Standard Chartered to Raise US$500 Million in Mumbai Listing

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Mar. 31 – Standard Chartered Bank is poised to obtain the first foreign company listing in India with its submission of a draft prospectus to the Indian Stock Exchange.

The bank aims to raise US$500 million through issuance of the first Indian Depository Receipt (IDR), a move which will allow Indian investors to buy into the bank in a rupee denominated IDR, a manner similar to the issuance of American depository receipts. The move is important because it is expected to usher in an era of IDRs that could attract strong interest from other multinational companies with a focus on India and Asia.

The listing itself is expected to take place within the next three months. Standard Chartered has its roots firmly in India, in much the same manner that their rival, HSBC, has in China. The bank was established as The Chartered Bank of India, Australia and China in London in 1851 by James Wilson after a grant of a Royal Charter from Queen Victoria.

The first branches opened in 1858 in Calcutta, Bombay and then Shanghai. In the beginning, the bank wanted to take advantage of trade expansion between Europe and Asia, a position it still maintains. The bank opened a branch in Hong Kong in 1859 and was given approval to issue bank notes in 1862, a privilege it still carries now.

The bank now has 94 branches in 38 cities in India and employs more than 17,000 people. Last year it made more than US$1 billion in profits from its Indian operations, the second highest in the region after Hong Kong. Indian bank profits are expected to improve further this year. The bank’s total group profit for 2009 was US$7 billion.

A successful listing in Mumbai by Standard Chartered is expected to pave the way for similar listings being sought by other top companies such as Arcelor Mittal and Tata to name a few. The bank is also expected to announce plans to list in Shanghai.

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