beyondbrics

The London Stock Exchange couldn’t have picked a better time to lure Indian companies to list on Europe’s biggest bourse.

Tuesday’s decision by the Reserve Bank of India to hike interest rates for the 10th time in 15 months to tackle inflation could convince many industrialist – worried by the higher borrowing costs at home – to go for a listing in London to raise cash.

Ibukun Adebayo, head of primary markets for India at the LSE, said that 71 Indian companies were already listed in London – either on the main or junior market – and he expects the number to grow over the next 12 to 18 months.

“We expect more new and further issues from India in the second half of the year … as companies both big and small continue to expand their operations beyond India’s boundaries,” said Adebayo.

Indian companies are among the keenest to list abroad. With borrowing costs on the rise at home, exchanges like LSE are seen to offer a high profile, a wider pool of investors for these companies to tap into. Listing overseas also makes it easier to raise finance for acquisitions in Europe and the UK.

In London, Indian groups have collectively raised more than $8bn since the first company listed nearly a decade ago. Essar Energy, the lastest Indian conglomerate to launch an IPO in London, raised £1.2bn last year, the largest listing in the UK since 2007.

But London isn’t the only the only option nowadays for Indian and other EM companies looking to list abroad.

US exchanges have recently attracted a number of mul­tibillion IPOs from China and Russia, Hong Kong, which was the global leader in IPOs in 2009 and 2010, and Singapore have been actively trying to lure more  emerging market companies to list of their exchanges.

SGX, the Singaporean exchange, which is a shorter flight away from Mumbai and Delhi than London saw a number of Indian real estate developer list on the their bourse last year.

What seems to be clear is that the battle between exchanges to win over new emerging market clients will become increasingly more competitive as they seek to tap into the emerging markets willingness to become global players.

Related reading:
Indian IPOs: playing politics, Lex
Coal India: here comes the money, beyondbrics
BSE and SGX: best of friends, beyondbrics
Banks find EMs all work, no fees, FT
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