ADR

What is an ADR / GDR?

Indian companies issue shares which are traded on Indian stock exchanges like BSE, NSE etc. These shares are sometimes also listed and traded on foreign stock exchanges like NYSE (New York Stock Exchange) or NASDAQ (National Association of Securities Dealers Automated Quotation).

The company deposits a large number of its shares with a bank located in the country where it wants to list indirectly. The bank issues receipts against these shares, each receipt having a fixed number of shares as an underlying (Usually 2 or 4).

These receipts are then sold to the people of this foreign country (and anyone who is allowed to buy shares in that country). These receipts are listed on the stock exchanges. They behave exactly like regular stocks – their prices fluctuate depending on their demand and supply, and depending on the fundamentals of the underlying company. These receipts, which are traded like ordinary stocks, are called Depository Receipts.

Following are the major Indian ADRs:
Cognizant CTSH
HDFC Bank Ltd. HDB
ICICI Bank Ltd. IBN
iGATE Corp. IGTE
Morgan India Investment Fund . IIF
Infosys Technologies Ltd. INFY
Mahanagar Telecom MTE
Patni Computer PTI
Dr. Reddy's RDY
Rediff.com REDF
Satyam SAY
Sify Ltd. SIFY
Syntel Inc. SYNT
Tata Motors Ltd. TTM
Videsh Sanchar Nigam VSL
Wipro Ltd. WIT
WNS Ltd. WNS
The India Fund Inc. IFN
Sterlite Industries India Ltd. SLT