2. Depository Receipts ?????
• Represents shares of Indian company trading on a
foreign stock exchange.
• Depository Receipts (DRs) are negotiable
securities issued outside India by a Depository
bank on behalf of an Indian company
• DRs are traded on Stock Exchanges in the US,
Singapore, Luxembourg, London, etc.
• DR treated as FDI in India
3. GDR ?????
A bank certificate issued in more than one
country for shares in a foreign company.
It is denominated in US $ or Euro’s or
British Sterling
It is very similar to ADR’s
Its not for Indian investors
4. Statutory Requirement
• A company can issue GDRs, if it is eligible to
issue shares to person resident outside India
under the FDI
• For unlisted company
5. How Investor can buy GDRs ?
Provide
notification of
local shares
Deposit Shares
setting
Local broker Local Depository
or Company Depositor bank
Foreign
market
Local
market
Investor
7. Some Companies with GDRs
GDR industry Date of Size of Shares GDR
Companies issue GDR ( in per GDR issue
million $ ) Price
VSNL Tele. 24/3/1997 527 0.5 $ 13.93
million
MTNL Tele. 4/12/1997 418.53 2.0 $ 11.95
million
Ashok Autos 20/3/1995 125 3.0 $ 12.79
leyland million
Ranbaxy Pharma. 20/6/1994 100 1.0 $ 19.98
Lab. million
8. Success of GDR - VSNL
• VSNL successfully issued India’s largest-ever
GDR offering in March 1997, raising about US
$527 million.
• The issue was listed on London Stock exchange
and several times it was over subscribed . It
reduced the govt. ownership in VSNL to 65 %
