Nasdaq's portal seeks to attract fund-hungry India Inc
US bourse Nasdaq is pitching its Portal Market before India Inc as a way to faster fund raising as competition builds up from London's Alternative Investment Market and Singapore Exchange's recently launched Catalist.
While all three routes have fundamental difference of structure, they all offer faster fund raising with lesser regulatory hurdles.
Further, all three are betting big on Asian companies, especially India, where the demand for funds is huge.
Nasdaq Portal Market facilitates trading in those securities that are not registered with the US market regulator, Securities Exchange Commission, and are referred to as 144A securities.
The 144A securities can be sold only to Qualified Institutional Buyers (QIBs) and trading too takes place only among QIBs.
As many as 70 India companies have raised funds on the Portal Market with 25 of them, including Reliance, DLF, Axis Bank, Idea Cellular Suzlon Energy, raising about $8.3 billion in 2007.
Reliance Industries and DLF both raised over $2 billion on the market.
"Instead of the usual 24 weeks taken to raise money through the IPO route, Portal Market needs only 10 weeks for listing as no SEC approval is required," Nasdaq Senior Vice-President Jeffrey H Singer, who in here to attend the Nasscom India Leadership Forum 2008, has said.
Though the fears of a possible slowdown in the US following the subprime crisis has reduced the number of issues on the Portal Market, Singer expects the environment to start normalising by mid-2008.
"There is a sense of caution as the crisis has made its way into every sector. However, it should trickle out by the second quarter of 2008," Singer said.
Nasdaq's Portal Market was created with 12 Wall Street banks including Merrill Lynch, Credit Suisse, JP Morgan, Lehman Brothers, Deutsche Bank, Citigroup among others.
"We have a strong pipeline of Indian companies raising funds through the Portal Market in 2008. We hope that at least 30 Indian companies should tap this route," he said.
However, the secondary market was yet to start trading. "We expect that this year we should start trading among QIBs," he said.
Asked about plans of Nasdaq to pick up stake in Indian bourses, Singer said they continue to look at all opportunities but no specific talks were on.
Nasdaq has bought stake in OMAX, a Swedish exchange recently, for about $40 million. The bourse also has a platform called First North, exclusively meant for smaller companies.