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.
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.
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 ISSUE | SYMBOL | INDUSTRY | EXCH |
DR. REDDY'S LABORATORIES LTD. | RDY | Pharmaceutical | NYSE |
HDFC BANK LTD. | HDB | Banks | NYSE |
ICICI BANK LTD. | IBN | Banks | NYSE |
INFOSYS TECHNOLOGIES LIMITED | INFY | Technology Services | NASDAQ |
MAHANAGAR TELEPHONE NIGAM LIMITED | MTE | Fixed Line Comm. | NYSE |
REDIFF.COM INDIA LTD | REDF | Technology Services | NASDAQ |
SATYAM COMPUTER SERVICES LIMITED | SAY | Technology Services | NYSE |
SIFY LTD. | SIFY | Technology Services | NASDAQ |
VIDESH SANCHAR NIGAM LIMITED | VSL | Fixed Line Comm. | NYSE |
WIPRO LTD. | WIT | Technology Services | NYSE |
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.
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 Mills | Textiles | 03-Feb-94 | 125.00 | 1.0 | 9.78 |
Ashok Leyland | Autos | 20-Mar-95 | 137.77 | 3.0 | 12.79 |
Bajaj Auto | Autos | 27-Oct-94 | 110.00 | 1.0 | 16.89 |
Ballarpur Ind.# | Paper | 27-May-94 | 35.00 | 1.0 | 8.77 |
Bombay Dye | Textiles | 16-Nov-93 | 50.00 | 1.0 | 9.20 |
BSES Ltd | Power | 04-Mar-96 | 125.00 | 3.0 | 14.40 |
Century Textiles | Diversified | 21-Sep-94 | 100.00 | 2.0 | 254.00 |
CESC | Power | 14-Apr-94 | 125.00 | 1.0 | 10.67 |
Core Parent | Pharma | 21-Jun-94 | 70.00 | 1.0 | 12.60 |
Crompton Greaves | Electrical | 02-Jul-96 | 50.00 | 1.0 | 7.56 |
DCW | Diversified | 19-May-94 | 25.00 | 5.0 | 13.55 |
Dr. Reddy's | Pharma | 18-Jul-94 | 48.00 | 1.0 | 11.16m |
E. I. Hotels | Hotels | 07-Oct-94 | 40.00 | 1.0 | 9.30 |
EID Parry | Fertiliser | 07-Jul-94 | 40.00 | 1.0 | 8.39 |
Finolex Cab | Cables | 19-Jul-94 | 55.00 | 1.0 | 16.60 |
Flex Industries | Packaging | 30-Nov-95 | 30.00 | 2.0 | 8.05 |
G.E. Shipping | Shipping | 17-Feb-94 | 100.00 | 5.0 | 15.94 |
G.N.F.C | Fertiliser | 06-Oct-94 | 61.11 | 5.0 | 12.75 |
GAIL | Oil & Refineries | 04-Nov-99 | 22.50 | 6.0 | 9.67 |
Garden Silk | Textiles | 04-Mar-94 | 45.00 | 5.0 | 26.28 |
Grasim (1st) | Diversified | 25-Nov-92 | 90.00 | 1.0 | 12.98 |
Grasim (2nd) | Diversified | 09-Jun-94 | 100.00 | 1.0 | 20.50 |
Guj Ambuja # | Cement | 26-Nov-93 | 80.00 | 1.0 | 5.95 |
Himachal Futuri | Telecomm. | 02-Aug-95 | 50.00 | 4.0 | 9.30 |
Hindalco (1st) | Aluminium | 22-Jul-93 | 72.00 | 1.0 | 10.73 |
Hindalco (2nd) | Aluminium | 08-Jul-94 | 100.00 | 1.0 | 16.00 |
Hindustan Dev. | Diversified | 21-Sep-94 | 76.00 | 1.0 | 2.05 |
India Cements | Cement | 11-Oct-94 | 90.00 | 1.0 | 4.23 |
