ADR & GDR

Presented by Jinisha Hirani Kanan Mehta Sanchita Naik Jatin Kambli

Presented to :- Prof. Shishir Asthana

ADR
A negotiable security issued by a U.S. banks

Represents the underlying securities of a non- US company that trades in US financial markets
ADRs are denominated in U.S. dollars Shares of foreign company represented by ADR are called American depository Shares (ADS)

ADS are traded just like the shares of any US domiciled company

Advantages of ADR It is an easy and cost effective way to buy shares of a

foreign company educes administrative costs and avoids foreign taxes on R every transaction

Helps companies which are listed to tap the American equity markets Any foreigner can purchase these securities The purchaser has a theoretical right to exchange shares (non- voting right shares for voting rights)

GDR
Global Depositary Receipts

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

Advantages & Dis-advantages

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. DRs are liquid because they are based on demand and supply which G is regulated by creating or cancelling shares. DR issuance provides the company with visibility, more larger and G diverse shareholder base and the ability to raise more capital in international markets.

They have foreign exchange risk i.e. currency of issuer is different from currency of GD.

Difference between ADR & GDR

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. epositary receipts traded in USA ADR. D epositary receipts traded in a country other D than USA GDR.

India- ADR and GDR

ADRs and GDRs are an excellent means of investment for NRIs and foreign nationals wanting to invest in India. y buying these, they can invest directly in Indian B companies without going through the hassle of understanding the rules and working of the Indian financial market - since ADRs and GDRs are traded like any other stock. RIs and foreigners can buy these using their regular N equity trading account.

Indian Companies using ADR/GDR

COMPANY Bajaj Auto Dr. Reddys HDFC Bank Hindalco ICICI Bank Infosys Tecnologies ITC L&T MTNL Patni Computers Tata Motors State Bank of India Wipro ADR NO YES YES NO YES YES NO NO YES YES YES NO YES GDR YES YES YES YES YES YES YES YES YES NO NO YES YES

THANK YOU