Promethean India, an India-focused private equity firm managed by the Burmans of Dabur Group, has raised £50 million (about Rs 407 crore) on the AIM exchange to invest in India.
The London Stock Exchange boasts of more than 2,800 listings worth over £3,500 billion (about $6,849 billion). The LSE has two sub-markets — Professional Securities Market (PSM) and Alternative Investment Market (AIM) — that serve as a gateway to companies opting for an overseas listing.
A significant portion of the capital raised by Indian businesses on the London exchange (about $3 billion) last year was for investing in India. A major portion of the fund raised on the London bourses is through the AIM market.
Promethean is the 17th India-focused company and second India-dedicated private equity firm after Evolvence India to raise capital through AIM. Evolvence India had raised $65 million (about Rs 265 crore) in March this year. Peter Burt, former chief executive of Bank of Scotland, will be at the helm of Promethean India.
The private equity firm is already learnt to have lined up a couple of investment deals in India. According to sources in the know, Promethean will target non-core or underperforming companies where the firm has identified unrealised value. The private equity firm should remain invested in the target company for 2-6 years.
“AIM is an exclusive small-cap growth market. Being a facilitator for small and start-up companies to raise capital, there is no fixed minimum criteria or size of the company or a certain percentage of equity free-float. The regulatory process to enter AIM is a bit more flexible and pragmatic than other markets,” said Girish Nadkarni, COO – investment banking, IL&FS Investsmart.
The number of Indian (or India-related) companies admitted to AIM has shot up from three in December 2005 to 13 in December 2006 and to 17 in May 2007. The market accounts for about 65% of all IPOs in Western Europe. At the beginning of 2007, there were more than 1,060 issuers listed on AIM with a combined market capitalisation of £37 billion ($72.3 billion). Great Eastern Energy Corporation, Hardy Oil & Gas, Noida Toll Bridge and Unitech Corporate Parks are some of the other companies listed on AIM.
In a bid to curb the exodus of Indian companies to AIM, capital market regulator, Sebi, had allowed Indian companies to raise capital through qualified institutional placements (QIPs). “The QIP route is a better alternative for companies to raise smaller amount of funds without much hassles. However, when it comes to large financing, overseas markets (and AIM in particular) are the best bet,’’ summed up a merchant banker on condition of anonymity.
Source : Economic Times