U.S. Stock Market Listings of Fast-Growing Indian Companies: An Innovative Financing...

U.S. Stock Market Listings of Fast-Growing Indian Companies: An Innovative
Financing Option

NEW YORK, Feb. 17 /PRNewswire/-- Emissary Capital, LLC
(www.emissarycapital.com), a merchant bank based in New York City and
specializing in Indian companies, is a pioneer firm leading the charge for
Indian companies to obtain stock market listings in the U.S. Emissary assists
Indian companies in raising funds from U.S. and European investors in
conjunction with a U.S. stock market listing. This turns a fast growing
Indian company into a U.S. public company with the prestige and capability to
raise money from U.S. and European institutional investors.
Focus on small and medium enterprises (SMEs). SMEs are a dynamic force in
India's robust economy. An overwhelming 95% of industrial units in India fall
under this category. India's strength in the information technology sector is
well known, but it is India's fast growing manufacturing sector, driven by
approximately three million SMEs in sectors ranging from auto components to
industrial goods, that is rapidly making India a leading global manufacturing
hub.
Debt financing is not the answer for SMEs. There seems to be an across
the board consensus that Indian SMEs have not been able to fully tap their
potential and keep pace with India's growth because of their inability to
access greater sources of financing. For the vast majority of Indian SMEs, the
high domestic interest rate regime (prime rate of 12.75% to 13.25%) continues
to be a substantial hindrance. Furthermore, the ability to raise debt
financing outside India (typically referred to as External Commercial
Borrowings (ECBs) is strictly regulated by the Reserve Bank of India (RBI).
No IPO boom for Indian SMEs in Indian stock markets. The Indian stock
markets including the Bombay Stock Exchange (BSE) and the National Stock
Exchange (NSE) have essentially ignored the robust Indian SMEs. The average
size of an Indian IPO rose to approximately $100 million in 2007-2008.
Meanwhile, smaller Indian companies seeking to raise funds of less than that
amount have found it increasingly difficult to raise funds through Indian
stock market listings. According to data gathered by the Securities and
Exchange Board of India, only 104 companies raised capital in the range of
$2.5 million to $125 million in March 2007 fiscal year. No companies have
raised money in the $1.25 million to $2.5 million range since April 2007.
Finally, only 52 companies have been able to raise funds in the range of $2.5
million to $125 million in the March 2008 fiscal year.
There are few smaller Indian IPOs because Indian merchant bankers prefer
to work on bigger IPOs that earn them bigger fees, as the work required for a
small IPO compared to a large IPO is relatively the same. Also, the regional
stock exchanges, where the majority of SMEs would list themselves if possible,
face stiff competition from India's two major stock exchanges, the BSE and the
NSE.
The Emissary Approach. Instead of having Indian SMEs rely on Rupee loans
with very high interest rates, Emissary's unique strategy involves providing
equity financing together with U.S. public stock market listings to Indian
SMEs. Being a U.S. public company provides Indian SMEs with increased
exposure and visibility as well as prestige. Also, U.S. public companies
enjoy better valuations than their private company counterparts which is
integral to Indian companies' long term success as the Indian growth story
continues to unfold in the near future.
Emissary Capital is dedicated to working with Indian companies in
traditional industries, with a special focus on consumer goods, retail,
manufacturing, real estate and energy.
About Emissary Capital, LLC
Emissary Capital, LLC is a full service merchant banking firm which
specializes in assisting fast growing Indian companies in obtaining financing
and U.S. stock market listings, as well as identifying and advising on merger
and acquisition transactions for such companies. Emissary Capital brings deep
domain knowledge of the U.S. capital markets to such Indian companies.
Contact:
Amit Tandon, CEO
Emissary Capital, LLC
(212) 297-6148

SOURCE Emissary Capital, LLC

Amit Tandon, CEO, Emissary Capital, LLC, +1-212-297-6148