Hedge funds, FIIs dump StanChart's IDRs

New Sebi norms prevent conversion of the bank’s Indian Depository Receipts into its shares. Hedge funds and foreign institutional investors (FIIs), which were eyeing arbitrage gains by building large positions in Standard Chartered Plc’s Indian Depository Receipts (IDRs), sold them in huge quantities.

According to bulk deal data on stock exchanges, Credit Suisse (Singapore) sold 5.5 million Standard Chartered IDRs on Monday. Others such as Deutsche Securities Mauritius (1.3 million IDRs) and Swiss Finance Corporation (10.8 million IDRs) also sold Standard Chartered IDRs, data showed. On the other hand, ICICI Prudential MF bought 2.98 million Standard Chartered IDRs

Every 10 IDRs of Standard Chartered Plc represent one equity share of the bank whose shares are trading at nearly 16 pounds or a little over Rs 1,200 on the London Stock Exchange (LSE). At Friday’s close, 10 IDRs would have cost investors Rs 1,148.50, implying a discount of nearly five per cent to the LSE price.