Global Depository Receipts (GDR)
5paisa Research Team
Last Updated: 26 Feb, 2025 11:11 PM IST

Content
- Introduction
- Global Depository Receipts (GDR) Meaning
- Characteristics of Global Depository Receipts
- Global Depository Receipts Example- Infosys
- Advantages of Global Depository Receipts
- Disadvantages of Global Depository Receipts
- What are the features of a GDR?
- Global Depository Receipts Example- Tata Motors LTD
- Conclusion
Introduction
GDR Full Form stands for Global Depository Receipts. GDRs are financial instruments used to raise capital from international investors. They represent ownership in a foreign company and are issued by a bank in a foreign country. GDRs are typically denominated in US dollars and traded on international stock exchanges.
GDRs are popular among emerging market companies that wish to raise capital from international investors. They offer several advantages, including access to a broader pool of investors, improved liquidity, and a lower cost of capital. GDRs also allow foreign companies to benefit from the higher valuations and more favourable regulatory environments of international stock exchanges.
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Frequently Asked Questions
A GDR is a financial instrument that represents ownership in a foreign company and is issued by a bank or financial institution in a foreign country.
ADRs are issued in the United States and represent ownership in a foreign company, while GDRs are issued outside the United States and are traded on international stock exchanges.
GDRs can be issued by companies that wish to raise capital from international investors.
Business firms trade in GDRs to raise capital from international investors, diversify their investor base, and increase liquidity for their shares.
GDRs provide investors with access to foreign companies without the need to navigate complex foreign markets, as well as currency hedging benefits and the ability to invest in a foreign company while minimising currency risk.
Disadvantages of GDRs for investors include currency risk, limited control, limited voting rights, fees, limited market access, and taxation.