Over 70 local companies looking to list on the LSE

At least seven Indian companies are actively working on plans to list on the London Stock Exchange (LSE) and two of them are likely to get listed shortly, LSE officials said on Thursday.
Currently, of the 650-odd companies from 70 countries listed on the exchange, about 20 are from India.

The number is set to swell, the rush of interest shows.

Going by Fiona Owen, partner, Grant Thornton corporate Advisory Services, South Asia, over 70 Indian companies are looking to raise funds from the exchange through equity issuances.

Religare is working on the plans of three companies that would raise about $250 million through LSE listing. “We are engaged with a power company, a mining company and a renewable energy company right now,” Alan MacKenzie, head of London listings and broking, Religare Hichens Harrison said.

“There is growing interest now in India to get listed on the LSE since several Indian companies are pursuing M&A activity in Europe,” Ibukun Adebayo, head of primary markets-India, LSE, said at a seminar held by the exchange.

“A wide variety of companies including from sectors like infrastructure, mining and power are coming to the LSE for listing. Apart from the cost-effectiveness in raising funds through London, these companies are willing to get listed closer to the M&A activity in which they are also involved,” he said.

With the economic situation looking up and merger and acquisition (M&A) activity improving, LSE is trying to woo non-IT companies from India to list on the bourse.

LSE officials refused to divulge details of the companies engaged in negotiations for raising funds and getting listed on the bourse, but said the number of enquiries have risen in the last nine months.

According to LSE officials, one reason for the interest in a London listing is Indian companies’ preference for global depository receipts (GDRs) over American depositary receipts. Also, the exchange does not impose any restriction on the size of the fund raise.

LSE is offering the main market and Alternative Investment Market (AIM) options to the companies willing to get listed. While the larger issuers are encouraged to take either premium (shares) or GDR listings on the exchange’s main market, the smaller issuers are being offered the AIM platform, which accommodates the growth companies.

Vedanta’s $1 billion issue in 2003 is the largest Indian premium listing in London to date and Tata Steel’s $500 million issue in 2009 the largest GDR listing.