CLIENT WATCH

London Calling

Recent speculation regarding Essar Group’s potential $3 billion listing on the LSE, as reported in the Financial Times on 8th March, was the most notable name in an emerging trend of Indian corporates looking towards London.

 

A recent article by DNA India notes comments by LSE officials last week that at least seven Indian companies were looking to list within the next few months. Grant Thornton partner, Fiona Owen, predicts a rush of over 70 Indian companies looking to issue equity on the exchange.

 

The news provides a timely boost for the LSE, which is still reeling after Rusal’s rejection in favour of the Hong Kong Stock Exchange earlier this year. There are currently 31 Indian companies quoted on the three main LSE markets – AIM, PSE and International Main Market – with only 12 on the latter. Of these, only one company (CESC Ltd.) has ordinary shares listed here.

 

Out of the Economic Times top ten Indian corporates, only Tata Motors has Global Depositary Receipts listed on the main market, with Tata Steel and State Bank of India listing GDR’s on the Professional Services Market.         

 

 

 

Capital markets specialists in English law firms will undoubtedly be readying themselves for a welcome inflow of India related work alongside their M&A counterparts -  the recent interest suggests the M&A activity in Europe may be set to increase.

 

It is the listing of Essar Group’s oil and power subsidiaries however, which gives the surest sign that corporate India is waking up from its recession induced slumber.  Having emerged relatively unscathed, the cash-rich balance sheets of the subcontinent’s corporates are an excellent springboard from which to pursue bargains.

 

As part of the research for the India Report 2010, RSG Consulting spoke to Essar Group’s General Counsel, Mukesh Bhavnani, on a number of occasions, and noted his enthusiasm for the company’s expansion plans.

 

Of more immediate interest to firms looking to secure the Essar listing were his thoughts on law firm marketing – parts of which he thought were ‘phenomenal’.

 

Yet it was billing structures which Mukesh, who reduced the price of law firms by 50% during his time as General Counsel at Coca-Cola, was most passionate about. ‘There is a magic word called fixed-fee which is rational’. City law firms may do well to take him at his word as they jostle for position as lead counsel for the listing instruction.