INITIAL PROJECT PROPOSAL ON

OVERSEAS CAPITAL
MARKET (ADR/GDR)

Members: Ketan Mehta (21)

Archish Thakor (48)
(MBA – II (Finance))

Preferred Guide: Prof. Ashish Shah

Prof.Nirali Parikh

SOM LALIT INSTITUTE OF BUSINESS

MANAGEMENT
 INTRODUCTION

AMERICAN DEPOSITARY RECEIPT (ADR)

It represents ownership in the shares of a non-U.S. company and trades

in U.S. financial markets. The stock of many non-US companies trade on US
stock exchanges through the use of ADRs. ADRs enable U.S. investors to buy
shares in foreign companies without the hazards or inconveniences of cross-
border & cross-currency transactions. ADRs carry prices in US dollars, pay
dividends in US dollars, and can be traded like the shares of US-based
companies.

Individual share of a foreign corporation represented by an ADR are called

American Depository Shares (ADS).

GLOBAL DEPOSITORY RECEIPT (GDR)

It is a certificate issued by a depository bank, which purchases shares of

foreign companies and deposits it on the account. GDRs represent ownership of
an underlying number of shares.

GDRs are listed on a European stock exchange such as London or Luxembourg

and clear through the Euromarkets clearing systems, Euroclear and Clearstream.
GDRs may also be listed on other exchanges, such as Dubai and Singapore. The
ability of retail investors to purchase GDRs will depend on the type and location
of the listing. In general, however, GDR offerings are aimed at institutional
investors and depending on the exchange, they can then be purchased by retail
investors in the secondary market.
OBJECTIVE

To understand the conceptual and regulatory framework for issuing

and listing Depository Receipts (DR) programs and its impact on Indian Capital
Markets.

MISSION

• To know and understand the overseas capital markets and their

trading criteria.

• To study the benefits via ADR and GDR programs to corporate

sector.
 RESEARCH METHODOLOGY
• Objective Research
• Descriptive Research

RESEARCH/ DATA SOURCES

A. PRIMARY
• Interaction with stock broking firm
• Live trading sessions study.

B. SECONDARY
• News Articles
• News Papers
• Internet

TIME BUDGET
We intend to acquire an in depth Knowledge of the subject and complete
the same within the time specified in the curriculum i.e. 18-20 weeks.
 EXPECTED CONTRIBUTION OF THE STUDY

The study will contribute to our Knowledge of how the ADR (American
Depository Receipts) and GDR (Global Depository Receipts) works at Macro
and Micro level.

It will also contribute to our knowledge of overseas market, its working

and how the process of trading is carried out in the international stock
exchanges.