ADR GDR
This query is : Resolved
07 April 2009
pls name site wher i can find trading of ADR GDR???
whtADR GDR means? pls explain
whtADR GDR means? pls explain
13 April 2009
Bloomberg should be the first choice. Further the stock exchanges where ADR / GDR are listed would also give trading details.
ADR / GDR stand respectively for American / Global Depository Receipt. Though it is possible to get a company’ shares listed in a foreign stock exchange, it is felt that investors in that country are more comfortable if the price of one unit which can be traded is compatible with general perception of such asset prices and if the transfer can be effected locally.
Suppose my shares are worth Rs 15. If I were to seek listing at say NYSE at current parity with no arbitrage share price would be around $0.32 which would generally place my shares among so called penny stocks (please do not compare with current depressed asset prices globally). What I would do is create a unit of say 20 shares each unit costing $6.25 and get my Indian depository to issue sufficient number of shares to a local depository in US and then sell ADR (after complying with all SEC stipulations of course). Buyer of one ADR will be entitled to 20 shares should she choose to convert. If she sells her ADR the new buyer will become the beneficial owner in the books of the US depository. (Each Infosys ADRs incidentally constitute 0.5 Infosys share)
The same process is adopted for listing in European stock exchanges and the instruments there are called GDR.
ADR / GDR stand respectively for American / Global Depository Receipt. Though it is possible to get a company’ shares listed in a foreign stock exchange, it is felt that investors in that country are more comfortable if the price of one unit which can be traded is compatible with general perception of such asset prices and if the transfer can be effected locally.
Suppose my shares are worth Rs 15. If I were to seek listing at say NYSE at current parity with no arbitrage share price would be around $0.32 which would generally place my shares among so called penny stocks (please do not compare with current depressed asset prices globally). What I would do is create a unit of say 20 shares each unit costing $6.25 and get my Indian depository to issue sufficient number of shares to a local depository in US and then sell ADR (after complying with all SEC stipulations of course). Buyer of one ADR will be entitled to 20 shares should she choose to convert. If she sells her ADR the new buyer will become the beneficial owner in the books of the US depository. (Each Infosys ADRs incidentally constitute 0.5 Infosys share)
The same process is adopted for listing in European stock exchanges and the instruments there are called GDR.
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