Britain’s Standard Chartered Bank yesterday began selling shares in India, hoping to raise up to US$588 million in the first initiative of its kind by a foreign company.
The London-based lender is selling shares through Indian Depository Receipts (IDRs) — rupee-denominated certificates similar to US Depository Receipts which show ownership of shares in an overseas firm.
The price band for the offering is 100 to 115 rupees per IDR.
Buyers of the certificates earn bonuses or dividends in the same way they would as owners.
Standard Chartered, which makes most of its profits in Asia, will issue 240 million IDRs through the offer, which is open for subscription to retail, institutional and overseas investors and corporations. The process ends on Friday.
The bank is aiming to boost its brand and visibility in India, where it opened its first branch more than 150 years ago.
India is Standard Chartered Bank’s second-largest and fastest-growing market after Hong Kong, with profit in excess of US$1 billion last year.
Once the issue closes, the bank will list its IDRs on India’s two leading stock exchanges, the Mumbai and the National stock exchange, next month.
On Monday, the bank said it had allocated shares worth US$80 million to six anchor investors as part of its India listing.
Standard Chartered will become the first foreign company to list in India through the IDR route. Foreign companies are not allowed to list their shares in India.
The funds raised will be repatriated to the bank’s London headquarters as capital reserves to be used for growth and expansion plans.
“It is a form of homecoming. We see this as a bold, strategic move to increase our brand presence and visibility in India,” the banking group’s chief executive Peter Sands said earlier this month.
The bank has hired investment banks including Goldman Sachs, UBS Securities and Bank of America-Merrill Lynch to manage the offering.
Unlike several other leading banks, Standard Chartered emerged relatively unscathed from the financial crisis and did not require a bailout from the British government to stay afloat.
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