In the life of every country comes a time when multinationals choose to list on its exchanges.
With Standard Chartered Plc choosing to issue Indian depository receipts (IDRs), that moment may have arrived in India.
Events, both local and global, have had a hand to play in this. India is one of the two countries in the world that can hope to grow at double-digit rates in the next few years (though its eventual growth rate will likely be in a high single digit). The Indian stock market appears to be on a roll again, and some analysts see the benchmark index of the Bombay Stock Exchange crossing 22,000 by the end of the year. The index is already at a two-year high.
Standard Chartered admits that there is symbolic value to its IDR sale. To be sure, many multinational firms will see similar symbolic value in selling shares in India. But there will be those that may be tempted to do this for purely financial reasons as well. There’s money to be raised here, and India’s obsession with all things foreign will probably translate into a rush for IDRs as well.