
Rajesh Abraham in Mumbai | December 08, 2006 11:07 IST
In pursuit of their global ambitions, domestic companies are looking to list their shares on exchanges in new geographies - not just New York or Nasdaq exchanges.
They have set their sights on exchanges such as Euronext and those in Dubai and Toronto.
Experts attribute the trend to local companies' growing desire to be more visible among customers in the new markets they enter.
They also prefer these markets for raising capital because of speedier execution of deals and the better valuations they achieve from overseas investors, riding high on the India growth story.
"Businesses are globalising and so are investors - and so is access to capital markets. But a lot of investors are behaving opportunistically today," said Rahul Bhasin, managing director, Barings Private Equity Partners.
According to him, companies expect to get 5-10 per cent higher returns in the short run by listing on overseas bourses.
"I believe you should list in markets which are relevant to you either from the supply-chain side or from the customer side. Listings in markets other than those typically have short-term benefits but longer-term costs," he said.
While Aditya Birla Minerals, Hindalco's copper mining subsidiary in Australia, recently raised $300 million through an initial share offering at the Australian Stock Exchange, Yatra Capital proposes to list on Euronext through its maiden public offer of �100 million, for investment in the Indian realty sector.
Dubai and London's alternative investment market are also emerging as new destinations for Indian companies. At least four real estate companies have plans to raise funds through the AIM platform, while Dubai expects to see more mid-cap listings in the coming months.
Amit Khandelwal, partner (transaction advisory services) in Ernst & Young, who has been involved in some recent AIM listings, said the raising of capital from the AIM market also cut costs, besides helping companies get better valuations."Investors in overseas floats are high networth individuals and they understand companies and markets better. This is helping companies receive higher valuations," he said.