UK-based lender Standard Chartered Plc was in the process of finalising the size and time of its Indian Depository Receipt (IDR) issue, after having secured the approval of the RBI, sources said.
RBI guidelines require issuers of IDRs to secure the approval of the sectoral regulator, which in this case is RBI itself. IDRs enable foreign companies to raise resources from India the same way American or Global Depository Receipts (ADRs/GDRs) enable Indian companies to raise resources overseas. ADRs and IDRs are derivatives instruments that derive their value from the shares deposited with custodians.
In January this year, Stanchart had filed a letter of intent with the capital markets regulator, the Securities and Exchange Board of India (SEBI). According to sources, SEBI has expressed its approval to the letter of intent but the size and the timing of the issue have yet to be finalised by the bank’s board. Once these details are firmed up, the bank will have to file a draft red herring prospectus (DRHP) with the regulator.