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What is American Depository Receipt (ADR) and Global Depository Receipt (GDR)?

This article explains what ADRs and GDRs are, and how they can be used by Non Resident Indians (NRIs) and non-Indians for making investments in India.

India is hot these days – all major brokerages are of the opinion that India has a great long term potential, and that investors in India would reap handsome benefits in the next 10 years.

With the current correction in the Indian stock market, the valuations have become even better. And the logic of investing in Indian equity market has become even more compelling.

This is great for people living in India – they can invest in various mutual funds (MFs), or can choose some great companies and invest in those. (Confused if you should invest in stocks directly or through mutual funds? Please read “Direct investment in Stocks versus Mutual Funds (MFs)?”)

But what about Non Resident Indians (NRIs) and foreign nationals? Considering the many restrictions on NRIs and foreign nationals investing in India, how can they benefit from the potential that India offers?

There are some very good proxies to investing directly in India – and ADRs and GDRs are a great option.


What is an ADR / GDR?

ADR stands for American Depository Receipt. Similarly, GDR stands for Global Depository Receipt. Let’s understand these better.

Every publicly traded company issues shares – and these shares are listed and traded on various stock exchanges. Thus, companies in India issue shares which are traded on Indian stock exchanges like BSE (The Stock Exchange, Mumbai), NSE (National Stock Exchange), 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).

But to list on a foreign stock exchange, the company has to comply with the policies of those stock exchanges. Many times, the policies of these exchanges in US or Europe are much more stringent than the policies of the exchanges in India. This deters these companies from listing on foreign stock exchanges directly.

But many good companies get listed on these stock exchanges indirectly – using ADRs and GDRs.

This is what happens: 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. Each receipt amounts to a claim on the predefined number of shares of that company. The issuing bank acts as a depository for these shares – that is, it stores the shares on behalf of the receipt holders.


What is the difference between ADR and GDR?

Both ADR and GDR are depository receipts, and represent a claim on the underlying shares. The only difference is the location where they are traded.

If the depository receipt is traded in the United States of America (USA), it is called an American Depository Receipt, or an ADR.

If the depository receipt is traded in a country other than USA, it is called a Global Depository Receipt, or a GDR.


How can you use an ADR / GDR?

ADRs and GDRs are not for investors in India – they can invest directly in the shares of various Indian companies.

But the ADRs and GDRs are an excellent means of investment for NRIs and foreign nationals wanting to invest in India. By buying these, they can invest directly in Indian companies without going through the hassle of understanding the rules and working of the Indian financial market – since ADRs and GDRs are traded like any other stock, NRIs and foreigners can buy these using their regular equity trading accounts!


Which Indian companies have ADRs and / or GDRs?

Some of the best Indian companies have issued ADRs and / or GDRs. Below is a partial list.

Company ADR GDR
Bajaj Auto No Yes
Dr. Reddys Yes Yes
HDFC Bank Yes Yes
Hindalco No Yes
ICICI Bank Yes Yes
Infosys Technologies Yes Yes
ITC No Yes
L&T No Yes
MTNL Yes Yes
Patni Computers Yes No
Ranbaxy Laboratories No Yes
Tata Motors Yes No
State Bank of India No Yes
VSNL Yes Yes

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  2. Sir,
    This topic is explained in a very lucid manner.
    Thank you for this i have understood well .
    But Reliance industries was the first company to float GDR’S.

  3. Hi,

    Thanks a lot for the praise! I am happy that I could be of help.

  4. Hello sir
    thanks !!!!!!!!!!
    for this lucrative information
    it is of great help for me……..

  5. Thanks , sir for such brief information & definetely it is great help of me ………….

  6. Parvesh Jain says:

    A very clear explanation.

    But Can you explain if Issuing ADR or GDR counts in as part of FDI or FII limits, or not?

  7. Anonymous says:

    Hi Parvesh,


    Investment obtained through ADRs / GDRs is considered foreign investment, and is counted as a part of the Foreign Direct Investment (FDI) limit.

  8. Anonymous says:

    Hi Subhasish,

    Thanks for the kind words…. I am glad that you liked the article.

  9. subhasish says:

    Thanks for this clear explanation about Depository Receipts(ADR&GDR).thanks.

  10. Anonymous says:

    Hi Shyna,

    Thanks… I am glad that I could be of help.

  11. abhishek says:

    hello sir,
    This is one of the simpliest and best explanation.

    thank you

  12. very simple and clear xplaination….

    thank you…

  13. thamks a lot for ur wonderful work..and hope this could help me a lot

  14. Ravi Agarwal says:


    This is a very good article. Please can you also give the complete list of all the indian companies who have issued ADR’s and GDR’s so far.

    Ravi Agarwal

  15. Anonymous says:

    Hi Ravi,


    I am sorry, but I would not be able to give a complete list… But some Googling should be enough for getting that!

  16. Randhir says:

    Thanks for such an informatics article on ADR and GDR

    i was thinking do they carry any voting rights as well, and again as they are counted in FDI are they counted for sector cap as well.



  17. pratap roul says:

    sir,it helps me for better understanding,before this i am not certion about both adr gdr…..

  18. Anonymous says:

    Hi Randhir,

    The depositories that hold the underlying shares (used to issue the ADRs / GDRs) can vote.

    And yes, they also count towards the sectoral limits.

  19. Satish Benedict Khalkho says:

    I was thinking do they carry any voting rights as well, and again as they are counted in FDI are they counted for sector cap as well.



  20. pls send the required matter

  21. Hi Rekha,

    This has already been covered in the article.

