Professional Documents
Culture Documents
July 2007
Agenda
AIM: financing alternative for Indian companies Indian issuers on AIM Routes to AIM for Indian issuers Case studies AIM institutional investor base AIM regulation Deciding between markets
New path to international financing for emerging Indian companies AIM offers: Access to investors beyond FIIs Liquidity for small companies High quality disclosure, appropriate for smaller companies World-class profile of London Stock Exchange India-related companies / investment funds raised $2.7 billion on AIM in 2006
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IPO of holding company or subsidiary abroad (shares) Follow-on offering for Indian listed company (GDRs) IPO of India-focussed investment company
Objectives
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Hardy Oil & Gas (AIM, June 2005): existing offshore holding, attracted by AIM E&P valuations KSK Power Ventur (AIM, November 2006): tapped AIM demand for early-stage Indian infrastructure
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Ishaan Real Estate (AIM, November 2006): 207 million for FDI-compliant real estate
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Case study
Highlights
IPO of offshore holding company Effected via 29% capital increase Structured via Isle of Man, with Mauritius subsidiary holding Indian domiciled operating company Proceeds for new power generation projects, development of coal resources
Transaction profile
Date Amount raised Market cap at IPO Commission on placement Nominated advisor fee Format Nominated adviser UK law Isle of Man law Reporting accountants Competent persons report Board of directors November 2006 31 million 138 million 4% of capital raised 175,000 Shares Arden Partners Lawrence Graham Cains Advocates Mazars IMC Group Consulting One UK-based director
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Case study
Highlights
Independent closed-end investment company Indian FDI-eligible real estate (SEZs, IT parks) Target IRR of 20%, leveraged 78% invested at launch in 8 projects Co-invest with K. Raheja entities, ensuring quality pipeline Ishaan to invest via Mauritius holding and SPVs, holding stakes in Raheja Indian property ventures Board of 5 non-executives
Transaction profile
Date Amount raised Domicile Commission on placement Fees as % gross proceeds Format Nominated adviser + broker Joint Glo-Co, books Special advisor UK, US law Isle of Man law Reporting accountants Property valuers November 2006 207 million Isle of Man 3.0% - 3.5% 4.3% Shares Deutsche Bank Deutsche, JP Morgan ENAM Lovells Simcocks Advocates Ernst & Young Cushman & Wakefield
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Case study
Investors
All investors with more than 3% disclosed at admission to AIM Major investors in Ishaan:
Alliance Capital Blackrock International Capital International Fidelity Investments Henderson Global Investors HSBC Investments Jardine Fleming Asset Management Lone Pine Capital Franklin Templeton Investments ZA Capital
Transaction completed in about 6 months Due diligence required on 8 projects, for immediate investment upon completion Valuation of all targeted projects by Cushman & Wakefield Reg S and Rule 144a components to the offering Disclosure focussed on structure of fund, agreement with investment advisor, and initial portfolio of investments Detailed disclosure on board of directors Lock-up under AIM rules requiring directors of a newly created company not to sell shares for 12 months 170 page offer document
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Case study
Highlights
First follow-on offering by an Indian-listed company on AIM Effected via 50% capital increase when Noida was reporting net losses Objectives:
re-finance debt finance new road link raise profile in capital markets broaden shareholder base
Transaction profile
Date Amount raised Over-allotment Total cost Format GDR ratio Nominated adviser Co-financial adviser UK law Reporting accountants Competent persons report March 2006 $50 million 10% 5% of capital raised GDRs +DIs 1:5 shares Collins Stewart Edelweiss Capital Mishcon de Reya SR Batliboi (E&Yo) Halcrow
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Case study
GDR structure
