StanChart IDRs gain on Sebi nod for partial fungibility

The market regulator decided to allow partial redemption up to 25% of the IDRs originally issue in a financial year

Indian depository receipts (IDRs) of Standard Chartered Plc have rallied 5% at Rs 101 after the market regulator the Securities and Exchange Board of India (Sebi) allowed partial conversion of IDRs into underlying shares.

 “To retain the domestic liquidity, it is decided to allow partial fungibility of IDRs (i.e. redemption/conversion of IDRs into underlying equity shares) in a financial year to the extent of 25% of the IDRs originally issued,” Sebi said in a circular.

The capital market regulator’s move is aimed at improving liquidity in the instrument by making it more attractive for investors. Currently, Standard Chartered Plc is the only foreign entity that has listed its IDRs on the Indian bourses.

The IDR opened at Rs 101 and hit a high of Rs 104 on the NSE. The counter has seen over four-fold surge in trading volumes today. As many as a combined 4.38 million shares have already changed hands so far against an average sub one million shares that were traded daily in past two weeks.