Standard Chartered IDR closes slightly below Listing Price despite Strong Markets

Standard Chartered IDR closed below its listing price of Rs 104 in the Indian Market.A Review of Standard Chartered IDR had revealed severe disadvantages for retail investors.In Seven Reasons Why StanChart IDR was not a good buy, I had listed out the shortcomings of the IDR instrument and Standard Chartered as a stock.It seems that I was right  as Standard Chartered IDR closed slightly below its list price despite listing itself at the lower end of the price band.This comes despite Global Markets being strong in the past 2-3 days with the Pound also recovering losses against the Dollar.

Standard Chartered IDR is quite important to the company itself but also for the broader Indian stock market.The failure of this issue will be a setback both for foreign company issuers and investors in India.There are a number of IDR shortcomings which needs to be rectified before  more such IDR issues are allowed.Also some concrete reasons behind the issuance of an IDR would also help.

Standard Chartered Slips Below Offer Price in Mumbai Debut – Bloomberg

Standard Chartered Plc slipped below the offer price in its trading debut in Mumbai after the U.K. lender became the first company to sell Indian Depository Receipts.The stock traded 0.1 percent lower at 103.95 rupees as of 2:02 p.m. local time, after earlier climbing as much as 3.9 percent. London-based Standard Charters sold the shares last month at 104 rupees apiece.

Standard Chartered plans to use the proceeds to reach more corporate clients in Asia’s second-fastest growing major economy. The lender raised $540 million, at the lower end of its proposed offering, as equities slumped worldwide and Europe’s debt crisis made investors wary of western banks.