The `Islamic Index' is a new concept of scrips of `Islamically compatible' companies, introduced in Dow Jones in February 1998. Talking to The Financial Express, PCFL managing director Zafar Sareshwala said that scrips of nearly 600 companies, which come under the six broad parameters of Shariat laws, have been listed in the Dow Jones Islamic Index, two-third of them being US-based.

Islamic or Shariat compatibility included such parameters that the net asset to total debt of the company should not exceed 1:3, the non-permissible income (from liquor, gambling, selling soft literature, etc) should be less than 10 per cent of the total income.

In another significant development in Islamic finance, Sareshwala said that PCFL proposed to take over London-based Parsoli UK Ltd, about to promote `Global Islamic Fund' in the UK with one of the largest British investment bank with a seed fund of US$ 15 million. This fund has been benchmarked against Dow Jones Islamic Index.

He said the due diligence exercise had already begun but he refused to identify the fund managers at this juncture. He said that UK company has over 150 high net worth international clients. He said there was a huge and natural market for Islamic banking and finance in India. It could amount to 5 per cent of the total market capitalisation even by most conservative estimates. Traditionally, he pointed out, Indian Muslims tend to shy away from conventional banking and investment.

He said that PCLF, registered with the RBI as an NBFC, has initiated a survey of the Islamic finance potential in India. As per preliminary estimates, at least 30 to 40 Indian companies, including several blue chip ones, were found to be Islamic compatible.

In keeping in tune with future trends, PCLF has readied itself with Internet-based trading and has already set up its website `Parsoli.com', whenever permitted by RBI/Sebi.

Sareshwala, a globe-trotter in connection with his export company, said that a large number of Non-resident Indian Muslims (NRIMs) intended to trade in scrips of Indian scrips but could not as they were not listed in stock exchanges abroad. With India's going for current account convertibility, he said, the interest might result in greater market capitalisation of Indian companied abroad.

The Ahmedabad-based PCFL has posted a net profit of Rs 97.02 lakhs during the outgoing financial year ended December 31, 1999 as compared to Rs 52.02 lakhs in the previous year.