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GLOBAL DEPOSITORY
RECEIPT (GDR)
PRESENTED BY
Sandhya Singh MBA( IB ) 3rd Semester
CONTENTS
WHAT IS GDR
PROCESS OF GDR
DIAGRAMMIC REPRESENTATION OF
PROCESS OF GDR BENEFITS OF GDRs IMPORTANT FEATURES OF COMPANY FOR ISSUE OF GDRs SOME EXAMPLES USE OF GDRs FOR CORPORATE FINANCING
WHAT IS GDR
the U.S such as London or Luxembourg. Accounting and disclosure standards as far as ADRs are concerned , are more stricter than GDRs It is a negotiable certificate that represents a companys publicly traded equity or debt.
PROCESS OF GDR
The company deposits a large number of its shares
with a bank located in a country where it wants to list indirectly. The bank issues a receipt against these shares, each receipt having a fixed no. of shares as an underlying. These receipts are sold to the people of this foreign country which are listed on the stock exchanges .They behave exactly like regular stock their prices fluctuate depending on demand and supply. These receipts which are traded like ordinary stocks ,are called Depository Receipts .Each receipt amount to a claim on a predefined no. of shares of that company. The issuing bank act as a depository for these shares.
PROCESS OF GDR
Releases Equity Shares DOMESTIC CUSTODIAN BANK Request the Bank to release INDIAN COMPANY
Equity Shares
Give Instructions to issue GDRs OVERSEAS DEPOSITORY BANK
INVESTOR
Convenient to purchase and hold other countries securities.
Enhancing a company visibility status and profile in other countries among investors.
Offer a new avenue for raising equity capital, often a highly competitive rate
Opportunity to earn and invest in other currencies. Invest in high growth economies.
company going public. o If a company has international involvement and a global investor appeal, it can mobilise resources by issuing GDR. o If a company wants to develop an international investor base, it may issue GDR. o If a company wants to mobilise resources globally, it can issue GDR.
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