  22. vipin rathia says:

    all the points have been covered in this article.
    this is the best explanation of this topic

  23. Hi Vipin,

    Thanks a lot! I am glad you liked it.

  24. this is the best explanation till date….great work!

  25. written in a very understandable form,
    thanks a lot, keep up thr good work

  26. Hi Rahul,

    Thanks a lot!

  27. hi
    anybody could tell me where i can see the updated adrs and gdrs rates, ie before the indian market opens.
    thank you

  28. Hi Vaibhav,

    Thanks a ton!


    very nicely explained thanks for that.
    does any other depository receipts exists,why there is individual depository receipts for US.

  30. Anonymous says:

    Hello Kalishankar,

    Thanks a lot…

    I am not exactly sure why there is a separate depository receipt for the US – but I believe it is because USA is a huge market for such securities, so special securities have been designed for it so that companies can raise more money.

  31. Vikas Chomal says:

    Thank you sir for the explanation. I am feeling confident after reading this.

  32. Rahul kumar Dwivedi says:

    I am not exactly sure why there is a separate depository receipt for the US – but I believe it is because USA is a huge market for such securities, so special securities have been designed for it so that companies can raise more money.

  33. Anonymous says:

    Hi Vikas,

    Thanks a lot – I am happy that I could be of help!

  34. VisionLeader says:

    This is crisp and clear explanation of purpose of ADR and GDR. Good job.

  35. Hi Neha,

    Thanks… Appreciate your positive comment…

  36. R.S.SAVANUR says:

    Hi ,

    Useful and most effective one and easy to understand. Thanks

  37. Hi VisionLeader,


  38. Hello R.S.SAVANUR,


  39. The data which has given over here is really very helpful because it is really very effective and explained in simple language it is much understandable, thanx


  41. Anonymous says:

    Hi Kumari,

    Thanks a lot… I am glad I could be of help!

  42. Hello,
    I m really thankful for this article because it has given me the basic understanding of what is ADR & GDR. It has proved to be my guide in further study of ADR & GDR because it is the base.
    Again Thanks a lot………..

  43. is their any limit for the amount or the number of depository receipts that can be issued?

  44. shivgarwalm aa says:

    yery good exp

  45. hello sir….
    thanks a lot for such a nice information in very simple will be help ful for me in further study…sir i hv little bit confused in dual listing will u help me……

  46. vanita singh says:

    Hello Sir,
    I have very well understood the topic. It’s very clear.
    I want to know the procedures for raising capital abroad through GDR/ADR

    vanita singh

  47. Prabhash says:

    Thanks for such a good
    article . It is very clearly
    explained .

  48. S Ghosh says:

    Wonderful explaination.

    Can u pls tell me the difference between ARD / GDR, FII and FDI.

  49. Haarish J Juneja says:

    Sir i wanted to know the different regulatory norms a GDR needs to fulfill with .ADR only complies with SEC but what about GDR

  50. Robin S says:

    Excellent Article Sir,
    Very lucidly explained.
    Thanks a lot!


    hello sir,
    thank for my help
    that statment is know about is what is differnt is the adr/gdr and i am so happy that statment are my help agin thank for my help……..

  52. this was of great help, well i m pursuing PGDM and now in my 3rd Trisem we have to finalise our electives; i m a BCA, and i m interested in HR. Its dual specialization so i have to select two specialisations-an option between Finance and IT, i like both; the issue is i don’t know what is the scope in finance being a fresher, are there any courses which i shall undertake to groom myself this year so that when i face interviews in 2011, i have really something to offer……..can u suggest something…….plz

  53. Can you please let me know who regulates ADR/GDR issues. Is it SEBI or RBI or Central Government. What are the regulations/Laws related to these issues

  54. Thanx to make me understand the term in such a simple terminology.

  55. H.K.Singla says:

    these definitions are very well explained.
    I got too much from this

  56. Thank u sir,for giving a clear information about ADR

  57. semsmymnqueld says:

    . . . . . . . . . . . .

  58. it s a very clear explanation.thanks for this

    wanted to knw the depth pf adr/gdr.could u plz explain,type,procedur,regulation of the same

  59. Thanks a lot for your simple explanation.

    Jhinu Baby Lukose

  60. ASHISH RANJAN says:

    thnks alot sir this great to understand about ADR and GDR in such an easy manner. it will be great for me if u provide me more info about ADR and GDR.

  61. The article is an aid even for those who are a beginner in financial terms… thank you very much for this simple but informative article. I am expecting much more in the future… Once again, thank you..
    Can you please help to understand the procedure for listing a company in stock exchange??

  62. shah Devika says:

    superb info
    very useful for students making their presentations….

  63. Yogesh Kadam says:


  64. kanishka kamble says:

    can u plz eloborate more about adr and gdr with example.

  65. Mahaveer Dhariwal says:

    Dear Sir,

    This is the art which u possess……complicate terminolory in simple words…….best article ever in ADR / GDR

  66. Arun Gandhi says:

    Very nicely explained in a way which I can understand the basics .

    I was wondering if the Company cannot list on the NYSE , due to Stringent Rules …..then ADR’s they not have any rules to be complied by the underlying Company ? Or do the Banks list them ? The two way fungibility permitted by RBI ….the Foreigners can cancel the ADR’s and sell them in Indian Market ?

  67. Voila- thats the definition I was looking for- Excellent! It’ll be great if you can publish more layman explanations on a blog or may be even on a paid website. Information is plenty but i’m students will be ready to pay nominal charges for well put information. Think about it!

  68. very nice explanation…..thx….

  69. abdul rahim says:

    nice explanation.

  70. Dharmesh Thakor says:

    very nicely explained. very easy to understand

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