Tuesday, December 28, 2010

European Depositary Receipt (EDR)

After learning ADRs and GDRs and its difference, you should increase your learning by studying about EDRs. EDR means European depositary receipt. If  any company wants to sell his shares in European countries, you need European depositary receipt. This receipt is provided by European banks. Suppose, an Indian company want to sell the shares in France. For this, Indian company has to acquire EDR after paying its minimum money. This is usable in the limited countries in Europe. Many European countries accept GDRs as substitute of EDRs.
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American Depository Receipts

Definition of ADRs

American depository receipt is the receipt for trading of non US Company in the stock market of USA. IF any non USA company is interested to trade in USA stock market, then it can receive ADR level one, ADR level two and ADR level three. ADR for level one can easily get after accepting the conditions of SEC of USA but major problem is that this ADR can only use for getting investment from USA and it can not be used for getting investment money from any other country. It is the reason that Indian company prefers to get GDRinstead of ADR. Students who are studying finance should understand one thing that ADRs is compulsory to sell shares in USA. No one can sell shares with GDRs as the substitute of ADRs. Any company can start trading in USA stock exchange after buying ADRs from New York Stock exchange or NASDAQ.



Indian ADR Trading in US

ADR ISSUESYMBOLINDUSTRYEXCH
 DR. REDDY'S LABORATORIES LTD.RDYPharmaceuticalNYSE
 HDFC BANK LTD.HDBBanksNYSE
 ICICI BANK LTD.IBNBanksNYSE
 INFOSYS TECHNOLOGIES LIMITEDINFYTechnology ServicesNASDAQ
 MAHANAGAR TELEPHONE NIGAM LIMITEDMTEFixed Line Comm.NYSE
 REDIFF.COM INDIA LTDREDFTechnology ServicesNASDAQ
 SATYAM COMPUTER SERVICES LIMITEDSAYTechnology ServicesNYSE
 SIFY LTD.SIFYTechnology ServicesNASDAQ
 VIDESH SANCHAR NIGAM LIMITEDVSLFixed Line Comm.NYSE
 WIPRO LTD.WITTechnology ServicesNYSE
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GDRs And its Importance


Definition of GDRs

GDRs mean global depository receipts. It is negotiable and transferable from one body to another. It is also evidence of ownership of a company's shares . When a bank purchases shares of foreign company, at that time it issues a certificate, that certificate is called global depository receipt.

Suppose A USA based company wants to buy the shares of Indian company, then it only possible by getting GDRs. USA Company can buy Indian company shares by the help of his bank. Bank takes some charges and issues GDR.
Importance of GDRs

If any company gets GDRs for his purchased shares, then these can be sold in any stock market of world through global network of banks and financial institutions.

Global Depositary Receipts (GDRs) give power to investors and companies access to two or more markets, most frequently the US market and the Euromarkets, with one security. GDRs are most commonly used when the company is raising capital in the local market as well as in the international and US markets, either through private placement or public offerings.
Securities and Exchange Commission of USA has allowed USA companies and also foreign companies to buy and sell shares through GDRs
Among the Indian Companies, Reliance Industries Ltd. was the first company to get funds through a GDR issue , after this many other Indian Companies like Infosys,WIPRO AND ICICI have started to raise funds via GDRs. 
It is the good way for getting foreign investment for developing economy .

