Entire IDR proceeds to go to parent: StanChart's Swaroop
Standard Chartered India today said it will use the entire proceeds from the forthcoming $500-million IDRs to pay back a portion of the $1.3 billion capital its parent pumped into it during the past two years.kolkata Updated: May 21, 2010 12:12 IST
Standard Chartered India Friday said it will use the entire proceeds from the forthcoming $500-million IDRs to pay back a portion of the $1.3 billion capital its parent pumped into it during the past two years.
The country's oldest and the largest multinational bank will be launching a $500-million Indian Depository Receipts (IDRs) next week. The StandChart issue will be the country's first IDR, through which the England-based parent will be diluting just 1 per cent of its stake in its India operations.
"This issue is not just to raise money, but to help in our greater visibility in India as we have already pumped $1.3 billion in capital in the past two years into Indian operations," StanChart chief executive for India and South Asia Neeraj Swaroop said in Kolkata on Friday.
Based on the current market capitalisation of the bank on the London Stock Exchange, the forthcoming IDR issue could be around $500 million. The price band for IDRs will be fixed on May 24.
"The entire proceeds from the IDRs will go to parent," Swaroop said.
Asked if StanChart India will need any fresh capital this year if the current growth sustains, he said, "we are currently adequately capitalised here with a CAR of 12.6 per cent and in 2010 the capital requirement will depend on the business mix."
Meanwhile, Swaroop said StanChart India is planning to acquire the remaining 26 per cent stake in UTI Securities from Securities Trading Corporation of India by the third quarter of 2010. Over the years, StanChart raised its stake close to 74 per cent in UTI Securities. The bank picked up 49 per cent in the erstwhile UTI Securities in 2007-08 and subsequently it raised to 74 per cent.
First Published: May 21, 2010 12:11 IST