Adrs and gdrs ppt

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Adrs and gdrs ppt

  1. 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. 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. 3.  Any foreigner can purchase these securities The purchaser has a theoretical right to exchange shares ( non-voting right shares for voting rights)
  4. 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. 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. 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. 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. 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. 9.  NRIs and foreigners can buy these using their regular equity trading accounts
  10. 10. Company ADR GDRBajaj Auto No YesDr. Reddys Yes YesHDFC Bank Yes YesHindalco No YesICICI Bank Yes YesInfosys Technologies Yes YesITC No Yes
  11. 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

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