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Journalism of Courage
With the markets in India crashing on Tuesday,UK bank Standard Chartered’s India share sale to raise up to about $580 million was roughly 5 percent subscribed on its first day (Tuesday),with most bids at the low end of the price band,stock exchange data showed. Global selldown also kept a lid on demand.
Standard Chartered is selling a total of 240 million shares through Indian depositary receipts,of which 36 million were allocated to six anchor investors at 104 rupees apiece on Monday.
Investors bid for 11.2 million of the 204 million shares on offer at the end of the first day,with most bids at the lower end of the 100-115 rupees a share price range,the stock exchange data showed.
Demand for the Asia-focused bank’s shares is expected to pick up over the next couple of days as institutional investors in India often place their bids towards the close of the issue,said a banker working on the deal.
Analysts said demand from retail investors,who will get a 5 percent discount,was unlikely to be heavy given the meltdown in global stock markets.
The issue will undoubtedly sail through,but the market conditions are playing spoilsport,said Jagannadham Thunuguntla,equity market head at SMC Capital. Also,since this is the first depositary receipts,investors are a bit cautious.
Indian shares skidded 2.7 percent to their lowest close in three-and-a-half months on Tuesday as Europe’s sovereign debt woes sparked heightened fears of larger foreign fund outflows.
Shares in UK insurance giant Prudential fell on their Tuesday debut in Hong Kong and Singapore,weighed down by the global market selloff and concerns that investor support is eroding for its takeover bid for AIG’s Asian life unit.
UBS AG,Goldman Sachs,JM Financial Consultants,Bank of America-Merrill Lynch,Kotak Mahindra Capital and SBI Capital Markets are managing Standard Chartered’s offering. ($147.7 rupees)