Investors had option to take GDRs (clear via Euroclear or Clearstream) or GDRs + Depositary Interest (CDIs) All investors took GDRs + CDIs Fees waived for investors in GDRs and CDIs company to pay fees GDR/GDR + CDI holders exercise vote Depositary Bank to inform holders of shareholder meetings, ensure votes exercised only as instructed by holders
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#Trades
203 373 89 86 120 196 145 215 152 106 259 257
Value (m)
5.4 7.0 1.9 1.4 2.3 2.2 1.0 2.3 2.0 1.6 5.1 11.3
#Shares (m)
1.8 2.5 1.9 0.5 0.9 0.9 0.3 0.7 0.6 0.5 1.4 2.6 14.6
12mth turnover of shares % of outstanding 12 month annualised turnover of shares % of free float Shares outstanding (m) Free float
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#Trades
42 10 9 22 159 205 812 376 300 183 212
Value (m)
2.5 1.7 0.1 5.4 8.7 13.7 16.9 25.0 22 6.9 8.6
#Shares (m)
1.3 0.9 0.1 2.7 3.6 4.9 4.9 6.8 5.7 1.7 2.2 25.2
Jul-May annualised turnover of shares % of outstanding Jul-May annualised turnover of shares % of free float Shares outstanding (m) Free float
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Price performance
At offer (/$) 12-06-07 % change
1.44 1.76 1.07 0.82 1.01 0.22 3.96 0.25 5.70 1.00 1.00 1.00 1.00 1.00 1.00 5.00 1.00
4.56 3.98 2.53 1.28 1.53 0.12 3.5 0.25 6.35 0.94 0.89 1.06 1.08 0.85 0.92 3.81 1.06
217% 119% 136% 56% 51% -46% -12% 0% 11% -6% -11% 6% 8% -15% -8% -14% 6%
IPOs
Eros International KSK Power Ventur West Pioneer Great Eastern Energy Platinum Mining
Noida Toll Bridge Eredene India Hospitality Ishaan DEV Property Naya Bharat Evolvence Trinity Capital Unitech Corp Parks
* or $
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New issues AIMMost active Institutions investor base: major institutions Total invested in AIM companies, $ million, 2006* $ 1,968 1,286 1,245 1.237 1,130 1,070 1,034 952 850 720 Most active institutions by number of IPO investments
- Fidelity - Artemis -F&C - AXA - Gartmore - AMVESCAP - RAB Capital - Goldman Sachs - Merrill Lynch - HSBC
- Fidelity - Artemis - New Star - AMVESCAP - Merrill Lynch - AXA - Gartmore - Schroders - Goldman Sachs - UBS
- Fidelity - Artemis - RAB Capital - AXA - Gartmore - UBS - AMVESCAP - Henderson - Merrill Lynch - CSFB
32 31 25 20 17 17 16 16 15 14
Source: Teather & Greenwood, Growth Company Investor * Translated into $ at 1.00 = $1.90 Data for mid-year 2006
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- General Financial - Mining - Software, IT services - Support services - Oil & gas - Media - Real estate - Pharma, biotech - Travel, leisure - Electronics
880 802 568 494 441 415 301 301 300 195
- Mining - Oil & gas - Real estate - General financial - Support services - Industrial metals - Travel, leisure - Pharma, biotech - Media - Software, IT services
$ 13.0 10.4 9.0 8.8 5.1 4.3 4.2 3.5 3.1 2.2
Source: Teather & Greenwood, Growth Company Investor * Translated into $ at 1.00 = $1.90 Data for mid-year 2006
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- Sportingbet - Imperial Energy - First Calgary - Centurion Electronics - PIPEX Comms - Highland Gold - Clipper Windpower - Star Energy - Asia Energy - Serica Energy
Electronics 60 Telecoms Mining Electricity Oil & gas Coal Oil & gas 57 53 47 41 39 39
Source: Teather & Greenwood, Growth Company Investor * Translated into $ at 1.00 = $1.90 Data for mid-year 2006
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AIM regulation
Eligibility Admission rules adapted to suit young, growing companies Rules allow market to decide on free float, track record Short, principles-based rule book Market practice-driven disclosure IFRS financial data Advisors prepare document, Exchange does not approve it Similar concept to SEBI filing for QIPs Supervision Exchange supervises, licences advisors
Disclosure
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AIM data
AIM companies Overseas AIM companies Market value Market turnover 2006 UK company admissions 2006 Overseas company admissions 2006 IPOs on AIM, 2006 Capital raised (new & further) since 1995 Total capital raised in 2006
Note: translated at 1.00=$1.95
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Admission ceremony: opening of market reception with representatives from the company, advisers and Exchange Benefits: completion event for the issuer and working group media coverage to raise profile at launch featured on Exchange website
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