London based StanChart' IDR (Indian Depository Receipt) today came out with an issue for raising money from Indian market. The bank is offering a price band of Rs 100-115 per IDR and 10 IDRs would map to a single share of the bank. At Rs 50 per USD simple conversion, this maps to Rs 975-1125 as premium for a single share of the bank.
The issue from the bank which operates as a branch in India and not as subsidiary is first of its kind issue of raising money by a foreign company in India. Once this is complete, this should become a trend setter and open up similar issues by other companies wishing to raise money. This hopefully would improve the overall image of Indian market in global landscape.
Besides raising money for the bank, it serves as a good branding exercise for the bank too. With Government inching ahead with plans to liberate the financial services industry, this issue would help bank establish a more market-visible commitment to Indian market. This should also help Indian people see the bank as a more trusted option for savings and investments.
Few more details about StanChart Indian operations- The bank’s profit in India rose 19 per cent to $1.06 billion (over Rs 4,600 crore) last year, contributing 21 per cent of group earnings. The Indian operations rank fractionally behind Hong Kong as the biggest profit contributor. Most of the Indian earnings came from wholesale banking, where profits grew by half to $1 billion while consumer banking, which had been hit by bad debt, declined around 25 per cent to $54 million (around Rs 250 crore).
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