Question

Explain the issue process of GDR.

Answer 1

(i) First of all, the company issuing GDRs handover it's shares to some Domestic Custodian Bank (DCB)

(ii) Then DCB requests some Overseas Depository Bank (ODB) situated in a foreign country for issuing the shares as GDRs.

(iii The ODB converts the shares into GDRs denominated in US dollars.

(iv) In the end, ODB issue them to the intending investors