Indian firms continue to outperform AIM

Thursday, January 01, 2009 | Posted by: Grant Thornton
Categories: | Tags: India, investment, global, India Watch, LSE, South Asia Group, aim, Fiona Owen

Grant Thornton’s latest India Watch index reveals that, despite the current tough market conditions, Indian companies listed on the London Stock Exchange (LSE) are still collectively outperforming both the AIM 100 and the AIM all-share by a wide margin.

Grant Thornton’s latest India Watch index reveals that, despite the current tough market conditions,  Indian companies listed on the London Stock Exchange (LSE) are still collectively outperforming both the AIM 100 and the AIM all-share indices.

We are using the India Watch to monitor the UK/India business relationship through examining both cross border M&A trends between the nations and tracking the performance of Indian companies on the London Stock Exchange since 1 January 2007.

The latest results reveal that, since 1 January 2007, the Indian Index has outperformed the AIM 100 and the AIM all-share by 22% and 23% respectively.

The strongest performers over the last quarter to December 2008 - Elephant Capital Plc, Eredene Capital Plc and Evolvence India Holdings Plc - these were also incidentally, the top performers of the last 12 months (see tables below).  Grant Thornton UK LLP acted as reporting accountant to Elephant Capital Plc (then called Promethean India Plc) which raised circa US$100 million of new funds when it listed on AIM in April 2007.

Top performing companies over the last quarter

Top performing companies over the last year

The top performing companies from last quarter - Mortice Ltd, Eros International Plc and CBay Systems Holding Ltd - are all down significantly. However, evidence demonstrates that the fall in value of these companies reflects the current state of the financial markets as opposed to a direct reflection of specific companies.

Sector Analysis

In contrast to last quarters sector report and as noted above, the support service stocks are beginning to feel the pinch of the economic downturn. Despite the current conditions, the tables above and the chart below show the growth of Equity Investment Instruments during these turbulent times, with a one percent increase in market share.

On 2 January 2009, the Indian authorities unveiled a revised package for economic stimulus. This package is designed to minimize the effects of the global economic downturn and while these measure will not shelter India completely, it should help the country to continue its annual growth trends, though maybe not to the levels of prior year. 

When economic stability returns to the market place and investor confidence grows, we can be sure that India will be at the forefront of the emerging markets and that India’s relationship with London will continue to flourish.

Fiona Owen
Partner and Head of South Asia Group Capital Markets
For Grant Thornton UK LLP