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

India’s Next Trillion Dollar Era will see a huge boom in consumption and savings/investment, which will throw up several Winner Categories i.e. those which grow at over 1.5 times GDP growth rate, and are consolidated in nature.

There are 21 such Winner Categories.Within these categories there are Category Winners which will enjoy exponential growth in profits. Category Winners bought at reasonable (not necessarily cheap) valuation create significant wealth over the long term.

Top india  stocks for 2010

Tata steel

Suzlon

HCL TECH

Vijaya Bank

ONGC

Larsen and Toubro

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Indian stock picks for 2010

India’s 7.9% economic growth in the third quarter of 2009 vividly illustrates a dramatic transformation in the country’s image, from a land of elephants and snake charmers to that of an IT powerhouse and an emerging economic giant. While both sets of perceptions are valid, they hide far more than they reveal. Indeed, when it comes to the Indian economy, what most people believe to be true contains more fiction than fact.

1. Indraprastha Gas Limited (IGL) will continue to enjoy monopoly in the National Capital Region (NCR).
2. Cement stocks will be in limelight for some more days due to better than expected results estimates.
3. Tata Communications is the dark horse, according to many analysts.
4. Hats off to Narendra Modi for announcing new industrial policy for Gujarat. We need such concrete measures at centre to face current slow down.
5. I am positive on growth prospects of Mundra Port but current valuations are not sustainable.
6. Best auto companies by sales are Hyundai in 4-wheelers and Yamaha in 2-wheelers. Unfortunately, both Companies are not listed in the Indian stock markets.

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Analysts picks: Infosys Technologies, Hindustan Zinc, Tata Steel, Jet Airways, Adani Enterprises

1. Tata Power: Positive growth prospects but I have some doubts on financial front.
2. Maruti Suzuki: More clarity is needed.
3. IVRCL Infra : Rare infra company which is not facing any financial troubles. IVRCL is a must buy when markets correct in the coming months.
4. Marico: Good Company but I always try to accumulate growth stars.
5. Piramal Healthcare: Company is making strategic moves but take time.
6. Glenmark: Company will outperform other Pharma stocks if market conditions improve. This is a must buy when market corrects to reasonable levels.

Infosys hit its 52-week low at Rs 1,065 per share,

Wipro, Rs 196.50; TCS, Rs 358;

HCL Tech, Rs 89.70; and

Cognizant’s low was $17.37 on the Nasdaq.

This was at a time when companies were reworking on their operational strategies, optimising costs and embarking on rationalisation measures, even sending people back home. The writing is on the wall: India’s vaunted technology companies must upgrade their business model or face dwindling profits and market share.

For years, India’s top six software companies (sometimes referred to as SWITCH: Satyam, Wipro (WIT), Infosys (INFY), Tata Consultancy (TCS.BO), Cognizant (CTSH), HCL) have roiled global IT markets with their high-quality, low-cost software and tech-related services. They gave India a new hope, and their success became the accelerator for the country’s growth. Companies such as IBM, Accenture, and Electronic Data Systems (EDS), which ruled the roost with their high-end offerings, saw business slip away to the Indians. SWITCH seemed unbeatable, especially as the group grew in sophistication. On the back of bagging major deals from large clients in the US, share prices of these companies are back ruling the roost. On Thursday,

Infosys scaled a new 52-week high at Rs 2,600.

HCL Tech at Rs 373.30 is hovering near its annual high of Rs 377.

And TCS isn’t too far from its peak of Rs 805 when it closed at Rs 746.80 on Thursday.

This euphoria is not restricted to Indian companies. IBM and Cognizant too are trading near their 52-week peaks. IBM is trading at $130 against a 52-week low of $80.52, Cognizant which has a large India presence, is trading at $46.25 against its year low of $17.37.The most immediate crisis is the U.S. economic downturn. Over the years, the Indians have grown less dependent on America as their main market and have expanded business to Europe, Japan, and other parts of the world. But they’ve neglected their home turf. According to a study by Everest, the Indian domestic tech market is currently worth just $1 billion but will be valued at $15 billion within five years. That’s a massive opportunity, not just in terms of money but for innovation