Well many people will welcome  the new Standard and Chartered release of Indian depository receipts in the Indian market  , many may just see it a s a cash grab by standard an d chartered bank for  investment of money by the indian junta in thier  company. Those who like th Bank and  think they  can make some money by investing in them now have a more clear transparent way on investing in this global bank.

Standard Chartered launched its first ever Indian depository receipt (IDR) offering (May 25), closing on May 28. The bank issued 240 million IDRs, with every 10 representing one share of Standard Chartered. The IDRs were allocated at Indian rupee 104 each.

Standard Chartered derived 12% of its income from India in 2009. It has been present in the country for over 150 years, having opened its first branch in 1858 in Kolkata. India contributed $1.06 billion of the company’s $7.23 billion operating profit in 2009, ranking only behind Hong Kong.

So what is a Indian Depository receipt ?

As per the definition given in the Companies (Issue of Indian Depository Receipts) Rules, 2004, IDR is an instrument in the form of a Depository Receipt created by the Indian depository in India against the underlying equity shares of the issuing company. In an IDR, foreign companies would issue shares, to an Indian Depository (say National Security Depository Limited – NSDL), which would in turn issue depository receipts to investors in India. The actual shares underlying the IDRs would be held by an Overseas Custodian, which shall authorise the Indian Depository to issue the IDRs. ( ref: http://www.bankingindiaupdate.com/idr.htm)

How this works is , The foreign company IDRs will deposit shares to an Indian depository. The depository would issue receipts to investors in India against these shares. The benefit of the underlying shares (like bonus, dividends etc) would accrue to the depository receipt holders in India.

Stanchart  Indian Depository receiepts

Standard Chartered plc was the first foreign company to have publicly shown interest in making an IDR issue in India. The company is already listed on the London and Hong Kong stock Exchanges. Standard Chartered CEO Peter Sands is quoted in the Indian media as saying the "IDR listing (is) to enhance StanChart’s commitment to India.

India shares Investment

Peter Sands, group chief executive at Standard Chartered, said this will be the "anchor investor" portion of a $588 million IDR issued by the bank.

The IDR issue is the first of its kind for India. Like American or global depository receipts, which Indian companies can use to raise resources overseas, IDRs enable foreign companies to do the same in India. The IDRs will allow Standard Chartered to boost its market visibility and brand perception in India and will give Indian investors an opportunity to invest in the company and participate in its growth.

More information:

IDR issue Process

According to SEBI guidelines, IDRs will be issued to Indian residents in the same way as domestic shares are issued. The issuer company will make a public offer in India, and residents can bid in exactly the same format and method as they bid for Indian shares. The issue process is exactly the same: the company will file a draft red herring prospectus (DRHP), which will be examined by SEBI. The general body of investors will get a chance to read and review the DRHP as it is a public document, available on the websites of SEBI and the book running lead managers. After SEBI gives its clearance, the company sets the issue dates and files the document with the Registrar of Companies. In the next step, after getting the Registrar’s registration ticket, the company can go ahead with marketing the issue. The issue will be kept open for a fixed number of days, and investors can submit their application forms at the bidding centers. The investors will bid within the price band and the final price will be decided post the closure of the Issue. The receipts will be allotted to the investors in theirdemat account as is done for equity shares in any public issue.

What is the procedure to apply to an IDR?
The process is similar to an initial public offering where a draft prospectus is filed with the Securities and Exchange Board of India.

The minimum issue size is $500 million (around Rs 2,250 crore). IDRs will be issued through a public offer in India in the demat form and will be listed on Indian exchanges. Trading and settlement will be similar to those of Indian shares. 50% of the issue size is reserved for qualified institutional investors. Retail investors can subscribe upto 30% of the issue size. The minimum application size shall be Rs.20,000.

Links:

• Government of India
• Securities and Exchange Board of India
• Reserve Bank of India
• Issue of Indian Depository Receipts (IDRs), Reserve Bank Of India Official Website
• Australian Stock Blog
• Indonesia Stock Market IDX

You tube video in Indian depository receipts

Traders are now betting on who will announce the next big purchase. Will it be China looking to employ its $US2.3 trillion of reserves? What about Japan, which has the second-biggest pile of currency? Or Gulf states working to end dollar hegemony? And let’s not forget about Brazil and South Korea. Well done, India.

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The price of gold leapt to a record peak of $US1,093.10 an ounce in trading in London on Wednesday in the wake of the International Monetary Fund’s massive sale of the precious metal to India.

Gold had already reached a record high of $US1,087.80 on Tuesday as the IMF said it had sold 200 tonnes of gold to India’s central bank over a two-week period last month for $US6.7 billion ($A7.42 billion) to bolster its finances.

After spiking to a new high on Wednesday, gold pulled back slightly to stand at $US1,091 in London morning trade.

Gold and other commodity prices have surged in recent months amid a move away from the dollar, which has been slumping. The move accelerated last month on a report that Gulf states may stop using the greenback for oil trading.

India is the world’s biggest consumer of gold, importing between 700 and 800 tonnes of the metal every year or 20 per cent of global demand.

A senior IMF official said that the IMF was "lucky" in selling the 200 tonnes to India for roughly $US1,045 an ounce, compared with $US850 an ounce in April 2008.

Telecoms firm Bharti Airtel (BRTI.BO: Quote, Profile, Research) rose 1.8 percent to
417.25 rupees, after it denied late on Wednesday a media report
it had reached an agreement with South Africa's MTN (MTNJ.J: Quote, Profile, Research).
[ID:nL9276101]
 The 30-share BSE index .BSESN closed up 0.21 percent, or
33.31 points, at 16,216.86 after rising as high as 16,434.77 --
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Telecoms firm Bharti Airtel (BRTI.BO: Quote, Profile, Research) rose 1.8 percent to
417.25 rupees, after it denied late on Wednesday a media report
it had reached an agreement with South Africa's MTN (MTNJ.J: Quote, Profile, Research).
[ID:nL9276101]
 The 30-share BSE index .BSESN closed up 0.21 percent, or
33.31 points, at 16,216.86 after rising as high as 16,434.77 --
its highest in 15 months. Only 14 of its constituents gained.