Competition forces small-cap firms to choose AIM listing

By siliconindia   |   Friday, 26 September 2008, 16:24 IST
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Mumbai: Coupled with tedious listing formalities in domestic bourses market and fazed by relentless competition from the large and mid-sized firms in raising funds, several Indian small cap firms prefer to list their shares on London Stock Exchange's Alternative Investment Market (AIM). AIM, a sub-market of London Stock Exchange (LSE), allows smaller companies to float shares with more flexible regulatory system than in the main market. From February 2005 to June 5 this year, 28 Indian property and infrastructure, power generation, media, and oil, gas and resources firms have raised 2,085 million pounds from AIM. "The tally is set to go past beyond the 100-mark by the beginning of 2010," said John Llewellyn-Lloyd, CEO of the UK-based Noble Group, one of the promoters of the AIM. Lloyd said that at least 10 domestic firms, belonging to the property, media, infrastructure and financial services sectors are in the pipeline to raise funds within the first quarter of the next year. What makes companies choose AIM to raise funds is that there is no minimum requirement flotation whereas listing in the two leading domestic bourses requires a minimum of 25 percent flotation. Moreover, getting shares listed in the AIM does not also require any pre-float trading history, but making it to the BSE or NSE requires for a minimum of at least three years of profit making track record. And also the companies can get closer to the foreign investors.