Question

what are GDRs ( GLOBAL DEPOSITORY RECEIPTS )?

Answer 1

Sometimes organisations wish to raise funds in foreign currency as well. For this they deliver their shares in local currency to a depository bank. Against these shares, the depository bank issues depository receipts in US dollars. These depository receipts denominate in US dollars are called as Global Depository Receipts (GDR). Each GDR represents a specific number of shares. GDRs are listed and traded on a foreign stock exchange. Like any other security they are negotiable instruments and can be traded freely. Nowadays, many Indian companies such as Reliance, Wipro, etc. raise funds in foreign currency through GDR.