This document provides an overview of American Depository Receipts (ADRs) and Global Depository Receipts (GDRs). It defines ADRs and GDRs, describes the process for issuing them, and outlines their key advantages. It also differentiates between types of ADRs/GDRs, levels of ADR programs, and provides examples of Indian companies that have issued ADRs and GDRs.

1. ADR & GDR
PRESENTED BY:
YASHAL SHAH
DHAVAL KARIA
VRUTANT VAKHARIA
VISHAL JHAMNANI
VIDYALAKSHMI SHARMA
ABHIMANYU SHRIVASTAV

2. TABLE OF CONTENTS
• DEPOSITORY RECEIPTS
• AMERICAN DEPOSITORY RECEIPTS (ADR)
• PROCESS TO ISSUE ADR/GDR
• ADVANTAGES OF ADR
• TYPES OF ADR
• LEVELS OF ADR
• GLOBAL DEPOSITORY RECEIPTS (GDR)
• TYPES OF GDR
• DIFFERENCE BETWEEN ADR & GDR
• EXAMPLES OF ADR & GDR

3. Depository receipts
• Depository receipts are instruments issued by
international depositories (ODB), and they represent
an interest in the underlying shares held by them in
the issuer company (Indian Company). The shares
are usually held by a domestic custodian on behalf
of the depositories in turn issue the depository
receipts, which entitle the holder of the receipts to
get the underlying shares on demand.

4. • DRs are traded on Stock Exchanges in the US,
Singapore, Luxembourg, London, etc.
• DRs listed and traded in US markets are known as
American Depository Receipts (ADRs) and those
listed and traded elsewhere are known as Global
Depository Receipts (GDRs). In Indian context, DRs
are treated as FDI

5. INTERNATIONAL CAPITAL MARKET
INTERNATIONAL BOND MARKET INTERNATIONAL EQUITY MARKET
EURO FOREIGN
GDR ADR
BOND BOND

6. AMERICAN DEPOSITORY RECEIPTS
• ADR is a dollar-denominated negotiable certificate.
It represents a non-US company’s publicly traded
equity. It was devised in the late 1920s to help
Americans invest in overseas securities and to assist
non-US companies wishing to have their stock
traded in the American Markets.
• ADR were introduced as a result of of the
complexities involved in buying shares in foreign
countries and the difficulties associated with trading
at different prices and currency values.

7. Process to issue adr/gdr
Domestic
Issuing Share Custodian
Company certificate bank
(RIL) (SBI)
confirmation
Foreign GDR/ADR
Issue of DR
Depository Holders
(Morgan (Bank Of
Stanley) America)
Payment
Clearing Foreign Stock
Agency Dividend Exchange
(Euro Clear) (NYSE)

8. ADVANTAGES OF ADR/GDR
• Can be listed on any of the overseas stock
exchanges /OTC/Book entry transfer system.
• Freely transferable by non-resident.
• They can be redeemed by ODB.
• The ODB should request DCB to get the
corresponding underlying shares released in favor
of non resident of investors. (Shareholders of issuing
companies).

9. Types of adr
SPONSORED ADR UNSPONSORED ADR
Issued with cooperation of Issued by – broker/dealer
the company whose stock or depository bank without
will underlie the ADR the involvement of
company whose stock
underlies the ADR
Comply with regulatory No regulatory reporting
reporting.
Listing on international Trade on OTC market
Stock Exchanges allowed.

10. Levels of adr
• Level 1- Level 1 depositary receipts are the lowest level of
sponsored ADRs that can be issued. When a company issues
sponsored ADRs, it has one designated depositary who also
acts as its transfer agent.
• Level 1 shares can only be traded on the OTC market and the
company has minimal reporting requirements with the U.S.
Securities and Exchange Commission [SEC].
• Level 2- Level 2 depositary receipt programs are more
complicated for a foreign company. When a foreign company
wants to set up a Level 2 program, it must file a registration
statement with the U.S. SEC and is under SEC regulation.

11. • The advantage that the company has by upgrading their program to
Level 2 is that the shares can be listed on a U.S. stock exchange.
These exchanges include the New York Stock Exchange (NYSE),
NASDAQ, and the American Stock Exchange (AMEX).
• Level 3- A Level 3 American Depositary Receipt program is the
highest level a foreign company can sponsor. Because of this
distinction, the company is required to adhere to stricter rules that
are similar to those followed by U.S. companies.
• Foreign companies with Level 3 programs will often issue materials
that are more informative and are more accommodating to their U.S.
shareholders because they rely on them for capital

12. GLOBAL DEPOSITORY RECEIPTS
• A bank certificate issued in more than one country
for shares in a foreign company. The shares are held
by a foreign branch of an international bank. The
shares trade as domestic shares, but are offered for
sale globally through the various bank branches.
• A financial instrument used by private markets to
raise capital denominated in either U.S. dollars or
Euros.
• The voting rights of the shares are exercised by the
Depository as per the understanding between the
issuing company and the GDR holders.

13. Types of gdr
• Rule 144A GDRs
• Rule 144A GDRs are privately placed depositary
receipts which are issued and traded in
accordance with Rule 144A. This rule was
introduced by the SEC in April 1990 in part to
stimulate capital raising in the US by non-US issuers.
• Non-US companies now have ready access to the
US equity private placement market and may thus
raise capital through the issue of Rule 144A GDRs
without complying with the stringent SEC
registration and reporting requirements.

14. • Regulation S
• With the global integration of the major securities
markets, it is now commonplace to have fungible
securities listed and cleared in more than one
market.
• Just as ADRs allow non-US issuers to access the
important US market, GDRs allow issuers to tap the
European markets.

15. DIFFERNCE BETWEEN ADR & GDR
ADR GDR
American depository receipt Global depository receipt (GDR) is
(ADR) is compulsory for non –us compulsory for foreign company
companies to trade in stock to access in any other country’s
market of USA. share market for dealing in stock.
ADRs can get from level 1 to level GDRs are already equal to high
III. preference receipt of level II and
level III.
ADRs up to level –I need to GDRs can only be issued under
accept only general condition of rule 144 A after accepting strict
SEC of USA. rules of SEC of USA .
ADR is only negotiable in USA . GDR is negotiable instrument all
over the world
Investors of USA can buy ADRs Investors of UK can buy GDRs from
from New york stock exchange London stock exchange and
(NYSE) or NASDAQ luxemberg stock exchange and invest
in Indian companies without any extra
responsibilities .

16. WHICH INDIAN COMPANIES HAVE
ADR & GDR
COMPANY ADR GDR
Bajaj Auto No YES
Dr Reddy’s YES YES
HDFC Bank YES YES
ICICI bank YES YES
ITC NO YES
L&T NO YES
MTNL YES YES
HINDALCO NO YES
INFOSYS YES YES
TECHNOLOGIES
TATA MOTORS YES NO

17. COMPANIES ADR GDR
PATNI COMPUTERS YES NO
SBI NO YES
WIPRO YES YES
VSNL YES YES

18. THANK YOU