The Hindu Business Line : Indian mid-cap cos catch LSE's fancy

THE London Stock Exchange (LSE) is the latest to jump on the Indian mid-caps bandwagon. Mid-cap companies whose scrips are being chased by investors - ranging from retail to FIIs - are now being sought after for listing on LSE's trading platform - AIM.

AIM allows companies that do not have the size and capability to list on the main market of LSE, an option to raise money from the securities market with flexible regulatory requirements.

"In terms of our international strategy, India remains a key market. The cost of floating and maintaining a main market listing is onerous. For smaller companies, the options of raising capital are far limited. The brief (of AIM) was to give smaller companies across all industry sectors the opportunity to raise capital and, importantly, have a pragmatic approach to regulation," said Ms Tracy Pierce, Head - Issuer Services, London Stock Exchange.

Representatives from London Stock Exchange have been meeting mid-cap companies to explain the benefits of AIM listing.

Though AIM allows these companies to be part of a trading platform with minimal regulatory requirements, companies that could potentially list on AIM are worried about the cost of monitoring the movement of their quotations. "We would look at a listing in AIM when we expand our selling operations in Europe. It has to go hand-in-hand with market development in that geography, otherwise it is not worth it," said the Chief Finance Officer of a mid-cap company that is considering listing in AIM. Also, companies say this is the wrong time to explore other capital markets. "The mid-cap party is on in India now. We may as well make the most of this before considering other options of public listing," said another top executive of a mid-cap company listed on the NSE. "We would examine this option subsequently," he said.

Under AIM, there are no specified minimum shares that should be in public hands. There is no requirement of a trading track record and no minimum market capitalisation requirement to be met prior to listing. The size of companies listed in AIM is between $5 million and $100 million.

There is no need for the company to be incorporated in the UK. Also, no prior shareholder approval is required for many transactions, according to Ms Pierce.

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