StanChart IDRs get lukewarm response on debut

The Indian depository receipts (IDRs) of Standard Chartered Plc, the UK-based bank that gets most of its earnings from Asia, the Middle East and Africa, received a lukewarm response on their India debut.

The first-ever IDRs traded at Rs 103.05 in Mumbai, compared with the issue price of Rs 104, as the benchmark Sensex gained 0.84 per cent. The IDRs traded between Rs 108 and Rs 100.60.

An IDR is a receipt denominated in Indian currency and created by a domestic depository against underlying equity shares of the issuer company, Standard Chartered Plc, in this case. Ten IDRs represent one share of Standard Chartered.

At 5:15 pm IST, Standard Chartered Plc’s shares traded at 1,612.50 pence on the London Stock Exchange, down 36.5 pence from their previous close. With one pound at Rs 68.506 on Friday, this translates into Rs 110.46 per IDR.

“The price of Standard Chartered IDR is simply a derivative of the bank’s stock price on LSE,” said Saurabh Mukherjea, head of Indian equities at UK-based Execution Noble. “There is no price formation taking place here.’’