ADR, GDR, and Direct Listings 2023: Insights and Regulations

  Nov 02, 2023

ADR and GDR and Direct Listings 2023

Q1: What is an ADR (American Depository Receipt)?

A1: An ADR, or American Depository Receipt allows U.S. investors to invest in foreign companies which issue receipts instead of shares which are almost the same. Non-US companies through this mechanism can get listed on US stock exchanges.

Q2: What is a GDR (Global Depository Receipt)?

A2: A GDR, or Global Depository Receipt, is similar to an ADR but is issued and traded in international markets outside the United States. GDRs also represent shares in a foreign company and enable international investors to invest in that company’s stock.

Q3: Why are ADRs and GDRs used by Indian companies?

A3: Indian companies use ADRs and GDRs as a means to access international capital markets and raise funds by allowing foreign investors to trade their shares on international stock exchanges.

Q4: What is the recent change in Indian regulations regarding listings on foreign exchanges?

A4: The recent change permits Indian companies to list directly on foreign exchanges, eliminating the need for ADRs and GDRs. This change is intended to provide Indian companies with more flexibility and opportunities for international listings.

Q5: When did this change come into effect?

A5: The change came into effect on October 30, 2023, when the relevant section (Section 5) of the Companies (Amendment) Act, 2020, was enforced by the Central Government.

Q6: Are there any specific conditions or rules associated with this change?

A6: While the change allows Indian companies to list directly on foreign exchanges, the specific conditions and rules for such listings are yet to be notified. The government is expected to provide guidelines and regulations regarding this process in the future.

These FAQs provide definitions of ADRs and GDRs and explain the recent change in Indian regulations that allows companies to list directly on foreign exchanges. It highlights that detailed conditions and rules for such listings are pending notification by the government.


Get a call back

Fill the below form to get free counselling for UPSC Civil Services exam preparation


Enhancing India’s Dairy Sector through Amul’s Global Growth
Snakebite Management and Awareness in India
Snow Leopard Population Assessment in India (SPAI)
Hydrogen in Heavy Industries
Ice Stupas in Ladakh
Women-led Farmer Producer Organizations (FPOs)
Public Examinations (Prevention of Unfair Means) Bill, 2024
Indo-Bangla Tangail Sari GI Tags
Consumption Data and Disparity in India
India’s Household Consumption Expenditure Data
Lichens: Effective Tools for Environmental Monitoring
Pollinators and Their Importance
Placers: A Comprehensive Understanding
Rare Earth Elements Mining in India
ISRO’s PAPA: A Milestone in Understanding Solar Phenomena