Question

What is an Indian Depository Receipt?

• A. A deposit account with a Public Sector Bank
• B. A depository account with any of the Depositories in India
• C. An instrument in the form of depository receipt created by an Indian depository against underlying equity shares of the issuing company
• D. An instrument in the form of deposit receipt issued by Indian depositories

Answer 1

Answer: (C)

An instrument in the form of depository receipt created by an Indian depository against underlying equity shares of the issuing company

An IDR is an instrument denominated in Indian Rupees in the form of a depositoryreceipt created by a Domestic Depository (custodian of securities registered with theSecurities and Exchange Board of India) against the underlying equity of issuingcompany to enable foreign companies to raise funds from the Indian securities Markets.