Press releases 2005
5 October 2005
London Stock Exchange welcomes first new entrant to its Professional Securities Market
Electrosteel Castings Limited (“ECL”), a leading Indian manufacturer of ductile iron pipes and fittings, today became the first company to issue Global Depositary Receipts (GDRs) on the Professional Securities Market (PSM), the London Stock Exchange’s market for wholesale securities, launched in July 2005.
Electrosteel Castings is the first Indian company to join PSM, raising a total of US$35 million, with a US$5 million greenshoe option to be exercised within 30 days, in its offering of GDRs. It joins 61 other companies on the PSM, which have transferred their existing listed wholesale securities.
Tracey Pierce, Head of International Business Development at the London Stock Exchange, said:
“We are delighted to welcome Electrosteel Castings to the Professional Securities Market. This new market is a pragmatic solution for those overseas companies who elect to report in their home jurisdiction accounting standards, to access one of the world’s largest pools of international capital. We look forward to welcoming many more companies to PSM.”
PSM is designed for issuers whose financial data are reported according to their own home-country accounting standards. By joining PSM, issuers still list directly with the UK Listing Authority (UKLA), but they are able to continue to use home jurisdiction accounting standards, instead of conforming to the new European Prospectus Directive requirement for listed companies to report financial data in accordance with International Financial Reporting Standards (IFRS).
Electrosteel Castings was incorporated in 1955 in India as a Public Limited Company. The Company is a water infrastructure company providing techno economic solutions for water supply and sewerage systems. The Company is India’s largest manufacturer, and one of the few manufacturers in the world of ductile iron spun pipes and ductile iron fittings.
Presently the Company is producing annually 200,000 tonnes of ductile iron pipes in its facility at Kolkata. The proceeds of the GDR issue will be used to finance its expansion plan to increase the capacity to 250,000 tonnes. The expansion is expected to go on stream by March 2006. Apart from a major share in the Indian ductile iron pipe market, the Company exports ductile iron pipes to, inter-alia, United Kingdom, Spain, France, the Middle East and Singapore.
HSBC Bank Plc and Jermyn Capital Partners Plc acted as Joint Lead Managers to the offering.
For further information, please contact:
Anya Velzeboer Press Office +44 (0)20 7797 1222
Notes to editors:
About the London Stock Exchange:
The London Stock Exchange is one of the world’s leading equity exchanges and an international provider of services that facilitate the raising of capital and the trading of shares and debt securities.
The London Stock Exchange is the most international equities exchange by trading in the world and Europe's largest pool of liquidity. In 2004, 80% of all European IPOs floated in London. By the end of 2004, the market capitalisation of UK and international companies on the London Stock Exchange’s markets amounted to £3.5 trillion, with £4.7 trillion of equity business transacted over the year.
The London Stock Exchange is a Recognised Investment Exchange (RIE) under the Financial Services and Markets Act 2000 and is supervised by the Financial Services Authority.
Professional Securities Market:
The Professional Securities Market was established in July 2005, to coincide with the introduction of the FSA's new Listing Rules. PSM provides a solution for those issuers seeking to list securities in London without having to re-state their financial information to IFRS or following the additional requirements of an offering to retail investors. Debt securities or depository receipts of any denomination may be listed on PSM on production of a prospectus aimed at a wholesale or professional audience.
These are dollar denominated, tradeable equity securities issued by a depositary bank on behalf of a foreign company.