Citi Leading Foreign Depository For Gdrs, Says Report
Citibank NA and the Bank of New York have received the maximum mandates as foreign depositories for Indian GDR offerings.
From 1992 to date, Indian corporates have raised $5,843.42 million through 60 global depository receipts and 6 Euro-convertible bond issues, according to a report on overseas depositories by the Mumbai-based firm Skindia Finance, which tracks GDR markets. Currently only four overseas depositories The Bank of New York, Bankers Trust, Citibank NA and Morgan Guaranty have handled all Indian GDR offerings.
Citibank has emerged as the leader in getting mandates in terms of number of issues and the amount of the issues. Of the total number of issues hitting the markets, 39 per cent of the depository work has been handled by Citibank.
A total of 547,971,793 global depository receipts have been issued for these 66 floats. The GDRs mandated to Citibank contain 38.44 per cent of the total GDRs followed by The Bank of New York with 32.18 per cent of the GDRs. The report states that there has been a marked shift in the quality of GDRs in 1996, with blue chip offerings accounting for 90 per cent of the total amount raised through GDRs. The average size was also the highest in any year and for the first time issues were made at an average premium (2.7 per cent).
The largest GDR issue of $369.95 million in October 1996 was mandated by The Bank of New York. RIL was the first Indian corporate to raise funds using the GDR route in May 1992 with a $150.4 million issue, which was bagged by The Bank of New York.
In 1993, a total of $510.6 million issues were raised through 7 GDR offerings. The year witnessed the emergence of two other depositories, Bankers Trust and Morgan Guaranty.
This led to increased competition, with The Bank of New York, Bankers Trust and Citibank mandating 28.7 per cent of the issues.
The scenario changed in the next year, with a flood of issues in the Euro-markets, with $3,373 million raised through 43 issues and during the year Citibank obtained the mandates for 17 issues amounting to $1,362.9 million.