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Thursday, March 04, 2010

StanChart picks iBankers for India listing

Standard Chartered, the London-headquartered bank that gets 90 per cent of its profits from Asia, Africa and West Asia, has finalised plans to get listed in India by June.

The bank, which has had a presence in India for more than 150 years, will file a prospectus by the end of this month for an issue of Indian depository receipts (IDRs) to become the first foreign company to list on Indian bourses six years after the first IDR rules were framed.

Investment banks Goldman Sachs, UBS, Kotak, DSP Merill Lynch and SBI Caps have been appointed as advisors to the IDR issue.

Neeraj Swaroop, country chief executive, Standard Chartered India, said, “We will file our draft red herring prospectus (DRHP) latest by the end of March. We are looking at raising around $500 million to $1 billion from the listing based on the market conditions.” Swaroop was talking to reporters after announcing the financial results of Standard Chartered's India operations.

Swaroop said the bank has cleared a majority of the regulatory hurdles with the RBI and is now in a position to announce their listing plans. “Some minor approvals have to be obtained but they are more of procedural and hence will be obtained during the filing process.”

India, for Standard Chartered, continues to be the second best market after Hong Kong in the world. Standard Chartered's India operations reported a 19 per cent increase in profit before tax to $1.09 billion in 2009 from $891 million a year earlier. The share of operating profit in the bank's total profit stood at 20.5 per cent in 2009.

The rise in profit was on the back of strong growth in its wholesale business. The bank's operating profit from wholesale business jumped 49 per cent to $1.006 billion in 2009 from $674 million in 2008. “Wholesale banking business is the single largest profit-making business in India,” Swaroop told said in Mumbai. StanChart has 150 wholesale banking clients in India.

The subdued growth in the consumer banking segment continued even in 2009. The bank saw the operating profit from consumer banking business fall 24 per cent to $54 million from $71 million in 2008. “Within the consumer banking, portfolios like SMEs and Mortgages grew faster than other categories,” Shyam Srinivasan, head of consumer banking said.

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