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Adrs and gdrs ppt
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Adrs and gdrs ppt

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  • 1.  A negotiable certificate issued by a U.S. bank Represents a specified number of shares of a foreign company ADRs are denominated in U.S. dollars
  • 2.  It is an easy and cost effective way to buy shares of a foreign company Reduces administrative costs and avoids foreign taxes on every transaction Helps companies which are listed to tap the American equity markets
  • 3.  Any foreigner can purchase these securities The purchaser has a theoretical right to exchange shares ( non-voting right shares for voting rights)
  • 4.  A bank certificate issued in more than one country for shares in a foreign company Offered for sale globally through the various bank branches Shares trade as domestic shares
  • 5.  GDRs allow investors to invest in foreign companies without worrying about foreign trading practices, laws Easier trading, payments of dividends are in the GDR currency GDRs are liquid because they are based on demand and supply whichis regulated by creating or cancelling shares
  • 6.  GDR issuance provides the company with visibility, more larger and diverse shareholder base and the ability to raise more capital ininternational markets However, they have foreign exchange risk i.e. currency of issuer isdifferent from currency of GDR
  • 7.  Both ADR and GDR are depository receipts, and represent a claim on the underlying shares. The only difference is the location where they are traded. Depositary receipts traded in USA - ADR Depositary receipts traded in a country other than USA -GDR
  • 8.  ADRs and GDRs are an excellent means of investment for NRIs andforeign nationals wanting to invest in India. By buying these, they can invest directly in Indian companies without going through the hassle of understanding the rules and working of the Indian financial market - since ADRs and GDRs are traded like anyother stock
  • 9.  NRIs and foreigners can buy these using their regular equity trading accounts
  • 10. Company ADR GDRBajaj Auto No YesDr. Reddys Yes YesHDFC Bank Yes YesHindalco No YesICICI Bank Yes YesInfosys Technologies Yes YesITC No Yes
  • 11. Companies ADR GDRL&T No YesMTNL Yes YesPatni Computers Yes NoRanbaxy Laboratories No YesTata Motors Yes NoState Bank of India No YesWIPRO Yes Yes