Standard Chartered IDR seen heavy sell-off on Monday
The only IDR listed on the Indian stock exchanges is the Standard Chartered IDR (Indian Depository receipts) which has seen heavy sell-off on Monday due to no arbitrage opportunity. Its shares closed at17.53% down at Rs 94.55.
SEBI had introduced a new rule on the IDR convertibility and investors are not aware of this latest rule so they fail to earn profit from the difference in the price of the Standard Chartered stock (on London and Hong Kong bourses) and its Indian Depository Receipt (IDRs). Standard Chartered has enough liquidity in the IDRs and there is no need to convert the IDRs into the underlying shares.
As per new rules of SEBI the IDR’s which are eligible for conversion into underlying shares after their one-year lock-in period ends on June 11 will not be possible.
Singapore’s Credit Suisse Limited have sold 3,498,404 94.37 shares of the company at Rs 94.37 a share and 2,051,004 shares at Rs 97.45. Deutsche Securities Mauritius sold-off 13 lakh shares at Rs 96.32 on Monday. While a Mauritius Swiss Finance Corporation sold 45,45,367 equity shares at Rs 95.29 and 70,05,716 shares at Rs 95.70.
Moreover, 7.5 lakh shares were bought by Swiss Finance at Rs 93.65 a share yesterday. Nearly 30 lakh shares at Rs 96.98 were purchased by ICICI Prudential MF (Dynamic Fund).