StanChart to launch equity issuance business, issue Rs3000 crore IDRs

Standard Chartered aims to launch an equity issuance business in India this year, its India chief executive said, joining a fiercely competitive marketplace to underwrite share sales in Asia's third-largest economy.

"We are in the process of putting together a business around equities including ECM (equity capital markets). It will start to roll out from the middle of this year in pieces, but materially I think it will be 2011 when we see a bigger chunk of revenues coming from there," Neeraj Swaroop said on Tuesday, according to a CNBC-TV18 report.

Swaroop said Standard Chartered will build its equities business by serving the bank's corporate clients."Our business model in equities will be centered on providing an equity suite of products to our existing customers," he said. "Because they already bank with us for whatever else we do, there will be some reason for them to give us the mandate for equities."

The British bank had yesterday filed a draft red herring prospectus related to its planned public share offering in India. The bank plans to raise Rs3,000 crore (over $500 million) via issue of Indian Depository Receipts (IDRs). The bank said that this would be the first listing of IDRs by an overseas company in India.(See: StanChart files for India listing of depository shares)

The bank said it had hired UBS AG, Goldman Sachs, JM Financial Consultants, DSP Merrill Lynch, Kotak Mahindra Capital and SBI Capital Markets to manage the offering.

The bank may dilute about 1.3 per cent of its capital to build its brand in a country that provides a fifth of its total profits.