Six Firms In Advanced Talks For Nasdaq Listing

At least six corporates are in 'advanced stages' of parleys with the Nasdaq Stock Market of the US for listing purposes.

Besides Infosys Technologies and Wipro, senior Nasdaq officials have held talks with HCL, Reliance Telecom, Essar Telecom, Hutchison Max and BPL Televentures (which had earlier sought to tap the markets with an ADR offering) towards this end.

Reliance Telecom and Essar Telecom are firming up plans to launch ADRs in the next fiscal, Nasdaq business development director (Asia-Pacific), Patrick N S Sutch said.

The minimum size of the offerings would be in the $ 20-25 million range, marketmen say, to ensure adequate interest from market makers and also liquidity of the floats.

 

Nasdaq officials have, however, expressed disappointment over the tardy clearance by the ministry of finance of proposals by Indian corporates seeking to raise funds at the US markets.

Sutch, who is currently touring the country, said that little had changed over the past one year through the reform process, with bureaucratic delays still ruling the roost.

According to him, while this would be the ideal time for Indian software and telecom companies to tap the US markets, there is a growing fear that by the time the government allows it, Indian corporates may lose out to their Chinese counterparts. "One must take the money when one can and not when one needs it," he said.

Nasdaq bourse is the fastest growing equities market in the US, with 5, 554 companies listed on it as on March 30, 1997. It is the largest US bourse in terms of traded share volume, touching $18.8 billion in the third quarter 1997, up by 58 per cent, against $11.9 billion for the corresponding period in 1996.

Nasdaq also has the largest number of foreign listings (432) among US exchanges.

"The government has smoothened the process for infrastructure and power corporates to raise funds but in the case of other sectors, the issue is still decided on a case-by-case basis. One must realise that the pot of US funds is being tapped by other larger corporates from other countries,'' he said.

Sutch said that besides Indian corporates, interest through joint ventures has been expressed by large accounting and legal firms in the country.

Commenting on the global meltdown and the volatile SE Asian markets, Sutch said the issue was being blown out of proportion. "If we were to look at the US investor today, there is a lot of money sitting on the fence. A corporate with a good story seeking to raise funds will do well, though valuations may be better in few months time," he said.

Nasdaq recently amended its listing norms and has been of late lobbying to make listings for non-US companies easier. According to its new norms, a company has to file an 18-month statement as per the US Generally Accepted Accounting Principles (GAAP) instead of a 3-year record earlier.

He argued against the practice of local firms to raise funds through GDR offerings, stating that it has not helped India Inc. International investors are wary due to several illiquid stocks from local firms being listed overseas, he said.