Global Depository Receipt (GDR)

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Definition: Global Depository Receipt (GDR)

Global Depository Receipt (GDR) is a certificate issued by an international bank to a company against purchasing some shares of the same company which are then traded on international stock exchange.

Simply, they are derivative equities which are traded in foreign markets, giving rights to shareholders for respective amount of local securities. In such case, shareholders are entitled to all dividends and capital gains. Thus, GDR allow investors in any country to purchase shares of company in any other country without losing the income or trading flexibility. GDR is also called as International Depository Receipt or Euro Depository Receipt.
GDR is a financial instrument used by private markets to raise capital denominated in either U.S. dollars or euros. GDR facilitates trade of shares importantly in emerging markets.

Procedure for issue of GDR in a company

Advantages of GDR to issuing company

  • Accessibility to foreign capital markets
  • Increase in visibility of the issuing company
  • Rise in the capital because of foreign investors

Advantages of GDR to investor

  • Helps in diversification, hence reducing risk
  • More transparency since competitor’s securities can be compared
  • Prompt dividend and capital gain payments

Hence, this concludes the definition of Global Depository Receipt (GDR) along with its overview.


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