In what would be the first case of an MNC raising capital from India, UK's Stanchart today announced that it would float Indian Depository Receipts 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," Stanchart PLC's CEO (India and South Asia) Neeraj Swaroop told PTI immediately after filing for IDR with Securities and Exchange Board of India.
Stanchart began its Indian operations in April 1858 in Calcutta (now Kolkata).
Asked about the pricing of the instrument, he said that at present Stanchart PLC was being traded at 17 pounds a share but "we have not decided on the conversion rate."
While the banking major is looking for mopping up at least $500 million, it has not fixed any upper limit, 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 (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 per cent 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 solution to the Indian industry.
He said that Stanchart had posted a significant $one billion profit in 2009 and added that the outlook was good. He, 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 per cent, while income was rising at an average of 30 per cent.
