Standard Chartered to float first IDRs for over Rs2,200 crore

The Bank plans to float 220 million IDRs; looks at listing by June

In what would be the first case of an MNC raising capital from India, UK’s Standard Chartered has announced that it would float Indian Depository Receipts (IDRs) to mop up over $500 million (Rs 2,250 crore) and list the same on bourses by June.

Seeking to float 220 million IDRs, the UK-based banking major moved market regulator SEBI for approval of the scheme, guidelines for which were cleared way back in 2004. The bank had earlier said that the issue size could be between $500 million and $750 million.

“We have a strong presence in India. We are the oldest foreign bank in the country. We have good business and IDR is to give opportunity to Indian investors to participate in the global story,” Standard Chartered PLC's CEO (India and South Asia) Neeraj Swaroop told PTI immediately after filing for the IDR with SEBI.

Standard Chartered began its Indian operations in April 1858 in Calcutta (now Kolkata).

Asked about the pricing of the instrument, he said that at present Standard Chartered PLC was being traded at £17 a share but “we have not decided on the conversion rate.”

While the banking major is looking at mopping up at least $500 million, it has not fixed any upper limit, Mr Swaroop said, adding that he would also want the employees to participate in the issue.

The proceeds would be repatriated to the global entity for normal business activities and there was no shortage of capital adequacy.

“We have not faced any shortage of capital in the past. We will not face (the same in the future). India can get capital if required,” he said.

He, however, said that no decision had been taken for fixing a quota for employees and it would be decided when the issue nears completion and would depend on a host of issues like retail response.

Asserting that India, which contributes to 20% of global profits, would continue to be the focus area, he said that this year the bank would enter a host of specialised corporate equity services to assist IPOs, brokerage and equity solutions to the Indian industry.

He said that the organisation had posted a significant $1-billion profit in 2009 and added that the outlook was good.

Mr Swaroop, however, refrained from giving any numbers for the future but pointed out that profits for the last five years had been growing at an average of 41%, while income was rising at an average of 30%.
“The principal rationale for listing is brand-building and business development in India, the Bank’s second largest market. It accounts for 20.5% of group profits,” the bank said in a statement.

The Bank has over 94 branches in 37 cities in the country. Its retail customer base stands at around 20 lakh.

Investment bankers including Goldman Sachs, UBS, JM, SBI Capital and DSP Merrill Lynch advised Standard Chartered on the said issue.

In November last year, Standard Chartered global CEO Peter Sands said that the proposed IDR issue would enhance the lenders’ commitment to the local market.

The Bank has operations in an array of verticals, including consumer and wholesale banking, private banking and SME banking.

IDRs work like Global Depository Receipts or American Depository Receipts—foreign-listed securities against underlying equity shares of Indian companies—through which Indian companies raise resources overseas.

SEBI guidelines for IDR issues permit only the companies listed in their domestic markets for at least three years and have been profitable for three of the preceding five years.

  • Like this story? Get our top stories by email.


    Boeing eyes collaboration with ISRO

    Since the Indian space agency already has a tie-up with Europe’s EADS Astrium, both entities will have to explore new areas of possible future business ventures

    Boeing has evinced interest in collaborating with the Indian Space Research Organisation (ISRO) in the area of communication satellites, and the two entities are exploring joint opportunities, a senior ISRO official has said, reports PTI.

    But the future possible cooperation with Boeing is unlikely in the field of joint-building of communication satellites as the Indian space agency already has a tie-up in this segment with EADS Astrium, managing director of Antrix Corporation, ISRO’s commercial arm, K R Sridhara Murthi indicated.

    “They (Boeing) said that they are interested in having collaboration with us in the field of communication satellites. But we (ISRO) already have an alliance with the Europeans (EADS Astrium),” he said.

    “Maybe ISRO and Boeing will have to explore some new areas of business. We need to do a lot of homework before we can arrive at collaborative level. Still, it’s (a) very preliminary type of exchange,” Mr Murthi told PTI.

    ISRO, meanwhile, is expanding its alliance with Astrium, with which it has an agreement to jointly offer communication satellites with a launch mass of two tonnes to three tonnes for the international market.

    “We are trying to cooperate in other areas (in addition to communication satellites) such as Earth observations. So, we have built along with them (Astrium) some multi-sensor ground systems for the USA and we are also trying to cooperate in other areas and explore what other type of cooperation we can do in the field of Earth observations,” he said.

    Antrix, which markets ISRO-developed space products and services, currently has an order pipeline of Rs3,000 crore (in all types of business put together).

