Standard Chartered to raise $500m in India

MUMBAI: Britain-based Standard Chartered Bank announced plans on Tuesday to raise more than 500 million dollars in India through the fundraising initiative of its kind by an overseas company.

The bank said it will raise the money by issuing Indian Depositary Receipts rupee-denominated certificates showing ownership of shares in Standard Chartered similar to US American Depository Receipts.

The offering by Asia-focused Standard Chartered marked the first time in India an overseas company has announced plans to sell Indian Depository Receipts. Other foreign companies, such as consumer goods giant Unilever, have issued shares of their wholly owned local subsidiaries on the Bombay stock exchange.

“Our intention to be the first company to list IDRs (Indian Depositary Receipts) demonstrates how important India is to Standard Chartered,” the banking group’s chief executive Peter Sands said.

“India is one of our largest and fastest-growing markets and achieved over one billion dollars in profits in 2009,” he said in a statement.The bank filed a draft prospectus for the issue with the market regulator, the Securities and Exchange Board of India, and said it expects to complete the listing process by June.

The bank announced earlier this month it could raise up to 750 million dollars through the listing. It said in the statement on Tuesday the amount to be raised by the issue would hinge on market conditions and investor demand.

IDRs are derivatives that use shares, deposited by the company in India, as the underlying assets. Buyers of the certificates earn bonuses or dividends from the shares in the same way as they would as owners.