Depository Receipts (DRs) offer an option for the globalisation of equities in emerging market economies. DRs are negotiable certificates that represent shares in a foreign company and are traded in local exchanges of most advanced economies. ADR (American Depository Receipt) and GDR (Global Depository Receipt) are two depository receipts that are traded in local markets but represent the equity of a company listed in another country.


GDRs are negotiable certificates issued by depository banks that represent ownership of a specified number of a company’s shares. These receipts can be listed and traded independently from the underlying shares. With GDRs, foreign companies can trade in any country’s stock market except the US stock market. Those holding GDRs can convert them into shares by surrendering the receipts to the bank.

They are listed on Non-US stock exchanges like the London Stock Exchange or the Luxembourg Stock Exchange. The GDR market is an institutional one and hence offers less liquidity but allows trading across a more significant number of countries. For example, if Infosys wants to list its share in Australia, they will deposit a substantial number of shares with an Australian Bank. The bank can then issue receipts (GDRs) against these shares to investors. Each receipt represents a particular number of shares.


SEBI came out with a detailed framework for issuance of depository receipts (DR) in October 2019. The introduced changes allow increased access to foreign funds through ADRs and GDRs. Indian companies can now list their GDR at the International Financial Services Centre (IFSC) in Gujarat. With the new rules in place, the companies now have an additional source for raising funds. As per the amended rules, DRs can be issued by way of public offering, private placement, or in a manner that is accepted in the concerned jurisdiction. Companies planning to issue GDR need to seek prior approval of the Ministry of Finance and Foreign Investment Promotion Board (FIPB).

Examples of companies that have issued GDRs in India include Aditya Birla Capital listed in the Luxembourg Stock Exchange, GAIL Indian is listed in the London Stock Exchange, UPL is listed on Singapore Exchange.

The Central Government has amended the Companies (Issue of Global Depository Receipts) Rules, 2014 in a new notification dated 13th February 2020. The new amended rules will now be called Companies (Issue of Global Depository Receipts) Amendment Rules 2020.

The current notification has announced minor amendments and insertions in the old rule. The main additional specifications are:

  • The depository receipts may be issued as a public or private offering or any other manner that is legal and can be traded in the trading platform of that country’s jurisdiction.
  • Remittance of proceeds of depository receipts may be made to an International Financial Services Centre Banking Unit and funds should be utilised as per RBI instructions.

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