Indian Alum. | Aluminium | 22-Feb-94 | 60.00 | 1.0 | 6.77 |
Indian Hotels | Hotels | 28-Apr-95 | 86.25 | 1.0 | 16.60 |
Indian Rayon | Diversified | 25-Jan-94 | 125.00 | 1.0 | 15.01 |
Indo Gulf | Fertiliser | 18-Jan-94 | 100.00 | 1.0 | 4.51 |
Indo Rama | Textiles | 21-Mar-96 | 50.00 | 10.0 | 11.37 |
ICICI | Finance | 02-Aug-96 | 230.00 | 5.0 | 11.50 |
ICICI (ADR) | Finance | 22-Sep-99 | 315 | 5.0 | 9.80 |
Infosys | IT | 11-Mar-99 | 70.38 | 0.5 | 34 |
IPCL | Petrochemicals | 08-Dec-94 | 85.00 | 3.0 | 13.87 |
ITC | Cigarettes | 13-Oct-93 | 68.85 | 1.0 | 7.65 |
J.K. Corp | Diversified | 17-Oct-94 | 55.00 | 1.0 | 8.00 |
Jain Irrig | Plastics | 25-Feb-94 | 30.00 | 1.0 | 11.13 |
JCT Ltd. | Textiles | 29-Jul-94 | 45.00 | 10.0 | 16.96 |
Kesoram Ind | Diversified | 31-Jul-96V | 30.00 | 1.0 | 1.60 |
L & T (1st) | Diversified | 18-Nov-94 | 150.00 | 2.0 | 16.70 |
L & T (2nd) | Diversified | 01-Mar-96 | 135.00 | 2.0 | 15.35 |
Mah & Mah | Autos | 30-Nov-93 | 74.75 | 1.0 | 4.46 |
MTNL | Telecom | 04-Dec-97 | 418.53 | 2.0 | 11.958 |
NEPC Micon | Diversified | 07-Nov-94 | 47.70 | 1.0 | 3.18 |
Nippon Denro# | Steel | 03-Mar-94 | 125.00 | 10.0 | 21.36 |
Oriental Hotels | Hotels | 14-Dec-94 | 30.00 | 1.5 | 12.75 |
Ranbaxy Labs | Pharma | 29-Jun-94 | 100.00 | 1.0 | 19.38 |
Raymond Woolen | Textile | 09-Nov-94 | 60.00 | 2.0 | 10.61 |
Reliance | Diversified | 27-May-92 | 150.00 | 2.0 | 16.35 |
Reliance (2nd) | Diversified | 15-Feb-94 | 300.00 | 2.0 | 23.50 |
Reliance Petroleum | Diversified | 18-Oct-99 | 100 | 15.0 | 23.0 |
S.A.I.L. | Steel | 07-Mar-96 | 125.00 | 15.0 | 12.97 |
Satyam Infoway | IT | 19-Oct-99 | 75.00 | 1.0 | 18.0 |
S.I.E.L. | Diversified | 14-Oct-94 | 40.00 | 3.0 | 14.64 |
Sanghi Poly | Textiles | 28-Jul-94 | 50.00 | 5.0 | 9.56 |
SIV Ind | Textiles | 01-Aug-94 | 45.00 | 1.0 | 6.37 |
SPIC | Fertiliser | 28-Sep-93 | 65.00 | 5.0 | 11.15 |
SBI | Banking | 03-Oct-96 | 369.95 | 2.0 | 14.15 |
Sterlite India# | Diversified | 22-Dec-93 | 100.00 | 1.0 | 17.86 |
Tata Electric | Power | 22-Feb-94 | 65.00 | 100.0 | 710.00 |
Telco (1st) | Autos | 15-Jul-94 | 115.00 | 1.0 | 8.75 |
Telco (2nd) | Autos | 06-Aug-96 | 200.00 | 1.0 | 14.25 |
Tube Invest | Cycles & Acc. | 20-May-94 | 45.60 | 1.0 | 6.58 |
United Phos. | Pesticides | 25-Feb-94 | 55.00 | 1.0 | 20.50 |
Usha Beltron | Cables | 06-Oct-94 | 35.00 | 1.0 | 10.70 |
Videocon Int. | Electronics | 26-Jan-94 | 90.00 | 1.0 | 8.10 |
VSNL | Telecomm. | 24-Mar-97 | 527.00 | 0.5 | 13.93 |
Wockhardt | Pharma | 25-Feb-94 | 75.00 | 1.0 | 14.35 |
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