Depository Receipt A Negotiable Financial Instrument Covering GDR, ADR, IDR

1. Created By – Arvind Kumar Bhardwaj 1
A Negotiable Financial Instrument
Covering GDR, ADR, IDR
Depository Receipt

2. Created By – Arvind Kumar Bhardwaj 2
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Prepared by: Arvind Kumar Bhardwaj

3. Created By – Arvind Kumar Bhardwaj 3
C O N T E N T S
CONTENTS ------------------------------------------------------------------------------------------------------------------------------- 3
1 CROSS BORDER INVESTING AND CAPITAL RAISING---------------------------------------------------------------------- 4
2 DEPOSITORY RECEIPT --------------------------------------------------------------------------------------------------------- 4
2.1 AMERICAN DEPOSITARY RECEIPT(ADR) ---------------------------------------------------------------------------------------- 4
2.2 GLOBAL DEPOSITARY RECEIPT(GDR) ------------------------------------------------------------------------------------------- 5
2.3 INDIAN DEPOSITARY RECEIPT(IDR) --------------------------------------------------------------------------------------------- 6
3 BENEFITS OF DEPOSITORY RECEIPTS---------------------------------------------------------------------------------------- 8
4 ONLINE DEPOSITORY RECEIPT REGISTRY----------------------------------------------------------------------------------- 9
5 REFERENCE---------------------------------------------------------------------------------------------------------------------10
Table of Figures
Figure 1 ADR - List of all the Indian Companies listed on New York Stock Exchange under the
American Depository Receipts (ADR) category ................................................................................. 5
Figure 2 GDR - List of all the Indian Companies listed on more than one country’s stock exchange
under the Global Depository Receipts (GDR) category and can be traded globally. ........................ 6
Figure 3 IDR - List of foreign companies listed on Indian Stocks Exchanges under the Indian
Depository Receipts (IDR) category................................................................................................... 7
Figure 4 Online DR Registry ............................................................................................................... 9

4. Created By – Arvind Kumar Bhardwaj 4
JPMorgan established the first depositary receipt program in 1927
Infosys Technologies was the first company to issue ADR in 1999
1 Cross Border Investing and Capital Raising
Increasing globalization and investor appetite for diversification offer a unique opportunity to
companies looking to tap a new investor base, expand awareness, or raise capital. By creating a
depositary receipts, they can gain the flexibility and access they need to achieve their company’s
strategic goals. Depositary receipts hold special appeal for investors because they can make
investing in a company beyond the investor’s home borders easy and convenient. That eases
fuels investor appetite, which in turn has driven explosive growth in the depositary receipt
market.
2 Depository Receipt
A depositary receipt is a negotiable financial instrument issued by a bank to represent a foreign
company's publicly traded securities. The depositary receipt trades on a local stock exchange.
Depositary receipts make it easier to buy shares in foreign companies because the shares of the
company don't have to leave the home state.
2.1 American Depositary Receipt(ADR)
An American depositary receipt (ADR) is a negotiable security that represents securities of a non-
US company that trades in the US financial markets. Securities of a foreign company that are
represented by an ADR are called American depositary shares (ADSs).
Shares of many non-US companies trade on US stock exchanges through ADRs. ADRs are
denominated and pay dividends in US dollars and may be traded like regular shares of stock.
Over-the-counter ADRs may only trade in extended hours.
Unsponsored ADR vs. sponsored ADR
An American depositary receipt (ADR) issued by a depositary bank without the involvement or
participation - or even the consent - of the foreign issuer whose stock underlies the ADR. The
issuer therefore has no control over an unsponsored ADR, in contrast to a sponsored ADR where
it retains control. Unsponsored ADRs are usually established by depositary banks in response to
investor demand. Shareholder benefits and voting rights may not be extended to the holders of

5. Created By – Arvind Kumar Bhardwaj 5
these particular securities. Unsponsored ADRs generally trade over-the-counter (OTC) rather than
on United States exchanges.
Figure 1 ADR - List of all the Indian Companies listed on New York Stock Exchange under the
American Depository Receipts (ADR) category
Source: http://www.indiainfoline.com/MarketStatistics/ADR Retrieved on 23 September 2013
2.2 Global Depositary Receipt(GDR)
A global depository receipt or global depositary receipt (GDR) is a certificate issued by
a depository bank, which purchases shares of foreign companies and deposits it on the account.
GDRs represent ownership of an underlying number of shares.
Global depository receipts facilitate trade of shares, and are commonly used to invest in
companies from developing or emerging markets.

6. Created By – Arvind Kumar Bhardwaj 6
Figure 2 GDR - List of all the Indian Companies listed on more than one country’s stock exchange
under the Global Depository Receipts (GDR) category and can be traded globally.
Source: http://www.indiainfoline.com/MarketStatistics/GDR Retrieved on 23 September 2013
2.3 Indian Depositary Receipt(IDR)
An Indian Depository Receipt is an instrument denominated in Indian Rupees in the form of a
depository receipt created by a Domestic Depository (custodian of securities registered with
the Securities and Exchange Board of India) against the underlying equity of issuing company to
enable foreign companies to raise funds from the Indian securities Markets.

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Standard Charted PLC is only IDR as on date September 23, 2013
Figure 3 IDR - List of foreign companies listed on Indian Stocks Exchanges under the Indian
Depository Receipts (IDR) category
Source: http://www.indiainfoline.com/MarketStatistics/IDR Retrieved on 23 September 2013

8. Created By – Arvind Kumar Bhardwaj 8
3 Benefits of Depository Receipts
There are many benefits of depository receipt for issuer (corporations) and investor. I have listed
I have listed the main benefits here.

9. Created By – Arvind Kumar Bhardwaj 9
4 Online Depository Receipt Registry
There is good online DR registry available where you can filter the DR on the basis of different
criterion like region, country, industry, DR exchange, depository, date, sponsorship and capital
raised indicator.
Other good feature is ‘download to excel’ option so we can further analysis and create chart etc if
required.
Below is the screen shot for online DR registry.
Figure 4 Online DR Registry
Source: http://www.adrbnymellon.com/dr_directory.jsp Retrieved on 23 September 2013

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5 Reference
❖ http://www.adrbnymellon.com
❖ http://en.wikipedia.org
❖ http://www.nptel.iitm.ac.in
❖ http://www.nyse.com/
❖ http://www.londonstockexchange.com/home/homepage.htm
❖ www.investopedia
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