Adr & Gdr

AMERICAN DEPOSITARY RECEIPTS

ADR- IN A NUTSHELL… Domestic Stock Exchange

SHARES

U.S. AMERICA

CERTIFICATE

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An ADR is a negotiable U.S. certificate representing ownership of shares in an non-US corporation. ADR’s are quoted and traded in U.S. Dollars in the US securities market. Also, the dividends are paid to investor in US dollars.

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ADRs were specifically designed to facilitate the purchase, holding and sale of non-US securities by US investor, and to provide a corporate finance vehicle for non-US companies.

ABOUT ADR…  ADRs

first introduced in 1927  The stock of many non US companies, traded on US exchanges through the use of ADRs.  ADRs enable US investors to buy shares in foreign companies without undertaking cross-border transactions.  The shares of the non-US corporation trade on a non-US exchange, while the ADRs trade on a US exchange.

Types of ADR…  Unsponsored ADR  Sponsored ADR

Program

Program

Level I

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Level II

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Level III

Specimen Of ADR …

GLOBAL DEPOSITARY RECEIPTS

GDR-IN A NUTSHELL…

 negotiable

instrument denominated in freely convertible currency.

 Global  It

funding vehicle for raising capital.

can be traded globally in exchange or otc market.

About GDR… 

In may 1992 by reliance industries US $ 150 mn.

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After that market pulled down due to several reasons.

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Political instability, falling markets, liquidity crunch etc.

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Biggest Asian GDR issued by SBI in 1997 for US $ 350 mn.

Indian Companies Issuing GDR…

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Bajaj Auto

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Dr. Reddys

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HDFC Bank

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Hindalco

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ICICI Bank

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Infosys Technologies

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ITC

Benefits Of ADR/GDR For…

NRI cant invest directly… If you are a foreign born individual investor whose parents or grand parents were never part of India, Indian Capital Markets are closed for you for direct investment. • Indian rupee is still controlled by Indian government for Capital account transactions. • This means, resident Indian nationals are not allowed to invest in overseas stocks and likewise, foreign nationals can not invest in Indian markets. •

Process for ADR/GDR… Releases Equity Shares Requests the bank to release of equity Shares

Requests for buying ADR/GDR

Gives Instructions to Issue ADRs/ GDRs

Issue ADRs/GDRs

ADR VS GDR…

THANK YOU!