Indian GDR

THE COMPREHENSIVE GDR LISTING
GDR
Companies
# euro convertible bond
**adjusted for bonus		Industry
Segregation		Date
Of
GDR
Issue		Size
Of GDR
Issue
US $
Mill		Shares
per
GDR		GDR
Issue
Price **(US$)
Arvind MillsTextiles03-Feb-94125.001.09.78
Ashok LeylandAutos20-Mar-95137.773.012.79
Bajaj AutoAutos27-Oct-94110.001.016.89
Ballarpur Ind.#Paper27-May-9435.001.08.77
Bombay DyeTextiles16-Nov-9350.001.09.20
BSES LtdPower04-Mar-96125.003.014.40
Century TextilesDiversified21-Sep-94100.002.0254.00
CESCPower14-Apr-94125.001.010.67
Core ParentPharma21-Jun-9470.001.012.60
Crompton GreavesElectrical02-Jul-9650.001.07.56
DCWDiversified19-May-9425.005.013.55
Dr. Reddy'sPharma18-Jul-9448.001.011.16m
E. I. HotelsHotels07-Oct-9440.001.09.30
EID ParryFertiliser07-Jul-9440.001.08.39
Finolex CabCables19-Jul-9455.001.016.60
Flex IndustriesPackaging30-Nov-9530.002.08.05
G.E. ShippingShipping17-Feb-94100.005.015.94
G.N.F.CFertiliser06-Oct-9461.115.012.75
GAILOil & Refineries04-Nov-9922.506.09.67
Garden SilkTextiles04-Mar-9445.005.026.28
Grasim (1st)Diversified25-Nov-9290.001.012.98
Grasim (2nd)Diversified09-Jun-94100.001.020.50
Guj Ambuja #Cement26-Nov-9380.001.05.95
Himachal FuturiTelecomm.02-Aug-9550.004.09.30
Hindalco (1st)Aluminium22-Jul-9372.001.010.73
Hindalco (2nd)Aluminium08-Jul-94100.001.016.00
Hindustan Dev.Diversified21-Sep-9476.001.02.05
India CementsCement11-Oct-9490.001.04.23
Indian Alum.Aluminium22-Feb-9460.001.06.77
Indian HotelsHotels28-Apr-9586.251.016.60
Indian RayonDiversified25-Jan-94125.001.015.01
Indo GulfFertiliser18-Jan-94100.001.04.51
Indo RamaTextiles21-Mar-9650.0010.011.37
ICICIFinance02-Aug-96230.005.011.50
ICICI (ADR)Finance22-Sep-993155.09.80
InfosysIT11-Mar-9970.380.534
IPCLPetrochemicals08-Dec-9485.003.013.87
ITCCigarettes13-Oct-9368.851.07.65
J.K. CorpDiversified17-Oct-9455.001.08.00
Jain IrrigPlastics25-Feb-9430.001.011.13
JCT Ltd.Textiles29-Jul-9445.0010.016.96
Kesoram IndDiversified31-Jul-96V30.001.01.60
L & T (1st)Diversified18-Nov-94150.002.016.70
L & T (2nd)Diversified01-Mar-96135.002.015.35
Mah & MahAutos30-Nov-9374.751.04.46
MTNLTelecom04-Dec-97418.532.011.958
NEPC MiconDiversified07-Nov-9447.701.03.18
Nippon Denro#Steel03-Mar-94125.0010.021.36
Oriental HotelsHotels14-Dec-9430.001.512.75
Ranbaxy LabsPharma29-Jun-94100.001.019.38
Raymond WoolenTextile09-Nov-9460.002.010.61
RelianceDiversified27-May-92150.002.016.35
Reliance (2nd)Diversified15-Feb-94300.002.023.50
Reliance PetroleumDiversified18-Oct-9910015.023.0
S.A.I.L.Steel07-Mar-96125.0015.012.97
Satyam InfowayIT19-Oct-9975.001.018.0
S.I.E.L.Diversified14-Oct-9440.003.014.64
Sanghi PolyTextiles28-Jul-9450.005.09.56
SIV Ind Textiles01-Aug-9445.001.06.37
SPICFertiliser28-Sep-9365.005.011.15
SBIBanking03-Oct-96369.952.014.15
Sterlite India#Diversified22-Dec-93100.001.017.86
Tata ElectricPower22-Feb-9465.00100.0710.00
Telco (1st)Autos15-Jul-94115.001.08.75
Telco (2nd)Autos06-Aug-96200.001.014.25
Tube InvestCycles & Acc.20-May-9445.601.06.58
United Phos.Pesticides25-Feb-9455.001.020.50
Usha BeltronCables06-Oct-9435.001.010.70
Videocon Int.Electronics26-Jan-9490.001.08.10
VSNLTelecomm.24-Mar-97527.000.513.93
WockhardtPharma25-Feb-9475.001.014.35
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