WELCOME

FDI,FII,ADR

Presented by
Dillip Khuntia
 FDI
 Physical Investment/Establishment of
Enterprise

 Consist of Parent Enterprise &

Foreign Affiliate
 Types

 Vertical FDI Horizontal

Owns shares of FDI
Foreign
Enterprise:- MNC carries
supplies input for out similar
it or uses output
of it business
 What Attracts FDI
 Consistent Economic Growth
 Deregulation
 Liberal Investment Rules
 Operational Flexibility
 Availability of Resources
 Methods of FDI
 By incorporating a wholly owned
company
 By acquiring shares

 Through Merger & Acquisition

 Participating in an Joint Venture

 Benefits
 Helps in Economic Growth

 Creates Employment Opportunity

 Better Lifestyles

 Knowledge & Skill

 Increase in Revenue of
Government
Calendar year Amount of FDI In US$ mn
2009 inflow (in
Rs.crore)
January 2009 2,733
13,346
February 1,488
7,329
March 1,956
10,023
April 2,339
11,708
May 10,168 2,095

June 12,335 2,582

Rank Country 2006-07 2007-08 2008-09 2009-10 Cumulativ %age to
e inflow total
inflow

1 Mauritius 28,759 44,483 50,764 30,591 191,863 44%

(6,463) (11,096) (11,208) (6,279) (43,143)
2 Singapore 2,662 12,319 15,727 4,162 38,014 9%
(578) (3,073) (3,454) (856) (8,667)
3 U.S.A 3,861 4,377 8,002 5,334 33,294 8%
(856) (1,089) (1,802) (1,108) (7,443)
4 U.K 8,389 4,690 3,840 1,193 24,097 6%
(1,878) (1,176) (864) (246) (5,473)
5 Netherlands 2,905 2,780 3922 1,962 17,814 4%
(644) (695) (883) (406) (3996)

6 Japan 382 3,336 1,889 3,788 15,013 3%

(85) (815) (405) (779) (3,310)
7 Cyprus 266 3,385 5,983 3,195 13,245 3%
(58) (834) (1,287) (655) (2,927)
 FDI Inflow
40000

35000

30000

25000

20000
Total Inflow
15000

10000

5000

0
20 20 20 20 20 20 20 20 20 20
00- 01- 02- 03- 04- 05- 06- 07- 08- 09-
01 02 03 04 05 06 07 08 09 10
Statement 0n RBI’s Regional Offices

Received FDI inflow

40000

35000

30000

25000

20000
ADR
15000

10000

5000

0
MUMBAI Chennai Panaji BBSR RN I
 Sectors Attracting FDI
30000

25000
Service
Computer
20000 Telecommunication
Real Estate
15000 Construction Activity
Automobile
Power
10000
Metallurgical Industries
Petroleum
5000 Chemical

0
2006-07 2007-08 2008-09 2009-10
 FII
 Investor or Investment Fund

 Registered in One Country

 Invests in Another Country

 Companies
 Pension Funds

 Mutual Funds

 Investment Funds
 Insurance Companies

 Bank

 Charitable Trusts

 Asset Management Company

 Registered on the Basis of
 Previous Track Record

 Competence

 Financial Capability

 Management
1 Asian Paint Ltd.

2 Sonata Software Ltd.

3 Ranbaxy Laboratories Ltd.
4 Balaji Telefilms Ltd.
5 HDFC Bank Ltd.
6 Infosys Technologies Ltd.
7 CRISIL
8 RIL
9 Reliance Petroleum Ltd.
1 Dr. Reddy,s Laboratories
0
 Investment by FII in India
25000
20000
15000
10000
5000
0
FII
-5000
-10000
-15000
-20000
2000- 2000 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009-
01 1-02 03 04 05 06 07 08 09 10
 Trend in FII Investment
from Nov-03 to Nov-18
400
350
300
250
200
150
100
50
0
3rdN ov 6th 9th 12th 18th
N ov N ov N ov N ov
 WHY INDIA
 Second Largest Emerging Market

 Skilled & Competitive Labour force

 Highest Rate of Return on Investment

 Second Largest Software developer

 Growth over past few years averaging

8%
 ADR
 ADR represents ownership in the
shares of a non-U.S. company and
trades in U.S. financial market

 Introduced in 1927

 JPMorgan
 Types
 Unsponsored

 Level-I

 Level-II

 Level-III
 ADRs’ Special Risk
 Currency Risk

 Political Risk

 Inflation Risk
 Sources
 By depositing the domestic shares

 Can obtain in secondary market

By Purchasing
By Swapping
 Strength & Weakness
 Strength
Allow to invest outside with greater
ease
Capitalize on emerging economies
 Weakness

Risky
Language barrier
Lack of International Standards
1 Bajaj Auto
2 Dr. Reddy
3 HDFC Bank
4 ICICI Bank
5 Infosys Technologies
6 MTNL
7 Panti Computer
8 Tata Motors
9 VSNL
10 WIPRO
 ADR MKT CAP OF
INDIAN COMPANY
16000

14000

12000

10000

8000

6000

4000

2000

0
HDFC IN FY SAY SLT TTM
Thank You