UK bank Standard Chartered's sale of Indian shares worth up to about $590 million was fully covered on its final day of bookbuilding, after volatile markets and a new regulation weighed on demand during its first three days.
Standard Chartered's Indian Depositary Receipt (IDR) issue is the first, and the emerging markets-focused bank has said the offering is aimed more at building its brand and presence in its second-largest market than about raising funds.
The offer was being closely tracked by other foreign firms that have large consumer presence in Asia's third-largest economy and may also be considering share issues to raise their profiles.
Investors had bid for 1.28 times the 204 million IDRs on offer to the public as of mid-afternoon, stock exchange data showed, with most bids towards the low end of its 100-115 rupee price range. The public portion of the offer had been only about 11 percent covered at the end of Thursday.
Every 10 IDRs represents one share of Standard Chartered Plc, based on Thursday's London closing price of 1,682 pence, and the currency conversion, that valued each IDR at about 114 rupees as of Friday morning, towards the high end of the offering's price range.
"The book is building around 104-105 rupees. This is at a substantial discount to the London stock price, which is why we saw good subscription on the last day," said Arun Kejriwal, director of research firm KRIS.
Standard Chartered was selling a total of 240 million IDRs, of which 36 million were allocated to six anchor investors at 104 rupees apiece on Monday. Indian share sales often see few orders until the final day, when investors have a better indication of how the deal will be priced.
A rule requiring institutional investors to pay 100 percent of the value of their share applications, which took effect on May 1, also kept a lid on early demand as big investors did not want to tie up funds sooner than was necessary.