Standard Chartered Plc's Rs 2,760-crore public offer of Indian depository receipts (IDRs), the first-ever such issue in domestic market, got subscribed just 5 per cent on the opening day of the issue today.
At the end of the first day, the issue got total bids for 1.1 crore receipts against 20.4 crore receipts on offer for public subscription, thereby getting subscribed 0.05 times, according to the data available with the NSE.
Standard Chartered Plc has come out with a public offer of 24 crore IDRs, that includes 3.6 crore receipts reserved for the anchor investors. The banking major has already raised Rs 374 crore by offering 3.6 crore IDRs to anchor investors.
The price band of the issue has been fixed at Rs 100-115. At the upper end, the offer is valued at Rs 2,760 crore, while at the lower end the bank would be able to mop up Rs 2,400 crore.
By the end today's trade, the issue got subscribed 12 per cent in the portion reserved for the qualified institutional buyers, which includes FIIs and mutual funds.
"Usually on the first day, an issue doesn't see participation in great numbers from retail investors. This is a unique issue and will sail through easily, despite volatility in the secondary markets," CNI Research Chairman and Managing Director Kishore P Ostwal said.
An IDR represents an ownership in shares of a foreign company that trades in the Indian capital markets. Each IDR is issued by an Indian depositary bank and can represent a fraction of a share, a single share, or multiple shares of a foreign company. An IDR is bought and sold just like a regular stock and is issued/sponsored by a bank or a brokerage house.
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The issue of StanChart IDRs closes on May 28 and is done through 100 per cent book-building process.
Retail investors and eligible employees subscribing to IDRs under the retail and the employee portion respectively, will benefit from a further 5 per cent discount.
The bank said allotment of the IDRs is scheduled to be completed by June 7, with listing on the BSE and the NSE shortly thereafter. Ten IDRs will represent one underlying share of the British lender.
Standard Chartered Bank is the country's largest and the oldest foreign bank, which opened its first branch in April 1858 in Calcutta, and India accounted for over 20 per cent of the bank's profit before tax in the 2009 calender year.
The book running lead-managers to the issue are UBS Securities, Goldman Sachs Securities (as global coordinators), JM Financial Consultants, DSP Merrill Lynch, Kotak Mahindra Capital and SBI Caps. It has appointed Standard Chartered-STCI Capital Markets as a co-book running lead manager.