How do we apply for the IDR?

The same way you apply for an IPO, I am skipping this, looks expensive.

How to analyze the pricing of IDRs?

I'm keeping my money for "bargains" in the secondary market.

The same way as we analyze any usual IPO.

After all, for every IDR, there is an underlying stock.

In case of Standard Chartered IDR, 10 IDRs will be equal to 1 share of Standard Chartered PLC, which is already listed on London and Hong Kong stock exchanges.

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Guys, applying for this one or giving it a miss?

Pretty low level of activity for an IPO (IDR) .

I guess it's got to do more with the prevailing market conditions.

The low level of activity is due to the following :-

a) Domestic Insurance companies are not allowed to invest in IDRs as per IRDA directive.

b) FIIs can directly buy from London Stock Exchange (LSE) and Hong Kong Stock Exchange (HKSE) where the stock is listed.

c) For Retail Perspective :

1 IDR stands for one-tenth of a Stan Chart share, and any dividend declared by Stan Chart will be apportioned according to your IDR holdings.

Dividend tax will be assessed at 30% (plus 10% surcharge) on all the dividends you get from these IDRs.

In the case of IDRs, the short term capital gains will be charged at 30%.

Investors will need to pay a 20% long term capital gains plus 3% surcharge on IDRs.

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I am not applying for the IDR.

Taxation rates aren't a big issue, but I don't find the valuations attractive enough.

Also, the bank has exposure to Chinese, US and European economies and thus an investor will have to track the bank more closely.

I think it is better for smaller Indian investors to invest in Indian companies, which are much easier to track.

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I also believe that the bank exposure is everywhere.

But I was surprised when listened one of the interview on CNBC TV recently, stating that they have zero exposure in Spain, Portugal, Greece and other part of Euro.

Most of Standard Chartered's business comes from Asia (nearly 80%).

Thus, the bank relatively insulated from the current crisis in EU.

However, many Asian economies have a strong correlation to the western economies.

e.g.

China depends a lot on exports to the US/EU.
Middle-East Asia depends on oil exports.

Thus, the growth and future prospects of the bank greatly depend on the economic conditions in US/EU.

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Does anyone know the story here? Why is it down 20%?

Standard Chartered is listed at the London Stock Exchange and Hong Kong Stock Exchange.

Prices in these global markets are higher than in the Indian market and investors were hoping to make money by using this price difference.

Investors believed that they could convert their IDRs into shares and sell the shares in the global markets.

However, SEBI has said that such a conversion won't be allowed.

Redemption will only be allowed for illiquid IDRs. Standard Chartered's IDR is very liquid.

Business Line : Markets / Stock Markets : IDR redemption allowed only if liquidity is low: SEBI

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