‘ADR/GDR issues by Indian firms to revive’

Our Markets Bureau

Mumbai, May 17: THE American Depository Receipts (ADR) and Global Depository Receipts (GDR) issues by Indian firms are set to revive after a dull year.

But the New York Stock Exchange (NYSE) and the London Stock Exchange (LSE) are expected to steal the show in the future, unlike in the past when many of the Indian companies have listed themselves on Nasdaq, PRIME, the premier data base on primary capital market, said.

“With the primary market continuing to be in a state of turmoil and eligibility criteria for domestic listing for several large corporates not being very conducive, the attention seems to be shifting towards the overseas markets,” Pridvi Haldia of PRIME said in a release on Thursday.

Nasdaq will lose its advantage this time as it has witnessed extremely turbulent times, he said.

At least 25 companies were actively pursuing their overseas listing plans, out of 60 companies announced their plans for the same during the last one year.

Prominent among them being Bharti Televentures ($200 million), BPL Communications ($200 mn), HCL Technologies ($500 mn), HDFC Bank ($175 mn), Mascon Global ($40 mn), Reliance Infocom and Reliance Petroleum ($1,000 mn), Mr Haldia said. Of these, BPL, HCL and Reliance Petro have already obtained government approval.

“The new fiscal, in fact, has already started on a positive note with Dr Reddy’s Labs raising Rs 619 crore ($133 mn) and Satyam Computer raising Rs 662 crore ($141 mn) both ADR offerings through NYSE,” Mr Haldia said.

Despite dismal scenario at Nasdaq, the capital raising in the current year is expected to far exceed Rs 1,764 crore ($389 mn), which have been mobilised in the fiscal 2000-01, Mr Haldia predicted.

The five corporates who have helped raise this money were Wipro (Rs 607 crore), Silverline Technologies (Rs 483 cr), Aptech (Rs 377 cr), Rediff.com (Rs 284 cr) and Usha Beltron (Rs 52 cr).

The Rs 1,764 crore mobilised during 2000-01 was a fall of 65 per cent when compared to 1999-2000.
The reason for the massive downtrend in the latest fiscal, according to Mr Haldia, was the crash in Nasdaq in April 2000, which has increasingly made raising of capital difficult.