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Wednesday, March 03, 2010

StanChart plans IDR issue by June

In what would be the first instance of equity-raising in India by an overseas-listed company, UK-based Standard Chartered Plc. plans to raise up to $ 750 million (Rs 3, 450 crore) through Indian Depository Receipts (IDR) issue within the first half of the calendar year.

“We have already got advisors and we will file for the IDR issue after our (India) results are published by March-end,” said Neeraj Swaroop, Regional Chief Executive, India and South Asia.

In a statement today, Standard Chartered Group Chief Executive Peter Sands said, “There is a race for which will be our biggest market by profits this year. We have built a superb franchise in India, and this year it is our intention to open a new chapter in our long history there with the listing.”

The Indian branch of Standard Chartered Bank recorded an operating profit of $ 1,060 million (Rs 4,886 crore at today’s rates) for 2010—just $ 2million less than the Hong Kong division’s figures of $ 1,062 million.

Like American or Global Depository Receipts (ADRs/GDRs), where Indian companies raise resources overseas, IDRs enable foreign companies to do the same in India. ADRs and IDRs are derivatives instruments that derive their value from the shares deposited with custodians.

The bank has appointed JM Financial and UBS AG as lead managers to the issue. Goldman Sachs, Bank of America and Kotak Mahindra are the other banks appointed to manage the issue.

Swaroop had earlier told Business Standard that the listing would not have a material impact on the bank’s India operations. “What it does is to help improve our presence in the country because you are bringing one more element to engage with the banking public. So, you are not just bringing in banking services, but you are also bringing in the Standard Chartered stock so they can become investors.”

“It gives the Indian public a chance to participate in the risks and opportunities on the global scene. It also demonstrates to the policy makers our continued commitment because we would not list if we were not planning long term,” Swaroop said.

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