Mumbai / London: UK-based bank Standard Chartered plans to raise up to $750 million with an Indian share listing in the next three months to beef up its profile in what may soon become its biggest market.
Chief executive Peter Sands said the Asia-focused bank would raise at least $500 million and was unlikely to raise more than $750 million in what would be the first offering of Indian Depositary Receipts in Asia’s third-largest economy.
The amount will depend on investor appetite and will take place in the first half.
“The IDR listing is really all about brand awareness and business development in a market that’s incredibly important to us, rather than specifically for raising capital,” Sands told reporters on a conference call.
The London-based bank, which has been in India for 152 years and is the largest international bank there with 94 branches and 17,000 staff, is also listed in Hong Kong and is expanding across Asia after weathering the financial crisis better than most rivals.
Its London shares were down 1% at 1,774 pence at 1029 GMT. The Indian listing plans had been well flagged and were in line with expectations, analysts said.
Standard Chartered also wants to list in Shanghai, but that is dependent on regulators approving plans. Its bigger rival HSBC wants to list in Shanghai this year, but that is also dependent on getting regulatory approvals.
Deals, Financing Growth
Standard Chartered’s profit in India rose 19% to $1.06 billion last year, contributing 21% of group earnings, ranking India fractionally behind Hong Kong as the biggest profit contributor and putting it on track to become the top market this year.
Most of the Indian earnings came from wholesale banking, where profits grew by half to $1 billion, as corporate advisory income grew on the back of cross-border financing and deals. The bank is advising and financing Indian telecom firm Bharti Airtel’s planned purchase of Kuwait’s Zain.
“Given the strength of the economy and strength of leading corporates in India I think you’re going to see further development of capital markets,” Sands said.
Indian consumer banking profits fell by a quarter last year to $54 million, hurt by a rise in bad loans.
The bank said it had hired UBS AG, Goldman Sachs, JM Financial Consultants, DSP Merrill Lynch, Kotak Mahindra Capital and SBI Capital Markets to manage the offering.
StanChart appointed its STCI Capital Markets unit as a co-book running lead manager.