FINANCIAL MANAGEMENT

PRESENTATION ON :-

GLOBAL DEPOSITARY RECEIPTS

NAME ROLL NO -

RITESH TILAK 35

Depository Receipts ?????

• Represents shares of Indian company trading on a foreign stock exchange.

• Depository Receipts (DRs) are negotiable securities issued outside India by a Depository bank on behalf of an Indian company

• DRs are traded on Stock Exchanges in the US, Singapore, Luxembourg, London, etc.

• DR treated as FDI in India

GDR ?????

A bank certificate issued in more than one country for shares in a foreign company.

It is denominated in US $ or Euro’s or British Sterling

It is very similar to ADR’s

Its not for Indian investors

Statutory Requirement

• A company can issue GDRs, if it is eligible to issue shares to person resident outside India under the FDI

• For unlisted company

How Investor can buy GDRs ?

Local market

Local brokeror Company

Foreign market

Local Depositor

Depository bank

Investor

Buy Shares from

Deposit Shares

Provide notification of local shares setting

Issue GDRs

Buy or Sell of GDRs

Chart of GDR’s Industry wise

Some Companies with GDRs

GDR Companies

industry

Date of issue

Size of GDR ( in million $ )

Shares per GDR

GDR issue Price

VSNL Tele. 24/3/1997

527 million

0.5 $ 13.93

MTNL Tele. 4/12/1997

418.53 million

2.0 $ 11.95

Ashok leyland

Autos 20/3/1995

125 million

3.0 $ 12.79

Ranbaxy Lab.

Pharma.

20/6/1994

100 million

1.0 $ 19.98

Success of GDR - VSNL

• VSNL successfully issued India’s largest-ever GDR offering in March 1997, raising about US $527 million.

• The issue was listed on London Stock exchange and several times it was over subscribed . It reduced the govt. ownership in VSNL to 65 %