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PRESENTATION

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

These are similar to ADR but traded outside

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

Request for buying GDRs INVESTORS GDRs

BENEFITS OF GDRs FOR


COMPANIES
Broadening and diversifying a company investors base.

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.

IMPORTANT FEATURES OF COMPANY FOR THE ISSUE OF GDR


o Either be a publicly quoted company or

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.

SOME MAJOR GDRs ISSUED BY INDIAN COMPANIES


Dr. REDDY S HDFC BANK ITC HINDALCO WIPRO L & T ICICI BANK INFOSYS Technologies STATE BANK OF INDIA RANBAXY Laboratories MTNL VSNL

USE OF GDRs FOR CORPORATE FINANCING


To raise debt or equity capital.

To diversify their shareholder base.


To increase demand for their securities. To create dollar denominated securities for tax

efficient acquisitions. To enhance their global image.

THANKS