Global banking giant Standard Chartered Bank on Wednesday said it is planning to raise up to USD one billion (over Rs. 4,500 crore) by June through Indian Depository Receipts (IDR).
“We remain keen to pursue our intent to have an IDR offering ... we are looking at quarter two (April-June 2010) and we are looking at USD 500 million to USD 1 billion,” Standard Chartered Bank (South Asia) chief executive Neeraj Swaroop said on the sidelines of an event on microfinance.
The offering is subject to the market conditions and the bank will have to take the final decision on it, he said. The IDR would be issued by parent entity Standard Chartered PLC.
Like American or Global Depository Receipts (ADRs), where Indian companies raise resources overseas, IDRs enable foreign companies to do the same from India.
ADRs or IDRs are derivative instruments that derive their value from the shares deposited with custodians. The foreign companies deposit shares with a custodian, who in turn issues depository receipts based on these shares. The receipts are based on ratio of shares equivalent to depository receipt.
The government notified the IDR rules in 2004. The market regulator SEBI norms too are in place for number of years now.
SEBI guidelines permit only those companies listed in their home market for at least three years and have been profitable for three of the preceding five years for IDR issues.
Standard Chartered Bank plans to file the draft red herring prospectus with SEBI towards the end of March, Swaroop had earlier said.
The bank has appointed a host of investment bankers including Goldman Sachs, UBS, JM, Kotak Mahindra, SBI Capital and DSP Merril Lynch, to advise it on the proposed IDR 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.
Standard Chartered has over 94 branches in 37 cities in the country and a combined customer base of around 20 lakh retail customers among others.
The bank has operations in an array of verticals, including consumer and wholesale banking, private banking and SME banking.