FINANCIAL MANAGEMENT

PRESENTATION ON :GLOBAL DEPOSITARY RECEIPTS

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NAME NO ROLL

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 Euros or British Sterling It is very similar to ADRs 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 broker or Compan y
s re ha yS Bu m fro
Deposit Shares

Local Depos itor

Provide notification of local shares setting

Deposi tory bank

Forei gn mark et

Local market

ll of e S r Buy o GDRs

e su Is DRs G

Investor

Chart of GDRs Industry wise

Some Companies with GDRs

GDR industry Date of Companies issue Size of Shares GDR ( in per GDR million $ ) 0.5 2.0 3.0 1.0 GDR issue Price

VSNL MTNL Ashok leyland Ranbaxy Lab.

Tele. Tele. Autos

24/3/1997 527 million 4/12/1997 418.53 million 20/3/1995 125 million

$ 13.93 $ 11.95 $ 12.79 $ 19.98

Pharma. 20/6/1994 100 million

Success of GDR - VSNL

VSNL successfully issued Indias largestever 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 %