    The company expects to close the current fiscal (2009-10) with a revenue of Rs1,000 crore, more or less the same as the previous fiscal, reflecting a market environment impacted by the global slowdown.

    Mr Murthi said that ISRO would launch the first Algerian remote sensing satellite, built by Astrium, on board India's PSLV as a co-passenger with Cartosat-2B on 5th May. This satellite weighs around 150 kg.

    ISRO already has some business relationship with Algeria, which is receiving data from Indian satellites through the station built by the former.

  • Like this story? Get our top stories by email.



    shadi Katyal

    10 years ago

    Why the negativity? Do anyone think that Boeing is not aware fof ISRO tie up with EADS.
    I for one never understood such articles or is it the beaurucracy and red tape we talking.
    Investigate and show some interest and who knows what else might fall in our lap.

    Zoozoo lessons

    Who needs celebrities for brand endorsements when you can have animated creatures breaking through the clutter?

    Anyone who enjoys watching the IPL matches will tell you there are three things that keep him/her going: the fast-paced cricket, the peppy cheerleaders, and the completely whacked-out Vodafone Zoozoos. I can’t think of the last time viewers actually looked forward to watching ads on TV. Usually, commercial breaks are used as a good time to slip into the loo. Or to check FB status updates. Or to tweet. Or to grab a beer. And so on. The success of these creatures is a remarkable story in Indian advertising.
    So it’s a good time to list down the reasons why the Zoozoos are such a huge hit, and the lessons marketing and brand managers need to learn from their success. 
    1.  The creatures have a universal appeal. Across socio-economic strata, and beyond age and gender barriers. The Zoozoos appeal to all segments. This is critical for mass brands. There’s no point using characters that have limited appeal, aka an Onida Devil or the Air India Maharajah (both dead and buried, not surprisingly). And the egg-heads play to the galleries, so no cerebral juggling is required while conceptualising the situations.

    2.  Vodafone has proved that it’s possible to involve the audiences without using celebrities. A good lesson for brand managers who rush to movie stars and cricket players, because they either don’t believe in their own brands, or are too chicken-hearted to take risks. Non-use of celebs assures some serious cost savings. That moolah is then used to create multiple commercials and achieve carpet coverage in the media.

    3.  It’s a highly extendible idea. The Zoozoos can be used effortlessly to communicate any new offer/feature from Vodafone. The humour is in-built, and all the creative directors need to do is put the creatures in a mad situation. Notice how other cell-phone makers struggle with movie stars when it’s time to spell out features. Airtel is a good example.

    4. The Zoozoos help impart a truly distinctive brand identity for Vodafone. The lock-in with the brand is deadly. And because of that, they make the advertising and the brand memorable. Which is the hallmark of a good idea. Other marketers with lesser ideas go to ballistic levels to be noticed and heard. The Havells’ hangman ad is a good example. The Zoozoos simply break the clutter through their uniqueness.

    5. The creatures can be seamlessly extended for 360-degree media usage. For example, they get smartly used for in-place promotions at the IPL matches. Not only do they plonk the lovable creatures in the midst of the crowds in the stadium, but at last year’s finale, they had the studio anchor do a live interview with them, where the Zoozoo couple belted out solid cricket gyaan in their hysterical voices. (To be cruelly honest, they made more sense to me than some of the ‘esteemed’ empanelled commentators). Imagine the impact: reportedly, 29 million people watched the final match on their TVs, what a massive Zoozoo dose that. Brilliant stuff!
    Hope other brand managers are taking some cues from these crazy creatures.

  • Like this story? Get our top stories by email.




    10 years ago

    Great idea. Every sensible consumer will not be influenced any brand even if is endorsed by any celebrity. We all know that a particular star is paid to back a specific product or services, it is not guarantee of better quality or competitive rates. Here the luminary is just a paid advocate of the brand. In India, people always value the suggestions of their relatives, friends, neighbors, colleagues for their purchasing decisions. No star can fool us. We know what is she/he using.

    There are various products launched by renowned companies and endorsed by famous film and cricket star; however, they are no more in the market. I have a list of all such products.
    The entrepreneur should take care for better customer satisfaction rather than association by star.

    We are listening!

    Solve the equation and enter in the Captcha field.

    To continue

    Sign Up or Sign In


    To continue

    Sign Up or Sign In



    online financial advisory
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 3 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)
    FREE: Your Complete Family Record Book
    Keep all the Personal and Financial Details of You & Your Family. In One Place So That`s Its Easy for Anyone to Find Anytime
    We promise not to share your email id with anyone