adr gdr
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ADR stands for American Depository Receipt. Similarly, GDR stands
for Global Depository Receipt. Let’s understand these better. Every publicly traded company issues shares These shares are sometimes also listed and traded on foreign stock exchanges But to list on a foreign stock exchange, the company has to comply with the policies of those stock exchanges. But many good companies get listed on these stock exchanges indirectly – using ADRs and GDRs.
A depository is like a bank wherein the deposits are securities (viz. shares, debentures, bonds, government securities, units etc.) in electronic form at the request of the shareholder through the medium of a Depository Participant If an investor wants to utilize the services offered by a Depository, the investor has to open an account with the Depository through a Depository Participant ADR- American Depositary Receipts A negotiable certificate issued by a U.S. bank Represents a specified number of shares of a foreign company ADRs are denominated in U.S. dollars. Give Non-U.S. companies access to the US capital markets 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 Provide exposure to the global markets (except U.S.) outside the issuer’s home market.
Let us take Patni example – trades on the Indian stock at around Rs.460/-
This is equivalent to US$ 10 – assume for simplicity Now a US bank purchases 10000 shares of Patni and issues them in US in the ratio of 10:1 This means 1 ADR purchased is worth 10 Patni shares. Quick calculation means 1 ADR = US $100 Once ADR are priced and sold, its subsequent price is determined by supply and demand factors, like any ordinary shares.
COMPANY SHARE DEPOSITARY BANK INVESTOR
for Global Depository Receipt. Let’s understand these better. Every publicly traded company issues shares These shares are sometimes also listed and traded on foreign stock exchanges But to list on a foreign stock exchange, the company has to comply with the policies of those stock exchanges. But many good companies get listed on these stock exchanges indirectly – using ADRs and GDRs.
A depository is like a bank wherein the deposits are securities (viz. shares, debentures, bonds, government securities, units etc.) in electronic form at the request of the shareholder through the medium of a Depository Participant If an investor wants to utilize the services offered by a Depository, the investor has to open an account with the Depository through a Depository Participant ADR- American Depositary Receipts A negotiable certificate issued by a U.S. bank Represents a specified number of shares of a foreign company ADRs are denominated in U.S. dollars. Give Non-U.S. companies access to the US capital markets GDR- Global Depositary Receipts A bank certificate issued in more than one country for shares in a foreign company Offered for sale globally through the various bank branches Shares trade as domestic shares Provide exposure to the global markets (except U.S.) outside the issuer’s home market.
Let us take Patni example – trades on the Indian stock at around Rs.460/-
This is equivalent to US$ 10 – assume for simplicity Now a US bank purchases 10000 shares of Patni and issues them in US in the ratio of 10:1 This means 1 ADR purchased is worth 10 Patni shares. Quick calculation means 1 ADR = US $100 Once ADR are priced and sold, its subsequent price is determined by supply and demand factors, like any ordinary shares.
COMPANY SHARE DEPOSITARY BANK INVESTOR
