More Indian companies showing interest in SGX listing

More Indian companies showing interest in SGX listing
By Lynda Hong | Posted: 13 December 2011 2006 hrs

SINGAPORE : Royal Bank of Scotland has reported an increase in interest by Indian companies to list their shares on the Singapore Exchange (SGX).

The number of Indian listings on the SGX lags far behind those from China but some big deals may be in the works.

Shares of Indian companies must be listed in their home country before they can list in Singapore.

Theoretically, that makes a pool of 18,000 potential SGX candidates.

SGX has continued to see strong interest in Indian companies listing REITs and Business Trusts.

There are now some 10 Indian Global Depository Receipts (GDRs) listed on SGX.

But investors are shy about investing in GDRs as they are not stocks, but certificates representing a number of underlying shares registered in another country.

Dilip Kadambi, Head, Equity Capital Markets, India and SEA, said: "It would probably be more ideal to have an equity listing, a straight stock listing, rather than have a GDR listing where you'd find the liquidity vanish and a lot of fund managers...don't like illiquid stuff, illiquid counters."

Mr Kadambi says in the last year interest has grown for Indian companies to list on the SGX with possible deals ranging from between 15 million to 600 million US dollars.

However there are only three Indian listings on the SGX thus far.

The number pales against the 148 listings of Chinese firms (S-chips) which comprises 19 percent of SGX listings although investor appetite for S-chips remains clouded by scandal.

Eric Ong, Analyst, Kim Eng Research, said: "We do see less Chinese listings in the pipeline, especially given the low valuation it can command in the market. This is because of the negative perception it has been getting from the investors right now because there's been a few corporate scandals recently. "

Over at Deloitte Singapore, there has been fewer IPO queries compared to the second half of last year (at fewer than ten).

Still, half of them are from China.

Dr Ernest Kan, Head, Global IFRS & Offerings Services, Deloitte Singapore & Southeast Asia, said: "The Chinese entities are still very hungry because they haven't sought their listing yet, locally. To have another market here out in Singapore, they would still be very keen to come. Whereas for the Indian companies, they would have assess to see if they can tap from their domestic markets, then they will probably stay put. But if they can't, of course then they would look to Singapore."

To get more Indian companies to list in Singapore, the SGX has appointed Neena Prasad as Senior Vice President and Head of Listings (India).

She has led SGX's efforts to attract Indian listings since 1st November although this is an uphill task as the sovereign debt crisis has made many wait for more certainty before listing their stock.

- CNA/ch

- wong chee tat :)