What are ADRs & GDRs?

ADRs and GDRs are two types of depositary receipts with other types including European depositary receipts (EDRs), Luxembourg depositary receipts (LDRs), and Indian depository receipts (IDRs). ADRs are shares of a single foreign company issued in the U.S.

What does GDR mean?

The full form of GDR is Global Depository Receipt. Global Depository Receipt (GDR) are certificates issued by a depository bank, which purchases foreign company shares and deposits them in the account. GDRs are commonly used to raise capital from international investors through public stock offerings or private placement.

What is a global depositary receipt (GDR)?

A global depositary receipt (GDR) is a negotiable financial instrument issued by a depositary bank. It represents shares in a foreign company and trades on the local stock exchanges in investors' countries. GDRs make it possible for a company (the issuer) to access investors in capital markets beyond the borders of its own country.

How to get GDRs in India?

Only companies with a three-year sound financial record can get access to GDRs. Thus, Indian companies should get clearance from the Ministry of Finance and Foreign Investment Promotion Board (FIPB) to obtain GDRs. The depository bank can convert GDRs into shares and trade them on the domestic stock exchanges.