First IDR in India
Each IDR represents one-tenth of Standard Chartered PLC's UK listed stock. The actual price at which the IDRs are offered for subscription by investors will be known only on Monday May 24th. The Friday closing price of Stanchart's shares at the London Stock Exchange offers a clue as to the likely level around which the eventual price would be determined. At Rs 103.6 (computed based on a 5 per cent discount on the current price of 16.1) ), the stock would discount the bank's calendar 2009 earnings by 13.4 times. The offer would be at a price-book value of 2.1 times, excluding goodwill. The pre-tax dividend yield would be 3.5 per cent.
This price would place the stock at a discount to most of the Indian private sector banks (1.8 to 4.4 times). While StanChart may not match the pace of Indian private sector banks on growth in its asset book, its large size, well-diversified presence across emerging markets, along with a clean balance sheet and strong risk management systems, make the stock a good investment.
The profit before tax (PBT) of StanChart for the year ended December 31, 2009 was Rs 24,044 crore .
Standard Chartered PLC intends to raise $500 million from this offer of IDRs. The primary objective appears to be an India listing as the offer will only add 1.18 per cent to the equity base and shore up the core capital ratio marginally from 8.92 per cent to 9.16 per cent. As of December 2009, the capital adequacy ratio of Standard Chartered PLC stood at a comfortable 16.5 per cent.
This price would place the stock at a discount to most of the Indian private sector banks (1.8 to 4.4 times). While StanChart may not match the pace of Indian private sector banks on growth in its asset book, its large size, well-diversified presence across emerging markets, along with a clean balance sheet and strong risk management systems, make the stock a good investment.
The profit before tax (PBT) of StanChart for the year ended December 31, 2009 was Rs 24,044 crore .
Standard Chartered PLC intends to raise $500 million from this offer of IDRs. The primary objective appears to be an India listing as the offer will only add 1.18 per cent to the equity base and shore up the core capital ratio marginally from 8.92 per cent to 9.16 per cent. As of December 2009, the capital adequacy ratio of Standard Chartered PLC stood at a comfortable 16.5 per cent.