A Presentation on ADR & GDR Submitted To: Ms. Pooja Gadhavi

Submitted By & Presented By: Pioneer Group Dave Rudresh (10) Joshi Bhumika(15) Nayak Akash (29)

What is ADR Introduction ADR - American Depository Receipts Method to raise funds from American Markets.

How ADR Operates Indian companies to adopt US ing

Norms which is also called as GAAP maintain ing practices as per

American Financial Year [From 1stJanuary to 31st December] Also follow variety of stringent standards as

per American norms.

How ADR Operates Cont………. One to comply with the laws of Indian

Companies Act, and the other to comply with the American Laws. The role of the American bank which has

issued these receipts is very crucial (imp), since it is they who stand guarantee to the issued receipts. Hence they do exhaustive (overall) study of the Indian company from all perspectives, and only then issue the ADR to the Indian company.

What is GDR and how it operates The full form of GDR is Global Depository

Receipt. It is not a different financial instrument, as it

may sound, from that of ADR. In fact if the Indian Company which has issued GDRs in the American market wishes to further extend it to other developed and advanced countries such as Europe, then they can sell these ADRs to the public of Europe and the same would be named as GDR.

Global depository receipt (GDR) is compulsory

for foreign company to access in any other country’s share market for dealing in stock.   Indian companies prefer to get GDR due to its

global use for getting foreign investment for own business projects.

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. If the depository receipt is traded in the United

States of America (USA), it is called an American Depository Receipt, or an ADR. If the depository receipt is traded in a country other

than USA, it is called a Global Depository Receipt, or a GDR.

Difference between ADR & GDR

Cont…..

ADRs can get from level -I to level –III. GDRs

are already equal to high preference receipt of level –II and level –III.  ADRs up to level –I need to accept only

general condition of SEC of USA but GDRs can only be issued under rule 144 A after accepting strict rules of SEC of USA . 

Difference between ADR & GDR

Cont…..

GDR is negotiable instrument all over the

world but ADR is only negotiable in USA . Even both GDR and ADR is the proxy way to

sell shares in foreign market by India companies ADRs is not substitute of GDRs but GDRs can use on the place of ADRs .

Indian companies have ADRs and / or GDRs? Company

ADR

GDR

Bajaj Auto

No

Yes

Dr. Reddy’s

Yes

Yes

HDFC Bank

Yes

Yes

Hindalco

No

Yes

ICICI Bank

Yes

Yes

Infosys Technologies

Yes

Yes

ITC

No

Yes

Indian companies have ADRs and / or GDRs? Company

ADR

GDR

L&T

No

Yes

MTNL

Yes

Yes

Patni Computers

Yes

No

Ranbaxy Laboratories

No

Yes

Tata Motors

Yes

No

State Bank of India

No

Yes

VSNL

Yes

Yes

WIPRO

Yes

Yes

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