Skip to main content

ADR VS GDR VS IDR

1) AMERICAN DEPOSITORY RECEIPT (ADR)

The term American depositary receipt (ADR) refers to a negotiable certificate issued by a U.S. depositary bank representing a specified number of shares usually one share of a foreign company's stock. The ADR trades on U.S. stock markets as any domestic shares would. ADRs offer U.S. investors a way to purchase stock in overseas companies that would not otherwise be available. Foreign firms also benefit, as ADRs enable them to attract American investors and capital without the hassle and expense of listing on U.S. stock exchanges.

2) GLOBAL DEPOSITORY RECEIPT (GDR)

A global depositary receipt (GDR) is a bank certificate issued in more than one country for shares in a foreign company. GDRs list shares in two or more markets, most frequently the U.S. market and the Euromarkets, with one fungible security. GDRs are most commonly used when the issuer is raising capital in the local market as well as in the international and US markets, either through private placement or public stock offerings. A global depositary receipt (GDR) is very similar to an American depositary receipt (ADR), except an ADR only lists shares of a foreign country in the U.S. markets.

3)  INDIAN DEPOSITORY RECEIPT (IDR)

Indian Depository Receipt (IDR) is a financial instrument denominated in Indian Rupees in the form of a depository receipt. The IDR is a specific Indian version of the similar global depository receipts. It is created by a Domestic Depository (custodian of securities registered with the Securities and Exchange Board of India) against the underlying equity of issuing company to enable foreign companies to raise funds from the Indian securities Markets. The foreign company IDRs will deposit shares to an Indian depository. The depository would issue receipts to indian investors against these shares. The benefit of the underlying shares (like bonus, dividends etc.) would accrue to the depository receipt holders in India.

Comments

Post a Comment

Popular posts from this blog

THESIS ON CENTRAL DEPOSITORY SERVICES (INDIA) LIMITED (CDSL)

Central Depository Services (India) Limited (CDSL) is very good stock to hold for long-term investors and I am presenting a thesis on it which is as follows: ·        Its fundamentals are very strong and impressive which can be understood from the following points:   Ø   It is a debt free company. Ø   It has delivered a good profit growth of 24.10% CAGR over last 5 years. Ø   It has been maintaining a healthy dividend payout ratio of 42.69%. Ø   It has a healthy Cash from Operations. Ø   It has a healthy ROE and ROCE of more than 20%. Ø   It has a very healthy Operating and PAT Margins of 75.51% and 58.55% respectively as per the financials of F.Y. 2020-21. ·       The penetration to equity markets in India is still very low as roughly about 3% of India’s population invests in equity markets as compared to 55% in US, which suggests that there’s lots of headroom for India’s stock marketplace p...
2 comments
Read more

UNDERSTANDING ESG FRAMEWORK

Most investors focus on the profit generating ability of a business to make investment decision. However, over the last few years, the societal discussions about companies and businesses have also started focusing on sustainable development, and corporate social responsibility.  This has given traction to investment theme that is focused on Environment, Social and Corporate governance (ESG). Initially this framework was used by handful of “Impact” investors. But this framework has gradually gained traction as these frameworks also provide commercial value. Under this framework investors evaluate companies based on these criteria: (i) How does the company’s activities affect the environment? Companies with low carbon emission and low contributors to pollution rank better than others.  (ii) What are the activities that the company perform in terms of social development? This includes focus on human rights, gender equality and many such social factors. Companies that contri...
Post a Comment
Read more

THESIS ON JAMNA AUTO INDUSTRIES LIMITED

ABOUT THE COMPANY The company was incorporated in 1954. It manufactures  high-quality  suspension solutions  for a wide range of commercial vehicles. Its product range includes  Leaf Springs, Parabolic Springs, Lift Axles & Air Suspensions.  It is a well- known brand in automotive Industry catering to all  OEM's, Replacement Market  and Export Market. For Springs – they have the highest annual capacity of over  3,00,000 MT. It offers a complete line of suspension solutions for Indian commercial vehicles ranging from tippers, tractors, trailers, ICVs, and Buses. It caters to OEM, after market, and overseas markets. MANUFACTURING CAPACITY The company has 10 plants all over India, manufacturing high quality suspension systems. The plants comprise state-of-the-art machinery and advanced technologies. All the plants are ISO certified, adhere to international safety standards, and are strategically located in close proximity to OEMs  ...
Post a Comment
Read more