LSE allows listing for Indians firms following Indian accounting standards |
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Sun, 06 Nov 2005 20:05
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MUMBAI, India: Indian companies, following Indian accounting standards, are now eligible to list on the London Stock Exchange (LSE). Until now, only companies reporting their financial status in accordance with the International Financial Reporting Standards (IFRS), wee eligible for the listing.
Hugh Sandeman, head of business development for India of LSE, said at a press conference that Indian issuers can now raise capital from London's professional investors even when they adhere to the accounting standards of their choice. Under this new regulation, Indian companies can list directly with the UK Listing Authority (UKLA) and continue to use Indian accounting standards instead of conforming to the new European requirement for listed companies to report. This exception will be available to companies in India and other Third World countries on an indefinite basis for depository receipts, convertible bonds and debt.
However, these companies will not be able to sell their securities to retail investors. To avail of this facility, these companies need to report their financial information according to IFRS.
Sandeman said LSE and UKLA are ensuring continuity for Indian global depository receipts and foreign currency convertible bonds issuers. GDRs of some 20 Indian companies are listed on the LSE main market. Noted among these, which trade on International Order Book platform are Ballarpur Industries, Reliance Industries, Grasim Industries, Hindalco, ITC and Larsen & Toubro. The LSE is now promoting this platform in India, wherein securities listed on Luxembourg Stock Exchange can be traded on the LSE.
The LSE's director (Market Services) Martin Graham said the professional securities market route retains the flexibility that has been the feature of London's approach to issuers from emerging markets. "It gives Indian issuers another route to raise capital in London and gain access to one of the world's largest pools of international capital.''
The market capitalisation of U.K. and international companies traded on the LSE's markets amounted to 3.5 trillion pounds at the end of 2004 with 4.7 trillion pounds of equity business transacted over the year.
By this concession, the LSE is countering the aggressive marketing by U.S.-based exchanges to attract Indian companies, which use GDR and ADR routes to raise funds.
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