What is a GDR? Global Depositary Receipt
A GDR is a Global Depositary Receipt, a certificate issued by a depositary bank that represents shares of a company and lists on a foreign exchange outside the company's home market, often in London or Luxembourg. It is a way for a company to raise money from overseas investors without listing its actual shares on that exchange. This guide explains what a GDR is, how it is regulated in India, and how it differs from an American Depositary Receipt. It is not investment advice.
Definition
A GDR
is a Global Depositary Receipt, a negotiable certificate issued by an overseas depositary bank that represents shares in a company. It lists on a foreign exchange outside the company's home country, commonly in Europe, while a local custodian holds the underlying shares. Source: SEBI.
What is a GDR and why do companies issue one?
A GDR lets a company reach international investors in one step. The company deposits shares with a custodian at home, and a depositary bank abroad issues receipts against them that trade on a foreign exchange, usually priced in US dollars. For the company it is a route to overseas capital and a broader shareholder base. For the investor it is a way to hold the stock through a familiar exchange and settlement system.
How is a GDR regulated in India?
Indian companies issue depositary receipts under the Depository Receipts Scheme, 2014 and the related rules under the Companies Act. The framework sets which companies can issue, the permitted international exchanges, and the disclosure that applies.
2014
The year India's current Depository Receipts Scheme took effect
Source: SEBI, Depository Receipts Scheme, 2014
How does a GDR differ from an ADR?
Both are depositary receipts, but they list in different places. An ADR trades in the United States in US dollars under SEC rules. A GDR trades outside both the home country and the US, typically on a European exchange. The full side by side is in ADR vs GDR.
Where a GDR sits for a smart-money reader
A GDR changes where the stock trades, not what the company must disclose at home. An Indian company with a GDR still reports its shareholding pattern to the NSE and BSE, where the depositary's holding of the underlying shares appears. Reading the home disclosure alongside the overseas listing gives the fuller picture.
Flock reads disclosure filings and keeps each one dated and linked back to its source, so you can go from a summary to the original filing in one step. What any of it means for your money is your call to make.
Frequently asked questions
What is a GDR in simple terms?
A Global Depositary Receipt is a certificate issued by a depositary bank that represents shares in a company and lists on a foreign exchange, often in London or Luxembourg. It lets a company raise money from overseas investors without listing the shares directly there. Source: SEBI.
What is the difference between a GDR and an ADR?
An ADR trades in the United States in US dollars. A GDR trades outside both the company's home country and the US, typically on a European exchange. The mechanics are similar, a depositary bank issues receipts against shares held by a custodian. Source: SEC, SEBI.
How are Indian GDRs regulated?
Indian companies issue depositary receipts under the Depository Receipts Scheme, 2014 and the related Companies rules. The framework sets who can issue, the eligible exchanges, and the disclosure required. Source: SEBI, Depository Receipts Scheme, 2014.
Where does the underlying share of a GDR sit?
The underlying shares are held by a domestic custodian in the company's home market, and the overseas depositary bank issues the receipts against them. The receipt holder has an economic interest in those deposited shares. Source: SEBI.
Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.
Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.